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EXHIBIT 4 a (5)
SERVICES AGREEMENT
FOR HP-OMS OPERATIONS SERVICES
BETWEEN
TECHNOMATIX LTD
AND
HP-OMS-COMPAQ (ISRAEL) LTD
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SERVICES AGREEMENT
FOR HP-OMS OPERATIONS SERVICES
THIS SERVICES AGREEMENT FOR HP-OMS OPERATIONS SERVICES is entered into as of
this 30th day of October 2003, by and between HP-OMS (ISRAEL) LTD., a limited
liability company organized and existing under the laws of Israel, having its
registered office at 9 Ha'Dafna St. Ra'anana ("HP-OMS") and TECNOMATIX LTD., a
limited liability company organized and existing under the laws of Israel,
having its registered office at 00 Xxxxxxx Xxxxxx, Xxxxxxx Pituach, Israel (the
"CUSTOMER").
WHEREAS, the Customer wishes to purchase from HP-OMS and HP-OMS wishes to
render to the Customer certain global IT outsourcing services, subject
to the terms and conditions hereinafter set forth;
WHEREAS, the parties through this Agreement desire to commence a strategic
relationship, as more particularly set out below; and
WHEREAS, in connection with the provision of such services, the Parties have
also entered into that certain Employee Transfer Agreement, attached
to this Agreement as Exhibit F.
NOW, THEREFORE, in consideration of the mutual covenants and conditions set
forth in this Agreement, the Parties hereto agree as follows:
1. DEFINITIONS
As used in this Agreement, unless expressly otherwise stated or evident in the
context, the following terms shall have the following meanings, the singular
(where appropriate) shall include the plural and vice versa and references to
Exhibits and Sections shall mean Exhibits and Sections of this Agreement.
1.1 "ADD-ON ASSETS" means both the Purchased Add-On Assets and the Leased
Add-On Assets.
1.2 "AFFILIATE" means any entity Controlling, Controlled by, or under common
Control with HP-OMS or Customer, as the case may be.
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1.3 "AGREEMENT" means the terms and conditions of this Services Agreement
for HP-OMS Operations Services, including (unless otherwise stated)
all Exhibits and their respective Appendixes.
1.4 "CHANGE REQUEST" has the meaning set out in Exhibit B [Statement of
Work].
1.5 "COMMENCEMENT DATE" means the first day of the month which follows sixty
(60) days from the Effective Date, upon which date HP-OMS shall
commence the provision of the Services in accordance with this
Agreement, and which more specifically designates the launch of the
Transition and Stabilization Phases.
1.6 "CONFIDENTIAL INFORMATION" has the meaning set out in Section 17.1
(CONFIDENTIAL INFORMATION).
1.7 "CONTROL" and its correlative meanings, "Controlling", "Controlled by"
and under common Control with mean the legal, beneficial or equitable
ownership, directly or indirectly, of more than fifty percent (50%) of
the aggregate of all voting equity interests in an entity.
1.8 "CUSTOMER" means Tecnomatix Ltd.
1.9 "CUSTOMER COMPETITOR" means the list of companies set out in Exhibit J
[Customer Competitors], which list may be updated from time to time by
Customer, with the names of companies who compete with Customer in the
same industry in which Customer operates, by notice in writing to
HP-OMS.
1.10 "CUSTOMER CONTRACTORS" means third party contractors, vendors, agents,
representatives, and consultants selected and retained by Customer.
1.11 "CUSTOMER DATA" means any information contained in the Customer
Databases, and any derivatives resulting therefrom.
1.12 "CUSTOMER DATABASE" means any database at any time established (whether
in magnetic, paper or other form) by, on behalf of, or at the
direction of, the Customer, and including any customized database
established by HP-OMS in performance of this Agreement, which contains
information relating to the business or affairs of the Customer, its
employees or any third party.
1.13 "CUSTOMER EMPLOYEES" means the employees employed by the Customer, and
Customer Contractors who is given a user name in the Tecnomatix WAN.
For the avoidance of doubt, Customer Employees exclude HP-OMS
Personnel. .
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1.14 "CUSTOMER PRE-COMMENCEMENT OWNED MATERIALS" has the meaning set out in
Section 15.1 (PRE-EXISTING MATERIALS).
1.15 "CUSTOMER SITES" means any office, branch, site, location or other
facilities which are owned, leased, occupied or used by Customer and
to which it is necessary for HP-OMS to obtain access in order to
provide the Services or carry out any HP-OMS obligation in relation to
them, and as set out in Exhibit H - [Customer Sites]. Any addition or
reduction to this list is subject to the change management process set
out in and Exhibit E - [Pricing and Pricing Principles].
1.16 "CUSTOMER SOFTWARE" means Third Party Software licensed to and in use by
the Customer prior to the Commencement Date, and which are included
within the categories identified in Exhibit I - [HP-OMS Software and
Customer Software Categories].
1.17 "DELIVERABLES" has the meaning set out in Section 13.1 (TESTING)
1.18 "DEVELOPED MATERIALS" means any Materials or modifications, enhancements
or derivative works thereof, developed by or on behalf of HP-OMS for
Customer in connection with or as part of the Services.
1.19 "DISPUTE RESOLUTION PROCESS" means the process for dispute resolution set
out in Section 21.7 (DISPUTE RESOLUTION PROCESS).
1.20 "DUE DILIGENCE PROCESS" means the due diligence process entered into and
completed by the Parties from July 1, 2002 to December 31, 2002 in
connection with this Agreement.
1.21 "EFFECTIVE DATE" has the meaning set out in Section 2.5 (CONDITIONS
PRECEDENT TO EFFECTIVE DATE).
1.22 "EMPLOYEE TRANSFER AGREEMENT" means the employee transfer agreement
between the parties, attached hereto as Exhibit F.
1.23 "GENERAL SETUP COSTS" means the one-time setup cost set out in Exhibit E
[Pricing and Pricing Principles], for HP-OMS' setup and installation
of utilities, equipment, and infrastructure.
1.24 "GOVERNMENT APPROVAL" has the meaning set out in Section 2.5 (CONDITIONS
PRECEDENT TO EFFECTIVE DATE).
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1.25 "HARDWARE" means computing, networking and/or communications equipment or
hardware, including, without limitation, (i) midrange, storage
systems, server and distributed computing equipment and associated
attachments, features, accessories, peripheral devices, and cabling,
(ii) personal computers, laptop computers and workstations and
associated attachments, features, accessories, peripheral devices, and
cabling, and (iii) data telecommunications and network equipment and
associated attachments, features, accessories, peripheral devices, and
cabling.
1.26 "HP-OMS HARDWARE" means all Hardware or equipment in use by the Customer,
as well as all Hardware included within the Add-On Assets, Transition
Project Assets, Refreshed Assets, New Customer Employee Assets, Right
to Use Assets and any Third Party Contracts, and all other Hardware
used by HP-OMS in performing the Services, or which is the subject of
the Services under this Agreement.
1.27 "HP-OMS PERSONNEL" means those employees and Subcontractors of HP-OMS and
of HP-OMS Affiliates who perform any Services, including the
Transitioned Employees, subject to and in accordance with this
Agreement.
1.28 "HP-OMS SOFTWARE" means (i) all Third Party Software licensed to and in
use by the Customer within the categories identified in Exhibit I
[HP-OMS Software and Customer Software Categories], (ii) all Third
Party Software included within the Add-On Assets, Transition Project
Assets, Refreshed Assets, New Customer Employee Assets any Third Party
Contracts, and Right to Use Assets; and (iii) all other Software owned
or licensed by HP-OMS included within the categories identified in
Exhibit I [HP-OMS Software and Customer Software Categories], to the
extent such other Software is used by HP-OMS in performing the
Services, or which is the subject of the Services, under this
Agreement (such other Software hereinafter, the "OTHER HP-OMS
SOFTWARE").
1.29 "INITIAL TERM" has the meaning set out in Section 20.1 (TERM).
1.30 "INTELLECTUAL PROPERTY RIGHTS" includes copyrights, patents, trademarks,
service marks, design rights, trade secrets and all other proprietary
rights whether registered or unregistered.
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1.31 "KEY PERSONNEL" means the HP-OMS Personnel designated in Exhibit G
[Project Staff and Key Contacts] as Key Personnel, which list may
change from time to time by mutual written agreement of the Parties;
provided that the number of Key Personnel shall not be less than three
(3) personnel providing Services under this Agreement.
1.32 "LEASED ADD-ON ASSETS" means all Hardware and Software licenses (excluding
Customer Software licenses) leased from HP-OMS, or any entity
designated by it, pursuant to the change management process set out in
Section 11 or similar process, the support and maintenance of which
will be included in the price of the lease and the license,
respectively, in accordance with Exhibit E.
1.33 "LOSSES" means all liabilities, damages, fines, penalties and claims
(including taxes), and all related costs and expenses (including
reasonable legal fees and disbursements and costs of investigation,
litigation, settlement, judgment, interest and penalties).
1.34 "MATERIALS" means, collectively, Software, source code literary works,
other works of authorship, specifications, design documents and
analyses, processes, procedures methodologies, programs, program
listings, documentation, reports, drawings, databases and similar work
product.
1.35 "MCC" means the Monitoring and Control Center, as more specifically
described in Exhibit D.
1.36 "GENERAL SETUP ASSETS" has the meaning set out in Exhibit E [Pricing and
Pricing Principles].
1.37 "MCC GENERAL SETUP COSTS" means the one-time, fixed setup cost set out in
Exhibit E [Pricing and Pricing Principles], Appendix E for HP-OMS'
setup and installation of the MCC General Setup Assets.
1.38 "NEW CUSTOMER EMPLOYEE ASSETS" means Hardware and Software, which HP-OMS
shall purchase and license, respectively, and provide to Customer,
upon receipt of Customer notice that it has increased the number of
Customer Employees, in accordance with Exhibits B and C.
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1.39 "OPERATIONS SERVICES" or "SERVICES" means collectively the services,
functions and responsibilities described in the Agreement as a
responsibility of HP-OMS and to be provided by HP-OMS for the benefit
of Customer, Customer Affiliates, and Customer Employees, whether
located at the Customer Sites or otherwise, all pursuant to this
Agreement and as they may be supplemented, enhanced, modified or
replaced during the Term in accordance with this Agreement, including,
without limitation: (i) the services described in Exhibit A -
[Services Description], Exhibit B - [Statement of Work] and Exhibit C
- [Service Level Agreement]; (ii) the Transition and Stabilization
Services described in Exhibit D; (iii) HP-OMS responsibilities with
respect to the supported Software described in Exhibit I [HP-OMS
Software and Customer Software Categories]; (iv) the Termination
Assistance Services described in Exhibit M [Termination Assistance];
and (v) any services provided pursuant to Section 11 (CHANGE
MANAGEMENT).
1.40 "OTHER HP-OMS SOFTWARE" has the meaning set out in the definition of
HP-OMS Software.
1.41 "PARTIES" shall mean both Customer and HP-OMS.
1.42 "PURCHASED ADD-ON ASSETS" means all Hardware and Software licenses
(excluding Customer Software licenses) purchased by Customer from
HP-OMS or a third party, the support and maintenance of which will be
added to the Target Price, in accordance with the change management
process set out in Section 11 or similar process.
1.43 "REFRESHED ASSETS" means Hardware and Software licenses (excluding
Customer Software licenses) purchased by HP-OMS pursuant to the
Technology Refresh Program.
1.44 "REQUIRED CONSENTS" means any consents, licenses or approvals required in
accordance with Section 7 (REQUIRED CONSENTS).
1.45 "RSC" means Regional Support Center, as more specifically described in
Exhibit D.
1.46 "RIGHT TO USE ASSETS" has the meaning set out in Exhibit E [Pricing and
Pricing Principles].
1.47 "SERVICE LEVEL CREDITS" has the meaning set out in Section 4.2(b) (SERVICE
LEVEL CREDITS).
1.48 "SERVICE LEVELS" means the predetermined, objective performance criteria
and services levels for delivery of Operations Services, as described
in Exhibits A (SERVICES DESCRIPTION), B (STATEMENT OF WORK) and C
(SERVICE LEVEL AGREEMENT) of this Agreement.
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1.49 "SOFTWARE" means one or more computer programs capable of operating on a
controller, processor or other hardware product, including
documentation relating thereto, the applicable source or object codes,
all updates and new releases thereof.
1.50 "HP-OMS SUBCONTRACTORS" means contractors, and consultants selected and
retained by HP-OMS.
1.51 "TARGET PRICE" means the price payable by Customer for performing the
Services, as specified (and adjusted) in accordance with Exhibit E -
[Pricing and Pricing Principles].
1.52 "TECHNOLOGY REFRESH PROGRAM" means the technology refresh program outlined
in Section 2.11 of Exhibit C, Appendix A.
1.53 "TERM" means collectively, the Initial Term the Extended Term and any
Termination Assistance Period.
1.54 "TERMINATION ASSETS" means, collectively, the Leased Add-On Assets,
Transition Project Assets, Refreshed Assets, and New Customer Employee
Assets and all related Third Party Contracts to which HP-OMS is a
party immediately prior to expiration or earlier termination of this
Agreement as permitted hereunder.
1.55 "TERMINATION ASSISTANCE PERIOD" has the meaning set out in Section 20.7(a)
(TERMINATION ASSISTANCE SERVICES)
1.56 "TERMINATION ASSISTANCE SERVICES" means the services provided by HP-OMS
at the Customer's request, after expiry or termination of this
Agreement for any reason to facilitate the orderly transfer of the
Services to Customer or to an alternative service provider nominated
by Customer, as set out in Section 20.7 (TERMINATION ASSISTANCE
SERVICES) herein.
1.57 "TERMINATION FEES" means the appropriate fees payable by Customer in the
case of early termination, as detailed in Exhibit E [Pricing and
Pricing Principles].
1.58 "THIRD PARTY CONTRACTS" means all agreements (including Software licenses,
Hardware leases and support and maintenance agreements) between third
parties and Customer or third parties and HP-OMS that have been or
will be used to provide, or which are the subject of, the Services, to
the extent a Party has financial or operational responsibility for
such contracts under this Agreement. Third Party Contracts shall
include, without limitation, (i) all such agreements transferred or
assigned to HP-OMS by agreement of the parties, as listed in Exhibits
O1 and O2, which Exhibits shall be finalized by the parties as of the
Commencement Date; (ii) all such agreements which are not transferred
or assigned to HP-OMS, but under which HP-OMS shall act as Customer's
agent, as listed in Exhibit O2, which Exhibit shall be finalized by
the parties as of the Commencement Date; and (iii) Post Due
Diligence-Pre Commencement Date Third Party Contracts (defined in
Section 3.1 (b); and (iv) those third party agreements entered into by
HP-OMS following the Commencement Date.
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1.59 "THIRD PARTY SOFTWARE" means all Software licensed under, or which is the
subject of, the applicable Third Party Contract.
1.60 "TRANSITION AND STABILIZATION PHASES" means the transition and
stabilization phases of the Services, commencing as of the
Commencement Date and expiring 12:00:01 a.m., Israel time, ten (10)
months following the Commencement Date, as specified in Section 12
(TRANSITION AND STABILIZATION PHASES), unless expressly extended in
writing by Customer.
1.61 "TRANSITION AND STABILIZATION SERVICES" means the Services provided by
HP-OMS during the Transition Period, in accordance with Exhibit D
[Transition and Stabilization] and this Agreement.
1.62 "TRANSITION MILESTONES" has the meaning set out in Section 12.1
(TRANSITION PLAN).
1.63 "TRANSITION PLAN" has the meaning set out in Section 12.1 (TRANSITION
PLAN).
1.64 "TRANSITION PROJECT ASSETS" means Hardware and Software, including without
limitation the MCC General Setup Assets, the "Worldwide Network
Solution" deliverables and the technology gap projects, described in
Exhibit D, which shall be delivered and implemented at HP-OMS premises
or sites and at the appropriate Customer Sites during the Transition
and Stabilization Phases, in accordance with Exhibit D.
1.65 "TRANSITIONED EMPLOYEES" means the employees of Customer who accept
HP-OMS' offer of employment and become employed by HP-OMS pursuant to
the Employee Transfer Agreement (Exhibit F) and subject to the terms
and conditions of this Agreement. Upon being employed by HP-OMS, such
Transitioned Employees shall be deemed to be HP-OMS Personnel.
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2. SCOPE
2.1 PURPOSES. As part of organizational changes, and with the purpose of
decreasing its IT expenditures around the world while improving and
enhancing the internal IT environment and level of operation services,
Customer has decided to transfer the responsibility and the management
of its IT operations at the Customer Sites to HP-OMS, which will be
performed under the supervision of the Customer.
2.2 SERVICES; EMPLOYEE TRANSFER. HP-OMS will provide the Customer with
comprehensive outsourcing Services, including employee transfer, as
defined in the Employee Transfer Agreement, and the provision of IT
Services as more specifically detailed in this Agreement.
2.3 ELIGIBLE RECIPIENTS OF SERVICES. Throughout this Agreement, the Services
shall be provided to Customer for the benefit of Customer and its
Affiliates (including entities which may become Affiliates after the
Commencement Date). For the avoidance of doubt, Customer shall be
responsible for its Affiliates' compliance with Customer's obligations
hereunder; however, notwithstanding anything in the Agreement to the
contrary, Customer Affiliates shall have no liability under this
Agreement.
2.4 STRATEGIC PARTNERSHIP. The parties acknowledge and agree that this
Agreement reflects a strategic relationship between HP-OMS and the
Customer, in which the business successes of one party will have
corresponding benefits to the other. Accordingly, HP-OMS shall make
best efforts to assist Customer in the development of its MPM
business; each party will appoint a program manager dedicated to
oversee and manage such assistance, and a representative of the senior
management of each party shall meet on a quarterly basis after the
Commencement Date to monitor the progress of this strategic
relationship.
2.5 CONDITIONS PRECEDENT TO EFFECTIVE DATE.
(a) The effective date of this Agreement shall be the date on which both
of the following conditions have been satisfied (the "EFFECTIVE
DATE"): (i) Customer has obtained written approval from both the
Office of the Chief Scientist of the Israeli Ministry of Industry and
Trade and the Israel Investment Center to the mechanism set out in the
Services Agreement, including the applicable exhibits thereto, for
Customer's investment in Hardware and Software ("GOVERNMENT
APPROVAL"); and (ii) Customer has obtained approval from its board of
directors to the signing of this Agreement, which approval is
scheduled to occur on or before December 8, 2003; and HP-OMS has
obtained the approval of HP Corporate, which approval is scheduled to
occur on or before December 8, 2003.
