Download 1. Data Protection and Privacy

Form Q.2
Clause Library
(Cross referenced to the text; Unless otherwise noted, Section references correspond
to Sections in Form B.1)
Index
A.
Acceptance (Chapter 5.D; § 7)
1. Acceptance – Deliverables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Acceptance of Services and Deliverables for Multi-Phase Projects
3. Acceptance/Rejection of Work Product.
4. Milestones and Acceptance
B.
Access to Computer Network. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1. Access to Licensee’s Network – Neutral. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Access to Licensee’s Network – Licensee Oriented. . . . . . . . . . . . . . . . . . . . . .
C.
Affiliates (Chapter 4.A.3)
1. Affiliate Transactions – Customer Liable for Affiliate Obligations
2. Affiliate Transactions – Parties Not Responsible for Liabilities of Affiliates
3. Affiliate Transactions – Parties Not Responsible for Liabilities of Affiliates
– Alternative Language
4. Affiliate Transactions – Addition of Affiliates (§§ 1.2, 1.2.A)
D.
Arbitration (Chapter 23.D; § 30) (See also Section T.)
1. Singapore Arbitration Language. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Singapore Arbitration Language – Alternative Language. . . . . . . . . . . . . . . .
3. Vietnamese Arbitration Language. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4. Arbitration and Enforcement - Procedures
5. Confidentiality of Dispute
E.
Assignment (Chapter 4.G; § 22). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1. Divestiture/Assignment (§ 42). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Assignments Void. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F.
Audit (Chapter 7.F; §§ 38.J, 9.13(i)). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1. ISAE 3402/SSAE 16
2. SSAE 16 Audit – Neutral
3. Security Audits – Alternate to SSAE 16 - Favors Vendor. Audit
4. Limiting Right of Licensee to Audit Licensor’s Fees – Licensor Oriented
5. Audit – Right of Licensor to Audit Number of Software Users – Licensor
Oriented
6. Audit – Prohibition on Licensor Auditing Number of Licensee Users –
Licensee Oriented (§ 8.J)
7. Audit – Allowing Licensee to audit the Licensor’s books to confirm
proper billing by Licensor
8. Audit – Allows Licensee to Audit Licensor Compliance with Applicable
Laws and Licensee Policies – Licensee Oriented
9. Audit - Allows Licensor to Audit Escrow Agent to Confirm Compliance
with Source Code Release Terms
10. Audit – General Provisions on Conduct of Audit
11. Customer Royalty Provision with Audit Language
12. Operational/Security Audit - Allows the Customer to Confirm Vendor’s
Compliance with Vendor’s Operational/Security Obligations
13. Audit – Licensee Right to Audit Vendor
14. Audit – Books and Records - Balanced
15. Audit of Reseller
16. Audit of Reseller – Alternative Language
17. Audit - Licensee Software Use
18. Audit - Vendor Audit of Customer’s Software Usage
19. Audit – Comprehensive Language
20. Audit - Data Security and Confidentiality
21. Audit - Customer Compliance with License Terms– Favors Customer
22. Compliance, Controls and Audit Rights
23. Confidentiality of Audit
24. Controls, Records and Inspection
G. Bankruptcy (Chapter 20). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1. Termination in the Event of Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Affirmation of Rights Under Section 365(n) of the Bankruptcy Code (Form
C.4 § 13)
3. Affirmation of Rights Under Section 365(n) of the Bankruptcy Code –
Licensee Oriented (Form C.4, § 13)
4. Termination Due To Adverse Changes in Licensor’s Financial
Circumstances
5. Customer Rights to Vendor Services Upon Vendor Bankruptcy
6. Customer Rights in Event of Vendor Bankruptcy - ASP Contract
H.
Benchmarking (Chapter 7.L). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1. Use of Benchmarking Data – Licensor Oriented (§ 8.B). . . . . . . . . . . . . . . . .
2. Benchmarking - Confidentiality
I.
Boilerplate (Chapter 6)
.
1. Use of English Language. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Entire Agreement – English is Only Language of Contract
3. Assurance of Licensor’s Future Performance – Licensee Oriented
4.
Electronic/Facsimile Signatures
5. Counterparts/Facsimile Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6. Notices
7. Notice - International Contracts
8. Prior Review and Counsel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9. Prior Review and Counsel – Alternative Language
10. Relationship of Parties - I n d e p e n d e n t C o n t r a c t o r s . .
11. Use of Other Party’s Name, Logo and Trademarks. . . . . . . . . . . . . . . . . . . . . .
12. Reference to Dates and Days. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13. Licensor to Notify Licensee in Event of Structural Change in Licensor’s
Business.
14. Trading in Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15. No Joint Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16. Pronouns
...............................................
17. Order of Precedence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18. Responsibility for Employees and Agents . . . . . . . . . . . . . . . . . . . . . . . . . . .
19. Time of Performance – Alternate Language to Time is of the Essence. . .
20. Certification of Compliance with Terms of Agreement. . . . . . . . . . . . . . . . .
21. Invalidity
22. Waiver
23. Entire Agreement and Waiver
24. Entire Agreement
25. Survival
26. Due Dates
27. Relationship of the Parties
J.
Breach (Chapter 5.F; § 5)
1. Problem Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Step in Rights – Licensee’s rights to assume Licensor’s subcontracts in
event of Licensor’s breach (§ 5.3.7)
3. Step in Rights – Alternative Language
4. Step in Rights – Comprehensive Language
5. Vendor Financial Solvency – Material Changes
6. Notice of Potential Vendor Breach
7. Incident Management/Notification of Breach
8. Notice of Material Adverse Effects
9.
10.
11.
12.
13.
Confidentiality/Data Protection Claims
Errors in Data Conversion – Licensor Oriented
Timing – Neutral Bilateral. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Timing – Delay by Licensee – Neutral. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Timing – Licensor Oriented. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14. Timing – Licensee Oriented
K. Change in Control/Divestiture (Chapter 4.G)
1. Change in Control of Licensee
2. Change in Control of Licensee – Alternative Language
807
3. Change in Control – Mutual
4. Change of Control and Divestiture
5. Divested Entity’s Use of Software
6. Divestiture of Customer Business
7.
8.
Divestiture of Customer Business – Alternative Language
Mergers and Acquisitions
9. Software Use for Subsequently Acquired Companies – Licensor
Oriented
L.
Change Management (Chapter 7.E; § 9.8)
1. Change Management (§ 9.8).
.
M. Cloud/Hosting (Chapter 9)
1. Multi-User Resale License Grant
2. License Grant with Regulatory Obligations
3. General Terms from Licensor Allowing Cloud Provider to Provide Cloud
Services to End Users
4. License Grant Allowing Cloud Provider to Sublicense Software on a
Hosted Basis
5. License Grant Allowing Cloud Provider to Sublicense the Software.
6. ASP Services License Grant
7. Managed Services License Grant
8. Cloud Encryption Standards
9. Cloud Warranty Disclaimer
10. Conversion to Conventional Installation – Hosting/ASP to Traditional
Software License
11. Testing and Acceptance
12. No Additional Fees for Licensee’s Customers’ Access
13. Notification of Website Unavailability
14. Protection of Customer Data - With Indemnity
15. Source Code Escrow – ASP Services
16 Data Security Language – Balanced Approach
N.
Compliance with Laws (Chapter 6.I; § 25)
1. Licensor Responsible for Compliance with Laws - Change in Law
Justifies Change in Rates – Licensor Oriented
...........
2. Licensor Responsible for Identification and Compliance with
Applicable Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. Vendor Required to Provide Notice of Change in Law
4. Anti-Kickback Statute and Stark Law
5. Compliance with Laws – Excludes Compliance That Would Cause
Violation of U.S. Law
6. Change in Laws
O.
Confidentiality (Chapter 17; § 12). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1. Licensor Information – Licensee Oriented - Licensor Prohibited From
Providing Confidential Information to Licensee
2. Survival of Confidentiality Obligations – Trade Secrets (§ 12)
3. Survival of Confidentiality Obligation- Alternative Language
4. Disclosure of Confidential Information to Third Parties – Licensor Oriented
(§ 12)
5. No Restriction on Marketing Independently Developed Information
6. Presentations and Publications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7. SEC Disclosures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8. Insider Trading – Tipping (Form O.2)
9. Injunctive Relief for Breach of Confidentiality Obligations (§§ 5.5.3, 12)
10. Damages – For Breach of Confidentiality Obligations. . . . . . . . . . . . . . . . . . .
11. Confidential Information – Incorporates Trade Secret Language. . . . . . .
12. Media Releases and Public Disclosures Related to Agreement. . . . . . . . . . .
13. Retention of Confidential Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14 No Requirement to Destroy Electronically Stored Materials
15. Confidential Information – Compliance with ITAR and Export Rules
16. Confidential Information – Receiving Party Will Not Compete With
Disclosing Party – Teaming Agreement
17. Confidential Information – Internet Mail Encryption
18. Confidential Information – Vendor Employee Obligations
19. Employee Access to Confidential Information – Informal Tone
20. Confidential Information May Not be Transferred Offshore
21. Disclosure of Confidential Information to Regulators
22. Confidentiality of Materials; Security; Privacy
23. Restrictive Disclosure Provisions
24. Third Party Employees with Access to Vendor Confidential Information
25.
26.
27.
28.
P.
Will Not Work on Competitive Products
Additional Use Restrictions
Confidentiality Language – “Reasonable Care” Standard -Vendor Oriented
Confidentiality Language – “Shall Not Disclose” Standard -Vendor Oriented
Confidentiality Language – Customer Oriented
Data Privacy/Security (Chapter 16; § 12). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.
Data Protection and Privacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.
Data Protection and Privacy – Alternative Language
Data Protection – Informal Tone
3.
4.
Data Privacy – Comprehensive Language
5.
Data Privacy – Mutual – Short Form
6
Data Privacy - Mutual
7.
Data Privacy – EU Directive on Data Privacy
8.
Data Security – Vendor Obligations
9.
Data Security
10. Data Security – Comprehensive Language
11. Data Security – Alternative Language
12. Data Security and Privacy
13. Publishing of Web Content
14. Attorney-Client Privileged Documents
809
15.
Ownership of Customer Data
16. Data Privacy and Data Security Questionnaire
17
Data Protection and Privacy - HIPAA
18. Security Breach – Vendor Notification Obligations
19 International Cross Border Transfer of Data
20. Vendor Compliance with Identified Standards
21. Requirements for Encryption
22. Requirements for Encryption – Alternative Language
23. Global Data Protection and Privacy
24. Personally Identifiable Information – Compliance with Applicable Privacy
and Data Security Laws
25. Notice of “Unauthorized Use”
26. Breach Notification Obligations
Q. Delivery
1. Software Delivery
2. Delivery, Installation and Use
3. Electronic Delivery of Software
Electronic Delivery of Software – Alternative Language
4.
5. Time Boxing
R. Development (Chapters 7.B and 13)
1.
Software Interfaces
2.
Development and Enhancements
3.
Custom Products - Reseller
4.
Commercialization of Software
5.
Continued Development – Material Inducement For Customer to Enter
Into Agreement
S.
T.
Disaster Recovery/Business Continuity (Chapter 7.H; § 35)
1.
Movement of Licensor Personnel
2.
Disaster Recovery – Creation of Copies of Software
3.
Disaster Recovery and Business Continuity Plan
4.
Business Continuity Plan
5.
Business Continuity Plan – Comprehensive Language
Disputes and Dispute Resolution (Chapters 23 and 24) (See also Section D.)
1.
Expedited Dispute Resolution Process – Shortened Time Frames
2.
Expedited Dispute Resolution Process – Alternative Language
3. Dispute Resolution
4. Escrow – Offset
5.
Legal Hold
6, Legal Fees
7. Legal Fees – Alternative Language
8. Waiver of Jury Trial (Chapter 6.G; § 32)
9. Tolling of Statute of Limitations for Matters Submitted to Arbitration
10. Intellectual Property Disputes Not Subject to Arbitration
U.
Employee Related Terms (Chapter 21). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1. Hiring Employees of Other Party – Exclusive Remedy. . . . . . . . . . . . . . . . . .
2. Hiring Employees of Other Party – Liquidated Damages Calculation
3. Violent Crime Control and Law Enforcement Acts – Insurance Industry
4. Workplace Violence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5. Pre-Approval of Licensor’s Personnel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6. Pre-Approval of Licensor’s Contractors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7. Required Employee Screens – Not Reimbursable (§ 9). . . . . . . . . . . . . . . . . .
8. Workers on Denied Persons List
9. Employee Access to Data by Employee on Denied Persons List
10. EICC Code of Conduct
11. Vendor Personnel – Key Personnel, Qualifications, Non-Competition
12. Compliance with Immigration Requirements
13. Customer Review of Vendor Employee Candidates
14. Limitations on Use of Vendor Personnel – Immigration Status and Location
15. Background Checks
16. Limiting Employee Access to Employer’s Systems – CFAA Language –
Casual Tone
17. Employee Prohibition on the Use of Third Party Confidential Information –
Casual Tone
18. Vendor Employees to Remain on Project
V.
Exclusivity/Work For Competitors (Chapter 7.Q; § 9.12)
1. Prohibition on Vendor Providing Services to Customer Competitors
2. Prohibition on Vendor Personnel Working for Customer Competitors
3. No Prohibition on Licensor Employees Providing Services to Other Parties (§
9.12)
4. Vendor Exclusive Right to Provide Services
5. Vendor Exclusive Right to Provide Services – Alternative Language
6. No Minimum Commitment by Customer
7. No Minimum Commitment by Customer – Alternative Language
8. Reseller May Obtain Similar Services/Products From Other Parties
9. No Limit On Customer Use of Third Party Vendors
10. Agreement Does Not Grant Licensor Exclusive Right to Licensee’s
Business
W. Export (Chapter 7.N). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1. Compliance with Export Controls. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Compliance with Export Control – Alternative Language
3. Compliance with Export Controls - Encryption
4. Compliance with USA Patriot Act and OFAC
X
Force Majeure (Chapter 6.D)
.
1 Force Majeure - Short Form
2. Force Majeure – Comprehensive Language
3. Force Majeure - Mitigation
811
Y. Governing Law (Chapter 6.H) (UCITA - Chapter 12; § 16.1.4.A)
1. Governing Law - Uniform Computer Information Transactions Act
(“UCITA”)
2.
3.
4.
5.
6.
Opt Out of UCITA
Opt Out of UCITA – Alternate Language
Adoption of UCITA Subsequent to Execution of Agreement
Governing Law
Governing Law and Jurisdiction – Providing for English Law and z
Arbitration
Z. Indemnity – General (Chapter 5.B § 15)
1.
General Indemnity - Balanced
2.
Indemnity - General
3.
Indemnity – Not Dependant on Application of Fault
4.
Indemnification Rights Not Applicable Upon Failure to Mitigate
5. Indemnity – Employment
6. Indemnity – Employment – Alternative Language
7. Indemnity – Employment – Alternative Language
8. Indemnity (Mutual) – Personal Injury and Property Damage
9. Survival of Indemnification Obligations
AA. Indemnity – Intellectual Property (Chapter 5.C; § 14)
1. General and Intellectual Property Indemnity – Neutral. . . . . . . . . . . . . . . . .
2. Intellectual Property Indemnity – Licensee Oriented (§ 14). . . . . . . . . . . . .
3. Intellectual Property Indemnity – Long Form (§ 14)
4. Intellectual Property Indemnity – Licensor Oriented. . . . . . . . . . . . . . . . . . .
5. Intellectual Property Indemnity – Licensee Oriented
6. Intellectual Property Indemnity – Prorated Refund of License Fee. . . . . .
7. Intellectual Property Indemnity - Exclusions
.
8. Intellectual Property Indemnity - Exclusions – Alternative Language
9. Intellectual Property Indemnity – Vendor Use of Customer Software
10. Procedures for Notice of Intellectual Property Indemnity Claim
BB. Insurance (Chapter 6.C; § 38). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1. Licensor’s Insurance Coverage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Licensor’s Insurance Coverage – Alternative Language. . . . . . . . . . . . . . . . . . .
3. Insurance Does Not Limit Liability
4. Self Insurance
CC. Intellectual Property (Chapter 3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1. Copyright Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Trademark Protection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. Jointly Owned Software – Use and Copyright Notice. . . . . . . . . . . . . . . . . . .
4. Ownership of Intellectual Property – Joint Ownership
5. Ownership of Intellectual Property – Alternative Language –
Comprehensive Language
6. Title to Developed Materials Vests in Customer
7. Ownership of Software Modifications
8. Waiver - Moral Rights (Chapter 7.A.2., EE)
9. Waiver - Moral Rights – Alternative Language
10. Residual Knowledge
11.
12.
13.
14.
Residuals – Short Form
Residuals – Unilateral – Feedback
Residuals – Expanded
Security Interest for Trial Testing
DD. Limitation of Liability (Chapter 5.I)
1. Damages Payable by Vendor for Breach of Privacy Obligations
2. Breaches of Data Privacy Obligations Subject to Limitation of Liability
3 Breaches of Data Privacy Obligations Subject to Limitation of Liability –
Alternative Language
4. Limitation of Liability – General
5. Limitation of Liability – General – Alternative Language
6. Limitation on Liability – Broken Out by Type of Claims Including
Personally Identifiable Information (“PII”) and Failure to Comply with Laws
7. Limitation of Liability – Definition of Damages
8. Disclaimer of Liability – Use of Services
9. Disclaimer of Liability – Dangerous Applications
10. Disclaimer of Liability – Hazardous Applications
EE. Maintenance (Chapter 15)
1. Reinstatement of Maintenance - Favors Licensor (§ 3.14)
2. Reinstatement of Maintenance – Favors Licensor - Alternative Language
(§ 23.B.2)
3. Reinstatement of Maintenance – Favors Licensor - Alternative Language
4. Reinstatement of Maintenance – Favors Licensee - Alternative Language
5. Commitment to Offer Support on Listed Operating Environments
6. Maintenance Fee Credit – Arising from Failure of Software to Achieve
Acceptance in a Timely Manner
7. Rejection of Update (§ 23.B.2)
8. Change of Operating System
FF. Miscellaneous
1. Health Crisis Preparations – Pandemics
2. Blue Pencil Language
3. Non-circumvention of the Agreement
4. Location of Performance of Services – Quality Certifications
5. Gifts, Gratuities and Conflicts of Interest
6 Amendment of Agreement -URLs
7. Vendor Ability to Perform Dependant on Customer Co-operation
8. Financials
GG. Offshore Labor
813
.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
HH.
1.
2.
3.
4.
No Use of Offshore Labor – Warranty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
No Use of Offshore Labor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assignment of Foreign Nationals to Project (§§ 9, 43). . . . . . . . . . . . . . . . . .
Prohibition on Working From Home by Offshore Employees. . . . . . . . . . .
Proof of Right to Work in United States. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Onsite and Onshore Labor – Certification By Licensor That
It Can Supply Required Foreign Labor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Secondary Displacement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assignment of Copyright Interests – Indian Employees (Chapter 5.A). . . .
Transition of Foreign Employees in Event of Termination. . . . . . . . . . . . . .
Information Protection – Deemed Export Rule – Favors Vendor
Offshore Services (Chapter 19)
Offshore Services Provisions
Approved Offshore Locations
Offshore Development – Requires Customer Consent
Requirements for Offshore Activities
II.
Open Source Software (Chapter 10; § 16.AA). .
1. Restrictions on Open Source Software. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Requests to Use Third Party and Open Source Software
JJ.
Outsourcing
1. Transfer of Software Licenses
2. Use of Programs – Outsourcing
3. Customer Requested Software
KK. Policies (Forms P 1-14)
1. Customer Policies – General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Use of Internet Access by Licensor Employees Working at Licensee Site
3. Policy and Procedures Manual. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4. Policy and Procedures Manual – Alternative Language. . . . . . . . . . . . . . . . . . .
5. Information Security Requirements
6. Code of Business Conduct
LL. Price/Payment (Chapter 5.J; § 8)
1. Currency Conversion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Currency Exchange Control. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. Payment in Local Currency
4. Annual Adjustment to Charges – Fee Increase Tied to White Collar
Occupations
5. Fee Increases Tied to United States CPI.
6. Fee Increase Tied to CPI
7. Fee Increases Tied to Indian CPI
8. Price Increases Tied to White Collar Occupations Currency and Risk .
9. Labor Rates Fixed For Duration of SOW; Overtime
10. Change in Pricing Methodology
11. Shared Cost Savings
12. Disputed Amounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13. Disputed Amounts – Alternative Language
14. Disputed Payment Issues
15. Pass-Through Charges
16. Liens and Lien Claims
17. Liens/Security Interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18. Liens – Alternative Language. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19. Change in Customer’s Credit Rating
20. Price Reduction for Late Delivery – Favors Licensee
.
21. Release and Discharge Upon Payment in Full
22 Rebate/Referral Fees for Third Party Products
23. Early Pay Discount
24 Invoicing and Payment Terms
25. Use of E-commerce for Billing and Payment
26. Electronic Purchase Orders
27. Purchase Order Required for Payment
28. Purchase Order Numbers
29. Terms Set Forth in Invoices and Purchase Orders are Non-Binding
30. Waiver of Termination Fees – Business Downturn
31. Pricing Based on Number of CPU Cores
32. Pricing Based on Allocation of Risk
33. Pricing Based on Limit of Liability
34. Pricing Assumptions – Favors Vendor
35. Material Inaccuracy of SOW - Vendor Assumes Any Cost Arising From
SOW Inaccuracy
36. Letter of Credit
37. Fidelity Bond – For Data Breach
38. Performance Bond
39. Parent Company Guarantee
MM. Quality Assurance (Chapter 7.F; § 9.13)
1. Quality Assurance and Internal Controls (§ 9.13(i))
2 . Compliance with Industry Quality Standards
NN. Remedies (Chapter 5.H; § 5.3)
1. Express Remedies
2. Remedies Not Exclusive
3 . Equitable Relief
4 . Specific Performance – (§ 5.3.4)
5. Specific Performance – Alternative Language (§ 5.3.4)
.
.
6. Set-Off Rights
7. Electronic Self Help
8. Mitigation
OO. Representations, Warranties and Covenants (Chapter 5.A.1; § 16)
1. Survival of Representations, Warranties and Covenants
2. Child Labor (§ 16)
...........................................
3. Documentation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
815
.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
International Warranty/Alliance Partner Warranty. . . . . . . . . . . . . . . . . . . . .
Software Functionality and Performance
......................
Software – General
Intellectual Property Infringement – Knowledge Limitation. . . . . . . . . . . .
Intellectual Property Infringement
Open Source Software. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Open Source Software – Alternative Language. . . . . . . . . . . . . . . . . . . . . . . . . . .
Services – General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services Covenant – Standard of Care
Services - Alternative Language
In Absence of Service Levels
Performance Standards For Delivery of Services – General Language
Software/Services
Third Party Products (Including Indemnities)
No Conflict of Interest by Licensor
Protection of Customer Good Will and Trade Name
Operating Systems Compatibility – Future Modifications Must Be
Compatible With The Releases of Operating System, Databases, etc. (§
10.H)
Performance in Hosted Environment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vendor Personnel and Performance of Services . . . . . . . . . . . . . . . . . . . . .
Unauthorized Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unauthorized Code – Alternative Language
Viruses – Neutral – Bilateral (§ 16.L). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Viruses – Licensor Oriented (§ 16.L). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Software Does Not Contain Trapdoors
Express Negligence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Use of Licensee as Alpha/Beta Site. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Obligation to Notify Other Party of Material Action. . . . . . . . . . . . . . . . . . . .
Compliance with Laws
Corporate Authority
Authorization to Perform
Authorization to Perform – Alternative Language
Covenant of Future Assurances - Mutual
Safety
Vendor Employee Immigration Status
Equal Opportunity Employer
Foreign Corrupt Practices Act
Date Compliance and Testing
ISAE 3402 / SSAE 16 - Hosting
Business Continuation
Disaster recovery/Business Continuity
Massachusetts Security Standards
Warranty Disclaimer – Software Does Not Operate Error Free
Warranty Disclaimer – Vulnerability to Hacking
Warranty Disclaimer – General
Warranty Disclaimer – Alternative Language
Warranty Disclaimer – Third Party Software, Hardware and Equipment
Performance – No Use of Public Cloud
PP. Reseller Agreements (Chapter 8.B.1)
1. Due Diligence
2. Training Services
3. Provision of Sublicense Agreements
4. Restrictions on Referral Fees
5. Third Party Referral Fees
QQ. RFP/RFI Related (Chapter 2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1. Vendor Disclaimer Related to RFP Submission. . . . . . . . . . . . . . . . . . . . . . . . .
2. Assignment of Antitrust Claim
3. RFP /RFI Confidentiality Legend
4. RFP/RFI Exceptions Language
5. RFP/RFI Response – Acceptance of Terms – Favors Customer
6. RFP/RFI Response Not Confidential
RR. Service Levels (Chapter 7.G; § 3.10.3.B)
1. Performance Standards for Delivery of Services – General Language
2. Service Levels – Severity Levels
3. Service Levels – General Terms
4. Service Levels – Defaults and Credits
5. Service Level Credit Calculation and Earn Back
6. Service Levels Measured By Percentage (“Law of Small Numbers”)
7. Service Levels Measured By Percentage (“Law of Small Numbers”) –
Alternative Language
SS. Statements of Work/Work Orders (Chapter 7.D)
1. Manner of Executing Work Orders
2. Unauthorized Work; Pre-Contract Work Authorization
TT. Subcontractor Issues (Chapter 7.A; 15.D, 19.A)
1. Appropriate Employee and Subcontractor Agreements. . . . . . . . . . . . . . . . .
2. Subcontractor Flow downs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. Cooperation with and Access by Third Parties. . . . . . . . . . . . . . . . . . . . . . . . . .
4. Subcontractors Bound By Terms of Agreement
UU. Taxes (Chapter 5.K, 19.D; § 8.6)
1. Taxes – Indefinite Work Assignment – Tax Gross Up (§ 8.6). . . . . . . . . . .
2. Taxes – Indefinite Work Assignment – Alternative Language. . . . . . . . . . .
3. Taxes – Indefinite Work Assignment – Requirement to Provide Records to
Licensee
4. Taxes – Licensee Not Responsible for Foreign Taxes
5. Taxes – Licensor Oriented. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6. Taxes – Licensor Oriented – Alternative Language
7. Taxes – Licensor Oriented – Alternative Language – Short Form
8. Taxes – Customer Oriented
9. Taxes – Customer Oriented – Alternative Language
817
10. Taxes – Comprehensive – Favors Licensor
11. Disclosure of Tax Structure
12. Sales Tax Exclusion
VV. Term and Termination (Chapter 5.G; § 5)
1. Termination - Change in Licensor’s Financial Status
2. Termination - Change of Control of Licensor
3. Termination - Changes in Law
4. Termination -Business Downturn
5. Termination Assistance – Short Form
6. Termination Assistance – Alternative Language – Comprehensive
Language
7. Termination Assistance – Alternative Language – Favors Licensee
8. Improper Termination – Conversion of Termination for Breach to
Termination for Convenience
9. Licensor Continued Performance
10. Suspension of Work for Licensee’s Convenience
11. Post Termination Data Obligations
.
.
12. Termination of Customer for Non-Payment of Undisputed Fees
13. Evergreen Term
WW. Third Party Software/Products (Chapter 5.L)
1. Third Party Content
2. Licensee Provided Software
3. Clearance for Certain Licensee Provided Software
4. Third Party Software (§ 16.P)
.
.
.
5 . Third Party Products – Disclaimer
6. Third Party Consents
XX.
Use (Chapter 4.C)
1. Changing Business Practices – Limits on Licensor’s Ability to
Restrict Future Uses of Software (§ 3.1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Construction of License Grant – Ambiguity Interpreted
Against Licensor (§ 45). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. Source Code Restrictions
4. Copyright License – Marketing Materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5. Third Party Access – Licensee Oriented
6. Third Party Access – Licensor Oriented. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7. Third Party Access – Administrative Services. . . . . . . . . . . . . . . . . . . . . . . . . . .
8. Conversion of Exclusive License to Non-Exclusive License. . . . . . . . . . . . .
9. Grant of License – Seat License
................................
10. Grant of License – Non-Production Use License
...............
11. Grant of License with Right of Sublicense
.....................
12. Grant of License– Broad Use Rights
13. Grant of License- General
14. Grant of License – General – Alternative Language
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
Grant of License - Evaluation License
Number of Users
Annual Universal Pass Codes
Software Renaming and Bundling/Unbundling
Licensor Assistance with Licensee’s Internal License Management
Transfer and Assignment of License
Re-deployment and Transfer of Software
Movement of Software
Software Product Testing – Non-production Copies
Continual Improvement of Technology
International Version of Software
Scalability and Testing
Development of Competing Products
29.
30.
31.
32.
33.
Creation of Derivative Works – International
Evaluation and Trial Licenses
Production License Terms
Vendor Use of Customer Software and Hardware
Prohibition on Use of Customer Software without Customer Consent
Use of Vendor Tools and Software - Establishment of Knowledge
Repository
34. LPAR Licensing
819
A. Acceptance (Chapter 5.D; § 7)
1. Acceptance – Deliverables
Licensee shall have thirty (30) days after delivery of a Deliverable to perform
acceptance tests to confirm that the Deliverable conforms to the Acceptance Criteria. If
the period or procedures for acceptance testing are not set forth in Exhibit __ Licensee
shall provide written notice to Licensor before the end of the thirty (30) day evaluation
period if the Deliverables do not conform to the Acceptance Criteria. If Licensee does
not provide such notice, the Deliverables shall not be deemed accepted until and upon
the date of payment-infill or first productive use, whichever comes later; after which,
the Deliverables shall be deemed accepted. Such notice shall describe the nature of the
nonconformance. If Licensee gives timely notice that the Deliverable or Licensee’s
performance is nonconforming, Licensee shall, at no additional cost to Licensee, make
and submit to Licensee changes that may reasonably be required to correct the
deficiencies described in the notice within fifteen (15) days following receipt of each
notice. Unless a different period or procedure is specified in the Statement of Work,
Licensee shall have thirty (30) days from receipt of the corrected Deliverable to
determine if the Deliverable conforms to the Acceptance Criteria, and the corrected
Deliverable shall be deemed accepted by Licensee, unless it provides written notice to
Licensor before the end of the thirty (30) day re-evaluation period that the Deliverable
still does not conform to the Acceptance Criteria. In the event the corrected
Deliverable is still nonconforming, at the sole option of Licensee, Licensee may then
terminate the Statement of Work by written notice to Licensor, or elect that the
foregoing process continue for one or more additional thirty (30) day intervals until it
either terminates the Statement of Work or the Deliverable is accepted as provided
herein. Upon acceptance of a Deliverable, Licensee shall promptly pay the designated
balance due, if any, under the applicable Statement of Work. The time periods
specified herein for the performance of acceptance tests and correction of deficiencies
may be modified in the applicable Statement of Work.
2. Acceptance of Services and Deliverables for
Multi-Phase Projects
1.1 Acceptance of Services. To the extent a Statement of Work provides for
Services:
(a) Preliminary Acceptance. Unless otherwise specified in a Statement
of Work, Licensee shall have fifteen (15) business days from the completion of each
phase or major milestone to test the Services relating thereto in order to determine
whether such Services meet the standards and/or accomplish the objectives or other
criteria for such Services as established in the applicable Statement of Work (“Services Preliminary Acceptance Period”). If Licensee does not give notice of Acceptance or non-Acceptance of the Service within the Services Preliminary Acceptance Period, the Service shall be deemed to have been accepted. If Licensee
gives notice of non-Acceptance: (i) Licensee shall describe the reasons for nonAcceptance to Licensor in reasonable detail; (ii) Licensor shall have five (5) business
days (or such longer period of time as shall be reasonable under the circumstances) to
re-perform the deficient Services until the applicable standards, objectives, and/or
other criteria are met to Licensee’s reasonable satisfaction; and (iii) a ten (10) calendar day re-testing preliminary acceptance period shall begin.
