EXHIBIT 10.36
MASTER SECONDARY STORAGE SERVICES AGREEMENT
This MASTER SECONDARY STORAGE SERVICES AGREEMENT ("Agreement") is entered into
as of March 29, 2002 (the "Effective Date") by Storage Technology Corporation
("StorageTek"), having its principal xxxxxx xx Xxx XxxxxxxXxx Xxxxx, Xxxxxxxxxx,
XX 00000 XXX and Electronic Data Systems Corporation ("EDS") (collectively, the
"Parties"), having its principal office at 0000 Xxxxxx Xxxxx, Xxxxx, XX 00000
XXX.
RECITALS
A. EDS's objectives (as the client) in entering into this Agreement
with StorageTek (as the provider) include: (i) obtaining high quality Services
described in Schedule 3.1 of this Agreement; (ii) paying StorageTek for services
as provided in Schedule 6.3 of this Agreement; (iii) establishing a flexible
relationship with StorageTek specifying the manner in which StorageTek will
respond to the requests of EDS and to changes in technology and methods for
providing Services, including accommodation of specified levels of changes in
volumes of operations, new generations of technology and improved methods of
monitoring, measuring and achieving increased levels of Service; and (iv)
improving upon those Services, all as set forth in this Agreement. Based on such
review and understanding, StorageTek and EDS agree to work together in good
faith to achieve those objectives.
B. StorageTek is in the business of providing secondary storage
services and equipment and licensing storage management software. EDS is in the
business of providing global information technology services, including business
process management, e-business consulting services, information solutions,
product lifecycle management solutions and management consulting services.
C. The Parties now desire to enter into this Agreement, whereby (1) EDS
will sell StorageTek and Third Party Equipment currently operated by EDS and
located in its or its client's Data Centers to StorageTek; (2) StorageTek will
provide certain Secondary Storage Services to EDS and license certain of its
software to EDS; and (3) EDS will pay StorageTek a service fee based on the
Secondary Storage Services StorageTek provides to EDS.
D. On the basis of the foregoing and the representations and warranties
made by the Parties in this Agreement, EDS desires to engage StorageTek, and
StorageTek accepts such engagement, to perform the Services described in this
Agreement.
E. The foregoing provisions set forth the background under which the
Parties are entering into this Agreement and are intended to be a general
introduction to this Agreement. They are not intended to expand the scope of the
parties' express obligations under this Agreement or to alter the plain meaning
of the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and conditions of this Agreement, the Parties hereby agree as
follows:
1. DEFINITIONS.
Capitalized terms used herein shall have the meanings set forth in the
introductory paragraph above, this Agreement and in the Schedules attached
hereto. Many of the capitalized terms used herein are defined in Schedule 1.
2. SALE OF EQUIPMENT BY EDS.
2.1 Purchased Equipment. EDS hereby agrees to sell, assign, transfer
and convey to StorageTek, as of the Effective Date, good and valid title in and
to the Purchased Equipment located in the Data Centers, free of any
Encumbrances, on the terms and subject to the conditions set forth in this
Agreement. The Parties also may agree to add additional Purchased Equipment
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and/or additional Data Centers to this Agreement. The Parties shall execute
mutually agreed upon written addendums to Schedule 2.1(A) of this Agreement
whereby StorageTek will purchase such equipment on the same terms and conditions
set forth in this Agreement (including without limitation representations and
warranties, indemnification and limitation of liability). All additional
equipment will, upon execution of the applicable Schedule, be considered
"Purchased Equipment" for purposes of this Agreement. Any StorageTek software
installed on any Purchased Equipment shall be considered "Software" for purposes
of this Agreement, and any third party software installed on or used in
connection with any Purchased Equipment shall be considered "Third Party
Software" for purposes of this Agreement. StorageTek will have the right to
audit EDS's records, Data Centers and other facilities relating to the Secondary
Storage Equipment in order to verify that StorageTek has received good and valid
title in and to all Purchased Equipment listed in Schedule 2.1(A), free of any
Encumbrances and that the Purchased Equipment is located at the Data Centers
listed in Schedule 2.1(B). The audit will be conducted at StorageTek's expense,
unless the audit reveals that StorageTek has not received good and valid title
in and to any such Purchased Equipment, in which case EDS will reimburse
StorageTek for all reasonable costs and expenses incurred by StorageTek in
connection with such audit. In the event that StorageTek does not receive good
and valid title in and to any such Purchased Equipment, StorageTek may demand a
refund of a pro-rated portion of the Purchase Price paid for such affected
Purchased Equipment.
2.2 Previously Licensed Software. EDS shall have those rights to use
the Previously Licensed Software as set forth in Section 11 below.
2.3 Retention of EDS Liabilities. Notwithstanding anything to the
contrary in this Section 2 or elsewhere in this Agreement: (a) EDS shall retain
all, and StorageTek shall not assume any, right, title and interest in or to the
Third Party Software and any assets of EDS other than the Purchased Equipment;
and (b) EDS shall retain all, and StorageTek shall not assume and shall not be
liable for any liabilities, obligations or commitments of EDS arising under or
relating to the Third Party Software Licenses, the Third Party Maintenance
Agreements or any other agreements relating to the Purchased Equipment or the
Third Party Software.
2.4 Delivery of Documentation; Further Assurances. Within ninety (90)
days following the Effective Date, EDS shall deliver to StorageTek copies of any
specifications, documentation and manuals, in EDS's possession and control as of
the Effective Date, related to the Purchased Equipment which is not StorageTek
Equipment. EDS shall execute and/or cause to be delivered to StorageTek such
deeds, bills of sale, endorsements, assignments, instruments of conveyance and
other documents, and shall take such other actions, as may be necessary or
appropriate (in the reasonable judgment of StorageTek or its counsel) to sell,
assign, transfer, convey and deliver to StorageTek good and valid title to the
Purchased Equipment free of any Encumbrances or to otherwise carry out or
evidence the transactions contemplated by this Section 2.
2.5 Taxes.
2.5.1 Transfer Taxes. StorageTek shall bear and pay any sales
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and other transfer Taxes payable in connection with the transfer of the
Purchased Equipment to StorageTek. EDS will pay all other Taxes relating to the
Purchased Equipment and EDS's business that may at any time be asserted or
assessed with respect to events occurring, or tax periods (or portions thereof)
ending, on or before the Effective Date (computed on the basis of a closing of
the books). The term "Taxes" as used in this Section 2.5.1 and Section 2.5.2
shall mean all taxes, fees and assessments due, assessed or levied by any
federal, state or local government or taxing authority, and any penalties, fines
or interest thereon, imposed on the Equipment, its use or operation, but shall
not include any taxes, fees or assessments based upon or measured by the income,
gross receipts, net worth or conduct of business of StorageTek or any fines,
penalties or interest due as a result of StorageTek's delay or negligence in
filing any return or making any payment related to such Taxes. In the event
StorageTek pays any taxes for which EDS is responsible under this paragraph, EDS
shall reimburse StorageTek for such amounts within ten (10) days of EDS's
receipt of a written notice from StorageTek showing the amount, type of tax paid
and other reasonably necessary documentation.
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2.5.2 Cooperation. StorageTek and EDS will cooperate fully, as
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and to the extent reasonably requested by the other party, (A) in connection
with the filing of Tax returns or reports, in connection with any Tax audit,
litigation or other proceeding relating to the Purchased Equipment, (B) to
enable each to more accurately determine the appropriate Taxes due with respect
to the Purchased Equipment and the transfer thereof, and (C) to minimize such
Tax liability to the extent legally permissible. Such cooperation will include
the retention and (upon the other party's request) the provision of records and
information which are reasonably relevant to any such audit, litigation or other
proceeding and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder. EDS agrees to (A) retain all books and records with respect to Tax
matters pertinent to the Assets relating to any taxable period beginning before
the Effective Date until the expiration of the statute of limitations (and, to
the extent notified by StorageTek, any extensions thereof) of the respective
taxable periods, and to abide by all record retention agreements entered into
with any taxing authority, and (B) give the StorageTek reasonable written notice
prior to transferring, destroying or discarding any such books and records and,
if the StorageTek so requests, EDS will allow the StorageTek to take possession
of such books and records. StorageTek and EDS further agree, upon request of the
other party, to use commercially reasonable efforts to obtain any certificate or
other document from any governmental authority or any other person or take such
other action as may be reasonably necessary to mitigate, reduce or eliminate any
Tax that could be imposed with respect to the Purchased Equipment and the
transactions contemplated hereby.
3. SERVICES.
3.1 Generally.
3.1.1 Responsibilities. Throughout the Term, StorageTek will
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provide to EDS the Services in accordance with the provisions of this Agreement
and Schedule 3.1. The manner and means StorageTek uses to perform the Services,
including, but not limited to, the Assets, the personnel and services are in the
sole discretion and control of StorageTek, except as otherwise expressly
provided in this Agreement. Any StorageTek Assets that StorageTek places in a
Data Center in connection with its provision of the Services will be described
in an Acknowledgement substantially in the form of the attached Exhibit 1 and
executed by EDS pursuant to this Agreement (each, an "Acknowledgement"), which
Assets will be subject to the terms and conditions of this Agreement. Throughout
the Term, and in connection with StorageTek's provision of the Services, EDS
shall perform the functions and responsibilities identified as the
responsibility of EDS pursuant to this Agreement. EDS shall not permit anyone
other than authorized representatives of StorageTek to access the Data Centers
and effect adjustments or repairs to the StorageTek Assets. EDS shall give
StorageTek personnel and Subcontractors full and free access to the Data Centers
to the extent reasonably necessary or appropriate for them to perform the
Services, including to effect the necessary adjustments and repairs to the
Secondary Storage Assets.
a. In connection with its performance of the Services
pursuant to this Agreement, StorageTek agrees that:
(1) It will provide sufficient Employees to complete the
Services ordered within the applicable time frames established pursuant to this
Agreement, which Employees shall have sufficient skill, knowledge, and training
to perform the Services and shall perform such Services in a professional and
workmanlike manner, all of which will be measured exclusively by StorageTek's
performance with respect to the service levels set forth in Schedule 3.1;
(2) StorageTek Employees performing Services in the United
States will be United States citizens or lawfully admitted in the United States
for permanent residence or lawfully admitted in the United States holding a visa
authorizing the performance of Services on behalf of StorageTek;
(3) StorageTek shall provide for and pay the compensation of
StorageTek Employees and shall pay all taxes, contributions, and benefits (such
as, but not limited to, workers' compensation benefits) which an employer is
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required to pay relating to the employment of employees. EDS shall not be liable
to StorageTek or to any Employee for StorageTek's failure to perform its
compensation, benefit, or tax obligations. StorageTek shall comply with all
associated governmental regulations, including the filing of all necessary
reports and returns.
