EXHIBIT 10.38
-- Panamco / EDS Confidential --
Customer's Outsourcing Agreement
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I. PREAMBLE
This Customer's Outsourcing Agreement (the "AGREEMENT"), dated to be effective
as of December 1, 2000 (the "COMMENCEMENT DATE") is entered by and among
Embotelladora Panamco Tica, S.A., with its principal office at Calle Blancos,
150mts. al este de la Guardia Xxxxx, Xxxxxxxx Xxxxxx 0000-0000, Xxx Xxxx, Xxxxx
Xxxx (the "CUSTOMER"), and Electronic Data Systems (EDS) de Costa Rica S.A.,
with its principal office in Costa Rica at Xxxxxxx Los Xxxxx, Xxxxxxx 00 Xxxxx
00, 00000 - 0000 Xxx Xxxx, Xxxxx Xxxx (the "VENDOR").
Whereas Electronic Data Systems Corporation ("EDS") and The Coca-Cola
Company ("TCCC") have entered into a Master Outsourcing Agreement dated as of
the 18 day of June, 1999, ("MASTER OUTSOURCING AGREEMENT"), a copy of which is
attached hereto as Schedule M, which provides that a Customer (as that term is
defined in the Master Outsourcing Agreement) may, upon the execution of a
Customer's Outsourcing Agreement (as that term is defined in the Master
Outsourcing Agreement), outsource various technical information services to an
EDS affiliate upon the terms and conditions set forth in the Master Outsourcing
Agreement as supplemented or modified by this Agreement;
Whereas the Customer wishes to outsource various technical information
services to the Vendor on the terms and conditions set forth in the Master
Outsourcing Agreement, as supplemented or modified by this Agreement;
Whereas the Vendor is capable of providing the technical information
services required by this Agreement to be provided by Vendor to the Customer;
Now THEREFORE in consideration of the agreements contained herein, and
intending to be legally bound hereby, the parties agree as follows:
A. General
1. As of the Commencement Date all of the terms and conditions set
forth in the Master Outsourcing Agreement as supplemented or
modified by this Agreement, including all exhibits and
appendixes, shall be binding and enforceable between the Customer
and the Vendor.
a. The defined terms used in this Customer's Outsourcing
Agreement shall have the same meaning given to them in the
Master Outsourcing Agreement, including all exhibits and
appendixes thereto. Changes or amendments to the Master
Outsourcing Agreement made subsequent to the date hereof
shall only be effective for this Agreement if Customer and
Vendor hereto have so explicitly agreed in writing.
b. The Customer and the Vendor agree that they have both read
and do understand the Master Outsourcing Agreement,
including all exhibits and appendixes thereto.
c. Any reference to "Customer" herein shall include TCCC, its
divisions and subsidiaries and all entities directly or
indirectly involved in the manufacture or wholesale
distribution of TCCC products, provided that any such entity
shares information services with the Customer during the
Customer's Outsourcing Agreement Term.
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2. This Customer's Outsourcing Agreement shall supersede all
previous agreements and arrangements, written or oral, between
the parties on the subject matter hereof.
B. Definitions
In addition to the definitions in the Master Outsourcing Agreement,
the following definitions are applicable to this Agreement.
1. "CONTRACT YEAR" shall mean a twelve (12) consecutive month period
beginning at the Commencement Date and ending at midnight on the
day before the anniversary of the Commencement Date in each
subsequent year.
2. "DESKTOP SERVICES" are that portion of the Baseline Services
described as Desktop Services in Schedule B.
3. "HAND HELD TERMINALS" are the mobile computing terminals
generally used by the Customer sales force to take orders,
process invoices, perform sales settlements on delivery routes
and perform inventory control and in use by the Customer sales
force.
4. "HAND HELD SERVICES" are that portion of the Baseline Services
described as Hand Held Services in Schedule B.
5. "INTERNATIONAL TELECOMMUNICATIONS NETWORK MANAGEMENT SERVICES"
means the provision by Vendor, through duly licensed
telecommunications carriers, and management by Vendor in
accordance with the Telecommunications Management Services
described in Schedule B, of an international telecommunication
network connecting the Vendor Mexico City Data Center with
Customer premises in San Xxxx, Costa Rica for use in delivery and
use of the Help Desk Services and Midrange Services.
6. "KEY SYSTEMS" are those systems identified as Key Systems on
Schedule E-IV-C, made available through the Centralized
Services.
7. "LATIN AMERICA AGREEMENTS" are, collectively, this Customer's
Outsourcing Agreement together with the other seven Customer's
Outsourcing Agreements entered by and between affiliates of
Vendor and affiliates of Customer, each dated to be effective as
of December 1, 2000 and each incorporating the Master Agreement
with such additions and revisions as stated in such Customer's
Outsourcing Agreements, providing collectively for services to be
provided by Vendor and the affiliates of Vendor to Customer and
the affiliates of Customer in each of the following countries:
Mexico, the United States, Brazil, Costa Rica (and Panama),
Guatemala, Nicaragua, Colombia and Venezuela.
8. "MIDRANGE SERVICES" are that portion of the Baseline Services
described as Midrange Services in Schedule B.
9. "NETWORK MANAGEMENT SERVICES" are that portion of the Baseline
Services described as Network Management Services in Schedule B.
10. "PROJECT MANAGEMENT SERVICES" are that portion of the Baseline
Services described as Project Management Services in Schedule B.
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11. "TELECOMMUNICATIONS MANAGEMENT SERVICES" are that portion of the
Baseline Services described as Telecommunications Management
Services in Schedule B.