813
(b) Final Acceptance; Multi-Phase Projects. Upon completion of all
related Services for a particular project (including upon completion of an intermediate
phase of a project or entire project, as specified in a Statement of Work), and unless a
different time frame is provided in the applicable Statement of Work, Licensee shall have
fifteen (15) business days after completed performance of the final phase of Services to
test whether they meet the specifications set forth in the Statement of Work
(“Specifications”), in all material respects (the “Services Final Acceptance Period”),
unless a different time frame is specified in a Statement of Work. The Statement of
Work shall identify any applicable preliminary and final acceptance milestones, deadlines
or other criteria for acceptance. The Services Final Acceptance Period shall not begin
until any related Documentation, if any, has been delivered to Licensee. If Licensee does
not give notice of Acceptance or non-Acceptance of the Services within the Services
Final Acceptance Period, the Services shall be deemed to have been accepted as of the
last date of the Services Final Acceptance Period. If Licensee gives notice of nonAcceptance: (i) Licensee shall describe the reasons for non-Acceptance to Licensor in
reasonable detail; (ii) Licensor shall have fourteen (14) calendar days (or such longer
period of time as shall be reasonable under the circumstances) to re-perform the deficient
Services at no additional cost to Licensee until the deficiency is corrected; and (iii) the
Services Final Acceptance Period shall begin again. In the event Licensor fails to reperform a rejected Service to conform to the Specifications, as determined in Licensee’s
reasonable discretion, Licensee may terminate the applicable Statement of Work
immediately and receive from Licensor a refund of the fees previously paid to Licensor
for the rejected Services on a pro rata basis commensurate with the deficiency in
functionality that is the basis for rejection. If Services are deemed unacceptable despite
efforts to correct deficiencies pursuant to the foregoing procedures, and the Parties fail to
resolve the matter to their reasonable satisfaction, then either party may submit the matter
for dispute resolution pursuant to the procedures provided for in Article ___, (Dispute
Resolution). If the Parties intend that all Services and/or Deliverables performed and
provided in multiple phases under a Statement of Work are to be subject to final
Acceptance testing under this paragraph, because such interim phases culminate in an
integrated deployment or other solution, notwithstanding any preliminary acceptance that
may have been determined during an intermediate phase of the project, then the Parties
shall so explicitly provide in the Statement of Work. To the extent a project involves
Deliverables integrated with Services, then the foregoing testing, rejection and refund
procedures and remedies shall include all related Deliverables.
1.2 Acceptance of Deliverables. To the extent a Statement of Work provides
for Deliverables, the Statement of Work shall identify whether the Deliverable will
be subject to Licensee review (a “Review Deliverable”) or will be subject to Licensee
testing (a “Test Deliverable”). Any reference to a “Deliverable” herein shall include
reference to a Test Deliverable or a Review Deliverable, as the context requires.
(a) Preliminary Acceptance. Unless otherwise specified in the applicable Statement of Work, Licensee shall have fifteen (15) calendar days after receipt to
review each Review Deliverable or thirty (30) calendar days to test each Test Deliverable (or portions thereof if such Deliverable is to be delivered in portions as set
forth in the applicable Statement of Work) to determine whether it meets the Specifications (the “Preliminary Acceptance Period”). This Preliminary Acceptance Period
shall not begin until the Documentation has been delivered to Licensee and the Deliverables are fully installed and operational as determined by the Parties. If Licensee
does not give notice of Acceptance or non-Acceptance of the Deliverable within the
Preliminary Acceptance Period, the Deliverable shall be deemed to have been accepted. If Licensee gives notice of non-Acceptance, (i) Licensee shall describe the
reasons for non-Acceptance to Licensor in reasonable detail; (ii) Licensor shall have
five (5) business days (or such longer period of time as shall be reasonable under the
circumstances) to correct the Deliverable; and (iii) the Preliminary Acceptance Period shall begin again.
(b) Final Acceptance; Multi-Phase Projects. Upon final delivery of all
related Deliverables, (including upon completion of an intermediate phase of a project
or entire project, as specified in a Statement of Work), Licensee shall have ten (10)
calendar days after receipt to review the Review Deliverables or thirty (30) calendar
days to test the Test Deliverables to determine whether they meet the Specifications
(the “Deliverables Final Acceptance Period”), unless a different time frame is specified
in a Statement of Work. This Deliverables Final Acceptance Period shall not begin
until the Documentation has been delivered to Licensee and the Deliverables are fully
installed and operational as determined by the Parties. If Licensee does not give notice
of Acceptance or non-Acceptance of the Deliverables within the Deliverables Final
Acceptance Period, the Deliverables shall be deemed to have been accepted as of the
last date of the Deliverables Final Acceptance Period. If Licensee gives notice of nonAcceptance, (i) Licensee shall describe the reasons for non-Acceptance to Licensor in
reasonable detail; (ii) Licensor shall have fourteen (14) calendar days (or such longer
period of time as shall be reasonable under the circumstances) to correct the
Deliverables; and (iii) the Deliverables Final Acceptance Period shall begin again. In
the event Licensor fails to modify a rejected Deliverable to conform to the
Specifications contained in the applicable Statement of Work, as determined in
Licensee’s reasonable discretion, Licensee may terminate the applicable Statement of
Work immediately and receive from Licensor a refund of the fees previously paid to
Licensor for the rejected Deliverable on a pro rata basis commensurate with the
deficiency in functionality that is the basis for rejection, or if the Deliverable as a whole
does not meet Licensee’s requirements, then a refund of all fees paid to Licensor for
such deliverable. Except as otherwise agreed in advance in writing by Licensor or
following any refund under this Section ____, any continuing use by Licensee of the
Deliverables for the purposes intended shall constitute deemed acceptance by
Customer. If Deliverables are deemed unacceptable and the Parties fail to resolve the
matter to their reasonable satisfaction, then either party may submit the matter for
dispute resolution pursuant to the procedures provided for in Article ___, (Dispute
Resolution). If the Parties intend that all Services and/or Deliverables performed and
provided in multiple phases under a Statement of Work are to be subject to final
Acceptance testing under this paragraph, because such interim phases culminate in an
integrated deployment or other solution, notwithstanding any preliminary acceptance
that may have been determined during an intermediate phase of the project, then the
Parties shall so explicitly provide in the Statement of Work. To the extent a project
involves Deliverables integrated with Services, then the foregoing testing, rejection and
refund procedures and remedies shall include all related Services.
3.
Acceptance/Rejection of Work Product
1.1
Acceptance Testing Period. Customer shall have a thirty (30) day
acceptance testing period (“Acceptance Testing Period”) commencing on
the date each item of Work Product is successfully installed to test the Work
Product to determine whether it operates properly with Customer’s equipment
and operating environment and in accordance with all warranties and
specifications set forth in this Agreement, in the applicable SOW and in any
815
associated documentation (“Acceptance Criteria”). During the Acceptance
Testing Period, Customer shall have the right to use the Work Product in
order to perform tests on and otherwise evaluate the Work Product. If, in
Customer’s sole discretion, an item of Work Product does not meet the
Acceptance Criteria, and Vendor, within 30 days from receipt of written
notice from Customer detailing such failure, does not correct any and all
deficiencies identified by Customer to the extent necessary for the Work
Product to meet the Acceptance Criteria, then Customer, at its sole option,
may (a) allow Vendor additional time to correct the deficiencies or (b)
terminate this Agreement and/or the applicable SOW, in whole or in part, and
return or destroy the Work Product and related documentation, in which case
Vendor shall promptly refund to Customer all fees paid by Customer for such
Work Product and all related Services and Customer shall have no further
obligations to Vendor with respect to such Work Product or Services. The
Acceptance Testing Period will be suspended during periods when Vendor is
attempting to correct a deficiency, and Customer will have at least ten days to
conduct re-testing following each delivery of a correction to Customer.
1.2 Acceptance Date. Customer will be deemed to have accepted the Work
Product on the earlier of: (a) the close of business at the site where the Work
Product is being tested on the last day of the Acceptance Testing Period
(including any time for re-testing), or if such day falls on a Saturday, Sunday
or holiday on which such site is not open for regular business, on the next
business day on which such site is open for regular business, if Customer has
not sent notice to Vendor prior to such date that Customer has not accepted
the Work Product; or (b) the date an authorized representative of Customer
sends written notice to Vendor that it has accepted the Work Product (the
“Acceptance Date”). In no event will use of the Work Product by Customer,
including use in Customer’s production environment, during the Acceptance
Testing Period or otherwise, be deemed acceptance of the Work Product prior
to the Acceptance Date.
4.
Milestones and Acceptance
1.1
Each SOW shall list the milestones relating to Provider’s obligations
under such SOW. The SOW also shall provide, for each such milestone, the
completion date for such milestone (each, a “Milestone Date”). Unless
otherwise set forth in the applicable SOW, payments under each SOW shall
be milestone-based with payments tied to milestone completion (“Key
Milestone Payments”). Unless otherwise set forth in the applicable SOW,
the SOW shall specify any credits payable to Customer if a Milestone Date is
not met (“Key Milestone Credits”). All milestones associated with Key
Milestone Payments or Key Milestone Credits shall be considered “Key
Milestones.”
1.2
If Provider fails to achieve any Key Milestone by the Milestone Date,
then (a) Customer shall not pay the Key Milestone Payment until such time as
the Key Milestone is completed (unless Customer terminates prior to the
completion of such Key Milestone) and (b) Provider shall pay to Customer the
applicable Key Milestone Credit(s). Customer’s rights to Key Milestone
Credits and nonpayment of Key Milestone Payments shall not limit
Customer’s right to recover other damages incurred by Customer as a result of
such failure and Customer’s right to pursue other rights and remedies
including termination rights if applicable.
1.3
If Provider fails to, or Provider shall not be able to, successfully
complete a milestone by the Milestone Date set forth in the SOW, and such
milestone is a Key Milestone, Customer may, upon notice to Provider,
terminate the SOW in whole or in part.
B. Access to Computer Network
1. Access to Licensee’s Network – Neutral
Should it be necessary for Licensor to access and/or use Licensee’s computer or
network, either by remote means or in-person, it may do so provided that: (i) such
need is specifically stated in the applicable SOW, (ii) access is only by Licensor’s
employees, and (iii) each of such personnel will be issued and always use a unique
User ID and password. Access to the Licensee Network by Licensor shall only be
upon the express written permission of Licensee’s Chief Privacy and Data Security
Administrator. Furthermore, Licensor agrees to (i) cause each such personnel to first
sign Licensee’s Network Usage Policy, (ii) ensure their compliance with appropriate
policies and procedures of Licensee, and (iii) promptly report to Licensee any privacy
or security incidents.
2. Access to Licensee’s Network – Licensee Oriented
Licensor will not access or attempt to access any part of Licensee’s computer system,
database or information technology service without the prior written consent of the
applicable Party (which may be provided via e-mail). Where access is required for
performance of Services, Licensor will seek the minimum access required to
complete the Services. Licensor will comply with all Licensee computer system
access requirements, whether such access is on-site or off-site. Licensor will ensure
that each of its personnel having such access: (a) will be assigned a separate log-in
ID by Licensee and will use only that ID when logging onto Licensee’s computer
system; (b) will log-off Licensee’s computer system immediately upon completion of
817
each session of service; (c) will not knowingly allow other individuals to log-in and
access Licensee’s computer system using the individual ID; and (d) will treat the ID
and all other information that enables such access as Confidential Information.
Licensor will immediately notify Licensee, as applicable, upon termination or
reassignment of personnel with access to Licensee computer system so that Licensee
may change access codes for such personnel and take other necessary preventive
measures to prevent unauthorized access. If Licensee revises the requirements for
access to its computer system, Licensee will notify Licensor in writing of the change
or additional requirements and Licensor will comply with such new requirements as a
prerequisite to further access. Licensor will notify all of its personnel who have
access to Licensee’s computer system of Licensee’s policies regarding computer
access. Licensor will be responsible for compliance with such policies by all
Licensor personnel performing Services, wherever situated. All Licensor laptop
computers and other equipment or devices will have current operating system
patches, current virus definitions and weekly updates and scans. Licensor will take
commercially reasonable measures to ensure its personnel, computers, equipment and
devices do not introduce a virus, harmful code or disabling devices that may damage,
interfere with or otherwise adversely affect Licensee’s computer, database or system.
C. Affiliates (Chapter 4.A.3)
1. Affiliate Transactions - Customer Liable for Affiliate
Obligations
The benefits, obligations and privileges of the Agreement shall extend to all
entities that constitute “Customer,” including all Affiliates, even though each
such entity is not specifically named as a party to this Agreement. As such,
Customer and its successors and assigns will be and remain liable for all of the
obligations of all entities that constitute “Customer” under the Agreement,
including all Affiliates, and Vendor will look to Customer and its successors
and assigns for enforcement of Vendor’s rights under the Agreement. For
clarity, this Agreement does not create joint liability among Customer
Affiliates to Vendor, unless such Affiliate commits to such liability in writing
signed by its authorized representative. For purposes of the Agreement,
“Affiliate” means any entity controlled, directly or indirectly, by, under
common control with, or controlling Customer, and specifically includes
without limitation, subsidiaries, partnerships, joint ventures, and other entities
or operations for which Customer has operational or management control. For
the purposes of this definition, “control” means the power, direct or indirect,
to direct, or cause the direction of the management and policies of such entity
whether by contract or otherwise and, in any event and without limitation of
the previous sentence, owning the majority of the voting stock, shares,
securities or assets of another entity.
2. Affiliate Transactions – Parties Not Responsible for Liabilities
of Affiliates.
(a) If Vendor intends to provide any Software, Hardware, Services or Systems
to a Vendor Affiliate hereunder, the transaction shall be conducted by the
Vendor Affiliate and the Vendor Affiliate in the local country (a “Local Purchase”). The Local Purchase shall be subject to the terms and conditions of
the main body of this Agreement, as supplemented by Exhibit A hereto (
the “Local Participation Addendum”), which contains supplemental provisions necessary for conducting the Local Transaction in compliance with the
local laws, rules, regulations and other applicable country mandates and any
related business conditions mandated by such laws, rules and regulations
(collectively, the “Local Law”) in that country.
(b) The Parties agree that the Local Participation Addendum includes only
those modifications that were deemed required by the parties at the time of
execution of this Agreement. If either Party’s Affiliate subsequently determines that additional modifications are needed as a condition to proceeding
with a Local Purchase, the parties shall incorporate such additional terms and
conditions into the text of Exhibit A and shall execute the modified Local
Participation Addendum in the form agreed (each, a “Custom LPA”). Unless
and until a Custom LPA is executed by Affiliate parties, Exhibit A shall be
deemed binding on any Vendor Affiliates and Vendor Affiliates doing business hereunder, in the form attached hereto and without the need for additional signature.
(c) If either Party’s Affiliate fails to perform its obligations under the
applicable Local Participation Addendum (including payment obligations) and
such failure cannot be resolved at the Affiliate level, the other Party’s Affiliate
shall be entitled to raise such failure to Vendor and Vendor, for resolution in
accordance with Section ____ (“Dispute Resolution”) of this Agreement.
Notwithstanding the preceding sentence, it is agreed and acknowledged by the
Parties and all Affiliates doing business hereunder that liability with respect to
any Local Purchase exists at the Affiliate level, and in no way shall Vendor be
deemed a guarantor of its Affiliates’ obligations hereunder.
3.
Affiliate Transactions – Parties Not Responsible for
Liabilities of Affiliates – Alternative Language
819
1.1 “Affiliate(s)” shall mean any legal entity that, directly or indirectly, (i) is
owned and/or controlled by, (ii) owns and/or controls; or (iii) is under common ownership and/or control with a Party.
1.2 “Buyer(s)” shall mean Parent and/or each Parent Affiliate(s) ordering and
receiving Services pursuant to the terms and conditions of this Agreement.
Any Purchase Order placed by a Buyer under this Agreement will be a contractual arrangement between the applicable Buyer and Vendor, and such Purchase Order shall be an agreement by the Buyer to be bound by the terms and
conditions of this Agreement. Vendor will look only to the applicable Buyer
for performance of the applicable Buyer’s obligations under this Agreement
and such Purchase Order. For clarification, neither Parent nor another Buyer
will have liability for Purchase Orders placed by any other Buyer, nor will any
other Buyer have any liability for the performance or non-performance or otherwise by Parent or another specific Buyer or any liability for damages resulting from any acts or omissions by Parent or another Buyer. The applicable
Buyer placing the Purchase Order shall be fully responsible for payment, acceptance, and all other aspects of the procurement of the Services as well as
compliance with the terms and conditions of this Agreement as it relates to
such Services purchased and delivered to such Buyer.
4. Affiliate Transactions – Addition of Affiliates (§§ 1.2,
1.2.A)
Additional participants may become Parties to this Agreement by executing a
joinder counterpart signature page hereto which is acknowledged in writing by
Parent and may contain attachments thereto relating to such Affiliate to the
extent agreed to by Parent. Thereafter, Exhibit A (List of Participating
Affiliates) will be amended to include such new participant.
D. Arbitration (Chapter 23.D; § 30) (See also
Section T.)
1. Singapore Arbitration Language
Dispute Resolution
Any dispute arising in connection with this Agreement and which cannot be settled
by good faith negotiations between the parties or their nominated representatives
shall be submitted to binding arbitration in accordance with the Rules for the Conduct
of International Arbitrations for the time being of the Singapore International Arbitration Centre and governed by the International Arbitration Act. During such arbitration, both parties may be legally represented. Three Arbitrators will be nominated,
one each by Licensor and the Licensee, with the third, to be the President of the arbitration tribunal, to be nominated by the Singapore International Arbitration Centre or
as otherwise mutually agreed. The arbitration shall be conducted in Singapore in the
English language.
2. Singapore Arbitration Language – Alternative
Language
1.1 In the event of any dispute arising in connection with this Agreement, the
parties shall comply with the following dispute resolution process:
(a) The party claiming that a dispute has arisen shall give written notice
(“Dispute Notice”) to the other party stating details of the matter in
dispute and requiring that the meeting be resolved by a meeting between the parties;
(b) The parties shall within fourteen (14) days from the serving of the
Dispute Notice, use reasonable efforts and seek in good faith to resolve
the dispute, including but not limited to, having a meeting between the
senior management of each party.
(c) If the parties cannot resolve the dispute in accordance with Clause
1.1(b) within fourteen (14) days from the serving of the Dispute Notice,
the parties may, by mutual agreement:
(i) extend the period for parties to privately negotiate a resolution of the
dispute; or
(ii) refer the dispute to mediation by the Singapore Mediation
Centre.
1.2 In the absence of agreement under clause 1.1(c) or in the event mediation
by the Singapore Mediation Centre is unsuccessful, the dispute shall be forthwith
submitted to and finally settled by arbitration in Singapore in accordance with the
arbitration rules of the Singapore International Arbitration Centre for the time being
in force. The parties may be represented by lawyers in the arbitration. Unless otherwise agreed between parties, the tribunal shall consists of one (1) arbitrator to be mutually agreed and appointed by parties and failing such agreement, to be appointed by
the Chairman of the Singapore International Arbitration Centre. Arbitration proceedings shall be conducted wholly in the English language.
1.3 Except where clearly prevented by the area in dispute, both parties agree to
continue performing their respective obligations under this Agreement (including the
payment of all fees) while the dispute is being resolved unless and until such obligations are terminated or expire in accordance with the provisions of this Agreement.
1.4.1 Nothing in this Agreement prevents either party at any time seeking injunctive or other equitable relief in order to protect its rights.
COMMENT: Singapore is a leading global financial and commercial
center. The Singapore International Arbitration Centre is well respected
and the location of choice for dispute resolution throughout the Asia region. Singapore has also adopted the UNCITRAL Model Law as the basis
for regulating international arbitration.
3. Vietnamese Arbitration Language
821
1.1 In the event of any dispute arising in connection with this Agreement, the
parties shall comply with the following dispute resolution process:
(a) The party claiming that a dispute has arisen shall give written notice
(“Dispute Notice”) to the other party stating details of the matter in
dispute and requiring that the meeting be resolved by a meeting between the parties;
(b) The parties shall within sixty (60) days from the serving of the Dispute Notice, use reasonable efforts and seek in good faith to resolve
the dispute, including but not limited to, having a meeting between
the senior management of each party.
(c) If the parties cannot resolve the dispute in accordance with Clause
1.1(b) within sixty (60) days from the serving of the Dispute Notice,
the parties may, by mutual agreement, extend the period for parties to
privately negotiate a resolution of the dispute.
1.2
In the absence of agreement under clause 1.1(c), the dispute shall be forthwith submitted to and finally settled by arbitration in Ho Chi Minh City, Vietnam in accordance with the arbitration rules of the Vietnam International Arbitration Centre for
the time being in force. The parties may be represented by lawyers in the arbitration.
Unless otherwise agreed between parties, the tribunal shall consist of one (1) arbitrator
to be nominated by each party, with the third arbitrator, if not agreed by the parties, to be
appointed by the Chairman of the Vietnam International Arbitration Centre. Arbitration
proceedings shall be conducted wholly in the English language.
1.3 Except where clearly prevented by the area in dispute, both parties agree to
continue performing their respective obligations under this Agreement (including the
payment of all fees) while the dispute is being resolved unless and until such obligations are terminated or expire in accordance with the provisions of this Agreement.
1.4 Nothing in this Agreement prevents either party at any time seeking injunctive or other equitable relief in order to protect its rights.
COMMENT: Choice of law is not always a simple decision. Many
licensors do not take the time to identify which provisions of the licensor’s
contract may be unenforceable under the laws of a particular country, in
this case Vietnam. A party cannot assume that a clearly written provision
will be interpreted in a logical way by a local court as local law may
override such provision.
A party should not assume a country’s arbitration system will be applied
fairly to a foreign entity. Vietnam has chosen not to adopt the UNCITRAL
Model Law governing arbitration and the enforcement of arbitral decisions. As
such, negotiating arbitration and governing law provisions will likely involve an
element of “forum shopping.” The licensee may insist on selecting local laws to
obtain a “home court” advantage in addition to making it more costly and
inconvenient for the licensor to bring an action in Vietnam.
4.
Arbitration and Enforcement – Procedures
If any disagreement arises between the Parties concerning any matters set
forth in this Agreement, related to this Agreement, or arising between the
Parties as a result of this Agreement (a “Dispute”) exceeds $________, and
the Parties are unable to resolve the Dispute by negotiation, then the Dispute
may only be settled by mandatory, binding arbitration in accordance with this
Section __, and judgment on the award rendered in such arbitration may be
entered in any court having jurisdiction. Notwithstanding the foregoing
provision, however, either Party [or the Party providing confidential
information / getting the benefit of the non-compete] may seek provisional
injunctive or other equitable relief from any court of competent jurisdiction to
preserve the Party’s rights under Sections __[related to confidentiality and
non-compete] of this Agreement, pending arbitration, and such court may
grant such relief without requiring the Party to post bond or to show that an
adequate remedy is unavailable at law. The procedures for such arbitration
are as follows.
1.1 Initiation of Arbitration / Selection of the Arbitrator
(a) Arbitration proceedings are initiated when a Party (the “Initiating Party”)
serves a written notice of arbitration on the other Party, which notice shall
include a description of the Dispute and the name of the arbitrator appointed
by the Initiating Party, who shall be independent of the Initiating Party.
(b) Within ten (10) days after the date that such notice is given, the Party to
whom such notice is given (the “Receiving Party”) shall either agree with the
arbitrator appointed by the Initiating Party or shall similarly appoint an
arbitrator, who shall be independent of the Receiving Party, by giving like
written notice to the Initiating Party.
(c) If the Receiving Party agrees with the arbitrator appointed by the Initiating
Party, then such arbitrator shall act as the sole arbitrator.
(d) If the Receiving Party fails to agree with the arbitrator appointed by the
Initiating Party and fails to make an appointment within the ten-day period,
then the arbitrator appointed by the Initiating Party shall be empowered to act
as the sole arbitrator and to render a binding decision concerning the Dispute.
(e) If the Parties duly appoint two arbitrators, then the two arbitrators so
appointed shall, within ten (10) days after the appointment of the latter of
them to be appointed, select a third arbitrator, who shall be independent of
both Parties. If the two said arbitrators are unable, within said ten-day period,
to agree on the selection of said third arbitrator, then the arbitrator shall be
chosen under American Arbitration Association (“AAA”) procedures from its
panels of arbitrators with information technology commercial experience.
The selection of such third arbitrator pursuant to the procedures of the AAA
shall be binding on the Parties.
823
1.2 Administrative Matters Concerning the Arbitration.
(a) The arbitrator selected in accordance with the procedure set forth in
Section 1.1 of this Agreement (the “Arbitrator”) shall set a time for the first
hearing of the Dispute, which shall be within sixty (60) days following the
date the Arbitrator is finally appointed. The final decision of the Arbitrator
shall be rendered in writing to the Parties not later than sixty (60) days after
the last hearing date.
(b) The place of any hearing that is part of the arbitration shall be [city, state],
or at such other place as agreed to by the Parties.
(c) The existence of the arbitration proceedings, the evidence presented in any
such proceedings, and the decision of the Arbitrator shall be deemed to be
confidential information, which the Parties shall keep confidential and refrain
from disclosing unless required to do so by court order.
1.3 Limited Discovery / Responsibilities of the Parties.
[CONSIDER WHETHER CLIENT HAS AN
DISCOVERY. IF SO, MODIFY OR DELETE.]
INTEREST
IN
(a) The discovery available to the Parties, unless modified by the Arbitrator,
shall be limited to that set forth in this Section 1.3. Each Party shall have the
right to receive from the other Party answers to up to thirty (30) written interrogatories and thirty (30) requests to produce. Such interrogatories and requests to produce must be submitted at least thirty-five (35) days prior to the
time the Arbitrator set for the first hearing. Answers to such interrogatories
and requests to produce are due to the Party requesting them at least five (5)
days prior to the time the Arbitrator set for the first hearing. The Arbitrator
may, but is not required to, construe a Party’s failure to provide an answer to
an interrogatory or a response to a request to produce by such time as an admission against the interest of such Party with regard to the substance of such
interrogatory or request to produce.
(b) The Parties shall use all reasonable efforts to facilitate the arbitration.
Without limiting the generality of the foregoing, each Party shall make
available to the other Party and to the Arbitrator, as the Arbitrator shall
determine to be relevant to the Dispute: (i) for inspection and extraction, all
documents, books, and records and (ii) at any hearing, personnel under the
Party’s control. Each Party shall agree to conduct arbitration hearings to the
greatest extent possible on successive, contiguous days.
(c) Nothing in this Section 1 shall waive or preclude any objection to
production or testimony that is based upon any privilege recognized by the
law of the State of _______.
1.4 Procedural Rules / Governing Law. Except as specified in this Section
1, the arbitration shall be conducted in accordance with the Expedited
Procedures under AAA Rules then prevailing. The Arbitrator shall have no
authority to decide any Dispute ex aequo et bono, but shall be bound by the
terms of this Agreement and shall strictly apply the governing law chosen by
the Parties.
1.5 Form of Decision. The Arbitrator shall have no power or authority to
award punitive damages. The award shall be in writing, shall be signed by the
Arbitrator, and shall include findings of fact and a statement regarding the
reasons for the disposition of any Dispute.
1.6 Finality of the Decision. The decision of the Arbitrator shall be final and
binding on the Parties and shall be enforceable in any court of competent
jurisdiction. The Parties specifically disclaim the applicability of the U.N.
Convention on Contracts for the International Sale of Goods.
1.7 Fees and Expenses. Each Party shall bear its own fees and expenses.
The fees and expenses of the Arbitrator shall be divided equally between the
Parties. Any fees and expenses charged by AAA shall be divided equally
between the Parties. Notwithstanding the foregoing, however, the Arbitrator
may award costs and attorneys’ fees to the prevailing Party as part of the
Arbitrator’s award on the merits, if the Arbitrator deems such an award
appropriate in light of all of the circumstances.
1.8 Court Action. If either Party is forced to resort to an action at law or
in equity to enforce or interpret the terms of this Agreement, or to enforce
the decision of the Arbitrator, then the Party prevailing shall be
reimbursed by the other Party for all reasonable costs, attorneys’ fees,
and expenses that the Party prevailing made or incurred in enforcing the
covenants and agreements of this Agreement or the decision of the
Arbitrator. This award of costs, fees, and expenses is in addition to any
other relief to which the Party prevailing is entitled.
825
5.
Confidentiality of Dispute
(a) The Parties agree that any Dispute and any negotiations, mediation and
arbitration proceedings between the Parties in relation to any Dispute shall
be confidential and will not be disclosed to any third party.
(b)The Parties further agree that any information, documents or materials
produced for the purposes of, or used in, negotiations, mediation or
arbitration of any Dispute shall be confidential and will not be disclosed to
any third party.
(c) Without prejudice to the foregoing, the Parties agree that disclosure
may be made:
(1) In order to enforce any of the provisions of this Contract
including without limitation, the Parties agreement to arbitrate,
any arbitration order or award and any court judgment.
(2) To the auditors, legal advisers, insurers and Affiliates of
that Party to whom the confidentiality obligations set out in this
Contract shall extend.
(3) Where that Party is under a legal or regulatory obligation to
make such disclosure, but limited to the extent of that legal obligation.
(4) With the prior written consent of the other Party.
(d) The provisions of Sub-sections (a), (b) and (c) shall supersede the
terms and conditions of Section __ (“Confidential Information").
(e) The Parties agree to submit to the jurisdiction of the courts of
[city, state], for the purposes of any proceedings to enforce this
Section ___ and shall prevent any information, documents or
materials belonging to a Party from being used or disclosed by
that Party for any purpose.
E. Assignment (Chapter 4.G; § 21).
1.
Divestiture/Assignment (§ 42)
Where permitted by law, the rights of this Agreement may be assigned or not assigned,
at the election of Licensee, in whole or in part, to a successor of Licensee’s business
and/or to any affiliates of Licensee, including any divested entity providing service to
Licensee and its affiliates and any entity, that is acquired by Licensee during the term
of this Agreement and including, for a period of 12 months after any divestiture, any
entity that is divested by Licensee during the term of this Agreement.
Should Licensee, from time to time, sell or otherwise transfer the assets or equity
ownership of any Licensee division, affiliate or business unit (all jointly referred to as
“Business Unit”), and as part of such transfer Buyer agrees to provide transitional
services to the Business Unit in connection with the transfer of such Business Unit,
including the use of the Products and/or Services by Licensor for such Business
Unit, then Buyer shall have the right to do so for a period of 12 months after the
completion of any such transfer with no additional payment to Licensor. If Buyer,
as part of any agreement with such Business Unit, is required to provide such services
for a period beyond 12 months, then Buyer shall have the right to provide such services
for up to an additional six months period subject to a mutually agreed upon payment
to Licensor.
Licensee shall provide Licensor with thirty (30) days written notice of its intent
to assign this Agreement. Licensor shall seek the written consent of Buyer prior to
any assignment of this Agreement.
COMMENT: The licensor should carefully consider whether to
accept this language as it may significantly increase the cost to the
licensor. From the licensor’s perspective, the licensor should agree to
provide such services at a fixed hourly rate.
2. Assignments Void
Any attempted assignment in contravention of this Section ___ shall be void ab initio. A Change of Control with respect to a party shall constitute an assignment requiring prior written consent.
F. Audit (Chapter 7.F; §§ 38.J, 9.13(i))
1.
ISAE 3402/SSAE 16
Licensor will provide Customer with an ISAE 3402 / SSAE 16 Audit (or
equivalent audit) report for Licensor’s [insert applicable data center].
Licensor’s ISAE 3402 / SSAE 16 reports will cover the period of October 1 of
the prior year through September 30 of the year in which the report is issued.
If Customer desires Licensor to perform a separate, additional ISAE 3402 /
SSAE 16 Audit in a given year to meet specific Customer requirements,
Vendor will perform such ISAE 3402 / SSAE 16 Audit based on such
requirements; provided, however, that such activity shall be treated as a
separately chargeable project.
827
2.
SSAE 16 Audit – Neutral
Licensor will provide Licensee and its representatives with such information
and assistance as is reasonably requested to perform the audits, but the parties will arrange any assistance so it does not interfere with Licensor’s performance. Any third parties performing an audit under this subsection must
execute a nondisclosure agreement reasonably satisfactory to Licensor.
2.1 Statement on Standards for Attestation Engagements No. 16, Reporting on Controls at a Service Organization SSAE 16 Report. In addition to
granting Licensee access in a fiscal period to conduct an operational audit regarding internal controls on financial reporting, Licensor will provide Licensee, upon request, an auditor’s report concerning the Licensor’s activities issued under SSAE 16. The SSAE 16: (i) must be prepared by a certified public accountant registered with the Public Licensor Accounting Oversight
Board; (ii) cover a fixed time period and scope; (iii) results must be sufficient
to evidence a favorable assessment of Licensor’s internal controls as attested
to by Licensor auditors; and (iv) must be reasonably acceptable to Licensee.
