MASTER SERVICES AGREEMENT by and between Eurobancshares, Inc., a Commonwealth of Puerto Rico Corporation and Telefonica USA, Inc., a Florida corporation authorized to do business in Puerto Rico, d/b/a Telefonica Empressas as of August 6, 2007
“**
Confidential Treatment Requested”
Indicates
portions of this document that have been deleted and have been separately
filed
with the Securities and Exchange Commission.
by
and between
Eurobancshares,
Inc., a Commonwealth of Puerto Rico Corporation
and
Telefonica
USA, Inc., a Florida corporation authorized to do business in Puerto Rico,
d/b/a
Telefonica
Empressas as of
August
6, 2007
TABLE
OF SCHEDULES
Schedule
3.7
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Security
Requirements
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Schedule
5.1
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Account
Governance
|
Schedule
5.7
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Subcontractors
|
Schedule
5.8
|
Change
Control Procedures
|
Schedule
6.7
|
Benchmark
Methodology
|
Schedule
7.1
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Affiliates
|
Schedule
14.1
|
Insurance
|
Schedule
15.6
|
Exit
Rights
|
Schedule
16.1
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Dispute
Resolution Procedure
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Schedule
17.1
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Disaster
Recovery Plan
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Schedule
18.1
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Affected
Employees Provisions
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(i)
This
MASTER SERVICES AGREEMENT (this “Agreement”)
is
entered into as of August
6, 2007 (the “Effective
Date”),
by
and between Eurobancshares, Inc., a Commonwealth of Puerto Rico corporation
(collectively, “Company”),
and
Telefonica USA, Inc., a Florida corporation authorized to do business in Puerto
Rico, d/b/a Telefonica Empressas (“Service
Provider”).
Terms
used in this Agreement are either defined in the context in which they are
used
or in Article XX hereto.
In
consideration of the mutual covenants and agreements contained in this Agreement,
and for
other good and valuable consideration, the receipt and sufficiency of which
are
hereby
acknowledged,
Company
and
Service
Provider agree
as
follows:
ARTICLE
I
TERM
AND RENEWAL
ARTICLE
II
TRANSITION
2.1.
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Service
Commencement. As
of the applicable SOW Effective Date, and following completion of
the
Transition in accordance with this Article II, Service Provider shall
assume operational responsibility for, and commence providing, the
In-Scope Services covered by such SOW.
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2.2.
|
Transition
Services.
Commencing on the SOW Effective Date of the applicable SOW and during
the
term of the Transition Period for such SOW, Service Provider will
perform
the services (the “Transition
Services”)
set forth in the
written transition plan for a SOW, which plan shall be attached as
a
Schedule to such SOW (the “Transition
Plan”),
in
order to facilitate the transition of operational responsibilities
(the
“Transition”). The
Transition Plan shall constitute part of the applicable SOW. Each
Transition Plan shall include a description of the applicable Transition
Services, each party’s responsibilities with respect to the Transition
Services, the applicable Service Charges, and the applicable term
for such
Transition Services. If applicable, each Transition Plan shall also
address the transition of the Services from Company Facilities (as
defined
in Section 3.9) to Service Provider facilities.
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ARTICLE
III
SERVICES
3.1.
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In-Scope
Services.
Commencing on the applicable SOW Effective Date and during the remainder
of the SOW Term, Service Provider shall provide to Company, and Company
shall obtain from Service Provider, the services set forth from time
to
time on the SOW(s) under this Agreement (the “In-Scope
Services”).
Each SOW shall include a description of the applicable In-Scope Services,
the Service Level Agreement applicable to the performance of such
In-Scope
Services, each party’s responsibilities with respect to the In-Scope
Services, the Charges Schedule applicable to such In-Scope Services
and
other terms specific to such In-Scope Services. Except
as set forth on the Charges Schedule to a SOW, none of the In-Scope
Services will be subject to minimum
commitments.
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3.4.
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Compliance
with Company Policies.
In providing Services to Company, and without limiting or modifying
in any
respect the Service Provider’s Service obligations (including pursuant to
the Service Level Agreement), Service Provider shall comply, and
shall
cause each of its employees and subcontractors to comply at all times,
with Company corporate policies that are of general application to
Company
contractors that have been communicated to Service Provider in writing
or
that Service Provider has otherwise agreed to comply
with.
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3.5.
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Regulatory
Compliance.
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(a)
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Company
will obtain and maintain all Governmental Approvals applicable to
Company
in the conduct of its businesses and will identify, interpret and
comply,
and cause its employees, agents and subcontractors (other than Service
Provider), to comply, in all material respects with the Laws applicable
to
Company’s business and operations reasonably related to Company’s receipt
and use of the Services (the “Company
Regulatory Requirements”).
Company Regulatory Requirements also include any guidance, bulletins,
white papers, pronouncements, reports or similar communications issued
by
any Governmental Authority or applicable self-regulatory or industry
body,
whether or not such items or materials have the force of Law, to
the
extent determined by Company in its
discretion.
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(b)
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As
part of the In-Scope Services, Service Provider will obtain and maintain
all Governmental Approvals applicable to Service Provider in the
conduct
of its business and identify, interpret and comply, and cause its
employees, agents and subcontractors to comply, in all material respects
with all Laws applicable to Service Provider’s provision of the Services,
including all Laws affecting Service Provider’s performance under this
Agreement or relating to Service Provider’s employment of its employees,
its qualifications and ability to do business and to provide the
Services
contracted for herein, and its operation of owned and leased facilities.
The obligations set forth in this paragraph (b) are collectively,
the
“Service
Provider Regulatory Requirements.”
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(c)
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In
addition Service Provider will, and will cause its employees, agents
and
subcontractors to: (i) provide all assistance reasonably related
to the
In-Scope Services necessary to enable Company to comply with the
Company
Regulatory Requirements; and (ii) comply with all Company Regulatory
Requirements reasonably relating to the provision or receipt of the
In-Scope Services
of
which Company has made Service Provider aware. The obligations set
forth
in this paragraph (c) are collectively, “Compliance
Assistance”)
and shall be further subject to Section 3.6
hereof.
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(d)
|
In
addition, Company will, and will cause its employees, agents and
subcontractors (other than Service Provider) to: (i) notwithstanding
anything to the contrary set forth herein or in any SOW, upon Company’s
request, provide all assistance reasonably related to the In-Scope
Services necessary to enable Service Provider to comply with the
Service
Provider Regulatory Requirements; and (ii) comply with all Service
Provider Regulatory Requirements reasonably relating to the provision
or
receipt of the In-Scope Services, provided that (a) Company has been
given
Notice regarding the Service Provider Regulator Requirements, and
(b) the
obligations of Company set forth in this Section 3.5(d) do not cause
a
disruption to Company’s business or
operations.
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(e)
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If
either party receives an official charge of non-compliance from a
Governmental Authority with respect to the performance of either
party’s
obligations under this Agreement, the party receiving such Notice
will
promptly notify the other party of such charge in writing. Service
Provider shall be responsible for any fines and penalties imposed
on
Service Provider or Company arising from any failure by Service Provider,
its affiliates, agents or subcontractors to comply with the Service
Provider Regulatory Requirements or with any Company Regulatory
Requirements for which Service Provider has responsibility pursuant
to
Section 3.5, except to the extent that such noncompliance was caused
by an
act, omission or breach of this Agreement by Company, its affiliates,
agents or subcontractors. Company shall be responsible for any fines
and
penalties imposed on Service Provider or Company arising from any
failure
by Company or its agents or subcontractors to comply with the Company
Regulatory Requirements (except to the extent outsourced to Service
Provider pursuant to Section 3.5(c)), except to the extent that such
noncompliance was caused by an act, omission or breach of this Agreement
by Service Provider, its affiliates, agents or
subcontractors.
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3.6.
|
Required
Changes to In-Scope Services.
Service Provider will modify its provision of the In-Scope Services
if
necessary to (i) comply with changes in the Service Provider Regulatory
Requirements, Company Regulatory Requirements (as communicated by
Company
to Service Provider in writing), or any other applicable Laws, or
(ii)
provide the Compliance Assistance. Where any change in Law or any
Service
Provider Regulatory Requirement or Company Regulatory Requirement,
or the
provision of Compliance Assistance, requires a change in the In-Scope
Services, (A) Service
Provider will be financially responsible for modifications to the
In-Scope
Services it is required to make resulting from changes in Service
Provider
Regulatory Requirements
and shall not impose any additional Service Charges on Company for
such
changes; and (B) Company shall be responsible for additional Service
Charges associated with (I) Service Provider’s modifications
to the In-Scope Services it is required to make resulting from changes
in
Company
Regulatory Requirements,
provided, however if a change in Company Regulatory Requirements
affects
other Service Provider customers, then Service Provider will use
reasonable efforts to spread that cost of modifications to its performance
of services across its affected customers and Company will pay only
its
pro rata share associated with such modifications, and (II) the provision
of Compliance Assistance.
Notwithstanding anything to the contrary in the foregoing sentence,
Company acknowledges that certain cost sharing activities as referenced
in
the preceding sentence may not be achieved without the cooperation
of
other Service Provider customers, over which Service Provider has
no
control. The parties shall use the Change Control Procedures to document
any and all Changes to the In-Scope Services resulting from any Changes
described in this Section or from any other Changes required pursuant
to
any other Laws. Service Provider expressly acknowledges and agrees
that
any Changes that are required by changes in Laws are mandatory and
Service
Provider has no discretion whether or not to accept the Change, provided
that Company agrees to pay any applicable additional Service Charges
in
accordance with this Section associated with implementing such
Change.