C. Application of the Master Outsourcing Agreement
With reference to the below sections of the Master Outsourcing
Agreement, the parties to this Agreement have agreed to the following
particular terms and conditions:
II. TERM
A. Initial (2.03)
The initial term of this Agreement shall commence on the Commencement
Date and shall continue until midnight on the fifth anniversary of the
Commencement Date, unless terminated earlier pursuant to Section 18 of
the Master Outsourcing Agreement (the "INITIAL TERM").
III. PROVISION OF SERVICES
A. Description of Services (3.01)
The Baseline Services for this Agreement are described in Schedule B,
except for those portions of such Schedule B which refer expressly to
Services to be provided in another country other than Costa Rica or
Central America, or in some cases are identified specifically by
reference to Costa Rica or Central America
That portion of the Baseline Services described as Desktop Services
and Telecommunications Management Services shall also be provided by
Vendor and paid for by Customer pursuant to this Agreement for use and
access by an affiliate of Customer operating one site in Panama City,
Panama.
Schedule B describes generally the Baseline Services to be provided by
Vendor and affiliates of Vendor to Customer and affiliates of Customer
pursuant to the Latin America Agreements, and is being attached and
incorporated in substantially the same form to each of the Latin
America Agreements. It is acknowledged, however, that the
International Telecommunications Network Management Services, the
Midrange Services and the Help Desk Services described in Schedule B
shall not be provided by Vendor or paid for by Customer pursuant to
this Agreement, but rather shall be available to Customer and with
respect to Help Desk Services, Customer's Panamanian affiliate because
they shall be performed by an affiliate of Vendor operating in Mexico
and paid for by an affiliate of Customer operating in Mexico pursuant
to a different Latin America Agreement, and made available to Customer
by its affiliate on a shared use basis. Similarly, the Project
Management Services described in Schedule B shall not be provided by
Vendor or paid for by Customer pursuant to this Agreement, but rather
shall be available to Customer because they shall be performed by an
affiliate of Vendor operating in the United States and paid for by an
affiliate of Customer operating in the United States pursuant to a
different Latin America Agreement, and made available to Customer by
its affiliate on a shared use basis. It is therefore agreed that any
change in the terms of such Latin America Agreements pertaining to
Mexico and the United States, as indicated, may affect the actual
availability to Customer of the International Telecommunications
Network Management, Midrange, Help Desk
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and Project Management Services provided pursuant thereto, and that
such terms may be changed by the parties to such agreements without
the consent and approval of Customer or Vendor. It is also agreed that
notwithstanding anything to the contrary provided in this Agreement
and its Schedules, Vendor shall have no liability or responsibility to
Customer under this Agreement with respect to any delay or failure in
the Service, including failure to achieve any Service Level, with
respect to the International Telecommunications Network Management,
Midrange, Help Desk and Project Management Services. Any such delay or
failure in the International Telecommunications Network Management,
Midrange, Help Desk, or Project Management Services shall be addressed
solely in accordance with the terms of the Latin America Agreements
pursuant to which such Services are provided and paid for by the
affiliates of Customer and Vendor.
In the event that the Latin America Agreement relating to services to
be provided by an affiliate of Vendor to an affiliate of Customer in
Mexico shall expire or terminate for any reason prior to the
expiration or termination of this Agreement, Customer agrees to accept
directly from the affiliate of Vendor providing such services in
Mexico such International Telecommunications Network Management,
Midrange and Help Desk Services, and to pay such affiliate of Vendor
Customer's proportionate share of usage (as allocated collectively by
Customer and the affiliates of Customer to account for the total and
communicated by written notice to Vendor and such affiliate of Vendor)
on a monthly basis of the fees payable to such affiliate of Vendor for
such International Telecommunications Network Management, Midrange and
Help Desk Services under such Latin America Agreement on the date of
its termination or expiration. Such fees payable under such Latin
America Agreement shall be grossed up to cover the amount of any taxes
required to be paid by any applicable law with respect to such amounts
due from Customer to such affiliate of Vendor; the payment of such
taxes being the obligation of Customer. The parties hereto shall use
their best efforts to agree on a mutually satisfactory business
arrangement to resolve the situation in a different manner, and for
that purpose Customer shall meet with the affiliates of Customer and
with Vendor and the affiliates of Vendor party to all then continuing
Latin America Agreements to discuss and negotiate in good faith a
different arrangement designed to allow continued access to and use of
the International Telecommunications Network Management, Midrange and
Help Desk Services by Customer and the affiliates of Customer in a
manner and on terms mutually acceptable to all. It is understood that
the obligations of Customer under this paragraph may be enforced by
the affiliate of Vendor entitled to provide and receive payment for
such International Telecommunications Network Management, Help Desk
and Midrange Services as a third party beneficiary.
IV. DATA CENTERS
A. Data Center Location (4.01)
From the Commencement Date, Vendor shall deliver the Midrange Services
from the Customer Data Centers located at San Xxxx, Costa Rica until
completion of the Services described in the Transition Plan. Following
completion of such Services described in the Transition Plan, an
affiliate of Vendor shall deliver the Midrange Services from a data
center operated by it and located in Mexico City (the "VENDOR MEXICO
CITY DATA CENTER").
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B. Improvements. (4.04)
Improvements to Customer's facilities that would constitute "fixtures"
will become the Customer's property and will be performed at Customer
expense.
V. PERFORMANCE STANDARDS
A. Description of Performance Standards (5.02 and 8.02)
The Performance Standards and Service Levels to be applicable with
respect to this Agreement, and the applicability of the same during
the Transition Period, shall be as defined in Schedule E to this
Agreement. The credits that may be applicable in the event of any
failure by Vendor to achieve the Critical Service Levels with respect
to this Agreement shall be those identified by reference to Costa Rica
or Central America in such Schedule E.