(4) If EDS intends to provide an Employee performing Services
in the United States, Canada and/or Mexico with unescorted access to an EDS
location, StorageTek shall, to the extent allowed by applicable law, allow EDS
or its designated third party to conduct a background investigation and drug
screening ("Investigation") of such Employee. In connection with such
Investigation, EDS shall provide to StorageTek a standard form authorizing the
Investigation and the release of the results of such Investigation to
StorageTek, and StorageTek shall promptly request completion of such form by the
Employee, provided, however, that if such form is not completed, EDS shall not
be obligated to provide the Employee with unescorted access to EDS locations.
Any and all information obtained in connection with an Investigation of any
Employee or acquired or made known during such Investigation shall be deemed
strictly confidential, and also Proprietary Information, and shall only be
revealed to EDS employees with a bona fide need to know. To the extent required
by applicable law, upon request, EDS will provide the Employee involved with a
copy of the results of the Investigation. Upon request by StorageTek, EDS will
provide the StorageTek Office of Corporate Counsel with the results of such
Investigation. If, after reviewing the results of an Investigation, in
accordance and consistent with EDS's normal practices and guidelines, EDS
reasonably elects not to grant an Employee unescorted access to an EDS location,
StorageTek agrees not to utilize such Employee for any Services that require
unescorted access to an EDS location. EDS shall waive the Investigation for an
Employee if StorageTek provides EDS with written confirmation that: (i)
StorageTek has conducted a background and drug screening investigation of such
Employee with satisfactory results, or (ii) the Employee has been employed with
StorageTek for at least five (5) years in good standing. EDS agrees to conduct,
and to cause any third party it uses to conduct, any Investigation in strict
compliance with the Fair Credit Reporting Act (FCRA), any applicable state laws
or regulations, and any successor laws or regulations, and EDS agrees to
indemnify, defend and hold StorageTek and its officers, directors, employees,
agents, successors and assigns, harmless from and against all Losses arising
from claims relating to or arising out of (i) EDS's failure to so comply with
such applicable laws or regulations or (ii) EDS's breach of its confidentiality
obligations under this section.
3.1.2 Exclusions. The Parties agree that StorageTek shall have
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no obligation to maintain or support any Third Party Software, but shall use its
good faith efforts to manage the maintenance and support of such Third Party
Software. Upon the written request of StorageTek, EDS shall provide StorageTek a
letter from the maintenance provider stating the Third Party Equipment is
qualified for the manufacturer's standard maintenance agreement.
3.2 First Right of Refusal. [CONFIDENTIAL INFORMATION DELETED] Without
limiting the foregoing, EDS shall not establish any data center or other
facility utilizing Secondary Storage during the Term, on its own or in
conjunction with any third party, for purposes of transitioning to any other
location any of its requirements for Secondary Storage in the Data Centers. The
provisions of this Section 3.2 shall not survive the expiration or termination
of this Agreement for any reason.
3.2.1 New Customer Workload Information. Subject to any
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confidentiality obligations, EDS agrees to provide StorageTek with the necessary
information to propose a Base Service Fee for any New Customer Workload
requiring the purchase of existing Secondary Storage assets. To allow StorageTek
to provide an informed proposal, in a timely manner, EDS will, subject to any
confidentiality obligations, provide StorageTek with a substantially complete
description and valuation of the new customer assets according to book value,
fair market value and lease termination expense, all as appropriate and
necessary to evaluate the New Customer Workload opportunity. EDS will disclose
to StorageTek any forward commitment to be assumed by EDS relating to Secondary
Storage. Subject to any confidentiality obligations, EDS will further facilitate
the new customer proposal from StorageTek by specifying:
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1) Location(s) to be used for Secondary Storage Services in support of the New
Customer Workload;
2) Any requirement from the new customer to continue using their existing
configuration of Secondary Storage assets; and
3) GB Stored by location and by isolated workload.
StorageTek will respond in a timely manner with a proposal to: (1) purchase the
subject assets; or (2) provide a functionally equivalent configuration; and, in
combination with either (1) or (2), assign a Base Service Fee to the initial
Secondary Storage GB count for that New Customer Workload; or (3) decline the
purchase of the assets.
As determined by EDS in its reasonable business judgment, EDS will involve
StorageTek early in the process of evaluating the new customer opportunity to
increase the benefit of mutual review. If StorageTek refuses to make a proposal
for the purchase of Secondary Storage assets in a prospective engagement that
requires such a purchase, the Parties will cooperate in estimating an advisable
future time for integrating the New Customer Workload into the Secondary Storage
Services provided by StorageTek in the Data Centers and work together toward
that end.
3.2.2 Exception to Exclusivity. [CONFIDENTIAL INFORMATION
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DELETED]
A. Failure to Reach Agreement:
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(1) EDS is adding a New Customer Workload and under the New Customer
Workload, the customer requires that EDS utilize existing
non-StorageTek assets for some period of time on the customer
site or in the Data Center(s); and
(2) EDS offers StorageTek the opportunity to provide a proposal for
offering the Services which proposal includes StorageTek's
purchase of the non-StorageTek assets under the terms set forth
for New Customer Workload in Section 3.2.1; and
(3) StorageTek declines to provide a proposal or, after negotiating
in good faith, the parties fail to reach an agreement in a
timely manner with respect to StorageTek's provision of the
Secondary Storage Services for the New Customer Workload.
B. New Customer Requirements: As part of the New Customer Workload,
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the customer requires that EDS provide the Secondary Storage Services without
using StorageTek's services.
C. Contract Requirements: Any EDS customer contract, including
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contracts with pre-existing EDS customers, can require EDS, by the terms of that
contract, to provide the Secondary Storage Services without using StorageTek's
services; provided EDS gives StorageTek prompt written notice of such
requirement if and when raised as a possibility or exercised by such customer
and works with StorageTek in good faith to find possible alternative
arrangements.
3.3 Services Management.
3.3.1 Appointment. EDS and StorageTek shall each appoint an
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individual to act as the primary point of operational contact for the
administration and operation of this Agreement.
3.3.2 EDS Contract Manager. The EDS Contract Manager shall
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have overall responsibility for coordinating on behalf of EDS all activities of
EDS undertaken hereunder, for the performance of EDS's obligations hereunder,
for coordinating the performance of the Services with StorageTek, for acting as
a day-to-day contact with the StorageTek Service Manager and for making
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available to StorageTek the data, facilities, resources and other support
services from EDS required for StorageTek to be able to perform the Services in
accordance with the requirements of this Agreement.
3.3.3 StorageTek Service Manager. The StorageTek Service
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Manager shall have primary operational responsibility for coordinating on behalf
of StorageTek its joint activities with EDS undertaken hereunder and for
StorageTek's performance of the Services, including all StorageTek personnel and
other technical resources used by StorageTek in performing the Services, and
will serve as the day-to-day contact with the EDS Contract Manager. In addition,
the StorageTek Service Manager shall be responsible for providing EDS with
Service performance information, managing the StorageTek Services team, and
communicating with EDS business managers and the EDS Contract Manager regarding
Service requirements and Service management. The StorageTek Service Manager
shall have no authority to bind StorageTek except with respect to matters
concerning day-to-day operations.
3.3.4 Meetings and Reports. The StorageTek Service Manager and
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the EDS Contract Manager will meet as often as may reasonably be requested by
either party, but at least monthly, to review StorageTek's performance of the
Services and EDS's performance as required under this Agreement. The StorageTek
Service Manager shall provide to the Parties written reports on the Parties'
respective performance, identifying any significant problems that are unresolved
and any details concerning their expected resolution.
3.4 Modifications to Services. StorageTek and EDS shall cooperate
reasonably and promptly in the review, assessment, modification, deferral,
approval and/or rejection of any written proposals of either party for changes
to the scope of Services required to be provided under the Services Terms, this
Agreement or other amendments or modifications to the Services Terms or terms of
this Agreement. No modification or change in the scope of Services referred to
in Schedule 3.1, however, shall be binding upon either party unless approved by
StorageTek and, if outside the scope of Services described in Schedule 3.1,
embodied in a written amendment to the Services Terms and this Agreement signed
by the Parties hereto. Subject to the foregoing, the Parties agree that the
Parties, on mutual agreement, may establish, and both Parties will carry out,
administrative procedures to manage changes and proposed changes to the scope of
Services provided hereunder.
3.5 EDS Responsibilities. StorageTek's performance hereunder is
contingent upon the cooperation of EDS, including EDS's responsibilities
specified in the Services Terms, and the supply to StorageTek of adequate
resources and information as mutually agreed pursuant to this Agreement. If any
delays in StorageTek performance occur as a result of failure or untimely
performance by EDS and/or EDS's third-party providers or other vendors, or other
acts by EDS or those under EDS's control that are not authorized by StorageTek,
the time for performance will be extended to the extent of any such delay and
StorageTek will not incur any liability to EDS as a result of such delay,
including for any failure to meet the service levels specified in Schedule 3.1.