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3.7.
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Security
Requirements.
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(a)
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Safeguards.
Service Provider shall establish an information security program
with
respect to Company Data and Confidential Information (both of which
are
defined below) which: (i) ensures the security and confidentiality
of such
materials and information; (ii) protects against any anticipated
threats
or hazards to the security or integrity of such materials and information,
and (iii) protects against any unauthorized use of or access to such
materials and information, including access or use that could result
in
substantial harm or inconvenience to any of Company’s customers,
consumers, or employees. Service Provider shall also establish and
maintain network and internet security procedures, protocols, security
gateways and firewalls with respect to such materials and information.
All
of the foregoing shall be in accordance with the attached Schedule
3.7,
no less rigorous than those safeguards and procedures maintained
by
Company prior to the Effective Date which have been communicated
by
Company to Service Provider in writing and those maintained by Service
Provider for its own data and information of a similar nature.
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(b)
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Physical
Security.
Service Provider will maintain and enforce at any site from which
In-Scope
Services are rendered safety and security procedures that are in
accordance with the attached Schedule
3.7
and the most rigorous industry standards and at least as rigorous
as those
procedures in effect at sites from which Company provided such services
as
of the Effective Date and which procedures have been communicated
by
Company to Service Provider in writing. In addition, Service Provider
will
comply with all reasonable requirements of Company with respect to
security at such sites.
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(c)
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Security
Assessment.
Without limiting the generality of the foregoing, Service Provider’s
information security policies shall provide for (i) regular assessment
and
re-assessment of the risks to the security of Company Data and systems
acquired or maintained by Service Provider and its agents and contractors
in connection with rendering the In-Scope Services, including (a)
identification of internal and external threats that could result
in a
Security Breach (as defined below), (b) assessment of the likelihood
and
potential damage of such threats, taking into account the sensitivity
of
such data and systems, and (c) assessment of the sufficiency of policies,
procedures, and information systems of Service Provider and its agents
and
subcontractors, and other arrangements in place, to control risks;
and
(ii) protection against such risks.
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(d)
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Security
Breach.
“Security
Breach”
means (A) any circumstance pursuant to which applicable Law requires
notification of such breach to be given to affected parties or other
activity in response to such circumstance; or (B) any actual, attempted,
suspected, threatened, or reasonably foreseeable circumstance that
compromises, or could reasonably be expected to compromise, either
Physical Security or Systems Security (as such terms are defined
below) in
a fashion that either does or could reasonably be expected to permit
unauthorized Processing, use, disclosure or acquisition of or access
to
any Company Data or Confidential Information. “Physical
Security”
means physical security at any site or other location housing systems
maintained by Service Provider or its agents or subcontractors in
connection with the In-Scope Services. “Systems
Security”
means security of computer, electronic or telecommunications systems
of
any variety (including data bases, hardware, software, storage, switching
and interconnection devices and mechanisms), and networks of which
such
systems are a part or communicate with, used directly or indirectly
by
Service Provider or its agents or subcontractors in connection with
the
In-Scope Services. “Processing”
means any operation or set of operations performed upon Company Data
or
Confidential Information, whether or not by automatic means, such
as
creating, collecting, procuring, obtaining, accessing, recording,
organizing, storing, adapting, altering, retrieving, consulting,
using,
disclosing or destroying.
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(e)
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Breach
Notification.
In the event Service Provider becomes aware of any Security Breach,
Service Provider shall, (i) immediately notify Company’s Chief Compliance
Officer of such Security Breach and perform a root cause analysis
thereon,
(ii) investigate such Security Breach, (iii) provide a remediation
plan,
acceptable to Company, to address the Security Breach and prevent
any
further incidents, (iv) conduct a forensic investigation to determine
what
systems, data and information have been affected by such event; and
(v)
cooperate with Company, any law enforcement or regulatory officials,
credit reporting companies, and credit card associations investigating
such Security Breach. Subsequent to the initial response to any Security
Breach as set forth above, the parties shall cooperate in good faith
to
determine financial responsibility for such event, as follows. If
the
Security Breach is a result of an act or omission of Service Provider
other than in accordance with the terms of this Agreement, including
the
applicable SOW, such corrective actions shall be provided by Service
Provider at its own expense. If the Security Breach does not result
from
an act or omission of Provider other than in accordance with the
terms of
this Agreement, including the applicable SOW, such corrective actions
shall be provided pursuant to the Change Control Procedures. Without
limiting the foregoing, Company shall make the final decision on
notifying
Company’s customers, employees, service providers and/or the general
public of such Security Breach, and the implementation of the remediation
plan. If a notification to a customer is required under any Law or
pursuant to any of Company’s privacy or security policies, then
notifications to all customers who are affected by the same event
(as
reasonably determined by Company) shall be considered legally required.
Any changes to the Services necessary as a result of such Security
Breach
which constitute Additional Services (as defined in the Charges Schedule)
shall be subject to the Change Control
Procedures.
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(f)
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Notification
Related Costs.
In addition to any other obligations or liabilities of Service Provider
in
connection therewith, if the Security Breach is a result of an act
or
omission of Provider other than in accordance with the terms of this
Agreement, including the applicable SOW, Service Provider shall reimburse
Company for all reasonable out of pocket Notification Related Costs
incurred by Company arising out of or in connection with any such
Security
Breach resulting in a requirement for legally required notifications
(as
determined in accordance with the previous sentence). “Notification
Related Costs”
shall include Company’s external costs associated with addressing and
responding to the Security Breach, including but not limited to:
(i)
preparation and mailing or other transmission of legally required
notifications; (ii) preparation and mailing or other transmission
of such
other communications to customers, agents or others as Company deems
reasonably appropriate; (iii) establishment of a call center or other
communications procedures in response to such Security Breach (e.g.,
customer service FAQs, talking points and training); (iv) public
relations
and other similar crisis management services; (v) legal and accounting
fees and expenses associated with Company’s investigation of and response
to such event; and (vi) costs for commercially reasonable credit
reporting
services that are associated with legally required notifications
or are
advisable under the circumstances.
In
the event that the parties disagree as to the cause of any Security
Breach, such disagreement shall be resolved through the Dispute Resolution
Procedures.
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(g)
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Intrusion
Detection/Interception.
Service Provider will provide Company and its representatives with
access,
upon reasonable advance notice and during normal business hours,
to
Service Provider’s test results, systems, policies and procedures relating
to intrusion detection and interception with respect to the Service
Provider systems used to provide the Services for the purpose of
examining
and assessing, or having examined and assessed, those test results,
systems, policies and procedures. Service Provider will also permit
Company and its representatives the ability to conduct internal and
external intrusion detection, interception testing and other assessment
and examination of Service Provider’s systems as reasonably necessary to
comply with Company’s regulatory obligations and confirm compliance with
each of Service Provider’s activities pursuant to this Section 3.7,
provided that any such assessments or examinations will be conducted
in a
manner that does not unreasonably disrupt or delay Service Provider’s
performance of the Services hereunder or any other services for its
other
customers.
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3.8.
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Service
Locations.
The In-Scope Services will be provided from those Service Provider
location(s) specified in the applicable SOW (each, a “Service
Location”).
Service Provider will not, without the express written Consent of
Company,
Change, consolidate, eliminate or add to the Service Locations, or
reallocate the volume or nature of work processed between Service
Locations.
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3.9
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Company
Facilities.
If required by a SOW, Company shall provide to Service Provider the
office
space at the Company locations identified as Company Facilities in
such
SOW (the “Company
Facilities”),
as the same may be changed by Company from time to time throughout
the
applicable SOW Term, in accordance with the terms and conditions
set forth
in this Section 3.9, or in accordance with the specific terms and
conditions set forth in such SOW. Subject to the terms and conditions
set
forth in this Section 3.9, all decisions regarding the allocation of
office space at Company Facilities to Service Provider shall be made
by
Company.
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(a) With
respect to such Company Facilities, Service Provider shall have the same
privileges regarding use thereof (such as heating, lights, air conditioning
(‘HVAC’) systems, as do any other tenants of Company. Except as otherwise set
forth in a SOW, Company shall be responsible for providing, at its own expense,
all other facilities and support Service Provider’s needs at the Company
Facilities to provide the Services, including office-related equipment (i.e.,
personal computers, printers, fax machines and copiers), office supplies, and
local and long distance telephony.
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(b) Subject
to the terms of the applicable SOW, Company shall be fully responsible for
all
costs and expenses of applicable facilities leases, related leasehold
improvements, and utilities with respect to Company Facilities, and shall pay
all Company Facilities landlords and utility providers directly.
(c) The
Company Facilities shall be made available to Service Provider on an “AS IS,
WHERE IS” basis, with no warranties whatsoever.
(d) Company
and Company Affiliates, and agents and representatives of each, shall have
the
right to enter into any portion of Company Facilities at any time for any
reason, including, without limitation, for the purpose of inspecting Company
Facilities, showing Company Facilities, or performing services related to
Company Facilities.
(e) Service
Provider agrees that Service Provider and Service Provider personnel will at
all
times comply with all leases and other agreements applicable to its occupation
and use of the Company Facilities pursuant to the terms of this
Agreement.
(f) The
transition of the Services from Company Facilities to Service Provider
facilities shall be set forth in the Transition Plan applicable to the SOW
for
such Services.
3.10
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Company
Resources.
