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EXHIBIT 10.4
INTERIM SERVICES AND SYSTEMS REPLICATION AGREEMENT
by and among
AT&T CORP.,
LUCENT TECHNOLOGIES INC.
and
XXX XXXXXXXXXXX
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INTERIM SERVICES AND SYSTEMS REPLICATION AGREEMENT
TABLE OF CONTENTS
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Additional Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Corporate Support Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Data Processing Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Expiration Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Impracticable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Initial Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Providing Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.8 Receiving Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.9 Representative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.10 Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.11 System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.12 System Error. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.13 Systems Replication and Transfer Services . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.14 Telecommunications Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.15 Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(a) Initial Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(i) Data Processing Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(ii) Telecommunications Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(iii) Corporate Support Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(iv) Systems Replication and Transfer Services . . . . . . . . . . . . . . . . . . . . . 3
(b) Final Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(c) Additional Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(d) Services Performed by Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Charges and Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(a) Charges for Initial Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(b) Charges for Additional Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(c) Payment Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(d) Performance under Ancillary Agreements . . . . . . . . . . . . . . . . . . . . . . . . . 6
(e) Error Correction; True-ups; Accounting . . . . . . . . . . . . . . . . . . . . . . . . . 6
(f) Pricing Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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2.4 General Obligations; Standard of Care . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(a) Performance Metrics: Providing Company . . . . . . . . . . . . . . . . . . . . . . . . 7
(b) Performance Metrics: Receiving Company . . . . . . . . . . . . . . . . . . . . . . . . 7
(c) Transitional Nature of Services; Changes . . . . . . . . . . . . . . . . . . . . . . . . 7
(d) Responsibility for Errors; Delays . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(e) Good Faith Cooperation; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(f) Alternatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.5 Certain Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(a) Service Boundaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(b) Impracticability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(c) Additional Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(d) No Sale, Transfer, Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.6 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(a) Information Subject to Other Obligations . . . . . . . . . . . . . . . . . . . . . . . . 9
(b) All Information Confidential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(c) Internal Use; Title; Copies, Return . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.7 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(a) Receiving Company Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(b) Providing Company Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(c) Termination of Less than All Services . . . . . . . . . . . . . . . . . . . . . . . . . 11
(d) User IDs, Passwords . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.8 Disclaimer of Warranties, Limitation of Liability and Indemnification . . . . . . . . . . . 11
(a) Disclaimer of Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(b) Limitation of Liability; Indemnification of Receiving Company . . . . . . . . . . . . . 11
(c) Limitation of Liability; Indemnification of Providing Company . . . . . . . . . . . . . 11
(d) Subrogation of Rights vis-a-vis Third Party Contractors . . . . . . . . . . . . . . . . 12
2.9 Representative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE III MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.1 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.2 Laws and Governmental Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.3 Relationship of Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.4 Incorporation of Provisions of the Separation and Distribution Agreement . . . . . . . . . . 13
3.5 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.6 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.7 Modification and Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.8 Inconsistency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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INTERIM SERVICES AND SYSTEMS REPLICATION AGREEMENT
THIS INTERIM SERVICES AND SYSTEMS REPLICATION AGREEMENT, dated
as of February 1, 1996 (the "Effective Date"), is by and among AT&T Corp., a New
York corporation ("AT&T"), Lucent Technologies Inc., a Delaware corporation
("Lucent"), and XXX Xxxxxxxxxxx, a Maryland corporation ("NCR"). Capitalized
terms used herein and not otherwise defined shall have the respective meanings
assigned to them in Article I hereof or as assigned to them in the Separation
and Distribution Agreement (as defined below).
WHEREAS, the Board of Directors of AT&T has determined that it
is in the best interests of AT&T and its shareholders to separate AT&T's
existing businesses into three independent businesses;
WHEREAS, in order to effectuate the foregoing, AT&T, Lucent
and NCR have entered into a Separation and Distribution Agreement, dated as of
the date hereof (the "Separation and Distribution Agreement"), which provides,
among other things, subject to the terms and conditions thereof, for the
Separation of the Lucent Assets and Lucent Liabilities, the IPO, the
Distribution and the execution and delivery of certain other agreements in
order to facilitate and provide for the foregoing; and
WHEREAS, in order to ensure an orderly transition under the
Separation and Distribution Agreement it will be necessary for one or more of
the parties to provide to one or both of the other parties the Services
described herein for a transitional period.