StorageTek will use reasonable efforts to perform notwithstanding the failure or
untimely performance by EDS, but EDS will reimburse StorageTek for any
reasonable additional costs incurred by StorageTek as a result of such delay.
3.6 Resources. Except as otherwise expressly provided in this
Agreement, StorageTek shall provide all of the personnel, Assets, and services
that StorageTek deems necessary to provide the Services. StorageTek shall have
the right, in its sole discretion, to use Subcontractors to perform any of the
Services required hereunder. Any such Subcontractors will be subject to
confidentiality obligations which are at least as protective of EDS's
Confidentiality rights as those set forth in the Agreement. StorageTek's use of
the Subcontractors shall not relieve StorageTek of the representations and
warranties pursuant to Section 8 of this Agreement. StorageTek shall not
implement any action or decision regarding such resources that would materially
increase the amounts payable to StorageTek under this Agreement without EDS's
prior written consent, which consent may be withheld in EDS's sole discretion.
No consent on behalf of EDS shall be binding on EDS unless granted in writing by
EDS's Contract Manager (or authorized designee).
Subject to the terms and conditions of this Agreement, StorageTek
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agrees to allow EDS to access the Secondary Storage Assets and other personal
property described in any Acknowledgement together with all attachments,
replacements, parts, substitutions, additions, upgrades, accessories, operating
manuals and software delivered on or with any of the foregoing. StorageTek may
also place additional Secondary Storage Assets in a Data Center to provide the
Secondary Storage Services, in which case EDS will execute additional
Acknowledgements whereby EDS will access such Assets on the same terms and
conditions set forth in this Agreement. EDS will not in any way hypothecate,
create or permit to exist any Encumbrance in or an interest in any of the Assets
located in the Data Centers nor will EDS sell, transfer, assign, pledge,
collaterally assign, exchange or otherwise dispose of the Assets. EDS shall not
remove or conceal any notices that identify Assets as belonging to StorageTek.
EDS shall access the Assets in the conduct of its business, in a manner and for
the use contemplated by the manufacturer and in material compliance with
manufacturer's suggested guidelines and all applicable federal, state and local
laws and regulations relating to the possession, use and maintenance of the
Assets.
3.7 Removal of StorageTek Employees from EDS Account. Under this
Agreement, EDS shall have the right to notify StorageTek if EDS determines in
good faith that the continued assignment to the EDS account of any StorageTek
employee is not in the best interests of EDS, which notice shall specify in
reasonable detail reasonable grounds for removal of such StorageTek employee.
Upon receipt of such notice, StorageTek shall have a reasonable time period, not
to exceed twenty (20) days, to investigate the matters stated therein, discuss
its findings with EDS and attempt to resolve such matters in a manner acceptable
to EDS. If EDS continues to request the replacement of such individual after
such period, StorageTek shall remove the individual from the EDS account.
Nothing in this Section shall be deemed to require StorageTek to terminate the
employment of such individual.
4. [Intentionally Left Blank]
5. ASSUMPTION OF LEASES FOR CERTAIN EDS LEASED EQUIPMENT.
5.1 Terms and Conditions. Schedule 5 lists all of EDS's Leased
Equipment thereunder as of the Effective Date. EDS and StorageTek agree, after
the Effective Date, to negotiate in good faith the terms and conditions under
which either, in StorageTek's sole discretion, (a) the third party lessor would
assign the Third Party Lease Agreements and StorageTek would purchase the Third
Party Equipment, (b) StorageTek would assume EDS's rights and obligations under
the Third Party Lease Agreements, or (c) in the event that StorageTek cannot
formally assume the Third Party Lease Agreement(s), EDS shall obtain for
StorageTek the rights to use the Third Party Equipment and StorageTek will pay
the amounts owed under such Third Party Lease Agreement(s). EDS will work with
StorageTek to obtain the third party lessor's consent, to the extent necessary,
to the assignment or assumption of the Third Party Lease Agreements, as well as
the rights to the Third Party Software necessary to perform the Services. In the
event that (b) occurs, StorageTek would be entitled to acquire any such Leased
Equipment under the terms of the Third Party Lease Agreements. The Parties agree
that none of the Leased Equipment will form any part of the Purchased Equipment
unless or until either of the events described in subsections (a) or (b) occur,
at which time the Leased Equipment will become Purchased Equipment within the
meaning of this Agreement. EDS shall provide to StorageTek complete copies of
all Third Party Lease Agreements (including without limitation any amendments or
modifications thereto) in EDS's possession and control as of the Effective Date
within ten (10) business days after the Effective Date. StorageTek may, in its
sole discretion, elect not to assume EDS's rights and obligations under any
Third Party Lease Agreement that either includes (i) any material payment
obligations that, in the aggregate, exceed the amount set forth in Section 4 of
Schedule 6.3, or (ii) any material, non-standard terms or conditions of which
EDS has not notified StorageTek in writing prior to the Effective Date.
5.2 Limitations. EDS agrees not to renegotiate, extend the term of, or
otherwise modify the Third Party Lease Agreements without StorageTek's prior
written consent. In no event will StorageTek be obligated to make any payments
for any Leased Equipment beyond the expiration of the term remaining under the
applicable Third Party Lease Agreements as of December 1, 2001. To the extent
that there are limitations on the use and location of any Leased Equipment and
StorageTek intends to use such Leased Equipment in a manner or location not
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provided for under the agreement with the Leased Equipment provider, EDS will
provide StorageTek with reasonable assistance in obtaining the necessary consent
from the owner of such Leased Equipment. If StorageTek is unable to obtain the
necessary consent, EDS will be responsible for any additional costs incurred by
StorageTek as a result of StorageTek's inability to use the Leased Equipment in
a manner or location as it intends.
6. FEES AND PAYMENT TERMS.
6.1 Purchase Price for Purchased Equipment. As consideration for the
sale of the Purchased Equipment to StorageTek, StorageTek shall pay to EDS the
Purchase Price of $52,200,000 within thirty (30) days after the Effective Date.
6.2 [Intentionally Left Blank]
6.3 Services Fees. In consideration for the Secondary Storage Services
provided by StorageTek to EDS hereunder, EDS shall pay StorageTek the Services
Payments, subject to the terms and conditions of the pricing appendix attached
hereto as Schedule 6.3.
6.4 Payment Terms. Subject to the express remedies set forth in Section
7 of Schedule 3.1, and EDS's termination rights as set forth in Section 7 of the
Agreement, all payments shall be absolute and unconditional, and shall not be
subject to any abatement, reduction, set off, defense, counterclaim,
interruption, deferment or recoupment for any reason whatsoever. Except as
otherwise expressly provided in this Section 6, StorageTek shall invoice EDS for
all Services Fees and other fees owed to StorageTek on a monthly basis. All
invoiced amounts shall be due and payable by EDS within thirty (30) days of
EDS's receipt of the applicable invoice. Separately contracted services, media
and other disposables will be listed as separate items on the invoices sent to
EDS. On overdue payments (with the exception of reasonably disputed payments),
StorageTek has the right, with 20 days' prior written notice that payments are
overdue (during which time EDS has the right to cure), to charge interest at the
lesser rate of (a) prime rate plus two points per month; or (b) the maximum
allowable under the particular jurisdiction.
6.5 Taxes.
6.5.1 Unless EDS provides StorageTek with a valid and
applicable exemption certificate, and to the extent that StorageTek is required
by law to collect sales, use, gross receipts, or other transaction type taxes
(herein referred to as "Taxes") from EDS on any sum payable hereunder, then
StorageTek shall timely remit such taxes to the appropriate taxing jurisdiction.
StorageTek shall only collect Taxes that are required by law and will reimburse
EDS for any amounts collected that are not required by law or that are otherwise
not remitted to such taxing jurisdiction. Taxes shall be separately stated on
the invoice by jurisdiction. Non taxable and taxable Services shall be
documented separately and by the applicable jurisdiction.
6.5.2 Where permissible, the Parties shall work together in
the minimization of Taxes. The Parties understand that, for state and local
sales and use tax purposes, the amounts payable under this Agreement and all
Authorization Letters may be audited by the applicable taxing authority, and the
Parties shall cooperate to minimize any assessments.
6.5.3 EDS shall indemnify and hold harmless StorageTek from
and against any and all Taxes that EDS is responsible to pay, or is liable for.
EDS shall not be liable for any penalties, interest, fees, or other expenses, if
any, incurred by StorageTek as the result of any such Taxes not being paid at
the time or in the manner required by applicable law. In the event of an
assessment of Taxes, EDS shall pay or reimburse StorageTek for such assessed
Taxes, provided, however, that EDS shall have the right to appeal such
assessment, and StorageTek shall cooperate accordingly, provided, however, that
EDS shall pay pre-authorized and reasonable third party fees if applicable.
StorageTek reserves the right to settle and pay such assessment without
notification to or approval by EDS, provided, however, that in such event
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StorageTek cannot seek relief from EDS for such assessment. In the event that
EDS provides StorageTek with a certificate that is deemed to be invalid by the
applicable taxing authority, then EDS shall be required to pay tax, penalty and
interest assessed related to such invalid certificate.
6.5.4 If EDS is required by law to make any deduction or to
withhold from any sum payable to StorageTek hereunder, then the sum payable by
EDS upon which the deduction or withholding is based shall be increased to the
extent necessary to ensure that, after such deduction or withholding, StorageTek
receives and retains, free from liability for such deduction or withholding, a
net amount equal to the amount StorageTek would have received and retained in
the absence of such required deduction or withholding.
6.5.5 If EDS is required by law to make any deduction or
withholding from any sum payable to StorageTek under this Agreement, EDS shall
promptly report and effect payment thereof to the applicable tax authorities.
EDS shall also promptly provide StorageTek with official tax receipts or other
evidence issued by the applicable tax authorities sufficient to establish that
the taxes have been paid.