B. Adjustment of Service Levels (5.04)
Periodic adjustments of Service Levels and governing rules are
described in Schedule E to this Agreement.
C. Measurement and Monitoring (5.05)
Measurement and monitoring of Service Level performance are described
in Schedule E to this Agreement.
VI. PROJECT TEAM
A. Customer Project Manager (6.02)
The Customer Project Manager appointed as of the Commencement Date is
Xxxxxx Xxxxxxxx.
B. Vendor Project Manager (6.03)
The Vendor Project Manager (also referred to as the "CLIENT DELIVERY
EXECUTIVE" or the "CDE") appointed as of the Commencement Date is
Xxxxxxx Xxxxxx.
C. Project Staff (6.06)
Key Staff Members are defined by reference to Costa Rica in Schedule G
to this Agreement. Notwithstanding the terms of the Master Agreement,
(i) members of the Project Staff formerly employed by Customer shall
be considered to be Key Staff Members only if so defined on Schedule
G, and (ii) Vendor shall not reassign or replace any such individual
during the initial five (5) year term of this Agreement except in
those circumstances described in Section 6.06(b) of the Master
Outsourcing Agreement.
D. Contractors and Subcontractors (6.07)
Vendor contractors and subcontractors approved by Customer as of the
Commencement Date are identified on Schedule L to this Agreement.
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E. Right to Hire (6.11)
It is recognized that the right of Customer to hire Vendor Personnel
during the Termination Assistance Period recognized by Section 6.11 of
the Master Outsourcing Agreement shall not include any right of
Customer to hire the Vendor Project Manager.
VII. OTHER VENDOR RESPONSIBILITIES
A. Reports (7.03)
Reports to be prepared periodically by Vendor are described in Exhibit
G of Schedule B to this Agreement.
B. Change Control Procedures (7.02)
The first draft of the Change Control Procedures to be applicable for
purposes of this Agreement shall be prepared by Vendor within ninety
(90) days of the Commencement Date and the parties shall use their
best efforts to have such Change Control Procedures agreed and
included in the Policy and Procedures Manual within one hundred twenty
(120) days of the Commencement Date.
C. Consents (7.04)
Customer shall have the obligation to obtain, and to pay for costs
associated with obtaining, required consents and approvals as
described in Section 7.04 of the Master Outsourcing Agreement,
including those specifically identified on Schedule N to this
Agreement.
D. Disaster Recovery Plan (7.11)
Arrangements for restoration and continued provision of the Midrange,
Network Management, and Help Desk Services (the "CENTRALIZED
SERVICES") in the event of a disaster, or force majeure event, shall
be addressed in a Disaster Recovery Plan which shall be developed by
Vendor within one hundred eighty (180) calendar days following the
Commencement Date and subsequently implemented by Vendor following
completion of the Services described in the Transition Plan. Such
Disaster Recovery Plan shall be designed to allow for (i) restoration
of the Key Systems provided through the Centralized Services to be
completed within forty eight (48) hours and (ii) restoration of other
Services to be provided by Vendor within sixty (60) days, in each case
following the declaration of the occurrence of a disaster that
inhibits the Vendor of providing the Services. Such declaration shall
be automatic if, at any time, the Services are interrupted and not
completely restorable in 24 hours from the occurrence of the event
causing the outage.
VIII. TRANSITION TO VENDOR
A. Transition Plan (8.01)
The Transition Period shall begin with the Commencement Date and shall
be completed on or before the first anniversary of such date in
accordance with the Transition Plan defined and attached in Schedule H
to this Agreement.
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B. Transitioned Customer Employees (8.03)
Certain Customer employees as are listed in Schedule J (the
"TRANSITIONING EMPLOYEES") may be offered employment with the Vendor
subject to employment policies of Vendor and the terms as set forth in
Schedule J. The Transitioning Employees who accept an offer of
employment with the Vendor will become employees of Vendor, and shall
commence such employment with Vendor on the date set forth in Schedule
J (such date being referred to as the "EMPLOYEE TRANSITION DATE"). For
each Transitioning Employee hired by Vendor, Customer's obligations to
continue to pay wages, provide benefits and make employee
contributions shall terminate as of the Employee Transition Date
except to the extent otherwise provided in Schedule J. Within forty
five (45) days following the Commencement Date, Vendor shall deliver
to Customer a written list of all Transitioning Employees who accepted
an offer of employment with the Vendor, and Customer shall acknowledge
receipt of such list. Thereafter, upon the request of either party,
Customer and Vendor shall amend Schedule J by mutual written agreement
to substitute (i) the list of Transitioning Employees hired by Vendor,
for (ii) the list of Transitioning Employees qualified to receive an
offer of employment from Vendor included in Schedule J on the
Commencement Date.
IX. EQUIPMENT, SOFTWARE, AND PROPRIETARY RIGHTS (9.01, 9.02, 9.07)
A. Equipment
The equipment that will be used by the Vendor to provide and perform
the Services is listed by reference to Costa Rica or Central America
in Schedule I, the Resource Control Log, attached to this Agreement,
and shall be provided by Customer or Vendor and replaced or refreshed
as described in such Schedule B.