NOW, THEREFORE, in consideration of the premises and for other
good and valid consideration, the receipt and adequacy of which are hereby
acknowledged, the parties, intending to be legally bound, agree as follows:
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ARTICLE I
DEFINITIONS
For the purpose of this Agreement the following terms shall
have the following meanings:
1.1 ADDITIONAL SERVICES shall have the meaning set forth
in subsection 2.1(c).
1.2 CORPORATE SUPPORT SERVICES shall mean the Services
described in the Exhibits set forth in subsection 2.1(a)(iii).
1.3 DATA PROCESSING SERVICES shall mean the Services
described in the Exhibits set forth in Subsection 2.1(a)(i).
1.4 EXPIRATION DATE shall have the meaning set forth in
Section 2.2.
1.5 IMPRACTICABLE (and words of similar import) shall
have the meaning set forth in subsection 2.5(b).
1.6 INITIAL SERVICES shall have the meaning set forth in
subsection 2.1(a).
1.7 PROVIDING COMPANY shall mean, with respect to any
particular Service, the entity or entities identified on the applicable Exhibit
as the party to provide such Service.
1.8 RECEIVING COMPANY shall mean, with respect to any
particular Service, the entity or entities identified on the applicable Exhibit
as the party to receive such Service.
1.9 REPRESENTATIVE of any party shall mean a managerial
level employee appointed by such party to have the responsibilities and
authority set forth in Section 2.9.
1.10 SERVICE shall have the meaning set forth in
subsection 2.1(c).
1.11 SYSTEM shall mean the software, hardware, data store
or maintenance and support components or portions of such components of a set
of information technology assets identified in an Exhibit hereto.
1.12 SYSTEM ERROR shall have the meaning set forth in
subsection 2.4(d)(iii).
1.13 SYSTEMS REPLICATION AND TRANSFER SERVICES shall mean
the Services described in the Exhibits set forth in subsection 2.1(a)(iv).
1.14 TELECOMMUNICATIONS SERVICES shall mean the Services
described in the Exhibits set forth in subsection 2.1(a)(ii).
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1.15 TERMINATION DATE shall have the meaning set forth in
Section 2.2.
ARTICLE II
SERVICES
2.1 SERVICES.
(a) INITIAL SERVICES. Except as otherwise provided
herein, for the term determined pursuant to Section 2.2 hereof, Providing
Company shall provide or cause to be provided to Receiving Company, in each
case as identified in the Exhibits attached hereto or subsequently agreed to
prior to the Closing Date in accordance with the procedures set forth herein,
the following "Initial Services":
(i) DATA PROCESSING SERVICES described in
Exhibits DP-1 through DP-8;
(ii) TELECOMMUNICATIONS SERVICES described in
Exhibits TC-1 through TC-15;
(iii) CORPORATE SUPPORT SERVICES described in
Exhibits 001(CFO) through CS-050(CFO), CS-201(HR) through CS-264(HR);
CS-301(GPO) through CS-332(GPO), CS-401(GRE) through CS-440(GRE), CS-501(L&GA)
through CS-524(L&GA), CS-601(PR) through CS-606 (PR), CS-701 (E&S) through
CS-714(E&S), CS-801(BL) through CS-823(BL) and CS-901(GEN) through CS-905(GEN),
as more fully identified in the list preceding each series of Exhibits hereto;
and
(iv) SYSTEMS REPLICATION AND TRANSFER SERVICES
described in Exhibits SR-001(CFO) through SR-182(CFO), SR-201(HR) through
SR-236(HR), SR-301(GPO) through SR-324(GPO), SR-401(GRE) through SR-423(GRE),
SR-501(L&GA) through SR-559(L&GA), SR-701(E&S) through SR-717(E&S) and
SR-801(BL) through SR-809(BL).
(b) FINAL EXHIBITS. The parties have made good faith
efforts as of the date hereof to identify each Initial Service and complete the
content of each Exhibit pertaining to the Initial Services. To the extent an
Exhibit has not been prepared for an Initial Service or an Exhibit is otherwise
incomplete as of the date hereof, the parties shall use good faith efforts to
prepare or complete Exhibits by the Closing Date. Any Services reflected on
any such additional or amended Exhibit shall be deemed an "Initial Service" as
if set forth on such Exhibit as of the date hereof.
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(c) ADDITIONAL SERVICES.
(i) From time to time after the Closing Date, the
parties may identify additional services that one party will provide to one or
both of the other parties in accordance with the terms of this Agreement (the
"Additional Services" and, together with the Initial Services, the "Services").