6.6 Reports. At all times during the Term, and for at least three (3)
years after any termination of this Agreement, EDS will maintain complete and
accurate records of the GB Stored (as defined in Schedule 6.3 attached hereto)
at all sites and all other data reasonably necessary for verification of amounts
to be paid to StorageTek under this Agreement. Upon the first business day after
the end of each of the first six calendar months after Effective Date, EDS shall
provide StorageTek with a written report setting forth (a) the GB Stored on the
first day of such calendar month; and (b) the GB Stored on the last day of such
calendar month. Following such six (6) month period, StorageTek may collect from
EDS, its systems and employees such data as is reasonably necessary to calculate
the fees payable by EDS hereunder. Schedule 6.5 lists factors which will become
the process for StorageTek to generate the monthly report on GB Stored.
6.7 Audit Rights.
6.7.1 By StorageTek
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(A) Systems Access. EDS will provide designated StorageTek
--------------
personnel an appropriate level of on-site and remote building and systems access
to inspect the Secondary Storage Equipment and perform the duties relating to
this Agreement, including without limitation to collect data reasonably
necessary to calculate the fees payable by EDS hereunder. StorageTek personnel
will be granted system access using EDS-approved contractor system user
identification. System access will be granted at comparable levels with EDS tape
management personnel who perform like functions. StorageTek will comply with the
reasonable safety and security guidelines of EDS which are generally applicable
to EDS's employees with respect to access to the Facilities and which have been
provided reasonably in advance by EDS to StorageTek. Minimally this access will
include read access to SMF datasets, RMF datasets, tape management catalog,
DFHSM control files and software control libraries for StorageTek hardware. Both
parties will act in good faith to determine appropriate access levels for
business needs as they arise.
(B) Other Audit. During such time that EDS is providing a
-----------
calculation of the amounts owed under this Agreement, and for three (3) months
thereafter, StorageTek will have the right, during normal business hours and
upon at least ten (10) days prior notice, to have an independent audit firm
selected by StorageTek and approved by EDS (such approval not to be unreasonably
withheld) audit EDS's records and facilities relating to EDS's activities
pursuant to this Agreement in order to verify that EDS has paid to StorageTek
the correct amounts owed under this Agreement. The audit will be conducted at
StorageTek's expense, unless the audit reveals that EDS has underpaid the
amounts owed to StorageTek by five percent (5%) or more in any quarter, in which
case EDS will reimburse StorageTek for all reasonable costs and expenses
incurred by StorageTek in connection with such audit. EDS will promptly pay to
StorageTek any amounts shown by any such audit to be owing plus interest as
9
provided in Section 6.3 above. Such audits will be conducted no more than once
in any period of six (6) consecutive months.
6.7.2 By EDS. During such time that StorageTek is providing a
------
calculation of the amounts owed under this Agreement, and for three (3) months
thereafter, EDS will have the right, during normal business hours and upon at
least ten (10) days prior notice, to have an independent audit firm selected by
EDS audit StorageTek's records and facilities relating to StorageTek's
activities pursuant to this Agreement in order to verify that StorageTek has
charged EDS the correct amounts owed under this Agreement. The audit will be
conducted at EDS's expense, unless the audit reveals that EDS has overpaid the
amounts owed to StorageTek by five percent (5%) or more in any quarter, in which
case StorageTek will reimburse EDS for all reasonable costs and expenses
incurred by EDS in connection with such audit. StorageTek will promptly pay to
EDS any amounts shown by any such audit to be owing plus interest as provided in
Section 6.3 above. Such audits will be conducted no more than once in any period
of six (6) consecutive months. If an undisputed audit finding reveals that
StorageTek has undercharged EDS for Services during the audited period, EDS
shall pay such amount to StorageTek within thirty (30) days after StorageTek's
written request. To the extent that EDS requires additional audit rights as a
result of its customer relationships or its established internal policies,
StorageTek shall work in good faith with EDS to provide EDS with such audit
rights sufficient to meet those needs.
7. TERM AND TERMINATION.
7.1 Term. This Agreement is entered into as of the Effective Date and
will continue for an initial term of ten (10) years thereafter. Thereafter, this
Agreement will renew automatically for additional, successive one (1) year
renewal terms unless either party gives the other party written notice of its
intent not to renew at least one hundred eighty (180) days prior to the end of
the then-current term.
7.2 Termination.
7.2.1 For Breach. If either party should materially fail to fulfill its
----------
obligations under this Agreement, the other party may in its discretion give the
breaching party written notice (in accordance with Section 15.7) of such breach
and its intention to terminate this Agreement. The breaching party will have
thirty (30) days from receipt of such notification to cure a breach, except
that, with respect to any breach that cannot reasonably be cured within such
thirty (30) day period, the breaching party will (a) institute a plan to cure
the breach, (b) notify the non-breaching party of the terms of the plan, and (c)
have such further period of time to cure such breach as is set forth in the plan
and would be required by a party, in the exercise of good faith and all
commercially reasonable efforts, in order to cure such breach; provided,
however, that such breaching party will in fact exercise such good faith and
make such commercially reasonable efforts to attempt to cure such breach. The
non-breaching party may terminate this Agreement upon failure of the breaching
party to cure a breach after expiration of the cure period provided above.
Except as otherwise provided in this Agreement, any such termination shall be
without prejudice to any other rights the Parties may have. Notwithstanding the
foregoing, either party may terminate the Agreement immediately and
automatically with written notice upon a material violation of any obligations
of confidentiality or the license provisions relating to Software or Code.
7.2.2 For Convenience. (a) No sooner than thirty (30) months following the
---------------
Effective Date, EDS shall have the option, but not the obligation, to terminate
this Agreement for convenience. EDS shall exercise its termination option by
delivering to StorageTek written notice of such termination identifying the
termination date (which shall be at least one hundred and eighty (180) days
after the date of such notice), and EDS shall pay to StorageTek the applicable
Termination Fee set forth in Schedule 7.2.2 hereto. In connection with any such
termination, (i) EDS shall have no liability to StorageTek for amounts in excess
of (A) the fees specified in this Agreement through the date of termination, (B)
StorageTek's out of pocket expenses such as travel and travel-related expenses
reasonably incurred in connection with such early termination, and (C) the
applicable Termination Fee, and (ii) StorageTek shall use commercially
reasonable efforts to reduce any expenses (as set forth in (B) of this Section)
for which EDS is responsible that are associated with any such termination.
10
7.2.3 For Cause. EDS shall have the option, but not the obligation, to terminate
---------
this Agreement for cause upon thirty (30) days written notice, if such a right
arises pursuant to Section 5.6 of Schedule 3.1. In connection with any such
termination, (i) EDS shall have no liability to StorageTek for amounts in excess
of (A) the fees specified in this Agreement through the date of termination and
(B) StorageTek's out of pocket expenses such as travel and travel-related
expenses reasonably incurred in connection with such early termination, and (ii)
StorageTek shall use commercially reasonable efforts to reduce any expenses (as
set forth in (B) of this Section) for which EDS is responsible that are
associated with any such termination.
7.2.4 For Failure to Reach an Accord on an Adjustment. EDS shall have the
-----------------------------------------------
option, but not the obligation, to terminate this Agreement if, pursuant the
results of the Final Benchmarking Report issued in connection with the
Validation of Base Service Fee activities set forth in Schedule 6.3, the Parties
are required to meet to agree on a Benchmarking Adjustment, and StorageTek and
EDS fail to reach mutually acceptable revisions to the Base Service Fee within
ninety (90) days of the receipt of the Final Benchmarking Report. EDS shall
exercise its termination option by delivering to StorageTek written notice of
such termination identifying the termination date (which shall be at least sixty
(60) days after the date of such notice). In connection with any such
termination: (i) EDS shall have no liability to StorageTek for amounts in excess
of (A) the fees specified in this Agreement through the date of termination, and
(B) StorageTek's reasonable and actual out of pocket expenses, such as travel
and travel-related expenses, incurred in connection with such early termination;
and (ii) StorageTek shall use commercially reasonable efforts to reduce any
expenses (as set forth in (B) of this Section) for which EDS is responsible that
are associated with any such termination.
7.2.5 Upon Bankruptcy or Insolvency. Either party may terminate the Agreement
-----------------------------
upon written notice to the other party in the event the other party ceases doing
business as a going concern; makes an assignment for the benefit of creditors;
admits in writing its inability to pay its debts as they become due; files a
voluntary petition in bankruptcy; is adjudicated bankrupt or insolvent; files a
petition seeking for itself any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar arrangement under any present
or future statute, law or regulation, or files an answer admitting the material
allegations of a petition filed against it in any such proceeding; consents to
or acquiesces in the appointment of a trustee, receiver, or liquidator of it or
of all or any substantial part of its assets or properties; or it or its
shareholders shall take any action to effect its dissolution or liquidation.
7.3 Effect of Termination. All rights and obligations of the Parties
under this Agreement will automatically terminate except for rights of action
accruing prior to termination and any obligations which expressly or by
implication are intended to survive termination. In addition, the terms of this
Agreement will remain in full force and effect until fulfilled for obligations
required to be performed by either of them before termination but which remain
unperformed at the time of termination. In the event of any termination of this
Agreement, including, but not limited to, termination for EDS's default,
insolvency or cessation of operation or performance, StorageTek may access the
Data Centers or any other EDS premise or the premises of any customers of EDS,
to remove any or all of the Secondary Storage Equipment. In the event that EDS
refuses to deliver the Secondary Storage Equipment on request or to grant
StorageTek such access, StorageTek shall be entitled to commence, ex parte, a
proceeding in any appropriate court and obtain a replevin or other order for the
Secondary Storage Equipment.