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(b) Without derogating from subsection (a) above, Customer and HP-OMS
shall cooperate with each other to achieve their mutual goal of
obtaining Government Approval as soon as possible, but not later than
January 1, 2004. In the event that the Customer fails to obtain
Government Approval by January 1, 2004, the parties, in good faith,
shall use their best commercial efforts to resolve the matter to
obtain such approval on an expedited basis.
3. HP-OMS' OBLIGATIONS
3.1 SERVICES. In consideration for the Target Price, HP-OMS shall perform
the Operations Services in accordance with the terms and conditions of
this Agreement and for the Term of this Agreement beginning as of the
Commencement Date.
(a) AGREEMENT AND EXHIBITS. The Services shall consist of the services,
functions and responsibilities described in this Agreement and in all
Exhibits thereto, as they may evolve during the Term of this Agreement
or be supplemented, enhanced, modified or replaced in accordance with
this Agreement.
(b) INCLUDED SERVICES. If any services, functions or responsibilities not
specifically described in this Agreement (a) are an inherent and
necessary part of the Services or required for proper performance or
provision of the Services in accordance with this Agreement; or (b)
were performed preceding the Commencement Date by or for Customer
(provided that HP-OMS had knowledge or notice, obtained during the Due
Diligence Period, of such services, functions or responsibilities -
e.g., where reflected or a cost or amount allocated in Customer's or
its Affiliates' books or records), then they shall be deemed to be
included within the scope of the Services to be delivered for the
Target Price, as if such services, functions or responsibilities were
specifically described in this Agreement (collectively, "INCLUDED
SERVICES"). Notwithstanding the foregoing, Included Services shall
also mean operational and financial responsibility for services,
functions and responsibilities not specifically described in this
Agreement but included under Third Party Contracts between Customer
and third parties, signed after the last day of the Due Diligence
Period (i.e., after December 31, 2002) but prior to the Commencement
Date ("POST DUE DILIGENCE-PRE COMMENCEMENT DATE THIRD PARTY
CONTRACTS"); provided, however that HP-OMS shall have financial
responsibility for such Post Due Diligence-Pre Commencement Date Third
Party Contracts only from the Commencement Date until the end of the
Transition and Stabilization Phases, after which time Customer shall
bear such financial responsibility. In addition, if requested by
HP-OMS, Customer shall terminate such Post Due Diligence-Pre
Commencement Date Third Party Contracts, where early termination
thereunder is permitted without penalty, provided that HP-OMS
continues to bear throughout the Term operational responsibility for
the services and functions otherwise performed under such terminated
contracts. Any dispute between the Parties as to the scope of Services
shall be resolved in accordance with Section 21.7 (DISPUTE RESOLUTION
PROCESS).
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3.2 CHANGES TO THE SERVICES. Except as may be necessary on an emergency basis
to maintain the continuity of the Services, HP-OMS may not, without
Customer's consent, modify (a) the composition or nature of the
Services or (b) the manner in which the Services are provided or
delivered if such modification(s) would have an adverse effect on the
business of Customer.
4. SERVICE LEVELS
4.1 INCLUDED SERVICES. HP-OMS shall perform Included Services at the same
levels of accuracy, quality, completeness, timeliness, responsiveness
and productivity that apply to Services which are specifically
described in the Agreement, as would be determined (a) by a reasonable
person or (b) by reference to the HP IT Service Management Reference
Model.
4.2 COMPLIANCE WITH SERVICE LEVELS.
(a) ULTIMATE HP-OMS RESPONSIBILITY. HP-OMS shall provide the Services at
all Customer Sites in accordance with the Service Levels, commencing
on the date which is ten (10) calendar months after the Commencement
Date. HP-OMS shall be responsible for meeting or exceeding the
applicable Service Levels even where doing so is dependent on the
provision of Services by HP-OMS Subcontractors.
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(b) SERVICE LEVEL CREDITS. HP-OMS recognizes that Customer is paying
HP-OMS to deliver the Services at specified Service Levels. If HP-OMS
fails to meet such Service Levels, then HP-OMS shall pay or credit to
Customer the performance credits specified in Exhibit C ("SERVICE
LEVEL CREDITS") in recognition of the diminished value of the Services
resulting from HP-OMS' failure to meet the agreed upon level of
performance, and not as a penalty. The Service Level Credit
reimbursement will be done according to the mechanism detailed in
Exhibit C section 1.6 (G) Service Level Credits shall not be HP-OMS'
sole liability or Customer's exclusive remedy for failure to meet the
Service Levels.
4.3 PROBLEM ANALYSIS. If HP-OMS fails to provide Services in accordance with
the Service Levels and this Agreement, HP-OMS shall (after restoring
service or otherwise resolving any immediate problem) (i) promptly
investigate and report on the causes of the problem; (ii) provide a
root cause analysis of such failure (i.e., diagnosing the problem at
the lowest reasonable level) ("ROOT CAUSE ANALYSIS") as soon as
practicable, after such failure or Customer's request (iii) use all
commercially reasonable efforts to implement remedial action and begin
meeting the Service Levels as soon as practicable; (iv) advise
Customer of the status of remedial efforts being undertaken with
respect to such problem; and (v) demonstrate to Customer's reasonable
satisfaction that the causes of such problem have been or will be
corrected on a permanent basis. HP-OMS shall use all commercially
reasonable efforts to complete the Root Cause Analysis within fifteen
(15) working days; provided that, if it is not capable of being
completed within fifteen (15) working days using reasonable diligence,
HP-OMS shall complete such Root Cause Analysis as quickly as possible
and shall notify Customer prior to the end of the initial fifteen (15)
working day period as to the status of the Root Cause Analysis and the
estimated completion date. At any event, it is not intended that a
protracted Root Cause Analysis should unduly delay prompt resolution
of Service Level issues, including allocation of Service Level
Credits. HP-OMS shall provide the results of the Root Cause Analysis
to Customer in writing or comparable electronic media.
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4.4 MONITORING AND CONTROL; HELP DESK AND ASSET MANAGEMENT SYSTEMS. As part
of the Services, HP-OMS shall implement the monitoring and control,
help desk and asset management systems, tools and procedures, all as
set forth in Exhibits A, B and D, to measure and report on HP-OMS'
performance of the Services against the applicable Service Levels.
Customer or its designee shall have the right to audit all such
systems. HP-OMS shall provide Customer with on-line access (in
"read-only" mode) to up-to-date problem management data and other data
regarding the status of service problems, service requests and user
inquiries. HP-OMS also shall provide Customer with access to the data
used by HP-OMS to calculate its performance against the Service Levels
and the measurement and monitoring tools and procedures utilized by
HP-OMS to generate such data for purposes of audit and verification.
Customer shall not be required to pay for such measurement and
monitoring tools or the resource utilization associated with their
use.
4.5 NOTICE OF DEFAULT. If HP-OMS becomes aware of any failure by HP-OMS to
comply with its obligations under this Agreement or any other
situation (i) that has impacted or reasonably could impact the
maintenance of Customer's financial integrity or internal controls,
the accuracy of Customer's financial, accounting or human resources
records and reports or compliance with Customer's strategic decisions,
or (ii) that has had or reasonably could have any other material
adverse impact on the Services in question or the impacted business
operations of Customer, then HP-OMS shall immediately inform Customer
in writing of such situation and the impact or expected impact and
HP-OMS and Customer shall meet to formulate an action plan to minimize
or eliminate the impact of such situation.
4.6 REPORTS. As part of the Services HP-OMS shall provide monthly performance
reports to Customer in a form to be agreed upon between the Parties,
in accordance with Exhibit B.
4.7 BENCHMARKING OF SERVICE LEVELS.
(a) Customer may initiate a single benchmarking survey at any time during
the Initial Term following the second anniversary of the Commencement
Date. The purpose of such benchmarking survey is to ensure that HP-OMS
provides Customer with the technology and Services Levels equal to or
greater than other organizations receiving similar services and other
organizations in similar industries.
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(b) The selection of the agent to conduct such benchmarking survey will be
agreed upon by the Parties, and if the Parties are not able to agree
on the identity of such agent within thirty (30) days, the Customer's
independent auditor shall select the third party expert to conduct
such surveys and the methodology of such surveys.
(c) All costs incurred to conduct such benchmarking study will be borne by
Customer.
(d) Following receipt of the results of the benchmarking survey, and if
requested by Customer, HP-OMS will provide the Customer, within sixty
(60) days of study completion, with an action plan and schedule for
HP-OMS to implement the survey results with respect to the technology
or Service Levels for the Customer's approval, in accordance with the
change management process set out in Section 11; provided, that if
Customer approves such plan and schedule, (i) the Target Price shall
not be reduced as a result thereof; (ii) Costs and expenses relating
to addition of items which are not specified as in the scope of the
Services hereto will be fully borne and paid by Customer; (iii) HP-OMS
shall only be required by pay fifty percent (50%) of the fees and
costs that Customer would otherwise be responsible for paying under
the change management process, relating to changes of items which are
specified as in the scope of the Services..
5. HP-OMS PERSONNEL
5.1 QUALIFICATIONS OF HP-OMS PERSONNEL; HP RESPONSIBILITIES.
(a) HP-OMS may select qualified and reputable HP-OMS Personnel to fulfill
any of HP-OMS' obligations; provided, however, that HP-OMS will use
only HP-OMS Personnel that have the requisite technical skills,
competence, ability and qualifications to perform their portion(s) of
HP-OMS' obligations in accordance with the Services standard set out
in Section 14.1(a) (SERVICES STANDARD). Without limiting the
generality of the foregoing, HP-OMS shall ensure that all HP-OMS
Personnel performing Services for Customer shall be properly educated
and trained for the Services they are to perform, including but not
limited training in connection with Customer's special requirements
and internal IT procedures. In addition, HP-OMS shall assign (or cause
to be assigned) sufficient HP-OMS Personnel to provide the Services in
accordance with this Agreement. Prior to HP-OMS' use of any HP-OMS
Personnel, HP-OMS shall provide Customer the resumes of individual
HP-OMS Personnel, which resumes shall, among other things, include
specific information describing the requisite technical skills of such
HP-OMS Personnel.
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(b) Subject to Section 5.2 (CUSTOMER RIGHTS CONCERNING KEY PERSONNEL;
REPLACEMENT OF HP-OMS PERSONNEL), where HP-OMS Subcontractors are to
be used by HP-OMS for the provision of the Services, HP-OMS shall give
Customer reasonable prior notice specifying the components of the
Services affected, the scope of the proposed subcontract, and the
identity and qualifications of the proposed Subcontractor.
(c) HP-OMS shall at all times be responsible for any failure by any HP-OMS
Personnel to perform in accordance with this Agreement or to comply
with any duties or obligations imposed on HP-OMS under this Agreement
to the same extent as if such failure to perform or comply was
committed by HP-OMS or HP-OMS employees. HP-OMS shall guarantee the
performance of all such HP-OMS Personnel providing any of the Services
hereunder. HP-OMS shall be Customer's sole point of contact regarding
the Services, including with respect to payment.
5.2 CUSTOMER RIGHTS CONCERNING KEY PERSONNEL; REPLACEMENT OF HP-OMS
PERSONNEL. Throughout the Term: (a) HP-OMS shall use in the
performance of the Services and shall not replace or contract with any
additional Key Personnel or any communication or security Customer
Contractors utilized by Customer to provide the services (included
within the Services) prior to the Commencement Date under Third Party
Contracts, without receiving Customer's prior written approval; (b) at
Customer's request (for reasonable reasons, including without
limitation, those specified in Exhibit B, Appendix G), HP-OMS shall
promptly replace or cease to negotiate or contract with any HP-OMS
Personnel (or prospective HP-OMS Personnel) for the provision of the
Services; and (c) all other HP-OMS Personnel, shall not be replaced by
HP-OMS within the first twelve (12) months of engagement of such
HP-OMS Personnel in the provision of Services without Customer's prior
written approval, not to be unreasonably withheld.
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5.3 REQUESTED REPLACEMENT BY CUSTOMER. In the event that Customer determines
in accordance with Section 5.2(b) (CUSTOMER RIGHTS CONCERNING KEY
PERSONNEL; REPLACEMENT OF HP-OMS PERSONNEL) that a member of HP-OMS
Personnel should be replaced, then Customer shall give HP-OMS notice
to that effect requesting that such HP-OMS Personnel be replaced.
HP-OMS shall, upon Customer's request, replace as promptly as possible
such HP-OMS Personnel with an individual of suitable ability and
qualifications, without cost to Customer. Nothing in this provision
shall operate or be construed to limit HP-OMS' responsibility for the
acts or omissions of the HP-OMS Personnel.
5.4 MANAGEMENT OF HP-OMS PERSONNEL. Subject to Section 5.2 (CUSTOMER RIGHTS
CONCERNING KEY PERSONNEL; REPLACEMENT OF HP-OMS PERSONNEL):
(a) HP-OMS shall appoint a representative to supervise and coordinate
HP-OMS' performance of obligations, which shall be identified in
Exhibit G - [Project Staff and Key Personnel] ("HP-OMS Project
Manager"). The HP-OMS Project Manager shall be deemed one of the Key
Personnel and shall be located in Israel. HP-OMS shall not reassign or
replace the HP-OMS Project Manager during the first two (2) years of
his or her assignment as the HP-OMS Project Manager.
(b) HP-OMS will perform the Services using a dedicated list of people
detailed in E Exhibit G - [Project Staff and Key Personnel]. Any
change or addition to this list will be communicated to Customer's
Project Manager.
5.5 KEY PERSONNEL.
(a) APPROVAL OF HP-OMS' KEY PERSONNEL.
(i) The initial list of Key Personnel is set forth in Exhibit G.
Such list may be modified by the mutual written agreement of the
Parties. Neither Party will unreasonably withhold agreement to add or
substitute a person onto Exhibit G.
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(ii) HP-OMS shall notify Customer of HP-OMS Personnel that HP-OMS
suggests should be added to Exhibit G. HP-OMS shall introduce the
individual to the appropriate Customer representatives, shall provide
reasonable opportunity for Customer representatives to interview the
individual, and shall provide Customer with a resume and such other
information about the individual as may be reasonably requested by
Customer. If Customer objects to the proposed assignment, the Parties
shall attempt in good faith to resolve Customer's concerns on a
mutually agreeable basis. If the Parties have not been able to resolve
Customer's concerns within five (5) working days of Customer
communicating its concerns, HP-OMS shall not assign the individual to
that position and shall propose to Customer the assignment of another
individual of suitable ability and qualifications.
(b) CONTINUITY OF KEY PERSONNEL. HP-OMS shall cause each of the Key
Personnel to devote full time and effort to the provision of Services
under this Agreement. In the event of the voluntary resignation,
involuntary termination for cause, illness, disability or death of one
of its Key Personnel, HP-OMS shall (i) give Customer as much notice as
reasonably possible of such development, and (ii) expeditiously
identify and obtain Customer's approval of a suitable replacement.
Subject to Section 5.2 (CUSTOMER RIGHTS CONCERNING KEY PERSONNEL;
REPLACEMENT OF HP-OMS PERSONNEL), HP-OMS shall transfer, reassign or
remove one of its Key Personnel only after (i) giving Customer at
least ninety (90) days prior notice of such action, (ii) identifying a
suitable replacement in accordance with Section 5.5(a)(ii) (APPROVAL
OF HP-OMS' KEY PERSONNEL), and (iii) demonstrating to Customer's
reasonable satisfaction that such action will not have an adverse
impact on HP-OMS' performance of its obligations under this Agreement.
Subject to Section 5.2 (CUSTOMER RIGHTS CONCERNING KEY PERSONNEL;
REPLACEMENT OF HP-OMS PERSONNEL), under no circumstances shall HP-OMS
transfer, reassign or remove more than one third (1/3) of the Key
Personnel in any twelve (12) month period.
5.6 HP-OMS PERSONNEL NOT CUSTOMER EMPLOYEES. Except as otherwise expressly set
forth in this Agreement, the Parties intend to create an
independent contractor relationship and nothing in this Agreement
shall operate or be construed as making Customer or HP-OMS partners,
joint venturers, principals, joint employers, co-employers, agents or
employees of or with the other. No officer, director, employee, agent,
Affiliate, contractor or subcontractor retained by HP-OMS to perform
work on Customer's behalf hereunder shall be deemed to be an officer,
director, employee, agent, Affiliate, contractor or subcontractor of
Customer for any purpose. No officer, director, employee, agent,
Affiliate, or Contractor retained by Customer to perform work on
Customer's behalf with which HP-OMS cooperates hereunder shall be
deemed to be an officer, director, employee, agent, Affiliate,
contractor or subcontractor of HP-OMS for any purpose. HP-OMS, not
Customer, has the right, power, authority and duty to supervise and
direct the activities of the HP-OMS Personnel and to compensate such
HP-OMS Personnel for any work performed by them on Customer's behalf
pursuant to this Agreement. HP-OMS, and not Customer, shall be
responsible and therefore solely liable for all acts and omissions of
HP-OMS Personnel. Customer, not HP-OMS, has the right, power,
authority and duty to supervise and direct the activities of the
Customer's Personnel and to compensate such Customer's Personnel for
any work performed by them. Customer, and not HP-OMS, shall be
responsible and therefore solely liable for all acts and omissions of
Customer Employees.
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5.7 RETENTION OF HP-OMS PERSONNEL.
(a) TURNOVER RATE AND DATA. Subject to Section 5.5(b) (CONTINUITY OF
KEY PERSONNEL), if Customer determines that HP-OMS' turnover rate is
unacceptable and so notifies HP-OMS, HP-OMS shall within ten (10)
working days (i) provide Customer with data concerning HP-OMS'
turnover rate, (ii) meet with Customer to discuss the reasons for the
turnover rate, and (iii) submit a proposal for reducing the turnover
rate for Customer's review and approval. Notwithstanding any transfer
or turnover of HP-OMS Personnel, HP-OMS shall remain obligated to
perform the Services without degradation and in accordance with the
Service Levels.
(b) RESTRICTIONS ON PERFORMING SERVICES TO COMPETITORS; CHANGES TO
SYSTEM ADMINISTRATION PASSWORDS.
(i) HP-OMS shall not cause or permit, without Customer's prior
written consent, any HP-OMS Personnel performing Services in
connection with the RSC or the MCC to perform services for a Customer
Competitor while engaged in the provision of Services to Customer and
for an additional period of at least twelve (12) months immediately
following the date of termination of such HP-OMS Personnel's provision
of Services to Customer. Notwithstanding the foregoing, HP-OMS
Subcontractors (except individual HP-OMS Subcontractors) shall not be
subject to the twelve (12) month limitation above, provided that such
HP-OMS Subcontractors have continuing obligations of confidentiality
with respect to Customer's Confidential Information, at least to the
extent set out in Section 17 (CONFIDENTIAL INFORMATION) and for a
minimum period of three (3) years following the date of termination of
such Subcontractor's provision of Services to Customer. In addition,
during the Term, HP-OMS shall not utilize any RSC or the MCC dedicated
for Customer for the benefit of any third party that is a Customer
Competitor.