The parties shall create an Exhibit for each Additional Service setting forth
the identities of the Providing Company and the Receiving Company, a
description of the Service, the time period during which the Service will be
provided, the charge, if any, for the Service and any other terms applicable
thereto and obtain the approval of each party's Representative. Except as set
forth in subsection 2.1(c)(ii), the parties may, but shall not be required to,
agree on Additional Services during the term of this Agreement.
(ii) Except as set forth in the next sentence, the
Providing Company shall be obligated to perform, at charges established
pursuant to subsection 2.3(b), any Additional Service that: (A) was provided
by the Providing Company immediately prior to the Closing Date and that
Receiving Company reasonably believes was inadvertently or unintentionally
omitted from the list of Initial Services or (B) is essential to effectuate an
orderly transition under the Separation and Distribution Agreement unless such
performance would significantly disrupt Providing Company's operations or
materially increase the scope of its responsibility under this Agreement. If
Providing Company reasonably believes the performance of Additional Services
required under subparagraphs (A) or (B) would significantly disrupt its
operations or materially increase the scope of its responsibility under this
Agreement, the Providing Company and Receiving Company shall negotiate in good
faith to establish terms under which Providing Company can provide such
Additional Services, but the Providing Company shall not be obligated to
provide such Additional Services if, following good faith negotiation, it is
unable to reach agreement on such terms.
(d) SERVICES PERFORMED BY OTHERS. At its option,
Providing Company may cause any Service it is required to provide hereunder to
be provided by another member of its Group or by any other Person that is
providing, or may from time to time provide, the same or similar services for
the Providing Company. The Providing Company shall remain responsible, in
accordance with the terms of this Agreement, for performance of any Service it
causes to be so provided.
2.2 TERM. The term of this Agreement shall commence on
the Effective Date and shall remain in effect through December 31, 1998
("Expiration Date"), unless earlier terminated under Section 2.7 ("Termination
Date"). This Agreement may be extended by the parties in writing either in
whole or with respect to one or more of the Services, provided, however, that
such extension shall only apply to the Service for which the Agreement was
extended. The parties shall be deemed to have extended this Agreement
respecting a specific Service if the Exhibit for such Service specifies a
completion date beyond the aforementioned Expiration Date. The parties may
agree on an earlier expiration date respecting a specific Service by specifying
such date on the Exhibit for that Service. Services shall be provided up to
and including the date set forth in the applicable Exhibit, subject to earlier
termination as provided herein, with the understanding that Services scheduled
to expire on September 30, 1996 shall
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expire on the later of September 30, 1996 and the Distribution Date unless the
parties otherwise agree with respect to a specific Service.
2.3 CHARGES AND PAYMENT.
(a) CHARGES FOR INITIAL SERVICES. Receiving Company
shall pay Providing Company the charges, if any, set forth on the Exhibit for
each of the Services listed therein as adjusted, from time to time, in
accordance with the process and procedures established under subsection 2.3(e)
hereof. Wherever practical, charges shall be based on actual incurred costs,
not budgeted or estimated costs. The parties also intend for charges to be
easy to administer and justify and, therefore, they hereby acknowledge it may
be counterproductive to try to recover every cost, charge or expense
particularly those that are insignificant or de minimis. The parties shall use
good faith efforts to discuss any situation in which the actual charge for a
Service is reasonably expected to exceed the estimated charge, if any, set
forth on an Exhibit for a particular Service, provided, however, that the
incurrence of charges in excess of any such estimate shall not justify stopping
the provision of, or payment for, Services under this Agreement.
(i) In the case of Data Processing Services,
Telecommunications Services or Common Support Services, except as otherwise set
forth in an Exhibit for a specific Service, the parties intend for these
charges to allow Providing Company to recover the fully allocated direct costs
of providing such Services plus all out-of-pocket, third party costs, charges
or expenses, but without any profit. Where the number of employees assigned by
each party to jointly support an Initial Service is in proportion to the
parties' historical or expected use of such Initial Service, and each party is
responsible for the costs and expenses of its employees so assigned, recovery
may be limited to other direct costs, such as data processing and software
license fees.