7.3.1 Upon expiration or termination of this Agreement, EDS
shall have the option, but not the obligation, to purchase any Secondary Storage
Equipment owned by StorageTek and used by StorageTek at the time of the
termination or expiration exclusively to provide the Services. The purchase
price for any Secondary Storage Equipment purchased by EDS shall be the greater
of (i) the net book value of the applicable Secondary Storage Equipment, or (ii)
the fair market value of the applicable Secondary Storage Equipment. EDS shall
pay the purchase price to StorageTek concurrently with StorageTek's delivery to
EDS of the Equipment and a valid xxxx of sale. StorageTek shall convey to EDS
good and valid title in and to the Secondary Storage Equipment. EDS shall pay
any amounts payable pursuant to Section 6.5 (Taxes). In addition, EDS shall have
the option, but not the obligation, but only to the extent permitted by
StorageTek's leases, to assume any lease of Secondary Storage Equipment leased
11
by StorageTek and used by StorageTek at the time of the termination or
expiration exclusively to provide the Services. All references in this section
to EDS shall include EDS's designee.
7.4 Extension of Termination Effective Date. EDS may, at its option, by
providing StorageTek with no less than sixty (60) days prior written notice,
extend the termination date it has specified pursuant to this Article one or
more times, subject to the Parties mutual agreement with respect to any changes
in Services Payments, provided that the total of all such extensions shall not
exceed six (6) months.
8. REPRESENTATIONS AND WARRANTIES.
8.1 By StorageTek. StorageTek represents and warrants, to and for
the benefit of EDS, as follows:
8.1.1 Authority. StorageTek has the absolute and unrestricted
---------
right, power and authority to enter into and perform its obligations under this
Agreement, to purchase the Purchased Equipment, and to carry out and perform all
of its obligations under the terms of this Agreement and the Schedules. The
execution and delivery of this Agreement by StorageTek have been duly authorized
by all necessary action on the part of StorageTek and its board of directors.
This Agreement constitutes the legal, valid and binding obligation of
StorageTek, enforceable against it in accordance with its terms.
8.1.2 Services. All Services for which the quantitative level
--------
of performance is measured by a Service Level as set forth in Schedule 3.1 shall
be performed in a manner to meet or exceed the Service Levels set forth in
Section 4.5 of Schedule 3.1. For any breach of the foregoing warranty with
respect to such Services, EDS's exclusive monetary remedy, and StorageTek's
entire monetary liability, shall be that remedy explicitly set forth in Schedule
3.1. For any other Services StorageTek provides under this Agreement, StorageTek
will exercise reasonable care in the performance of the Services and will
perform the Services in a professional and workmanlike manner. EDS agrees to
promptly provide StorageTek with written notice of any deficiencies in the
Services. Unless EDS provides StorageTek with written notice within thirty (30)
days of its discovery of any deficient Services, which shall not exceed ninety
(90) days from the performance or delivery of such deficient Services,
StorageTek shall be deemed to have provided all Services in accordance with the
above warranties.
8.1.3 Disclaimer of Other Warranties. THE EXPRESS WARRANTIES
AND REMEDIES SET FORTH IN THIS SECTION 8.1 ARE IN LIEU OF ALL OTHERS, WHETHER IN
CONTRACT, TORT, STATUTE OR OTHERWISE. STORAGETEK DISCLAIMS ALL OTHER WARRANTIES,
INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, TITLE AND NON-INFRINGEMENT, AND ANY WARRANTIES ARISING
FROM COURSE OF DEALING OR COURSE OF PERFORMANCE.
8.2 By EDS. EDS represents and warrants, to and for the benefit
of StorageTek, as follows:
8.2.1 Authority; Binding Obligation. EDS has the absolute and
-----------------------------
unrestricted right, power and authority to enter into and perform its
obligations under this Agreement, to sell and transfer the Purchased Equipment,
and to carry out and perform all of its obligations under the terms of this
Agreement and the Schedules. The execution and delivery of this Agreement by EDS
have been duly authorized by all necessary action on the part of EDS and its
board of directors. This Agreement constitutes the legal, valid and binding
obligation of EDS, enforceable against it in accordance with its terms.
8.2.2 Title and Condition. EDS has good and marketable title
-------------------
to all of the Purchased Equipment. No default by EDS or any of its Affiliates
exists with respect to any of the Purchased Equipment or under any Third Party
Maintenance Agreement or other agreement concerning the Purchased Equipment, and
none of the Purchased Equipment is subject to any Encumbrance. Except as
12
otherwise stated in the Disclosure Schedule, all of the Purchased Equipment is
in good repair and good working order, subject to normal wear and tear.
8.2.3 Litigation. No action, suit, proceeding or investigation
----------
of any nature affecting the Purchased Equipment, including any claims alleging
infringement of the intellectual property rights of others with respect to the
Purchased Equipment, is pending or threatened against EDS or any of its
Affiliates, nor, to the best knowledge of EDS, is there any basis therefor.
There is no judgment, decree, injunction, rule or order of any court,
governmental department, commission agency, instrumentality or arbitrator or
other similar ruling outstanding against EDS or any of its Affiliates affecting
the Purchased Equipment. No action, suit, proceeding or investigation is pending
or threatened by EDS or any of its Affiliates affecting the Purchased Equipment.
8.2.4 Right to Grant Licenses; No Breach of Other Agreements.
------------------------------------------------------
EDS has sufficient rights in the Third Party Software to grant the rights and
licenses granted to StorageTek hereunder and has the full right, power and
authority to grant such rights and licenses without the consent of any third
party. This Agreement, the transactions contemplated hereby and EDS's
performance of its obligations hereunder will not breach any provision of any
Third Party Software License, Third Party Maintenance Agreement or Third Party
Lease Agreement.
8.2.5 StorageTek Assets. EDS shall, at its expense, keep the
-----------------
StorageTek Assets located at the Data Centers free and clear from any liens or
encumbrances of any kind (except any caused by StorageTek), will be liable to
StorageTek for any loss or expense caused by EDS's failure to do so. EDS shall
give StorageTek immediate written notice of any attachment or judicial process
affecting the StorageTek Assets or StorageTek's ownership. The foregoing
representations and warranties shall survive the execution and delivery of this
Agreement and any Schedules.
9. INDEMNIFICATION.
9.1 Third Party Contracts. Each Party shall indemnify, defend and hold
harmless the other, its Affiliates and its respective officers, directors,
employees, agents, successors and assigns, from and against all Losses arising
directly from third party allegations of the other's failure to perform any
obligations required to be performed by the other after the Effective Date under
any of the Third Party Agreements.
9.2 Breach of Section 8.2.5. EDS shall indemnify and hold harmless
StorageTek and its officers, directors, employees, control persons, advisors and
agents from and against all damages, losses, expenses and liabilities (including
reasonable attorneys' fees) arising out of, relating to or in connection with
any third party claim against StorageTek that arises out of EDS's breach of its
warranty set forth in Section 8.2.5 (StorageTek Assets).
9.3 Business Operations. Each of the Parties acknowledges and agrees
that by entering into and performing its obligations under this Agreement,
neither party, nor its subcontractors, will assume or be exposed to the business
and operational risks associated with the conduct of the other's business
operations. Accordingly, and without limiting the Parties' obligations pursuant
to any other written agreements between them, (a) EDS agrees to indemnify,
defend and hold harmless StorageTek, its subcontractors and their respective
officers, directors, employees, control persons, advisors and agents (in their
capacities as such, the "StorageTek Indemnitees"), from any and all third party
claims, demand, charge, action, cause of action or other proceedings brought
against any of the StorageTek Indemnitees for Losses arising out of or relating
to the conduct of the EDS's business, including without limitation the use by
EDS of any Secondary Storage Equipment and the Services to be provided by
StorageTek under this Agreement to deliver services to EDS customers, and (b)
StorageTek agrees to indemnify, defend and hold harmless EDS, its subcontractors
and their respective officers, directors, employees, control persons, advisors
and agents (in their capacities as such, the "EDS Indemnitees"), from any and
all third party claims, demand, charge, action, cause of action or other
proceedings brought against any of the EDS Indemnitees for Losses arising out of
or relating to the conduct of StorageTek's business other than the Secondary
13
Storage Services provided by StorageTek under this Agreement, except to the
extent such Losses arise out of other agreements between EDS and StorageTek.
9.4 Mutual Indemnification. Each Party shall indemnify, defend and hold
harmless the other, the other's Affiliates and its respective officers,
directors, employees, agents, successors and assigns, from and against all
Losses arising from third party claims relating to: (i) death of or injury to
any agent, employee, customer, invitee, visitor or other person to the extent
caused by the conduct of the indemnitor, its Affiliates, or their respective
agents, employees or contractors; or (ii) damage to, or loss or destruction or,
any real or tangible personal property to the extent caused by the tortious
conduct of the indemnitor, its Affiliates, or their respective agents, employees
or contractors. Each Party shall also indemnify, defend and hold harmless the
other, the other's Affiliates and its respective officers, directors, employees,
agents, successors and assigns, from and against all Losses arising from its
failure to meet its Tax obligations as set forth in this Agreement.
9.5 Intellectual Property Indemnification. StorageTek and EDS each
agree to defend the other against any action to the extent that such action is
based on a third party claim that the Software, in the case of StorageTek, or
the Confidential Information provided by the indemnitor, or any part thereof,
(a) infringes a copyright perfected under applicable law, (b) infringes a patent
granted under applicable law or (c) constitutes an unlawful disclosure, use or
misappropriation of another party's trade secret. The indemnitor will bear the
expense of such defense and pay any damages and attorneys' fees that are
attributable to such claim finally awarded by a court of competent jurisdiction.
9.5.1 If any Software or Confidential Information becomes the
subject of a claim under this Section, or in the indemnitor's opinion is likely
to become the subject of such a claim, then the indemnitor may, at its option,
(a) modify the Software or Confidential Information to make it noninfringing or
cure any claimed misuse of another's trade secret, provided such modification
does not adversely affect the functionality of the Software, or (b) procure for
the indemnitee the right to continue using the Software or Confidential
Information pursuant to this Agreement, or (c) replace the Software with
substantially equivalent Software that is noninfringing or that is free of
claimed misuse of another's trade secret. Any costs associated with implementing
any of the above alternatives shall be borne by the indemnitor but will be
subject to Section 13 (Limitations of Liability).