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(a) Service
Provider shall use Company Facilities, Company Software (except for Software
licensed or sublicensed to Company by Service Provider), Company equipment
(except for equipment provided to Company by Service Provider) and related
Company-owned resources (collectively, “Company
Resources”)
for the
sole and exclusive purpose of providing the Services, unless in its sole
discretion Company pre-approves another use in writing in a SOW or through
the
Change Control Procedures. The use of Company Facilities by Service Provider
shall not constitute a leasehold or other property interest in favor of Service
Provider.
(b) Service
Provider shall be responsible for any damage (normal wear and tear excepted)
to
Company Resources resulting from the abuse, misuse, neglect, or negligent acts
or omissions of Service Provider or other failure to comply with the obligations
respecting Company Resources.
(c) Service
Provider shall keep Company Resources in good order (normal wear and tear
excepted), not commit or permit waste or damage to Company Resources or use
Company Resources for any unlawful purpose or act, and shall comply with
Company’s standard policies and procedures (including applicable leases)
regarding access to and use of Company Resources which have been communicated
by
Company to Service Provider in writing, including procedures for the physical
security of Company Facilities.
(d) Service
Provider shall not make improvements or changes involving structural, mechanical
or electrical alterations to Company Facilities without Company’s prior written
approval. At Company’s election, any improvements or fixtures to Company
Facilities shall become the property of Company. If Company does not elect
to
take title thereto, Provider shall remove the same at the end of the use of
Company Facilities and shall repair any damage caused by such
removal.
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(e) When
Company Resources are no longer required for performance of the Services,
Provider shall return them to Company in substantially the same condition as
when Provider began use of them (normal wear and tear excepted).
3.11 Dedicated
Environment.
For
purposes of the initial SOW entered into as of the date hereof, all hardware
and
software provided by Company at any time during the term of such SOW shall
be
dedicated solely to Company; any hardware and software provided by Service
Provider may be shared with other Service Provider customers, but shall be
logically partitioned so that there is no intermingling of Company Data or
Confidential Information with that of other Service Provider customers and
no
other Service Provider customers or others shall have the ability to access
such
information or data.
ARTICLE
IV
SERVICE
PROVIDER PERFORMANCE METRICS
4.1.
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Service
Level Agreement.
Service Provider will perform the In-Scope Services at all times
during
the SOW Term and any Termination Assistance Period in accordance
with
specific performance standards identified by Company in each of the
SOWs
(the “Service
Level Agreement”).
The Service Level Agreement will indicate the level of performance
Service
Provider must achieve for each service metric (the “Service
Level”).
Service Provider shall perform all In-Scope Services without an expressly
defined Service Level Agreement at a level of accuracy, completeness,
availability, timeliness, quality, responsiveness and performance
that
equals or exceeds the level of performance by Company or any Third
Party
providing such services for Company immediately before the applicable
SOW
Effective Date (in the case of In-Scope
Services).
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4.2.
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Service
Level Measurement.
Beginning on the SOW Effective Date, Service Provider shall implement
and
operate all measurement and monitoring tools and procedures required
to
measure and report its performance relative to the applicable Service
Level Agreement. Each Service Level Agreement will be measured on
at least
a monthly basis, unless otherwise indicated. Service Provider shall
provide, as part of Service Provider’s monthly performance reports, a set
of hard (if requested by Company) and soft-copy reports to verify
Service
Provider’s performance and compliance with the Service Level Agreement
(“Performance
Reports”).
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4.3.
|
Service
Level Failures.
Service Provider’s failure to meet the Service Level for any Service Level
Agreement shall entitle Company to receive credits against Service
Charges
in the form of Service Level Credits in accordance with this Section
if
such Service Level Agreement has Service Level Credits associated
with it.
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(a)
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Calculation
of Service Level Credits.
Service Provider will provide to Company a Service Level Credit Report
resulting from Service Provider’s failure to meet any
Service Level for any Critical Performance Indicator (each,
a “Performance
Failure”).
Service Level Credits will be calculated each month for Performance
Failures, and determined pursuant to the applicable SOW, referencing
the
Critical Performance Indicator to which the Performance Failure relates.
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(b)
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Issuance
of Credits.
Company will review the report of Service Level Credits (if any)
issued by
Service Provider each month and notify Service Provider, within 30
days,
of any issues with such report and/or its election to receive such
credits
on the next issued invoice following such notification from Company.
If Company so elects, Service Provider will reduce the amount payable
by
Company on the next Invoice by the amount of Service Level Credits
Company
received during the applicable month. Service Level Credits for a
given month shall not exceed the total monthly xxxx payable by Company
for
any applicable period.
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(c)
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Root
Cause Analysis.
Service Provider will be required to conduct, at its expense, a root
cause
analysis for each failure to meet any Service Level. Upon determination
of
the cause of such failure, Service Provider will provide to Company
an
additional report that details the results of the root cause analysis,
and
which details any measures that should be taken to minimize the
possibility that such failures will re-occur. To the extent that
the root
cause analysis indicates that Service Provider’s failure to meet the
Service Level was caused by Service Provider, Service Provider will
correct the problem at no additional cost to Company and ensure that
there
will be no re-occurrence of such
failures.
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ARTICLE
V
RELATIONSHIP
MANAGEMENT
5.2.
|
Service
Provider Project Manager.
During the Agreement Term, Service Provider will designate a senior-level
individual who will be primarily dedicated to Company’s account (the
“Service
Provider Project Manager”).
The Service Provider Project Manager may be replaced by Service Provider
from time to time during this Agreement. In addition, the Service
Provider
Project Manager (i) must be approved by Company, (ii) will be the
primary
contact for Company in dealing with Service Provider under this Agreement,
(iii) will have overall responsibility for managing and coordinating
the
delivery of the Services, (iv) will meet regularly with the Company
Contract Manager, and (v) will have the power and authority to make
decisions with respect to actions to be taken by Service Provider
in the
ordinary course of day-to-day management of Company’s account in
accordance with this Agreement.
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5.3.
|
Company
Contract Manager.
During the Agreement Term, Company will designate a senior level
individual (i) who will serve as Company’s primary contact for Service
Provider in dealing with Company under this Agreement, and (ii) who
will
have the power and authority to make decisions with respect to actions
to
be taken by Company in the ordinary course of day-to-day management
of
this Agreement (the “Company
Contract Manager”
(may also be referred to in the SOWs as “Company Project Manager”)).
Company may from time to time replace the individual serving as the
Company Contract Manager by providing Notice to Service Provider.
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5.5.
|
Annual
Review.
On an annual basis during the Agreement Term, the Contract Managers
shall
conduct an annual performance review attended by certain of the senior
management of each party (the “Annual
Review”).
The parties contemplate that such Annual Review will include at least
the
following:
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(a)
|
Review
of the previous year’s periodic Performance Reports prepared by Service
Provider;
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(b)
|
Review
and adjustment of the Service Level Agreement requirements and the
associated performance measures and metrics pursuant to Article
IV;
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(c)
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Adjustments
to the Service Charges in accordance with the Charges Schedule;
and
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(d)
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Review
of emergency response and disaster recovery plans that have been
adopted
and implemented by Service Provider for the
Services.
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Any
adjustments undertaken pursuant to this Section shall be governed
by
Section 5.8.
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5.6.
|
Review
Meetings.
During the Agreement Term, the Service Provider Project Manager and
the
Company Contract Manager (and any other appropriate operational personnel)
shall meet periodically, at such intervals and at such times and
locations
as set forth in the Account Governance Schedule or as reasonably
requested
by Company, but in no event less than once per calendar quarter,
to review
their respective performance under this Agreement and to discuss
planned
or anticipated activities that may adversely affect performance or
any
Changes.
|
5.7.
|
Service
Provider Subcontractors.
Service Provider may not subcontract any of the Services without
Company’s
prior written Consent, provided, however the subcontractors listed
on
Schedule
5.7
hereto are pre-approved subcontractors for the purposes of this Section
5.7 and that Service Provider may utilize an Affiliate to provide
the
Services. Service Provider may also retain a Third Party in certain
circumstances to perform Services as set forth in Section 17.1(b).
The
following shall apply to any permitted subcontractor relationship
hereunder:
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ARTICLE
VI
PAYMENT
6.1.
|
Service
Charges.
In consideration for the performance of the Services, Company shall
pay to
Service Provider the charges for the Services (the “Service
Charges”)
specified in the Transition Plan and SOWs hereunder (collectively,
the
“Charges
Schedule”).
Except as otherwise expressly stated or provided for in this Agreement
or
an SOW, as same may be amended pursuant to the Change Control Procedures,
Company will not be obligated to pay Service Provider any amounts
in
addition to the Service Charges for Service Provider’s performance of the
Services.
|
6.3.
|
Invoices;
Method of Payment.
Service Provider shall render an invoice substantially in the form
attached to the Charges Schedule (“Invoice”)
in accordance with the invoicing procedures set forth in the Charges
Schedule on or after the first business day of each calendar month
which
shall reflect (i) the current month’s Service Charges, (ii) any pass
through charges under the Charges Schedule accrued during the preceding
month, (iii) when applicable pursuant to the Service Level Agreement,
any
Service Level Credits, and (iv) such other amounts as may from time
to
time arise under this Agreement that may appropriately be reflected
on
Invoices hereunder. Each Invoice will include such detail as reasonably
requested by Company to satisfy Company’s internal accounting and
chargeback requirements and as set forth in the Charges Schedule
(which
detail shall also be provided in electronic format compatible with
Company’s financial computer systems). All amounts due to Service Provider
and set forth on a valid Invoice delivered pursuant to this Section
shall
be due and payable within thirty (30) days of Company’s receipt of such
Invoice. Any amounts not paid when due shall accrue interest at the
rate
of twelve percent (12%) per annum (or, if lower, the maximum rate
permitted by applicable law).
|
6.4.
|
Unused
Credits.