(ii) In the case of Systems Replication and
Transfer Services, except as otherwise set forth in an Exhibit for a specific
Service, the parties intend that costs and expenses associated with isolating,
separating or replicating a System be borne by the parties in proportion to
their usage of the System prior to the Effective Date. The parties shall
determine the appropriate proportion of each party for each Systems Replication
and Transfer Service prior to the Closing Date. Where the number of employees
assigned by each party to jointly replicate or transfer a System is in
proportion to the parties' historical or expected use of such System, and each
party is responsible for the costs of its employees so assigned, recovery may
be limited to other direct costs such as third party contractor fees or
extraordinary data processing or networking costs. For purposes of the
foregoing, the parties acknowledge that, unless otherwise agreed in writing,
the costs of buying new hardware or obtaining new software licenses shall be
the responsibility of the party purchasing such hardware or licensing such
software.
(b) CHARGES FOR ADDITIONAL SERVICES. Receiving Company
shall pay Providing Company the charges, if any, set forth on each Exhibit
hereafter created for each of the Additional Services listed therein. Except
for Systems Replication and Transfer Services
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required by Section 2.1(c)(ii), costs and expenses associated with System
Replication and Transfer Additional Services shall be borne by the party
requesting such Additional Services. Charges, if any, for other Additional
Services, including those required by Section 2.1(c)(ii), shall be determined
according to methods in use prior to the Closing Date or such other method as
may be mutually agreed that ensures that Providing Company recovers costs and
expenses, but without any profit, in accordance with subsection 2.3(a).
Notwithstanding the foregoing, however, the agreement of a party to provide or
receive any Additional Service that is not required pursuant to subsection
2.1(c)(ii) at any given rate or charge shall be at the sole discretion of such
party.
(c) PAYMENT TERMS. Providing Company shall xxxx
Receiving Company monthly for all charges pursuant to this Agreement. Such
bills shall be accompanied by reasonable documentation or other reasonable
explanation supporting such charges. Receiving Company shall pay Providing
Company for all Services provided hereunder within thirty (30) days after
receipt of an invoice therefor. Late payments shall bear interest at the Prime
Rate plus two percent (2%) per annum.
(d) PERFORMANCE UNDER ANCILLARY AGREEMENTS.
Notwithstanding anything to the contrary contained herein, Receiving Company
shall not be charged under this Agreement for any Services that are
specifically required to be performed under the Separation and Distribution
Agreement or any other Ancillary Agreement and any such other Services shall be
performed and charged for in accordance with the terms of the Separation and
Distribution Agreement or such other Ancillary Agreement.
(e) ERROR CORRECTION; TRUE-UPS; ACCOUNTING. Before the
Closing Date, the parties shall agree on a process and procedure for conducting
internal audits and making adjustments to charges as a result of the movement
of employees and functions between parties, the discovery of errors or
omissions in charges, as well as a true-up of amounts owed. The parties shall
set forth the agreed upon process and procedure in Exhibit 1 hereto. In no
event shall such processes and procedures extend beyond one (1) year after
completion of a Service.
(f) PRICING ADJUSTMENTS. In the event of a tax audit
adjustment relating to the pricing of any or all Services provided pursuant to
this Agreement in which it is determined by a taxing authority that any of the
charges, individually or in combination, did not result in an arm's-length
payment, as determined under internationally accepted arm's-length standards,
then the parties, including a Providing Company subcontractor or a member of
the Providing Company's Group providing or receiving Services hereunder, may
agree to make corresponding adjustments to the charges in question for such
period to the extent necessary to achieve arm's-length pricing. Any adjustment
made pursuant to this subsection 2.3(f) shall be reflected in the parties'
official books and records, and the resulting overpayment or underpayment shall
create an obligation to be paid in the manner specified in subsection 2.3(c).
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2.4 GENERAL OBLIGATIONS; STANDARD OF CARE.
(a) PERFORMANCE METRICS: PROVIDING COMPANY. Subject to
subsection 2.5(c), the Providing Company shall maintain sufficient resources to
perform its obligations hereunder. Specific performance metrics for the
Providing Company may be set forth in Exhibits. Where none is set forth for
Data Processing Services, Telecommunications Services and Common Support
Services, the Providing Company shall use reasonable efforts to provide
Services in accordance with the policies, procedures and practices in effect
before the date hereof and shall exercise the same care and skill as it
exercises in performing similar services for itself. Where none is set forth
for System Replication and Transfer Services, the Providing Company will use
reasonable efforts to replicate and transfer each System so that it has
substantially the same functionality for Receiving Company as it did
immediately before the date hereof taking into account changes reasonably
expected and customary in a new operating environment.
(b) PERFORMANCE METRICS: RECEIVING COMPANY. Specific
performance metrics for the Receiving Company may be set forth in Exhibits.