In the event that any of such equipment used in providing the Midrange
Services is no longer needed for use in providing such Services
pursuant to this Agreement, if so requested by Customer in accordance
with the procedure discussed below, it shall be the responsibility of
Vendor to sell or otherwise dispose of such equipment on behalf of
Customer, using good faith efforts to sell such equipment for its fair
market value. Upon notice that disposal of any such equipment is
necessary, Vendor shall prepare and provide to Customer estimates of
both the then current fair market value of the equipment in question
and the anticipated expenses of sale or other disposal. Within a
reasonable time after receiving such estimates, Customer shall provide
written notice to Vendor of its election as to whether Vendor should
proceed to dispose of the equipment in the manner contemplated by the
Vendor estimates. The proceeds of any such sale shall be first applied
to pay the reasonable expenses incurred by Vendor in completing such
sale or other disposal, and the remainder, if any, shall be paid by
Vendor to Customer. If the expenses of such sale or other disposition
by Vendor exceed the proceeds, Customer shall reimburse the difference
to Vendor.
In the event that any personal computers or Hand Held Terminals for
which Services are provided by Vendor pursuant to this Agreement are
replaced or otherwise not needed for use by Customer, upon the request
of Customer it shall be the responsibility of Vendor to (i) first
erase and overwrite the disc storage and memory of each such device in
a manner designed to assure that matters stored thereon cannot be
recovered, and (ii) then to sell or otherwise dispose of such devices
in a manner determined most appropriate by Vendor. All expenses and
all proceeds
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relating to or arising from such erasure and overwriting and the sale
or other disposal of such devices by Vendor shall be for the account
of Vendor.
B. Customer Software
Schedule I, by reference to Costa Rica or Central America, contains a
list of all the Customer Software applicable hereto.
C. Vendor Software
Schedule I, by reference to Costa Rica or Central America, contains a
list of all the Vendor Software applicable hereto.
D. Source Code and Back-up Tapes
Vendor shall maintain copies of the Back-Up Tapes for the following
time periods:
For Midrange databases, Back-Up Tapes shall be required with respect
to each calendar month and each calendar year, and such Back-Up Tapes
shall be maintained for not less than six (6) years from date of
creation.
E. Third Party Software
Schedule I, by reference to Costa Rica or Central America, contains a
list of all the Third Party Software anticipated to be used by Vendor
in providing the Baseline Services as of the Commencement Date. The
additional information with respect to such Third Party Software as
required by Section 9.09 (a) of the Master Outsourcing Agreement shall
be provided by Vendor to Customer within one hundred twenty (120)
days.
X. RESOURCING AND AGGREGATE LIMITATIONS (10.01)
To the extent that Customer obtains from third parties, or provides to
itself, any of the Services in accordance with Section 10.01 of the
Master Outsourcing Agreement, the amounts to be paid to Vendor by
Customer will be adjusted according to the mechanism set forth in
Schedule F (and, if appropriate, the Global Pricing Exhibit of the
Master Agreement), and any equipment, software or service contracts
owned or leased by Vendor for use in providing the Services and no
longer needed by Vendor as a result of such reduction in Services by
Customer shall be sold or assigned to or at the direction of Customer
as provided in Article XIV.B of this Agreement below as applicable in
the event of a termination of this Agreement.
XI. THIRD PARTY SERVICE CONTRACTS (10.03)
The Vendor shall have access to and use of all of the third party
services governed by the Third Party Service Contracts described in
Part I of Schedule K to this Agreement. The Vendor shall have
financial responsibility to reimburse Customer for the regular monthly
charges with respect to, but shall not assume, those Third Party
Service Contracts described by reference to Costa Rica or Central
America in Part II of Schedule K to this Agreement.
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XII. INSURANCE (12.01)
It is agreed that the requirements of Section 12.01 of the Master
Outsourcing Agreement shall be satisfied by EDS maintaining the
insurance described therein throughout the term of this Agreement,
with the endorsements required by Section 12.01(b) and the
certificates and notices required by Section 12.01(c) provided to
Administracion S.A. de C.V., an affiliate of Customer organized under
the laws of Mexico for the benefit collectively of Customer and each
of the affiliates of Customer party to a Latin America Agreement.
XIII. PAYMENT TO VENDOR (13.01, 13.03, 13.12, 13.14)
A. Baseline Service Fees
Baseline Service Fees and the Baseline Resources included in such Fees
are defined in Schedule F to the Agreement. In those instances where
fees or amounts with respect to more than one country are indicated on
such Schedule F, the fees and amounts applicable to this Agreement
shall be those identified by reference to Costa Rica or Central
America. Such Baseline Service Fees are not calculated on a
"cost-plus" basis as anticipated by the Global Pricing Exhibit
attached to and part of the Master Agreement, and therefore shall not
be subject to the Global Volume Discounts as described in such Global
Pricing Exhibit.
B. Retained and Pass Through Expenses
Retained and Pass Through Expenses are defined in Schedule F to the
Agreement.
C. Incidental and Other Charges
Each of Customer and Vendor shall be responsible for the incidental
expenses that may be incurred by Vendor as provided in Schedule F to
this Agreement.
D. Increase or Reduction in Fees
Customer shall pay Additional Volume Charges (also referred to as
"ARCs" or "AVCs") and be entitled to receive Reduced Volume Credits
(also referred to as "RRCs" or RVCs") as defined in Schedule F to this
Agreement.
Each of Customer and Vendor acknowledge that the fees payable under
this Agreement for any New Services that are Inscope Infrastructure
Services shall be based upon the Global Pricing Exhibit attached to
and part of the Master Agreement, if other New Service Fees are not
agreed by Vendor and Customer in accordance with Section 3.02 of the
Master Outsourcing Agreement.