Any unused credits against future payments or other undisputed amounts
owed to either party by the other pursuant to this Agreement will
be paid
to the applicable party within forty-five (45) days after the expiration
or termination of this Agreement.
|
Disputed
Charges.
Company may withhold payment to Service Provider of amounts that
Company
reasonably and in good faith disputes. Any amounts (or portions thereof)
not so disputed otherwise will be paid by the applicable payment
due date
as otherwise provided for in this Agreement. Company shall notify
Service
Provider in writing on or before the payment due date of any disputed
charges for which it is withholding payment. Notwithstanding Section
6.3,
Company shall not be required to pay the disputed portion of an Invoice
unless and until the parties have successfully resolved the dispute
in
accordance with the Dispute Resolution Procedures.
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6.6.
|
Taxes.
Company
shall be solely
responsible for all indirect Taxes (including but not limited to;
Sales
and Use Tax, Communications Services Tax and Value Added Tax) imposed
on,
based on, or measured by any consideration for, arising from, or
due in
connection with any provision of Services by Service Provider to
Company
pursuant to this Agreement. Should any amounts due under this
Agreement be subject to withholding or retention tax, Company shall
notify
Service Provider prior to the withholding and provide Service Provider
with the adequate certifications that the withholding amounts were
remitted to the proper taxing authorities. Company shall not be
responsible for reporting and/or paying any income, franchise, real
property, personal property or ad valorem taxes due and assessed
on
Service Provider. The Parties agree to work together throughout the
term of this Agreement in order to establish and maintain the most
advantageous tax consequences within the parameters of all applicable
laws.
|
ARTICLE
VII
COMPANY
AFFILIATES
7.1.
|
Services
to Company Affiliates.
Service Provider will provide the Services to Company and its current
Affiliates that are forth on Schedule
7.1
hereto (and their successors). Company and the applicable Affiliate
shall
be jointly and severally liable for the failure of any such Affiliate
to
perform its obligations and duties with respect to Services provided
by
Service Provider to such Affiliate.
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ARTICLE
VIII
REPRESENTATIONS,
WARRANTIES AND COVENANTS
8.1.
|
Representations,
Warranties and Covenants.
Service Provider hereby represents, warrants and covenants to Company
as
follows:
|
(a)
|
8.2.
|
Disclaimer
of Warranties.
Except as otherwise expressly provided in this Agreement or in any
SOW,
the parties make no representations, warranties or conditions, express
or
implied, regarding any matter, including the merchantability, suitability,
non-infringement, fitness for a particular use or purpose, or results
to
be derived from the use of any service, software, hardware, deliverables,
work product or other materials provided under this
Agreement.
|
ARTICLE
IX
CONFIDENTIALITY;
SAFEGUARDING OF DATA
9.1.
|
Confidentiality.
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(c)
|
Permitted
Disclosures.
Each party may disclose relevant aspects of the other party’s Confidential
Information to its employees, Affiliates, legal representatives,
accountants, tax advisors, subcontractors and agents on a need-to-know
basis; provided,
however,
that such party shall use reasonable efforts to ensure that such
employees, Affiliates, legal representatives, accountants, tax advisors,
subcontractors or agents comply with these confidentiality
provisions.
|
(e)
|
Return
of Confidential Information.
Neither party may withhold the Confidential Information of the other
party
or refuse for any reason (including due to the other party’s actual or
alleged breach of this Agreement) to promptly return to the other
party
its Confidential Information (including copies thereof) if requested
to do
so. Upon expiration or any termination of this Agreement and completion
of
a party’s obligations under this Agreement, each party shall, upon the
request of the other, return or destroy all documentation in any
medium
that contains or refers to the other party’s Confidential Information, and
retain no copies. Subject to the foregoing confidentiality obligations,
Company may retain copies of the Confidential Information of Service
Provider to the extent required for Company’s continuing operations or
internal business purposes.
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14
(f)
|
Exclusions.
This Section 9.1 will not apply to any particular information that
either
party can demonstrate (i) was, at the time of disclosure to it, in
the
relevant public domain; (ii) after disclosure to it, is published
or
otherwise becomes part of the relevant public domain through no fault
of
the receiving party; (iii) was rightfully in the possession of the
receiving party at the time of disclosure to it and was not the subject
of
a pre-existing confidentiality obligation; (iv) was received after
disclosure to it from a Third Party who had a lawful right to disclose
such information to it; or (v) was independently developed by the
receiving party without use of or reference to the Confidential
Information of the disclosing
party.
|
9.2.
|
Company
Data.
As
between the parties, Company will be the sole and exclusive owner
of all
Company Data. Service Provider shall utilize the Company Data solely
for
purposes of this Agreement. All access to Company
Data will
be subject to the confidentiality provisions set forth in Section
9.1;
provided, however, the exclusions set forth in Section 9.1(f) do
not apply
to Consumer Information. Without Company’s Consent (in its discretion),
the Company Data shall not be (i) used by Service Provider or Service
Provider Representatives other than in connection with providing
the
Services, (ii) aggregated or commingled by Service Provider or Service
Provider Representatives with Service Provider or Third Party data,
(iii)
disclosed, sold, assigned, leased or otherwise provided to Third
Parties
by Service Provider or Service Provider Representatives, or (iv)
commercially exploited by or on behalf of Service Provider or Service
Provider Representatives.
|
ARTICLE
X
PROPRIETARY
RIGHTS
10.1.
|
Ownership
of Work Product.
|
(a)
|
Service
Provider agrees to disclose and promptly furnish to Company any and
all
technical information, computer or other specifications, documentation,
works of authorship or other creative works, ideas, knowledge, or
data,
written, oral or otherwise expressed, originated by Service Provider
or by
one or more of Service Provider’s employees, subcontractors, consultants,
representatives or agents (“Service
Provider Representatives”)
as a result of work performed under or in anticipation of this Agreement
which is identified as Work Product to be owned by Company in an
SOW
pursuant to the terms of this provision (“Work
Product”).
Company shall own all right, title and interest in and to the Work
Product
created hereunder, including all Intellectual Property Rights therein.
Service Provider expressly acknowledges that the parties have agreed
that
all aspects of the Work Product and all work in process in connection
therewith are to be considered “works made for hire” within the meaning of
the United States Copyright Act of 1976, as amended (the “Copyright
Act”),
and that Company is to be the “author” within the meaning of such Act. All
such copyrightable Work Product, as well as all copies of such Work
Product in whatever medium fixed or embodied, shall be owned exclusively
by Company as its creation, and Service Provider hereby expressly
disclaims any interest in any of them. Unless a SOW
or
Schedule
sets forth otherwise in connection with such Work
Product,
Company
hereby
grants
to Service
Provider a
fully paid-up, non-exclusive license to use, display, copy and make
derivative
works
of
the Work
Product solely
for the purpose of providing the Services
to
Company under this Agreement.
Notwithstanding the foregoing, the Parties agree that Work Product
shall
not include tangible and intangible materials and information that
relate
solely to Service Provider’s technological and business infrastructure
used to deliver the Services to Company and other Service Provider
customers, which materials and information are (i) not developed
for or on
behalf of Company, or (ii) do not incorporate, refer to, or rely
on
Company Confidential Information, Company Data, Company Software,
or
Intellectual Property Rights of
Company.
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(b)
|
In
the event (and to the extent) that the Work Product created by Service
Provider and its Service Provider Representatives hereunder or any
part or
element thereof is found as a matter of law not to be a “work made for
hire” within the meaning of the Act, Service Provider hereby irrevocably
conveys and assigns (and in the case of Work
Product not
yet developed, hereby
covenants
upon their development to irrevocably convey and assign) to Company
the
sole and exclusive right, title and interest in the ownership to
all such
Work Product, and all copies of any of them, without further
consideration, and agrees to assist Company to register, and from
time to
time to enforce, all Intellectual Property Rights and other rights
and
protections relating to the Work Product created hereunder in any
and all
countries.
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10.2.
|
Pre-existing
Materials.
If the Work Product includes or requires the use of inventions or
materials previously made, developed or copyrighted by Service Provider
or
others, and not originated or developed hereunder (“Pre-existing
Materials”),
then Service Provider grants and agrees to grant to Company an
unrestricted, royalty-free license to make, use, sell, have made,
copy,
modify, distribute, display and perform the inventions, information
or
other aspects of the Pre-existing Materials, but only to the extent
necessary to make, use, sell, have made, copy, modify, distribute,
display
and perform the Work Product originated or developed as a result
of the
work performed under or in anticipation of this
Agreement.
|
10.3.
|
Knowledge
Capital. Nothing
in this Agreement will preclude Service Provider from marketing,
developing or using for itself or others, services or products that
are
the same as or similar to those provided to Company or its Affiliates
by
Service Provider pursuant to this Agreement, as long as such services
or
products do not include any Company Software, Company Confidential
Information, Company Data, Work Product, Intellectual Property Rights
of
Company, or any other proprietary information belonging to Company.
Each
party will continue to be free to use its general knowledge, skills
and
experience, and to use and disclose any generalized ideas, concepts,
know-how, and techniques that are acquired or used during the course
of
the Agreement, so long as they acquire and apply such information
without
the use or disclosure or any confidential or proprietary information
belonging to the other party. This Section 10.3 will not diminish
either
party’s obligations regarding Confidential Information under Article
IX.