The SSAE 16 report will be provided solely at the expense of Licensor.
2.2 Results of Operational Audit or Security Assessment. If any operational audit or security assessment reveals an inadequacy or insufficiency of Licensor’s security, confidentiality, privacy practices and standards, disaster
recovery capabilities, or fail-over planning or ineffectiveness of internal controls, Licensor will promptly develop and implement a corrective action plan
reasonably satisfactory to Licensee. The cost of developing and implementing this plan will be Licensor’s sole responsibility. Licensee may perform
one or more additional follow up operational audits or security assessments
to verify performance under the corrective action plan without regard to the
once-per-year limitation.
3.
Security Audits – Alternative to SSAE 16 – Favors Vendor
[THIS SECTION IS MEANT TO TAKE THE PLACE OF SSAE 16
PROVISIONS (SUCH AS WHEN A HOSTING FACILITY IS NOT
AUDITED UNDER THE SSAE 16 STANDARDS).]
(a) Where Licensor utilizes data centers that do not currently apply SSAE 16
standards, Licensor will take all commercially reasonable efforts to ensure
that such facilities allow Licensee to perform an annual on-site security audit
of the data center and areas that process Licensee information, as specified in
this Section. Once such identified data centers achieve SSAE 16 status, annual
on-site security audits will no longer be required.
(b) During the term of the Agreement, at any time upon at least five (5) business days notice, Licensee may perform information security reviews of any
systems, equipment, software, network(s), or facilities used by Licensor and
its permitted subcontractors and contractors to provide the services hereunder
(“Reviews”). Reviews of environments or systems may include without limitation physical inspection, process reviews, evidence of external and internal
vulnerability scans performed by or on behalf of Licensor, evidence of code
reviews, and evidence of system configuration reviews. The Reviews may be
conducted, at Licensee’s discretion and at Licensee’s expense, by Licensee or
its designee(s). The Reviews may also include the performance by Licensee or
its designee of announced or unannounced penetration, vulnerability assessments, and security tests, as it relates to the receipt, maintenance, use, storage,
and retention of Licensee’s information (e.g., Hosted Data) in which case Licensee shall provide contemporaneous notice to Licensor. Licensor shall provide all necessary cooperation to Licensee, and ensure that its contractors also
so cooperate, in the performance of any such Reviews without additional
charge to Licensee. To the extent the Review is performed or supported by
Licensor or its contractors, Licensee’s selected tools (e.g., vulnerability scanning tools) will be used as and to the extent so directed by Licensee.
(c) Notwithstanding the intended breadth of Licensee’s Review rights, Licensor may restrict Licensee’s access to the proprietary information of other Licensor and Licensor contractors’ customers or to Licensor and Licensor contractors’ locations that are not used in connection with the Services provided
to Licensee. It is understood that Reviews may materially interfere with Licensor’s ability to perform the services to Licensee and in such circumstances
Licensee will provide appropriate performance relief. To the fullest extent
permitted by law, Licensor hereby waives the benefit of any state or federal
law which may provide a cause of action against Licensee based upon Reviews permitted under this Section.
(d) Licensor and Licensee shall meet to review each Review promptly after
the issuance thereof. Licensor will respond to each Review in writing within
thirty (30) days from receipt of such Review, unless a shorter response time is
specified in such Review report. Should any Review result in the discovery of
material security risks to the systems, equipment, software, network(s), or facilities used by Licensor or its contractors to provide the Services (as such materiality is determined by Licensee) Licensee shall promptly notify Licensor of
829
such risks, and Licensor shall respond to Licensee in writing within three (3)
days with Licensor’s plan to take reasonable measures to promptly correct,
repair, or modify the applicable system, equipment, software, network, or facility to effectively eliminate such material security risks without additional
charge to Licensee. Upon Licensee’s approval, Licensor shall implement such
plan as quickly as practicable. Should Licensor fail to take reasonable
measures to remedy the identified risk pursuant to such approved plan, Licensee may terminate this Agreement for cause effective upon a date provided in
a written notice
(e) Licensor and Licensee shall also develop and agree upon an action plan to
promptly address and resolve any non-material deficiencies, concerns, and
recommendations in such Review and Licensor shall undertake remedial
action in accordance with such action plan and the dates specified therein.
Any action resulting from a Review that relates to Licensor’s failure to
comply with a then-existing obligation of Licensor under this Agreement shall
be made at Licensor’s sole expense. The actions and remedies contemplated
by this Section are in addition to all other rights Licensee may have in respect
of Licensor’s failure to meet its obligations under this Agreement.
4. Audit – Limiting Right of Licensee to Audit Licensor’s Fees –
Licensor Oriented
Only to the extent necessary to verify the accuracy and completeness of fees
and out-of-pocket expenses or to enable Licensor and Licensee to meet applicable legal, regulatory and contractual requirements (in each case to the extent
applicable to the Services and/or the fees for such Service)
COMMENT: While this language appears to benefit the licensor by
qualifying the licensee’s right to audit, the licensor should insist on
inserting greater detail to limit the licensee’s ability to conduct a broad
based audit instead of a narrowly focused audit. This language gives the
licensee carte blanche to conduct the audit.
5. Audit – Right of Licensor to Audit Number of
Software Users – Licensor Oriented
5.1 Periodic Accounting Reports. On or before the last business day
of the first month following the end of each calendar quarter, Licensee shall
generate a report using functionality provided by the system that shall document Licensee’s user count. If the user count provided by the report is greater
than the current license limitation, Licensee shall report the current user count
to Licensor. Licensor shall determine what fees are due to Licensor under the
terms of this Agreement and Licensor shall invoice Licensee for the appropriate amount.
5.2 Payments. Within thirty (30) days of receipt of any invoice referenced in the preceding Paragraph, Licensee shall pay to Licensor all payments
due and payable pursuant to Article __ of this Agreement.
5.3 Books and Records. Licensee shall maintain at its principal place
of business full, accurate, and complete books of account and records reflecting all activities and transactions subject to or covered by this Agreement. Licensee shall keep such books and records in at least sufficient detail as will
permit the written reports provided for in this Agreement to be made and the
licensee fees payable hereunder to be determined. These books and records
shall be open to inspection and/or audit during usual business hours, from
time to time, upon reasonable advance notice, by Licensor or by Licensor’s
designated representatives, who shall be entitled to copy extracts therefrom.
Licensor’s right to inspect shall include any of Licensee’s records reflecting
information either provided to or maintained for any regulatory agencies or
authorities or industry associations pertaining to the Software or to Licensee’s
operations under the License. Such books and records shall be maintained for
at least three (3) years after the period to which they pertain for the purposes,
e.g., of verifying the accuracy of the payments by Licensee. Licensee shall
cause its appropriate employees and agents to cooperate with Licensor in connection with such inspections or audits.
5.4 Audit. In the event that Licensor requests an independent audit of
Licensee’s books and records pursuant to this Agreement, all audit expenses
shall be borne by Licensor. However, should such audit reveal a deficiency in
the licensee fees paid by Licensee of greater than five percent (5%) of any
payment thereof, then Licensee shall bear the entire cost of the audit.
5.5 Inspections by Licensor. Licensor shall have the right at any
time during normal business hours, upon reasonable advance notice, to visit
and inspect Licensee’s facilities, and all operations by Licensee conducted
under the License, and all equipment and materials utilized by Licensee in so
doing. Licensee shall cause its appropriate employees and agents to cooperate
with Licensor and to provide reasonable facilities and assistance to Licensor
in connection with such visits or inspections.
6.
Audit – Prohibition on Licensor Auditing Number of
831
Licensee Users – Licensee Oriented (§ 8.J)
Based on the enterprise scope of license, there is no need for and Licensor
shall not request an audit of Licensee. If Licensor believes that Licensee is in
violation of [the license grant provisions], Licensor can request a written
compliance certificate provided that such certificate shall not create a
separate cause of action.
COMMENT: Licensors should reject language similar to that set forth
above. Further, this language prevents the licensor from bringing an
action against the licensee in the event the licensee provides the licensor
a fraudulent certificate
7. Audit – Allowing Licensee to audit the Licensor’s
books to confirm proper billing by Licensor
Licensee and its authorized representatives shall have the right at all reasonable times during the term of this Agreement and for a period of two (2) years
thereafter to inspect and audit Licensor’s books, payrolls, and other records
relating to matters under this Agreement for which payment by Licensee is to
be or has been made on the basis of (a) Licensor’s actual costs or reimbursement of actual costs incurred and paid by Licensor and (b) unit prices for materials and fixed unit rates for the period worked by Licensor’s personnel and
equipment; provided, however, that such inspection and audit of charges
based on fixed unit rates and unit prices shall be limited to Licensor’s personnel schedules for periods paid by Licensor, time sheets, payroll classification
data, equipment schedules and material issue and delivery records.
8. Audit – Allows Licensee to Audit Licensor
Compliance with Applicable Laws and Licensee
Policies - Licensee Oriented
1. Licensor shall maintain appropriate documentation necessary to
demonstrate Licensor’s compliance with applicable law, regulation and Licensee policy and as otherwise necessary to comply with applicable law and the
terms of the License Agreement between Licensee and Licensor (the “Agreement”).
2. Licensee reserves its right to confirm and validate Licensor’s compliance with the terms of the Agreement through periodic audits of Licensor’s
documents and systems. Licensee’ representatives, designees, auditors and
regulators as Licensee may from time to time designate (“Licensee’ Auditors”) shall, upon reasonable notice, have the right to audit Licensor’s docu-
ments, systems and operations, and conduct interviews with Licensor employees, permitted subcontractors and agents. Licensor shall provide access at all
reasonable times and after reasonable notice to Licensee’ Auditors to any facility or part of a facility at which Licensor is providing the Services and to
any and all data and records relating to the Services provided to Licensee.
The foregoing audit rights shall include when applicable, audits (a) of practices and procedures, (b) of systems, (c) of security practices and procedures, (d)
of disaster recovery and backup procedures, and (e) necessary to enable Licensee to meet applicable law and/or regulations.
3. The expense of an audit or examination shall be borne by Licensee
unless an audit reveals that Licensor or permitted subcontractor or agent is not
in compliance with the terms of the Agreement or there has been an overcharge. If, as a result of an audit, it is determined that Licensor has overcharged Licensee or has charged Licensee for any time involving the management of employees of the Licensor with regard to administrative tasks performed for the benefit of Licensor and not directed to the management or conduct of a Licensee project, Licensee shall notify Licensor of the amount of
such overcharge and Licensor shall promptly pay to Licensee the amount of
the overcharge, plus interest at the rate of 1.5% per month calculated from the
date of receipt by Licensor of the overcharged amount until the date of payment to Licensee. The expenses associated with correcting deficiencies (including payment of any government-levied penalties) that may be identified as
a result of the audit or government inspection/enforcement action shall be the
responsibility of Licensor unless otherwise agreed upon, in writing, by both
parties.
4. Licensor shall fully cooperate with Licensee’s auditors and/or governmental authorities in connection with audit conducted under terms of the
Agreement. Further, Licensor shall notify Licensee, within 24 hours, promptly by telephone or by email if any governmental or regulatory authority requests an inspection or makes written or oral inquiries of Licensor regarding
any aspect of Licensee’ activities pursuant to the Agreement. Unless otherwise required by applicable law or regulation, Licensor shall not allow access
to any governmental or regulatory authority relating to such activities without
giving Licensee the right to have a representative present. Licensor and Licensee shall cooperate in resolving any concerns of any governmental or regulatory authority. Licensor shall promptly notify Licensee by telephone or by
email if Licensor believes that the actions or inactions of any governmental or
regulatory authority, including the issuance or failure to issue any report, permit, or license, may cause a negative impact on Licensor’s ability to perform
the Services.
5. Licensor shall retain all records, documents and other information required to meet Licensee’ audit requirements under the Agreement for the
longer of (a) five years from the termination or expiration of the Agreement,
(b) until final resolution of any dispute concerning the Agreement or (c) as
long as required by law, regulation or Licensee Policy.
6. Licensor shall promptly make available the results of a review or audit
conducted by Licensor, its affiliates, permitted subcontractors or agents (includ833
ing internal and external auditors), relating to Licensor’s operating practices and
procedures to the extent relevant to the Services or Licensee (including, e.g.,
any SSAE-16 reports) to the Licensee Senior Director, Corporate Compliance
Audit or other individual identified by Licensee. Licensor shall, and shall cause
permitted subcontractors and agents to provide all audit-related materials to Licensee at Licensor’s expense.
7. Without limiting the generality of this Agreement, upon ten (10)
days’ prior notice from Licensee to Licensor that Licensee wishes an
information security audit to be performed, Licensor shall conduct or allow
Licensee to conduct, as specified in Licensee’ notice, such information
security audit to test the compliance with generally accepted industry
standards or such other security standards and procedures as determined by
Licensee and as established by Licensee policy. To the extent that Licensor is
conducting an information security audit, this information security audit shall
be conducted either by Licensor or a third party designated by Licensor which
is acceptable to Licensee, in accordance with standards acceptable to
Licensee, and at no expense to Licensee. To the extent that Licensee elects to
conduct an information security audit pursuant to this Section 7, Licensor
acknowledges and agrees that Licensee Auditors may conduct an information
security audit of the environment used to provide the Services, including
security, policies, and operational matters. Regardless as to who is conducting
the audit, Licensor shall, at no expense to Licensee: (a) provide any Licensee
or Licensor designated auditor with all assistance and resources reasonably
required to conduct any information security audit authorized pursuant to this
Section 7, and (b) remedy any deficiencies identified during any such
information security audit as directed by Licensee. Licensee may only
provide Licensor with a notice requiring an audit pursuant to this Section 7
once per calendar year unless Licensee in good faith believes that there is a
potential or actual information security risk or breach.
9. Audit - Allows Licensor to Audit Escrow Agent to
Confirm Compliance with Source Code Release
Terms
Escrow Agent shall maintain, for two (2) years from the calendar year in question, adequate records concerning its treatment of the Source Code so that Licensor may determine that Escrow Agent has taken adequate precautions to
prevent unauthorized use or disclosure of the Source Code. Escrow Agent
agrees that Licensor may, directly or through its advisors, inspect, review and
obtain copies of such records from Escrow Agent upon reasonable notice and
subject to confidentiality agreements reasonably satisfactory to Escrow Agent
for the purposes of confirming Escrow Agent’s treatment of the Source
Code. Such audits shall occur not more often than once per year (unless the
previous audit disclosed material deficiencies that made an inadvertent release
highly probable). The parties agree that the failure by Escrow Agent to
strictly adhere to Section _____ (“Release of Source Code”) shall not be
deemed to be a material breach of this Agreement unless such failure causes a release of the Source Code that cannot be remedied.
COMMENT: Licensors should be hesitant to agree to the last
sentence as it potentially releases the escrow agent from any liability for its wrongful actions. The escrow agent should bear responsibility for its failure to comply with its contractual obligations.
10.
1.1
Audit – General Provisions on Conduct of Audit
Audit Scope
The audit will cover all purchases that are initiated under this Agreement during the audit period whether or not delivery and or payment occur during the
audit period.
2
Audit Procedure
A. The Vendor agrees to provide Customer with such information as Customer may reasonably require from time to time to verify compliance
with this Agreement. For the term of this Agreement, and for five
years thereafter, the Vendor shall maintain the necessary historical
records for Customer to determine the Vendor’s compliance relating to
pricing and product delivery or any service levels as defined in the
Agreement.
B. During the term of this Agreement, Customer may perform an audit at
least once every twelve-month period to determine compliance with
this Agreement based upon at least a fifteen (15) day notice. This audit may include a limited review of the Vendor’s processes relating to
invoicing, service delivery, and reporting. An audit may involve limited interviews with appropriate personnel, as well as limited reviews
of manual procedures and computer processing activities relating to
these areas.
C. The Vendor will supply an electronic file of billings in Microsoft Excel or Access format or other agreed format for all purchases under
this Agreement and/or for the specified period selected for the audit.
D. The Vendor agrees to grant Customer a right of access to the Vendor’s
premises, systems and reasonable access to accounts and records to
conduct such audit. The Vendor agrees to make available free of
charge any personnel and facilities, as are reasonably necessary to per835
form the audit and to have available all documentation as requested for
each item selected for the audit which may include but not necessarily
be limited to the following:


Vendor’s invoice to Customer and the corresponding purchase
order,
Negotiated pricing for comparison of amount billed to Customer.
E. Customer and its representatives will enter into an appropriate confidentiality agreement prior to the beginning of the audit, if so requested
by the Vendor.
F. The audit will consist of a selection of services and or products purchased by Customer during the period of the audit (may be selected on
a transaction or order basis depending upon nature of agreement). The
audit will determine the amount that should have been invoiced for
each item selected for the audit, and any overcharge. Within thirty
(30) days of the completion of the audit, the Vendor agrees to refund
the net amount of any overcharges.
G. The audit will also determine compliance with any service levels, as
well as the amount of associated penalties established by this Agreement, if any. Where an audit finds that the Vendor’s performance is
unsatisfactory, a remedial plan shall be agreed within thirty (30) days
of completion of the audit.
H. The Vendor agrees that Customer’s right of audit under this
Agreement shall be extended to cover any subcontracts or other
arrangements into which the Vendor have entered into for the
provision of services under this Agreement.
11.
Customer Royalty Provision with Audit Language
11. 1 Customer Royalty. In consideration of Customer partially
funding the development of the Custom Software, Licensor shall pay Customer a royalty on the future licensing of the Software as set forth in this Section
___. Licensor shall pay to Customer a royalty based on the “Gross License
Fee” (“Fee”) of the Custom Software for all third party licenses of the Custom
Software by Licensor made within _______ ( ) months from the earlier of
[Acceptance of the module by the Customer] and [the Licensor first licensing
such module to any third party].
11.2 Fee. Subject to the limitations of Section 7.1 above, Customer
shall receive [five percent (5%)] of the Fee received by Licensor for all licenses of the Custom Software licensed by the Licensor.
11.3 Payment. On or before the last business day of the first month
following the end of each calendar quarter, Licensor shall generate a report
that shall document the number of licenses of the Custom Software granted by
the Licensor in the previous calendar quarter and all license fees received by
the Licensor from the licensing of the Custom Software in the previous calendar quarter. Licensor shall calculate the fees, if any, that are due to Customer
under the terms of this Section 3 and, within thirty (30) days of such date, pay
to Customer all such monies due Customer.
11.4 Audit. Licensor shall keep all usual and proper books and records pertaining to the licensing and use of the Custom Software. During the
Term of this Agreement and for three years thereafter, Customer and/or its
designated representatives, shall have the right to audit (including by inspecting and copying any such books and records) Licensor, in order to verify its
compliance with the terms of this Agreement. Customer shall conduct such
audits during the Licensor’s normal business hours and in such a manner as to
not interfere unreasonably with Licensor’s normal business operations. Customer may conduct such audits from time to time, as Customer deems necessary, but shall use any information obtained or observed during the course of
the audit solely for the purposes of determining: (i) whether the Licensor is
making the proper royalties in compliance with the terms of this Agreement,
and is otherwise in compliance with this Agreement and any applicable laws,
and (ii) enforcing its rights under this Agreement and any applicable laws.
Except to the extent necessary to enforce its rights, Customer and its representatives will hold all such information in confidence.
12. Operational/Security Audit - Allows the Customer to Confirm
Vendor’s Compliance with Vendor’s Operational/Security
Obligations.
Operational/Security Audit. At any time during the term of this
Agreement and at its own expense, Customer may engage Customer’s internal
audit staff or an independent third party professionally trained, experienced and
qualified to conduct such audit and who is not a competitor of Vendor (a “Service Auditor”), to perform a review and audit (“Service Audit”) of the Services,
including, without limitation: (i) the parts of any Vendor Facilities at which
Vendor is providing such Services, (ii) Vendor Personnel providing such Ser837
vices, (iii) any data and records relating to such Services to verify the integrity,
security and privacy of Customer Data, and Customer Systems, and to examine
any software, equipment used by Vendor Personnel either provided by Vendor
or Customer, the Vendor systems that process, store, support and transmit such
data and/or that are used in the performance of Services, (iv) the provision of
any Deliverables, and (v) compliance with Business Continuity Plan and Offshore Security Controls. Such audits may include penetration audits and shall
extend to all Vendor Facilities. The Service Auditor may examine Vendors’ data practices and procedures, management systems, general controls and security
practices and procedures, and backup procedures, incident or investigative records in relation to the Services and any other aspects of such Services related to
Customer. The Service Auditor shall prepare and submit to Customer a written
report of the results of the Service Audit (a “Service Audit Report”). Customer
shall provide Vendor with a copy of the Service Audit Report within thirty (30)
days of Customer’s receipt thereof. Any dispute or issue related to a Service
Audit shall be resolved in accordance with the procedures set forth in Article __.
The Service Auditor shall comply with all reasonable confidentiality and security requirements that Vendor may reasonably impose but such auditor may nonetheless request, copy and examine any books or records which Customer itself
could request, copy and examine under this Agreement.
13. Audit - Licensee Right to Audit Vendor
Vendor shall maintain applicable documentation supporting any and all
offered pricing, reimbursable costs and purchases made under the pertinent
Schedule for at least five (5) years after the expiration or termination of this
Agreement (“Retention Period”). During the Term of this Agreement and
the Retention Period, Licensee shall have the right to audit at any reasonable
time with thirty (30) calendar days advanced notice, all applicable
documentation in Vendor or its subcontractor’s possession or other person or
entity that has provided Product, licensed Programs, or performed work in
connection with or related to Vendor’s Services under this Agreement to
verify Vendor’s compliance with the terms and conditions of this Agreement.
Audits shall be conducted in accordance with Exhibit ___ _- Audit attached
hereto. After such Retention Period, Vendor shall either return the
documentation as directed by Licensee or securely destroy the documentation
and provide Licensee certification of such secure destruction. Vendor agrees
that Licensee’s right of audit under this Agreement shall be extended to all of
Vendor’s third party providers of Product, Programs, and/or Services
delivered under this Agreement. Vendor shall obtain the similar right from
any of its suppliers or subcontractors in order to satisfy this audit requirement.
14. Audit - Books and Records - Balanced
For the duration of the Services and a period of 6 months thereafter, Customer will have the right, after giving Company at least 10 days’ prior written
notice, to review certain records directly relating to the charges paid for the
Services. This right will not extend to any fixed fee component of the charges, or to any Services performed more than 2 years prior to the date of Customer’s request for a review. If Customer exercises this right, Company will
make available such records as it determines to be necessary to support the
amounts charged to Customer. Customer agrees to compensate Company for
time expended by Company’s staff to facilitate the review and to reimburse
Company for any expenses incurred in connection with the review. Customer
may exercise this right only once in any calendar year and Customer agrees to
limit the duration of the review to a reasonable period. The review must be
conducted at mutually convenient times and locations and in a manner that
does not disrupt Company’s business operations. Customer agrees to keep information disclosed to Customer in the course of the review confidential from
all third parties, except for any third party participating in the review with
Company’s consent. If such audit reveals an underpayment of more than five
percent (5%), in addition to Company’s payment of such underpayment (including any applicable interest due), Company shall bear the cost of such audit.
15.
Audit of Reseller
Reseller shall maintain applicable documentation supporting any and all offered pricing, reimbursable costs and purchases made under this Agreement.
During the Term of this Agreement and for a period of two (2) years after the
expiration or termination hereof, if Licensor has reasonable cause to believe
that Reseller is not complying with the terms of this Agreement, Licensor
shall have the right to audit to the extent necessary to verify compliance at any
and all reasonable times with thirty (30) calendar days advanced notice, all
applicable documentation in Reseller or its subcontractor’s possession or other
person or entity that has performed work in connection with or related to Reseller’s Services under this Agreement to verify, among other things, the
compensation, the list prices versus Reseller’s offered discounts, compliance
with the terms and conditions of this Agreement and the appropriateness of
any other consideration provided to Reseller. Audits shall be conducted in accordance with Exhibit __- Audit attached hereto and made a part of this
Agreement.
839
16. Audit of Reseller – Alternative Language
(a) During the Term of this Agreement, Reseller agrees to maintain all
usual and customary documents and entries related to Software licensed to
Reseller under this Agreement. In order to verify Reseller’s compliance
with the terms of this Agreement, Licensor may cause an audit to be
conducted of the applicable Reseller documents. Audits shall be conducted
after the second anniversary of this Agreement and no more frequently
than annually during the Term of this Agreement. Licensor or its agent
may perform the audit. If an audit is to be conducted by an agent for
Licensor, Licensor shall inform Reseller of such fact and provide Reseller
with the name of the agent at least twenty (20) business days prior to the
start of the audit. Licensor’s agent must be an accredited and nationally
known accounting firm (“Auditor”) that is not a competitor to Reseller
and is otherwise reasonably acceptable to Reseller, who executes a nondisclosure agreement reasonably acceptable to Reseller and who will
comply with all the requirements set forth in this Section ____. The audit
shall be conducted during Reseller’s regular business hours at the
applicable Reseller, upon thirty (30) calendar day’s prior written notice,
and shall be conducted so as not to interfere with Reseller or its
Customer’s normal business activities. The audit shall consist of a
statistical sample of Software licensed by Reseller during the period of the
audit unless otherwise agreed by the parties. Licensor will determine how
to apply the tools and process to Reseller’s enterprise, either though a
comprehensive review or extrapolation. Licensor shall give Reseller a
copy of the audit findings containing the information necessary to indicate
Reseller’s compliance or noncompliance with this Agreement. If an audit
uncovers under-payments of license and/or Maintenance and Support fees,
and a review by Reseller validates such under-payments, Reseller shall
promptly pay such fees to Licensor based upon receipt of an invoice,
setting forth the rationale for submission of the invoice.
(b) All Licensor personnel (or Auditor’s personnel) performing an audit
shall be subject to the “Confidentiality” provisions of this Agreement.
The parties agree that all materials gathered by Licensor’s audit team are
confidential to Reseller and shall be treated as such and shall be controlled
by Licensor under the “Confidentiality” provisions of this Agreement.
Licensor and Auditor’s employees conducting an audit shall be subject to
the same security and safety policies, procedures and regulations when
entering onto Reseller or its Customer’s property, as Reseller’s employees.
(c) Licensor agrees to assist Reseller’s internal license management
process by ensuring that licensed Software products have a
management/compliance component producing artifacts required to
validate the metric upon which the Software is licensed (e.g., number and
type of Software, number of devices running Software (actual or virtual),
capacity of device, transactions processed, number of users, etc). The
license management/compliance component tool must be the same tool as
Licensor uses to audit Reseller compliance and discovery of such artifacts
and must either be available through the licensed Software product or via
industry standard products. If discovery is via industry standard product,
the licensed Software product must provide an identifying fingerprint or
signature that (i) relates uniquely to the Software product, (ii) can be
obtained electronically by industry standard products that use heuristic
scanning techniques for discovering software products (i.e., does not
require a full disk scan to locate software installation information) (iii) is
removed when the product is de-installed (iv) creates executable files with
complete and accurate file header information, e.g., vendor, product name
and version. Licensor further agrees to (v) provide mapping instructions
that correlate the fingerprints/signatures to licensed product names and
(vi)
provide
updates
to
the
mapping
instructions
and
fingerprints/signatures upon a Reseller request. Licensor agrees that the
audit rights in subsection (a.) above shall not be applicable to this
Agreement, until Licensor is in compliance with this subsection (c)
(d) Licensor shall be responsible for all Licensor-related costs associated
with the audit including costs associated with Auditors engaged in the
audit.
17. Audit - Licensee Software Usage
Licensee may use the Licensed Software only with a number of Development
Servers, Development Seats, and CPUs which may not exceed at any time the
licensed number set forth in Section __ (“License Grant”). Any operation of
the Licensed Software with any greater number at any time shall constitute a
material breach of the Master Agreement. Licensor may, at its option and
upon reasonable advance notification, perform an audit of Licensee’s usage of
the Licensed Software to determine the number of Development Servers,
Development Seats and CPUs used by Licensee. This audit will be for the
sole purpose of determining any additional License Fee due Licensor for the
841
Licensed Software and will be subject to Licensee’s reasonable security
requirements (such as requiring escorts while visiting, requiring security
clearance to view servers/computers that contain classified information).
18. Audit – Vendor Audit of Customer’s Software Usage
On Vendor’s written request, not more frequently than annually, Customer
shall furnish Vendor with a signed certification (a) verifying that the Programs
are being used pursuant to the provisions of this Agreement, including any
User limitations; and (b) listing the locations, types and serial numbers of the
Designated Systems on which the Programs are run.
Vendor may, at its expense, audit Customer’s use of the Programs. Any such
audit shall be conducted during regular business hours at Customer’s facilities
and shall not unreasonably interfere with Customer’s business activities. If an
audit reveals that Customer has underpaid fees to Vendor, Customer shall be
invoiced for such underpaid fees based on the Price List in effect at the time
the audit is completed. If the underpaid fees exceed 5% of the license fees
paid, then Customer shall also pay Vendor’s reasonable costs of conducting
the audit. Audits shall be conducted no more than once annually.