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(ii) HP-OMS shall change all HP-OMS Personnel system administration
passwords (permitting such HP-OMS Personnel access to Customer's
confidential and proprietary information, including any Customer Data)
within twenty-four (24) hours after any HP-OMS Personnel performing
system administration functions ceases to provide Services to
Customer. In addition, in the event that any RSC HP-OMS Personnel
receives a system administration password in order to perform a
Service for which the MCC is otherwise responsible, HP-OMS shall
change the relevant system administration passwords within twenty-four
(24) hours after completion of the Service by such RSC HP-OMS
Personnel. During the Transition and Stabilization Phases, HP-OMS
shall propose for Customer's approval, IT business procedures which
will mechanize and standardize the foregoing, and, upon Customer's
approval, shall implement such procedures throughout the Term and the
Termination Assistance Period.
(iii) Prior to the commencement of any HP-OMS Personnel's involvement
in the provision of the Services, HP-OMS shall ensure that such
individual has executed a confidentiality agreement, which is at least
as protective of Customer's Confidential Information as the terms and
conditions of Section 17 (CONFIDENTIAL INFORMATION), and survives in
all cases the termination of such HP-OMS Personnels' involvement in
the provision of the Services.
5.8 CONDUCT OF HP-OMS PERSONNEL.
(a) CONDUCT AND COMPLIANCE. While at Customer Sites, HP-OMS Personnel will
comply with the applicable rules and regulations regarding personal
and professional conduct generally applicable to personnel at such
Customer Sites, including but not limited to those rules which will
affect HP-OMS' provision and/or delivery of the Operations Services,
and of any subsequent changes thereto, provided they were advised to
HP-OMS in advance and in writing or made available to HP- OMS
Personnel by means generally used by Customer to disseminate such
information to its employees or contractors. HP-OMS Personnel shall
also comply with reasonable requests of Customer personnel pertaining
to personal and professional conduct and otherwise conduct themselves
in a businesslike manner.
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(b) IDENTIFICATION OF HP-OMS PERSONNEL. If requested by Customer in
writing, all HP-OMS Personnel shall clearly identify themselves as
HP-OMS Personnel and not as employees of Customer.
(c) RESTRICTION ON MARKETING ACTIVITY. Except for marketing
representatives expressly agreed to by HP-OMS and Customer, none of
the HP-OMS Personnel performing Services for Customer hereunder shall
conduct, without the prior written consent of Customer, any sales or
marketing activities directed at Customer or any third party, at any
Customer Site or any other location, for as long as such HP-OMS
Personnel are engaged in the provision of Services to Customer.
(d) SUBSTANCE ABUSE. HP-OMS shall immediately remove (or cause to be
removed) any HP-OMS Personnel who is known to be or reasonably
suspected of engaging in substance abuse while on a Customer Site or
while performing Services. In the case of reasonable suspicion, such
removal shall be pending completion of the applicable investigation.
Substance abuse includes the sale, attempted sale, possession or use
of illegal drugs, drug paraphernalia, or, to the extent not permitted
on Customer Sites, alcohol, or the misuse of prescription or
non-prescription drugs. HP-OMS represents and warrants that it has and
will maintain a substance abuse policy and that such policy will be
applicable to all HP-OMS employees performing Services under this
Agreement. HP-OMS represents and warrants that it shall require its
HP-OMS Subcontractors and Affiliates providing Services to have and
maintain such policy and practices and to adhere to this provision.
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5.9 MEALS AND SOCIAL EVENTS FOR ON-SITE HP-OMS PERSONNEL; HP-OMS
REIMBURSEMENT. Customer shall provide all HP-OMS Personnel, who are
working at a Customer Site on a full-time basis during at least 80% of
the applicable working week, with the same level of food, beverage and
access to social events that are provided to Customer Employees, as a
benefit of their employment with Customer at the applicable Customer
Site. HP-OMS shall credit Customer against Customer's obligation to
pay the fees due hereunder.
6. CUSTOMER OBLIGATIONS
6.1 COOPERATION WITH HP-OMS.
(a) Customer acknowledges that HP-OMS' ability to deliver the Services is
dependent upon Customer's and Customer's Affiliates' reasonable
cooperation with HP-OMS. Customer will comply with the Customer
obligations stated in this Agreement, as well as the payment
obligations specified in Exhibit E - [Pricing and Pricing Principles]
and the transition obligations specified in the Transition Plan
referenced in Section 12 (TRANSITION AND STABILIZATION PHASES), and
will perform and observe the Customer responsibilities outlined in all
Exhibits and attachments. Furthermore, Customer undertakes, subject to
Section 2.3 (ELIGIBLE RECIPIENTS OF SERVICES), that all of Customer's
Affiliates at the applicable Customer Site shall be familiar with the
relevant terms of this Agreement and that they shall abide by
Customer's responsibilities derived therefrom in a timely manner.
6.2 CUSTOMER PROJECT MANAGER(S). Customer shall appoint one or more
representative(s) (in Customer's discretion) to supervise and
coordinate Customer's performance of Customer's obligations, which
representatives shall be identified in Exhibit G - [Project Staff and
Key Contacts], as updated by the Parties from time to time. Customer
may change its representative(s) at any time upon thirty (30) days
prior written notice. Customer's Project Manager(s) shall be
authorized to act as the primary point of contact for HP-OMS in
dealing with Customer with respect to each Party's obligations under
this Agreement and issue all consents or approvals and make all
requests on behalf of Customer.
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6.3 PROVIDING ACCESS TO HP-OMS. Customer will provide HP-OMS with access to
and use of all information, Customer Sites, Customer Data, and/or
Customer Software and/or systems, internal resources, facilities,
access passwords as necessary to deliver the Operations Services,
subject to Section 5.7(b) (RESTRICTIONS ON PERFORMING SERVICES TO
COMPETITORS; CHANGES TO SYSTEM ADMINISTRATION PASSWORDS), Section 5.8
(CONDUCT OF HP-OMS PERSONNEL), Section 17 (CONFIDENTIAL INFORMATION),
and Section 21.2 (SECURITY).
6.4 DISCLOSURE OF QUARTERLY FINANCIAL RESULTS OF PARENT. Following the public
release of Customer's financial reports and upon written request from
HP-OMS, Customer shall procure that a management representative of
Tecnomatix Technologies Ltd. will meet with a representative of HP-OMS
to respond to questions concerning the quarterly financial results of
Tecnomatix Technologies Ltd., to the extent permissible under
applicable law.
7. REQUIRED CONSENTS
7.1 HP-OMS-ADMINISTRATIVE RESPONSIBILITY FOR REQUIRED CONSENTS. As part of the
Services, HP-OMS shall assume primary responsibility for all
administrative activities necessary to obtain all Required Consents
and notify relevant third parties: (i) in connection with it acting as
agent for Customer under the Third Party Contracts to which Customer
is a party in connection with HP-OMS' provision of the Services, in
accordance with Section 7.4 (HP-OMS AS CUSTOMER'S AGENT UNDER THIRD
PARTY CONTRACTS) below; (ii) to grant to Customer (where applicable)
the right to use and/or access the HP-OMS Software and HP-OMS
Hardware; (iii) to assign or transfer to Customer or its designee the
Termination Assets in accordance with Section 20.6(d) (TRANSFER OF
TERMINATION ASSETS ON TERMINATION/EXPIRATION OF AGREEMENT) following
the expiration or termination of this Agreement to the extent provided
in this Agreement; (iv) to assign or transfer to Customer any
Developed Materials, and (v) to otherwise use any Intellectual
Property Rights or materials, to the extent necessary for the purpose
of HP-OMS' performance of its obligations under this Agreement
(collectively, the "HP-OMS- RESPONSIBLE REQUIRED CONSENTS"). Customer
will cooperate with and assist HP-OMS in obtaining the HP-OMS
Responsible Required Consents by executing all documents reasonably
necessary, which are prepared or provided by HP-OMS.
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7.2 FINANCIAL RESPONSIBILITY. The responsibility for payment of transfer,
relicensing and/or termination fees and/or expenses associated with
obtaining any HP-OMS- Responsible Required Consents or terminating any
licenses or agreements as to which Required Consents cannot be
obtained shall be referred for resolution to the Dispute Resolution
Process, and the Parties will endeavor to equitably allocate any such
fees and/or expenses.
7.3 ACCESS TO CUSTOMER SITES. Customer shall be responsible for obtaining,
and shall pay and be liable against HP-OMS for any vendor fees
required or costs occurring in connection with and relating to
obtaining all Required Consents to grant HP-OMS the right to access
Customer Sites (including any fees, royalties and costs required to
provide HP-OMS such consents).
7.4 HP-OMS AS CUSTOMER'S AGENT UNDER THIRD PARTY CONTRACTS. Unless otherwise
directed by Customer (and subject to Section 7.5 (CONTINGENT
ARRANGEMENTS) below), HP-OMS is hereby appointed as Customer's agent
in connection with Customer's rights and obligations under Third Party
Contracts to the extent necessary to fulfill HP-OMS' obligations under
the Agreement and HP-OMS accepts such appointment. HP-OMS shall retain
operational and financial responsibility over such contracts and shall
so notify the relevant third party vendor/service supplier under the
applicable Third Party Contract.
7.5 CONTINGENT ARRANGEMENTS. Should an HP-OMS-Responsible Required Consent not
be obtained, despite HP-OMS' using all commercially reasonable
efforts, Customer and HP-OMS will cooperate with each other in
achieving a reasonable alternative arrangement for Customer to
continue to process its work with as minimal interference to its
business operations as is reasonable until such Required Consent is
obtained. Subject to the foregoing, if Customer shall retain financial
and/or operational responsibility for such Services, any payments to
be made by Customer to the third party for Services and related costs
to Customer will be reimbursed by HP-OMS. The Service Levels will not
apply to such Services for which operational responsibility is
retained by Customer. Except as otherwise expressly provided herein,
the failure to obtain any Required Consent shall not relieve HP-OMS of
its obligations under this Agreement.
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8. HARDWARE
8.1 SERVICES IN CONNECTION WITH HP-OMS HARDWARE. HP shall perform the Services
in connection with the HP-OMS Hardware in accordance with this
Agreement, including without limitation, complying with Section 14
(FUNDAMENTAL OBLIGATIONS; WARRANTIES AND DISCLAIMERS).
8.2 MINIMUM LEVEL OF HP-OMS HARDWARE MAINTENANCE. HP-OMS shall maintain all
HP-OMS Hardware in good working order, including without limitation
undertaking repairs and preventive maintenance on HP-OMS Hardware in
accordance with the applicable Hardware manufacturer's recommendations
and requirements, so as to be eligible for such manufacturer's
maintenance program on termination or expiration of this Agreement
("ELIGIBILITY REQUIREMENTS"); provided, that HP-OMS shall not be
required to meet the Eligibility Requirements with respect to any
HP-OMS Hardware owned or leased by Customer prior to the Commencement
Date, which Customer did not so maintain prior to the Commencement
Date.
8.3 FINANCIAL AND OPERATIONAL RESPONSIBILITY. HP-OMS shall be responsible for
all third party fees or expenses (including maintenance and/or support
charges, if any) on or after the Commencement Date associated with all
HP-OMS Hardware, and shall pay all amounts becoming due with respect
to such HP-OMS Hardware, and all related expenses (including pro rata
maintenance and/or support fees, if any), for periods on or after the
Commencement Date. In addition, HP-OMS shall be responsible for the
evaluation, procurement, testing, installation, use, support,
management, administration, operation and maintenance of such HP-OMS
Hardware and the performance, availability, reliability, compatibility
and interoperability of such HP-OMS Hardware and related Third Party
Contracts, each in accordance with this Agreement, including the
Service Levels and change management procedures.
8.4 TITLE TO HP-OMS HARDWARE.
(a) Subject to Section 20.6(d) (TRANSFER OF TERMINATION ASSETS ON
TERMINATION/EXPIRATION OF AGREEMENT), title to the Leased Add-On
Assets, Transition Project Assets, Refreshed Assets, and New Customer
Employee Assets is retained by HP-OMS, and Customer has no rights
thereto except as specifically permitted under this Agreement (the
"HP-OMS-OWNED HARDWARE"). Under no circumstances whatsoever shall
Customer be entitled to transfer to a third party any rights or
obligations in such assets, including rights to retain and/or to use
such assets. Without derogating from the above, Customer shall not
transfer such assets as a loan to any third party, nor shall it sell
it or cause it to be seized or mortgaged.
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(b) As between Customer and HP-OMS, title to all HP-OMS Hardware owned or
leased by Customer prior to the Commencement Date and all Purchased
Add-on Assets are retained by Customer, and HP-OMS has no rights
thereto, except for the sole purpose of providing the Services (the
"CUSTOMER-OWNED HARDWARE"). Under no circumstances whatsoever shall
HP-OMS be entitled to transfer to a third party, any rights or
obligations in such assets, including rights to retain and/or to use
such assets. Without derogating from the above, HP-OMS shall not
transfer such assets as a loan to any third party, nor shall it sell
it or cause it to be seized or mortgaged.
8.5 NON-INTERFERENCE WITH HP-OMS HARDWARE. Each party shall refrain from any
act or omission with regard to the HP-OMS Hardware, which may imply,
directly or indirectly, that HP-OMS or Customer is not the rightful
owner of the applicable HP-OMS Hardware (owned as set out in Section
8.4 (TITLE TO HP-OMS HARDWARE) above. Without derogating from the
above, (a) if requested by HP-OMS, the Customer hereby undertakes to
notify all relevant creditors or any other relevant institution that
the title of HP-OMS-Owned Hardware is vested exclusively with HP-OMS;
and (b) if requested by Customer, HP-OMS hereby undertakes to notify
all relevant creditors or any other relevant institution that the
title of Customer-Owned Hardware is vested exclusively with Customer.
HP-OMS shall be entitled to xxxx HP-OMS-Owned Hardware as its property
by attaching an appropriate legend to each item thereof, and Customer
shall be entitled to xxxx Customer-Owned Hardware as its property by
attaching an appropriate legend to each item thereof.
8.6 UPGRADE, MODIFICATION AND REPLACEMENT OF HP-OMS HARDWARE.
(a) Subject to clause (b) below, HP-OMS may upgrade, modify and replace
the HP-OMS Hardware, as HP-OMS, in its sole discretion, deems
appropriate, so long as HP-OMS does not change, and remains in
compliance with (i) the Service Levels, including but not limited to
HP-OMS' obligations in connection with the Technology Refresh Program;
(ii) all other relevant terms and conditions of this Agreement; and
(iii) the language of the upgraded, modified or replaced HP-OMS
Hardware (e.g., the language of the operating system and keyboard).
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(b) Any deviation by HP-OMS from Customer's standards with respect to
infrastructure Hardware (i.e., routers, switches, servers, storage and
backup devices, and communication lines), in effect prior to the
Commencement Date (which standards shall be documented by HP-OMS
during the Transition and Stabilization Phases), shall require
Customer's prior written consent, which shall not be unreasonably
withheld.
8.7 USE OF HP-OMS HARDWARE. Neither Party may use any HP-OMS Hardware for any
purpose other than Customer's business purposes (and any other act
which is reasonably incidental to such use).
9. SOFTWARE
9.1 LIMITED RIGHT TO USE CUSTOMER SOFTWARE. The Customer hereby grants
HP-OMS a right to use the Customer Software solely in connection with
HP-OMS' provision of the Services to Customer and to the extent
permitted under the applicable Third Party Software.
9.2 HP-OMS' PROVISION OF CUSTOMER SOFTWARE SERVICES. HP-OMS shall provide the
Services for the Customer Software in accordance with this
Agreement, including Exhibit B (the "CUSTOMER SOFTWARE SERVICES").
9.3 CUSTOMER SOFTWARE WARRANTIES. With respect to the Customer Software used
by HP-OMS to provide the Operation Services, and unless otherwise
specified in Exhibit B, the Customer represents and warrants that,
during the entire Term of this Agreement:
(a) Customer Software is and shall be supported under the applicable Third
Party Contract, at the same level as prior to the Commencement Date
and will continue to be supported by Customer or an authorized third
party, all to the extent set out in Exhibit B.
9.4 OTHER RIGHTS/OBLIGATIONS IN CONNECTION WITH CUSTOMER SOFTWARE
(a) HP-OMS reserves the right to move Customer Software and Customer Data
solely within the applicable Customer Site, upon written consent from
Customer, not to be unreasonably withheld.
(b) Customer may change the location of Customer Software upon prior
written notice to HP-OMS, subject to the terms and conditions of
Exhibit B.
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(c) Customer is responsible for paying the applicable third party supplier
of Customer Software the applicable fee entitling Customer to receive
Customer Software updates.
9.5 CUSTOMER'S RIGHT TO USE HP-OMS SOFTWARE. HP-OMS grants to Customer a
non-exclusive, royalty-free right, in object code form, to use all
Software included within the Termination Assets throughout the Term,
subject to Section 20.6(d) (TRANSFER OF TERMINATION ASSETS ON
TERMINATION/EXPIRATION OF AGREEMENT), except with respect to Other
HP-OMS Software, which shall be provided to Customer on a
non-exclusive, right to use, paid-up, perpetual basis.
9.6 HP-OMS' PROVISION OF HP-OMS SOFTWARE SERVICES; FINANCIAL RESPONSIBILITY.
(a) HP-OMS shall provide the Services in connection with the HP-OMS
Software in accordance with this Agreement. Without limiting the
generality of the foregoing, any support or maintenance services
provided by HP-OMS with respect to the HP-OMS Software shall be
performed in accordance with the applicable HP-OMS Software
documentation, supplier recommendations and requirements.
(b) HP-OMS shall be responsible for any third party fees or expenses on or
after the Commencement Date associated with the provision of the
Services described in this Agreement with respect to HP-OMS Software
and related Third Party Contracts, and shall pay all amounts becoming
due under such licenses or related agreements, and all related
expenses (including any maintenance and/or support charges) for
periods on or after the Commencement Date.
(c) Customer shall be responsible for any third party fees or expenses due
prior to the Commencement Date with respect to HP-OMS Software and
related Third Party Contracts, and shall pay all amounts due under
such licenses or related agreements, and all related expenses
(including any maintenance and/or support charges) for periods prior
to the Commencement Date.
9.7 PARTIES' COMPLIANCE WITH HP-OMS SOFTWARE AND CUSTOMER SOFTWARE LICENSE
TERMS. Each party undertakes to abide by the provisions of the license
to use terms and conditions of each HP-OMS Software and Customer
Software (including every revision or update), as well as by all
instructions concerning manufacturer's copyright in the Software
and/or any relevant documentation.