E. Payment Schedule
1. Start-up
Vendor shall invoice One-time Transition Charges as described on
Schedule F to this Agreement. In the event of a termination for
convenience by Customer in accordance with Section 18.01(b) of
the Master Outsourcing Agreement, any such Transition Charges as
yet
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unpaid by Customer shall be considered to be among the capital
investments to be paid by Customer to Vendor as a termination
fee.
2. Monthly Service Charges
Monthly Service Charges shall be invoiced in arrears. This means
that each month's Services will be invoiced on the first day of
each month and Customer will pay undisputed charges not more than
30 days after receipt of the invoice.
3. ARC/RRCs
Vendor will provide an invoice for variable charges, with
appropriate back-up detail, and shall endeavor to provide such
invoice in the month following the month in which the charges
were incurred. Customer will pay undisputed charges not more than
30 days after receipt of the invoice.
F. Adjustment to Charges
1. Payment Currency.
All charges and sums due to the Vendor under this Agreement are
specified in this Agreement in either United States Dollars
("DOLLARS") or Costa Rican Colones ("LOCAL CURRENCY"). The
parties acknowledge, however, that to the extent required by
applicable law of Costa Rica, the amounts specified here in
Dollars may be paid by Customer to Vendor in Local Currency. If
Customer elects or is required to make any such payment in Local
Currency rather than Dollars, the parties agree that the rate of
exchange used to convert the amounts due from Dollars to Local
Currency shall be the rate at which the central bank in Costa
Rica publicly offers to sell Dollars for Local Currency on the
day immediately preceding the date payment is made to Vendor. If
such central bank should stop publishing its rate for the sale of
Dollars, the parties agree that the rate of exchange used to
convert the amounts due from Dollars to Local Currency shall be
(i) the rate published in the bulletin of the local stock market
for operations denominated in Dollars or, (ii) if there is no
local stock market or such a rate is not published by the stock
market, shall be the rate determined by averaging the rates
offered by the three largest banks in Costa Rica as the rates at
which such banks offer to sell Dollars for Local Currency on the
day immediately preceding the date payment is made to Vendor.
2. Interest on Late Payments
Any amounts due to be paid hereunder in Dollars not paid when due
will bear interest until paid as set forth in Section 13.12 of
the Master Outsourcing Agreement. If any amounts due to be paid
hereunder in Local Currency are not paid when due, the following
procedure shall be followed to determine the amount due from
Customer when payment is made: (i) each amount due but unpaid
shall be converted to a value in Dollars at the exchange rate
established by Article XIII,F,1 of this Agreement above as of the
date such payment was due, (ii) interest on the resulting amount
of Dollars shall be calculated from the date such amount was due
until it is paid as set forth in Section 13.12 of the Master
Outsourcing Agreement, and (iii) the resulting total in Dollars
of the payment due plus accrued interest shall be converted to a
value in Local Currency at the exchange rate established by
Article XIII,F,1 of this Agreement above as of the date such
payment is actually made.
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3. Cost of Living Adjustment
a. Local Currency Adjustment.
The total portion of the amounts payable to Vendor hereunder
which are specified as due and payable in Local Currency
shall be indexed to the Indice del Nucleo Inflacionario as
published by the Central Bank of Costa Rica, or the
equivalent if such index is not available (the "NCPI"). If,
on the first day of any calendar year during the term of
this Agreement, the NCPI for the calendar month immediately
preceding such day (the "NCPI CURRENT INDEX") is higher than
the NCPI (i) one year prior thereto, or (ii) in the event
Vendor has made an immediate adjustment during such year as
described below, the date of such adjustment (as applicable,
the "NCPI Base Index"); then, effective as of the first day
of such calendar year, all amounts specified in this
Agreement as due from Customer to Vendor in Local Currency,
as previously adjusted pursuant to this Section, shall be
increased by the percentage that the NCPI Current Index
increased from the NCPI Base Index. If at any time during a
calendar year the NCPI Current Index increases by ten
percent (10%) or more over the NCPI Base Index, then by
notice to Customer, Vendor may immediately increase the
portion of the amount payable to Vendor in Local Currency
under this Agreement by such percentage, without waiting
until the first day of the next calendar year. For purposes
of clarity, it is acknowledged that the intent of the
parties is that any such amounts payable by Customer to
Vendor in Local Currency will be modified periodically as
appropriate in accordance with this paragraph, applying any
such changes in the NCPI for the appropriate period to the
pricing for this Agreement, as such pricing may have been
previously modified pursuant to this paragraph, so that such
adjustments have cumulative effect with respect to all
changes in the NCPI from the Commencement Date through
termination of this Agreement.
b. Dollar Adjustment.
Forty-two percent (42%) of the portion of the amounts
payable to Vendor hereunder which are specified in this
Agreement as due and payable in Dollars shall be indexed to
the Consumer Price Index for All Urban Consumers, U.S. City
Average, for All Items (1982-84 = 100), as published in the
Bureau of Labor Statistics of the Department of Labor of the
United States of America (the "CPI"). Such adjustments shall
be calculated using the CPI in the manner as provided above
with respect to adjustments based upon the NCPI for amounts
specified as payable in Local Currency except that (i) such
adjustments shall be calculated only on the first day of
each calendar year during the term of this Agreement,
commencing January 1, 2002, and no immediate adjustments
shall be made, and (ii) such adjustment shall be made to
correspond to ninety five percent (95%) of the change in the
CPI index for each calendar year, rather than one hundred
percent (100%) of the index change. If the CPI growth in
every calendar year is less than 5 %, Vendor will not adjust
the portion of the amounts payable to Vendor hereunder which
are specified in this Agreement as due and payable in
Dollars. For purposes of clarity, it is acknowledged that
the intent of the parties is that any such amounts payable
by Customer to Vendor in Dollars will be modified
periodically as appropriate in accordance with this
paragraph, applying any such changes in the CPI for the
appropriate period to the pricing for this Agreement, as
such pricing may have been previously modified pursuant to
this paragraph, so that such
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adjustments have cumulative effect with respect to all
changes in the CPI from the Commencement Date through
termination of this Agreement.