19. Audit – Comprehensive Language
a. Service Level Audit. At any time during the term of this Agreement and at
Customer’s own expense, Customer may engage its internal audit staff or a third
party generally in the business of performing audits of Services and professionsionally trained, experienced and qualified to conduct such audit, who is not a
competitor of Vendor (a “Service Level Auditor”), to perform a review and audit of Vendors’ performance and reporting of the Services in relation to the required Service Levels (a “Service Level Audit”). The Service Level Auditor
shall prepare and submit to Customer a written report of the results of the Service Level Audit (a “Service Level Audit Report”). Customer shall deliver to
Vendor a copy of the Service Level Audit Report within ten (10) days of Customer’s receipt thereof. Any dispute or issue related to a Service Level Audit
shall be resolved in accordance with the procedures set forth in Article ___
(“Dispute Resolution”). The Service Level Auditor shall comply with all reasonable confidentiality and security requirements that Vendor may reasonably
impose but such auditor may nonetheless request, copy and examine any books
or records which Customer itself could request, copy and examine under this
Agreement.
b. Financial Audit. At any time during the term of this Agreement, and for a
period of eighteen (18) months after termination or expiration of this Agreement,
and at Customer’s own expense, Customer may engage its internal audit staff or
an independent third party, professionally trained, experienced and qualified to
conduct such audit and who is not a competitor of Vendor (a “Fee Auditor”), to
perform a review and audit of all records and reports to confirm the accuracy and
the correct calculation of the Fees, Service Levels, and any other charges, credits, or fees related to this Agreement (a “Financial Audit”) covering the thencurrent or the previous calendar year. The Fee Auditor shall prepare and submit
to Customer a written report of the results of the Financial Audit (a “Fee Audit
Report”). In the event that the Fee Audit Report reveals that any charges or expenses have been overbilled or underbilled, then Customer shall make adjustment in the fees and invoices as necessary on a prospective basis in future
months as necessary to correct errors or maintain compliance with the Agreement. If the overbilled Fees or Reimbursable Expenses exceed by more than
five percent (5%) the amount, which the Fee Auditor determines to have been
proper, Vendor shall pay the reasonable fees, costs and expenses incurred by
Customer in connection with the Financial Audit. Any dispute or issue related to
a Financial Audit shall be resolved in accordance with the procedures set forth in
Article ___ (“Dispute Resolution”). The Fee Auditor shall comply with all reasonable confidentiality and security requirements that Vendor may reasonably
impose but such auditor may nonetheless request, copy and examine any books
or records which Customer itself could request, copy and examine under this
Agreement.
c. Customer Operational/Security Audit. At any time during the term of this
Agreement and at its own expense, Customer may engage Customer’s internal
audit staff or an independent third party professionally trained, experienced and
qualified to conduct such audit and who is not a competitor of Vendor (a “Service Auditor”), to perform a review and audit (“Service Audit”) of the Services,
including, without limitation, (i) the parts of any Vendor Facilities at which
Vendor is providing such Services, (ii) Vendor Personnel providing such Services, (iii) Records and any data and records relating to such Services to verify
the integrity, security and privacy of Customer Data, and Customer Systems, and
to examine any software, Equipment used by Vendor Personnel either provided
by Vendor or Customer, the Vendor systems that process, store, support and
transmit such data and/or that are used in the performance of Services, (iv) the
provision of any Deliverables, and (v) compliance with Business Continuity
Plan and Customer Offshore Security Controls. Such audits may include penetration audits and shall extend to all Vendor Facilities. The Service Auditor may
examine Vendors’ data practices and procedures, management systems, general
controls and security practices and procedures, and backup procedures, incident,
843
or investigative records in relation to the Services and any other aspects of such
Services related to Customer. The Service Auditor shall prepare and submit to
Customer a written report of the results of the Service Audit (a “Service Audit
Report”). Customer shall provide Vendor with a copy of the Service Audit Report within thirty (30) Business Days of Customer’s receipt thereof. Any dispute
or issue related to a Service Audit shall be resolved in accordance with the procedures set forth in Article __ (“Dispute Resolution”). The Service Auditor
shall comply with all reasonable confidentiality and security requirements that
Vendor may reasonably impose but such auditor may nonetheless request, copy
and examine any books or records which Customer itself could request, copy
and examine under this Agreement.
d. SSAE 16/ISAE 3402 Audits. If requested by Customer, Vendor shall conduct a SSAE 16/ISAE 3402 review within twelve (12) months after the engagement has reached fifty (50) Vendor Resources on a consistent basis. Within thirty (30) days of the audit reports receipt by Vendor, Vendor shall provide Customer with a copy of each audit report and the related working papers submitted
by Vendor’s independent accountants regarding any of the matters set forth in
this paragraph along with Vendor’s plan for correcting any short comings identified during the audit. All such reviews shall comply with American Institute of
Certified Public Accountants SSAE 16/ISAE 3402 standards, and the reports
obtained shall be of the type generally referred to (depending on the publication)
as either type “2” or “B,” which includes an opinion on the operating effectiveness of Vendor’s controls, or such other standards as are mutually agreed by the
Parties. If the audit reveals that the Services provided by Vendor do not cause
Vendor’s operations to meet the auditor’s recommendation, then Vendor shall
provide such further Services as are reasonable to bring its operations into conformance with the auditor’s recommendations to such level and degree, at no
cost to Customer. Should Customer request Vendor to conduct a SSAE 16/ISAE
3402 review, Customer shall pay all costs and expenses with respect to such audit and review.
e. Post Termination Compliance Audits. For a period of eighteen (18)
months after termination or expiration of this Agreement, and at Customer’s own
expense, Customer or its designee shall have the right to conduct an audit, during normal business hours, to confirm Vendor’s compliance with the posttermination obligations set forth in this Agreement.
f. HIPAA and Other Regulatory Compliance Audits. Vendor understands
and acknowledges that Customer is subject to various internal and external audit
requirements, and that Vendor may be subject to such audit requirements in its
capacity as Customer’s service provider. Accordingly, Vendor shall cooperate
with and assist Customer and take actions at Customer’s direction in connection
with audits and inspections required or requested to be performed by Customer’s
customers, suppliers, accreditation bodies and applicable Governmental Authorities, as well as Customer’s internal and external auditors, including with regard
to: (a) HIPAA, the Sarbanes-Oxley Requirements, the PCI Standards and any
other requirements of Law or applicable industry standards, and (b) any third
party contracts related to the Services to which Customer is bound. Such cooperation and assistance shall include, as applicable, assisting Customer in providing the applicable auditing party with access to the Records, Vendor agents and
Vendor Facilities. Without limitation of the foregoing, if this Agreement is subject to the provisions of Section 952 of P.L. 96-499, which governs access to
books and records of subcontractors of services to Medicare providers where the
cost of value of such services under the contract exceeds Ten Thousand Dollars
($10,000) over a twelve (12) month period, then Vendor shall permit representatives of the Secretary of the Department of Health and Human Services and of
the Comptroller General to have access to the contract and books, documents
and records of Vendor, as necessary to verify the fees, costs, and expenses of the
Services, in accordance with criteria and procedures contained in applicable federal regulations.
g. Cooperation with Audits, Monitoring; Follow-Up.
1. Customer and any third party designated by Customer shall have the right to
conduct all or portions of the audits on-site at Vendor Facilities and/or electronically and to electronically and remotely monitor Vendor and Vendor Personnel’s
compliance with the terms of this Agreement. Vendor agrees to install any software on the Equipment and network used in the performance of Services to assist with such electronic audits and monitoring. Vendor agrees to cooperate with
Customer in monitoring Vendor and Vendor Personnel’s performance under this
Agreement and to provide Customer with updated information in these and other
areas, in such form as Customer may reasonably request. Vendor agrees to notify Customer promptly in writing in the event it experiences any financial or operational difficulty, other catastrophic event, material change in strategic goals,
or significant staffing changes. At no cost to Customer, Vendor shall provide
full access to Vendor Facilities, Vendor Systems, Records, Vendor management
and Vendor Personnel assigned to provide services hereunder and cooperate with
any audit(s) conducted by either Customer, Customer’s agent, or a U.S. federal
agency pursuant to this Article __. Vendor shall not charge Customer for the
management hours or fees with respect to the time spent by Vendor’s management and employees in providing assistance to Customer, Customer’s internal
and external auditors, or any governmental authority performing any audits,
compliance, security and control testing. If reasonably required by Customer,
845
Vendor shall assign personnel to the audit activities through the use of project
initiation and authorization process.
Vendor shall support financial and operational audits relating to the Services
provided hereunder performed by Customer’s internal audit department or
external auditors who are professionally trained, experienced and qualified to
conduct such audit, who are not competitors of Vendor. This support
includes, but is not limited to: (i) audit access to any Vendor Systems,
Customer Systems and Customer Data, subject to appropriate security
requirements as set forth in this Agreement; (ii) the right to audit any Vendor
Systems, Customer Systems and/or Vendor Facility where access to Customer
Systems is available; (iii) right to audit any aspect of Vendor Systems
security, documentation and control; and (iv) the right to audit Vendor’s
compliance with the contractual terms of this Agreement.
The results and reports of each audit under this Article ___ shall be submitted
to the Customer Contract Manager and the Vendor Engagement Executive. If
any audit report indicates that Vendor’s performance of the Services is not
unsatisfactory but could nonetheless be improved in specific ways, the
Customer Contract Manager and the Vendor Engagement Executive shall
make good faith effort to implement such recommendations as soon as
commercially feasible. If any audit report establishes that Vendor’s
performance of the Services is not in compliance with the terms of this
Agreement, the Schedules, or the applicable SOW, Vendor shall submit to
Customer within thirty (30) days of its receipt of the relevant audit report a
plan to improve Vendor’s performance to the level required by this
Agreement. Upon review and approval of such plan by the Customer
Contract Manager, Vendor shall implement such plan within thirty (30) days
after approval of such plan.
20. Audit - Data Security and Confidentiality
An independent expert shall review, on at least an annual basis, the
infrastructure, policies and procedures in effect or proposed by Licensor in
order to determine compliance with Licensor’s security and confidentiality
obligations under this Agreement, including but not limited to, its Security
Policy, to conduct security tests with respect to Licensee Confidential
Information and recommend modifications, if any, consistent with the Parties’
respective systems architecture, in order to enhance protection of Licensee
Confidential Information and shall communicate such results to the Parties.
The Licensor shall co-operate fully with any such inspections and tests. The
expert will be engaged by Licensee with the consent of Licensor (which
consent shall not be unreasonably withheld) and paid for by Licensee (the cost
of which shall be reimbursed by Licensor or credited against fees otherwise
owed Licensor by Licensee). Licensee shall review the expert’s findings and
will recommend steps to Licensor to enhance the protection of Licensee
Confidential Information consistent with such expert’s findings and to ensure
compliance with this Agreement. Licensor will use best efforts to promptly
address any deficiencies in accordance with the recommendations of Licensee,
provided that Licensor will not be required to implement any specific
recommendation made by the independent expert unless such recommended
implementation is required to bring Licensor into compliance with the
requirements under the Security Schedule, if applicable, or the terms of the
Agreement generally. If any such audit reveals that Licensor has failed to
meet its data security obligations hereunder or that a data security breach has
occurred or vulnerability exists, Licensee shall notify Licensor with sufficient
information to determine the length and impact of such failure. An
independent third party expert, jointly selected by Licensee and Licensor,
shall perform a follow up audit at Licensor’s expense to determine whether
Licensor has cured its failure to meet its data security obligations hereunder or
remediated the data security breach and/or vulnerability to Licensee’s
reasonable satisfaction.
21. Audit - Customer Compliance with License Terms– Favors
Customer
a. During the Term of this Agreement, Customer agrees to maintain all
usual and customary documents and entries related to Software licensed to Customer
under this Agreement. In order to verify Customer’s compliance with the terms of
this Agreement, Vendor may cause an audit to be conducted of the applicable
Customer documents. Audits shall be conducted after the second anniversary of this
Agreement and no more frequently than annually during the Term of this Agreement.
Vendor or its agent may perform the audit. If an audit is to be conducted by an agent
for Vendor, Vendor shall inform Customer of such fact and provide Customer with
the name of the agent at least twenty (20) business days prior to the start of the audit.
Vendor’s agent must be an accredited and nationally known accounting firm
(“Auditor”) that is not a competitor to Customer and is otherwise reasonably
acceptable to Customer, who executes a non-disclosure agreement reasonably
acceptable to Customer and who will comply with all the requirements set forth in
this Section. The audit shall be conducted during Customer’s regular business hours
at the applicable Customer or Customer facility, upon thirty (30) calendar day’s prior
written notice, and shall be conducted so as not to interfere with Customer or its
Customer’s normal business activities. The audit shall consist of a statistical sample
of Software licensed by Customer during the period of the audit unless otherwise
agreed by the parties. Customer will determine how to apply the tools and process to
Customer’s enterprise, either though a comprehensive review or extrapolation.
847
Vendor shall give Customer a copy of the audit findings containing the information
necessary to indicate Customer’s compliance or noncompliance with this Agreement.
If an audit uncovers under-payments of license and/or Maintenance and Support fees,
and a review by Customer validates such under-payments, Customer shall promptly
pay such fees to Vendor based upon receipt of an invoice, setting forth the rationale
for submission of the invoice.
b. All Vendor personnel (or Auditor’s personnel) performing an audit shall
be subject to the “Confidentiality” provisions of this Agreement or substantially
similar provisions already in place between Vendor and such party . The parties
agree that all materials gathered by Vendor’s audit team are confidential to Customer
and shall be treated as such and shall be controlled by Vendor under the
“Confidentiality” provisions of this Agreement. Vendor and Auditor’s employees
conducting an audit shall be subject to the same security and safety policies,
procedures and regulations when entering onto Customer property, as Customer’s
employees.
c. Vendor agrees to participate in Customer’s internal license management
process by ensuring that licensed Software products have a management/compliance
component producing artifacts required to validate the metric upon which the
Software is licensed (e.g., number and type of Software, number of devices running
Software (actual or virtual), capacity of device, transactions processed, number of
users, etc). The license management/compliance component tool must be the same
tool as Vendor uses to audit Customer compliance and discovery of such artifacts and
must either be available through the licensed Software product or via industry
standard products. If discovery is via industry standard product, the licensed
Software product must provide an identifying fingerprint or signature that (i) relates
uniquely to the Software product, (ii) can be obtained electronically by industry
standard products that use heuristic scanning techniques for discovering software
products (i.e., does not require a full disk scan to locate software installation
information), (iii) is removed when the product is de-installed, and (iv) creates
executable files with complete and accurate file header information, e.g., vendor,
product name and version. Vendor further agrees to provide mapping instructions
that correlate the fingerprints/signatures to licensed product names and mapping
instructions and fingerprints/signatures upon a Customer request. Vendor agrees that
the audit rights in subsection a above shall not be applicable to this Agreement until
Vendor is in compliance with this subsection c.
d. Vendor shall be responsible for all Vendor-related costs associated with
the audit including costs associated with Auditors engaged in the audit.
22.
Compliance, Controls and Audit Rights
1.1 Compliance
Vendor shall comply with all relevant laws and regulatory requirements in
providing the services including all voluntary compacts between Customer
and governmental or extra-governmental authorities and all regulatory
requirements intended to govern business conduct between countries in which
Customer receives or uses the services and countries from which Vendor will
perform services. Vendor shall make any necessary changes required to the
provision of the services due to any relevant regulatory change at no
additional cost to Customer.
1.2 Data Protection
(i) To the extent applicable, each party shall at all times, comply with all
obligations applicable to it under all data protection, export and import laws
and regulations, including without limitation such laws and regulations
pertaining to personally identifying information, applicable to it in the course
of performing its obligations under the Agreement including by (a)
maintaining a valid and up to date registration or notification as required; and
(b) complying with all such laws and regulations pertaining to cross border
data flows and security measures.
(ii) Vendor’s solution will
To the extent that Vendor is controlling or processing personally indentifying
data, Vendor shall: (a) bring into effect and maintain all appropriate technical
and organizational measures to maintain security, prevent unauthorized or
unlawful access to or processing of Personal Data and accidental loss or
destruction of, or damage to, Personal Data in compliance with Laws; (b)
ensure the reliability of their staff having access to the Personal Data; (c) act
only on the instructions of Customer in relation to the processing of the
Personal Data
1.3 Vendor shall comply with the most stringent of
(i) all Customer policies, standards and procedures related to the services,
including but not limited to those governing quality, change, and problem
management, safety, data privacy and data security, business continuity and
disaster recovery, and pervasive and transaction controls; and
(ii) the policies, standard and procedures that are generally adopted by leading
providers of services similar in scope, scale and geographic coverage to the
outsourced services
849
1.4 Customer shall retain control over the technical architecture of the
services, and Vendor shall comply with Customer‘s policies, standards and
specific requirements in this regard. Vendor shall adopt and implement any
revised technical architecture, policy, standards and specific requirements
reasonably required by Customer subject to an equitable fee adjustment if
necessary and reasonable and as mutually agreed by the Parties.
1.5 Vendor will develop and implement quality assurance and internal
controls, including implementing tools and methodologies, to ensure that the
services are performed in an accurate and timely manner, in accordance with
the Agreement. Without limiting the foregoing, Vendor will (i) maintain a
strong control environment in day-to-day operations, (ii) develop and execute
a process to ensure regular internal control self- assessments are performed
with respect to all services and certify the outcome of such self-assessments to
Customer on a timely basis (iii) maintain an internal audit function sufficient
to monitor the processes and systems used to provide the services (i.e.,
perform audits, track control measures, communicate status to management,
drive corrective action, etc, (iv) provide to Customer a summary of audit
activity performed, associated significant findings, status of follow-up
activity, summary of control incidents (i.e., frauds, conflict of interest
situations, etc.) and related corrective action, every six months, and (v)
provide the services in a professional and workmanlike manner using sound
principles and practices and exercising reasonable skill, care and diligence in
accordance with generally accepted industry standards.
1.6 Vendor shall implement and maintain independently audited quality
certification (such as a comprehensively implemented Six Sigma program)
and provide copies of its certification under such program and also any
relevant audit or report documentation whenever so requested by Customer.
1.7 As part of the services and at no additional cost beyond the base services
fees, Vendor will:
(i) undertake at least annually, and shall cause to be undertaken by Vendor’s
material sub-contractors, a SSAE 16 audit that covers the common controls for any Vendor sites where Vendor performs work for Customer;
(ii) provide the reports and attest to the results of such audits to Customer;
and
(iii) will perform the SSAE 16 audits at such time(s) and in such manner
to enable Customer to rely upon the reports and attestations in meeting its
securities reporting obligations.
1.8 Customer’s internal and external auditors will have full access to
Vendor’s and Vendor subcontractors’ facilities and records (excluding records
evidencing Vendor’s and Vendor subcontractors’ costs of providing services)
related to the services to perform operational, technical, regulatory and
financial audits as well as fraud checks; Customer agrees not to use as external
auditors any entities that are direct competitors to Vendor for the provision to
the marketplace of the in-scope services.
1.9 Vendor will provide Customer with summaries of any relevant findings
from its internal audit reports related to the Services
1.10 Vendor and Customer shall develop and agree upon an action plan to
promptly address and resolve any deficiencies, concerns and/or
recommendations arising out of any audit, and Vendor, at its own expense,
shall undertake remedial action in accordance with such action plan and the
dates specified therein.
23.
Confidentiality of Audit
Each party agrees to hold confidential (in accordance with Section __
(“Confidentiality”) all information learned and determinations made in the
course of any inspection or audit under this Section __ (“Audits”), except
when it is necessary for a party to reveal such information in order to enforce
its rights under this Agreement in arbitration or in court and except when
compelled by Law.
24.
Controls, Records and Inspection
1.1 Controls. Vendor shall establish and maintain, and ensure that other
members of Vendor Group establish and maintain, all Controls which are
necessary and appropriate in accordance with good management practice
(under the circumstances of this Contract) to ensure:
(i) The accuracy and completeness of Vendor’s invoices under this
Contract and of the Records required to be kept by Section 1.2 (“Records”).
851
(ii) Compliance with Sections ___ (“Conflict of Interest”) and __
(“Improper Influence”) of this Contract, and detection of any other
improper conduct by members of Vendor Group.
(iii) Compliance with all other obligations of Vendor under this Contract, including Exhibit ___ – Independent Vendor Health, Environmental and Safety Guidelines and Exhibit ___ – Drug, Alcohol
and Search Policy.
1.2
Records. Vendor shall establish and maintain, and ensure that other members of Vendor Group establish and maintain, all Records which are
necessary and appropriate in accordance with good management practice
(under the circumstances of this Contract) to record accurately and completely all of the following:
(i) The performance by Vendor of its obligations under this Contract.
(ii) The liability for and calculation of all amounts payable by Company to Vendor under this Contract.
(iii) All amounts payable by Vendor or Subcontractors to other members of Vendor Group or other Persons in connection with the performance by Vendor of its obligations under this Contract.
(iv) The Controls adopted by members of Vendor Group in accordance
with Section __.
(v) Compliance with Sections _____
1.3
Retention of Records. All Records required to be kept by Section 1.2
shall be maintained and retained by Vendor Group until at least twenty-four
months from the end of the calendar year in which the Services under a Service Order are completed or terminated. All Records required to be kept by
Section 1.2 shall be maintained in either paper or unaltered electronic format;
if in electronic format, then the Record must be reproducible onto a printed
paper copy. If any Dispute arises under this Contract then all Records relevant
to the Dispute shall be retained at least until the Dispute is finally resolved and
all obligations arising out of the resolution of the Dispute are satisfied.
1.4
Inspection of the Services.
(i) Right to Inspect. Company may, at its own cost, inspect the performance
of the Services in the Area of Operations at any time. Company may, at its
own cost, inspect the Services being provided at sites owned or controlled by
members of Vendor on reasonable notice during normal business hours.
(ii) No Waiver of Company’s Rights. Company’s inspection of the performance of the Services does not excuse Vendor from any obligations. Company’s failure to inspect, witness, test, discover defects, raise issues concerning
or reject Services performed by Vendor that are not in accordance with this
Contract or any Service Order does not relieve Vendor from the liabilities and
obligations set out in this Contract or raise any defense to the insufficiency of
Vendor’s performance.
1.5 Inspection of Records. Company may, at any time, at its own cost, inspect all Records pertaining to Section 1.2. Company may also inspect all
Records held by Vendor Group which relate to Sections _____ through
______ until at least twenty-four months from the end of the calendar year in
which this Contract is completed or terminated. Company may also inspect
all Records held by Vendor Group which relate to Section __ and Section ___
until expiration of the period required by Section.1.3. Where Company inspects Records under this Section 1.5, all of the following apply:
(A) The inspection shall take place following reasonable notice at the
premises of the Vendor Group member where those Records are kept, during
normal business hours.
(B) The inspection may be carried out by Company or by any Person
engaged by Company for that purpose who is not a competitor of Vendor and
is subject to confidentiality restrictions no less stringent than those imposed
upon a Party to this Contract.
(i) The Company may conduct the inspection only for the purpose of determining any of the following:
(1)
Whether Vendor has complied with this Contract.
(2)
The veracity of invoices and support documents.
1.
Whether Vendor and Subcontractors have satisfied their payment obligations to other Vendor Group members or other
Persons (including tax authorities) arising out of this Contract) Company (or its representatives conducting the inspection) may, at its own cost, make copies of any of the Records.
853
Vendor shall, if requested by Company, make copying facilities available at a reasonable cost to Company or its representatives at the time of the inspection in the place where the inspection is taking place.
(vi)
Subject to any additional compensation required for audits exceeding
the frequency set forth in Section 1.6, Company is not responsible for any
costs of Vendor Group incurred in conducting the inspection other than copying costs referred to in Section 1.5(B)(ii). Vendor is not responsible for any
costs of Company incurred in conducting the inspection. Notwithstanding
anything to the contrary in this Contract, Attorney-client records, cost information, and data concerning other clients and activities beyond the provision
of the Services are not subject to audit or inspection by Company.
1.6
Access and Assistance. No more than once per Contract year, Vendor
shall provide, and shall ensure that other members of Vendor Group provide,
all of the following:
(vii)
Access to all relevant sites to enable Company or its representatives
to carry out inspections in accordance with this Section 1, including access to
all relevant material, equipment and personnel used in the provision of the
Services, provided that such access shall be on a non-interference basis and
subject to Vendor’s reasonable security requirements..
(ii)
All Records requested by Company or its representatives for the purposes of inspection under this Section 1, and full assistance in performing the
inspection and accessing those Records.
1.7
Use of Information. Company may only use information obtained
from inspections under Section 1.5 for the administration or enforcement of
this Contract, for tax or audit purposes, or for the resolution of Disputes.
1.8 Confidentiality. Company shall keep all information obtained from
inspections under Section 1.5 confidential pursuant to this Section 1.8
(“Confidentiality”), except that Company may disclose the information in
each of the following circumstances:
(i)
To the extent necessary for the uses permitted by Section __; and
(ii) Where disclosure is required by applicable law, court order, stock
exchange regulations, or government order, decree, regulation or rule, or
where failure to disclose could reasonably result in sanctions or increased
sanctions against a member of Company Group.
1.9 Remediation. If any inspection by Company or audit by a third party
concludes that Vendor or Vendor Group is not in compliance with any
applicable law or audit requirement, then Company will present Vendor with
such conclusions and the parties will promptly work together to correct such
non-compliance, to the extent required. Depending upon the non-compliance
issue, Vendor understands that correction may need to be immediately
undertaken.
G. Bankruptcy (Chapter 20. Termination in the Event
of Bankruptcy
In the event of Licensor’s bankruptcy, Licensee may by giving written notice to
Licensor, terminate this Agreement in whole or in part and without charge, as of
the date specified in such notice of termination. Any licenses granted under this
Agreement or which are provided pursuant to this Agreement are intended to be
licenses of rights in intellectual property as contemplated by Section 365(n) of
the United States Bankruptcy Code, 11 U.S.C. § 365(n). In the event that
Licensor becomes a debtor under the United States Bankruptcy Code, it is the
intent of the Parties that Licensee shall have all benefits granted to licensees
under the provisions of the United States Bankruptcy Code including, without
limitation, Section 365(n) of Title 11 of the U.S.Code (11 S. 365(n)
2. Affirmation of Rights Under Section 365(n) of the
Bankruptcy Code (Form C.4 § 13)
All rights and licenses granted under or pursuant to this Agreement by
Licensor to Licensee (including the license) are, and shall otherwise be
deemed to be, for the purposes of Section 365(n) of the United States
Bankruptcy Code (the “Bankruptcy Code”), licenses to rights in
“intellectual property” as defined under Section 101 (35A) of the
Bankruptcy Code. As licensee of such rights under this Agreement,
Licensee shall retain and may fully exercise all of its rights and elections
855
under the Bankruptcy Code. Upon the event of the commencement of
bankruptcy proceedings by or against Licensor under the Bankruptcy
Code, Licensee shall be entitled to retain all of its rights under this
Agreement (including the license right
3. Affirmation of Rights Under Section 365(n)
of the Bankruptcy Code – Licensee Oriented
(Form C.4 § 13)
In the event Licensor voluntarily or involuntarily becomes subject to the protection of
the Bankruptcy Code and Licensor or the trustee in bankruptcy rejects this Agreement
under Section 365 of the Bankruptcy Code, Licensee shall have the right to: (a) treat
this Agreement as terminated; or (b) retain Licensee’s rights under this Agreement,
specifically including the right to exercise its rights granted herein to the Licensed
Software (and to all work-in-progress relating thereto). Failure by Licensee to assert its
right to retain its benefits to the intellectual property embodied in the Licensed
Software pursuant to Section 365(n)(1)(B) of the Bankruptcy Code with respect to an
executory contract rejected by Licensor or the trustee in bankruptcy shall not be
construed by the courts as a termination of such contract by Licensee under Section
365(n)(1)(A) of the Bankruptcy Code.
4. Termination Due To Adverse Changes in Licensor’s
Financial Circumstances
If Licensor (i) files a petition in bankruptcy; (ii) has an involuntary petition in
bankruptcy filed against it which is not challenged within twenty (20) days
and dismissed within sixty (60) days; (iii) becomes insolvent, (iv) makes a
general assignment for the benefit of creditors; (v) admits in writing its
inability to pay its debts as they mature; (vi) has a receiver appointed for its
assets; (vii) has any significant portion of its assets attached; or
(viii) experiences a material negative change in its net assets (i.e., total assets
minus total liabilities); then Customer may by giving written notice to
Licensor, terminate this Agreement in whole or in part and without charge, as
of the date specified in such notice of termination. Any licenses granted under
this Agreement or which are provided pursuant to this Agreement are intended
to be licenses of rights in intellectual property as contemplated by Section
365(n) of the United States Bankruptcy Code, 11 U.S.C. § 365(n). In the
event that Licensor becomes a debtor under the United States Bankruptcy
Code, it is the intent of the Parties that Customer shall have all benefits
granted to licensees under the provisions of the United States Bankruptcy
Code including, without limitation, Section 365(n) of Title 11 of the U.S.
Code (11 U.S. 365(n))
5. Customer Rights to Vendor Services Upon Vendor
Bankruptcy
Each party agrees that this is an Agreement under which applicable law
excuses Customer from accepting performance from any entity other than
Vendor. For this reason, if Vendor becomes the subject of any bankruptcy
proceeding, then Customer shall be excused from accepting performance from
Vendor, as debtor-in-possession, from a trustee of Vendor, and from any
assignee of any such debtor-in-possession or trustee, and that this Agreement
may not be assumed or assigned by Vendor, any debtor-in-possession, or
trustee without Customer’s prior consent.
6.
Customer Rights in the Event of Vendor Bankruptcy - ASP
Contract
All licenses and access rights, Licensed Applications, and Source Code
delivered pursuant to this ASP Agreement constitute "intellectual property"
under Section 101(35A) of the Bankruptcy Code (11 U.S.C. § 101(35A)).
Vendor agrees that if Vendor as a debtor-in-possession, or a trustee or receiver
for Vendor, rejects this ASP Agreement or a License/Service Schedule,
Customer may elect to retain its license rights thereunder as provided in
Section 365(n) of the Bankruptcy Code (11 U.S.C. §365(n)). Customer, and
any intellectual property rights, licenses or assignments from Vendor of which
Customer may have the benefit, shall receive the full protection granted to
Customer by applicable bankruptcy law.
H. Benchmarking (Chapter 7.L)
1. Use of Benchmarking Data – Licensor Oriented (§ 8.B)
With respect to any benchmark reports, Licensee acknowledges that the
contents of each benchmark report are based upon information contained in
Licensor’s database. Licensee acknowledges Licensor’s claim that the contents
of such database belong solely to Licensor and may be used by Licensor in
future engagements for other customers. Licensee also acknowledges that the
information contained in each benchmark report and other deliverables may
become a part of Licensor’s database and may be used
in future engagements for other customers. Licensor cannot use any
Confidential Information in Licensor’s database unless such data are coded to
857
preserve Licensee’s anonymity and the security of its information. Under no
circumstances may Licensor include any Personal Information that Licensee has
identified as Personal Information in the database.
2. Benchmarking - Confidentiality
If Licensee is required by its Outsourcing Services Agreement to benchmark
the Licensee Services, Vendor agrees to permit Licensee to include information related to the Software, as part of the benchmarking exercise. Benchmarking shall be performed in compliance with the provisions of Section __
(“Confidentiality”) and the results of such benchmarking activity shall only
be shared with the Customer under the confidentiality provisions of its Outsourcing Services Agreement and Licensor, if so requested.
I. Boilerplate (Chapter 6)1.
Use of English Language
Multiple languages are spoken throughout the Licensee’s workplace and facilities; as such, there is no rule that English must be spoken at all times at Licensee workplaces. Licensee is guided by common sense and mutual respect
in the workplace. The most important principle is that all participants understand the business conversations that take place; therefore, Licensee expects
that when multilingual personnel, including Licensor’s Representatives, are
involved in a business discussion with others, one or more of whom only
speak English or the dominant local language spoken at the Licensee’s facility
where the Services are being performed, the discussion will naturally shift to
English or such local language, not only out of respect and courtesy but to ensure that business is conducted efficiently, safely and in compliance with laws
and regulations. Individuals should otherwise feel free to speak their native
language or whatever language they choose.
2. Entire Agreement – English is Only Language of Contract
This Agreement, including all Exhibits to this Agreement, constitutes the
entire agreement between the parties relating to this subject matter and
supersedes all prior or simultaneous representations, discussions, negotiations,
and agreements, whether written or oral. The original of this Agreement has
been written in the English language. Licensee hereby waives and agrees
never to assert any right it may have to have this Agreement written in the
language of its place of residence.
3. Assurance of Licensor’s Future Performance – Licensee
Oriented
Licensee shall have the right to require Licensor to provide Licensee with adequate assurance that Licensor will perform its obligations in a timely fashion
in accordance with the License. Should Licensee request Licensor to provide
adequate assurance, or a statement by Licensor that Licensor cannot or will
not perform in a timely fashion in accordance with the License, or any act of
omission of Licensor which makes it, in Licensee’s judgment, improbable at
the time that Licensor will perform in accordance with the License shall permit Licensee to terminate the License for default under Paragraph ___ (“Termination”).
COMMENT: The Licensor should not agree to the inclusion of this
language as it creates a right of anticipatory breach that may not
otherwise exist. Further, it may create additional liability on the
licensor’s behalf if the licensor provides such adequate assurance
and later breaches. This language is overreaching and overbearing,
providing the licensee with a remedy but not a right it already has. If
the licensee is concerned about the licensor’s ability to meet certain
delivery obligations, the licensee can protect itself through the
inclusion of milestones in the license agreement.
4. Electronic/Facsimile Signatures
This Agreement may be validly executed via facsimile transmission or
through other electronic means showing the signatures of the parties and each
such reproduced copy of this Agreement shall constitute an original Agreement for all purposes.
5. Counterparts/Facsimile Signatures
This Agreement may be executed in one or more duplicate originals, all of
which together shall be deemed one and the same instrument. This
Agreement shall be binding on the Parties through facsimile signatures, with
originals to follow by regular mail or overnight courier.
6. Notices
(i) All notices required or permitted must be in writing and delivered by mail
(postage prepaid) or by hand delivery to the address of the receiving Party set
out in the signature page to this Contract or in the Service Order, as
appropriate. Notice may also be delivered by facsimile sent to the facsimile
859
number of the receiving Party set out in the signature page to this Contract or
in the Service Order, as appropriate, provided that the original notice is
promptly sent to the recipient by mail (postage prepaid) or by hand delivery.
Notices sent by email are ineffective.
(ii) Notices are effective when received by the recipient during the recipient’s
regular business hours.
(iii)Notices which do not comply with these requirements are ineffective, and
do not impart actual or any other kind of notice.
7. Notice - International Contracts
All notices, demands and other communications to be given or delivered under
or by reason of the provisions of this Agreement will be in writing, in the English language, and will be deemed to have been given (a) when delivered if personally delivered by hand, (b) when received if sent by a nationally or internationally recognized overnight courier service (receipt requested), (c) seven (7)
Business Days after being mailed, if sent by first class mail, return receipt requested, or (d) when receipt is acknowledged by an affirmative act of the party
receiving notice, if sent by facsimile, e-mail, telecopy or other electronic transmission device (provided that such an acknowledgement does not include an
acknowledgment generated automatically by a facsimile, e-mail, telecopy machine or other electronic transmission device). Notices, demands and communications to Licensor and Licensee will, unless another address is specified in
writing, be sent to the address indicated below:
If to Licensee:
Name
Company
Street
City, State Zip Code
With a copy of legal notices to (which shall not constitute notice):
If to Licensor:
Name
Company
Street
City, State Zip Code
With a copy of legal notices to (which shall not constitute notice):
COMMENT: Neither party should agree that a notice is effective
within a set number of days after mailing. Both U.S. and
international mail are notoriously unreliable. As such, notice should
only be effective upon receipt. Notices should not be sent via email
or fax as the chance for mis-delivery or non-delivery is significant.