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9.8 SOURCE CODE ESCROW OF THIRD PARTY HP-OMS SOFTWARE. To the extent permitted
by applicable third party licensors, HP-OMS will add Customer as a
beneficiary to any source code escrow agreements entered into by
HP-OMS under HP-OMS Software licenses received by HP-OMS from third
parties (other than Software licenses owned or leased by Customer
prior to the Commencement Date, which are used by HP-OMS to perform
the Services).
9.9 HP-OMS' OPERATIONAL RESPONSIBILITY. In connection with HP-OMS' obligations
under Third Party Contracts, HP-OMS shall be responsible for enforcing
(and shall enforce) all of Customer's and HP-OMS' rights for (and
shall comply with the applicable operational obligations in connection
with) the evaluation, procurement, testing, installation, use,
support, management, administration, operation and maintenance of all
HP-OMS Software. In addition, HP-OMS shall be responsible for
enforcing (and shall enforce) all of its rights for (and shall comply
with the applicable operational obligations in connection with) the
performance, availability, reliability, compatibility and
interoperability of such HP-OMS Software, each in accordance with this
Agreement, including the Service Levels and change management
procedures. HP-OMS shall have the same operational responsibilities as
described above with respect to Customer Software, to the extent of
HP-OMS' "Make it Work" obligations set out in Exhibit B, except that
HP-OMS shall not be responsible for evaluation and testing (in excess
of fifty (50) hours of evaluation/testing) for each such Customer
Software.
10. PRICE AND PAYMENT
10.1 TARGET PRICE AND BANK OF WORK HOURS INVOICING AND PAYMENT. In
consideration of HP-OMS providing the Services as described in this
Agreement, Customer shall pay to HP-OMS the Target Price. The Target
Price shall be invoiced on a quarterly basis, in accordance with the
payment schedule detailed in Exhibit E - [Pricing and Pricing
Principles]. HP-OMS shall adjust the Target Price all as specified in
Exhibit E - [Pricing]. In consideration of HP-OMS providing the
Services outside of the "Service Window" hours (specified in Exhibit
C,), Customer shall pay to HP-OMS the Bank of Work Hours hourly rates,
described in Exhibit E. The invoice for such hourly work shall be
delivered to Customer on a monthly basis, together with all supporting
information reasonably requested by Customer, as more specifically set
out in Exhibit E. Except as otherwise set forth herein, HP-OMS shall
not invoice Customer for any advance or concurrent charges or other
amounts. All HP-OMS expenses relating to the Services (including
travel and living expenses) are included in the Target Price and Bank
of Work Hours hourly rates and shall not be reimbursed by Customer
unless agreed to by Customer in writing.
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10.2 APPLICATION OF CREDITS/LIQUIDATED DAMAGES. To the extent a credit
(including but not limited to a Service Level Credit) is due to
Customer pursuant to this Agreement, HP-OMS shall provide Customer
with an appropriate undisputed credit (in the invoice immediately
following the date of such credit), applied against amounts then due
and owing; if no further payments are due to HP-OMS, HP-OMS shall pay
such undisputed amounts to Customer within thirty (30) days.
10.3 INVOICING; DATE OF PAYMENT OF INVOICES. HP-OMS shall issue quarterly
invoices for all payments due under this Agreement not earlier than
the first day of the first month of each quarter in which the
quarterly Target Price is due hereunder. Subject to Section 10.5
(ESCROW OF DISPUTED AMOUNTS), Customer shall make payment of the
Target Price due under this Agreement, as specified in Exhibit E
hereto.
10.4 TAXES. Each party shall bear its own tax obligation, all as specified in
Exhibit E hereto.
10.5 ESCROW OF DISPUTED AMOUNTS.
(a) In the event Customer disputes in good faith any amount claimed to be
payable by HP-OMS under the Agreement, Customer shall pay the disputed
amount into escrow, in accordance with Subsection (c) below.
(b) In the event HP-OMS disputes in good faith any credit (including but
not limited to a Service Level Credit), which may be due to Customer
pursuant to this Agreement, (i) Customer shall pay the disputed sum
into escrow, in accordance with Subsection (c) below, provided that
payments other than the disputed amounts remain to be paid under the
Agreement; or (ii) HP-OMS shall pay the disputed sum into escrow, in
accordance with Subsection (c) below, if no further payments are due
to HP-OMS under the Agreement.
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(c) In the event of a disputed amount payable into escrow as described in
Section 10.5 (DISPUTED AMOUNTS), the party with the obligation to pay
shall so pay such disputed amount in full (the "DISPUTED AMOUNT") to
Advocate Xxxxx Xxxxxxx, Advocate of Tel Aviv (or to any other party
agreed upon in advance and in writing by the parties), as escrow agent
for the parties (the "ESCROW AGENT"), in accordance with an escrow
agreement to be executed among Customer, HP-OMS and the Escrow Agent,
a signed copy of which shall be attached to this Agreement as Exhibit
P [Escrow Agreement] within thirty (30) days from the Commencement
Date (the "ESCROW AGREEMENT"). The escrow agreement shall provide,
among other things, that any amounts desposited with the the Escrow
Agent shall not be released to either party, until the dispute is
resolved in accordance with Section 21.7 (DISPUTE RESOLUTION PROCESS)
and the Escrow Agent receives either (i) written notice signed by both
parties with instructions directing the release of the Disputed
Amount; or (ii) a final, unappealable judgment signed by a court of
competent jurisdiction in Israel ordering the release of the Dispute
Amount to one of the parties. Unless otherwise agreed by the parties,
the Escrow Agreement shall further provide that each party shall
indemnify, defend and hold harmless the Escrow Agent from any claims,
actions, damages, fees and expenses, costs, reasonable attorney's fees
and other liabilities incurred by the Escrow Agent relating to this
escrow arrangement except where it is adjudged that the Escrow Agent
has acted with gross negligence or willful misconduct.
10.6 INTEREST ON UNPAID AMOUNTS. Interest on amounts in arrears shall be
computed and paid as specified in Exhibit E.
10.7 CREDITS/REIMBURSEMENT FOR CUSTOMER PAYMENTS COVERING PERIODS AFTER
COMMENCEMENT DATE. Except as otherwise permitted hereunder, Customer
shall not make any payments (whether prior to or after the
Commencement Date) to any third party in consideration for Services,
Software, Hardware or other materials to be provided or performed on
or after the Commencement Date by HP-OMS or a third party for which
HP-OMS has financial responsibility hereunder, with the intention of
diminishing the Services to be provided by HP-OMS hereunder, without
the prior written authorization by HP-OMS. If HP-OMS has authorized
such payments or if such payments are made by Customer in good faith -
it shall promptly credit Customer against amounts then due and owing
hereunder to HP-OMS; if no further payments are due and owning to
HP-OMS, HP-OMS shall pay such amounts to Customer within thirty (30)
days. If HP-OMS pays for services, Software, Hardware or other
materials after the Commencement Date for services Software, Hardware
or other materials provided to Customer prior to the Commencement
Date, Customer shall reimburse HP-OMS in such amounts.
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10.8 GUARANTEE FROM TECNOMATIX TECHNOLOGIES LTD. In addition to its other
rights and remedies against Customer under this Agreement, in the
event of a breach by Customer hereunder, HP-OMS may, at any time,
exercise its rights as a beneficiary to the Guarantee, executed by
Tecnomatix Technologies Ltd, attached hereto as Exhibit K.
10.9 CERTAIN GOVERNMENT INCENTIVES. In connection with certain government
incentives available or which may become available to Customer,
Customer has committed or may commit in the future through itself, its
divisions, and Affiliates to expend funds or make investments or
expenditures which may include the purchase of products or services,
currency or capital investments, technology transfers through
licensing or other arrangements, real property leases or purchases,
and lease buy-back arrangements. Since it is anticipated that HP-OMS
may be making or accomplishing such qualifying investments on behalf
of Customer, each Party shall utilize its best efforts, consistent
with all preexisting commitments and applicable legal requirements, in
order to afford Customer the benefit of all such incentives which are
available as a result of the performance of Services under this
Agreement. HP-OMS shall make information available to Customer on a
periodic basis as to the nature and amount of investment activities it
is planning in respect of the Services, and shall provide Customer
with such certificates and other appropriate documentation as are
necessary to support utilization by Customer of such incentives.
10.10 AUDIT RIGHTS.
(a) HP-OMS RECORDS. HP-OMS shall, and shall cause HP-OMS Subcontractors
to, maintain complete and accurate records of and supporting
documentation for all fees chargeable hereunder, all Customer Data and
all transactions, soft document access, reports, data or information
created, generated, processed or stored by HP-OMS in the performance
of its obligations under this Agreement, including in respect of the
Service Levels ("CONTRACT RECORDS"). HP-OMS shall maintain such
Contract Records with respect to the Termination Assets in accordance
with generally accepted accounting principles applied on a consistent
basis and generally accepted auditing standards and in accordance with
the financial record management provisions of Exhibit E, and with
respect to other obligations under the Agreement, in accordance with
HP-OMS' record retention policy as it may be modified from time to
time and provided to HP-OMS in writing.
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(b) OPERATIONAL AUDITS. HP-OMS shall, and shall cause HP-OMS
Subcontractors to, provide to Customer (and auditors and other
representatives) access at reasonable hours to HP-OMS Personnel, to
the facilities at or from which Services are then being provided, and
to HP-OMS records and other pertinent information, all to the extent
relevant to the Services and HP-OMS' obligations under this Agreement.
Such access shall be provided for the purpose of performing audits and
inspections of HP-OMS and HP-OMS Personnel in respect of Customer and
its businesses, to (i) verify HP-OMS' compliance with this Agreement
(ii) enable Customer to meet applicable legal, regulatory and
contractual requirements and (iii) to verify the accuracy and
completeness of fees (other than the Target Price). HP-OMS shall
provide any assistance reasonably requested by Customer or its
designee in conducting any such audit, including installing and
operating audit software. Without limiting Customer's other rights and
remedies under this Agreement, if an audit reveals a material breach
of this Agreement or an overcharge by HP-OMS, HP-OMS shall promptly
reimburse Customer for the actual cost of such audit, together with
interest on the difference between the overcharged and the correct
amounts from the date of HP-OMS' receipt of such overcharge at the
rate set out in Section 10.6 (INTEREST ON UNPAID UNDISPUTED AMOUNTS).
If an undercharge has occurred, Customer will reimburse HP-OMS to the
extent of such undercharge.
(c) QUARTERLY REPORT BY HP-OMS. Within fourteen (14) business days after
the end of each calendar quarter, HP-OMS shall provide Customer with a
report containing a list of the Termination Assets, initial book
value, accumulated depreciation, net book value, and calculated years
for depreciation per asset, as set out in HP-OMS' financial records,
and any other relevant information requested by Customer to confirm
compliance with HP-OMS' financial record management obligations, as
set in Exhibit E, Appendix F.
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(d) FINANCIAL AUDITS. Except as provided below, Customer shall have no
right to carry out, either directly or through a third party any
financial audit of HP-OMS, or HP-OMS's Subcontractors. HP-OMS's
auditors shall provide to Customer on a quarterly basis and at any
other reasonable times if so requested by Customer, at the cost of
HP-OMS, confirmation of HP-OMS' compliance with its obligations with
respect to the Termination Assets as set out in Exhibit E, as well as
(i) a list describing each of the Termination Assets, (ii) the initial
book value of the asset, (iii) years for depreciation, (iv) method of
depreciation; (v) net book value, and (vi) any other reasonable detail
requested by Customer. If any such audit reveals non-compliance,
HP-OMS shall promptly correct such noncompliance in its financial
records.
In accordance with the foregoing, during the Term of this Agreement
and for a period of seven (7) years after termination or expiration of
this Agreement, HP-OMS shall provide to Customer (and auditors and
other representatives) access at reasonable hours to HP-OMS' Contract
Records to the extent relevant to the performance of HP-OMS'
obligations under this Agreement (and any other Contract Records
relevant to the requirements of such governmental agencies), if and to
the extent required by any applicable governmental authority. HP-OMS
shall provide any assistance reasonably requested by Customer or its
designee in conducting any such audit.
11. CHANGE MANAGEMENT
11.1 CHANGE REQUESTS. Customer or HP-OMS may submit a written Change Request
to initiate changes in the Services as detailed in Exhibit B. The
Change Request shall be managed in accordance with the process
described in the Change Management chapters in Exhibit B - [Statement
of Work] and Exhibit E - [Pricing and Pricing Principles]).
11.2 CHANGE REQUEST ORDERS. HP-OMS will advise Customer of the resultant impact
of the Change Request on price and schedule within the time frame
prescribed in Exhibit B - [Statement of Work]. Prior to
implementation, all Change Requests must be mutually agreed upon in
writing by the Parties. Pending such agreement, HP-OMS shall continue
to perform and to be paid as if such Change Request had not been
requested or recommended. Once a Change Request Order is signed by the
Parties and implemented, HP-OMS will adjust Customer's invoice in
accordance with the agreed terms of the Change Request order. However,
the price of changes requiring up to fifty (50) person hours of work
(per change request) shall be charged at the Bank of Work Hours rates,
identified in Exhibit E - [Pricing and Pricing Principles]; provided,
that HP-OMS shall perform the first fifty (50) person hours of work
per calendar year, otherwise chargeable at the Bank of Work Hours
rates, free of charge.
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11.3 CUSTOMER'S RIGHT TO USE CUSTOMER CONTRACTORS. Nothing in this Agreement
shall be construed as a requirements or exclusive contract, and
notwithstanding anything to the contrary contained herein, this
Agreement shall not be interpreted to prevent Customer from obtaining
from Customer Contractors, or providing to itself, any or all of the
same or similar Services described in this Agreement. For the
avoidance of doubt, this Section shall not limit HP-OMS' obligations
to perform, and Customer's obligations to pay for, the Services in
accordance with the terms and conditions of this Agreement.
11.4 HP-OMS COOPERATION. HP-OMS shall fully cooperate with and work in good
faith with Customer or Customer Contractors as requested by Customer
and at no additional charge to Customer. Such cooperation shall
include: (i) timely providing access to any facilities being used to
provide the Services, as necessary for Customer personnel or Customer
Contractors to perform the work assigned to them; (ii) timely
providing reasonable electronic and physical access to the business
processes and associated Hardware and Software, to the extent
necessary and appropriate for Customer Employees or Customer
Contractors to perform the work assigned to them; (iii) timely
providing written requirements, standards, policies or other
documentation for the business processes and associated Hardware or
Software procured, operated, supported or used by HP-OMS in connection
with the Services; or (v) any other cooperation or assistance
reasonably necessary for Customer Employees or Customer Contractors to
perform the work in question. Customer Employees and Customer
Contractors shall comply with HP-OMS' security and confidentiality
requirements, and shall, to the extent performing work on Software or
Hardware for which HP-OMS has operational responsibility, comply with
HP-OMS' standards, methodologies, and procedures.
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12. TRANSITION AND STABILIZATION PHASES
12.1 TRANSITION PLAN. The Parties have agreed upon a transition plan for the
transfer of the responsibilities relating to the Services from
Customer to HP-OMS, which Plan is detailed in Exhibit D - [Transition
and Stabilization] (the "TRANSITION PLAN"). Such Transition Plan shall
be implemented during the Transition and Stabilization Phases. Exhibit
D identifies, among other things (i) the transition and stabilization
activities to be performed by HP-OMS and the significant components
and subcomponents of each such activity, (ii) the Deliverables to be
completed by HP-OMS, (iii) the date(s) by which each such activity or
Deliverable is to be completed (the "TRANSITION MILESTONES"), and (iv)
any transition responsibilities to be performed or transition
resources to be provided by Customer. In addition, within thirty (30)
after the Commencement Date, HP-OMS shall prepare and deliver to
Customer for Customer's review, comment and approval a detailed work
plan based on and consistent with Exhibit D. Such detailed work plan
shall become a part of Exhibit D and be incorporated therein.
12.2 PERFORMANCE. As part of the Services, HP-OMS shall perform the Transition
and Stabilization Services described in Exhibit D in accordance with
the Transition Milestones set forth therein. HP-OMS shall provide all
cooperation and assistance reasonably required or requested by
Customer in connection with Customer's evaluation or testing of the
Deliverables set forth in Exhibit D. HP-OMS shall perform the
Transition and Stabilization Services so as to avoid or minimize to
the extent possible (i) any material disruption to or adverse impact
on the business or operations of Customer, (ii) any degradation of the
Services then being received by Customer, or (iii) any material
disruption or interference with the ability of Customer to obtain the
full benefit of the Services, except as may be otherwise provided in
Exhibit D.
12.3 DISCLOSING KNOWN RISKS; AVOIDING DELAYS. Prior to undertaking any
transition activity, HP-OMS shall discuss with Customer all known
Customer-specific material risks and shall not proceed with such
activity until Customer is reasonably satisfied with the plans with
regard to such risks (provided that, neither HP-OMS' disclosure of any
such risks to Customer, nor Customer's acquiescence in HP-OMS' plans,
shall operate or be construed as limiting HP-OMS' responsibilities
under this Agreement). HP-OMS shall identify and resolve, with
Customer's reasonable assistance, any problems that may impede or
delay the timely completion of each task in Exhibit D that is HP-OMS'
responsibility and shall use all commercially reasonable efforts to
assist Customer with the resolution of any problems that may impede or
delay the timely completion of each task in Exhibit D that is
Customer's responsibility.
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12.4 REPORTS. Key Personnel shall meet at least weekly with Customer's Project
Manager(s) to report on HP-OMS' progress in performing its
responsibilities and meeting the timetable set forth in Exhibit D.
HP-OMS also shall provide written reports to Customer at least weekly
regarding such matters, and shall provide oral reports more frequently
if reasonably requested by Customer. Promptly upon receiving any
information indicating that HP-OMS may not perform its
responsibilities or meet the timetable set forth in Exhibit D, HP-OMS
shall notify Customer in writing of material delays and shall identify
for Customer's consideration and approval specific measures to address
such delay and mitigate the risks associated therewith. After the
Transition and Stabilization Phases are completed, HP-OMS will provide
Customer with periodic reports as described in Exhibit B - [Statement
of Work].