9.5.2 With respect to any Software provided or developed by a
Party pursuant to this Agreement, such Party shall have no liability to the
other Party under this Agreement (a) to the extent that any claim of
infringement is based upon the use of the Software in connection or in
combination with equipment, devices or Software not supplied by that Party or
used in a manner for which the Software was not designed, (b) for infringements
that arise solely as a result of the implementation by that Party of
functionality requirements presented by the other Party where there is no
non-infringing alternative to such implementation, and the other Party has been
so advised by that Party prior to implementation, and (c) for maintenance,
modifications, updates, enhancements and improvements to the Software made by
any party other than that Party.
9.5.3 This Section 9.5 sets forth each Party's sole
obligation, and each party's sole remedy, as applicable, with respect to
infringement of third party intellectual property rights in connection with this
Agreement.
9.6 Indemnification Procedures. The indemnitor's obligation to defend,
indemnify and hold harmless the indemnitee, as applicable, pursuant to this
Section 9 shall be subject to the indemnitee having given the indemnitor prompt
written notice of the claim or of the commencement of the related action, as the
case may be, and information and reasonable assistance, at the indemnitor's
expense, for the defense or settlement thereof. The indemnitor shall have sole
control of the defense and settlement of such claim or related action, provided
that the indemnitor shall not settle such claim or related action in a manner
which imposes any obligation on the indemnitee without the prior written consent
of the indemnitee (which consent shall not be unreasonably withheld). The
indemnitee shall be entitled to engage counsel at its sole expense to consult
with the indemnitor with respect to the defense of the claim and related action.
14
10. CODE.
10.1 Ownership. StorageTek retains ownership of all Code.
10.2 License Grant. As part of EDS's authorized use of the applicable
StorageTek Equipment, StorageTek grants to EDS a personal license to use the
Code for the sole purpose of enabling the specific unit of StorageTek Equipment
to perform its Functions and to transfer the Code under the terms herein only
with the transfer of the particular unit of StorageTek Equipment on which the
Code executes. This Code license confers no license or other right to EDS or
anyone else to use Maintenance Code.
10.3 Restrictions. Without StorageTek's express written authorization,
the following Restrictions shall apply: Neither EDS nor anyone else may (a)
access, copy (note that backup or archival copies of the Code may be made
available by StorageTek to EDS upon written request therefor), display, print,
adapt, alter, modify, patch, prepare derivative works of, transfer (except as
set forth below) or distribute (electronically or otherwise) the Code; (b)
reverse assemble, decode, translate, decompile or otherwise reverse engineer the
Code (except as such decompilation may be expressly permitted under local law
when it is indispensable solely for the purpose of achieving interoperability);
or (c) sublicense, assign or lease the Code or permit another person to use such
Code.
11. SOFTWARE.
11.1 License Grant. StorageTek grants to EDS, for the Term of this
Agreement, a personal, nonexclusive right to (a) execute the machine readable
portions of the Software on or for operation of the applicable StorageTek Assets
to perform their functions and (b) use the remainder of the Software to support
such execution.
11.2 Restrictions. EDS's right to use the Software is limited to
customary data processing applications for EDS and customers of EDS; e.g. EDS
may not use the Software in the development or marketing of a competitive or
compatible software or hardware product. Neither EDS nor anyone else may (a)
access, copy (except that EDS may maintain copies solely for backup, archival,
disaster recovery, and disaster testing, but not for production), display,
print, adapt, alter, modify, patch, prepare derivative works of, transfer
(except as set forth below) or distribute (electronically or otherwise) the
Software; (b) reverse assemble, decode, translate, decompile or otherwise
reverse engineer the Software (except as such decompilation may be expressly
permitted under local law when it is indispensable solely for the purpose of
achieving interoperability); or (c) sublicense, assign or lease the Software or
permit another person to use such Software. Certain Software may be accompanied
by separate written terms, such as a "shrink-wrap" license. Such terms, which
shall in no event be more restrictive than those set forth herein, shall replace
the terms set forth in this Section 11 as to such Software to the extent such
terms conflict or are inconsistent with these terms. Should any provisions in a
"shrink wrap" or "click to accept" license be more restrictive than those set
forth herein, EDS will be provided a formal opportunity to review such terms
prior to installation of the software.
11.3 Ownership; Confidentiality. Notwithstanding the copyright notice,
which may appear on Software, all Software marked with a confidentiality legend
is an unpublished copyrighted work and owned by StorageTek or its licensor. EDS
will treat such Software as confidential in accordance with Section 12.1 of this
Agreement and will not disclose such Software to any third party other than
EDS's employees who are involved in EDS's permitted use of such Software.
11.4 Return or Destruction of Software. Promptly upon expiration or
other termination of EDS's right to use Software and at EDS's option, EDS will
return, destroy or otherwise terminate its access to and use of such Software.
If EDS elects to destroy the Software, an authorized representative of EDS will
certify to StorageTek that such Software has been destroyed. This Section
applies to all copies of Software in any form including translations,
compilations or partial copies within modifications, derivative works, and
updated works, whether partial or complete, and whether or not modified or
merged into other programs or materials of StorageTek or of EDS. EDS may retain
a reasonable number of copies of the Software solely for archival purposes. Upon
15
termination of this Agreement for any reason not related to EDS's breach of
StorageTek proprietary rights, StorageTek agrees to grant to EDS on StorageTek's
then-current commercial terms a license to any StorageTek commercially available
software products used during the term of this Agreement to provide Services to
EDS.
11.5 Restricted Rights. The Software is a "commercial item," as that
term is defined at 48 C.F.R. 2.101 (OCT 1995), and more specifically is
"commercial computer software" and "commercial computer software documentation,"
as such terms are used in 48 C.F.R. 12.212 (SEPT 1995). Consistent with 48
C.F.R. 12.212 and 48 C.F.R. 227.7202-1 through 227.7202-4 (JUNE 1995), the
Software is provided to U.S. Government end users (a) only as a commercial end
item and (b) with only those rights as are granted to all other end users
pursuant to the terms and conditions herein.
12. MUTUAL OBLIGATIONS.
12.1 Confidentiality.
12.1.1 Nondisclosure. For the Term of this Agreement and for
-------------
two (2) years thereafter, each of StorageTek and EDS agrees that it will keep
confidential and not disclose in any manner whatsoever, including through the
use thereof, any Proprietary Information of the other Party. EDS acknowledges
and agrees that it will not use any StorageTek Proprietary Information for any
purpose whatsoever other than in connection with StorageTek's provision of
Services during the Term of this Agreement. Upon termination or expiration of
this Agreement, all such rights that EDS has in and to StorageTek Proprietary
Information shall cease. Each Recipient agrees to cause each of its employees,
agents, contractors or consultants, whom the Recipient knows or should know to
have access to the Disclosing Party's Proprietary Information to execute such
agreements as are necessary to assure that such individuals maintain the
confidentiality of the Disclosing Party's Proprietary Information and not to use
the Disclosing Party's Proprietary Information except in accordance with this
Agreement.
12.1.2 Exceptions. The Recipient's obligations of
confidentiality set forth herein shall not apply to any Proprietary Information
of the Disclosing Party which:
(a) was publicly available at the date of receipt from the Disclosing Party
(without violating any confidential obligations);
(b) was in the Recipient's possession before the date of receipt from the
Disclosing Party (without violating any confidential obligations);
(c) has become publicly available after the date of receipt from the Disclosing
Party, without disclosure through any means by the Recipient; or
(d) has become legally available to the Recipient from any third party without
restriction on disclosure or use.
12.1.3 Rights and Remedies of the Disclosing Party.
Immediately upon the Disclosing Party's request, and at the expiration or
earlier termination of this Agreement, the Recipient shall:
(a) return all Confidential Materials, including, without limitation, all
originals, copies, reproductions and summaries of Confidential Information;
and
(b) destroy all copies of Confidential Information in its possession, power or
control, which are present on magnetic media, optical disk, volatile memory
or other storage device, in a manner that assures the Confidential
Information is rendered unrecoverable.
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Upon completion of those tasks an authorized representative of the Recipient
shall provide written confirmation to the Disclosing Party that the requirements
of this Section have been complied with.
12.2 Nondisclosure Agreements. EDS and StorageTek shall each, at the
other Party's request made from time to time during the Term, cause its
subcontractors designated by the other Party and involved in the performance of
the Services hereunder to sign nondisclosure agreements reasonably proposed by
the other Party. StorageTek shall at all times during the Term ensure that its
employees providing Services to EDS are parties to appropriate nondisclosure
agreements. EDS shall at all times during the Term ensure that its employees
having access to the Secondary Storage Equipment or StorageTek Confidential
Information are parties to appropriate nondisclosure agreements.
12.3 Ownership of EDS Data. All EDS Data shall remain the property of
EDS. The EDS Data shall not be (i) used by StorageTek other than in connection
with providing the Services, (ii) disclosed, sold, assigned, leased or otherwise
provided to third parties by StorageTek, or (iii) commercially exploited by or
on behalf of StorageTek, its employees or agents. EDS does not convey nor does
StorageTek obtain any right in programs, systems or materials utilized or
provided by EDS in the ordinary course of business in connection with this
Agreement. EDS does not convey, nor does StorageTek obtain any right in
programs, systems, materials, copyrights, trademarks, or intellectual property
utilized or provided by EDS in the ordinary course of business in connection
with this Agreement.
12.4 Ownership of StorageTek IP.
(a) StorageTek does not convey nor does EDS obtain any right in programs,
configurations, systems or materials utilized or provided by StorageTek in the
ordinary course of business in the performance of this Agreement.
(b) In the event that EDS requests that StorageTek perform professional services
outside the scope of the Services provided for under this Agreement, the Parties
will negotiate in good faith and enter into a separate agreement (or Statement
of Work), the terms of which shall govern the scope of the work, payment,
delivery, acceptance, intellectual property ownership and any other terms the
Parties deem necessary.