XIV. TERMINATION
A. Termination for Failure to Provide the Services. (18.03)
If the Vendor fails to provide and perform the Baseline Services or
any New Services and such failure creates a material adverse effect on
the Customer's business and the Vendor does not, (within 48 hours
after proper notice of such failure has been provided to the Vendor by
the Customer), cure such failure or, if such failure cannot be cured
within such 48-hour period, then the Vendor shall provide to the
Customer a workaround solution that will allow the Customer to perform
its normal business operations, then the Customer may, upon proper
notice to Vendor, terminate this Customer's Outsourcing Agreement as
of the date specified in the notice of termination without regard to
Section 18.02 of the Master Outsourcing Agreement. For purposes
hereof, failure to provide Baseline Services or New Services shall be
deemed to have "a material adverse effect on Customer's business" in
accordance with the standard provided in Section 18.03 of the Master
Outsourcing Agreement.
B. Transfer of Assets upon Termination or Expiration of the Agreement.
Upon expiration or termination of this Agreement for any reason,
Vendor shall sell or assign to or at the direction of Customer, and
Customer shall accept and provide consideration as provided herein
with respect to, all equipment, software and service contracts then
owned or leased by Vendor primarily for use in providing the Services,
to the extent that Vendor may do so under the applicable agreements.
If any such agreements may not be assigned by Vendor to Customer, then
Vendor shall retain such agreements and be reimbursed by Customer all
costs related thereto arising from and after the date of termination,
in accordance with the procedures described on Schedule D. All such
equipment shall be transferred in good working condition, reasonable
wear and tear excepted. In the case of Vendor-owned equipment, Vendor
shall grant to Customer or its designee a warranty of title and a
warranty that such equipment is free and clear of all liens and
encumbrances. Such conveyance by Vendor to Customer shall be (i) at
Vendor's net book value for assets being depreciated by Vendor in
accordance with generally accepted accounting principles, (ii) at fair
market value for assets the acquisition cost of which was not
capitalized by Vendor, and (iii) on assumption of all executory
obligations and reimbursement of pre-paid obligations with respect to
non-capitalized contractual rights. In the case of leases or other
contracts, Vendor shall represent and warrant that it is not in
default of the lease or other contract on the date of assignment, and
that all payments due thereunder have been made through the date of
assignment. To the extent permitted by Vendor's contracts with third
parties, Vendor shall assign or transfer to Customer or its designee
all warranties and other third party warranties on any such assets
conveyed to Customer or its designee.
C. Fee in the Event of Early Termination.
In the event of any termination of this Agreement prior to the
conclusion of the Initial Term, Customer agrees to pay to Vendor the
termination charge as defined by reference to Costa Rica in the table
of such charges set forth in Schedule F.
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XV. TERMINATION ASSISTANCE SERVICES (18.06 AND 19.01)
Termination Assistance Services and the Fees to be paid by Customer with
respect thereto are described in Schedule D hereto.
XVI. DAMAGES (21.01)
NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL,
PUNITIVE OR CONSEQUENTIAL DAMAGES OR LOST PROFITS ARISING OUT OF OR
RELATING TO SUCH PARTY'S PERFORMANCE UNDER THIS AGREEMENT. FURTHERMORE,
THE TOTAL AMOUNT WHICH CAN BE RECOVERED BY EITHER PARTY FOR THE OTHER
PARTY'S FAILURE TO PERFORM, WHETHER BASED ON AN ACTION OR CLAIM IN
CONTRACT, EQUITY, NEGLIGENCE, TORT OR OTHERWISE, UNDER THIS AGREEMENT
SHALL NOT EXCEED AN AMOUNT EQUAL TO THE AGGREGATE OF ALL SERVICE FEES
PAID BY CUSTOMER UNDER THIS AGREEMENT IN THE TWELVE MONTHS PRECEDING ANY
CLAIM. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE FOREGOING
LIMITATIONS SHALL NOT APPLY TO (I) CUSTOMER'S OR VENDOR'S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT; (II) THE INDEMNIFICATIONS SET FORTH IN
ARTICLE 20; (III) CUSTOMER OBLIGATIONS TO PAY FEES AS PROVIDED HEREIN FOR
SERVICES RENDERED, OR (IV) BREACH OF THE CONFIDENTIALITY OBLIGATIONS SET
FORTH IN ARTICLE 15.
Vendor's responsibilities for Telecommunications Management Services
under this Agreement shall be limited to managing the Telecommunication
Services Agreement(s) at issue as provided in Schedule B. Vendor shall
not itself be liable for a breach by the TC Vendor of the terms and
conditions of such Telecommunication Services Agreement(s) or for any
obligations incurred by Customer under the Telecommunication Services
Agreement(s).
Other than credits which may become available to Customer (directly or
indirectly) in the event of a failure of a Service Level with respect to
the International Telecommunications Network Management Services as
provided on Schedule E, Vendor disclaims any and all liability resulting
from or arising out of the provision of any Telecommunication Services by
a TC Vendor or any acts or omissions of a TC Vendor. With the exception
of such Service Level credits or any warranties or indemnities that the
TC Vendor shall provide for Customer's benefit pursuant to the
Telecommunication Services Agreement, the Telecommunication Services are
made available to Customer on an "AS IS" basis without warranty. Vendor'
responsibility with respect to any Service Interruption shall be as
described in Schedule B and, to the extent applicable to such Service
Interruption, Schedule E.