For example, if the intended beneficiary moves, the sending party
may still receive confirmation of receipt from the receiving fax even
though the intended beneficiary never received the notice. Similarly,
a recipient may receive an email while on an extended absence from
the office and have no knowledge of an email’s content, but yet the
period for any required action has begun.
8.
Prior Review and Counsel
Each party agrees that (a) it was provided a fair and reasonable time to evaluate
this Agreement and to negotiate the terms and conditions of this Agreement, (b)
it has had a fair and reasonable opportunity to consult with an attorney at law of
its choice licensed to practice law in such party’s country or state of residence
(which attorney is not and was not the other party’s attorney), and (c) it has read
and fully understands this Agreement and its terms and conditions. Each party
agrees that it is not acting under undue influence or based on unwritten
promises in executing this Agreement and that execution of this Agreement is
done freely, knowingly and voluntarily.
9. Prior Review and Counsel - Alternative Language
This Agreement has been negotiated between unrelated parties who are sophisticated and knowledgeable in the matters contained in this Agreement and
who have acted in their own self-interest. In addition, each party has been, or
has had the opportunity to be, represented by legal counsel. The provisions of
this Agreement shall be interpreted in a reasonable manner to effect the purposes of the parties, and this Agreement shall not be interpreted or construed
against any party to this Agreement because that party, or any attorney or representative for that party, drafted this Agreement or participated in the drafting
of this Agreement.
10. Relationship of Parties – Independent Contractors
The Parties acknowledge that they are independent contractors, and nothing
set forth in this Agreement shall be deemed or construed to render the Parties
as joint venturers, partners or employer and employee. Under no circum861
stances shall Licensee be considered the employer of any Licensor personnel,
nor shall Licensor have any right with respect to any employee of Licensee.
11.
Use of Other Party’s Name, Logo and Trademarks
Each party shall use the other party’s name, logo and trademarks only in the
manner specified by the other party in writing, or as expressly permitted by
this Agreement.
12. Reference to Dates and Days
All references to dates and days shall be according to the Gregorian calendar.
Days shall mean consecutive calendar days.
13. Licensor to Notify Licensee in Event of Structural
Change in Licensor’s Business
Licensor shall promptly notify Licensee of any material changes in its structure or operations occurring during the term of this Agreement, including,
without limitation: material changes in Licensor’s composition, ownership,
management, financial condition, information systems, insurance coverages or
other matters materially affecting Licensor’s operations.
14. Trading in Securities
Each party hereto shall refrain from trading in securities of the other party
while in possession of material non-public information pertaining to the other
party.
15. No Joint Venture
Nothing herein shall be deemed to constitute the Parties or their Affiliates as
joint ventureres, partners or agents of each other. Neither Party not its
Affiliates shall be liable for any debts, accounts, obligations or other liabilities
of the other Party or its Affiliates. Neither Party nor its Affiliates is authorized
to incur any debts or other obligations of any kind on the part of or as agent
for the other, except as may be specifically authorized in writing.
16. Pronouns
All personal pronouns used in this Agreement shall include the other gender,
whether used in the masculine or feminine or neuter gender; and the singular
shall include the plural whenever and as often as may be appropriate.
17.
Order of Precedence
In the event of any conflict or inconsistency between the terms and conditions
of this Agreement and the terms and conditions of any Statement of Work, the
terms and conditions of this Agreement shall control.
18. Responsibility for Employees and Agents
Vendor will be solely and entirely responsible for Vendor’s actions and omissions
and the actions and omissions of Vendor’s agents, employees, representatives and
Assistants.
19.
Time of Performance – Alternate Language to Time is of
the Essence
Licensor and Licensee will use commercially reasonable efforts to fulfill their
respective obligations in a timely manner in order to achieve the agreed milestones and dates set forth in the Statement of Work.
20. Certification of Compliance with Terms of Agreement
Upon request by Licensee, Licensor shall provide Licensee with reasonable
assurances of Licensor’s compliance with the terms of this Agreement and
any Exhibit(s). Reasonable assurances may include, but are not limited to,
Licensor’s signed certification of such compliance, as it applies to certain requirements, and/or the Agreement or Exhibit(s) generally.
21.
Invalidity
If any provision of this Agreement is found to be invalid or unenforceable to
any extent, then that portion shall be deemed conformed to the minimum
requirements of law to the extent possible. In addition, the remainder of this
863
Agreement is not affected and continues to be valid and enforceable to the
fullest extent permitted by law.
22. Waiver
Waiver by any party hereto or to this or any Ancillary Agreement of any default by any other party hereto or thereto of any provision of this Agreement
or such Ancillary Agreement shall not be deemed a waiver by the waiving
party of any subsequent or other default.
23. Entire Agreement and Waiver
This License Agreement is intended to be the entire agreement between the
parties with respect to matters contained herein, and supersedes all prior or
contemporaneous agreements, discussions and negotiations with respect to
those matters. No shrink-wrap, click-wrap, or other terms and conditions
provided with the Software hereunder shall be binding and shall have no
effect to Company. No waiver of any breach or default shall constitute a
waiver of any subsequent breach or default.
24. Entire Agreement
By entering into this Agreement, Vendor waives all terms and conditions
contained in its order acknowledgement form, invoices or other documents
that are different from or additional to the terms and conditions set forth in
this Agreement, and all such different or additional terms and conditions shall
be null and void. Customer’s acceptance of any Services provided by Vendor
and payment of any invoices hereunder, are expressly made conditioned on
Vendor’s assent to the terms and conditions set forth in this Agreement.
25. Survival
The parties agree that their respective rights, obligations and duties under Sections [LIST SURVIVING SECTIONS], and as well as any rights, obligations
and duties which by their nature extend beyond the termination or expiration
of this Agreement shall survive any termination or expiration and remain in
effect for a period of five (5) years thereafter or the period specified in this
Agreement, if longer.
After expiration or termination of this Agreement, all provisions relating to
payment shall survive until completion of required payments, including without limitation any payments due with respect to Software sold after the termination or expiration of this Agreement. In addition, all provisions regarding
indemnification, warranty, liability and limits thereon, and confidentiality
and/or protection of proprietary rights and trade secrets shall survive indefinitely.
26. Due Dates
If any payment or other action required under this Agreement falls due on a
date that is a Saturday, Sunday or legal holiday, then such payment or other
action shall become due on the first Business Day after such Saturday, Sunday
or legal holiday.
27. Relationship of the Parties
Nothing in this Agreement is intended to or shall operate to: (i) create a
distribution relationship, partnership, joint venture, association or other cooperative entity between the parties for any purpose whatsoever, or (ii) authorize
a party to act as agent for the other party, or (iii) grant authority to act in the
name or on behalf of, or to assume or enter into any obligation on behalf of, or
otherwise to bind the other party in any way (including but not limited to the
making of any representation or warranty, the assumption of any obligation or
liability and the exercise of any right or power).
J.
Breach (Chapter 5.F; § 5)
1. Problem Management
The Licensor shall be responsible for tracking, managing, and resolving any
unscheduled event that adversely affects the Services (each a “Problem”) arising
from or relating to the Services (“Problem Management”). The Licensor’s
general responsibilities with respect to Problem Management shall include the
following steps:
1.1 Licensor will log reported Problems with respect to the Services upon
receipt of notice from Licensee, automated alarm, or other source. Licensor
shall identify and log Problems arising in the performance of the Services with
the appropriate Licensee level-1 help desk support. For each Problem, Licensee
shall assign a severity level and the Licensor will prioritize resolution of Problems in accordance with the Services Agreement.
865
1.2 Licensor will monitor, control, and manage each Problem arising
from or relating to the Services until it is corrected or resolved, including reporting on
charge related outages. The Subcontractors will provide any assistance that
Licensor may reasonably request in monitoring, controlling, and managing
Problems. To the extent a Problem does not arise from or relate to the Services, Licensor shall refer such Problem to the appropriate entity, as identified
by Licensee, for resolution.
1.3 Licensor will correct or resolve Problems within the scope of the Licensor’s responsibilities. Resolution of a Problem will be subject to the Licensee level-1 help desk’s verification that the Problem has been resolved.
1.4 Licensor will adhere to the procedures for Problem escalation, review and reporting specified by Licensee in writing, and also take appropriate
measures to avoid reoccurrence of Problems.
1.5 Licensor will perform Problem analysis, including identification of
the source of the Problem.
1.6 Licensor will monitor, measure, and provide reports on Problems including statistics on the types of Problems, total number of Problems, outstanding Problems, resolution times (including the average time to resolve Problems), and as otherwise required to report the Licensor’s compliance with the
requirements of each of the
related agreements. Licensor shall undertake best efforts to improve the average
time
to resolve Problems.
1.7 Licensor shall maintain communications with the appropriate
Licensee level-1 help desk support on Problems through resolution. Licensor
shall, for each Problem, provide prompt notification to Licensee of system
outages on critical systems and otherwise provide the appropriate level 1 help
desk support with regular and timely progress updates (at least hourly with
respect to Level-1 Problems) that clearly indicate the nature of the Problem, the
estimated time to completion, and potential short-term alternatives. Licensor
shall make known to the appropriate Licensee level-1 help desk support
information regarding the status of Severity 1 Problems and Severity 2
Problems on at least a daily basis or more frequently as appropriate. Licensor
shall track and report any backlog of unresolved Problems.
1.8 Licensor shall maintain a Problem tracking and management tool.
Such tool shall include a mechanism to capture, store, and retrieve solutions for
reuse by Licensor Personnel and Licensee. Licensor shall grant Licensee access
to monitor and view the Problem management database on an ongoing basis
upon the request of Licensee authorized personnel. In addition, Licensor shall
have access to, and leverage, for reuse any Licensor-wide cross-customer
solutions from central problem resolution databases maintained by the Licensor.
1.9 Licensor shall provide or dispatch support specialists to provide on-
site troubleshooting and maintenance response as necessary to identify and
resolve
Problems.
1.10 Licensor shall engage and manage third party suppliers and vendors
as necessary to localize and resolve Problems that arise from or relate to the
Services as received from the Licensee level-1 help desk support, automated
alarm or other source.
2. Step in Rights – Licensee’s rights to assume Licensor’s
subcontracts in event of Licensor’s breach (§ 5.3.7)
If, (i) there is a dispute between Licensor and any Subcontractor; (ii) Licensor
is in breach of this Agreement; and (iii) the applicable Subcontractor elects to
exercise its rights to terminate the applicable Subcontract, then Licensee will
have the right to assume the rights and responsibilities of Licensor (“Step In”)
under the Subcontract as such rights and responsibilities would have existed
under the Subcontract on the date that Licensee exercises its Step In rights
(the “Step In Date”) had Licensor not been in breach. If Licensee exercises its
rights to Step In under a Subcontract, (a) Licensee will not be liable for any
breaches of Licensor under the Subcontract and will not be obligated to cure
any such breaches; (b) Licensee will have the rights and responsibilities of
Licensor arising on or after the Step In Date, including the obligation to pay
the Subcontractor for any services performed for Licensee under the
Subcontract on or after the Step In Date; and (c) the Subcontractor will not be
entitled to terminate the Subcontract for any grounds accruing prior to the
Step In Date or based upon any action or inaction by Licensor.
COMMENT: To protect its interests, the Licensee should insist on the
right to assume the vendor’s contract with the Licensor’s subcontractors.
By doing so, the Licensee can hopefully avoid any disruptions in the
project and also have a better understanding of the role each
subcontractor plays in the project.
3. Step-in Rights – Alternative Language
In the event that Vendor is failing to deliver all or part of the services,
Customer may assign Customer staff or third parties to step in and perform
any failing elements of the services until such time as Vendor can demonstrate
the ability to resume provision of such services.
All costs associated with the exercise of such step-in rights shall be borne by
867
Vendor.
Customer’s exercise of its step-in rights shall not constitute a waiver by
Customer of any termination rights or rights to pursue a claim for damages
arising out of the failure that led to the step-in rights being exercised
4. Step In Rights – Comprehensive Language
Subcontractor agrees that it is imperative that Vendor be able to seamlessly
orchestrate efforts among the subcontractors for the successful execution and
completion of its obligations as the Prime under the Agreement and as such
Vendor maintains certain contractual obligations to the Customer as the
Prime. As such, the Parties agree to the following Step In Provision Step
In Rights.
If any of the following circumstances occur, Subcontractor agrees that Vendor
is entitled to the following step in rights (“Step In Rights”) as set forth below:
a) Subcontractor is acquired by a third party that does not assume
Subcontractor’s obligations under this Agreement or Statement
of Work, or
b) Any governmental authority or other third party seizes all, or a
substantial portion, of Subcontractor assets, or
c) Upon Subcontractor’s written notification to Vendor that Subcontractor is unable to perform all or most of its duties under
this Agreement or Statement of Work, for any reason, or
d) If Subcontractor is placed into receivership; Subcontractor files
a petition in bankruptcy under Chapter 7 of the U.S. Bankruptcy Code; Subcontractor files a petition in bankruptcy under
Chapter 11 of the U.S. Bankruptcy Code and the trustee rejects
an executory contract between Vendor and Subcontractor,
thereby preventing Subcontractor from performing its obligations under this Agreement or Statement of Work,; or Subcontractor is adjudged bankrupt under Chapter 7 of the U.S. Bankruptcy Code, or
e) Disbarment or suspension of Subcontractor by the State of
______________or disbarment or suspension as a federal contractor, or
f) By a binding award of a duly appointed arbitrator or by an order of a court of competent jurisdiction, or
g) For any reason, if Subcontractor substantially discontinues the
software or software licenses relevant to the Project, or
h) Termination of this Agreement, for cause, or
i) As agreed to in writing by Subcontractor and Vendor.
1.2
Right to Hire
If Vendor invokes its Step In Rights as contained herein, Vendor shall be
granted the right to hire any and all Subcontractor employees working on this
Agreement that Vendor deems necessary for the completion of any and all
obligations under the Agreement. Subcontractor shall not be entitled to any
additional remuneration other than that contained in this Article __ as outlined
below, if Vendor exercises this right. Subcontractor shall take no actions
whatsoever to dissuade Subcontractor employees from becoming Vendor
employees.
1.3 Work Products
If Vendor invokes its Step In Rights as contained herein, all Subcontractor
Work Products under escrow shall immediately become available to Vendor
solely for the purposes of Vendor’s performance of its obligations as the
Prime under the Agreement. If this occurs, Subcontractor shall not receive any
additional remuneration for the escrow products other than that contained in
Articles 1.4, 1.5, and 1.6 of this Article 1 below.
1.4 Outstanding Payments – Finished Deliverables
All outstanding invoices for completed Subcontractor deliverables approved
by the State as part of the Project that are supplied up to and including the day
that Vendor invokes its Step In Rights as contained herein shall remain due
and payable to Subcontractor within Net 45 days less the State Withholding.
1.5
Outstanding Payments – Partial Deliverables
For partially completed Subcontractor deliverables during the DDI Phase
869
(“Partial Deliverables”) performed up to the day that Vendor invokes its Step
In Rights, the Parties agree to use the following approach to determine
Subcontractor’s remuneration.
The basis for determination of the value of the work provided by
Subcontractor for Partial Deliverables shall be based on the Vendor Earned
Value Reporting System (“Vendor EVRS”). The Vendor EVRS is a proven
tracking system current deployed on other Vendor projects that tracks
individual activities against the overall project and projects a percentage of
completion for each activity or deliverable.
The calculation for Subcontractor payment for Subcontractor for Partial
Deliverables will be based on the following formula:
Subcontractor Partial Deliverable Value = (Vendor EVRS %
complete value for the Subcontractor Partial Deliverable) x (the total
SOW value for that specific Subcontractor deliverable during the DDI
Phase)
Subcontractor rights under this Article ___ shall only take effect upon
Subcontractor’s full delivery of all Partial Deliverables to Vendor. Payment
for Partial Deliverables will be made Net 45 days from final delivery of
Partial Deliverables less the State Withholding.
1.6 Other Cost Settlement Items
For Subcontractor items not addressed in Article 1.4 or Article 1.5 that
Subcontractor would like to include to Vendor for cost settlement
consideration (“Cost Settlement Items”), Subcontractor will provide Vendor
with a list of Cost Settlement Items within no more than thirty (30) business
days from the date that Vendor invokes its Step In Rights for further
discussion. Parties agree to address Cost Settlement Items on a case-by-case
basis.
1.7 Non Applicable Cost Recovery
The cost recovery provisions available to Subcontractor in Articles 1.4, 1.5,
and 1.6 of this Section 1 shall not apply to the following under the following
circumstances:

Subcontractor is acquired by a third party that does not assume Subcontractor’s obligations under this Agreement, or




This Agreement is terminated for cause resulting from gross negligence or willful intent, or
By a binding award of a duly appointed arbitrator or by an order of a
court of competent jurisdiction that renders an award counter to the
Subcontractor payment rights in this Article 1, or
Disbarment or suspension of Subcontractor by the State of
____________ or disbarment or suspension as a federal contractor, or
As mutually agreed to in writing by Subcontractor.
1.8 Conflicts
In the event of any conflict between the provisions, terms and conditions of
this Article 1 and the rest of this Agreement and its Exhibits and Attachments,
the provisions of this Article 1 shall prevail.
5.
Vendor Financial Solvency - Material Changes
Upon Customer’s written request, Vendor will furnish an audit report prepared by independent certified accountants, or such other financial information acceptable to Customer, for the purposes of demonstrating its financial
condition. If Vendor’s audit reports are publicly available, in lieu of providing written copies thereof, Vendor may inform Customer of where and when
they may be obtained. In addition, Vendor agrees to provide all necessary
consents to Customer obtaining Vendor’s financial statements and other Vendor financial information from the financial institution(s) with which Vendor
has a lending, depository or other relationship to further Customer’s examination. In addition, Vendor will notify Customer in writing in the event of: (i)
financial difficulty that may materially impact any Products or Services; (ii)
significant staffing reductions or changes in key staff that may affect Vendor’s
ability to provide any Products or Services; (iii) a decision by Vendor to outsource, relocate, sell, or acquire significant operations or support associated
with the Products or Services or other critical components of the environment
used to provide the Products or Services; (iv) cessation of business or material
adverse change in any business of any subcontractor used by Vendor hereunder; (v) any unfavorable change to the credit ratings assigned to Vendor by
major United States and international credit rating agencies; (vi) loss of a significant customer’s business; (vii) an announced intention or the actual filing
for bankruptcy protection under any Law; (viii) the existence of a strike
against any part of its operations; or (ix) the closing of any of its operational
sites supporting Customer.
871
6.
Notice of Potential Vendor Breach
1.1 Potential Breach. If Vendor becomes aware of any information, act or
omission that could lead to Vendor’s breach of any obligation or warranty
described in this Agreement or an applicable Statement of Work (including
inability to meet mutually agreed deadlines or inability to deliver Deliverables
according to the specifications in the applicable Statement of Work), Vendor
shall: (i) promptly notify Customer, in writing; and (ii) take all reasonable
actions, in consultation with Customer, necessary to avoid breaching the
Agreement or the applicable Statement of Work (including adding additional
Vendor Personnel to the Vendor team, at no cost to Customer, in order to meet
mutually agreed deadlines).
1.2 Foreseeable Costs. If Vendor materially breaches this Agreement or any
Statement of Work, then Vendor shall pay for, or reimburse Customer for, all
reasonable costs of completing the associated Services or Deliverables
incurred by Customer that are greater than the amount Customer would have
paid Vendor but for Vendor’s material breach. Such additional costs may
include: (i) costs to Customer of completing the Services or Deliverables
itself; and (ii) Customer’s cost of engaging a third party supplier to complete
the Services or Deliverables. This section shall not be construed as limiting or
restricting any other rights or remedies that Customer may otherwise have
against Vendor for breach of this Agreement, including the right to terminate
the Agreement or applicable Statement of Work as described in this
Agreement.
7.
Incident Management/Notification of Breach
Recipient shall develop and implement (and, in the case of Licensor as
Recipient, require any Approved Subcontractor to develop and implement) an
approved incident response plan that specifies actions to be taken when the
Licensor, an Approved Subcontractor or Licensee suspects or detects that a
party has gained unauthorized access to Licensee Confidential Information or
systems or applications containing any Licensee Confidential Information (the
”Response Plan”). Such Response Plan shall, include, among other things, an
escalation procedure to senior managers and appropriate reporting to
regulatory and law enforcement agencies. The Licensor, as Recipient, shall
immediately report to Licensee’s Chief Information Security Officer via
telephone or email (and provide a confirmatory notice in writing as soon as
practicable but in any event within twenty four (24) hours) all incidents that
may in any way affect the operation of Licensee or the confidentiality,
availability or integrity of Licensee Confidential Information (including
backed up data), including but not limited to, any successful or attempted
unauthorized access to systems or networks which contain or provide access
to the Confidential Information; provided that the foregoing notice obligation
is excused for such period of time as Recipient is prohibited by law
enforcement agencies to notify Discloser. Recipient will promptly furnish to
the Discloser full details that the Recipient has or may obtain regarding the
general circumstances and extent of such unauthorized access, including
without limitation, the categories of personal data and the number and/or
identities of the data subjects affected, as well as any steps taken to secure the
Confidential Information and preserve information for any necessary
investigation. Recipient shall use reasonable efforts to assist Discloser in
investigating or preventing the reoccurrence of any such access; (i) cooperate
with the Discloser in its efforts to comply with statutory notice or other legal
obligations applicable to Discloser or its clients arising out of unauthorized
access or use and to seek injunctive or other equitable relief, (ii) cooperate
with the Discloser in any litigation and investigation against third parties
deemed reasonably necessary by Discloser to protect its proprietary rights;
and (iii) promptly take all reasonable actions necessary to prevent a
reoccurrence of and mitigate against loss from any such authorized access.
The Licensor shall ensure that all Personnel fully understand the process and
conditions under which they are required to invoke the appropriate incident
response. Recipient shall maintain absolute confidentiality regarding actual or
suspected unauthorized possession, use, or knowledge of Discloser’s
Confidential Information or any other failure of Recipient’s security measures
or noncompliance with its security policies or procedures. Recipient agrees to
immediately discontinue use of and access to Discloser’s Confidential
Information if requested, for any security reasons cited by Discloser.
8. Notice of Material Adverse Effects
Licensor will promptly notify Licensee of:
(a) any notice of violation of any applicable statutes, ordinances, orders,
directives, decisions, judgments, decrees, rules or regulations promulgated by
any regulatory, administrative or judicial authority that relates to the
performance of the Services or which may have a material adverse effect on
its ability to fulfill its duties and obligations under this Agreement;
(b) the commencement of any litigation or any regulatory, administrative or
judicial proceeding or investigation adverse to Licensor that relates to the
873
performance of the Services or which may have a material adverse effect on
its ability to fulfill its duties and obligations under this Agreement or relating
to any breach of privacy or security;
(c) any material adverse change in the financial condition of Licensor
including in any event downgrade by a nationally recognized ratings agency
or removal of Services Provider from any nationally recognized securities
trading exchange by any regulatory and exchange authority or loss of a client
from which Licensor receives a material portion of its aggregate revenues.
(d) any other event relating to Licensor which may have a material adverse
effect on its ability to perform the Services or fulfill its duties and obligations
under this Agreement, as the case may be, including, but not limited to, any
applicable statutes, ordinances, orders, judgments, directives, decisions,
decrees, rules or regulations that would have a substantial adverse effect on
the confidentiality, privacy or security-related obligations provided for under
this Agreement; and
(e) any breach or suspected breach by Licensor or its Personnel, Approved
Subcontractors, agents or others of any security, confidentiality or privacy
provision hereunder; any misuse of, or improper access to any proprietary
intellectual property of Licensee or Licensee Confidential Information; any
breach or suspected breach of Licensor’s Security Policy which results in, or
which may result in, improper access to the information or data of any client
of Licensor together with details as to such event.
9. Confidentiality/Data Protection Claims
In the event of a breach of any provisions of Section __ (Confidentiality and Data
Protection), Section __ (Global Data Protection and Privacy) or Section __
(Massachusetts Security Standards) of this Agreement by Licensor, any of its Related
Companies, or any of their current or former Personnel, directors or officers, or
failure to perform any of Licensor’s obligations and responsibilities hereunder and
more specifically, with respect to the breaches of the Data Protection and Privacy
Laws, the Licensor shall be liable to Licensee, Licensee’s Related Companies, as
well as their Personnel, clients, parents, subsidiaries or affiliated companies, as
applicable, for any damages caused thereby. If a data subject is not able to bring an
action against Licensee arising out of a breach by the Licensor as the data importer of
any of the Licensor’s obligations under this Agreement arising under the transmission
of Licensee Personal Data to the Licensor because Licensee has disappeared factually
or has ceased to exist in law or became insolvent, the Licensor agrees that the data
subject may issue a claim against the Licensor as data importer as if Licensor were
the data exporter.
10. Errors in Data Conversion – Licensor Oriented
Licensee acknowledges that data conversion is subject to the likelihood of human and
machine errors, omissions, delays, and losses, including inadvertent loss of data or
damage to media, that may give rise to loss or damage. Licensor shall not be liable
for any such errors, omissions, delays, or losses of either Licensee or Licensee’s licensees. Licensee and Licensee’s licensees are responsible for adopting measures to
limit the impact of such problems, including backing up of data, and adopting procedures to ensure the accuracy of input data; examining and confirming results prior to
use, and adopting procedures to identify and correct errors and omissions, replace
lost or damaged media, and reconstruct data.
11. Timing – Neutral Bilateral
Subject to Section __ (Force Majeure), the Approval Process with respect to each
Deliverable shall be performed within the times prescribed therefore in the Statement
of Work; provided, that, (i) dates for performance by a party as set forth in the
Statement of Work shall be adjusted for delays caused by the other party hereto (the
Delaying Party), but only to the extent required by such Delaying Party’s delay (i.e.,
only dependent tasks shall be re-scheduled and then only for a day-for-day period, or if
the parties mutually agree, for the period of time reasonably necessary to afford the
party the period for performance that it would have had absent the delay); (ii) in the
case of any Deliverable for which no time period is prescribed in the Statement of
Work, Evaluation of any Deliverable (whether initially delivered or fixed and redelivered) shall be ten (10) business days from the date of delivery or re-delivery; (iii)
the fix/re-delivery period shall be ten (10) business days from the date of receipt of
notice of Nonconformities or such longer period as mutually agreed by the parties; and
(iv) if at the end of any Evaluation period or re-Evaluation Period, Customer shall not
have issued either an Approval or a notice of Nonconformities, Vendor may so notify
Customer in writing and Customer shall, within five (5) business days thereafter, notify
Vendor of all Nonconformities or the Deliverable will be deemed Approved. Unless
the parties otherwise agree in writing, a failure by Vendor to timely make any delivery
or submission for the Approval Process shall count as a failed delivery and shall have
the same effect as if the Deliverable had been delivered with Nonconformities.
12.
Timing – Delay by Licensee – Neutral
If Licensee fails to timely complete scheduled work which delays Licensor, Licensee
agrees that the entire schedule set forth in Subsection ____ shall be extended by a
number of days equal to the number of days which Licensee delays Licensor.
If either party anticipates that it cannot meet the completion dates for assigned
tasks or responsibilities and it is probable that a completion date for a Phase may be
delayed, such party shall immediately notify the other party in writing of the reason
for such delay and the estimated impact on the Phase’s schedule. At a minimum, the
875
completion dates for the Phase and any interrelated tasks shall be extended by the
period of any such delay.
13.
Timing – Licensor Oriented
If Licensee’s failure to timely perform any of its responsibilities set forth in the Implementation Plan directly and adversely affects Licensor’s ability to perform Licensor’s
obligations under the Implementation Plan, Licensee shall (a) extend the performance
due date for the implementation of any milestone in the Implementation Plan affected
thereby by the same number of days such failure continues (i.e., a “day-for-day” basis),
and (b) reimburse Licensor for any additional incremental costs actually and reasonably
incurred by Licensor as a direct result of such failure (but only to the extent
Licensor uses commercially reasonable efforts to minimize such costs). Performance
shall be extended as provided under (a) above, provided, however that any resulting
extension of the implementation of a milestone in the Implementation Plan that is identified as being in the critical path of any other milestone in the Implementation Plan or
the overall completion date of the Implementation Plan will extend the date
of such other milestone or such overall completion date, as applicable, by the same
number of days.
14.
Timing – Licensee Oriented
Licensor’s nonperformance of its obligations under this Agreement shall be excused
if and to the extent (i) such Licensor nonperformance results from Licensee’s (including its Affiliates’ or its subcontractors’) failure to perform its responsibilities; and (ii)
Licensor provides Licensee with reasonable notice of such nonperformance and (if
requested by Licensee) uses Commercially Reasonable Efforts to perform notwithstanding Licensee’s failure to perform (with Licensee being responsible to reimburse
Licensor for its additional Out-of-Pocket Expenses for such efforts).
K.
1.
Change in Control (Chapter 4.G)
Change in Control of Licensee
Vendor shall notify Customer within thirty (30) days of the purchase,
acquisition, or any other change in its ownership or control affecting ten
percent (10%) or greater interest, any acquisition by it of ten percent (10%) or
greater interest in any subsidiary and any new agreement with, by, or between
any affiliates that is materially relevant to this Agreement.
2.
Change in Control of Licensee – Alternative Language
a.
In the event of a transaction (“Transaction”) resulting in a change in
control of Licensor by which acquirer (“Acquirer”) acquires directly or indirectly, through purchase, amalgamation, combination, reorganization or otherwise: (i) all or substantially all of the assets of Licensor; or (ii) more than
fifty percent (50%) of the voting power of the voting stock of Licensor, Licensee may elect, in its sole discretion, to terminate this Agreement in whole or in
part. If only part of Licensor’s Software products are acquired by Acquirer in
connection with the Transaction, then for those Licensor Software products
which are not acquired, but are either divested, sold or otherwise transferred to
a third party (“Divested Software Product”), pursuant to a government decree, judgment, order, or otherwise, Licensee may elect to continue to enforce
its rights under the terms of this Agreement applicable to such Divested Software Product by assignment or such other means, and such terms of this
Agreement will become binding obligations of said third party.
b.
Licensee shall have ninety (90) days from the date of written notice
from Licensor, in accordance with the notice requirements of Section _____
(“Notices”) hereof, indicating that the Transaction has been consummated, to
make its election whether to terminate, in whole or in part, this Agreement or
to continue to utilize such Agreement by assignment or otherwise.
c.
If Licensee elects to terminate this Agreement in whole or in part under this Section, then: (i) on the date of Licensee’s election, Licensee’s obligations under this Agreement including, but not limited to, license fees, subscription fees, support fees; Maintenance and Support fees, etc. shall terminate
immediately; and (ii) no later than thirty (30) days after such date, Licensor
shall refund to Licensee the unamortized portion of any pre-paid Maintenance
and Support fees paid to Licensor as of the effective date of Licensee’s election. Irrespective of Licensee’s decision regarding termination of this Agreement: (a) Licensee’s licenses to use the Software shall continue in accordance
with the terms or surviving terms of this Agreement at no increase in price;
and (b) Acquirer shall give to Licensee a technology presentation/roadmap
regarding its vision for the continued use of said acquired Software, how the
Software will be used in the future, any foreseen overlap between current
products and the acquired Software, etc. In the event Acquirer discontinues
any Software in use by Licensee as of the effective date of the change of control, Acquirer shall ensure, at Licensee’s sole discretion, that a functional
equivalent is made available to Licensee for its use at no additional charge, or
the source code and documentation applicable for each such Software product
877
shall be furnished to Licensee as provided for in Section __ (“Source Code
Escrow”) of this Agreement.
d.
Notwithstanding anything of the foregoing, in the event Licensor is
required by a governmental agency to spin-off a piece of its business, or Licensor voluntarily spins-off an element of its firm (“Spin-Off”), such SpinOff will have no affect on Licensee. Licensor or Spin-Off entity shall ensure
that all Software acquired under this Agreement is available under the same
terms and conditions and pricing, to include Maintenance and Support, subsequent to such Spin-Off, irrespective as to which entity retains the Software for
marketing, sales and/or Maintenance and Support.
3.