12.5 INFORMATION REQUESTED/PROVIDED DURING DUE DILIGENCE PROCESS. Customer
hereby represents and warrants that it has provided HP-OMS with access
to Customer's relevant books and records during the Due Diligence
Process. However, if, during the Transition and Stabilization Phases,
HP-OMS discovers that such access was not provided, HP-OMS and
Customer will discuss in good faith the need to amend the Agreement to
provide for an equitable adjustment to the Target Price, considering
all the facts and circumstances surrounding such material inaccuracy
or deficiency. If Customer or HP-OMS disputes the need for or the
extent of such equitable adjustment, Customer and HP-OMS will
initially submit the matter to the Dispute Resolution Process defined
in Section 21.7 (DISPUTE RESOLUTION PROCESS). For the avoidance of
doubt, Customer shall have no responsibility (and the Target Price
shall not be adjusted) if HP-OMS had knowledge or notice, obtained
during the Due Diligence Period, of services, functions or
responsibilities performed by or for the Customer prior to the
Commencement Date - e.g., where reflected or a cost or amount
allocated in Customer's or its Affiliates' books or records.
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13. TESTING AND ACCEPTANCE TEST PROCEDURES
13.1 TESTING. At the end of each Transition Milestone and in accordance with
the Transition Plan, and at the end of each milestone identified in
any statement of work or upon delivery of any new Hardware or Software
(i.e., after the Transition and Stabilization Phases), HP-OMS, as part
of the Services, shall conduct testing of the deliverables thereunder
(the "DELIVERABLES") during an agreed acceptance testing period to
determine if the Deliverables are in compliance with the agreed
testing criteria and specifications ("ACCEPTANCE TEST(S)") and shall
permit Customer (in its sole discretion) to witness or participate in
the Acceptance Test. If HP-OMS determines that the Deliverables for
the applicable Transition Milestone have passed the Acceptance Test,
HP-OMS shall so notify Customer. If the Deliverables successfully
complete the Acceptance Tests during the Acceptance Test Period,
Customer shall indicate its written acceptance thereof and deliver
such acceptance to HP-OMS. If the applicable Acceptance Test reveals
any noncompliance with such acceptance criteria and specifications
("NONCOMPLIANCE"), HP-OMS shall promptly (and in a manner that does
not delay completing the Transition and Stabilization Services within
the Transition Milestones): (i) so notify Customer in writing (ii)
remedy the Noncompliance; and (iii) re-perform the Acceptance Test for
Customer's approval (under the same procedures for the initial
Acceptance Test).
14. FUNDAMENTAL OBLIGATIONS; WARRANTIES AND DISCLAIMERS
14.1 CERTAIN HP-OMS FUNDAMENTAL OBLIGATIONS. HP-OMS' fundamental obligations
under the Agreement shall include, without limitation, the following:
(a) SERVICES STANDARD. HP-OMS will perform the Operations Services with
promptness and diligence, in a professional and workmanlike manner in
accordance with the Services Levels, in accordance with the ITSM
guidelines and HP best known practices for the applicable service
level. HP-OMS shall provide on or before the Commencement Date a copy
of the applicable ITSM guidelines.
(b) HP-OMS PERSONNEL. HP-OMS shall use adequate numbers of qualified
individuals with suitable training, education, experience, competence
and skill to perform the Services. HP-OMS shall provide such
individuals with training as to new products and services prior to the
implementation of such products and services in the Customer
environment.
(c) HARDWARE/SOFTWARE MAINTENANCE. Unless otherwise agreed, HP-OMS shall
maintain the HP-OMS Hardware and HP-OMS Software so that they operate
substantially in accordance with the Service Levels and their
specifications.
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(d) THIRD PARTY HARDWARE/SOFTWARE NO LONGER SUPPORTED. For third party
HP-OMS Hardware and HP-OMS Software no longer supported by the third
party licensor or manufacturer, HP-OMS shall use commercially
reasonable efforts to perform maintenance for such HP-OMS Hardware or
HP-OMS Software, as required.
(e) TECHNOLOGY REFRESH. At all times throughout the Term, HP-OMS shall
upgrade or replace HP-OMS Hardware in accordance with the Technology
Refresh Program.
(f) SOFTWARE CURRENCY. At all times throughout the Term, HP-OMS shall
upgrade or replace HP-OMS Software as necessary to satisfy its
obligations under this Agreement according to Exhibit C, at no
additional cost to Customer; provided, HP-OMS shall utilize at least
the second to most (if not the most) updated version of such Software.
(g) HP-OMS SOFTWARE. Any HP-OMS Software will comply with its
specifications and will provide the functions and features and operate
in the manner described therein, subject to any software
manufacturer-caused errors.
(h) DEVELOPED MATERIALS. Developed Materials shall be free from material
errors in operation and performance, shall comply with their
documentation and the applicable specifications in all material
respects and shall provide the functions and features and operate in
the manner agreed by the Parties.
(i) NONCONFORMITY. In the event that the HP-OMS Software or Developed
Materials do not comply with the applicable specifications and
criteria set forth in this Agreement, and/or materially and adversely
affect the Services provided hereunder and subject to subsection (g)
above, HP-OMS shall repair in accordance with the Service Levels or
replace such HP-OMS Software or Developed Materials with conforming
HP-OMS Software or Developed Materials.
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(j) MALICIOUS CODE. HP-OMS shall take all commercially reasonable actions
and precautions (including the use of the latest updated version of
antivirus Software) according to Customer's security policy, defined
prior to the Commencement Date, to prevent the introduction and
proliferation of Malicious Code into Customer's environment or any
system used by HP-OMS to provide the Services,. Any deviation from
said policy, which is not supported by upgrades of the security
systems in use prior to the Commencement Date by the Customer, will be
carried out as per the Change Management Procedure. HP-OMS shall only
be required to invest up to 175,000 USD during the Term in new
security xxxxxxx.Xx used herein, "MALICIOUS CODE" means any known (i)
code, program, or sub-program, whose knowing or intended purpose is to
damage or interfere with the operation of the computer system
containing the code, program or sub-program, or to halt, disable or
interfere with the operation of the Software, code, program, or
sub-program, itself, or (ii) device, method, or token that permits any
person to circumvent or breach the normal security of the Customer
network, systems, the Software or the system containing the code.
Without limiting HP-OMS' other obligations under this Agreement, in
the event Malicious Code is found in Hardware, Software or systems
managed or supported by HP-OMS or used by HP-OMS to provide the
Services, HP-OMS shall exercise all commercially reasonable efforts,
at no additional charge to Customer, to eliminate and reduce the
effects of such Malicious Code and, if the Malicious Code causes a
loss of operational efficiency or loss of data, to mitigate such
losses and restore such data with generally accepted data restoration
techniques.
14.2 CERTAIN HP-OMS WARRANTIES. In addition to its warranties, representations
and other obligations set out elsewhere in this Agreement, HP-OMS
represents and warrants to the Customer as follows:
(a) OWNERSHIP AND USE. HP-OMS represents, warrants and covenants that it
is either the owner of, or authorized to use, any and all Software
provided and used by HP-OMS in providing the Services. As to any such
Software that HP-OMS does not own but is authorized to use, HP-OMS
shall advise Customer as to the ownership and extent of HP-OMS' rights
with regard to such Software to the extent any limitation in such
rights would materially impair HP-OMS' performance of its obligations
under this Agreement.
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(b) TRANSFER OF TERMINATION ASSETS ON TERMINATION/EXPIRATION; THIRD PARTY
CONTRACT TERMS. Upon expiration of the Initial Term or Extended Term
or earlier termination of this Agreement for any reason, HP-OMS will
(i) have full authority to transfer its interest as owner, lessee or
licensee of the relevant Termination Assets, without the payment by
Customer or its designee of any license fees (associated with any
period prior to the expiration of the Initial Term or Extended Term or
earlier termination of this Agreement) or transfer fees, in accordance
with Section 20 (TERM; BREACH; AND TERMINATION); and (ii) use best
efforts to make Third Party Contracts for the support and maintenance
of HP-OMS Hardware and HP-OMS Software assignable to Customer for a
period extending one year after such expiration or earlier termination
of this Agreement, on terms, conditions and prices no less favorable
to Customer or its designees, and at least sufficient for the
continuation of the activities comprising the Services.
(c) COMPLIANCE WITH LAWS. With respect to the provision of the Services
and the performance of its other legal and contractual obligations
hereunder, HP-OMS is and shall be in compliance with all applicable
laws (including privacy laws) on the Commencement Date and shall
remain in compliance with such laws for the entire Term of this
Agreement.
14.3 MUTUAL GENERAL WARRANTIES. Each Party represents and warrants to the other
that:
(a) CORPORATE EXISTENCE. It is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction of
its incorporation;
(b) CORPORATE POWER AND AUTHORITY. It has the requisite corporate power
and authority to execute, deliver and perform its obligations under
this Agreement;
(c) LEGAL AUTHORITY. It has obtained all licenses, authorizations,
approvals, consents or permits required to perform its obligations
under this Agreement under all applicable laws and under all
applicable rules and regulations of all authorities having
jurisdiction over the Services, except to the extent the failure to
obtain any such license, authorizations, approvals, consents or
permits is, in the aggregate, immaterial;
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(d) DUE AUTHORIZATION. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated by
this Agreement have been duly authorized by the requisite corporate
action on the part of such Party; and
(e) NO VIOLATION OR CONFLICT. The execution, delivery, and performance of
this Agreement shall not constitute a violation of any judgment,
order, or decree; a material default under any material contract by
which it or any of its material assets are bound; or an event that
would, with notice or lapse of time, or both, constitute such a
default.
14.4 WARRANTIES OF NON-INFRINGEMENT.
(a) PERFORMANCE OF RESPONSIBILITIES. Each Party represents and warrants
that it shall perform its responsibilities under this Agreement
(including, without limitation, HP-OMS' responsibilities with respect
to HP-OMS Software and HP-OMS Hardware) in a manner that does not
infringe, or constitute an infringement or misappropriation of, any
Intellectual Property Right or other proprietary or privacy rights of
any third party; provided, however, that the performing Party shall
not have any obligation or liability to the extent any infringement or
misappropriation is caused by (i) modifications made by the other
Party or its contractors or subcontractors, without the knowledge or
approval of the performing Party, (ii) the other Party's combination
of the performing Party's work product or Materials with items not
furnished, specified or reasonably anticipated by the performing Party
or contemplated by this Agreement, (iii) a breach of this Agreement by
the other Party, (iv) the failure of the other Party to use
corrections or modifications provided by the performing Party offering
equivalent features and functionality, or (v) Third Party Software,
except to the extent that such infringement or misappropriation arises
from the failure of the performing Party to obtain the necessary
licenses or Required Consents or to abide by the limitations of the
applicable Third Party Software licenses. Each Party further
represents and warrants that it will not use or create Materials in
connection with the Services which are libelous, defamatory or
obscene.
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(b) THIRD PARTY SOFTWARE INDEMNIFICATION. In addition, unless otherwise
agreed, with respect to HP-OMS Software licensed to HP-OMS from a
third party during the Term, HP-OMS covenants that it shall make
commercially reasonable efforts to obtain and provide intellectual
property indemnification for Customer (or obtain intellectual property
indemnification for itself and enforce such indemnification on behalf
of Customer) from the suppliers of such Software. Unless otherwise
approved in advance by Customer, such indemnification shall be
comparable to the intellectual property indemnification provided by
HP-OMS to Customer under this Agreement.
(c) ACTIONS IN CASE OF INFRINGEMENT. In the event that (i) any Materials,
Developed Materials, Hardware or Software provided by HP-OMS or its
Affiliates or HP-OMS Subcontractors pursuant to this Agreement or used
by them in the performance of the Services are found or, based upon a
third party claim or threatened claim of infringement, are likely to
be found, to infringe upon the Intellectual Property Rights,
proprietary or privacy rights of any third party in any country in
which Services are to be performed or received under this Agreement or
(ii) the continued use of such Materials, Developed Materials,
Hardware or Software is enjoined, HP-OMS shall, in addition to
defending, indemnifying and holding harmless Customer as provided in
Section 16 (INDEMNITIES) and to the other rights Customer may have
under this Agreement, promptly and at its own cost and expense and in
such a manner as to minimize the disturbance to Customer's business
activities do one of the following:
(i) OBTAIN RIGHTS. Obtain for Customer the right to continue using
such Materials, Developed Materials, Hardware or Software.
(ii) MODIFICATION. Modify the item(s) in question so that it is no
longer infringing, provided that such modification does not degrade
the performance or quality of the Services or adversely affect
Customer's intended use as contemplated by this Agreement.
(iii) REPLACEMENT. Replace such item(s) with a non-infringing
functional equivalent acceptable to Customer.
(d) IMPACT ON SERVICE LEVELS OF CUSTOMER INFRINGEMENT. If HP-OMS is
prevented by court injunction from using any Hardware and/or Software
as a result of Customer's breach of its obligations under this Section
14.4 (WARRANTIES OF NON-INFRINGEMENT), then HP-OMS shall not be
required to meet the relevant Service Levels to the extent and for as
long as the infringing action prevents HP-OMS from so meeting such
Service Levels, without prejudice to Customer's obligation to pay
HP-OMS the Target Price in respect of the relevant Services.
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14.5 OPERATION OF HP-OMS HARDWARE AND HP-OMS SOFTWARE. HP-OMS does not warrant
that the operation of the HP-OMS Hardware or HP-OMS Software will be
uninterrupted or error free; provided, however, that the foregoing
will not relieve HP-OMS of its obligation to provide Operations
Services in accordance with the Service Levels or to repair or
replace, at its discretion, any HP-OMS Hardware or HP-OMS Software in
order to comply with the terms of this Agreement.
14.6 STATIC AND/OR MOBILE TELEPHONE LINES. HP-OMS shall have no liability
arising out of or in connection with the availability, performance,
non-performance, defective performance, maintenance or otherwise, of
Static and/or Mobile Telephone lines used by Customer to
telecommunicate with third parties.
14.7 SAVINGS CLAUSE. HP-OMS shall not be liable for any delays in performance
of Services or part thereof and/or damages caused and/or failure to
meet the Service Levels to the extent such HP-OMS non-performance is
caused by Customer's (or any third party under Customer's control) act
or omission, but only if (i) HP-OMS provides prompt and reasonable
notification (including by e-mail) to the Customer of such act or
omission and HP-OMS' inability to perform under such circumstances,
(ii) HP-OMS provides Customer with a reasonable opportunity to correct
such act or omission and thereby avoid such HP-OMS non-performance,
and (iii) HP-OMS uses commercially reasonable efforts to perform
notwithstanding Customer's personnel's act or omission, provided that
such act or omission does not constitute a breach of Customer's
contractual obligations hereunder.
14.8 NO OTHER WARRANTIES. The warranties expressly set out in this Agreement
are exclusive and no other warranty, whether written or oral, is
expressed or implied. To the extent permitted by law, HP-OMS specially
disclaims the implied warranty of merchantability fitness for a
particular purpose, title and non-infringement.
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15. INTELLECTUAL PROPERTY RIGHTS
15.1 PRE-EXISTING MATERIALS. All rights of ownership, know how, methodology or
other Intellectual Property Rights in the Materials owned by each
Party prior to the Commencement Date, shall belong to the Party that
owned such Materials immediately prior to the Commencement Date
("CUSTOMER PRE-COMMENCEMENT-OWNED MATERIALS" or "HP-OMS
PRE-COMMENCEMENT-OWNED MATERIALS", respectively).
15.2 OTHER HP-OMS OWNED MATERIALS. HP-OMS shall be the owner of all
Intellectual Property Rights in (i) the Materials acquired by HP-OMS
on or after the Commencement Date (including Materials purchased from
Customer pursuant to this Agreement, subject to Section 20.6(d)
(TRANSFER OF TERMINATION ASSETS ON TERMINATION/EXPIRATION OF
AGREEMENT), (ii) derivative works of HP-OMS Pre-Commencement-Owned
Software created by HP-OMS and not otherwise owned by Customer
pursuant to the terms of this Agreement, (iii) Materials developed by
HP-OMS other than in the course of the performance of its obligations
under this Agreement or in connection with the use of any Customer
Data or Customer Pre-Commencement-Owned Materials (collectively,
"OTHER HP-OMS OWNED MATERIALS") (HP-OMS Pre-Commencement-Owned
Materials and Other HP-OMS Owned Materials collectively, the "HP-OMS
OWNED MATERIALS").
15.3 DEVELOPED MATERIALS. Unless the Parties agree otherwise, and subject to
Section 15.2 (OTHER HP-OMS OWNED MATERIALS) above, all Developed
Materials created by or for HP-OMS in connection with the Services
provided by HP-OMS under this Agreement shall, upon creation, be owned
by Customer and considered to be works made for hire. If any such
Developed Materials may not be considered a work made for hire under
applicable law, HP-OMS hereby irrevocably assigns, and shall assign,
to Customer without further consideration, all of HP-OMS' right, title
and interest in and to such Developed Materials, including
Intellectual Property Rights. HP-OMS agrees to execute any documents
and take any other actions reasonably requested by Customer to
effectuate the purposes of this Section.
15.4 CUSTOMER OWNERSHIP OF CUSTOMER DATA. Customer Data are and shall remain
the property of Customer. HP-OMS shall promptly deliver or provide
Customer access to Customer Data in the format, on the media and in
the timing prescribed by Customer (i) at any time at Customer's
request, or (ii) at the expiration of the Term or termination of this
Agreement and the completion of all requested Termination Assistance
Services. Thereafter, HP-OMS shall return or destroy, as directed by
Customer, all copies of the Customer Data in HP-OMS' possession or
under HP-OMS' control within ten (10) business days and deliver to
Customer written certification of such return or destruction signed by
an officer of HP-OMS. HP-OMS shall not withhold any Customer Data as a
means of resolving any dispute. Customer Data shall not be utilized by
HP-OMS for any purpose other than the performance of Services under
this Agreement. Nor shall Customer Data be sold, assigned, leased,
commercially exploited or otherwise provided to third parties by or on
behalf of HP-OMS or HP-OMS Personnel.
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15.5 SOURCE CODE AND DOCUMENTATION. HP-OMS shall, promptly as it is developed
by HP-OMS, provide Customer with the source code and documentation for
all Customer owned Developed Materials. The source code shall be
sufficient to allow a reasonably knowledgeable and experienced
programmer to maintain and support such Materials; and the user
documentation for such Materials shall accurately describe in terms
understandable by a typical end user the functions and features of
such Materials and the procedures for exercising such functions and
features. Customer may freely use, copy, distribute, create derivative
works of and modify all documentation provided by HP-OMS applicable to
the Developed Materials.