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XVII. MISCELLANEOUS
A. Notices (22.03)
In the case of Customer:
Embotelladora Panamco Tica, X.X.
Xxxxx Blancos, 150mts. al este de la Guardia Xxxxx
Xxxxxxxx Xxxxxx 0000-0000
Xxx Xxxx, Xxxxx Xxxx
Attention: Director General
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Panamco LLC
000 Xxxxxxxxx Xxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attention: General Counsel and Information Systems Director
FAX: 000-000-0000
In the case of Vendor:
Electronic Data Systems (EDS) de Costa Rica S.A.
X/x Xxxxxx Xxxxxx & Xxxxxxxxx
Xxxxxxx Xxx Xxxxx
Xxxxxxx 00 Calle 37, 10136 - 0000
Xxx Xxxx, Xxxxx Xxxx
Attention: Managing Partner
With a copy to:
Electronic Data Systems Corporation
0000 Xxxxxx Xxxxx
Xxxxx, Xxxxx 00000 X.X.X.
Attention: General Counsel
FAX: 000-000-0000
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And a copy to:
Electronic Data Systems Corporation
C/o Panamco L.L.C.
000 Xxxxxxxxx Xxx
Xxxxx 000 Xxxxx, Xx 00000 X.X.X.
Attention: EDS Client Delivery Executive
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
B. Governing Law and Forum (22.13)
This Agreement shall be construed and governed by the laws of Costa
Rica, subject to the requirements of Paragraph C in this Article XVII
of this Agreement below. Any claim, controversy or dispute arising
out of or relating to this Agreement ("Dispute") shall be resolved
first as provided in Section 17.01 of the Master Outsourcing Agreement
or, if such informal methods do not resolve the Dispute, as provided
in Paragraph C in this Article XVII of this Agreement below. To the
extent access to any courts is required without contravention of such
agreed provisions for the resolution of any Dispute, each of Customer
and Vendor irrevocably accepts the jurisdiction of the courts of Costa
Rica.
C. Arbitration
Any Dispute that the parties are unable to resolve through the
procedures described in Section 17.01 of the Master Outsourcing
Agreement will be submitted to arbitration in accordance with the
following procedures:
1. Either party may demand arbitration by giving the other party
written notice to such effect, which notice will describe, in
reasonable detail, the facts and legal grounds forming the basis
for the filing party's request for relief and will include a
statement of the total amount of damages claimed, if any, and any
other remedy sought by that party. The arbitration will be held
pursuant to the International Arbitration Rules of the American
Arbitration Association ("AAA") in effect at the time of the
arbitration, except as may be modified herein or by mutual
agreement of the parties. The arbitration shall be conducted
before three neutral arbitrators in New York, New York, or such
other location as may be mutually agreed by the parties.
2. Within 30 days after the other party's receipt of such demand,
the parties will mutually determine who the arbitrators will be
in accordance with such rules of the AAA or, if the parties are
unable to agree on the arbitrators within that time period, the
arbitrators will be selected by the AAA in accordance with such
rules. In any event, the arbitrators must be neutral
participants, with no prior working relationship with either
party, and shall have a background in, and knowledge of, the
information technology services industry. If persons with such
industry experience are not available, the arbitrators shall be
chosen from the large and complex case panel or, if appropriate
persons are not available from such panel, the retired federal
judges pool.
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3. The arbitrators shall allow such discovery as is appropriate to
the purposes of arbitration in accomplishing fair, speedy and
cost-effective resolution of disputes. The arbitrators will not
have authority to make any ruling, finding or award that does not
conform to the terms and conditions of this Agreement.
4. The decision of, and award rendered by, the arbitrators will be
final and binding on the parties. Upon the request of a party,
the arbitrator's award will include written findings of fact and
conclusions of law. Judgment on the award may be entered in and
enforced by any court of competent jurisdiction. Each party will
bear its own costs and expenses (including filing fees) with
respect to the arbitration, including one-half of the fees and
expenses of the arbitrators.
5 In the event that any Dispute subject to any such arbitration
relates to matters that are the subject of a separate and
additional dispute between an affiliate of Customer and an
affiliate of Vendor under another of the Latin America
Agreements, any arbitration proceedings to resolve such Disputes
shall be consolidated upon the request of either party. In the
event of any such consolidation of Disputes, to the extent the
matters in controversy is the same in each, the parties agree
that notwithstanding Paragraph B of this Article XVII above, this
Agreement shall be considered as construed under and governed by
the law of the jurisdiction to which the largest claim in Dispute
arises for the resolution of such Disputes involving the same
matters in controversy.
6. Other than those matters involving injunctive or other
extraordinary relief or any action necessary to enforce the award
of the arbitrators, the parties agree that the provisions of this
Article XVII, Paragraph C, are a complete defense to any suit,
action or other proceeding instituted in any court or before any
administrative tribunal with respect to any Dispute.
D. Customer Third-Party Contractors. (10.02)
Customer shall require Customer Third Party Contractors to comply with
Vendor's security and confidentiality requirements and shall not be
required to disclose any Vendor confidential or proprietary
information to any Third Party Contractor of Customer that is a
competitor of Vendor.
E. Individuals Performing the Services. (13.14)
Vendor agrees to be responsible to verify that all individuals it
provides to perform the Services required to be provided by Vendor
under this Customer's Outsourcing Agreement are legally able to work
in the country in which they are working to provide such Services.