Change in Control - Mutual
In the event that all of, or a controlling interest in, either Party, or a parent of a
Party hereto, is acquired by an unrelated third Party by merger, acquisition or
private or public purchase of securities or assets, the other Party shall have the
right:
a. To terminate the Agreement with forty-five (45) days written notice, or
b. To continue the Agreement, and at its option, to require that the Party in
which a controlling interest is acquired adopt reasonable internal constraints to
prevent disclosure of technical aspects of any portion of this project to the acquiring Party or any part of the acquiring Party which is in competition with
the non-acquired Party. As used herein, a controlling interest shall be defined
as the power to elect or control the majority of the Board of Directors of the
affected company.
4.
Change of Control and Divestiture
Change of Control. In the event of a transaction (“Transaction”) resulting in
a change in control of Supplier by which acquirer (“Acquirer”) acquires directly or indirectly, through purchase, amalgamation, combination, reorganization or otherwise: (i) all or substantially all of the assets of Supplier; or (ii)
more than fifty percent (50%) of the voting power of the voting stock of Supplier, Customer may elect to continue to enforce its rights under the terms of
this Agreement applicable to such Product, Programs, or Services and such
terms of this Agreement will become binding obligations of said Acquirer; or
to terminate this Agreement in whole or in part, in its sole discretion. Cus-
tomer shall have ninety (90) days from the date of written notice from Supplier, in accordance with the Notices section herein, indicating that the Transaction has been consummated, to make its election whether to terminate this
Agreement, in whole or in part.
Irrespective of Customer’s decision regarding termination of this Agreement, Customer’s rights to receive the benefits of the Products, Programs,
and/or Services procured as of the effective date of termination, shall continue
in accordance with the terms or surviving terms of this Agreement, at no additional cost. [In the event Acquirer discontinues any Product, Program, or Service in use by Customer as of the effective date of the change of control, Acquirer shall ensure, at Customer’s request, that a functional equivalent is made
available to Customer for its use at comparable pricing, or in the case of a
Program the source code and documentation applicable for each such Program
product shall be furnished to Customer.]
Divestiture. In the event Customer and/or any of its Customers divests
itself of a subsidiary or affiliate (“Divested Entity”), Customer and/or its
Customer (to include such Divested Entity) may continue to use the Product,
Program, and/or Services provided hereunder for the benefit of the Divested
Entity for a period of up to six (6) months from the effective date of such
divestiture. No additional fees or charges for such use by the Divested Entity
shall be due, provided the aggregate contracted capacity is not exceeded. In
addition, Customer shall have the option of transferring such Product,
Program, and/or Services provided hereunder, or any part thereof, to the
Divested Entity without additional charge. Should Customer elect to transfer
the Product, Program, and/or Services provided hereunder, or any part thereof,
to the Divested Entity, such Divested Entity shall enter into a separate
provisioning agreement with Supplier or the Divested Entity’s use shall be
governed by Supplier’s then current standard terms and conditions for such
Product, Program, and/or Services.
5.
Divested Entity’s Use of Software
In the event Licensee and/or any of its customers divests itself of a subsidiary
or affiliate (“Divested Entity”), Licensee and/or its customer (to include such
Divested Entity) may continue to use the Software licensed hereunder for the
benefit of the Divested Entity for a period of up to six (6) months from the
effective date of such divestiture. No additional fees or charges for such
usage for the benefit of the Divested Entity are due, provided the Software
879
Licensed Capacity is not exceeded. In addition, Licensee shall have the
option of transferring such Software, or any part thereof, to the Divested
Entity without additional charge. Should Licensee elect to transfer the
Software (or any part thereof) to the Divested Entity, such Divested Entity
shall enter into a separate licensing agreement with Licensor or the Divested
Entity’s usage of the Software shall be governed by Licensor’s standard end
user license agreement.
6.
Divestiture of Customer Business
If Customer sells, exchanges or otherwise disposes of all or a portion of the
assets of, or Customer’s interest in, any Business Group in which Services are
used, then Customer shall have the right to assign to such third party all applicable licenses, warranties, maintenance schedules and rights granted under
this Agreement with respect to such Services; provided that the third party
agrees to be bound by all obligations of Customer to Vendor that pertain to the
Services. Notwithstanding the foregoing, Customer shall have the right to assign this Agreement to any Affiliate.
7. Divestiture of Customer Business – Alternative Language
In the event that Licensee divests itself of any Affiliate or other portion of its
business (“Divested Business”), upon Licensee’s request, Licensor agrees that
it will (1) permit Licensee to provide the Products, Services or Deliverables
during the transition of the Divested Business to either the Divested Business
or the acquiring party, as applicable, without breach of this Agreement, and
(2) sign a written agreement with such Divested Business to permit the
Divested Business to continue its use of any Products, Services or
Deliverables on the same terms and conditions as set forth in the relevant
portions of this Agreement, for a period not to exceed one (1) year after the
final transition of such Divested Business from Licensee (collectively, the
“Transition Services”). Notwithstanding, Licensee, in its sole discretion,
may continue to procure the Products, Services or Deliverables pursuant to the
terms of this Agreement. In no event will Licensee incur any additional fees
or liability for any such Transition Services or continued use.
8. Mergers and Acquisitions
If Customer acquires Control of, or comes under common Control with an
entity that has an agreement with Vendor that relates to the subject matter of
this Agreement, then the Controlling entity, in its sole discretion, will have the
right to terminate one of the contracts without liability, charge or expense for
an early termination, and notwithstanding any provisions to the contrary in
either contract, after which, the Controlling entity will receive the benefits of
the remaining contract. At the Controlling entity’s request, Vendor agrees to
enter into an amendment with the Controlling entity to move Vendor’s
obligations in whole or in part from the cancelled contract to the remaining
contract, including Vendor’s obligation to provide products or services for the
fees set forth in the cancelled contract.
9. Software Use for Subsequently Acquired Companies –
Licensor Oriented
Licensee shall use {single copy licenses: [a single logical production copy of]} the
Software only to process data related to the internal operations or the financial
services offerings of itself, excluding businesses, blocks of business, or lines of
business acquired thereby from a third party after the effective date of this
Agreement.
COMMENT: Licensors should include language to this effect to avoid
losing revenue from the expansion of the licensee’s business. Similarly,
the licensee should reject this language to avoid paying additional license fees as its business expands.
L. Change Management (Chapter 7.E; § 9.8)
1. Change Management (§ 9.8)
1.1 “Change” means any material addition to, modification or removal of
any aspect of the Software or the Services or the IT Infrastructure. “Change
Request” means a written request for a change submitted by a Party. “Change
Management Process” means a written procedure for considering, analyzing,
approving, and carrying out Changes designed to ensure that only desirable
Changes are made and that Changes are carried out in a controlled manner with
minimal disruption to the Services or the Software and Licensee’s and its
Affiliates’ business operations. Notwithstanding any implication to the contrary
in the provisions below, the Licensor will coordinate all Changes with Licensee.
1.2 Working in consultation with Licensee, Licensor will develop a
Change Management Process. The Change Management Process will provide,
at a minimum, that:
1.2.1 Any Equipment and Software provided by or on behalf of Licensor that connects to Licensee’s IT environment will comply with Licensee’s
881
enterprise and application architecture, IT standards (including security standards), and strategic direction and will only be introduced into the IT Infrastructure in accordance with the Change Management Process.
1.2.2 No Change will be implemented without Licensee’s approval
except as may be necessary on a temporary basis to maintain the continuity of
the Services. Licensor will document and report emergency changes to
Licensee no later than the next business day after the Change is made.
1.2.3 Licensor will schedule all Changes (other than emergency
Changes) so as not to unreasonably affect Licensee’s (or its Affiliates’)
business operations or degrade the Services or the Software. The Licensor will
coordinate closely with Licensee on all Changes so as to prevent any
disruption from occurring as a result of conflicting or inconsistent Changes
being undertaken.
1.2.4 On a monthly basis, the Licensor will prepare a rolling quarterly
“look-ahead” schedule for ongoing and planned Changes for the next three (3)
months. The Licensor will monitor and report the status of Changes against the
applicable schedule and without jeopardizing the Master Schedule.
1.2.5 Licensor will not make any Change that may require Licensee
to install a new version, release or upgrade of, or replacement for, any Software
or
equipment
or to modify any Software or equipment without first obtaining Licensee’s approval, which Licensee may withhold in its discretion.
1.2.6 Upon Licensee’s request, the Licensor will perform a
comparison at a reasonable and mutually agreed level of detail, between the
amount of resources required by the affected Software and Equipment to
perform a representative sample of the processing being performed for
Licensee immediately prior to the Change and immediately after the Change.
Licensee will not be required to pay for increased resource usage resulting
from a Change except to the extent Licensee approved the Change after notice
from Licensor of the increased resource usage.
1.2.7 Licensor will not make any Change except in accordance with
the Change Management Process and with Licensee’s approval. Licensee will
not be obliged to approve Changes requested by Licensor and, conversely,
Licensor will not be obliged to carry out any proposed Change that Licensee
does not approve.
1.3 If Licensee submits a Change Request to a Licensor, Licensor
(working with any Subcontractor(s), as applicable) will prepare and submit to
Licensee without undue delay (and in any event within thirty (30) days) a
proposal for carrying out the Change. The proposal will contain a proposed plan
for carrying out the Change, an assessment of the effect of carrying out the
Change on the charges under the Services Agreement, and an assessment of the
impact of the Change on the Services and the Software, including an assessment
as to whether the Change would adversely affect the specifications,
functionality, operability, performance, accuracy, speed, responsiveness,
quality, or resource efficiency of any systems or Services or the Software or
require any material changes to Licensee’s (or its Affiliates’) facilities, systems,
equipment or Software.
1.4 Except as otherwise approved by Licensee in writing, Licensor will
bear all costs and expenses associated with making a Change or resulting from
implementation of a Change.
1.5 By giving written notice within a reasonable time, Licensee may
accept a proposal for Change or reject it. Should the Parties agree on carrying
out a Change, a written document will be prepared describing the Change and
its effects on the Services and the Software, the charges, and any affected
components of the Services Agreement (a “Change Order”). Licensor will
not begin performing any proposed Change until it has been authorized by a
Change Order signed by a duly authorized representative of Licensee. If
Licensor does so, it will be deemed to have provided such performance
gratuitously.
1.6 If an approved Change would result in New Services or a change in
any of the related agreements, the Change must be authorized via a contract
amendment or modification made pursuant to Section _____ (Contract
Amendments and Modifications) of the Services Agreement.
COMMENT: Change Management is very important as large projects inevitably change over time. To avoid disputes and delays, the
parties should set forth in detail Change Management procedures in
their agreement.
M.
1.
Cloud/ Hosting (Chapter 9)
Multi-User Resale License Grant
The license rights granted to Cloud Provider in Section ____ (“License
Grant”) shall be expanded to (i) allow Cloud Provider to integrate the
Software with Cloud Provider products to provide Integrated Products to be
deployed as software as a service, cloud offerings or other deployments made
possible through public, private or hybrid cloud environments or dedicated
environments (ii) allow Cloud Provider to install and deploy the Integrated
Products at any Cloud Provider’s managed location in the Territory and (iii) to
allow any number of customers of Cloud Provider to access the Integrated
Products in such environments by any means as determined by Cloud
Provider, including, without limitation, access via direct, dedicated lines or
through the internet or any combination of the foregoing, which would include
883
public, private or hybrid networks (clouds) (the “Cloud License”) . Pursuant
to the Cloud License Cloud Provider is authorized to resell as a Cloud
Provider-provided service (an “Integrated Product”) to an unlimited number
of End-User Customers during the Term of the Agreement upon payment of
fees to Licensor as described below.
Software license fees shall be determined based on the quantity and type of
network element being managed. The attached “Price List” attached hereto
as Exhibit ___ - Price List (as may amended from time to time by Licensor
with no less than 90 day written notice to Cloud Provider) shall be used to
calculate License Fees owed by Cloud Provider for the sale of either perpetual
licenses or cloud licenses of Licensor Software. Amendment of the attached
Price List by Licensor shall not affect any agreements entered into by Cloud
Provider prior to such amendment and such pricing as reflected in such Cloud
Provider agreements shall remain firm for the duration indicated in such
agreements. Cloud Device Fees shall be paid quarterly based on cumulative
number of active device managed by Cloud Provider pursuant to the Cloud
License.
2 License Grant with Regulatory Obligations
“End-User” means any individual authorized by an End-User Customer to
use a Product under this Agreement.
“End-User Customer” means any third party legal entity that uses a Product
under this Agreement solely in order to fulfill its own internal needs (and not
for resale, marketing or leasing).
3
GRANT OF LICENSE
3.1
Right to Host Server. Subject to the terms of this Agreement and
during the term of this Agreement, Licensor grants to Cloud Provider a
limited, non-exclusive, worldwide, non-transferable, terminable, license to
internally use, copy, and display the Products, and to permit Cloud Provider
employees, Subcontractors and End-Users to access and use the Products
hosted on computer hardware controlled by Cloud Provider in either a Cloud
Provider managed facility or an End-User Customer facility, provided that
Cloud Provider (i) submits Monthly Reports and pays applicable usage fees,
as set forth in this Agreement, to the Cloud Provider; and (ii) only allows
access to the Products to End-Users that are legally bound by the applicable
Licensor Receiver license agreement (which is embedded in the Receiver and
accepted by End-Users upon installation of the Receiver in order to access and
use the Products hosted by Cloud Provider).
3.2
Right to Distribute Client. Subject to the terms of this Agreement and
during the Agreement Term, Licensor grants to Cloud Provider a limited, nonexclusive, worldwide, non-transferable, terminable license to distribute to the
End-Users the client software for Products for use in accessing server
software for Products during the Agreement Term.
3.3 Restrictions. Licensor reserves all rights in and to the Products that are not
expressly granted herein. Nothing in this Agreement assigns to Cloud
Provider or to any End-User Customer any ownership right in any intellectual
property in the Products. Under this Agreement, neither Cloud Provider nor
any End-Users are permitted to (i) attempt to decompile, disassemble, reverse
engineer or otherwise attempt to discern the source code of the Products, (ii)
sell, resell, rent, lease, or distribute the Products (except as expressly set forth
in this Section 3), (iii) remove, obscure, alter, or obfuscate any copyright,
trademark or other proprietary notice, label or marking on the Products, (iv)
modify, translate or sublicense the Products or any portion thereof.
Cloud Provider hereby agrees, that to the extent that any applicable
laws (such as, for example, national laws implementing EC Directive 91/250
on the Legal Protection of Computer Programs) gives Cloud Provider the right
to perform any of the aforementioned activities without the consent of
Licensor to gain certain information about the Products, before Cloud
Provider exercises any such rights, Cloud Provider shall first request such
information from Licensor in writing detailing the purpose for which Cloud
Provider needs the information. Only if and after Licensor at its sole
discretion, partly or completely denies such request, shall Cloud Provider
exercise its statutory rights.
4. REPORTING AND PAYMENT
4.1
Reporting. Cloud Provider must submit to Distributor a monthly use
report (“Monthly Report”) using the template attached herein in Exhibit A,
via e-mail within fifteen (15) calendar days after the end of each calendar
month during each and every month in which this Agreement is in effect. A
Monthly Report must be submitted even if there was no usage. For [Product
Name] Products, the Monthly Report must be as described in the Program
Guide, listing the true and correct number of distinct End-Users who accessed
the [Product Name] or [Product Name] products hosted by Cloud Provider
within the prior month. For [Product Name], the Monthly Report must be as
885
described in the Program Guide, listing the true and correct number of peak
active virtual machines or physical servers who accessed the [Named] Server
and products hosted by Cloud Provider within the prior month. For [Product
Name], [Product Name] and [Product Name] Products the Monthly Report
must be, as described in the Program Guide, listing the true and correct
number of [Named] appliances hosted by Cloud Provider within the prior
month. Failure to submit two (2) Monthly Reports shall constitute a material
breach of this Agreement and such a failure shall provide Licensor with the
right (but not the obligation) to terminate this Agreement. Reporting details
shall include the additional detail specified under Exhibit __ during the
Agreement Term.
Reporting of End-User Customer names may be
anonymous with Cloud Provider agreeing to maintain records of such EndUser Customers and providing them to Licensor, upon written request from
Licensor, except in the cases where the Cloud Provider agreement with such
End-User Customers prohibits such disclosure.
4.2
Payment. Cloud Provider must pay Licensor the amounts as set forth
in Exhibit __ for all Products accessed during each month. There is no
monthly minimum usage, and there is no volume discount associated with this
Agreement. Licensor may reduce the suggested prices charged under this
Agreement at any time; Licensor may increase the suggested prices charged
under this Agreement only once per year on January 1 and only with three (3)
months prior written notice to Cloud Provider. The suggested prices
applicable as of the Agreement Effective Date are as set forth in Exhibit __
attached hereto and are also available from Licensor at any time upon request.
4.3
Evaluation Copies. With respect to End-User Customers, Cloud
Provider is permitted to exercise the license rights granted under this
Agreement at no charge for a period of sixty (60) days after granting such
End-User Customers access to the Products (the “Evaluation Period”),
provided, however, that Cloud Provider does not charge any third party or
End-User Customers for any access to or use of the Products during the
Evaluation Period. Cloud Provider must still comply with the reporting
requirements set forth in subsection 4.1 above, for use during the Evaluation
Period.
3. General Terms from Licensor Allowing Cloud Provider to
Provide Cloud Services to End Users
1. Service Offerings: the business models covered by this Addendum are as
follows:
Hosted Email Archiving – The [Product Name] Email Management
email archiving solution is deployed either in a hosted environment in a
Reseller data center or on premises at Reseller’s Client location.
Regardless of the venue the solution will be deployed and managed by
Reseller personnel. Under the terms of this Agreement Reseller will use
the Software from [Product Owner] on a monthly subscription basis and
deliver it as a fully integrated service offering to their Clients.
Hosted eDiscovery – The [Product Name] Discovery Manager
eDiscovery solution is deployed either in a hosted environment in a
Reseller data center or on premises at Reseller’s Client location.
Regardless of the venue the solution will be deployed and managed by
Reseller personnel. Under the terms of this Agreement Reseller will use
the Software from [Product Owner] on a monthly subscription basis and
deliver it as a fully integrated service offering to their Clients.
Hosted Archiving – The [Product Name] Archiving solution is
deployed either in a hosted environment in a Reseller data center or on
premises at Reseller’s Client location. Regardless of the venue the
solution will be deployed and managed by Reseller personnel. Under
the terms of this Agreement Reseller will use the Software from
[Product Owner] on a monthly subscription basis and deliver it as a fully
integrated service offering to their Clients.
2. Term: The initial term of this Addendum will be _____ (__) years from
the Agreement effective Date (“Agreement Initial Term”). This Agreement may subsequently be renewed for additional annual periods subject
to the mutual written agreement of the parties (each an “Agreement Renewal Term”). The Agreement Initial Term and all Agreement Renewal
Terms shall collectively be the “Agreement Term”. In the event of Termination of the Agreement for [Product Owner]’s convenience, the Agreement and this Agreement shall survive for a period of up to _________
(__) months, with respect to any obligations Reseller may have to existing
Clients, for which capacity purchases extend beyond the termination period.
3. Maintenance and Support: All prices below except where specifically
noted are inclusive of Enhanced (7x24) Maintenance and Support.
4. Hardware: Reseller is responsible for providing all hardware associated
with the Software covered by this Agreement.
887
5. Non-Production Software: A non-production copy of the Software covered by this Agreement will be provided to Reseller by [Product Owner]
for the Agreement Initial Term to be used for internal testing, training and
demonstration purposes using the Basic Demonstration Agreement in
place between the Parties.
6. Service Offering Software: The following Software is made available
under this Agreement in support of the Service Offerings described herein:
7. Hosted Email Archiving / eDiscovery and Archiving Price Schedule
Number of Mailboxes / Users
Email Management
Per Mailbox per Month
Discovery Manager
Per Mailbox per Month
1 – 50,0000
$
$
50,000 – 100,000
$
$
100,101 – 200,000
$
$
200,001 – 400,000
$
$
401,000 – 800,000
$
$
800,0001 - Up
$
$
Notes:
1. Prices are progressive and are achieved as “steps” are satisfied.
2. Price “steps” are achieved on a cumulative point in time basis. For
purposes of this Agreement, a federal project or contract shall constitute a single “Client”.
3. Per Mailbox / per month license “credits” can be pre-purchased at
discounted rates without requiring that preceding “steps” be satisfied and used anytime during the course of the Agreement Term.
8. Reporting. Reseller will issue not-to-exceed Purchase Orders (“NTE
PO”s) as applicable for the Software based on anticipated volumes of
mailboxes. No later than fifteen (15) days after the last business day of
each calendar month, Reseller shall submit to [Product Owner] reports,
identifying the mailboxes utilized during the prior calendar month for each
of the Service Offerings, in substantially the same format as set forth in
Exhibit __ (Monthly Report Template) attached hereto and incorporated
herein (each a “Monthly Report”). [Product Owner] will invoice Reseller
at the price agreed herein based on the data in each Monthly Report
against the applicable NTE PO, and Reseller will pay such invoice in accordance with the terms set forth in the Agreement.
4.
License Grant Allowing Cloud Provider to Sublicense
Software on a Hosted Basis
1.1
Hosted Services. "Hosted Services" means hosting, subscription,
service bureau, outsourcing or similar services provided by Reseller, a
Distributor or an End User to a Hosted Customer.
1.2 Hosted Customer. "Hosted Customer" means a third party for whom
Reseller, its Distributor or End User operates, maintains and/or uses the
Products on behalf of the third party.
A.
Distribution License. Licensor hereby grants to Reseller a worldwide,
non-exclusive, transferable (as provided in Section __ (“Assignment") right
and license, under Licensor's Intellectual Property Rights, to:
1. sell, offer for sale, market, reproduce, and distribute (directly and
indirectly) perpetual or term-based licenses of the Licensor Technology
and Derivative Technologies thereof and to Sublicense each of the
foregoing rights in the Licensor Technology and Derivative Technologies;
and
2. use the Licensor Technology and Derivative Technologies thereof, to
provide Hosted Services, including without limitation the right to market,
reproduce, distribute and grant Sublicenses of the Licensor Technology in
conjunction with the Hosted Services, and to Sublicense each of the
foregoing rights in the Licensor Technology and Derivative Technologies.
5. License Grant Allowing Cloud Provider to Sublicense the
Software.
Licensor grants Cloud Provider, a limited, non-exclusive, non-transferable
license to distribute the _______ System(s) directly to its customers through
and/or host the _______ Software in an application service provider (ASP)
environment so long as the _______ Systems(s) is incorporated with Cloud
Provider's Software and is not provided as a stand-alone product. Cloud
Provider shall pay the applicable license fees for each customer. Cloud
889
Provider may not transfer licenses between customers. If a customer ceases to
subscribe to the ASP service with Cloud Provider, the licenses for that
particular customer shall terminate
6. ASP Services License Grant
Licensor licenses to Licensee, a limited, non-exclusive, non-transferable right
to distribute the A-Cobol Run System(s) directly to its customers through
and/or host the Software in an application service provider (“ASP”)
environment so long as the _______ Systems(s) is incorporated with
Licensee's Software and is not provided as a stand-alone product. Licensee
shall pay the applicable license fees for each customer set forth in Exhibit
__- Fees. Licensee may not transfer licenses between customers. If a
customer ceases to subscribe to the ASP service with Licensee, the licenses
for that particular customer shall terminate.
7.
Managed Services License Grant
a. Grant. Subject to the terms and conditions of this Agreement,
Vendor hereby grants to Vendor, and Vendor hereby accepts a worldwide,
perpetual, limited, non-exclusive, transferable and assignable object code
license to: (i) Use the Software internally on behalf of its Customers for the
purposes described herein, and (ii) reproduce and use the Documentation
solely in connection with the license granted herein. For purposes of the
preceding sentence, “Use” shall mean loading, accessing, utilizing, storing or
displaying the Software in accordance with the permitted purposes and
restrictions set forth in this Section __.
b.
Affiliates. Vendor may transfer the license acquired hereunder
to any of its Affiliates, provided that such transfer is: (i) made to facilitate the
provision of Vendor’s Managed Services on a global basis; and (ii) shall not
expand or otherwise alter the scope of the license grant set forth above. In
connection with the transfer of license rights to a Vendor Affiliate, Vendor
and Vendor shall, to the extent necessary to reflect differences in local laws
and business conventions, enter into a Local County Addendum, as mutually
agreed. Except as provided herein, Vendor may not transfer the license rights
to any other third parties, provided any transfer as is implied in the remaining
clauses of this Section __ shall not be deemed barred or otherwise in violation
of this Agreement,
c.
Use Rights. Vendor acknowledges that Vendor is in the business of providing outsourcing, business process, hosting and other managed
services to third parties (collectively, “Managed Services”) in its capacity as
an information technology services provider. In order for Vendor to realize the
full benefit of the license granted in clause (a) above, Vendor agrees and
acknowledges that, in addition to the right to Use the Software for its internal
benefit as relates directly to performing the Managed Services on behalf of its
Customers in its capacity as an Administrator or Direct User of the Software,
Vendor also shall have the right to: (i) grant its Customers the right to Use the
Software, either as a Direct User, Beneficiary or Indirect User of the Software,
(ii) grant its Agents and the Customer’s Agents the right to Use the Software
only to the extent necessary to facilitate the provision of the Managed Services by Vendor to Customer and the full benefit and enjoyment of such Managed Services by the Customer; and (iii) grant the Customer’s customer Use
of the Software as a Beneficiary or Indirect User of the Software if the nature
of the Software, its functionality or purpose is such that it could reasonably
be contemplated to extend to the Customer’s customer in connection with the
Managed Services. In any instance where Vendor shall grant Use rights to a
third party, Vendor shall ensure that all such usage is subject to the terms of
Vendor’s then current end user license terms.
d. Distribution Rights. Vendor may distribute the Software by
installation of an SOE on the hard disk of a computer owned or leased by
Vendor or its Customer by either: (i) installing one copy of the Software on a
Vendor or Customer owned or leased computer file server for the purpose of
downloading and installing the Software onto computers within Vendor’s or
its Customer’s intranet, or (ii) bundling the Software on physical media (such
as a CD-ROM, DVD, hard disk, etc.) with other software or content, through
electronic means (including, without limitation, electronic software download)
or on a stand-alone basis solely on tangible media. In addition, Vendor may
authorize its Agents to install the Software as a component of Vendor’s or its
Customer's SOE on the computers that the Agent is providing to Vendor or
Customer in connection with the Managed Services.
e.
Assignment.
(i)
Notwithstanding the restriction on assignment above, if an
agreement for Managed Services or any part thereof, is terminated or expires,
and the Software used in connection with such Managed Services is needed by
the Customer to perform the previously performed Managed Services on its
own behalf, then Vendor may transfer the Software, or any part thereof, to its
Customer without additional charge. As a condition to such assignment, said
891
Customer shall enter into a separate licensing agreement with Vendor based
upon Vendor’s then current and standard licensing terms unless said Customer
is already party to a license agreement with Vendor, in which case Customer
and Vendor may agree that the Software shall be licensed subject to the terms
of the pre-existing agreement.
(ii)
If an agreement for Managed Services or any part thereof is
terminated or expires, and the Software used in connection with such Managed Services is used exclusively by Vendor and its Agents in the provision of
such Managed Services, then Vendor may redeploy the Software or any part
thereof, for use on behalf of another Vendor Customer, without additional
charge. Vendor and Vendor shall document the redeployment of such Software as necessary to keep Vendor fully informed of its location and Use.
[To Be Added to Definition Section of Agreement]
Administrator: A user that has the ability to access the executables of the
software, and can install, configure and manage the software.
Direct User: A user that has the ability to see and use the software for the
purpose it is designed to be used.
Beneficiary: An entity that benefits from the Software running in its
environment, but is neither an Administrator nor a Direct User of the
software.
Indirect User: A user of software that is not known or accessed directly,
but supports the availability of other software to which the user has direct
access. For example, a user is an Indirect User of operating system software
that is needed to enable the availability of an application used directly by the
user in a hosted environment.
8.
Cloud Encryption Standards
Customer will encrypt the Data using the AES-256 standard and stored on
Amazon Simple Storage Service (S3) devices within the Amazon east coast
and west coast data centers. When needed, the encrypted Data will be
replicated to Elastic Band Storage (EBS) devices and made available during
the boot process to server instances and associated server user accounts with
proper credentials. The credentials will be stored and maintained within the
Customer-managed data center and presented to the Amazon server instances
only during the boot process. No credentials will be stored in the Amazon
cloud environment.
COMMENT: Customers should seek to ensure that the definition of “Confidential Information” is broad enough to include information that the customer discloses, the information of Customer’s customers and information that the vendor
can access. Most non-disclosure agreements require only that each party must only exert "reasonable efforts" and thus may avoid liability for hacking etc. Customers should consider adopting a strict liability standard for any disclosure.
9.
Cloud Warranty Disclaimer
Due to the continual development of new techniques for intruding upon and
attacking networks, Vendor does not warrant that the Software or any equipment, system or network on which the Software is used will be free of vulnerability to intrusion or attack.
10.
Conversion to Conventional Installation - Hosting/ASP
to Traditional Software License
Licensee shall have the option to convert or extend the license(s) granted under this Agreement and any applicable License/Service Schedule to a perpetual license for installation and use of the Licensed Applications through Licensee’s own designated servers and websites. NOTE: TERMS,
CONDITIONS, AND PRICING OF ANY IN-HOUSE LICENSING
OPTION WILL NEED TO BE NEGOTIATED INDIVIDUALLY.
11. Testing and Acceptance
1.1.
All Licensee ASP Sites and the Licensed
General.
Applications as made available for use through the Licensee ASP Sites shall
be subject to testing and acceptance by Licensee. Testing may occur both
before and after any “go-live” date. Unless a License/Service Schedule
expressly specifies otherwise, the procedure for testing and acceptance shall
be as set forth in this Section __.
1.2.
Test Period. The Test Period for acceptance testing will begin
when the parties mutually agree that the Licensee ASP Sites and Licensed
Applications have been fully installed and configured and are ready for
893
testing, and will continue for up to ninety (90) days thereafter. If Licensee
notifies Provider during the Test Period of any failure of the Licensee ASP
Sites or Licensed Applications to meet Test Criteria, or that the Licensee ASP
Sites or Licensed Applications are Clinically Unacceptable, the Test Period
will be suspended from the date of such notification and will not begin to run
again until necessary corrections have been implemented by Provider. If such
a suspension of the Test Period occurs, Licensee will have the balance of such
Test Period (or up to thirty (30) days after implementation of the corrections,
whichever is longer) to complete testing.
1.3. Interim Deliverables. If implementation or acceptance testing
are to occur in stages or phases, all interim deliverables accepted by Licensee
shall be deemed conditionally, not finally, accepted, until all Licensee ASP
Sites, Licensed Applications, and other deliverables to be provided under the
License/Service Schedule have been fully configured, tested, and accepted.
Conditional acceptance of a deliverable may be designated as a payment
milestone in a License Schedule, but shall be subject to Licensee’s rights to
refunds or credits if the full set of Licensee ASP Sites, Licensed Applications,
and other deliverables fails to achieve Final Acceptance.
1.4. Final Acceptance. Final Acceptance will occur when either (i)
Licensee notifies Provider in writing that the Licensee ASP Sites, Licensed
Applications (including any required Licensee Customizations), and other
deliverables have satisfied the Test Criteria, are not Clinically Unacceptable,
and Licensee expressly accepts them, or (ii) Licensee continues to use the
Licensed Applications through the Licensee ASP Sites after the Test Period to
manage live data in a production environment and has not notified Provider
within ten (10) business days after the end of the Test Period of the failure of
the Licensee ASP Sites or Licensed Applications to satisfy the Test Criteria or
of their Clinical Unacceptability.
1.5. Failure to Achieve Final Acceptance. If any material failure
to meet Test Criteria during the Test Period, or any Clinical Unacceptability,
remains uncorrected for more than thirty (30) days after Licensee notifies
Provider of such failure, or if the Licensee ASP Sites and Licensed
Applications (including any required Licensee Customizations) fail to achieve
Final Acceptance within ten (10) business days after the originally scheduled
end of the Test Period, then Licensee may terminate the applicable
License/Service Schedule, reject any or all of the Licensee ASP Sites,
Licensed Applications, and other deliverables provided under that
License/Service Schedule, and receive a full refund from Provider of all
amounts paid for the rejected items and related services.
1.6.
Warranty and Support Obligations Not Affected. Any
failure by Licensee to notify Provider in connection with the Test Period of
any particulars in which Licensee deems any Licensee ASP Sites, Licensed
Applications, or any other deliverables nonconforming or defective shall not
in any way be deemed a waiver or otherwise excuse Provider from its
warranty or other obligations with respect to those items.