16. INDEMNITIES
16.1 INDEMNITY BY HP-OMS. HP-OMS agrees to indemnify, defend and hold harmless
Customer, its Affiliates and their respective officers, directors,
employees, agents, representatives, successors, and assigns from any
and all Losses relating to third party claims arising from or in
connection with any of the following, all subject to the limitation of
liability as per Section 18 hereunder:
(a) BREACH OF WARRANTIES. HP-OMS' breach of any of its warranties set out
in Section 14 (FUNDAMENTAL OBLIGATIONS; WARRANTIES AND DISCLAIMERS);
(b) THIRD PARTY CONTRACTS. HP-OMS' decision to terminate or breach of
obligations to be performed on or after the Commencement Date by
HP-OMS under any of the Third Party Contracts, including as a result
of HP-OMS' failure to obtain any Required Consents, to the extent
HP-OMS is financially or operationally responsible under this
Agreement;
(c) TAXES. Taxes, together with related interest and penalties, that are
the responsibility of HP-OMS under Section 10.4 (TAXES);
(d) CUSTOMER DATA OR CONFIDENTIAL INFORMATION. HP-OMS' breach of its
obligations with respect to Customer Data or Customer Confidential
Information;
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(e) AFFILIATE OR SUBCONTRACTOR CLAIMS. Any claim, initiated by a HP-OMS
Affiliate, Subcontractor or Personnel asserting rights under this
Agreement; and
(f) EMPLOYMENT CLAIMS. Any claim relating to any: (i) violation by HP-OMS,
HP-OMS Affiliates or HP-OMS Subcontractors, or their respective
officers, directors, employees, representatives or agents, of
applicable law protecting persons or members of protected classes or
categories, including laws or regulations prohibiting discrimination
or harassment on the basis of a protected characteristic; (ii)
liability arising or resulting from the employment of HP-OMS
Personnel, including Transitioned Employees (solely for acts/omissions
occuring prior to the effective date of their employment) by HP-OMS,
HP-OMS Affiliates or HP-OMS Subcontractors; (iii) payment or failure
to pay any salary, wages or other cash compensation due and owing to
any HP-OMS Personnel (including Transitioned Employees from and after
their employment effective dates); (iv) employee pension, benefit
plan, bonus program, vacation benefit, sick leave benefit, tuition
assistance, severance program, medical benefit, stock benefit, stock
option benefit or other benefits of any HP-OMS Personnel (including
Transitioned Employees for benefits accruing from and after their
employment effective dates); and/or (v) other aspects of the
employment relationship of HP-OMS Personnel (including Transitioned
Employees) with HP-OMS, HP-OMS Affiliates or HP-OMS Subcontractors or
the termination of such relationship, including claims for wrongful
discharge, claims for breach of express or implied employment contract
and claims of co-employment or claims based on waivers, releases and
other covenants made by Transitioned Employees with or to HP-OMS.
16.2 INDEMNITY BY CUSTOMER. Customer agrees to indemnify, defend and hold
harmless HP-OMS and its officers, directors, employees, agents,
representatives, successors, and assigns, from any Losses relating to
third party claims arising from or in connection with any of the
following, all subject to the limitation of liability as per Section
18 hereunder:
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(a) BREACH OF WARRANTIES. Customer's breach of any of its warranties set
out in Section 14 (FUNDAMENTAL OBLIGATIONS; WARRANTIES AND
DISCLAIMERS).
(b) THIRD PARTY CONTRACTS. Customer's breach of obligations to be
performed by Customer under any of the applicable Third Party
Contracts to the extent Customer is financially or operationally
responsible under this Agreement;
(c) PRE-COMMENCEMENT DATE MATTERS. Customer's breach of duties or
obligations to be observed or performed or amounts (including deferred
payments for benefits or services received by Customer prior to the
Commencement Date) to be paid for periods prior to the Commencement
Date by Customer under any of the Third Party Contracts assigned to
HP-OMS by Customer pursuant to this Agreement; and
(d) TAXES. Taxes, together with related interest and penalties, that are
the responsibility of Customer under Section 10.4 (TAXES).
(e) AFFILIATE OR SUBCONTRACTOR CLAIMS. Any claim, initiated by a Customer
Affiliate, Customer Contractor or Customer's personnel asserting
rights under this Agreement; and
(f) EMPLOYMENT CLAIMS. Any claim relating to any: (i) violation by
Customer, Customer Affiliates or Customer Contractors, or their
respective officers, directors, employees, representatives or agents,
of applicable law protecting persons or members of protected classes
or categories, including laws or regulations prohibiting
discrimination or harassment on the basis of a protected
characteristic; (ii) liability arising or resulting from the
employment by Customer, Customer Affiliates or Customer Contractors of
their respective employees, including Transitioned Employees (solely
for acts/omissions occuring while employed at Customer, prior to the
effective date of their employment with HP-OMS or its Affiliates);
(iii) payment or failure to pay any salary, wages or other cash
compensation due and owing to any Customer Employees (including
Transitioned Employees prior to their employment effective dates with
HP-OMS or its Affiliates); (iv) employee pension, benefit plan, bonus
program, vacation benefit, sick leave benefit, tuition assistance,
severance program, medical benefit, stock benefit, stock option
benefit or other benefits of any Customer Employees (including
Transitioned Employees for benefits accruing prior to their employment
effective dates); and/or (v) other aspects of the employment
relationship of Customer Employees (including Transitioned Employees
prior to their employment effective dates with HP-OMS or its
Affiliates) with Customer, Customer Affiliates or Customer Contractors
or the termination of such relationship, including claims for wrongful
discharge, claims for breach of express or implied employment contract
and claims of co-employment or claims based on waivers, releases and
other covenants made by Transitioned Employees prior to their
employment effective dates with HP-OMS or its Affiliates.
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00.0 XXXXX, XXXXXX INJURY; TANGIBLE PROPERTY DAMAGE. HP-OMS and Customer each
agree to indemnify, defend and hold harmless the other, and their
respective Affiliates, officers, directors, employees, agents,
representatives, successors, and assigns, from any and all Losses and
threatened Losses arising from or in connection with any of the
following: (a) the death or bodily injury of any agent, employee,
customer, business invitee, business visitor or other person caused by
the negligence or other tortious conduct of the indemnifying Party or
the failure of the indemnifying Party to comply with its obligations
under this Agreement; and (b) the damage, loss or destruction of any
real or tangible personal property caused by the negligence or other
tortious conduct of the indemnifying Party or the failure of the
indemnifying Party to comply with its obligations under this
Agreement.
16.4 INDEMNIFICATION PROCEDURES. With respect to third party claims, the
following procedures shall apply:
(a) NOTICE. Promptly after receipt by any entity entitled to
indemnification under this Agreement of notice of the commencement or
threatened commencement of any civil, criminal, administrative, or
investigative action or proceeding involving a claim in respect of
which the indemnified Party will seek indemnification pursuant to any
such Section, the indemnified Party shall notify the indemnifying
Party of such claim. No delay or failure to so notify an indemnifying
Party shall relieve it of its obligations under this Agreement except
to the extent that such indemnifying Party has suffered actual
prejudice by such delay or failure. Within fifteen (15) days following
receipt of notice from the indemnified Party relating to any claim,
but no later than five (5) days before the date on which any response
to a complaint or summons is due, the indemnifying Party shall notify
the indemnified Party that the Indemnifying Party elects to assume
control of the defense and settlement of that claim (a "NOTICE OF
ELECTION").
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(b) PROCEDURE FOLLOWING NOTICE OF ELECTION. If the indemnifying Party
delivers a Notice of Election within the required notice period, the
indemnifying Party shall assume sole control over the defense and
settlement of the claim; provided, however, that (i) the indemnifying
Party shall keep the indemnified Party fully apprised at all times as
to the status of the defense, and (ii) the indemnifying Party shall
obtain the prior written approval of the indemnified Party before
entering into any settlement of such claim asserting any liability
against the indemnified Party or imposing any obligations or
restrictions on the indemnified Party or ceasing to defend against
such claim. The indemnifying Party shall not be liable for any legal
fees or expenses incurred by the indemnified Party following the
delivery of a Notice of Election; provided, however, that (i) the
indemnified Party shall be entitled to employ counsel at its own
expense to participate in the handling of the claim, and (ii) the
indemnifying Party shall pay the fees and expenses associated with
such counsel if, in the reasonable judgment of the indemnified Party,
based on an opinion of counsel, there is a conflict of interest with
respect to such claim or if the indemnifying Party has requested the
assistance of the indemnified Party in the defense of the claim or the
indemnifying Party has failed to defend the claim diligently. The
indemnifying Party shall not be obligated to indemnify the indemnified
Party for any amount paid or payable by such indemnified Party in the
settlement of any claim if (x) the indemnifying Party has delivered a
timely Notice of Election and such amount was agreed to without the
written consent of the indemnifying Party, (y) the indemnified Party
has not provided the indemnifying Party with notice of such claim and
a reasonable opportunity to respond thereto, or (z) the time period
within which to deliver a Notice of Election has not yet expired.
(c) PROCEDURE WHERE NO NOTICE OF ELECTION IS DELIVERED. If the
indemnifying Party does not deliver a Notice of Election relating to
any claim within the required notice period, the indemnified Party
shall have the right to defend the claim in such manner, as it may
deem appropriate. The indemnifying Party shall promptly reimburse the
indemnified Party for all such costs and expenses incurred by the
indemnified Party, including attorneys' fees.
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16.5 INDEMNITY BY HP-OMS FOR PROFESSIONAL ERRORS AND OMISSIONS. HP-OMS agrees
to indemnify, defend and hold harmless Customer, its Affiliates and
their respective officers, directors, employees, agents,
representatives, successors, and assigns from any and all Losses
arising from or in connection with any of the following, all subject
to the limitation of liability as per Section 18 (LIMITATION OF
LIABILITY) hereunder:
(a) All Losses sustained by Customer due to acts or omissions of HP-OMS,
HP-OMS Personnel (or those acting on their behalf) in the rendering of
their services, and
(b) All Losses relating to third party claims arising from acts or
omissions of HP-OMS, HP-OMS Personnel (or those acting on their
behalf) in the rendering of their services.
17. CONFIDENTIAL INFORMATION
17.1 CONFIDENTIAL INFORMATION. HP-OMS and Customer each acknowledges that the
other possesses and will continue to possess information that has been
developed or received by it, has commercial value in its or its
customer's business and is not in the public domain. Except as
otherwise specifically agreed in writing by the Parties, "CONFIDENTIAL
INFORMATION" means (i) this Agreement and the terms thereof; (ii) all
information marked confidential, restricted or proprietary by either
Party; and (iii) any other information that is treated as confidential
by the disclosing Party and would reasonably be understood to be
confidential, whether or not so marked. In the case of Customer,
Confidential Information also shall include Software provided to
HP-OMS by or through Customer, Developed Materials, Customer Data,
attorney-client privileged materials, attorney work product, customer
lists, customer information and pricing, strategic plans, account
information, research information, trade secrets, financial/accounting
information, human resources and personnel information,
marketing/sales information, information regarding businesses, plans,
operations, third party contracts, internal or external audits, law
suits or other information or data obtained, received, transmitted,
processed, stored, archived, or maintained by HP-OMS under this
Agreement. By way of example, Customer Confidential Information shall
include plans for changes in Customer facilities, business units and
product lines, plans for business mergers, acquisitions or
divestitures, rate information, plans for the development and
marketing of new products, financial forecasts and budgets, technical
proprietary information, employee lists and company telephone or
e-mail directories. In the case of HP-OMS, Confidential Information
shall include financial information, account information, information
regarding HP-OMS' business plans and operations, and proprietary
software (e.g., the HP-OMS Software), documentation, tools and
methodologies owned by HP-OMS and used in the performance of the
Services, trade secrets, financial/accounting information, human
resources and personnel information, marketing/sales information,
information regarding businesses, plans, operations, products, third
party contracts, internal or external audits.
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17.2 OBLIGATIONS.
(a) During the Term of this Agreement and at all times thereafter, HP-OMS
and Customer shall not disclose, and shall maintain the
confidentiality of, all Confidential Information of the other Party.
Customer and HP-OMS shall each use at least the same degree of care to
safeguard and to prevent disclosing to third parties the Confidential
Information of the other as it employs to avoid unauthorized
disclosure, publication, dissemination, destruction, loss, or
alteration of its own like information (or information of its
customers) of a similar nature, but not less than reasonable care.
HP-OMS Personnel shall have access to Customer Confidential
Information only to the extent necessary for such person to perform
his or her obligations under or with respect to this Agreement or as
otherwise naturally occurs in such person's scope of responsibility,
provided that such access is not in violation of applicable law.
(b) The Parties may disclose Confidential Information to their Affiliates,
auditors, attorneys, accountants, consultants, contractors and
subcontractors, where (A) use by such person or entity is authorized
under this Agreement, (B) such disclosure is necessary for the
performance of such person's or entity's obligations under or with
respect to this Agreement or otherwise naturally occurs in such
person's or entity's scope of responsibility, (C) the person or entity
(and its applicable officers and employees) agree in writing to assume
the obligations described in this Section, and (D) the disclosing
Party assumes full responsibility for the acts or omissions of such
person or entity and takes all reasonable measures to ensure that the
Confidential Information is not disclosed or used in contravention of
this Agreement. Any disclosure to such person or entity shall be under
the terms and conditions as provided herein. Each Party's Confidential
Information shall remain the property of such Party.
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(c) Neither Party shall (i) make any use or copies of the Confidential
Information of the other Party except as contemplated by this
Agreement, (ii) acquire any right in or assert any lien against the
Confidential Information of the other Party, (iii) sell, assign,
transfer, lease, or otherwise dispose of Confidential Information to
third parties or commercially exploit such information, including
through derivative works, or (iv) refuse for any reason (including a
default or material breach of this Agreement by the other Party) to
promptly provide the other Party's Confidential Information (including
copies thereof) to the other Party if requested to do so. Upon
expiration or any termination of this Agreement and completion of each
Party's obligations under this Agreement, each Party shall return or
destroy, as the other Party may direct, all documentation in any
medium that contains, refers to, or relates to the other Party's
Confidential Information within ten (10) business days. Each Party
shall deliver to the other Party written certification of its
compliance with the preceding sentence signed by an officer of such
Party. In addition, each Party shall take all necessary steps to
ensure that its employees comply with these confidentiality
provisions.
17.3 EXCLUSIONS. Section 17.2 (OBLIGATIONS) shall not apply to any particular
information which the receiving Party can demonstrate by written
documentation (i) is, at the time of disclosure to it, in the public
domain other than through a breach of the receiving Party's or a third
party's confidentiality obligations; (ii) after disclosure to it, is
published by the disclosing Party or otherwise becomes part of the
public domain other than through a breach of the receiving Party's or
a third party's confidentiality obligations; (iii) is lawfully in the
possession of the receiving Party at the time of disclosure to it;
(iv) is received from a third party having a lawful right to disclose
such information; or (v) is independently developed by the receiving
Party without reference to Confidential Information of the furnishing
Party. In addition, the receiving Party shall not be considered to
have breached its obligations under this Section 17 for disclosing
Confidential Information of the other Party as required, in the
opinion of legal counsel, to satisfy any legal requirement of a
competent government body, provided that, promptly upon receiving any
such request, such Party advises the other Party of the Confidential
Information to be disclosed and the identity of the third party
requiring such disclosure prior to making such disclosure in order
that the other Party may interpose an objection to such disclosure,
take action to assure confidential handling of the Confidential
Information, or take such other action as it deems appropriate to
protect the Confidential Information. The receiving Party shall use
commercially reasonable efforts to cooperate with the disclosing Party
in its efforts to seek a protective order or other appropriate remedy
or in the event such protective order or other remedy is not obtained,
to obtain assurance that confidential treatment will be accorded such
Confidential Information.
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17.4 LOSS OF CONFIDENTIAL INFORMATION. Each Party shall: (i) immediately
notify the other Party of any possession, use, knowledge, disclosure,
or loss of such other Party's Confidential Information in
contravention of this Agreement; (ii) promptly furnish to the other
Party all known details and assist such other Party in investigating
and/or preventing the reoccurrence of such possession, use, knowledge,
disclosure, or loss; (iii) cooperate with the other Party in any
investigation or litigation deemed necessary by such other Party to
protect its rights; and (iv) promptly use all commercially reasonable
efforts to prevent further possession, use, knowledge, disclosure, or
loss of Confidential Information in contravention of this Agreement.
Each Party shall bear any costs it incurs in complying with this
Section 17.4.
17.5 NO IMPLIED RIGHTS. Nothing contained in this Section 17 shall be construed
as obligating a Party to disclose its Confidential Information to the
other Party, or as granting to or conferring on a Party, expressly or
impliedly, any rights or license to any Confidential Information of
the other Party.
17.6 SURVIVAL. The Parties' obligations of non-disclosure and confidentiality
shall survive the expiration or termination of this Agreement for a
period of ten (10) years.
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18. LIMITATION OF LIABILITY
18.1 CAP ON OVERALL LIABILITY. Except as provided in Section 18.3 (EXCEPTIONS
TO LIMITATIONS OF LIABILITY), notwithstanding any provision in this
Agreement and/or any applicable law, and to the extent each Party is
held legally liable to the other under or in connection with this
Agreement, HP-OMS' aggregate liability under this Agreement, for any
reason and upon all claims and causes of action, is hereby limited to
direct damages up to Four Million United States dollars (US
$4,000,000).
18.2 EXCLUSION OF CERTAIN DAMAGE TYPES. IN NO EVENT WILL EITHER CUSTOMER OR
HP-OMS OR THEIR RESPECTIVE AFFILIATES, SUBCONTRACTORS/CUSTOMER
CONTRACTORS AND SUPPLIERS BE LIABLE FOR ANY CONSEQUENTIAL, SPECIAL,
INDIRECT, INCIDENTAL OR PUNITIVE DAMAGES, INCLUDING WITHOUT LIMITATION
FOR LOSS OF GOODWILL, LOSS OF SAVINGS OR REVENUE, LOSS OF ACTUAL OR
ANTICIPATED PROFITS, EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES.
18.3 EXCEPTIONS TO LIMITATIONS OF LIABILITY.
(a) The limitations of liability set forth in Section 18.1 (CAP ON OVERALL
LIABILITY) shall not apply to amounts paid with respect to (i) third
party claims that are the subject of indemnification under this
Agreement in connection with a breach of a party's obligations under
Section 14.4 (WARRANTIES OF NON-INFRINGEMENT) regarding infringement
of intellectual property rights or in connection with liability under
Section 16.3(a) (DEATH OR BODILY INJURY); or (ii) Direct Losses
occasioned by the wrongful termination of this Agreement by HP-OMS.
18.4 ITEMS NOT CONSIDERED DAMAGES. Charges and other amounts that are due and
owing to HP-OMS for Services performed under this Agreement shall not
be considered damages subject to, and shall not be counted toward the
liability cap specified in Section 18.1 (CAP ON OVERALL LIABILITY).