Where none is set forth, the Receiving Company shall use reasonable efforts, in
connection with receiving Services, to follow the policies, procedures and
practices in effect before the date hereof including providing information and
documentation sufficient for Providing Company to perform the Services as they
were performed before the date hereof and making available, as reasonably
requested by the Providing Company, sufficient resources and timely decisions,
approvals and acceptances in order that Providing Company may accomplish its
obligations hereunder in a timely manner.
(c) TRANSITIONAL NATURE OF SERVICES; CHANGES. The
parties acknowledge the transitional nature of the Services and that Providing
Company may make changes from time to time in the manner of performing the
Services if Providing Company is making similar changes in performing similar
services for members of its own Group and if Providing Company furnishes to
Receiving Company substantially the same notice Providing Company shall provide
members of its own Group respecting such changes. Notwithstanding the
foregoing, between the date hereof and January 1, 1997, Providing Company will
not make any material change to Systems affecting Receiving Company without
first providing thirty (30) days prior written notice and obtaining Receiving
Company's prior written consent, which consent shall not be unreasonably
withheld or delayed.
(d) RESPONSIBILITY FOR ERRORS; DELAYS. Providing
Company's sole responsibility to Receiving Company:
(i) for errors or omissions in Data Processing
Services, Telecommunications Services and Common Support Services, shall be to
furnish correct information, payment and/or adjustment in the Services, at no
additional cost or expense to Receiving Company; provided, Receiving Company
must promptly advise Providing Company of any such error or omission of which
it becomes aware after having used reasonable efforts to detect any such errors
or omissions in accordance with the standard of care set forth in subsection
2.4(b);
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(ii) for failure to deliver any Data Processing
Service, Telecommunications Service or Common Support Service because of
Impracticability, shall be to use reasonable efforts, subject to subsection
2.5(c), to make the Services available and/or to resume performing the Services
as promptly as reasonably practicable;
(iii) for an error, bug, fault or deficiency in a
replicated or transferred System (a "System Error") that did not exist in the
System immediately before the Closing Date, shall be to use reasonable efforts,
subject to subsection 2.5(c) and taking into account the importance of the
affected System to the Receiving Company's business operations, to cooperate
with Receiving Company to correct such System Error at no additional cost or
expense to Receiving Company (such correction may take the form of new or
revised software or an appropriate work-around); provided, Receiving Company
must advise Providing Company of any such System Error within sixty (60) days
after completion of the activities set forth in (A) the Exhibit for the System
containing a System Error or (B) the Exhibit for any feeder System that caused
the System Error, whichever is later;
(iv) for failure to complete any of the Systems
Replication or Transfer Services because of Impracticability, shall be to use
reasonable efforts, subject to subsection 2.5(c), to make the Systems available
to Receiving Company from a Providing Company facility until Providing Company
can resume replication or transfer activities or until the parties devise an
appropriate alternative approach pursuant to subsection 2.4(f).
(e) GOOD FAITH COOPERATION; CONSENTS. The parties will
use good faith efforts to cooperate with each other in all matters relating to
the provision and receipt of Services. Such cooperation shall include
exchanging information, providing electronic access to Systems used in
connection with Services, performing true-ups and adjustments and obtaining all
consents, licenses, sublicenses or approvals necessary to permit each party to
perform its obligations hereunder. The costs of obtaining such consents,
licenses, sublicenses or approvals shall be allocated in accordance with
Section 2.3(a). The parties will maintain documentation supporting the
information contained in the Exhibits and cooperate with each other in making
such information available as needed in the event of a tax audit, whether in
the United States or any other country.
(f) ALTERNATIVES. If Providing Company reasonably
believes it is unable to provide any Service because of a failure to obtain
necessary consents, licenses, sublicenses or approvals pursuant to subsection
2.4(e) or because of Impracticability, the parties shall cooperate to determine
the best alternative approach. Until such alternative approach is found or the
problem otherwise resolved to the satisfaction of the parties, the Providing
Party shall use reasonable efforts, subject to Section 2.5(b) and Section
2.5(c), to continue providing the Service or, in the case of Systems, to
support the function to which the System relates or permit Receiving Party to
have access to the System so Receiving Party can support the function itself.
To the extent an agreed upon alternative approach requires payment above and
beyond that which is included in the Providing Company's charge for the Service
in question, the parties shall share equally in making any such payment unless
they otherwise agree in writing.
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2.5 CERTAIN LIMITATIONS.