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ARTICLE
XI
AUDIT
RIGHTS
11.1.
|
Service
Provider Records.
Service Provider shall maintain, at all times during the Agreement
Term
and at no additional charge to Company, complete and accurate records
and
supporting documentation pertaining to: (i) all Service Charges and
financial matters under this Agreement, in all cases prepared in
accordance with generally accepted accounting principles; (ii) all
other
transactions, reports, filings, returns, analyses, Work Product,
data
and/or information created, generated, collected, processed or stored
by
Service Provider and/or Service Provider’s subcontractors in the
performance of the Services; and (iii) all controls relevant to Service
Provider’s internal controls and Company’s control over the activities of
Service Provider (collectively, “Service
Provider Records”),
all in a manner sufficient to permit the audits in accordance with
this
Article XI.
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11.2.
|
Operational
Audits.
Not more than once per calendar year or at any such time as Company
has a
reasonable good faith concern that a breach of this Agreement may
have
occurred, Service Provider shall provide to Company and to internal
and
external auditors, inspectors, regulators and other representatives
that
Company may designate from time to time (“Company
Auditors”)
access in accordance with Section 11.6 to perform operational audits
and
inspections of Service Provider, its subcontractors and their respective
facilities (“Operational
Audits”),
to: (i) verify the integrity of the Company Data, (ii) examine the
systems
that process, store, support and transmit that data and examine any
summaries of external Third Party data processing audits or reviews,
(iii)
verify whether the Services comply with Regulatory Requirements;
(iv)
examine the controls (e.g., financial and accounting controls,
organizational controls, input/output controls, system modification
controls, processing controls, system design controls, and logical
and
physical access controls) and conduct walkthroughs (as defined by
the
PCAOB or any other governing body); (v) examine the security, disaster
recovery and back-up practices and procedures; (vi) verify the integrity
of the Service Provider’s Performance Reports; (vii) examine Service
Provider’s development of Work Product; and (viii) facilitate Company’s
compliance with Company Regulatory
Requirements.
|
11.3.
|
Financial
Audits.
Not more than once per calendar year or at any such time as Company
has a
reasonable good faith concern that a breach of this Agreement may
have
occurred, Service Provider shall provide to Company and Company Auditors
access in accordance with Section 11.6 to perform financial audits
and
inspections (“Financial
Audits”)
to (i) verify the accuracy and completeness of Service Provider Records,
and (ii) verify the accuracy and completeness of Service Provider’s
Invoices and Service Charges. If an Audit reveals that errors have
been
made in connection with the Service Charges and Taxes, then the parties
will work together to correct the error and any overpayments revealed
by
the Audit will be promptly paid by Service Provider or credited to
Company.
|
11.4.
|
Regulatory
Audits.
Upon written request made by a Governmental Authority to Service
Provider
or to Company, or by Company in response to a Governmental Authority
request or circumstance related to Company Regulatory Obligations,
Service
Provider will promptly make available to the Governmental Authority
or
Company Auditors Service Provider Records and other information relating
to Service Provider’s and its subcontractors’ compliance with the
Regulatory Requirements and, if so requested, provide the requesting
Governmental Authority or Company Auditors access in accordance with
Section 11.6 to examine Service Provider’s or its subcontractors’
compliance with the Regulatory Requirements and for purposes of
facilitating Company’s compliance with applicable Company Regulatory
Requirements (“Regulatory
Audits”).
|
11.5.
|
Service
Provider Audits and Reporting.
As
part of the Services, Service Provider will supply Company with an
annual
SAS 70 Type II audit report (“Service
Provider Audits”),
performed as of with a final date after September 30 of each calendar
year
up to and including December 31 of each calendar year) . If such
report is
dated prior to December 31 in any given calendar year, Service Provider
shall provide a letter or other statement reasonably acceptable to
Company
updating such report effective as of December 31 of such year. Service
Provider Audits shall include an audit of any applicable Service
Provider
subcontractors. Company shall be entitled to provide input and assist
in
defining the scope of the Service Provider Audits, as they apply
to the
Services and Company audit
requirements.
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11.6.
|
General
Principles Regarding Audits.
|
(a)
|
Access.
Service Provider shall provide Company and Company Auditors and requesting
Governmental Authorities with reasonable access at reasonable times
and
after reasonable Notice to: (i) the parts of any Service Location
at which
the Service Provider is providing the Services; (ii) systems and
assets
used by Service Provider to provide the Services; (iii) Service Provider
personnel providing the Services; (iv) Service Provider subcontractors
and
agents who perform any portion of the Services (including to such
entity’s
personnel, facilities, records, systems, controls, processes and
procedures); and (v) all Service Provider Records. Company
Audits
will be conducted in a manner that does not unreasonably disrupt
or delay
Service Provider’s performance of the Services hereunder or any other
services for its other customers.
|
(b)
|
Copies
of Audit Reports; Notice of Deficiency.
Upon completion of any Service Provider Audit, Service Provider shall
provide Company and, upon request, Company Auditors: (1) a copy of
the
Service Provider Audit reports, and (2) written notice of any deficiencies
or material weaknesses found and/or reported as a result of the Service
Provider Audit. Upon completion of any Operational Audit, Regulatory
Audits and/or Financial Audit (collectively, “Company
Audits”),
Company shall notify Service Provider of any deficiencies or material
weaknesses found as a result of the Company Audit, and provide Service
Provider with copies of portions of Company Audit reports reflecting
or
based upon information obtained from Service
Provider.
|
11.7.
|
Action
Plan.
As part of the Services, in the event any Audit reveals a deficiency
or
material weakness, Service Provider shall promptly provide Company
and
Company Auditors with a plan of action to correct the deficiency
or
material weakness, which plan of action shall be subject to Company’s
written approval and shall, at a minimum, include: (1) details of
actions
to be taken by Service Provider and/or its subcontractors to correct
the
deficiency or material weakness, and (2) target dates for successful
correction of the deficiency or material weakness (“Action
Plan”).
Service Provider shall also provide Company with Notice of Service
Provider’s successful completion of each action identified in the Action
Plan.
|
11.8.
|
Cost
of Audits.
The costs of Audits shall be borne as follows: (i) Service Provider
shall
be responsible for its costs to perform (including any Service Provider
subcontractors’ costs) the Service Provider Audits and for Service
Provider’s and Service Provider subcontractors’ reasonable cooperation and
provision of access for Company Audits; and (ii) Company shall be
responsible for all costs associated with Company Audits (other than
Service Provider’s reasonable cooperation and provision of access), except
as provided for in Section 11.3.
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ARTICLE
XII
INDEMNIFICATION
12.1.
|
Indemnification
by Service Provider.
Service Provider shall indemnify, defend and hold harmless Company,
Company Affiliates and their respective directors, officers, employees,
subcontractors and agents (collectively, the “Company
Indemnitees”)
from and against any and all Indemnifiable Losses incurred or suffered
in
respect of Third Party Claims (except in the case of paragraph (a),
(b) or
(c), in which the claim may also be made by any of the Company
Indemnitees), whether based in whole or in part in contract, tort,
negligence, statute or otherwise, arising from any of the
following:
|
(a)
|
the
death of or bodily injury to any third party or to any employee of
Company
or any Company Affiliate (or their respective subcontractors);
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19
(b)
|
the
loss of or damage to the real or tangible personal property (whether
owned
or leased) of any third party or any Company Indemnitee;
|
(c)
|
Service
Provider’s failure to pay and discharge any Taxes (including interest and
penalties) for which Service Provider is responsible pursuant to
the
provisions of this Agreement, including any Taxes resulting from
Service
Provider’s failure to pay, deduct or withhold Taxes with respect to any
personnel, agents, subcontractors or suppliers of any of the Service
Provider Entities;
|
(d)
|
any
breach by Service Provider of its representations, warranties or
covenants
set forth in this Agreement, except pursuant to Section 8.1(c);
or
|
12.2.
|
Indemnification
by Company.
Company shall indemnify, defend and hold harmless Service Provider,
Service Provider Affiliates, and their respective directors, officers,
employees, subcontractors and agents (collectively, the “Service
Provider Indemnitees”)
from and against any and all Indemnifiable Losses incurred or suffered
in
respect of Third Party Claims (except when the claim may also be
made by
any of the Service Provider Indemnitees), whether based in whole
or in
part in contract, tort, negligence, statute or otherwise, arising
from any
of the following:
|
(a)
|
the
death of or bodily injury to any third party or to any employee of
Service
Provider or any Service Provider Affiliate (or their respective
subcontractors);
|
(b)
|
the
loss of or damage to the real or tangible personal property (whether
owned
or leased) of any third party or any Service Provider
Indemnitee;
|
(c)
|
Company’s
failure to pay and discharge any Taxes (including interest and penalties)
for which Company is responsible pursuant to the provisions of this
Agreement, including any Taxes resulting from Company’s failure to pay,
deduct or withhold Taxes with respect to any personnel, agents,
subcontractors or suppliers of any of the Service Provider Entities;
|
(d)
|
any
breach by Company of its representations, warranties or covenants
set
forth in this Agreement, except pursuant to Section 8.1(c);
or
|
(e)
|
any
act or omission of any Company Entity in its capacity as an employer
of a
Person and arising out of or relating to (i) federal, state or other
Laws
or regulations for the protection of Persons who are members of a
protected class or category of Persons, (ii) sexual discrimination
or
harassment, and (iii) any other aspect of the employment relationship
or
its termination (including claims for breach of an express or implied
contract of employment) which arose when the Person asserting the
Third
Party Claim was or purported to be an employee of the Company
Entity.