1.7.
Subsequent Deliverables. Acceptance procedures for Licensee
Customizations or other deliverables that are ordered separately rather than as
part of the agreed implementation of the Licensee ASP Sites and Licensed
Applications shall be specified in a separate SOW. If the SOW does not
expressly specify the acceptance procedures, then implementation, testing,
and acceptance shall generally conform to the methodology set forth in this
Section ___, reasonably adapted as appropriate to the items being provided.
12. No Additional Fees for Licensee’s Customers’
Access
Any access to the Software by Licensee’s Customers or its Customer’s subcontractors, as part of the Licensee Services via a Licensee hosted intranet
web site, will not be counted in any annual reconciliation statement, nor will
such access require Licensee to pay additional fees associated with any upgrades, or require Licensee to purchase more Licensed Capacity, providing
such access is for use of the Software on or for Managed Devices which have
already been licensed hereunder.
13.
Notification of Website Unavailability
Vendor shall notify Customer’s designated point of contact by [telephone/email] at [telephone number/e-mail address] within five (5) minutes after
Vendor becomes aware that the Web Site is unavailable to users for any
reason other than for scheduled maintenance, providing such details as may be
available, including the time the outage occurred, the planned resolution of the
problem and the projected time when the Web Site will become available.
14. Protection of Customer Data - With Indemnity
Vendor shall ensure that no Customer data processed or stored by Customer
through the Service is (a) accessed or modified by anyone other than a
Customer authorized user or (b) is intentionally or inadvertently deleted, lost
895
or corrupted. Vendor shall indemnify Customer for all losses, damages, costs
and expenses incurred by Customer as a result of any breach by Vendor of any
of the foregoing obligations.”
COMMENT: Customers should seek to ensure that the definition of
“Confidential Information” is broad enough to include the information of
Customer’s customers. Most NDAs require only that each party must only
exert "reasonable efforts": and thus may avoid liability for hacking etc.
Customers should consider adopting a strict liability standard for any
disclosure.
Each party will: (a) notify the other party promptly of any material
unauthorized possession, use or knowledge, or attempt thereof, of the other
party’s Confidential Information by any person that may become known to
such party; (b) promptly furnish to the other party details of the unauthorized
possession, use or knowledge, or attempt thereof, and use reasonable efforts to
assist the other party in investigating or preventing the recurrence of any
unauthorized possession, use or knowledge, or attempt thereof, of
Confidential Information; (c) use reasonable efforts to cooperate with the
other party in any litigation and investigation against third parties deemed
necessary by the other party to protect its proprietary rights; and (d) promptly
use reasonable efforts to prevent a recurrence of any such unauthorized
possession, use or knowledge of Confidential Information.
15.
Source Code Escrow - ASP Services
NOTE: MAY NOT BE PRACTICAL IN SOME ASP SETTINGS.
1.1. Escrow Agreement. Within thirty (30) days after Final
Acceptance of Licensed Provider Applications under a License/Service
Schedule, both parties will execute a three-party agreement with Iron
Mountain Intellectual Property Management, Inc. or another national
technology-escrow firm approved by Licensee in its sole discretion (“Escrow
Provider”) or will agree on terms under which Licensee will become a
beneficiary of a two-party agreement between Provider and such Escrow
Provider. Provider shall have responsibility, and shall make commercially
reasonable follow-up efforts with Licensee and Escrow Providers to ensure
that the escrow agreement contemplated by this Section __is negotiated and
executed. Provider will be responsible for all fees due for the Escrow
Provider’s services. As between Provider and Licensee, the terms of this ASP
Agreement will prevail over any conflicting or inconsistent terms in the
agreement with the Escrow Provider.
1.2.
Deposit of Source Materials. Within thirty (30) days after the
later of (i) execution of the Escrow Agreement required by Section __, or (ii)
Final Acceptance of Licensed Provider Applications under a License/Service
Schedule, and within thirty (30) days after the release of each Update,
Provider shall deposit into escrow one copy of the Source Code of the
Licensed Provider Applications as configured and customized for Licensee,
together with (i) sufficient documentation for the Source Code to allow
Licensee to use the Source Code upon release in accordance with the
provisions of this ASP Agreement, and (ii) any software required to assemble,
compile, and test the Source Code and convert it into object code
(collectively, “Source Materials”). Provider will notify Licensee in writing
of each Source Materials deposit and Licensee will have the option to require
Provider to demonstrate to Licensee’s reasonable satisfaction that the
deposited Source Materials will compile into and function identically to the
then-current version of the Licensed Provider Applications.
1.3.
Access. Licensee will have the right to immediately access the
Source Materials held by the Escrow Provider if Provider ceases to do
business, becomes insolvent, or materially breaches its Support obligation
under this ASP Agreement or the applicable License/Service Schedule.
Within five (5) days after accessing the Source Materials, Licensee will
provide Provider with written notice of such access. Licensee shall thereafter
have the additional right and license to (i) assemble, compile, and test the
Source Materials and convert source code for Licensed Provider Applications
into object code, and (ii) install, use, support, and maintain the Licensed
Provider Applications through Licensee’s own designated servers and
websites during the applicable Subscription Term, including modifying the
Licensed Provider Applications as necessary to fix bugs and enable them to
function in Licensee’s operating environment. Licensee may use third-party
consultants and contractors to provide the foregoing services on its behalf,
subject to their execution of appropriate confidentiality agreements. All other
conditions and limitations on use hereunder shall continue to apply.
1.4.
Direct Access to Provider Source Code. If the parties do not
conclude an agreement with a Escrow Provider, or if Provider fails to deposit
conforming Source Materials including Updates as required, then upon the
occurrence of the conditions described in Section __ (“Access”), Provider
shall provide Licensee with all Source Materials immediately upon Licensee’s
897
written request, subject to the same limitations on use as set forth in Section
__ (“Access”).
1.5
Third-Party Applications. If Provider is providing Licensed ThirdParty Applications to Licensee and the applicable third-party license does not
provide Licensee with rights to Source Code, Provider shall obtain an
appropriate software escrow agreement from the third party licensor for
Licensee’s benefit, or if unable to do so, shall obtain Licensee’s prior written
consent that the third-party Software may be provided without such an escrow
agreement
16 – Data Security Language – Balanced Approach
Vendor acknowledges that the Assets may be used by Customer to
generate and/or store data that is mission-critical to Customer. Accordingly,
Vendor will maintain conformance with industry standards of data security
and will maintain a formal, comprehensive, data security program that
includes reasonable security procedures and practices that are appropriate to
the nature of the Customer data and are reasonably designed to (a) ensure the
security, confidentiality and integrity of Customer data; (b) protect against
threats or hazards to the security, confidentiality or integrity of Customer data;
(c) prevent unauthorized access to, and destruction, use, modification and
disclosure of Customer data, and (d) provide for prompt notice to Customer of
any unauthorized access to any Customer data. Without limiting the
foregoing, Vendor will maintain an uninterruptable power supply to the
Assets and take commercially reasonable steps to assure adequate physical
security of the Assets, including but not limited to: (i) maintaining fully
redundant subsystems and compartmentalized security zones controlled by
biometric access controls and methods, (ii) assuring that all Vendor personnel,
including its subcontractors, undergo adequate security screening prior to
having access to Customer data or any Assets accessed and used by Customer,
(iii) establishing commercially reasonable security procedures that limit, to
access that is required to enable Vendor to perform its obligations under this
Agreement, access to Customer data and Assets that are accessed and used by
Customer.
N.
Compliance with Laws (Chapter 6.I; § 25)
1. Licensor Responsible for Compliance with Laws – Change in
Law Justifies Change in Rates – Licensor Oriented
The Licensor shall comply with all federal, state, and local laws applicable to
its Services, including, but not limited to, all statutes, regulations and rules
that are in effect as of the Effective Date of the Agreement and shall procure
at its expense all licenses and all permits necessary for the fulfillment of its
obligation.
If any existing laws, regulation or policy is changed or if any new law,
regulation or policy is enacted that affects the services provided under this
Agreement, the parties to the Agreement shall modify this Agreement to the
extent reasonably necessary to (i) ensure that such services will be in full
compliance with such laws, regulations and/or policies; (ii) modify the rates
applicable to such services and (iii) address any schedule impacts.
COMMENT: The wording of this clause is favorable to the licensor as the licensor does not bear the financial risk of a change in
the law. Under this wording the licensor is able to pass any additional costs on to the licensee.
2. Licensor Responsible for Identification and Compliance with
Applicable Laws
Licensor is responsible for the identification of, interpretation of, and compliance with, any applicable laws, regulations and statutes that affect it or the
Licensee’s applications or business.
COMMENT: A party should never agree to blindly comply with
all applicable laws. Rather, an agreement to comply with laws
should be limited to those laws in existence at the time of contract
signature or those laws related to the licensor’s software. To do
otherwise shifts the burden of risk (and any resulting costs) associated with a change in the law from the licensee to the licensor.
3. Vendor Required to Provide Notice of Change in Law
Vendor shall promptly notify Customer of any change in Law that requires
Changes as soon as it becomes aware of such a change in Law, but in any
event prior to such Law becoming effective. As with other Changes, the
parties shall negotiate in good faith a reasonable and equitable adjustment, and
shall, if the parties so agree, confirm such Changes in a Change Order.
899
4.
Anti-Kickback Statute and Stark Law
(a) Each party shall comply with the provisions of all applicable laws relating
to the performance of its obligations under this Agreement. Each party is
responsible for obtaining its own legal advice concerning its compliance with
applicable laws.
(b) Each party certifies that it shall not violate the federal anti-kickback
statute, set forth at 42 U.S.C. § 1320a-7b(b) (“Anti-Kickback Statute”), or
the federal “Stark Law,” set forth at 42 U.S.C. § 1395nn (“Stark Law”), with
respect to the performance of its obligations under this Agreement. Further,
Vendor shall ensure that individuals meeting the definition of “Covered
Persons” (as such term is defined in the Corporate Integrity Agreement
between the Office of Inspector General of the Department of Health and
Human Services and AdvancePCS dated September 5, 2005) shall comply
with Vendor’s Compliance Program, including training related to the AntiKickback Statute and the Stark Law. Vendor’s Code of Conduct and policies
and procedures on the Anti-Kickback Statute and Stark Law may be accessed
at http://www.customer.com/portal/.
5. Compliance with Laws – Excludes Compliance That Would
Cause Violation of U.S. Law
Without limiting any other provision in this Contract, in performing its
respective obligations under this Contract, each Party shall comply with, and
shall ensure that all of its Affiliates and subcontractors comply with, all
applicable permits, licenses, authorizations, concessions and clearances and
all applicable laws and regulations, including those of the Country to the
extent applicable to the Services. Nothing in this Contract shall require
Vendor to comply with any applicable laws and regulations if such
compliance would subject either Party or their Affiliates to liabilities or
penalties under United States of America law.
6.Changes in Laws
Costs incurred by Vendor after the date of this Schedule, resulting from
changes in applicable federal or state law, tariffs or the regulatory
interpretation that can be reasonably allocated to Customer, will be billed as
an authorized charge or adjustment to prices as defined in the Schedules of
this Agreement. In the event of a change in law, either Party then has the right
to terminate this Agreement upon 30 days advance written notice to the other
Party and any settlement amount shall be calculated according to the Events of
Default; Remedies section of the Agreement. Such changes in applicable
federal or state law or tariffs or regulatory interpretation will not be deemed
an event of Force Majeure.
O. Confidentiality (Chapter 17; § 12)
1. Licensor Information – Licensee oriented as licensor
prohibited from providing confidential information to
licensee
Licensor shall not, whether in connection with the performance of Licensor’s
obligations under this Agreement or otherwise, transfer, submit, or otherwise
disclose to Licensee in any manner any information of a confidential or proprietary nature. In the event Licensor desires to disclose any information of a
proprietary or confidential nature to Licensee, Licensor shall first provide
written notice to Licensee identifying the nature of such information without
disclosing any proprietary or confidential aspects of such information. If Licensee determines, in its sole discretion, to receive such information, the Parties shall enter into a separate confidentiality and nondisclosure agreement
with respect to such information, under which Licensor shall
provide such information to Licensee; provided, however, that such agreement
shall only apply to the disclosure of such information previously identified in
writing by Licensor in accordance with the first sentence of this Section ___.
In the event Licensor transfers, submits, or otherwise discloses to Licensee
any information of a proprietary or confidential nature without first entering
into such a confidentiality and nondisclosure agreement, Licensor hereby
grants Licensee a royalty-free, perpetual, irrevocable, worldwide license and
right (with the right to sublicense) to make, have made, use, reproduce, distribute, modify, enhance, and create derivative works of such information and
all associated Intellectual Property Rights.
COMMENT: Under no circumstances should a licensor agree to
this or similar language even if the contract in question only pertains to services or maintenance. A licensor may have many types of
confidential information including employee lists, prices, methodologies, vendors and subcontractors as well as tools.
2. Survival of Confidentiality Obligations –
901
Trade Secrets (§ 12)
Recipient’s obligations under this Agreement shall expire on the fifth (5th) anniversary of the effective date, except with respect to those items of confidential
information which constitute trade secrets of the discloser, which obligations of
nondisclosure will remain in effect until such time as such item no longer is a
trade secret.
COMMENT: Both parties should insist on the insertion of
language that recognizes each party’s obligations to maintain the
confidentiality of the disclosing party’s trade secrets after the
expiration of the non-disclosure agreement or any artificial time
period. The parties should always include language that maintains
the confidentiality of any trade secrets so long as the information
remains a trade secret. Often the parties enter into a confidentiality
agreement obligating the parties to keep the information received
confidential for an artificially agreed time period such as five or
seven years. These agreements fail to recognize that a trade secret
may continue well beyond any such agreed upon time period.
3. Survival of Confidentiality Obligations – Alternative
Language
The Parties acknowledge and agree that with respect to Confidential
Information which rises to the level of a trade secret under Applicable Law,
such Confidential Information shall remain confidential and shall not be
disclosed by the Receiving Party for so long as such Confidential Information
retains its status as a trade secret.
4. Disclosure of Confidential Information to
Third Parties – Licensor Oriented (§ 12)
Licensee promises and agrees not to disclose or otherwise make the System,
including but not limited to any additions, supplements, Customizations, or
Modifications to the System, available to any person other than employees of
Licensee required to have such knowledge for normal use of the System. In
the event Licensee desires to disclose the System to a third party consultant,
Licensee must obtain Licensor’s prior written consent, not to be unreasonably
withheld, and Licensee, Licensor, and such third party consultant must
execute a Licensor nondisclosure agreement. For the purposes of this
Agreement, it will be reasonable for Licensor to withhold its approval if (i)
such consultant is a software vendor which markets, services, and/or develops
computer software programs similar to System; (ii) Licensor has reason to
believe that such consultant will not abide by the confidentiality provisions
herein, or (iii) that consultant is not financially secure to guarantee its
obligations hereunder.
COMMENT: This language is equally important for the licensor
and the licensee. The licensee wants to ensure that it has the right to
disclose the licensor’s confidential information to its consultants
and contractors so that they may support the system avoiding the
necessity of using the licensor and its likely higher rates. The
licensor wants to limit third party access to protect its trade secrets
and to potentially protect its revenue. The licensee needs to ensure
that the right granted under this paragraph will meet the licensee’s
needs not only in the present but also in the future.
5. No Restriction on Marketing Independently
Developed Information
Nothing in this Agreement will be construed as a representation or agreement
that the Recipient will not market, distribute, develop, or have developed for
it, products, concepts, systems or techniques that are similar to or compete
with the products, concepts, systems or techniques contemplated by or embodied in the Confidential Information of the other party, provided that the Recipient does not violate any of its obligations under this Agreement or the intellectual property rights of the other party in connection with such development.
Nothing herein shall obligate either party to enter into or continue to pursue
any business relationship or transaction with the other party. Without limiting
the foregoing, no obligation to buy or sell products, negotiate or conclude any
transaction or enter into or negotiate any agreement shall result unless and until the parties, at each party’s sole discretion, execute a written agreement, and
only in accordance with its terms.
6. Presentations and Publications
Licensor shall not present or publish, nor submit for publication, any work
resulting from Licensor’s services without Licensee’s prior written approval.
7.
SEC Disclosures
903
As necessary to perform its obligations under this Agreement, the Receiving
Party may disclose Confidential Information of the Furnishing Party to any
employee, officer, director, contractor, agent or representative of the Receiving
Party who has a legitimate “need to know” the information in question and who
is bound to the Receiving Party to protect the confidentiality of the information
in a manner substantially equivalent to that required of the Receiving Party
under this Agreement. Licensee may provide Confidential Information of
Licensor to contractors (including outsourcing suppliers that may replace
Licensor under this Agreement) (i) who have a legitimate “need to know” the
Confidential Information in question in order to provide services to Licensee,
and (ii) who are bound to Licensee and Licensor to protect the confidentiality of
the information in a manner substantially equivalent to that required of Licensee
under this Agreement. The Receiving Party may also disclose Confidential
Information of the Furnishing Party to the Receiving Party’s Auditors provided
they are made aware of the Receiving Party’s obligations of confidentiality with
respect to the Furnishing Party’s Confidential Information, and with respect to
non-regulatory Auditors, agree to be bound to protect the information in a
manner substantially equivalent to that required hereunder. Licensee and its
Affiliates may also disclose Licensor Confidential Information, including this
Agreement and the transactions contemplated by this Agreement, in any
periodic reports filed or required to be filed with the Securities and Exchange
Commission (“SEC”) pursuant to the rules and regulations promulgated by the
SEC, as well as to the New York Stock Exchange and any other regulatory
agency or body charged with the administration, oversight or enforcement of
regulations applicable to any business conducted by Licensee or any of its
Affiliates, to the extent Licensee determines in its sole discretion that such
information is required to be disclosed. Licensee shall solicit Licensor’s views
as to any confidential information that Licensor would like to redact from any
such filing in advance of such filing, and shall grant any such redaction requests
of Licensor as it reasonably can while still being responsive to the disclosure
requirements of the SEC, and acting in a manner consistent with Licensee’s
ordinary practices for disclosures of a similar nature, Licensee will give
particular consideration to Licensor requests for the redaction of any pricing,
and other terms with financial impact (e.g. service level credit amounts),
provided, however, final decision shall be made by Licensee on the content of
all such disclosures.
8.
Insider Trading – Tipping (Form O.2)
Each party is expressly prohibited from buying or selling the others’ shares or
other securities on the basis of the Confidential Information, a practice commonly known as “insider trading,” and is also prohibited from providing other
people with such information or recommending that they buy or sell securities,
a practice commonly known as “tipping.” Licensor agrees to be bound by customer’s Insider Trading Policy attached here to as Exhibit __.
9.
Injunctive Relief for Breach of Confidentiality
Obligations (§§ 5.5.3, 12)
Each party recognizes that the disclosing party and its affiliates may suffer
irreparable harm as the result of the unauthorized disclosure, reproduction, or
use of any Confidential Information and that monetary damages may be inadequate to compensate the disclosing party for such breach. Therefore, the receiving party agrees that in the event of any failure to comply with the provisions of this Section, the disclosing party will be entitled to a preliminary injunction, and an order of seizure and impoundment under Section 503 of the
Copyright Act upon an ex parte application by the disclosing party to protect
and recover the Confidential Information, and neither the receiving party nor
any of its Agents object to the entry of an injunction or other
equitable relief against the receiving party or any of its Agents on the basis of
an adequate remedy at law or any other reason.
10. Damages – For Breach of Confidentiality
Obligations
Notwithstanding anything contained in this Agreement to the contrary, including, but not limited to, Section 2.2.2 of the Arbitration Schedule (Form K.10),
in the event the receiving party breaches the confidentiality obligations contained in this Confidentiality Schedule with regard to Confidential Information, the disclosing party shall be entitled to indirect, consequential, special, incidental or damages and any such finder of fact shall be entitled to
award such indirect damages.
11. Confidential Information – Incorporates Trade
Secret Language
(a) Except with the prior written consent of the disclosing party, the receiving party agrees that it will not disclose or use for the receiving party’s
own benefit any Trade Secret, Proprietary Property or Confidential Information acquired from the disclosing party, the disclosing party’s customers,
905
suppliers, consultants, affiliates or third parties under contract with the disclosing party.
(b) For the purposes of this Agreement, a “Trade Secret” is information
that is not generally known to the public, and that gives or may give the
disclosing party an advantage over its competitors. Trade Secrets include, but
are not limited to (i) research being planned and developed, (ii) research methods
and processes, (iii) sources of supplies and materials of any type, (iv) materials
used in research or manufacturing,
(v) equipment and methods used in research or manufacturing, (vi) marketing
plans, (vii) information concerning the filing or pendency of patent applications,
and (viii) pricing, methodologies, approaches, etc.
(c) For the purposes of this Agreement, “Confidential Information” includes, but is not limited to:
(i) any information concerning data, documentation, procedures, inventions, nucleic acid and amino acid sequences, formulae, methods, processes and other intellectual property or the business plans,
customers, finances, property and related business information belonging to or created by the disclosing party or any client, customer
or third party contracting with the disclosing party; and
(ii) any advice or information that the receiving party provides to the
disclosing party in accordance with this Agreement.
Notwithstanding the above, however, “Confidential Information” does not
include any information which is demonstrated in writing:
(i) to be public knowledge at the time this Agreement commences, or
which thereafter becomes public knowledge through no fault or
involvement of the receiving party;
(ii) to have been properly provided to the receiving party without
restriction by an independent third party; or
(iii) was already known to the receiving party at the time of disclosure by the disclosing party.
(d) the receiving party shall treat all Trade Secrets, Proprietary Property
and Confidential Information in strict confidence, and shall take all reasonable
steps necessary to preserve the confidentiality and secrecy of such information, including, without limitation, executing and complying with the terms
of any additional confidentiality agreement(s) or security procedure(s) required or reasonably requested by the disclosing party or any client or customer of the disclosing party, and to return to the disclosing party any and all
original and reproduced materials embodying such information immediately
upon expiration or termination of this Agreement.
(e) The non-disclosure obligations with regards to:
(i) Trade Secrets shall be perpetual and shall survive the termination
or expiration of this Agreement; and
(ii) Confidential Information and Proprietary Property shall be in
effect for the term of this Agreement and shall survive for a period of seven (7) years after termination or expiration of this
Agreement.
(f) In the event receiving party is required or compelled to disclose any
Trade Secret, Proprietary Property or Confidential Information by any law or
governmental authority, receiving party shall notify disclosing party of such
requirement or compulsion as soon as possible to allow disclosing party to
seek a protective order or similar measure.
12. Media Releases and Public Disclosures Related to
Agreement
Without the prior written consent of the other party, neither party shall issue or
release any statement, article, advertisement, public or private announcement,
media release or other similar publicity relating in any manner to: (a) any aspect of this Agreement; (b) any aspect of the Licensed Software; or (c) the fact
that the parties have engaged in any discussions or negotiations regarding any
of the foregoing. Neither party shall use the name or any business name, trade
name, trademark, service mark or logo of the other party without the prior written consent of the other party.
COMMENT: A party bound by this or similar language should
notify its marketing department not to use the other party’s name
or logo on its website or on any list of clients.
13. Retention of Confidential Information
Upon completion of Licensor’s assignment for Licensee, Licensee shall return
or destroy, as Licensor may direct, all documentation in any medium that contains, refers to, or relates to Confidential Information within thirty (30) days;
provided that auditors performing audit functions may retain their work papers. Licensee shall deliver to Licensor written certification of its compliance
with the preceding sentence signed by an officer of Licensee. Notwithstanding the foregoing, Licensee shall be permitted to retain (subject to the
terms herein) such Confidential Information as may be required to comply with applicable professional obligations and standards and internal
policies. For the avoidance of doubt, anything that is stored on routine
back-up media for the purpose of disaster recovery will be subject to destruction in due course. Notwithstanding the foregoing, latent data such
as deleted files and other non-logical data types, such as memory dumps,
swap files, temporary files, printer spool files and metadata that can cus907
tomarily only be retrieved by computer forensics experts and are generally considered inaccessible without the use of specialized tools and techniques will not be within the requirement for return or destruction of
Confidential Information as set forth by this paragraph.
COMMENT: Some parties seek to return one copy of the
confidential information for its records after the termination of the
confidentiality obligations. They do so in the belief that if they
were ever accused of violating the non-disclosure provisions, they
would be unable to protect themselves because they lack a record
of the confidential information they received from the disclosing
party. If the disclosing party is willing to allow the receiving party
to retain a copy for its records, the receiving party should be
required to keep such information in the locked files of its legal
department.
14. No Requirement to Destroy Electronically Stored
Materials
Notwithstanding the foregoing, (i) neither the Receiving Party nor its
Representatives will be required to erase electronically stored Evaluation
Material that has been saved to a back-up file or other electronic medium in
accordance with its or its Representatives’ ordinary electronic back-up
practices, except as otherwise required by applicable law, and; (ii) each of the
Receiving Party and its Representatives may retain one copy of the Evaluation
Material, any and all e-mails and any attachments contained in such e-mails
and any electronic files, in each case, to the extent required to comply with
applicable laws, regulations, or internal company policy. Upon written
request by the Disclosing Party, the Receiving Party shall provide the
Disclosing Party with a certificate of compliance with this paragraph.
Notwithstanding the return, destruction or limited retention of the Evaluation
Material as provided by this paragraph, the Receiving Party and its
Representatives will continue to be bound by its obligations of confidentiality
and other obligations hereunder.
15. Confidential Information – Compliance with ITAR
and Export Laws
The Parties understand and acknowledge that Confidential Information
exchanged under this Agreement may be subject to compliance with any and
all applicable United States laws, regulations, or orders, including those that
may relate to the export of technical data. The Parties agree to comply with all
such laws, regulations, and orders, including, if applicable, all requirements of
the International Traffic in Arms regulations and/or the Export Administration
Act, as may be amended. Each Party further agrees to comply with any export
license requirements that govern the export, re-export, transfer, or release of
Confidential Information provided hereunder. Each Party agrees to provide
an Export Classification Number (“ECCN”) or USML Classification Number
to the receiving Party in writing for all Confidential Information that is
classified with an ECCN other than EAR99 or is classified on the USML.
The ECCN and USML Classification, if required shall be provided at the time
the Confidential Information is provided to the receiving Party. If a disclosing
Party provides Confidential Information subject to the terms of an export
license or other export authorization, the disclosing Party shall notify the
receiving Party in writing of any restrictions on the use, transfer, distribution,
or re-export of the Confidential Information contained in said export license
or authorization. Customer and its Affiliates shall not be obligated to perform
any obligations hereunder if and to the extent that any such performance is
prohibited by or contrary to any applicable U.S. laws or regulations, including
U.S. export regulations.
16.
Confidential Information – Receiving Party
Will Not Compete With Disclosing Party - Teaming
Agreement
In consideration for Team Member’s disclosure of its proprietary information,
development and provision of its proposal materials, its participation in and
assistance to Vendor in preparing for its proposal and participation in orals
and provision of equipment (hardware and software) for demonstrations
related to the Program or any other program, project or opportunity with the
Customer or any other utility company or any affiliate thereof at Team
Member’s cost and for other valuable consideration, the receipt and
sufficiency is hereby acknowledged, Vendor hereby agrees that it shall not,
nor shall its affiliates, assigns, successors or agents, engage in any acts or
omissions that may, directly or indirectly, whether solicited or unsolicited,
circumvent Team Member with respect to its actual, proposed or potential
participation in the Program or any other program, project or opportunity with
the Customer or any other utility company or any affiliate thereof by
providing the Services and shall exclusively work with and through Team
Member with respect to the provision of all Services. This clause shall
survive termination of this Agreement for a period of twenty four (24) months
thereafter.
909
17. Confidential Information – Internet Mail
Encryption
Both Parties undertake to protect Confidential Information (including but
not limited to patent-relevant, scientific and technical information)
against unauthorized access by third parties. If Confidential Information
is communicated via internet mail, use of internet mail encryption
technology is compulsory (for direct communication between the Parties,
Customer provides for a suitable technology at http://guides.XXX.com
free of charge). Without limiting the foregoing, any failure by Disclosing
Party to use such Internet mail encryption technology in its
communication of any Confidential Information shall not affect the
confidential and proprietary nature of such information. Rather, such
information shall continue to be Confidential Information and subject to
the restrictions of this Agreement.
18.
Confidential Information – Vendor Employee
Obligations
“Sensitive Information” means (a) all data or information submitted by thx
Customer customers to Customer’s online, Web-based applications
and platform provided by Customer via http://www.customer.com and/or
other designated websites (collectively, the “Customer Applications”); (b)
all information disclosed by salesforce.com customers to Customer in connection with professional services customer engagements; (c) all information
disclosed by customers to Customer in connection with customer support interactions; and (d) all other information about Customer’s customers, suppliers or employees to which Vendor and Vendor’s personnel will have access
during the term of the Agreement or any Statement of Work, including: (i)
Customer customer or supplier payment, credit, or banking information, (ii)
Customer customer credit card numbers and (iii) personally identifiable information about Customer customers, suppliers or personnel of Customer.
1.1
Individual Confidentiality Acknowledgments.
Form of Confidentiality Acknowledgment. All individual Vendor Personnel assigned to perform services for Customer will be required to execute a
Proprietary Information and Assignment Agreement in the form attached as
Attachment A (the “PIAA”), as a pre-condition of their assignment to perform services for Customer. Vendor has reviewed the PIAA and agrees that it
(a)
shall only assign individual Vendor personnel to perform services for Customer that are capable of executing the same.
Further Assurances. Vendor agrees to perform, during and after the term
of this Agreement, all acts deemed necessary or desirable by Customer to
permit and assist it, at its expense, in obtaining and enforcing the full benefits,
enjoyment, rights and title throughout the world of the PIAA. In the event that
Customer is unable for any reason to secure Vendor’s or Vendor Personnel’s
signature to any document so required, Vendor hereby irrevocably designates
and appoints Customer and its duly authorized officers and agents as Vendor’s
agents and attorneys-in-fact to act for and on Vendor’s behalf and instead of
Vendor, to do all lawfully permitted acts to further enforce Customer’s rights
under the PIAA with the same legal force and effect as if executed by Vendor
or Vendor Personnel. Vendor further agrees to provide notification to Customer within twenty-four (24) hours of any unauthorized access to or disclosure of Sensitive Information.
(b)
Updates. The form of PIAA may be updated from time to time upon notice to Vendor. Vendor agrees to perform, during and after the term of this
Agreement, all acts deemed necessary or desirable by Customer to have Vendor Personnel assigned to perform services for Customer execute any such
updated PIAA.
(c)
No Conflicts of Interest. During the term of this Agreement, Vendor will
not assign individual Vendor Personnel for whom accepting work with Customer would constitute an obligation inconsistent or incompatible with the
individual personnel’s obligations, or the scope of services to be rendered for
Company, under this Agreement (including the PIAA).
1.2
1.3
Location of Vendor Personnel.
Vendor Personnel with access to Sensitive Information may only be located at the following facilities:
(a)
Address:
Country:
911
Vendor Personnel with access to Sensitive Information may not be located
at any other facility without these Services Guidelines being amended pursuant to a duly authorized and mutually executed amendment to the Agreement.
(b)
19.
Tone
Access to Confidential Information – Informal
Access to, and/or use of, the Confidential Information shall be limited to
Authorized Employees. You shall only allow access to the Confidential
Information to Your Vendors whom Licensor has pre-approved in
writing, and who furthermore comply with Authorized Employees
subsections (i) through (iv) in paragraph 3. In accordance with Your
billing guidelines for these Services but in no event less than quarterly,
You must provide Licensor with a written Authorized Employee Report
containing the following information: (a) the full name of Your
Authorized Employees and Your Vendors who accessed the Confidential
Information; (b) what Confidential Information was disclosed and the
purpose of such access; (c) how the Confidential Information was
accessed (e.g. if through a Licensor website or other confidential or
secure electronic information site, such as “Customer Exchange”, the login used; if provided by You, the name of Your Authorized Employee);
and (d) where the Confidential Information currently resides at Your
business (in paper, oral, or electronic form). Additionally, each time You
provide any Developed Material to Customer, You must provide a copy
of the Developed Material to Licensor.
20.