(a) SERVICE BOUNDARIES. Except as provided in an Exhibit
for a specific Service: (i) Providing Company shall be required to provide the
Services only to the extent and only at the locations such Services are being
provided by Providing Company for the members of the Receiving Company's Group
immediately prior to the Effective Date; and (ii) the Services will be
available only for purposes of conducting the business of the Receiving Company
substantially in the manner it was conducted prior to the Effective Date.
(b) IMPRACTICABILITY. Providing Company shall not be
required to provide any Service to the extent the performance of such Service
becomes "Impracticable" as a result of a cause or causes outside the reasonable
control of Providing Company including unfeasible technological requirements,
or to the extent the performance of such Services would require Providing
Company to violate any applicable laws, rules or regulations or would result in
the breach of any software license or other applicable contract.
(c) ADDITIONAL RESOURCES. Except as provided in an
Exhibit for a specific Service, in providing the Services, Providing Company
shall not be obligated to: (i) hire any additional employees; (ii) maintain the
employment of any specific employee; (iii) purchase, lease or license any
additional equipment or software; or (iv) pay any costs related to the transfer
or conversion of Receiving Company's data to Receiving Company or any alternate
supplier of Services.
(d) NO SALE, TRANSFER, ASSIGNMENT. Receiving Company may
not sell, transfer, assign or otherwise use the Services provided hereunder, in
whole or in part, for the benefit of any Person other than a member of the
Receiving Company's Group.
2.6 CONFIDENTIALITY.
(a) INFORMATION SUBJECT TO OTHER OBLIGATIONS. Providing
Company and Receiving Company agree that all Information regarding the
Services, including, but not limited to, price, costs, methods of operation,
and software, shall be maintained in confidence and shall be subject to Article
VIII, relating to preservation and exchange of information and protection of
Proprietary Information, of the Separation and Distribution Agreement.
(b) ALL INFORMATION CONFIDENTIAL. Providing Company's
Systems used to perform the Services provided hereunder are confidential and
proprietary to Providing Company or third parties. Receiving Company shall
treat these Systems and all related procedures and documentation as
confidential and proprietary to Providing Company or its third party vendors.
(c) INTERNAL USE; TITLE, COPIES, RETURN. Subject to
Article IV of the Technology Assignment and Joint Ownership Agreement, between
AT&T and Lucent,
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relating to ownership of copyrights, and Article II of the Technology License
Agreement, relating to ownership of and rights to use technology, Receiving
Company agrees that:
(i) all Systems, procedures and related materials
provided to Receiving Company are for Receiving Company's internal use only and
only as related to the Services or any of the underlying Systems used to
provide the Services;
(ii) title to all Systems used in performing the
Services provided hereunder shall remain in Providing Company or its third
party vendors;
(iii) Receiving Company shall not copy, modify,
reverse engineer, decompile or in any way alter Systems without Providing
Company's express written consent;
(iv) Upon the termination of any of the Services,
Receiving Company shall return to Providing Company, as soon as practicable,
any equipment or other property of Providing Company relating to the Services
which is owned or leased by it and is or was in Receiving Company's possession
or control.
2.7 TERMINATION.
(a) RECEIVING COMPANY TERMINATION. Receiving Party may
terminate this Agreement either with respect to all, or with respect to any one
or more, of the Data Processing Services, Telecommunications Services or Common
Support Services provided hereunder at any time and from time to time, for any
reason or no reason, by giving written notice to the Providing Party at least
ninety (90) days prior to the date of such termination. Receiving Company may
immediately terminate this Agreement either with respect to all, or with
respect to any one or more, of the Systems Replication and Transfer Services
provided hereunder at any time and from time to time, for any reason or no
reason, by giving written notice to the Providing Party. In the case of
termination by Receiving Company of a Systems Replication and Transfer Service,
Receiving Company shall compensate Providing Party for the costs, in accordance
with subsection 2.3(a)(ii), incurred by Providing Party in performing such
Service up to the date on which Providing Party receives written notice of
Receiving Party's termination.
(b) PROVIDING COMPANY TERMINATION. Except where a longer
term is set forth in an Exhibit for any particular Service, Providing Company
may terminate this Agreement either with respect to all, or with respect to any
one or more, of the Services provided hereunder at any time after January 1,
1997, for any reason or no reason, by giving written notice to the Receiving
Party at least ninety (90) days prior to the date of such termination. If
Providing Company terminates this Agreement under this subsection 2.7(b), it
will have a continuing obligation to transfer to the Receiving Company all
Information of Receiving Company, including but not limited to data stores for
Systems, in an agreed upon format and at mutual equal expense.