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18.5 ACKNOWLEDGED DIRECT DAMAGES. Direct costs and expenses incurred (i) to
recover, recreate lost data; (ii) to restore Software; (iii) as a
result of system downtime; (iv) to implement a workaround in respect
of a failure to provide any Services; or (v) to procure the Services
or corrected Services from an alternative source or to bring the
Services in-house, including the costs and expenses associated with
the retention of independent consultants and legal counsel to assist
with any re-sourcing, all to the extent in excess of the prorated
Target Price under this Agreement, shall be considered direct damages
and neither Party shall assert that they are indirect, incidental,
collateral, consequential or special damages or lost profits to the
extent they result directly from either Party's failure to perform in
accordance with this Agreement.
18.6 CONFIDENTIAL INFORMATION; DEATH/BODILY INJURY. Notwithstanding anything
in this Agreement to the contrary, each party shall be entitled to
recover all Losses occasioned by the intentional or grossly negligent
breach of a party's obligations under Section 17 (CONFIDENTIAL
INFORMATION) or all Losses in connection with liability under Section
16.3(a) (DEATH OR BODILY INJURY).
19. INSURANCE
19.1 INSURANCE.
(a) REQUIREMENTS. With respect to performance hereunder both parties agree
to maintain, at all times during the term of this Agreement, the
following minimum insurance coverages and limits and any additional
insurance and/or bonds required by law:
(i) Workers Compensation insurance as required by applicable law.
(ii) Third Party liability insurance, covering legal liability for
physical loss or damage and/or bodily injury occurring to any
person and/or property of any person and/or entity.
(iii) Products liability/completed operations insurance, covering
legal liability for physical loss or damage and/or bodily injury
occurring to any person and/or property of any person and/or
entity.
The (i) Products liability/ completed operations policy and the (ii)
Third Party liability insurance arranged by HP OMS shall be extended
to include the Customer as additional insured in respect of Customer's
liability for negligent acts and/or omissions of HP-OMS and HP-OMS
Personnel subject to Cross Liability clause.
Policies of HP-OMS as described in (b)-(c) below shall be with a
single limit of: $[**] any one occurrence and in all for an annual
insurance period.
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(b) HP OMS undertakes to additionaly arrange the following insurance
policies at all times during the term of this agreement:
Employers Liability insurance, covering the liability of HP OMS
towards its employees, for death, injury or disease occurring during
and/or as a result of their employment, with a limit of $[**] any one
occurrence and in all for an annual insurance period. The policy shall
be extended to include Customer as an additional insured, insofar it
is considered as the employer of any of HP OMS's employees.
(c) APPROVED COMPANIES. All such insurance shall be procured with
reputable insurance companies.
(d) PRIMARY, NON-CONTRIBUTORY POLICIES. Products liability insurance,
third party liability insurance and Employers liability insurance
required by this Agreement from HP-OMS, shall be primary and
non-contributory with respect to other insurance which may be
available to Customer and its affiliates and/or their officers,
directors and employees.
(e) ENDORSEMENTS. The cancellation clause on the certificate of insurance
will be amended to read as follows:
"THE ISSUING COMPANY WILL MAIL 30 DAYS WRITTEN NOTICE TO THE
CERTIFICATE HOLDER PRIOR TO CANCELLATION OR A MATERIAL CHANGE TO
POLICY DESCRIBED ABOVE."
(f) NO IMPLIED LIMITATION. The obligation of the parties to provide the
insurance specified herein shall not limit in any way any of their
obligations or liabilities provided elsewhere in this Agreement.
(g) SUBCONTRACTORS. HP-OMS shall also require all Subcontractors used by
HP-OMS for the provision of the Services to maintain an appropriate
insurance to the extent it is required to maintain under this
contract.
(h) DEDUCTIBLES. The deductible amounts of each insurance policy required
hereunder shall not exceed US$[**] each occurance.
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(i) Both parties shall furnish upon request to the other party annually an
insurance certificate evidencing the above-mentioned insurance
policies, as relevant. Both parties undertake to notify the other
party in advance at least thirty (30) days prior to cancellation or
material change of any of such party's insurance policies detailed in
this Section above.
(j) It is hereby agreed that in respect to coverage provided to Customer
under HP OMS's policies as aforesaid, the limit of liability under the
policies shall in no way exceed the limitation of liability granted to
HP OMS under Section 18 (LIMITATION OF LIABILITY).
19.2 RISK OF LOSS.
(a) GENERAL. Except as otherwise provided in Section 16 (INDEMNITIES),
each Party shall be responsible for risk of loss of, and damage to,
any Hardware, Software or other materials owned by or licensed to such
Party, unless loss or damage is caused by the intentional misconduct
or negligence of the other party. Each Party shall promptly notify the
other of any damage (except normal wear and tear), destruction, loss,
theft, or governmental taking of any item of Hardware, Software or
other materials in the possession or under the control of such Party,
whether or not insured against by such Party, whether partial or
complete, which is caused by any act, omission, fault or neglect of
such Party ("EVENT OF LOSS"). Such Party shall be responsible for the
cost of any necessary repair or replacement of such Hardware, Software
or other materials due to an Event of Loss. For a Customer Event of
Loss, HP-OMS shall coordinate and oversee repair or replacement
performed by a third-party on a Pass-Through Expenses basis, or by
HP-OMS at agreed-upon prices.
(b) WAIVER. Except as provided below, HP-OMS and Customer each waive all
rights to recover against the other Party for damage, destruction,
loss, theft, or governmental taking of their respective real or
tangible personal property (whether owned or leased) from any cause to
the extent covered by insurance maintained by each of them, including
their respective deductibles or self-insured retentions. This waiver
of subrogation shall not extend to the damage, destruction, loss or
theft of real or tangible personal property caused by the negligence
or other tortious conduct of the other Party or the failure of the
other Party to comply with its obligations under this Agreement.
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20. TERM; BREACH; AND TERMINATION
20.1 TERM
(a) INITIAL TERM. The initial term of this Agreement shall commence on the
Commencement Date and continue for six (6) years (the "INITIAL TERM"),
unless terminated earlier in accordance with this Agreement.
(b) EXTENDED TERM. Customer, by notifying HP-OMS in writing at least one
hundred and eighty (180) days prior to the expiration of the Initial
Term, may extend the effectiveness of this Agreement at the then
current Target Price and under the same terms and conditions which
were in effect just prior to such expiration, for a period of up to
twenty-four (24) months (the "EXTENDED TERM").
20.2 TERMINATION FOR CAUSE BY CUSTOMER; OTHER REMEDIES
(a) HP-OMS' FAILURE TO CURE MATERIAL BREACH. The Customer may terminate
this Agreement immediately at any time by written notice to HP-OMS if
HP-OMS is in material breach of any of its obligations under this
Agreement and fails to remedy the breach for a period of thirty (30)
days after a written notice by the Customer specifying the material
breach.
(b) CHANGE OF CONTROL. Customer may terminate this Agreement immediately
upon written notice to HP-OMS in the event that HP-OMS experiences (in
one transaction or any series of transactions) a change of majority
ownership ("CHANGE OF CONTROL"), unless prior to such Change of
Control Customer is notified of such change and (i) Hewlett-Packard
Israel Ltd. agrees in writing to accept an assignment of this
Agreement; or (ii) Customer provides its written consent to such
Change of Control.
(C) GUARANTEE FROM HEWLETT-PACKARD ISRAEL LTD. In addition to its other
rights and remedies against HP-OMS under this Agreement, in the event
of a breach by HP-OMS hereunder, Customer may, at any time, exercise
its rights as a beneficiary to the Guarantee, executed by
Hewlett-Packard Israel Ltd., attached hereto as Exhibit L.
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(d) STEP-IN RIGHTS. Without prejudice to any of the Customer's other
rights:
if any default or non-performance by HP-OMS under this Agreement in
relation to any Service materially affects the performance of any
critical function of the Customer for more than forty-eight (48)
hours, the Customer may, at its option, take control of the relevant
Services and take such other action as is reasonably necessary to
restore the affected function of the Customer or otherwise continue
the provision of the Services ("STEP-IN RIGHTS"). To the extent
Customer exercises its Step-in Rights, HP-OMS shall be released from
its obligation to meet the relevant Service Level (over which Customer
has taken control) solely during the period in which the affected
function is being corrected. Once corrected, HP-OMS shall resume
responsibility for such Service Level. HP-OMS shall co-operate fully
with the Customer and its Customer Contractors, in accordance with
Section 11.5 (HP-OMS COOPERATION); provided, however, that HP-OMS may
require any person or entity which is not a Party to this Agreement to
execute its confidentiality agreement with HP-OMS, in a form which
contains terms substantially similar to the terms set out in Section
17 (CONFIDENTIAL INFORMATION) hereof. Any third party used by Customer
pursuant to this Section shall be deemed a Contractor of Customer.
(e) OTHER REMEDIES. In addition to its rights and remedies under this
Agreement, the each party may exercise all available legal and
equitable remedies (except to the extent such remedies are
inconsistent with the terms of this Agreement), including, but not
limited to, seeking relief for compensation or seeking orders for
declaration, injunctive relief or damages or such other orders and
relief as it may think fit.
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20.3 MUTUAL RIGHT OF TERMINATION. Either Party may terminate this Agreement,
immediately at any time by written notice to the other Party, if the
other Party (or in the event the other Party is HP-OMS, then
Hewlett-Packard Israel Ltd or in the event the other Party is
Customer, then Tecnomatix Technologies Ltd) (i) has a receiver
appointed or an assignee for the benefit of creditors; (ii) is or
becomes insolvent or is unable to pay debts as they become due; (iii)
ceases to trade for a period of sixty (60) days (either in whole or as
to any part or division involved in the performance of this Agreement)
or (iv) ceases to operate in the normal course of business for a
period of sixty (60) days (each of (i)-(iv) above an "INSOLVENCY
EVENT"), unless the Insolvency Event is removed or is no longer in
effect within forty-five (45) days of receipt of the notice of
termination, in which case the initial Insolvency Event shall not be
grounds for termination.
20.4 TERMINATION FOR CAUSE BY HP-OMS. HP-OMS may terminate this Agreement
immediately by written notice to Customer if:
(a) Customer fails to pay any undisputed sums equal to or greater than
twenty percent (20%) of the (then current) quarterly Target Price on
an accumulated basis, due to HP-OMS under this Agreement, on the due
date and such payment is not made within forty-five (45) days after a
written notice requiring the same; and provided that HP-OMS has given
Customer a second written notice of its intention to terminate the
Agreement at least fifteen (15) days (but not more than twenty (20)
days) prior to the expiration of such forty-five (45) day period.
20.5 TERMINATION FOR CONVENIENCE
(a) BY CUSTOMER. The Customer may terminate this Agreement for convenience
by giving HP-OMS at least one hundred and eighty (180) days prior
written notice, such notice not to be given before the end of the
first year and a half following the Commencement Date. On the
effective date of such termination, Customer shall pay to HP-OMS the
Termination Fees and compensation amounts as specified in Exhibit E
hereto.
(b) BY HP-OMS. HP-OMS may terminate this Agreement for convenience by
giving the Customer at least one year's prior written notice, such
notice not to be given before the end of the third year following the
Commencement Date.
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20.6 CONSEQUENCES UPON TERMINATION OR EXPIRATION
(a) RETURN OF HP-OMS OWNED MATERIALS AND OTHER HARDWARE. Upon the
expiration or earlier termination of the Term for any reason
whatsoever, the Customer will return (or relinquish access), within
thirty (30) days of its receipt of HP-OMS' notice to that effect, to
HP-OMS the HP-OMS Owned Materials and HP-OMS owned Hardware, subject
to Section 20.6(d) (TRANSFER OF TERMINATION ASSETS ON
TERMINATION/EXPIRATION OF AGREEMENT), and which are in Customer's
possession or control;
(b) RETURN OF CUSTOMER OWNED MATERIALS. Upon the expiration of the Term or
earlier termination of this Agreement, as the case may be, for any
reason whatsoever, with respect to Materials owned by Customer
(including but not limited to the Customer Pre-Commencement-Owned
Materials and Customer Software obtained by Customer after the
Commencement Date), HP-OMS shall, at no cost to Customer:
(i) deliver to Customer all such Materials in the format and medium
in use by HP-OMS in connection with the Services as of the date of
such expiration or termination; and
(ii) following completion by HP-OMS of any Termination Assistance
Services for which such Materials are required, destroy or securely
erase all copies of such Materials then in HP-OMS' possession and
cease using such Materials for any purpose.
(C) UPGRADED HP-OMS SOFTWARE, THIRD PARTY CONTRACTS; CONTINUING SUPPORT.
Upon the expiration of the Term or earlier termination of this
Agreement for any reason whatsoever:
(i) HP-OMS, unless otherwise agreed in advance by Customer in
accordance with Section 14.2(b) (TRANSFER OF TERMINATION ASSETS
ON TERMINATION/EXPIRATION; THIRD PARTY CONTRACT TERMS),
A. shall deliver to Customer a copy of all HP-OMS Software,
(excluding Software which is part of the Facilities Setup
Assets), upgraded to at least the second to most, if not
the most, updated version of such Software, associated
documentation, and all applicable Third Party Contracts
used by HP-OMS in the provision of the Services (to which
Customer shall receive a license or assignment), in
accordance with Section 14.2(b) (TRANSFER OF TERMINATION
ASSETS ON TERMINATION/EXPIRATION; THIRD PARTY CONTRACT
TERMS); and
B. Except as otherwise expressly set forth in this Agreement
and the exhibits thereto, Customer shall not be obligated
to pay any license fees (associated with any period prior
to the expiration of the Term or earlier termination of
this Agreement for any reason) or transfer fees in
connection with its receipt of the licenses and other
rights specified in this Section (collectively, "TRANSFER
FEES"); provided, however, that where Customer terminates
this Agreement for convenience, (i) Customer shall be
responsible for paying such Transfer Fees, and (ii)
Customer shall be responsible for the actual termination
fees incurred by HP-OMS associated with the termination of
Third Party Contracts. Notwithstanding the foregoing, the
amounts payable under subsections (i) and (ii) shall not
exceed the then applicable quarterly Target Price
payment.
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(d) TRANSFER OF TERMINATION ASSETS ON TERMINATION/EXPIRATION OF AGREEMENT.
In the event of termination of this Agreement for any reason
whatsoever HP-OMS shall transfer the Termination Assets to Customer
and Customer shall purchase such Assets in accordance with the terms
set out in Section 7 (TERMINATION) of Exhibit E.
(e) HARDWARE AND SOFTWARE MAINTENANCE REINSTATEMENT FEES.
(i) HP-OMS shall not terminate any Third Party Contract for the
support or maintenance of HP-OMS Hardware or HP-OMS Software
("THIRD PARTY SUPPORT CONTRACTS"), under which Customer was
receiving support or maintenance just prior to the Commencement
Date without Customer's prior written consent, given in
Customer's sole discretion. For the avoidance of doubt, Customer
may condition its consent on HP-OMS' agreement to pay any third
party maintenance reinstatement fees otherwise chargeable to
Customer to the relevant third party (due to lapse or non renewal
of such support or maintenance), upon expiration of the Term or
earlier termination of this Agreement.
(ii) Without limiting the generality of the foreogoing, where HP-OMS
provides direct support or maintenance for HP-OMS Hardware or
HP-OMS Software, HP-OMS, upon expiration of the Term or earlier
termination of this Agreement, shall continue to provide such
support or maintenance to Customer as part of Termination
Assistance Services, if requested by Customer.
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(f) HARDWARE TRANSFERRED BACK NOT AT PROPER WARRANTY LEVELS. In the event
that HP-OMS transfers to Customer any Hardware included within the
Refreshed Assets, Add-On Assets or New Customer Employee Assets, in
accordance with Section 20.6(d) (TRANSFER OF TERMINATION ASSETS ON
TERMINATION/EXPIRATION OF AGREEMENT) with a remaining warranty period
shorter than the standard warranty period generally maintained by
Customer for such Hardware type (as specified in Exhibit B),
considering the purchase date of such Hardware, HP-OMS shall be
responsible for paying the fees Customer would otherwise pay to a
third party manufacturer to purchase the required additional warranty
service.
(g) HIRING. Customer or its designee shall be permitted to undertake,
without interference from HP-OMS, HP-OMS Subcontractors or Affiliates
to hire, effective after the later of the termination of this
Agreement or completion of any Termination Assistance Services
requested by Customer: (i) any HP-OMS Personnel primarily assigned to
the performance of Services within the 12-month period prior to the
date of expiration of the Term or termination of this Agreement; and
(ii) any former Transitioned Employees. HP-OMS shall waive, and shall
cause HP-OMS Subcontractors and Affiliates to waive, their rights, if
any, under contracts with such personnel restricting the ability of
such personnel to be recruited or hired by Customer or its designee.
Customer or its designee shall have reasonable access to such HP-OMS
personnel for interviews, evaluations and recruitment. Customer shall
endeavor to conduct the above-described hiring activity in a manner
that is not unnecessarily disruptive of the performance by HP-OMS of
its obligations under this Agreement. All such personnel and
Transitioned Employees, if hired by Customer, shall be transferred to
Customer without any employer liabilities, such as severance pay,
vacation, and the like.
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20.7 TERMINATION ASSISTANCE SERVICES
(a) Upon expiration of the Initial Term or Extended Term or earlier
termination of this Agreement for any reason, HP-OMS, at the
Customer's request in writing, shall perform the Termination
Assistance Services as provided herein for a period of up to (as
determined by Customer) twelve (12) months from the effective date of
expiration or termination, as applicable the "TERMINATION ASSISTANCE
PERIOD").
(b) Commencing from the date that is the earlier of six (6) months prior
to the scheduled expiration or termination of this Agreement; or,
where notice of termination for cause has been given under this
Agreement, within fourteen (14) days after the receipt of that notice,
HP-OMS and Customer shall meet regularly and as often as is required
to develop and finalize a transition plan for the orderly transition
of the Services to the Customer or its designee, for approval by the
Customer, at least fourteen (14) days prior to the effective date of
expiration or termination of the Initial Term or Extended Term, as
applicable (the "TRANSITION-OUT PLAN").
(c) The Transition-Out Plan shall set out the obligations to be performed
by each Party in connection with the orderly transition of the
Services to the Customer (including estimates of the resources
required to achieve that transition), or its designee and shall
include, in addition to the requirements set out in this Section,
those matters described in Exhibit M [Termination Assistance
Services].
(d) Termination Assistance Services may include, among other services, any
service or assistance required by Customer for facilitating the
transfer of Operations Services to Customer or to a new service
provider, assistance and training and relocation of Customer Hardware
and Customer Software from HP-OMS sites to Customer Site(s) or new
service provider locations, as indicated by Customer.