(c) [Intentionally left blank]
(d) EDS acknowledges that StorageTek will bring onto and store at EDS's premises
certain manuals, tools and software which will be used by StorageTek to maintain
the Equipment, and that Equipment may have Maintenance Code loaded on it from
time to time, and that such manuals, tools and software, including Maintenance
Code, are the property of StorageTek, regardless of whether or not such items
contain any confidential markings, and that StorageTek may remove all such
manuals, tools and software at any time. EDS agrees not to use or copy any such
software or manuals or to permit such software or manuals to be used or copied
by any other person. It is EDS's responsibility to adequately safeguard
(back-up) its data used in conjunction with the Equipment.
(e) To the extent required, EDS hereby grants StorageTek the right to execute
StorageTek's maintenance-related software on the Equipment and any host central
processing unit to which such Equipment is attached. StorageTek hereby grants
EDS the limited right to use such software to generate reports to assist in the
maintenance of Equipment covered by this Agreement. EDS shall not use such
software in connection with any equipment not covered by this Agreement unless
such use is permitted by a separate written agreement.
(f) The loading or storing of StorageTek's software on Equipment, central
processing units ("CPU") or storage media, shall not transfer ownership of, or
any other rights not expressly granted herein in, such software to EDS. EDS
shall have no right to use any such software following the termination of this
Agreement and any copies of such software remaining on EDS's CPU or back-up
storage media shall be destroyed or, if destruction is impractical, EDS shall
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ensure and certify that such copies shall not be used by its employees or third
parties following termination of this Agreement. EDS agrees not to decompile,
reverse assemble or copy such software without StorageTek's permission.
12.5 Compliance With Law. Each of StorageTek and EDS agrees to comply
with all applicable laws, as such laws may be modified from time to time, and
specifically agree to comply with the following material laws affecting the
Secondary Storage Equipment, Software and Services: (i) the U.S. anti-boycott
regulations, (ii) the FCPA, (iii) the export control laws of the United States
of America, (iv) the prevailing regulations which may be issued from time to
time by the U.S. Department of Commerce and the Office of Munitions Control and
the U.S. Department of State, and (v) any export or import laws of the agencies
of any countries into or through which the Secondary Storage Equipment or
Software may be transported.
12.6 Damage; Destruction or Loss.
12.6.1 StorageTek shall bear the entire risk of loss, theft,
damage or destruction with respect to the Secondary Storage Equipment from any
cause other than EDS's (which, for purposes of this Section 12.6.1 shall include
all persons other than StorageTek or its designees) negligence or willful
misconduct, from the date of delivery of the Secondary Storage Equipment to the
Data Centers until the Secondary Storage Equipment is removed from the Data
Centers. In the event EDS's negligence or willful misconduct results in any
loss, theft, damage or destruction to the Secondary Storage Equipment,
StorageTek shall be relieved of its Services obligations to the extent any such
loss, theft, damage or destruction to the Secondary Storage Equipment impacts
StorageTek's ability to provide such Services until such time as EDS replaces or
repairs the Secondary Storage Equipment.
12.6.2 In the event any Secondary Storage Equipment is
materially damaged, EDS shall promptly notify StorageTek. If such damage is
caused by EDS's negligence or willful misconduct, and such damaged Secondary
Storage Equipment is economically repairable, EDS, at its expense, shall
promptly repair (or reimburse StorageTek for the cost to repair) the Secondary
Storage Equipment.
12.6.3 If, as a result of EDS's negligence or willful
misconduct, any Secondary Storage Equipment is damaged beyond repair or stolen,
destroyed or, in the opinion of EDS, not economically repairable EDS shall
promptly notify StorageTek and EDS shall, at its expense, promptly replace the
affected Secondary Storage Equipment with equipment of the same manufacturer,
model, configuration and condition, free and clear of any liens. Upon
replacement of any Secondary Storage Equipment, the replacement unit shall be
the property of StorageTek and, for purposes of this Section 12, shall be deemed
to be the Secondary Storage Equipment, which it replaced and thereupon shall be
subject to the terms of this Agreement.
12.7 Personal Property. All Secondary Storage Equipment shall be and
remain personal property notwithstanding the manner in which the Secondary
Storage Equipment may be attached or affixed to realty. EDS shall have no right
or interest in the Secondary Storage Equipment except as provided in this
Agreement.
13. LIMITATION OF LIABILITY.
NEITHER PARTY SHALL BE LIABLE TO THE OTHER PURSUANT TO THIS AGREEMENT FOR ANY
AMOUNTS REPRESENTING LOSS OF PROFITS, LOSS OF BUSINESS OR INDIRECT, SPECIAL,
CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES OF THE OTHER PARTY EVEN IF THE
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE SOLE AND
EXCLUSIVE MONETARY REMEDIES TO EDS FOR BREACH OF THE SERVICE LEVEL WARRANTY SET
FORTH IN THE FIRST SENTENCE IN SECTION 8.1.2 SHALL BE AS SET FORTH IN SUCH
SECTION; PROVIDED, HOWEVER, THAT THE LIMITATION DESCRIBED IN THIS PARAGRAPH
SHALL NOT APPLY TO LOSSES OTHERWISE RECOVERABLE BY THE INDEMNITEE PURSUANT TO
SECTION 9.4 (MUTUAL INDEMNIFICATION) OR SECTION 9.5 (INTELLECTUAL PROPERTY
INDEMNIFICATION).
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IN THE EVENT ONE PARTY IS LIABLE TO THE OTHER PARTY FOR ANY MATTER RELATING TO
OR ARISING OUT OF THIS AGREEMENT, THEN THE CUMULATIVE AMOUNT OF DAMAGES
RECOVERABLE AGAINST THE LIABLE PARTY SHALL NOT EXCEED TEN MILLION DOLLARS
($10,000,000); PROVIDED, HOWEVER, THAT THE LIMITATION DESCRIBED IN THIS SENTENCE
SHALL NOT APPLY TO LIABILITIES FOR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT BY THE
PARTIES, OR THE LOSSES OTHERWISE RECOVERABLE BY THE INDEMNITEE PURSUANT TO
SECTION 9.4 (MUTUAL INDEMNIFICATION), OR SECTION 9.5 (INTELLECTUAL PROPERTY
INDEMNIFICATION).
14. MISCELLANEOUS.
14.1 Binding Nature and Assignment. Neither Party may assign,
voluntarily or by operation of law, any of its rights or obligations under this
Agreement without the prior written consent of the other Party, which consent
shall not be unreasonably withheld; provided, that (i) either Party may assign
its rights and obligations under this Agreement to an Affiliate, or to an entity
which acquires all or substantially all of its assets, and (ii) StorageTek may
assign this Agreement and specifically intends to assign these provisions to its
Affiliates to fulfill EDS's requirements for Equipment, Software and Services in
countries outside of the United States. No assignment by a Party shall relieve
such Party of its rights and obligations under this Agreement. Subject to the
foregoing, this Agreement shall be binding on the Parties and their respective
successors and assigns. Any purported assignment of this Agreement other than as
permitted under this Section 14.1 shall be void and of no force or effect.
14.2 Governing Law; Dispute Resolution. The Parties agree that the laws
of the State of Colorado shall apply for transactions in the United States as
well as all transactions in which StorageTek is the selling or licensing party.
The Parties agree that the provisions of the United Nations Convention on
Contracts for the International Sale of Goods (CISG) shall not apply to this
Agreement regardless of whether the particular transaction under this Agreement
is entered into by the Parties or any of their Affiliates.
14.2.1 General. Any dispute or controversy between the parties
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with respect to the interpretation or application of any provision of this
Agreement or the performance by StorageTek or EDS of their respective
obligations hereunder shall be resolved as provided in this Article.
14.2.2 Informal Dispute Resolution. The Parties may, by
----------------------------
mutual agreement, attempt to resolve their dispute informally in the following
manner:
(a) Either Party may submit the dispute to the appointed
representatives of each Party, which shall meet as often as the Parties
reasonably deem necessary to gather and analyze any information relevant to the
resolution of the dispute. The applicable representatives of each Party shall
negotiate in good faith in an effort to resolve the dispute.
(b) If the applicable representatives of each Party determine
in good faith that resolution through continued discussions by such
representatives does not appear likely, the matter shall be referred to binding
arbitration as set forth below.
(c) During the course of negotiations, all reasonable requests
made by one Party to the other for non-privileged information, reasonably
related to the dispute, shall be honored in order that each of the Parties may
be fully advised of the other's position.
(d) The specific format for the discussions shall be
determined at the discretion of the applicable representatives of each Party,
but may include the preparation of agreed upon statements of fact or written
statements of position.
(e) Proposals and information exchanged during the informal
proceedings described in this Article between the Parties shall be privileged,
confidential and without prejudice to a Party's legal position in any formal
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proceedings. All such proposals and information, as well as any conduct during
such proceedings, shall be considered settlement discussions and proposals, and
shall be inadmissible in any subsequent proceedings.
(f) Notwithstanding this Section, neither Party may commence
formal dispute resolution proceedings pursuant to Section 14.2.3 (Arbitration)
without first observing the procedures set forth in this Section.