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(c) TERMINATION OF LESS THAN ALL SERVICES. In the event
of any termination with respect to one or more, but less than all, Services,
this Agreement shall continue in full force and effect with respect to any
Services not terminated hereby.
(d) USER IDS, PASSWORDS. The parties shall use good
faith efforts at the termination or expiration of this Agreement or any
specific Exhibit hereto, to ensure that all user IDs and passwords are canceled
and, subject to Section 2.5(c), that any data pertaining solely to the other
parties are deleted or removed from Systems.
2.8 DISCLAIMER OF WARRANTIES, LIMITATION OF LIABILITY AND
INDEMNIFICATION.
(a) DISCLAIMER OF WARRANTIES. PROVIDING COMPANY
DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO,
THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE,
WITH RESPECT TO THE SERVICES. PROVIDING COMPANY MAKES NO REPRESENTATIONS OR
WARRANTIES AS TO THE QUALITY, SUITABILITY OR ADEQUACY OF THE SERVICES FOR ANY
PURPOSE OR USE.
(b) LIMITATION OF LIABILITY; INDEMNIFICATION OF RECEIVING
COMPANY. Providing Company shall have no Liability to Receiving Company with
respect to its furnishing any of the Services hereunder except for Liabilities
arising out of the willful misconduct occurring after the Closing Date of
Providing Company or any member of the Providing Company's Group. Providing
Company will indemnify, defend and hold harmless Receiving Company Indemnitees
in respect of all Liabilities related to, arising from, asserted against or
associated with such willful misconduct. Such indemnification obligation shall
be a Liability of the Providing Company for purposes of the Separation and
Distribution Agreement and the provisions of Article V with respect to
indemnification shall govern with respect thereto. In no event shall Providing
Company or any member of the Providing Company's Group have any Liability for
any incidental, indirect, special or consequential damages, whether or not
caused by or resulting from negligence or breach of obligations hereunder and
whether or not informed of the possibility of the existence of such damages.
(c) LIMITATION OF LIABILITY; INDEMNIFICATION OF PROVIDING
COMPANY. Receiving Company shall indemnify and hold harmless the Providing
Company's Indemnitees in respect of all Liabilities related to, arising from,
asserted against or associated with Providing Company's furnishing or failing
to furnish the Services provided for in this Agreement, other than Liabilities
arising out of the willful misconduct following the Closing Date of Providing
Company or any member of the Providing Company's Group. The provisions of this
indemnity shall apply only to losses which relate directly to the provision of
Services. Such indemnification obligation shall be a Liability of the
Receiving Company for purposes of the Separation and Distribution Agreement and
the provisions of Article V with respect to indemnification shall govern with
respect thereto. In no event shall Receiving Company or any member of the
Receiving Company's Group have any Liability for any incidental, indirect,
special or consequential damages, whether or not caused by or resulting from
negligence or
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15
breach of obligations hereunder and whether or not informed of the possibility
of the existence of such damages.
(d) SUBROGATION OF RIGHTS VIS-A-VIS THIRD PARTY
CONTRACTORS. In the event any Liability arises from the performance of
Services hereunder by a third party contractor, the Receiving Company shall be
subrogated to such rights, if any, as the Providing Company may have against
such third party contractor with respect to the Services provided by such third
party contractor to or on behalf of the Receiving Company.
2.9 REPRESENTATIVE. The parties shall each appoint a
Representative to facilitate communications and performance under this
Agreement. Each party may treat an act of a Representative of another party as
being authorized by such other party without inquiring behind such act or
ascertaining whether such Representative had authority to so act. The initial
Representatives are named on Exhibit 2. Each party shall have the right at any
time and from time to time to replace any of its Representatives by giving
notice in writing to the other party setting forth the name of (i) each
Representative to be replaced and (ii) the replacement, and certifying that the
replacement Representative is authorized to act for the party giving the notice
in all matters relating to this Agreement. Each Representative is hereby
authorized by the party he or she represents to approve the establishment of
new or modifications to existing Exhibits for Initial Services before or after
the Closing Date and the addition of new Exhibits for Additional Services after
the Closing Date.
ARTICLE III
MISCELLANEOUS
3.1 TAXES. Receiving Company shall bear all taxes,
duties and other similar charges (and any related interest and penalties),
imposed as a result of its receipt of Services under this Agreement, including
any tax which Receiving Company is required to withhold or deduct from payments
to Providing Company, except (a) any tax allowable as a credit against the U.S.