However, it is neither necessary nor appropriate that all such
individuals providing Services on behalf of Vendor be legally
authorized to work in the United States.
F. Rules of Interpretation. (22.11)
In the event of a conflict between the terms and conditions of the
Master Agreement and Customer's Outsourcing Agreement, the terms and
conditions of Customer's Outsourcing Agreement shall prevail. In the
event of a conflict between the Master Agreement and
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Customer's Outsourcing Agreement and any Amendment to Customer's
Outsourcing Agreement, the terms of the Amendment to Customer's
Outsourcing Agreement shall prevail.
In those circumstances in the Schedules attached hereto where there is
a reference to "CENTRAL AMERICA" or "CA", it shall be considered
collectively as a reference to Costa Rica, Nicaragua and Guatemala.
Unless otherwise indicated from the context, the matter referenced
shall not be considered as a reference to each such country in the
Central America group, but rather in a manner allocated among the
Latin America Agreements pertaining to such three countries based upon
actual usage or location, or otherwise as mutually agreed by Customer
and its affiliates in Guatemala and Nicaragua with Vendor and its
affiliates in those countries. In any event, Customer and Vendor each
agree to negotiate in good faith to agree to written amendments to
this Agreement and its Schedules within a reasonable time to
appropriately reflect such allocations and references among the Latin
America Agreements for Central America.
G. Euro and Euro Compliance (16.01, 16.02, 22.01).
It is recognized not to be necessary that all Software and Equipment
provided or used pursuant to this Agreement be tested or warranted for
functionality with respect to Euro Compliance or data involving the
Euro currency, or conversion between Local Currency and the said Euro.
H. Survival
Without limiting the requirements of Section 22.15 of the Master
Outsourcing Agreement, it is agreed that the terms of Articles III-A;
VI-E; XIII-F-1 and 2; XIV-B; XV; XVI; and XVII-B and F of this
Agreement shall survive the expiration or termination of this
Agreement for any reason.
XVIII. REPRESENTATIONS AND WARRANTIES.
A. By Customer (16.01(a) through (f)).
Customer represents, warrants and covenants that:
(a) it is a corporation duly incorporated, validly existing and in
good standing under the laws of Costa Rica;
(b) it has all the requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement;
(c) the execution, delivery and performance of this Agreement have
been duly authorized by Customer;
(d) it covenants that is has not as of the Commencement Date, and
will not, disclose any Confidential Information of Vendor in violation
of the terms of this Agreement;
(e) there is no claim, action, suit, investigation, or proceeding
pending or, to Customer's knowledge, contemplated or threatened
against Customer which seeks damages or penalties in connection with
any of the transactions contemplated by this Agreement or to restrict
or delay the transactions contemplated hereby or to limit in any
manner Vendor's rights under this Agreement; and
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(f) there are no brokers with claims to fees based upon the
transactions contemplated under this Agreement.
B. By Vendor (16.02 (a) through (g)).
Vendor represents, warrants and covenants that:
(a) it is a corporation duly incorporated, validly existing and in
good standing under the laws of Costa Rica;
(b) it has all requisite corporate power and authority to execute,
deliver and perform its obligations under this Agreement;
(c) the execution, delivery and performance of this Agreement have
been duly authorized by Vendor;
(d) no approval, authorization or consent of any governmental or
regulatory authority is required to be obtained or made by it in order
for it to enter into and perform its obligations under this Agreement;
(e) it covenants that is has not, and will not, disclose any
Confidential Information of Customer in violation of the terms of this
Agreement;
(f) there is no claim, action, suit, investigation, or proceeding
pending or, to Vendor's knowledge, contemplated or threatened against
Vendor which seeks damages or penalties in connection with any of the
transactions contemplated by this Agreement or to restrict or delay
the transactions contemplated hereby or to limit in any manner
Customer's rights under this Agreement; and
(g) there are no brokers with claims to fees based upon the
transactions contemplated under this Agreement.
XIX. Schedules
The Schedules hereto shall form an integral part of this Customer's
Outsourcing Agreement and shall be regarded as incorporated into this
Agreement in every respect. In case of inconsistency between the terms and
conditions of the said Schedules and this Agreement the latter shall
prevail to the extent of such inconsistency but no further.
A. INTENTIONALLY OMITTED
B. DESCRIPTION OF SERVICES
C. INTENTIONALLY OMITTED
D. TERMINATION ASSISTANCE SERVICES
E. PERFORMANCE STANDARDS AND SERVICE LEVELS
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F. CHARGES AND RESOURCE BASELINES
G. KEY VENDOR STAFF MEMBERS
H. VENDOR'S TRANSITION PLAN
I. EQUIPMENT AND SOFTWARE RESOURCE LOG
1. EQUIPMENT PROVIDED BY CUSTOMER
2. EQUIPMENT PROVIDED BY VENDOR
3. SOFTWARE PROVIDED BY CUSTOMER
4. SOFTWARE PROVIDED BY VENDOR
J. EMPLOYEE TRANSITIONS
K. THIRD PARTY SERVICE AGREEMENTS
L. APPROVED SUBCONTRACTORS
M. MASTER AGREEMENT
N. CONSENTS AND APPROVALS
This Customer's Outsourcing Agreement is signed in two (2) original copies, to
be effective on the date first above written.
Embotelladora Panamco Tica, S.A Electronic Data Systems (EDS)
de Costa Rica S.A.
----------------------------------- ----------------------------------
Authorized representative Authorized representative
Printed name: Printed name:
----------------------------------- ----------------------------------
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-----------------------------------
Authorized representative
Printed name:
-----------------------------------
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