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12.4.
|
Indemnification
for Third Party Claims.
The following procedures shall apply with respect to indemnification
for
Third Party Claims arising in connection with this
Agreement:
|
(a)
|
Promptly
after receipt by a party (the “Indemnified
Party”)
of notice of the assertion or the commencement of any Third Party
Claim
with respect to any matter within the scope of Sections 12.1, 12.2
or 12.3
(as applicable), the Indemnified Party shall give Notice thereof
to the
other party (the “Indemnifying
Party”)
and shall thereafter keep the Indemnifying Party reasonably informed
with
respect thereto; provided,
however,
that the failure of the Indemnified Party to give the Indemnifying
Party
such prompt Notice will not relieve the Indemnifying Party of its
obligations hereunder except to the extent such failure results in
prejudice to the Indemnifying Party’s defense of such Third Party Claim.
Within fifteen (15) days following receipt of Notice from the Indemnified
Party relating to any Third Party Claim, but no later than ten (10)
days
before the date on which any response to a writ, statement of claim,
complaint or summons is due, the Indemnifying Party shall notify
the
Indemnified Party in writing that the Indemnifying Party shall assume
control of the defense and settlement of such Third Party Claim (the
“Assumption
Notice”).
|
(b)
|
If
the Indemnifying Party delivers the Assumption Notice relating to
any
Third Party Claim within the required notice period, and if the
Third
Party Claim seeks
only monetary relief against the Indemnified Party,
and for
so long as the
Indemnifying Party diligently
conducts the defense of such Third Party Claim, the Indemnifying
Party
will be entitled to have sole control over the defense and settlement
of
such Third Party Claim; provided,
however,
that the Indemnified Party will be entitled to participate in the
defense
of such Third Party Claim and to employ counsel at its own expense
to
assist in the handling of such Third Party Claim.
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(c)
|
If
the Indemnifying Party fails or chooses not to assume the defense
of any
such Third Party Claim within the prescribed period of time, then
the
Indemnified Party may assume the defense of any such Third Party
Claim at
the cost and expense of the Indemnifying Party.
|
ARTICLE
XIII
LIMITATION
OF LIABILITY
13.1.
|
Limitation
on Consequential Damages.
EXCEPT FOR APPLICABLE DAMAGES RELATING TO SERVICE PROVIDER’S ATTEMPTED
TERMINATION OF THIS AGREEMENT OTHER THAN IN ACCORDANCE WITH ITS TERMS
AND
CONDITIONS, OR ABANDONMENT OF THIS AGREEMENT AS SET FORTH IN SECTION
15.6
HEREOF AND DAMAGES RELATING TO SERVICE PROVIDER’S FRAUD, MISREPRESENTATION
OR FAILURE TO PROVIDE TERMINATION ASSISTANCE SERVICES IN ACCORDANCE
WITH
THE TERMS OF THIS AGREEMENT, NEITHER PARTY WILL BE LIABLE TO THE
OTHER FOR
ANY LOSS OF PROFITS OR INDIRECT, SPECIAL, INCIDENTAL, EXEMPLARY,
PUNITIVE
OR CONSEQUENTIAL DAMAGES OF ANY KIND WHATSOEVER ARISING FROM OR RELATED
TO
THIS AGREEMENT, REGARDLESS OF THE TYPE OF CLAIM, WHETHER IN CONTRACT,
TORT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY,
WHETHER OR NOT FORESEEABLE, AND REGARDLESS OF THE CAUSE OF SUCH DAMAGES
EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES
IN
ADVANCE.
|
13.2.
|
Limitation
on Direct Damages.
|
**
Confidential Treatment Requested.
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22
(b)
|
The
liability of Company to Service Provider, whether based upon an action
or
claim in contract, equity, negligence, tort or otherwise, will not
exceed,
in any year, an amount equal to ** during the ** prior to the
assertion of the claim (“Company Damages Limitation). Notwithstanding the
foregoing, the Company Damages Limitation shall not apply to: (1)
any
breach by Company of the terms of Section 9.1; (2) claims for
indemnification under Sections 12.2.
|
13.3.
|
Cumulative
Remedies.
Except for Service Levels specifically identified on a Service Level
Agreement as an “Exclusive Remedy Service Level”, no remedy or
election
under this Agreement
will
be deemed exclusive, but will be cumulative with, in addition to
and not
in lieu of any other remedies available to either party
at
law, in equity or
otherwise.
In the case of a breach of any provision of an Exclusive Remedy Service
Level, the Service Level Credit for such Exclusive Remedy Service
Level
shall be the sole and exclusive remedy of Company for Service Provider’s
breach of such Service Level
Agreement.
|
ARTICLE
XIV
INSURANCE
14.1.
|
Insurance
Coverage. During
the Agreement Term, Service Provider shall obtain and maintain at
its
expense those insurance policies with the minimum insurance limits
set
forth in the attached Schedule
14.1.
|
ARTICLE
XV
TERMINATION
15.2.
|
Termination
for Cause.
Company may terminate this Agreement as a whole or any Statement(s)
of
Work, for cause and without the payment of any termination fees,
penalties
or charges:
|
(a)
|
Immediately
upon Notice to Service Provider by Company, if Service Provider breaches
any of its material duties or obligations under this Agreement and
does
not cure such breach within ** days after Notice thereof (identifying
the basis for such Notice).
|
**
Confidential Treatment Requested.
Confidential
23
(b)
|
Immediately
upon Notice to Service Provider by Company, if Service Provider commits
a
series of non-material or persistent breaches of which it has received
notice from Company in each case, that Company perceives in the aggregate
to have a significant adverse impact on the Services and fails to
cure
such breaches within ** days after Notice thereof (identifying the
basis for such Notice).
|
(c)
|
If
Service Provider (i) becomes or is declared insolvent, or is unable
to pay
its debts; (ii) enters into an agreement for the cancellation, extension,
or readjustment of substantially all of its obligations; (iii) enters
into
or files a petition, arrangement, application, action or other proceeding
seeking the appointment of a trustee or liquidator of or a receivership
for all or a substantial part of its assets and relief or protection
under
applicable bankruptcy laws, (iv) suffers the appointment of a
receiver-manager or other third party with similar power over the
assets;
or (v) has proceedings seeking any such appointment in clauses (iii)
or
(iv) commenced against it which are not terminated or dismissed within
ninety (90) days of such commencement, then Company
may,
by giving Notice of termination to Service Provider, terminate this
Agreement as of a date specified in such Notice of
termination.
|
(d)
|
If
Service Provider incurs Damages to Company in excess of the Service
Provider Damages Limitation set forth in Section 13.2(a), as such
Damages
are either finally adjudicated or agreed to by the parties, immediately
upon Notice to Service Provider by
Company.
|
(e)
|
If
Company has not, pursuant to the Transition Plan, accepted all In-Scope
Services by **.
|
(f)
|
Upon
the occurrence of any one of the following events (each, a “Service
Level Termination Event”):
|
(i)
|
Service
Provider’s failure to meet a Service Level for ** consecutive months
or ** months out of any ** month period.
|
(ii)
|
Service
Provider’s failure to meet the Increased Impact Level for **
consecutive months or ** months out of any ** month
period.
|
For
purposes of determining whether a Service Level Termination Event has occurred,
Service Level Credits earned shall include all Service Level Credits incurred,
regardless of whether such Service Level Credits are actually paid or credited
to Company.
15.3 Termination
for Cause. Service
Provider may terminate this Agreement as a whole for cause and without the
payment of any termination fees, penalties or charges:
(e)
|
Immediately
upon Notice to Company ** days after Company’s receipt of the second
written notice of failure to pay from Service Provider, provided
in
accordance with the following. Such notices of non-payment shall
be in
writing, with an additional copy to the Chief Executive Officer of
Company, including identification of all unpaid and undisputed amounts,
and Service Provider’s intention to terminate this Agreement if payment is
not received, with the first of such notices due at least ** days
after such payment was due and an additional notice of the same type
at
least ** days after the delivery of the initial
notice.
|
**
Confidential Treatment Requested.
Confidential
24
(f)
|
If
Company (i) becomes or is declared insolvent, or is unable to pay
its
debts; (ii) enters into an agreement for the cancellation, extension,
or
readjustment of substantially all of its obligations; (iii) enters
into or
files a petition, arrangement, application, action or other proceeding
seeking the appointment of a trustee or liquidator of or a receivership
for all or a substantial part of its assets and relief or protection
under
applicable bankruptcy laws, (iv) suffers the appointment of a
receiver-manager or other third party with similar power over the
assets;
or (v) has proceedings seeking any such appointment in clauses (iii)
or
(iv) commenced against it which are not terminated or dismissed within
ninety (90) days of such commencement, then Service Provider may,
by
giving Notice of termination to Company, terminate this Agreement
as of a
date specified in such Notice of
termination.
|
15.4.
|
Termination
Assistance.
|
15.5.
|
License
Termination and Exit Rights. Upon
the expiration or termination of this Agreement and any Termination
Assistance Services for any reason, the licenses granted to Service
Provider pursuant to this Agreement shall automatically terminate
and
Service Provider and Company further agree to implement, respectively,
those items and matters set forth on Schedule
15.6
attached hereto.
|
**
Confidential Treatment Requested.