Federal income tax of the Providing Company, and (b) any net income tax imposed
upon Providing Company by the country of its incorporation or any governmental
entity within its country of incorporation. To assist Providing Company in
obtaining the credit identified in subsection (b) of this Section 3.1,
Receiving Company shall furnish Providing Company with such evidence as may be
required by the relevant taxing authorities to establish that any such tax has
been paid.
3.2 LAWS AND GOVERNMENTAL REGULATIONS. Receiving Company
shall be responsible for (i) compliance with all laws and governmental
regulations affecting its business and (ii) any use Receiving Company may make
of the Services to assist it in complying with such laws and governmental
regulations. While Providing Company shall not have any responsibility for
Receiving Company's compliance with the laws and regulations referred to above,
Providing Company agrees to use reasonable efforts, subject to subsection
2.5(c), to cause the Services to be designed in such manner that such Services
shall be able to assist Receiving
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Company in complying with applicable legal and regulatory responsibilities.
The Providing Company's charge, if any, for such Service may reflect its
efforts under this Section 3.2. In no event, however, shall Receiving Company
rely solely on its use of the Services in complying with any laws and
governmental regulations.
3.3 RELATIONSHIP OF PARTIES. Nothing in this Agreement
shall be deemed or construed by the parties or any third party as creating the
relationship of principal and agent, partnership or joint venture between the
parties, it being understood and agreed that no provision contained herein, and
no act of the parties, shall be deemed to create any relationship between the
parties other than the relationship of independent contractor nor be deemed to
vest any rights, interest or claims in any third parties.
3.4 INCORPORATION OF PROVISIONS OF THE SEPARATION AND
DISTRIBUTION AGREEMENT.
The following provisions of the Separation and Distribution
Agreement are hereby incorporated herein by reference, and unless otherwise
expressly specified herein, such provisions shall apply as if they are fully
set forth herein (references in paragraphs (a) through (d) below to "Article"
shall mean Articles of the Separation and Distribution Agreement, and except as
expressly set forth below, references in the material incorporated herein by
reference shall be references to the Separation and Distribution Agreement):
(a) Article V, relating to mutual releases and
indemnification, including procedures;
(b) Article VIII, relating to preservation and
exchange of information and protection of proprietary information;
(c) Article IX, relating to arbitration and
dispute resolution; and
(d) Article XII, miscellaneous provisions.
3.5 EXPENSES. Except as expressly set forth herein
(including in the Exhibits hereto) or in the Separation and Distribution
Agreement or another Ancillary Agreement, whether or not the IPO or the
Distribution is consummated, all legal and other costs and expenses incurred in
connection with this Agreement will be paid by AT&T (in the case of costs or
expenses incurred by AT&T or any other member of the AT&T Services Group),
NS-MPG (in the case of costs or expenses incurred by NS-MPG or any other member
of the NS-MPG Group) or NCR (in the case of costs or expenses incurred by NCR
or any other member of the NCR Group).
3.6 REFERENCES. All reference to Sections, Articles,
Exhibits or Schedules contained herein mean Sections, Articles, Exhibits or
Schedules of or to this Agreement, as the case may be, unless otherwise stated.
When a reference is made in this Agreement to a "party"
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17
or "parties", such reference shall be to a party or parties to this Agreement
unless otherwise indicated. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation". The use of the singular herein shall be deemed
to be or include the plural (and vice versa) whenever appropriate. The use of
the words "hereof", "herein", "hereunder", and words of similar import shall
refer to this entire Agreement, and not to any particular article, section,
subsection, clause, paragraph or other subdivision of this Agreement, unless
the context clearly indicates otherwise. The word "or" shall not be exclusive;
"may not" is prohibitive and not permissive.
3.7 MODIFICATION AND AMENDMENT. Except for modifications
to Exhibits, which may be made by Representatives pursuant to Section 2.9
hereof, this Agreement may not be modified or amended, or any provision waived,
except in the manner set forth in the Separation and Distribution Agreement.
3.8 INCONSISTENCY. In the event of any inconsistency
between the terms of this Agreement and any of the Exhibits hereto, the terms
of this Agreement, other than charges, shall control.
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IN WITNESS WHEREOF, the parties have executed this Interim
Services and Systems Replication Agreement as of the date first above written.
AT&T CORP.
By: /s/
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
LUCENT TECHNOLOGIES INC.
By: /s/
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
XXX XXXXXXXXXXX
By: /s/
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
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