(e) As part of the Termination Assistance Services, HP-OMS shall:
(i) do all reasonable things, execute all documents and provide the
Customer with all reasonable assistance, information, forms,
templates and documents which are required to enable services
similar to the Services to be provided to the Customer internally
or by another service provider in a manner which ensures orderly
transition and continuity of service all as more fully described
in Exhibit M [Termination Assistance Services];
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(ii) ensure that Customer receives all current and updated Customer
Data, Customer Databases, manuals, and the current and updated
source and object code of all HP-OMS Software (including Third
Party Software, provided the consent of the third party
licensor has been obtained): (a) on the applicable Hardware
transferred back from HP-OMS, in accordance with this
Agreement; or (b) where Customer does not receive the return of
such Hardware, in accordance with this Agreement, on
appropriate media in a readily useable format, as instructed by
Customer;
(iii) deliver (and not retain any copies thereof) to the Customer all
material forms of:
A. the Customer's Confidential Information;
B. other property of the Customer relating to the Services;
and
C. the current and updated source and object code of the
Customer Software;
in the possession, power or control of HP-OMS or any HP-OMS
Subcontractors, including all backup copies thereof (whether or
not those material forms were created by HP-OMS or HP-OMS
Subcontractors);
(iv) except with the prior consent of the Customer, cease accessing
any of the Customer's systems, electronic or communications
links;
(v) at the Customer's request, continue for a period not exceeding
twelve (12) months after the effective date of Agreement
termination or expiration to supply the Services to the
Customer on the terms and conditions of this Agreement pursuant
to a statement of work to be agreed by both parties which will
specify the scope, time period and other terms and conditions
thereof;
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(vi) provide to the Customer and its designated representatives,
such training in the HP-OMS Software used by HP-OMS in the
provision of the Services, as the Customer may reasonably
request, for a period of up to three (3) months;
(vii) perform the other obligations set out in the Transition-Out
Plan
(f) HP-OMS shall perform the Termination Assistance Services at the lower
of (a) the discounted rates applicable to the Bank of Work Hours, set
out in Exhibit E, Section 3.2 (BANK OF WORK HOURS); or (b) HP-OMS`
then current standard fees for such services. HP-OMS' performance of
Termination Assistance Services is subject to (i) Customer's prior
payment of all undisputed amounts due to HP-OMS under this Agreement
(and all disputed amounts to the Escrow Agent in accordance with
Section 10.5 (ESCROW OF DISPUTED AMOUNTS) up to the date of
termination or expiration of the Initial Term or Extended Term, as
applicable, and (ii) Customer allowing HP-OMS to use reasonably, at no
charge, any Customer resources and Customer Sites required to provide
the Termination Assistance Services.
(g) To the extent HP-OMS provides Termination Assistance Services during
the Initial Term or the Extended Term, the terms and condition of this
Agreement will remain in force, including but not limited to the
Service Levels and the applicable Service Level Credits. If
Termination Assistance Services is provided after the expiration or
termination of the Initial Term or the Extended Term, then Customer
shall be entitled to receive services which are the same or similar to
the Services in accordance with an agreed statement of work and
service levels, based on the Service Levels, subject to the fees
chargeable in accordance with Section 20.7(f) above.
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21. GENERAL
21.1 NON-RESTRICTIVE RELATIONSHIP. Nothing contained in this Agreement
shall be construed as creating a joint venture, partnership or
employment relationship between the Parties, nor shall either Party
have the right, power or authority to create any obligation or duty,
express or implied, on behalf of the other. This Agreement will not be
interpreted as preventing HP-OMS from entering into similar agreements
with others, whether or not in the same industry, subject to Section
5.7(b) (RESTRICTIONS ON PERFORMING SERVICES TO COMPETITORS; CHANGES TO
SYSTEM ADMINISTRATION PASSWORDS).
21.2 SECURITY
(a) PHYSICAL SECURITY. Customer is responsible for the
physical security of the Customer Sites; provided, that HP-OMS
shall be responsible for the safety and physical access and
control of the areas that HP-OMS is using in performing the
Services, and HP-OMS shall not permit any person to have
access to, or control of, any such area unless such access or
control is permitted in accordance with control procedures
approved by Customer or any higher standard agreed to by
Customer and HP-OMS (all to the extent that Customer provides
HP-OMS the physical ability to limit access and control over
such areas). HP-OMS shall be solely responsible for compliance
by HP-OMS Personnel with such control procedures, including
obtaining advance approval to the extent required.
(b) SECURITY PROCEDURES AT CUSTOMER SITES. HP-OMS shall maintain and cause
HP-OMS Personnel to adhere to the operational, safety and security
standards, requirements and procedures then in effect at the Customer
Sites, as such standards, requirements and procedures may be modified
by Customer from time to time (to the extent HP-OMS has received
written notice of such standards, requirements and procedures
or modifications thereof).
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(c) SAFEGUARDING CUSTOMER DATA.
(i) SAFEGUARDING PROCEDURES. HP-OMS shall establish and maintain
environmental, safety and facility procedures, data security
procedures and other safeguards against the destruction, loss,
unauthorized access or alteration of Customer Data in the
possession of HP-OMS which are in accordance with Customer's
security policy to be established as described in Exhibit D-.
HP-OMS shall provide to Customer backup copies of Customer Data,
in accordance with Customer's backup procedures in effect as of
the Commmencement Date, and Customer shall have the right to
keep such backup copies of the Customer Data in Customer's or a
third party's possession at Customer's expense if Customer so
chooses. HP-OMS shall remove all Customer Data from any media
taken out of service and shall destroy or securely erase such
media. No media on which Customer Data is stored may be used or
re-used to store data of any other customer of HP-OMS or to
deliver data to a third party, including another HP-OMS
customer, unless securely erased. In the event HP-OMS discovers
or is notified of a breach or potential breach of security
relating to Customer Data, HP-OMS will promptly notify Customer
and investigate and remedy the effects of such breach or
potential breach of security.
(ii) RECONSTRUCTION PROCEDURES. As part of the Services, HP-OMS shall
be responsible for developing and maintaining procedures for the
reconstruction of lost Customer Data which arein accordance with
Customer's security policy to be established as described in
Exhibit D-.
(iii) CORRECTIONS. HP-OMS shall correct, at no charge to Customer, any
destruction, loss or alteration of any Customer Data
attributable to the failure of HP-OMS or HP-OMS Personnel to
comply with HP-OMS' obligations under this Agreement.
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21.3 FILE ACCESS. Customer will have unrestricted access to, and the right
to review and retain, all computer or other files containing Customer
Data, as well as all systems and network logs. At no time will any of
such files or other materials or information be stored or held in a
form or manner not immediately accessible to Customer. HP-OMS shall
provide to the Customer all passwords, codes, comments, keys,
documentation and the locations of any such files promptly upon the
request of Customer, including Hardware and Software keys and such
information as to format, encryption (if any) and any other
specifications or information necessary for Customer to retrieve,
read, revise and/or maintain such files.
21.4 PUBLICITY. Without derogating from HP-OMS' confidentiality
obligations, HP-OMS may not use Customer as a reference in marketing
HP-OMS services unless Customer, in its sole discretion, gives its
express prior written consent to the specific case in which HP-OMS
seeks to refer a prospective HP-OMS customer to Customer. For the
avoidance of doubt, Customer's consent to act as a reference to one
prospective HP-OMS customer does not imply Customer's agreement to act
as a reference to any other prospective HP-OMS customers. In addition,
in no event will either Party publicize or disclose to any third
party, without the prior written consent of the other Party, any terms
or conditions of this Agreement, including without limitation, the
fact of its existence, except as required by applicable law.
21.5 NO ASSIGNMENT. Except with respect to HP-OMS' rights regarding the use
of HP-OMS Subcontractors, neither Party may assign any rights or
obligations under this Agreement without the prior written consent of
the other Party; provided, however, that each Party may assign or
transfer any rights and obligations hereunder to its Affiliate,
provided that the assigning Party remains liable hereunder, subject to
Section 20.2(b) (CHANGE OF CONTROL). For the avoidance of doubts:
HP-OMS' issuance of invoices in accordance with Exhibit E to entities
other than Customer shall not be deemed an assignment of Customers
legal undertaking pursuant to this agreement and the exhibits thereto,
to pay all amounts due to HP-OMS, and any non payment of such
invoices, in full or in part, shall be considered as non payment by
Customer, which shall entitle HP-OMS to all remedies and other rights
prescribed by this agreement and by law.
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21.6 FORCE MAJEURE
(a) FORCE MAJEURE EVENT. Performance delays, errors in performance or
non-performance by a Party will be excused to the extent that
performance is delayed or rendered impossible by earthquake,
strike, fire, flood, governmental acts, governmental orders, or
governmental restrictions, or where failure to perform is beyond
a Party's reasonable control (each being a "FORCE MAJEURE EVENT")
except to the extent the non-performing Party is at fault in
failing to prevent or causing such default or delay, and provided
that such default or delay cannot reasonably be circumvented by
the non-performing Party through the use of alternate sources,
workaround plans or other means, and such Party claiming a Force
Majeure Event shall be entitled to a reasonable extension of time
to remedy any such delay or failure to perform. Regular military
reserve duty of HP-OMS Personnel, strike, lockout or labor
dispute involving HP-OMS or a Subcontractor and its own personnel
shall not excuse HP-OMS from its obligations hereunder. The Party
claiming a Force Xxxxxx Event will give the other Party notice as
soon as practically possible after becoming aware of the
occurrence of a Force Majeure Event and will describe at a
reasonable level of detail the circumstances of the Force Majeure
Event, the steps being taken to address such Force Majeure Event,
and how long it is expected to continue. If a Force Majeure Event
prevents delivery of a material portion of the Operations
Services for more than sixty (60) days, Customer, with immediate
effect upon written notice to HP-OMS, may terminate this
Agreement, or may negotiate a Change Request, in accordance with
the procedures set out in Section 11 (CHANGE MANAGEMENT) for
changes to the Agreement. Subject to the foregoing, Customer
shall remain liable to pay HP-OMS such portion of the Target
Price equitably adjusted according to the portion of the
Operations Services which HP-OMS continues to perform in
accordance with the Agreement for the duration of such Force
Majeure Event.
(b) DISASTER RECOVERY. Upon the occurrence of a Force Majeure Event,
HP-OMS shall implement promptly, as appropriate, its disaster
recovery plan and provide disaster recovery services, and shall
periodically update and test such disaster recovery plan, as
described in Exhibit D. The occurrence of a Force Majeure Event
shall not relieve HP-OMS of its obligation to implement its
disaster recovery plan and provide disaster recovery services.
HP-OMS shall provide the disaster recovery services for a
separate fee to be agreed upon the parties.
(c) ALLOCATION OF RESOURCES. Without limiting HP-OMS' obligations
under this Agreement, whenever a Force Majeure Event or disaster
causes HP-OMS to allocate limited resources between or among
HP-OMS' customers and Affiliates, Customer shall receive at least
the same treatment as comparable HP-OMS customers.
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21.7 DISPUTE RESOLUTION PROCESS.
(a) GOVERNANCE. Any dispute between the Parties shall be resolved in
accordance with Exhibit N (GOVERNANCE). HP-OMS and Customer shall each
appoint one or more Project Manager(s) of suitable experience to be
its primary contact(s) to be responsible for performance of this
Agreement according to Sections 5.4 (MANAGEMENT OF HP-OMS PERSONNEL)
and 6.2 (CUSTOMER PROJECT MANAGER(S)) above. The Parties, including
the Project Managers, will meet at mutually agreed times and locations
to discuss issues arising in connection with performance of this
Agreement. In the event there is a dispute, which cannot be resolved
at these review meetings, either party may request in writing that the
Service Account managers of HP-OMS and the Director of Information
Technology of the Customer meet separately within ten (10) days to
resolve the dispute. If the dispute has not been resolved to the
mutual satisfaction of both Parties within ten (10) days of the
meeting, then the dispute shall be referred to the HP-OMS Manager and
the Customer's Manager who have authority to settle the dispute. If
the dispute has not been resolved by these representatives within ten
(10) days of the referral, HP-OMS and Customer will each designate a
senior corporate executive who will meet to resolve the dispute.
(b) MEDIATION.
(i) If the dispute is not resolved within ten (10) days of the
referral, the Parties may exercise their rights under this
Agreement, provided that prior to seeking court action (except in
the event that injunctive relief is required), the Parties shall
make reasonable, good faith efforts to resolve the matter through
nonbonding mediation (without prejudice to either Party's rights
under Section 20 (TERM; BREACH; AND TERMINATION)), according to
the following procedures:
(ii) A single mediator, with the relevant technical and legal
training, shall be appointed by agreement of the Parties; if the
Parties fail to agree upon the mediator within thirty (30) days
of notice of mediation, provided by either Party, the then
president of the Israel Bar Association shall appoint the
mediator. The mediator shall be made aware of the terms hereof
prior to his appointment. The mediation shall be carried on
continuously and completed within forty-five (45) business days
of its commencement (or such other period agreed by the Parties)
(the "MEDIATION PERIOD"). Each Party shall bear its own costs of
participating in the mediation. If after the Mediation Period,
the Parties have still not resolved their dispute, each Party may
seek resolution in accordance with Section 21.16 (GOVERNING Law).
21.8 WAIVER. Neither Party's failure to exercise any of its rights under
this Agreement shall constitute or be deemed to constitute a waiver or
forfeiture of such rights.
21.9 SEVERABILITY. If any term or provision of this Agreement is held to be
illegal or unenforceable, the validity or enforceability of the
remainder of this Agreement shall not be affected.
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21.10 EXHIBITS. The Exhibits attached and listed below are part of this
Agreement:
Exhibit A Services Description
Exhibit B Statement of Work
Exhibit C Service Level Agreement
Exhibit D Transition and Stabilization
Exhibit E Pricing and Pricing Principles
Exhibit F Employee Transfer Agreement
Exhibit G Project Staff and Key Contacts
Exhibit H Customer Sites
Exhibit I HP-OMS Software and Customer Software Categories
Exhibit J Customer Competitors
Exhibit K Guarantee of Tecnomatix Technologies Ltd.
Exhibit L Guarantee of Hewlett-Packard Israel Ltd.
Exhibit M Termination Assistance
Exhibit N Governance
Exhibit O1 Third Party Contracts
Exhibit O2 Not Transferred Third Party Contracts
Exhibit P Escrow Agreement
21.11 SURVIVAL. The following provisions survive termination of this
Agreement: Sections 5.7(b)(1) (RESTRICTIONS ON PERFORMING SERVICES TO
COMPETITORS; CHANGES TO SYSTEM ADMINISTRATION PASSWORDS.) 10 (Price
and Payment), 14.2-14.8 (FUNDAMENTAL OBLIGATIONS; WARRANTIES AND
DISCLAIMERS), 15 (INTELLECTUAL PROPERTY RIGHTS), 16 (INDEMNITIES), 17
(CONFIDENTIAL INFORMATION), 18 (LIMITATION OF LIABILITY), 20 (TERM;
BREACH; AND TERMINATION) and 21.7 (DISPUTE RESOLUTION PROCESS); 21.16
(GOVERNING LAW; JURISDICTION).
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21.12 HEADINGS. The headings in this Agreement are for the convenience of
the Parties only, and are in no way intended to define or limit the
scope or interpretation of the Agreement or any provision hereof.
21.13 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between HP-OMS and Customer, and supersedes any prior or
contemporaneous communications, representations or agreements between
the Parties, whether oral or written, regarding the subject matter of
this Agreement. Either Party's additional or different terms and
conditions shall not apply. The terms and conditions of this Agreement
may not be changed except by an amendment signed by an authorized
representative of each Party.
21.14 CONFLICTS. If there is a conflict among the terms in the various
documents within this Agreement:
(a) to the extent the conflicting provisions can reasonably be
interpreted so that such provisions are consistent with each
other, such consistent interpretation will prevail; and
(b) to the extent clause (a) above does not apply, the following
order of precedence shall prevail:
i) this Agreement (exclusive of its attachments) will
prevail over a conflicting term in its Exhibits; and
ii) an Exhibit will prevail over a conflicting term in its
Appendices.
21.15 NOTICES. All notices that are required to be given under this
Agreement shall be in writing and shall be sent to the address of
HP-OMS and Customer recipient set out below. For the purposes of this
Section the address of each Party shall be:
CUSTOMER: Tecnomatix Ltd
Attention: Director of IT
Address: 00 Xxxxxxx Xxxxxx, Xxxxxxx Pituach, Israel
Telephone: x000-0-0000000
Facsimile: x000-0-0000000
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WITH A COPY OF ALL DEFAULT NOTICES TO: CUSTOMER'S LEGAL COUNSEL at the
above address
HP-OMS: HP-OMS-COMPAQ (Israel) Ltd.
Attention: Project Manager - Tecnomatix
Address: 9 Dafna St. Ra'anana
Telephone: 00-0000000
Facsimile: 09-7425155
WITH A COPY OF ALL DEFAULT NOTICES TO:
Attention: HP-OMS Legal Counsel, at the above address
Unless specified otherwise in this Agreement, when HP-OMS or Customer is
required to provide written notice to the other, such notice will be deemed
given upon the earlier of:
[i] the day of receipt, if delivered in person or electronically;
[ii] the day of receipt, if delivered by facsimile, upon confirmation of
transmission, provided that a confirmatory copy is sent by first
class pre-paid mail, overnight courier, or hand delivery by the end
of the next business day.
[iii] one (1) business day after being given to an express courier with a
reliable system for tracking delivery; or
[iv] three (3) business days after the date of mailing, when using local
postal services, registered or certified mail, return receipt
requested, postage prepaid.
21.16 GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and
construed in accordance with the laws of Israel. Subject to Section
21.7 (DISPUTE RESOLUTION PROCESS), any dispute, controversy or claim
arising out of or relating to this Agreement or the breach,
termination or validity thereof shall be exclusively and finally
settled in the competent courts in Tel Aviv, Israel.
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IN WITNESS WHEREOF, HP-OMS AND CUSTOMER, EACH ACTING WITH PROPER AUTHORITY, HAVE
CAUSED THIS AGREEMENT TO BE EXECUTED AS OF THE DATE SET FORTH BELOW.
Made in Israel, in two original counterparts, each Party receiving its own.
SIGNED FOR AND ON BEHALF OF SIGNED FOR AND ON BEHALF OF
TECNOMATIX LTD HP-OMS-COMPAQ (ISRAEL)
LTD
By: /s/ Harel Beit-On___________ By: /s/ Xxxxx Xxxxxx
Name: Harel Beit-On_______________ Name: Xxxxx Xxxxxx
Title: Chairman & CEO______________ Title: HPS Country Manager____
Date: 30.10.2003__________________ Date: 30.10.2003
By: /s/ Efrat Safran____________ By: /s/ Xxxxxx Xxxxx
Name: Efrat Safran________________ Name: Xxxxxx Xxxxx
Title: General Counsel_____________ Title: HP-OMS General Manager
Date: 30.10.2003__________________ Date: 30.10.2003
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