Confidential
25
15.6.
|
Abandonment
of Agreement.
Service Provider acknowledges that its abandonment of this Agreement
could
cause irreparable harm, the amount of which may be extremely difficult
to
estimate, thus making any remedy at law or in damages inadequate.
Service
Provider therefore agrees that Company will have the right to apply
to any
court of competent jurisdiction for a temporary or provisional order
restraining any such abandonment of this Agreement by Service Provider,
without the necessity of posting bond. This right will be in addition
to
any other remedy available under this
Agreement.
|
15.7.
|
Survival
of Provisions.
Upon the expiration or termination of this Agreement for any reason,
the
provisions of Articles VIII, IX, X, XI, XII, XIII, XIV, XV, XVI,
XVII, and
IX and Sections 6.3, 6.4, 6.5 and 6.6 shall survive
indefinitely.
|
ARTICLE
XVI
DISPUTES
16.1.
|
Disputes
In General.
The Parties will resolve all Disputes
in
accordance with the procedures described in Schedule
16.1 (the
“Dispute
Resolution Procedures”).
|
16.2.
|
Continued
Performance.
Except where prevented from doing so by the matter in Dispute,
Service
Provider agrees
to continue performing its obligations under this Agreement
while
any good faith Dispute
is
being resolved unless and until such obligations are terminated by
the
termination or
expiration
of this Agreement.
|
ARTICLE
XVII
BUSINESS
CONTINGENCIES
17.1.
|
Disaster
Recovery Services.
|
(a)
|
Disaster
Recovery Plan.
Throughout the term of this Agreement, as part of the Services, Service
Provider shall maintain a disaster recovery plan appropriate
to the provision of the In-Scope Services and as attached hereto
as
Schedule
17.1,
(the
“Disaster
Recovery Plan”)
and the capacity to execute and perform such plan. Service
Provider will
perform testing of the Disaster
Recovery Plan at
least once each year
in
accordance with the Charges Schedule, and will provide the
test results to Company.
|
**
Confidential Treatment Requested.
Confidential
26
17.2.
|
Force
Majeure.
|
(a)
|
If
Service Provider is rendered unable, wholly or in part, by a Force
Majeure
Event, to carry out some or all of its obligations under this Agreement
or
a Statement(s) of Work, then during the continuance of such inability,
the
obligation of the Service Provider to perform the obligations so
affected
shall be suspended. The Service Provider shall promptly notify Company
verbally (to be confirmed in writing within twenty-four (24) hours
of the
inception of the event) of the occurrence of the Force Majeure Event,
which Notice shall include information with respect to the nature,
cause
and date of commencement of the occurrence(s), and the anticipated
scope
(and the obligations, the performance of which are thereby delayed)
and
duration of the delay. The Service Provider shall continue to use
commercially reasonable efforts to mitigate the impact or consequence
of
the event on the unaffected party and to recommence performance whenever
and to whatever extent possible without delay. Upon the conclusion
of a
Force Majeure Event, the affected party shall, with all reasonable
dispatch, take all necessary steps to resume the obligation(s) previously
suspended. Notwithstanding the foregoing, Service Provider’s performance
of any of its obligations under this Agreement shall not be suspended
or
excused pursuant to this Section 17.2 if Service Provider could end
or
reduce the effect of the Force Majeure Event by complying with a
provision
in the Disaster Recovery Plan. Subject to paragraph (c) below, in
the
event of any Force Majeure Event, Company shall not pay any Service
Charges in respect of the Services so
affected.
|
ARTICLE
XVIII
AFFECTED
EMPLOYEES
18.1
|
Affected
Employees.
Company may agree in any SOW to provide Service Provider with the
opportunity to offer employment to certain of the employees of Company
in
connection with the execution of the Agreement and one or more SOW
(the
“Affected Employees”). In such event, the relevant SOW shall incorporate
the provisions set forth in the “Affected
Employees Provisions”
Schedule
18.1
and such other provisions as may be agreed by the
Parties.
|
ARTICLE
XIX
MISCELLANEOUS
19.1.
|
Assignment.
This Agreement will be binding upon and inure to the benefit of the
parties and their respective successors and permitted assigns. Except
as
provided in Article VII, neither party shall assign this Agreement
or any
part hereof or any benefit or interest herein without the prior written
Consent of the other party, except that Company
may
assign its rights and delegate its duties and obligations under this
Agreement
to
one or more of its Affiliates and/or as part of the sale or
transfer
of all or
substantially
all of its assets and business, including
by
merger or
consolidation
to a Person
that
assumes and has the ability to perform Company’s
duties and obligations under this Agreement.
Any attempted assignment or
delegation
of any rights, duties, or
obligations
in violation of this Section will
be invalid and without effect.
|
**
Confidential Treatment Requested.
Confidential
27
19.2.
|
General
Principles Regarding Service Provider Personnel.
The personnel assigned to the Company account will be and remain
employees
of Service Provider, and Service Provider will provide for and pay
the
compensation and other benefits of such personnel, including salary,
health, accident and workers’ compensation benefits and all taxes and
contributions that an employer is required to pay (or withhold) with
respect to the employment of
employees.
|
19.3.
|
Relationship
of Parties.
In connection with this Agreement, each party is an independent
contractor; each has sole authority and control of the manner of,
and is
responsible for, its performance of this Agreement.
This Agreement does not and shall not be deemed to create a joint
venture,
partnership, fiduciary or agency relationship between the parties
for any
purpose. Neither party
may
create or
incur
any liability or
obligation
for or
on
behalf of the other party,
except as described in this Agreement.
|
19.4.
|
Notice.
Wherever under this Agreement one party is required or permitted
to give
notice to the other party (and no specific person is named as the
appropriate recipient of such notice), such notice (“Notice”)
shall be in writing and shall be delivered personally, sent by nationally
recognized express courier or sent by registered or certified mail
(return
receipt requested and postage prepaid). Any such Notice shall be
deemed
given when actually received and shall be addressed as
follows:
|
In
the
case of Company:
Eurobancshares,
Inc.
Xxxx
#0
Xx.
00.0
Xxx
Xxxx,
Xxxxxx Xxxx 00000
Attn:
Xxxx Xxxxxx, CIO-VP, IT
with
a
copy (which shall not constitute effective notice) to:
Eurobancshares,
Inc.
Xxxx
#0
Xx.
00.0
Xxx
Xxxx,
Xxxxxx Xxxx 00000
Attn:
Xxxxx Xxxx, Chief Operating Officer
and
with
a copy (which shall not constitute effective notice) to:
Hunton
& Xxxxxxxx LLP
0000
Xxxx
Xxxxxx
Xxxxx
0000
Xxxxxx,
Xxxxx 00000-0000
Attn:
Xxxxx X. Xxxxxxxxx
Telecopy:
(000) 000-0000
In
the
case of Service Provider:
Telefonica
Empresas
Xxxxx
Xxxxxx Xxxx
00
Xxxxxx
0 Xxxxx 000
Xxxxxxxx,
XX 00000
Telecopy:
0-000-000-0000 Fax
Attn:
Xxxxxx Xxxxxxxxxx, Vice President - GM
Confidential
28
with
a
copy (which shall not constitute effective notice) to:
Telefonica
0000
Xxxxxxxx Xxx
00xx
Xxxxx
Xxxxx,
XX, 00000
Telecopy:
1-305-925-5238
Attn:
Xxxxxx Xxxxxx, Legal Director
Either
party from time to time may change its address or
designee
for notification purposes by giving the other party
Notice of
the
new address (which
new address must be within the United States) or designee
and the date upon which such change will become effective.
19.5.
|
Severability.
If any term, provision, or restriction of this Agreement or any schedule
hereto is held by a court or panel of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement and such
schedules shall remain in full force and effect and shall in no way
be
affected, impaired or invalidated, and applicable term, provision
or
restriction of this Agreement will be deemed to be restated to reflect
the
original intentions of the parties as nearly as possible in accordance
with applicable law.
|
19.6.
|
No
Third Party Beneficiaries.
Nothing contained in this Agreement is intended or shall be construed
to
confer upon any Person (other than the parties hereto and the Company
Indemnitees specifically identified in Article VII, and Company’s
Affiliates entitled to receive Services hereunder) any rights, benefits
or
remedies of any kind or character whatsoever, or to create any obligations
of a party to any such Person, including to any suppliers, customers
or
subcontractors of a party.
|
19.7.
|
Publicity.
Service Provider shall not make any press releases, public announcements
or similar public disclosure relating to this Agreement or its subject
matter, including promotional or marketing material without Company’s
Consent.
|
19.8.
|
Amendment;
Waiver.
Other than in accordance with the Change Control Procedures, this
Agreement may not be modified or amended except by a written instrument
executed by or on behalf of each of the parties to this Agreement.
Unless
otherwise expressly provided in this Agreement,
a
delay or
omission
by either party
in
exercising any right or
power
under this Agreement
will
not be construed to be a waiver thereof. No waiver of any breach
of any
provision of this Agreement
will
constitute a waiver of any prior, concurrent or
subsequent
breach of the same or
any
other provision hereof.
|
19.9.
|
Entire
Agreement.
This Agreement (including the Schedules hereto and the SOWs hereunder,
each of which is incorporated herein by reference) constitute the
entire
agreement among the parties with respect to the subject matter hereof
and
supersedes all prior and contemporaneous agreements and understandings,
whether written or oral, among the parties with respect to such subject
matter.
|
Confidential
29
19.11.
|
Counterparts.