14.2.3 Arbitration.
-----------
(a) Except as set forth in clause (b) below, any controversy
or claim arising out of or relating to this Agreement, or any alleged breach
hereof, including any controversy regarding the arbitrability of any dispute,
shall be resolved at the request of either Party by binding arbitration in
Denver, Colorado before and in accordance with the then existing Commercial
Arbitration Rules of the American Arbitration Association (the "Rules"). In any
dispute in which the amount in controversy is less than Two Hundred Fifty
Thousand Dollars ($250,000), there shall be one (1) arbitrator agreed to by the
Parties or, if the Parties are unable to agree within thirty (30) days after
demand for arbitration is made, selected in accordance with the Rules. In all
other cases there shall be three (3) arbitrators, one (1) of whom shall be
selected by EDS within thirty (30) days after demand for arbitration is made,
one (1) of whom shall be selected by StorageTek within thirty (30) days after
demand for arbitration is made, and one (1) of whom shall be selected by the two
Party-appointed arbitrators within thirty (30) days after their selection. If
one or more arbitrator(s) is not selected within the time period stated in the
preceding sentence, such arbitrator(s) shall be selected pursuant to Rule 13 of
the Rules. Any arbitrator(s) proposed by the American Arbitration Association
shall have at least ten (10) years of experience in complex, commercial
technology engagements in the area that is generally the same as the technology
issue that is the subject of the dispute. Each Party shall pay its own
attorneys' fees and one-half (1/2) of the other arbitration costs, subject to
final apportionment by the arbitrators. The arbitrators shall apply the law set
forth herein to govern this Agreement and shall have the power to award any
remedy available at law or in equity; provided, however, that the arbitrators
shall have no power to amend this Agreement. Any award rendered pursuant to such
arbitration shall be final and binding on the Parties, and judgment on such
award may be entered in any court having jurisdiction thereof.
(b) Notwithstanding clause (a) above, either Party may request
a court of competent jurisdiction to grant provisional injunctive relief to such
Party until an arbitrator can render an award on the matter in question and a
court having jurisdiction thereof can confirm such award.
14.2.4 Continued Performance. Both parties shall continue
---------------------
performing their respective obligations and responsibilities under this
Agreement while any dispute is being resolved in accordance with this Article,
unless and until such obligations are terminated or expire in accordance with
the provisions of this Agreement.
14.2.5 Charges and Costs. In any legal action, the prevailing
-----------------
Party shall be entitled to recover, in addition to its damages (subject to
limitations stated elsewhere in this Agreement), its reasonable attorneys' fees,
expert witness fees, and other ordinary and necessary costs of litigation, as
determined by the arbitrators or court. Such costs include, without limitation,
costs of any legal proceedings brought to enforce a judgment or decree. In the
event one party prevails on all disputed issues, the losing party shall pay 100%
of such fees and expenses. If the arbitrators or court rules in favor of one
party on some issues and the other party on other issues, the arbitrators or
court shall issue with the rulings a written determination as to how such fees
and expenses shall be allocated between the Parties. The arbitrators or court
shall allocate fees in such a way that bears a reasonable relationship to the
outcome of the dispute, with the party prevailing on more issues, or on issues
of greater value or gravity, recovering a relatively larger share of its legal
fees and expenses.
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14.2.6 Equitable Remedies. The Parties agree that in the event
------------------
of any breach or threatened breach of any provision of this Agreement concerning
(i) Confidential Information, or (ii) intellectual property rights, money
damages may be an inadequate remedy. Accordingly, such provisions may be
enforced by the preliminary injunction or other order of a court of competent
jurisdiction pending resolution of the dispute pursuant to this Section.
14.3 Amendments; Waiver. Except as specifically set forth herein (e.g.,
providing for changes by StorageTek upon notice to EDS), a signed writing is
required to amend this Agreement or any Schedule or to waive any part thereof.
Any waiver shall only be valid for the specific situation so waived and shall
not be deemed to be a continuing waiver unless expressly stated to be
continuing.
14.4 Force Majeure. Neither party will be liable for delays in
manufacturing, shipping or delivery, or failure to manufacture, ship or deliver
Secondary Storage Equipment or Software, provide Services or to otherwise
perform any obligation under this Agreement due to any cause beyond the
reasonable control including, but not limited to, acts of God, acts of civil or
military authority, labor disputes, fire, riots, civil commotions, sabotage,
war, embargo, blockage, floods, epidemics, power shortages, or when due to
governmental restrictions, provided the party gives prompt written notice and
makes all reasonable efforts to perform. In no event will this provision affect
EDS's obligation to make payments under this Agreement for Services rendered.
14.5 Notices. Notices under this Agreement and any Schedules must be
given in writing by mail, postage prepaid, first class and shall be deemed to
have been given upon mailing OR may also be given by confirmed facsimile (deemed
to have been given upon the date of the confirmation of such facsimile) and
addressed to the Parties at their respective addresses set forth below:
STORAGE TECHNOLOGY CORPORATION
Attn: Office of Corporate Counsel
Xxx XxxxxxxXxx Xxxxx
Xxxxxxxxxx, XX 00000
EDS
Attn: Manager of Contract Administration
0000 Xxxxxx Xxxxx
Xxxxx, XX 00000
14.6 EDS Data. EDS agrees that StorageTek may use and share, within
StorageTek and its Affiliates and with other third parties such as
subcontractors, consultants and other business partners, the EDS Data for
purposes of carrying out the provisions of this Agreement or for any other
consulting or other services StorageTek or its Affiliates may provide EDS in
respect of the Secondary Storage Equipment, Software or Services, provided such
third parties are bound by obligations of confidentiality.
14.7 Publicity. Except as required by law or the rules of any stock
exchange, no public announcement or other publicity regarding the transactions
referred to herein shall be made by either party or any of their respective
Affiliates, officers, directors, employees, representatives or agents, without
the prior written agreement of the other as to form, content, timing and manner
of distribution or publication; provided, however, that nothing in this Section
shall prevent such parties from discussing such transactions with those persons
whose approval, agreement or opinion, as the case may be, is required for
consummation of such particular transaction or transactions.
14.8 Order of Precedence. In the event of inconsistency between or
among the documents listed below, the following order of precedence will govern:
(1) this Agreement; (2) the Schedules and exhibits attached hereto; (3)
Statements of Work attached to the Services Terms.
14.9 Nonsolicitation. During the Term, and for a period of one year
following the expiration or termination of this Agreement, no member of the
engagement team of either party will directly or indirectly solicit for
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employment any employee of the other party who (in the case of StorageTek
employees) performed Services hereunder or who (in the case of EDS) performed
substantial work on any project covered by this Agreement without the prior
written consent of the other party. Notwithstanding anything to the contrary,
neither party (nor any Affiliate of a party) shall be prohibited from placing
help-wanted advertisements in its own internal publications, its Web Site, or
any third party media of general circulation, nor from posting job openings at
such party's places of business.
14.10 Third Parties. This Agreement is entered into solely by and
between, and may be enforced only by, EDS and StorageTek; and this Agreement
shall not be deemed to create any rights in third parties, including, without
limitation, employees, suppliers, or Affiliates of a party, or to create
obligations of a party to any such third parties. Notwithstanding the foregoing,
subcontractors of StorageTek who are engaged to perform Services shall be third
party beneficiaries of the disclaimers, indemnification and limitations of
liability set forth in this Agreement.
14.11 Insurance Requirements.
14.11.1 EDS Insurance Requirement. Throughout the Term, EDS,
-------------------------
at its own expense, shall carry: (i) all-risk property damage insurance under a
blanket policy covering all of EDS's tangible property, and (ii) comprehensive
general liability insurance in an amount not less than ten million dollars
($10,000,000.00). EDS may maintain deductibles and/or self-insured retentions
relating to these policies in accordance with its normal practices. Upon
StorageTek's request, EDS shall provide a certificate of insurance and name
StorageTek as an additional insured with respect to comprehensive general
liability.
14.11.2 StorageTek Insurance Requirement. Throughout the Term
--------------------------------
StorageTek shall maintain in force, at minimum, the insurance coverages
described below.
(a) Commercial General Liability Insurance, including Products/Complete
Operations and Advertising Injury coverage, with a minimum combined single
limit of $10,000,000 per occurrence. Policy shall contain coverage for
property in the "care, custody and control" of StorageTek in an amount not
less than $1,000,000.
(b) Umbrella Liability Insurance, including Products/Complete Operations and
Advertising Injury coverage, with a minimum combined single limit of
$5,000,000 per occurrence;
(c) Worker's Compensation Insurance or any alternative plan or coverage as
permitted or required by applicable law, in such amount as StorageTek deems
necessary;
(d) Automotive Liability Insurance covering use of all owned, non-owned and
hired automobiles with a minimum combined single limit of $1,000,000 per
occurrence for bodily injury and property damage liability; and
(e) Crime insurance for Losses arising out of the dishonest acts of
StorageTek's employees in the amount of $5,000,000 for each loss or series
of related losses.
All insurance policies StorageTek is required to carry pursuant to this Article
shall: (i) be primary as to StorageTek's negligence and non-contributing with
respect to any other insurance or self-insurance EDS may maintain; (ii) name
EDS, its Affiliates and their respective officers, directors and employees as
additional insureds, as such parties' interests may appear with respect to this
Agreement, but only with respect to the insurance policies described in
subsections (a) and (b) above; (iii) be provided by reputable and financially
responsible insurance carriers; and (iv) require the insurer to notify EDS in
writing at least thirty (30) days in advance of cancellation or material
modification. Upon EDS' request, StorageTek shall cause its insurers to issue to
EDS on or before the Effective Date and each policy renewal date certificates of
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insurance evidencing that the coverages and policy endorsements required by this
Article are in effect.
14.12 Miscellaneous. The Parties are sophisticated and have been
represented by counsel during the negotiation of this Agreement. As a result,
the Parties believe the presumption of any laws or rules relating to the
interpretation of contracts against the drafter thereof should not apply, and
hereby waive any such presumption.
In witness whereof, the Parties have caused this Agreement to be executed by
their duly authorized representatives, effective as of the Effective Date.
STORAGE TECHNOLOGY CORPORATION ELECTRONIC DATA SYSTEMS CORPORATION
By: By:
---------------------------------- ------------------------------------
Authorized Signature Authorized Signature
------------------------------------- ------------------------------------
[Printed or Typed Name] [Printed or Typed Name]
Title: Title:
------------------------------- ---------------------------------
Date: Date:
-------------------------------- ----------------------------------
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