This Agreement may be executed in two or more counterparts, each
of which
shall be deemed to be an original, but all of which together shall
constitute one instrument binding on the parties, notwithstanding
that
both parties are not signatories to the original or the same
counterpart
|
TRANSFER
AND MANAGEMENT OF THIRD PARTY SERVICE CONTRACTS
20.1
|
Transfer
and Management of Third Party Agreements.
Certain SOWs may require the transfer of Company equipment, software,
or
third party agreements to the Service Provider and/or the management
of
Company equipment, software or third party agreements by the Service
Provider. All such transfer or management responsibilities will be
identified in the particular SOW, and the SOW shall contain additional
terms and conditions with respect to such
assets.
|
ARTICLE
XX
“Affiliate”
means,
with respect to any Person
directly
or
indirectly
controlling, controlled by or
under
common control with such Person.
“Business
Day”
means
each Monday
through
Friday,
other
than national holidays recognized by Company.
“Change”
means:
(1)
any
change to
(a)
the
Services
or any
of the processes or procedures used to perform the Services, or
(b)
the
Service Level Agreement;
(2)
any
change to (a)
the
Service
Locations, (b)
the
Security
Requirements,
Company
Regulatory Requirements,
Service
Provider Regulatory
Requirements,
or (c)
the Disaster Recovery Plan; (3)
any
change that disrupts the provision of the Services;
or
(4)
any
amendment, modification, addition or
deletion
proposed by a party
to
this
Agreement.
“Company
Data”
means
the
following data, whether provided or
produced
before, on, or
after
the
Effective
Date:
Confidential
30
All
data that is provided by or
on
behalf of Service
Provider to
Company
by
means of the In-Scope
Services,
including
reports;
|
Consumer
Information; and
|
All
data that is produced by means of the In-Scope
Services as
an intermediate step in using or
producing
any of the Company
Data,
including
databases
and files containing Company
Data.
|
“Consent”
means
consent, approval, authorization, clearance, exemption, waiver, or
similar
affirmation by a
party
given
in
accordance with the Agreement.
“Consumer
Information”
shall
mean all records, files, reports and other data relating to Company’s customers
provided to Service Provider by or on behalf of Company, its Affiliates or
business partners, or otherwise collected or obtained by Service Provider,
in
connection with the In-Scope Services, including but not limited to, customer
accounts, customer names, addresses and social security numbers, as well as
any
information derived therefrom.
“Dispute”
means
any
dispute, claim or
controversy
of any kind or
nature
arising under or
in
connection with the Services
or
otherwise
in connection with the Agreement
or
the
transactions contemplated thereby (including
disputes
as to the Services,
billing, or
the
creation, validity, interpretation, breach or
termination
of the Agreement).
(a)
|
Caused
by any of the following: (w) catastrophic weather conditions or other
extraordinary elements of nature or acts of God; (x) acts of war
(declared
or undeclared), acts of terrorism, insurrection, riots, civil disorders,
rebellion or sabotage; (y) failures of telecommunications providers
or
other utilities; and (z) changes in Law or acts of or failure to
act by
any federal, provincial, local or foreign Governmental Authority;
provided,
however,
that the parties expressly acknowledge and agree that Force Majeure
Events
do not include (i) vandalism, (ii) Service Provider’s inability to obtain
hardware, software, on its own behalf or on behalf of Company, or
its
inability to obtain or retain sufficient qualified personnel, (iii)
the
non-performance of subcontractors or agents relied on for the delivery
of
the Services, or (iv) any failure to perform caused solely as a result
of
a party’s lack of funds or financial ability or capacity to carry on
business; and
|
(b)
|
The
non-performing party is without fault in causing or failing to prevent
the
occurrence of such event, and such occurrence cannot be circumvented
by
reasonable precautions and could not have been prevented or circumvented
through the use of commercially reasonable alternative sources, workaround
plans or other means (including, with respect to Service Provider,
by
Service Provider meeting its security and disaster recovery obligations
described in this Agreement).
|
Confidential
31
“Governmental
Authority”
means
any
nation or
government,
any federal, state, province, territory, city, town, municipality, county,
local
or
other
political subdivision thereof or
thereto,
any quasi-governmental authority, and any court, tribunal, arbitral body,
taxation authority, department, commission, board, bureau, agency,
instrumentality thereof or
thereto
or
otherwise
which exercises executive, legislative, judicial, regulatory or
administrative
functions of or
pertaining
to government.
“Increased
Impact Level”
shall
mean those Service Levels identified as such on a Service Level
Agreement.
“Indemnifiable
Loss”
means
losses, claims, obligations, demands, assessments, fines and penalties (whether
civil or
criminal),
liabilities, expenses and costs (including
reasonable
fees and disbursements of legal counsel, accountants and other advisors
or
consultants)
actually suffered or
incurred
by a Person
relating
to any act or omission of a party
for
which
the other party
may
seek
indemnification under the Agreement.
“Intellectual
Property Rights”
means
all
intellectual property rights, including
(i)
any
patent, patent application, trademark (whether registered or
unregistered),
trademark application, trade name, service xxxx (whether registered
or
unregistered),
service xxxx application, copyright (whether registered or
unregistered),
copyright application, trade
secret,
Confidential
Information,
know-how, process, technology, development tool, ideas, concepts, design right,
moral right, data base right, methodology, algorithm or
invention,
(ii)
any
right
to use or
exploit
any of the foregoing, and (iii)
any
other
proprietary right or
intangible
asset (including
software).
“Law”
means
all applicable laws (including
those
arising under common law), statutes, codes, rules, regulations, reporting
or
licensing
requirements, ordinances and other pronouncement having the effect of law of
the
United
States,
Puerto
Rico, any foreign country or
any
domestic or
foreign
state, county, city or
other
political subdivision, including
those
promulgated, interpreted or
enforced
by any governmental or
regulatory
authority.
“Liabilities”
means
any direct or
indirect
indebtedness,
guaranty, endorsement, claim, loss, damage, penalty, deficiency, assessment,
Taxes,
cost,
expense (including
reasonable
attorneys’ fees and reasonable costs of investigation litigation and
settlement), obligation, disgorgement or
responsibility,
fixed or
unfixed,
known or
unknown,
asserted or
unasserted,
liquidated or
unliquidated,
secured or
unsecured.
“Losses”
means
all Liabilities,
judgments, claims, settlements, losses, damages, charges, liens, Taxes,
penalties, obligations and expenses.
“Person”
means an
individual, corporation, limited liability company, partnership, trust,
association, joint venture, unincorporated organization or
entity
of
any kind or
nature,
or
a
Governmental
Authority.
“Regulatory
Requirements”
means
the Service Provider Regulatory Requirements and the Company Regulatory
Requirements.
Confidential
32
“Service
Acceptance Date” the
date
when Company accepts an In-Scope Service in accordance with the Transition
Plan.
“Service
Level Credit”
means
the credit due to Company in the event of a Performance Failure, as calculated
in accordance with Section 4.3(a).
“Service
Provider Entity” means
Service Provider, any Service Provider Affiliate or any subcontractor of Service
Provider or any Service Provider Affiliate, or any of their respective employees
or agents.
“Software” or
“software”
means
any computer programming code consisting of instructions or
statements
in a form readable by individuals (source code) or
machines
(object code), and documentation
and
supporting materials therefor, in any form or
medium,
including
electronic
media.
“SOW
Effective Date”
means,
with respect to a SOW, the effective date of such SOW, as set forth on such
SOW.
“Statement(s)
of Work”
means
the statements of work attached hereto describing the In-Scope Services as
set
forth in Section 3.1
and
any additional statements of work expressly referencing this Agreement,
describing new services, agreed upon and duly executed by the parties during
the
Agreement Term, and attached hereto.
“Successor
Service Provider”
means
a
Person
that
provides services to Company
similar
to the In-Scope
Services following
the termination
or expiration of the Agreement.
“Tax”
or “Taxes” means
any
federal, state, provincial, county, municipal, local, or foreign tax, charge,
fee, levy, impost, duty, or other assessment, including income, gross receipts,
excise, employment, sales, use, consumption, transfer, recording, license,
goods
and services, harmonized sales, payroll, franchise, severance, documentary,
stamp, occupation, windfall profits, environmental, federal highway use,
commercial rent, customs duty, capital stock, paid-up capital, profits,
withholding, Social Security, single business, unemployment, disability, real
property, personal property, registration, ad valorem, value added, alternative
or add-on minimum, estimated, or other tax or governmental fee of any kind
whatsoever, imposed or required to be withheld by any Governmental Authority
that is currently in effect or may become effective during the Agreement Term,
including any interest, penalties, and additions imposed thereon or with respect
thereto.
“Third
Party Claim”
means
any
claim, demand, action, cause of action or other proceeding asserted
by
a
Person
other
than a party
or
such
party’s
Affiliates,
whether
by legal process or otherwise.
“Transition
Period”
means,
with respect to a Service, the period of time beginning on the applicable SOW
Effective Date for the Service and ending on the applicable Service Acceptance
Date.
Confidential
33
IN
WITNESS WHEREOF, this Agreement has been duly executed by and on behalf of
the
parties hereto as of the Effective Date.
Eurobancshares,
Inc.
|
||
|
|
|
By: | /s/ Xxxxxx Xxxxxxxxx Xxxxxxx, Xx. | |
|
||
Name: |
Xxxxxx
Xxxxxxxxx Xxxxxxx, Xx.
|
|
|
||
Title: | President and CEO | |
|