Confidential Information May Not Be Transferred Offshore
1.1
Except with Customer’s advance written consent, in no event
shall Confidential Information regarding or pertaining to Customer’s systems,
infrastructure, employees, or customers be stored, transmitted, or accessed at,
in, through, or from a site located outside the United States nor made available
to any person who is located outside the United States unless such Confidential Information relates solely, directly and independently (i) to Customer employees or customers located outside of the United States, or (ii) to voice or
data communications of Customer or its customers that originate and terminate outside the United States, or (iii) to Customer systems and/or infrastructure dedicated to the provision of Customer’s voice or data services outside
the United States or otherwise necessary for storage or access outside the
United States in connection with security, back-up, disaster recovery, or relat-
ed purposes as required by Customer services specifications, security and/or
technical requirements.
1.2
Notwithstanding the foregoing, Customer expressly consents
(i) to access to Customer systems from outside of the United States provided
that such access is solely and necessarily related to the maintenance and technical support of such systems, and that any such access to system(s) is monitored in real-time by both Vendor and Customer, and (ii) to the storage and
transmission outside of the United States of information related to product development, manufacturing, and training, which involves only the exchange of
general product information; and, provided that such information does not
contain, and such access does not require access to, Customer Critical Infrastructure Information, Customer Information or CPNI; and the communication
of any such information, and the exercise of any such access, occurs over a
secure network.
1.2.1 “Customer Information” means data pertaining to an identifiable customer, including, but not limited to subscriber name, address,
telephone number and CPNI, but does not include information published in a Customer-published directory.
1.2.2 “CPNI” means customer proprietary network information.
CPNI includes information on the type of service, the amount of service or usage, or other information typically found on a phone bill, but
does not include subscriber name, address, or telephone number.
1.2.3 “Critical Infrastructure Information” means non-public information about Customer’s networks and systems (such as TSP codes
and other National Security/Emergency Preparedness information, circuit diversity information for Customer Interoffice Facilities, identification of circuits likely used to support Homeland Security or Law Enforcement purposes), which if made available to a person or entity intending to cause harm to the United States economy, defense or other
operations, would assist such person or entity in accomplishing those
objectives.
1.3
Notwithstanding Subsections 1.1 and 1.2 above, unless Vendor
secures Customer further, prior written consent, in no event (i) shall Vendor
provide, direct, control, supervise, or manage any voice or data communication with regard to customers that occurs between United States locations (or
the United States portion of any international communication that may originate or terminate within the United States) from a location outside of the
913
United States, nor (ii) shall Customer Data be stored, transmitted, or accessed,
from, at, in, or through a site located outside the United Stated without Customer’s prior written consent. “Customer Data” shall include (a) any subscriber information, including, without limitation, name, address, telephone
phone number or other personal information of the Customer subscriber; (b)
any call-associated data, including without limitation, the telephone number,
internet address or other similar identifying designator associated with a
communication; (c) any billing records; (d) the time, date, size, duration of a
communication or physical location of equipment used in connection with a
communication; or (e) the content of any Customer communication.
1.4
Nothing in this Section 1 is intended to nor shall it operate in derogation of any requirement imposed on Customer by a governmental body or
agency outside the United States.
21. Disclosure of Confidential Information to
Regulators
Notwithstanding anything herein to the contrary, Customer may disclose any
information, including Vendor’s Confidential Information, in response to a
request from any regulatory official with authority over Customer or its
Affiliates.
22. Confidentiality of Material; Security; Privacy
1.1
Licensor may, during the course of providing its services hereunder,
have access to, and acquire knowledge from material, data, systems and other
information of or with respect to Customer or any of its Affiliates (as defined
in Section ___ (“Definitions”) which may not be accessible or known to the
general public, including information concerning its or their hardware,
software, designs, drawings, specifications, techniques, processes, procedures,
data, research, development, future projects, products or services, projects,
products or services under consideration, content under development, business
plans or opportunities, business strategies, finances, costs, vendors, employees
or customers and third party proprietary or confidential information that
Customer or an Affiliate treats as confidential ("Confidential Information").
Confidential Information shall not include any information that: (a) is or
subsequently becomes generally available to the public without Licensor’s
breach of any obligation under this Agreement; (b) was known to Licensor
prior to Customer’s or an Affiliate’s disclosure of such information to
Licensor; (c) is obtained from a third party without violation of an obligation
of nondisclosure and without restrictions on its disclosure; or (d) is
independently developed by Licensor without reference to the Confidential
Information.
1.2
Any knowledge acquired by Licensor from such Confidential
Information or otherwise through its engagement hereunder shall not be used
by Licensor other than for the limited purpose of performing services for
Customer under this Agreement nor used, published or divulged by Licensor
in connection with any products sold or services rendered by Licensor to any
other person, firm or corporation, in any advertising or promotion regarding
Licensor or its products or services, or in any other manner or connection
whatsoever without first having obtained the written permission of Customer,
which permission may be withheld by Customer in its sole discretion.
1.3
Nothing in this Agreement shall be deemed or construed to grant
Licensor a license to use, sell, develop, exploit, copy, or further develop any
Confidential Information acquired by Licensor through its engagement
hereunder.
1.4. In performing its services for Customer, Licensor shall comply with all
of Customer's security requirements, including those listed in Exhibit _ Computer System Security and Remote Access requirement. In the event
that Licensor is provided direct or remote access to any Customer or Affiliate
computer system, computer, network, related communications circuit or
associated software program (collectively, "Customer Computer System")
by any method, Licensor must comply with all of the security requirements
also described in Exhibit __ - Computer System Security and Remote
Access requirement, as may be amended by Customer from time to time.
Licensor shall only access Customer Computer Systems for the limited
purpose of fulfilling its obligations hereunder. Such access shall be limited to
that period of time necessary for Licensor to accomplish this purpose under
this Agreement. Licensor acknowledges that Customer retains the right to
terminate access to any Customer Computer System at any time, in its sole
discretion without any liability. Any violation of Exhibit __ - Computer
System Security and Remote Access requirement or unauthorized use of or
access to a Customer Computer System by Licensor’s employees,
Subcontractors or agents shall constitute a material breach of this Agreement.
1.5.
Licensor acknowledges that, in the course of performing the services
915
hereunder, Licensor may have access to Personal Information and Personal
Data (as each is defined below). Licensor shall implement and maintain
reasonable security procedures and practices appropriate to the nature of the
information, to protect any Personal Information (as defined below) obtained
hereunder from unauthorized access, destruction, use, modification or
disclosure. For purposes of this Section __, "Personal Information" means
any information that refers, is related to, or is associated with an identified or
identifiable individual, including, but not limited to, (a) Personal Data (as
defined below) and (b) an individual’s first name or first initial and his or her
last name in combination with any one or more of the following data
elements: (i) Social Security number, (ii) driver’s license number or state
identification card number, (iii) account number, credit or debit card number,
in combination with any required security code, access code, or password that
would permit access to an individual’s financial account or (iv) any
individually identifiable information regarding an individual’s medical history
or medical treatment or diagnosis by a health care professional. Licensor shall
apply protective security measures consistent with the Massachusetts
Standards for The Protection of Personal Information of Residents of the
Commonwealth codified at 201 CMR 17:00 et seq. (the "Massachusetts
Standards") and any applicable federal regulations, as such standards and
regulations may be modified from time to time, with respect to such portion of
the Customer data as constitutes "personal information" under the
Massachusetts Standards.
1.6.
Licensor acknowledges that Personal Data (as defined below) may be
subject to the requirements and restrictions arising under the Safe Harbor
Principles adopted by the United States Department of Commerce pursuant to
an arrangement with the European Union. For purposes of this Section 1.6,
"Personal Data" shall include all "personal data" as defined in Directive
95/46/EC of the European Parliament and of the Council of 24 October 1995
(the "Directive") on the protection of individuals with regard to the
processing of personal data and on the free movement of such data. Licensor
warrants and represents that either:
(a) (i) it has certified to the United States Department of Commerce its
adherence to the Safe Harbor Principles (as set forth in the decision of the
European Commission, 2000/520/EC) with respect to its processing of the
Personal Data pursuant to this Agreement, and (ii) it will maintain such Safe
Harbor certifications throughout the Term of this Agreement; or, if (a) is not
the case,
(b) it nonetheless will treat the Personal Data in accordance with the
requirements of the Safe Harbor Principles (as set forth in the decision of the
European Commission, 2000/520/EC); or if neither (a) nor (b) are the case,
(c) it is subject to the Directive under the principles of Article 4 thereof.
1.7. Licensor agrees to use the Personal Information only in connection
with providing the services to Customer as authorized under this Agreement.
Licensor shall promptly inform Customer of any loss, misuse, or unauthorized
access, destruction, deletion or modification that it knows or reasonably
believes to have occurred with respect to any Personal Information
(collectively, "Security Breach") and shall cooperate with Customer in the
investigation and remediation of any such occurrence. Such remediation may
include, but is not limited to, (a) the provision of notice concerning such
occurrence to any person affected or potentially affected thereby and
applicable domestic and international authorities, and (b) with respect to any
Security Breach that poses a risk of identity theft, including but not limited to
a Security Breach involving a Social Security number, driver’s license number
or similar personal identification number, the provision of daily credit
monitoring, access to credit reports and identity theft insurance to any person
affected or potentially affected thereby. To the extent that a Security Breach
results from Licensor’s failure to comply with its representations, warranties
and/or obligations hereunder, Licensor shall reimburse Customer for
remediation costs incurred by Customer in connection with such Security
Breach.
1.8. If pursuant to this Agreement, Licensor or its systems store, process, or
transmit credit card or other payment card data for or on behalf of Customer
or Affiliates, or provide software, equipment or systems that Customer or
Affiliates will use to store, process, or transmit credit card or other payment
card data, the provisions of Exhibit __- “Card Association Standards” are
incorporated into this Agreement..
1.9. Licensor acknowledges that Customer has guidelines relating to criminal
and other background checks of its employees, and that Customer expects Licensor to follow similar guidelines for all employees of Licensor who are or
will be performing services for Customer on Customer property and/or will
have access to Customer’s computer systems. Accordingly, Licensor has
conducted or agrees that it will conduct, at its own expense, criminal and other
background checks to the minimum extent set forth in the guidelines attached
as Exhibit __ - Guidelines for Background Checks which may be amended
by Customer from time to time. Licensor may, consistent with all applicable
laws, wish to conduct more comprehensive or inclusive employee criminal
917
and other background searches on its own accord. Licensor shall, at Licensor’s expense, comply with all laws applicable to the initial retrieval and subsequent use and disclosure of the information it obtains from conducting such
criminal and other background checks including, without limitation, the Fair
Credit Reporting Act.
23. Restrictive Disclosure Provisions
Notwithstanding subsection (a) (Restrictions on Disclosure) above, the
receiving Party may permit access to the Confidential Information only to
those directors, officers, members, and employees, and subject to subsection
(a), agents, affiliates, consultants and representatives, including legal counsel
(collectively, “Representatives”), who (i) need to know the Confidential
Information to carry out the Purpose; (ii) are informed by the receiving Party
of the confidential nature of the Confidential Information; and (iii) have
agreed in writing to treat the Confidential Information in a manner consistent
with the terms of this Agreement, provided that notwithstanding the foregoing
or anything herein to the contrary, Company agrees that it will not provide
Customer Confidential Information to any person other than those persons
identified on Exhibit A and it will not permit any person other than those
persons identified on Exhibit A to access or view the Customer Confidential
Information and it will inform such persons of the foregoing restriction;
The Company represents and warrants that the persons identified on
Exhibit A are all employees of the Company and none of such persons have
provided or participated in software development activities for the Company,
and such persons will not in the future participate in the development of any
software with features and/or functions that are similar to those offered by
Customer’s software.
24. Third Party Employees with Access to Vendor
Confidential information Will Not Work on
Competitive Products
Consultant stipulates and agrees that during the term of this Agreement, and
for 12 full calendar months thereafter, assigning Consultant’s personnel
receiving disclosure of Systems to develop or service computer software
programs with functions or designs similar to Systems or, which perform
similar functional capabilities as Systems, will constitute adequate evidence
that Consultant did not exercise sufficient care in protecting Licensor’s
Systems from unauthorized use or disclosure.
25. Additional Use Restrictions
Without limiting the generality of the foregoing, Licensor shall (i) not permit
any Confidential Information of Licensee to be disclosed to any entity that
competes with Licensee, or its Related Companies, or any products thereof;
(ii) not provide such access to any Personnel who directly services a business
that competes now or in the future with Licensee or its Related Companies;
(iii) train all Licensor Personnel on the special restrictions set forth herein
applicable to Licensee Confidential Information; (iv) provide meaningful
compensation incentives to senior Licensor employees relating to compliance
with Licensor confidentiality obligations hereunder with respect to Licensee;
(v) segregate and protect Licensee Confidential Information by configuration
of its information and processing systems or by adopting other appropriate
measures; and (vi) use determined, prudent and reasonable efforts to
strengthen the provisions in its agreements with each of its subcontractors that
would be providing a portion of the Services hereunder, which may include,
where possible, attempting to make such provisions comparable to the
confidentiality obligations of Licensor hereunder. Licensor shall keep a
record of the location of all Licensee Confidential Information and any copies
thereof in Licensor’s possession or control and shall provide such record to
Licensee upon request. Further Licensor shall promptly notify Licensee of any
transfer or relocation of material portions of Licensee Confidential
Information.
26. Confidentiality Language – “Reasonable Care” Standard Vendor Oriented
Receiving Party shall maintain the secrecy and confidentiality of all
Confidential Information of Disclosing Party with the same care that applies
to Receiving Party’s own confidential materials and information, but in any
event using reasonable care.
27. Confidentiality Language – “Shall Not Disclose” Standard
- Vendor Oriented
General Obligations. In connection with this Agreement, Customer
and its employees, agents and contractors may have access to private and
919
confidential information owned or controlled by Vendor relating to the
Service, pricing and other data. Similarly, Vendor and its employees and
agents may have access to Customer data that is collected or generated
through use of the Service. All such information acquired by either party
under this Agreement through its employees or agents shall be and remain its
owner's exclusive property, and the receiving party shall keep, and shall
obligate its employees, agents and contractors to keep, any and all such
information confidential and shall not copy or disclose it to others without the
owner's prior written approval, and shall return printed copies of such
information to the owner promptly upon request. Nothing herein shall limit
either party's use or dissemination of information not actually derived from
the other party or information which has been or subsequently is made public
by the owner or with the owner's consent.
28. Confidentiality Language – Customer Oriented
Vendor shall ensure that no Customer data processed or stored by
Customer through the Service is (a) accessed or modified by anyone other
than a Customer authorized user or (b) is intentionally or inadvertently
deleted, lost or corrupted. Vendor shall indemnify Customer for all losses,
damages, costs and expenses incurred by Customer as a result of any
breach by Vendor of any of the foregoing obligations.
COMMENT: Under this language, the vendor assumes liability in
the event of a hacking or a breach arising from the customer’s failure to
follow contractually agreed security procedures or otherwise fails to
implement proper security precautions.
P. Data Privacy/Security (Chapter 16; § 12)
1.
Data Protection and Privacy
[USE THIS LANGUAGE WHEN YOU EXPECT PERSONAL
IDENTIFYING INFORMATION (OTHER THAN WORK E-MAIL
ADDRESSES) TO BE DISCLOSED UNDER THE AGREEMENT. IF
NO SUCH INFORMATION IS BEING DISCLOSED, USE THE
ALTERNATE VERSION BELOW.]
a.
Definitions. The following definitions shall apply for purposes of this
Section ___.
“Data Privacy Laws” means any state or national law or regulation
protecting the privacy, confidentiality, or security of Personal Data or
any specific categories of Personal Data.
“Personal Data” is defined as any individually identifiable information about Licensee Licensees, clients, employees (including employees or customers of Licensee Licensees or clients) or any other individuals about whom Licensor receives identifiable information from
or on behalf of Licensee in connection with the provision of products,
services, functions, or transactions to be provided under this Agreement.
“Process” or “Processing” or “Processed” is as defined in the relevant Data Privacy Laws, or where not defined means any operation or
set of operations which is performed upon Personal Data, whether or
not by automatic means, such as creating, collecting, procuring, obtaining, accessing, recording, organizing, storing, adapting, altering,
retrieving, consulting, using, encrypting, or disclosing by transmission,
dissemination or otherwise making available, aligning or combining,
blocking, erasing, or destroying.
b.
Applicability of Data Privacy Protections. All Personal Data obtained from or on behalf of Licensee or in connection with the provision of
services to Licensee pursuant to this Agreement shall be protected pursuant to
this Section _____and such other paragraphs of this Agreement that address
Personal Data.
c.
Compliance with Data Privacy Laws. Licensor agrees that it will
collect, store, use, disclose, and process Personal Data in connection with its
performance under this Agreement only on behalf of and for the benefit of
921
Licensee in accordance with this Agreement and Licensee’s prior written instructions or as required by law. Licensor agrees that it will not process or disclose any Personal Data for any other purpose absent specific written instructions from Licensee and that it will at all times act and process such Personal
Data in compliance with all applicable Data Privacy Laws. In addition, to the
extent applicable, Licensor agrees to comply with any requirements of any
applicable Data Privacy Law regarding the collection, storage, use, transfer,
security, or processing of Personal Data.
d.
Transfer of Personal Data. Licensor warrants to Licensee that Personal Data provided to Licensor or obtained by Licensor under this Agreement shall not be transferred across national boundaries unless required by
law or specified within this Agreement to be authorized to be transferred
across national boundaries. Licensor agrees that any such transfer will only be
made in compliance with applicable Data Privacy laws.
e.
Safeguards. Licensor will develop, implement, maintain, and use appropriate administrative, technical, and physical safeguards to preserve the
security, integrity and confidentiality of, and to prevent intentional or unintentional non-permitted or violating use or disclosure of, and to protect against
unauthorized access to or accidental or unlawful destruction, loss, or alteration
of, the Personal Data created for or received from or on behalf of Licensee in
connection with the services, functions, or transactions to be provided under
or contemplated by this Agreement. Such safeguards shall meet all applicable
legal standards (including any encryption requirements imposed by law) and
shall meet or exceed accepted security standards in the industry. Licensor will
document and keep these safeguards current and shall make them available to
Licensee upon request. Licensor shall ensure that only such of Licensor’s employees or representatives who may be required to assist it in meeting its obligations under this Agreement shall have access to the Personal Data.
f.
Security Incidents. Licensor will report to Licensee any privacy or
security Incident of which it becomes aware. A privacy or security “Incident”
is an unauthorized access, use, disclosure, modification, destruction of information or interference, or any other breach of privacy or security, in connection with any Personal Data. Licensor will make the written report to the designated contact indicated in this Agreement as soon as possible and in no
event more than five (5) days after Licensor learns of such non-permitted or
violating use or disclosure. Licensor’s report will contain information concerning the nature and impact of the Incident, including, but not limited to,
identifying the Personal Data relating, directly or indirectly, to the Incident
and all governmental and agency reporting or disclosing relating to the Incident that has occurred or is being contemplated, and Licensor’s steps to miti-
gate this impact. Further, Licensor shall cooperate as reasonably requested by
Licensee in order to further investigate and resolve the Incident. In the event
of an Incident, Licensor agrees to pay all costs and expenses associated with
the Incident, including, but not limited to, notification costs and costs relating
to credit monitoring. Licensor agrees to secure and preserve all evidence and
logs pertaining to such Incident, to take no action that would impair evidence
or the tracking and tracing of the Incident, to make no public statements to the
press regarding the Incident without approval from Licensee, and to inform
Licensee without delay of any and all interactions with law enforcement in
connection with such Incident.
g.
Contact with Third Parties.
i.
In the event that Licensor receives a request from a third party
(including an individual) to access any Personal Data in Licensor’s possession, Licensor will promptly forward a copy of such request to Licensee and will cooperate with Licensee in responding to any such request.
Upon Licensee’s request, Licensor will make Personal Data in its possession available to Licensee or any third party designated in writing by Licensee and will update Personal Data in Licensor’s possession in accordance with Licensee's written instructions. If any government or competent
authority requests Licensor to disclose or allow access to Licensee Personal Data, Licensor shall immediately notify Licensee of such request and
shall not disclose or allow access to such Licensee Personal Data without
first giving Licensee an opportunity to consult with such government or
authority to seek to prevent such disclosure or accessing. The Parties shall
discuss and agree to any actions or steps which may be taken to avoid or
prevent such disclosure or accessing.
ii.
Licensor shall promptly notify Licensee if any complaints are
received about the processing of Personal Data from third parties, and Licensor shall not make any admissions or take any action that may be prejudicial to the defense or settlement of any such complaint and shall provide to Licensee such reasonable assistance as it may require in connection with such complaint.
h.
Subcontractors. Licensor will require any of its affiliates, subsidiaries, subcontractors, and agents, to which Licensor is permitted by this Agreement or in writing by Licensee to disclose any of the Personal Data Licensor
creates for or receives from or on behalf of Licensee, to provide reasonable
assurance, evidenced by written contract, that such affiliate, subsidiary, subcontractor, or agent will comply with the same confidentiality, privacy and
923
security obligations as Licensor with respect to such Personal Data as set forth
in this Agreement
[Only include the following portion of the paragraph if the Licensor’s
services will be performed by a subcontractor (such as hosting services
that are ultimately hosted by a third party)] (hereinafter “Subcontractor
Obligations”).
Prior to utilizing such subcontractors, Licensor shall confirm in writing that
such subcontractor will comply with all Subcontractor Obligations and will
promptly terminate such subcontractor if the subcontractor can not comply
with the Subcontractor Obligations. In the event a proposed subcontract cannot, in Licensee’s exclusive discretion, comply with the Subcontractor Obligations, then Licensee may terminate this Agreement without cause prior to the
transfer of Licensor’s obligations hereunder to the proposed subcontractor.
i.
[Remove this section if there is no PHI related to the agreement.]
HIPAA. To the extent (if any) that Licensee discloses protected health information to Licensor or Licensor accesses, maintains, uses, or discloses protected health information in connection with the performance of services or
functions under this Agreement, Licensor agrees as follows: The term “protected health information” (“PHI”) shall be defined that term is defined in the
HIPAA Privacy and Security Rules (45 CFR, Part 160-164) issued pursuant to
the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”).
Licensor: (a) will not use or further disclose PHI other than as permitted or
required by this Agreement or as required by law; (b) will use appropriate
safeguards to prevent use or disclosure of PHI other than as provided for by
this Agreement and that these safeguards will meet the requirements of the
HIPAA Security Rule as of the applicable compliance date for this Rule; (c)
will report to Licensee any use or disclosure of PHI not provided for under
this Agreement of which Licensor becomes aware, (d) will ensure that any
agents, including a subcontractor to whom Licensor provides PHI received
from Licensee, or created or received by Licensor on Licensee’s behalf, agree
to the same restrictions and conditions that apply to Licensor with respect of
such PHI; (e) will make available PHI in a Designated Record Set (if any is
maintained by Licensor) in accordance with 45 CFR section 164.526; (f) will
make available PHI for amendment and incorporate any amendments to PHI
in a Designated Record Set in accordance 45 CFR section 164.526; (g) will
make available PHI required to provide an accounting of disclosures in accordance with 45 CFR section 164.528 and (h) will make Licensor’s internal
practices, applicable documentation and records to the extent that such relate
to the use and disclosure of PHI received from Licensee, or created or received by Licensor on Licensee’s behalf, available to the Secretary of the
HHS for the purpose of determining Licensee’s compliance with the HIPAA
Privacy and Security Rules. If Licensee determines that Licensor has breached
this section, Licensee may terminate this Agreement, effective immediately
upon notice of termination (or such other time as stated in such notice).
j.
Breach of Agreement. Licensor agrees that any access, use, disclosure, handling, Processing, storage, transfer, disposal, loss, or acquisition of,
Personal Data in violation of this Section ___ shall constitute a material
breach of this Agreement and may cause immediate and irreparable harm to
Licensee for which monetary damages may not constitute an adequate remedy. Therefore, the Parties agree that Licensee may seek specific performance
and/or injunctive or other equitable relief for such violation, in addition to its
remedies at law, without proof of actual damages. Licensor agrees to waive
any requirement for the security or posting of any bond in connection with
such remedy.
ALTERNATIVE LANGUAGE
Data Protection and Privacy
[USE THIS LANGUAGE WHEN YOU DO NOT EXPECT PERSONAL
IDENTIFYING INFORMATION TO BE DISCLOSED UNDER THE
AGREEMENT. NOTE: THE NAMES AND WORK E-MAIL
ADDRESSES OF LICENSEE CONTACTS DO NOT CONSTITUTE
PERSONAL INDENTIFYING INFORMATION; HOME E-MAIL
ADDRESSES ARE, HOWEVER, CONSIDERED PII.]
a.
Definitions. The following definitions shall apply for purposes of this
Section _____:
“Data Privacy Laws” means any state or national law or regulation
protecting the privacy, confidentiality, or security of Personal Data or
any specific categories of Personal Data.
“Personal Data” is defined as any individually identifiable information about Licensee Licensees, clients, employees (including employees or customers of Licensee Licensees or clients) or any other individuals about whom Licensor receives identifiable information from
or on behalf of Licensee in connection with the provision of products,
925
services, functions, or transactions to be provided under this Agreement.
b.
Applicability of Data Privacy Protections. All Personal Data obtained from or on behalf of Licensee or in connection with the provision of
services to Licensee pursuant to this Agreement shall be protected pursuant to
this Section _____ and such other paragraphs of this Agreement that address
Personal Data.
c.
Transfer of Personal Data. In the event Licensor acquires Personal
Data, Licensor warrants to Licensee that Personal Data provided to Licensor
or obtained by Licensor under this Agreement shall not be transferred (or further transferred, as the case may be) across national boundaries unless required by law or specified within this Agreement to be authorized to be transferred across national boundaries.
d.
[IF THERE IS ANOTHER SECTION OF THE AGREEMENT
THAT PROVIDES FOR RETURN OR DESTRUCTION OF ALL
CONFIDENTIAL INFORMATION, THEN THIS SECTION CAN BE
DELETED.] Return/Destruction of Confidential Information. In the event
Licensor acquires Personal Data, at Licensee’s direction, or upon expiration or
termination of this Agreement: (i) Licensor shall return all of the Personal Data (in electronic, paper, and any other format) to Licensee, within thirty (30)
days, or (ii) Licensor shall securely destroy and dispose of any copies of Personal Data in its possession and provide a certificate signed by an officer of
Licensor attesting to such secure destruction and disposition.
e.
Breach of Agreement. Licensor agrees that any access, use, disclosure, handling, processing, storage, transfer, disposal, loss, or acquisition of
Personal Data in violation of this Section __ shall constitute a material breach
of this Agreement and may cause immediate and irreparable harm to Licensee
for which money damages may not constitute an adequate remedy. Therefore,
the Parties agree that Licensee may seek specific performance and/or injunctive or other equitable relief for such violation, in addition to its remedies at
law, without proof of actual damages. Licensor agrees to waive any requirement for the security or posting of any bond in connection with such remedy.
f.
Contact with Third Parties. In the event that Licensor receives a request from a third party to access any Personal Data in Licensor's possession,
Licensor will promptly forward a copy of such request to Licensee and will
cooperate with Licensee in responding to any such request. Upon Licensee’s
request, Licensor will make Personal Data in its possession available to Licensee or any third party designated in writing by Licensee and will update Per-
sonal Data in Licensor's possession in accordance with Licensee's written instructions.
g.
Safeguards. Licensor will develop, implement, maintain, and use appropriate administrative, technical, and physical safeguards to preserve the
security, integrity and confidentiality of, and to prevent intentional or unintentional non-permitted or violating use or disclosure of, and to protect against
unauthorized access to or accidental or unlawful destruction, loss, or alteration
of, the Personal Data created for or received from or on behalf of Licensee in
connection with the services, functions, or transactions to be provided under
or contemplated by this Agreement. Such safeguards shall meet all applicable
legal standards (including any encryption requirements imposed by law) and
shall meet or exceed accepted security standards in the industry. Licensor will
document and keep these safeguards current and shall make them available to
Licensee upon request. Licensor shall ensure that only such of Licensor’s employees or representatives who may be required to assist it in meeting its obligations under this Agreement shall have access to the Personal Data.
h.
Subcontractors. Licensor will require any of its affiliates, subsidiaries, subcontractors, and agents, to which Licensor is permitted by this Agreement or in writing by Licensee to disclose any of the Personal Data Licensor
creates for or receives from or on behalf of Licensee, to provide reasonable
assurance, evidenced by written contract, that such affiliate, subsidiary, subcontractor, or agent will comply with the same confidentiality, privacy and
security obligations as Licensor with respect to such Personal Data as set forth
in this Agreement
[Only include the following portion of the paragraph if the Licensor’s
services will be performed by a subcontractor (such as hosting services
that are ultimately hosted by a third party)] (hereinafter “Subcontractor
Obligations”).
Prior to utilizing such subcontractors, Licensor shall confirm in writing that
such subcontractor will comply with all Subcontractor Obligations and will
promptly terminate such subcontractor if the subcontractor can not comply
with the Subcontractor Obligations. In the event a proposed subcontract cannot, in Licensee’s exclusive discretion, comply with the Subcontractor Obligations, then Licensee may terminate this Agreement without cause prior to the
transfer of Licensor’s obligations hereunder to the proposed subcontractor.
i.
Security Incidents. Licensor will report to Licensee any privacy or
security Incident of which it becomes aware. A privacy or security “Incident”
927
is an unauthorized access, use, disclosure, modification, destruction of information or interference, or any other breach of privacy or security, in connection with any Personal Data. Licensor will make the written report to the designated contact indicated in this Agreement as soon as possible and in no
event more than five (5) days after Licensor learns of such non-permitted or
violating use or disclosure. Licensor’s report will contain information concerning the nature and impact of the Incident, including, but not limited to,
identifying the Personal Data relating, directly or indirectly, to the Incident
and all governmental and agency reporting or disclosing relating to the Incident that has occurred or is being contemplated, and Licensor’s steps to mitigate this impact. Further, Licensor shall cooperate as reasonably requested by
Licensee in order to further investigate and resolve the Incident. In the event
of an Incident, Licensor agrees to pay all costs and expenses associated with
the Incident, including, but not limited to, notification costs and costs relating
to credit monitoring.
2. Data Protection and Privacy – Alternative Language
1.1
Definitions. The following definitions shall apply for purposes of this
Section 1:
“Data Privacy Laws” means any state or national law or regulation
protecting the privacy, confidentiality, or security of Personal Data or
any specific categories of Personal Data.
“Personal Data” is defined as any individually identifiable
information about Customer customers, clients, employees (including
employees or customers of Customer customers or clients) or any
other individuals about whom Vendor receives identifiable
information from or on behalf of Customer in connection with the
provision of products, services, functions, or transactions to be
provided under this Agreement.
“Process” or “Processing” or “Processed” is as defined in the
relevant Data Privacy Laws, or where not defined means any operation
or set of operations which is performed upon Personal Data, whether
or not by automatic means, such as creating, collecting, procuring,
obtaining, accessing, recording, organizing, storing, adapting, altering,
retrieving, consulting, using, encrypting, or disclosing by transmission,
dissemination or otherwise making available, aligning or combining,
blocking, erasing, or destroying.
1.2
Applicability of Data Privacy Protections. All Personal Data
obtained from or on behalf of Customer or in connection with the
provision of services to Customer pursuant to this Agreement shall be
protected pursuant to this Section 1 and such other paragraphs of this
Agreement that address Personal Data.
1.3
Compliance with Data Privacy Laws. Vendor agrees that it will
collect, store, use, disclose, and process Personal Data in connection
with its performance under this Agreement only on behalf of and for
the benefit of Customer in accordance with this Agreement and
Customer’s prior written instructions or as required by law. Vendor
agrees that it will not process or disclose any Personal Data for any
other purpose absent specific written instructions from Customer and
that it will at all times act and process such Personal Data in
compliance with all applicable Data Privacy Laws. In addition, to the
extent applicable, Vendor agrees to comply with any requirements of
any applicable Data Privacy Law regarding the collection, storage, use,
transfer, security, or processing of Personal Data.
1.4
Transfer of Personal Data. Vendor warrants to Customer that
Personal Data provided to Vendor or obtained by Vendor under this
Agreement shall not be transferred across national boundaries unless
required by law or specified within this Agreement to be authorized to
be transferred across national boundaries. Vendor agrees that any such
transfer will only be made in compliance with applicable Data Privacy
laws.
1.5
Safeguards. Vendor will develop, implement, maintain, and use
appropriate administrative, technical, and physical safeguards to
preserve the security, integrity and confidentiality of, and to prevent
intentional or unintentional non-permitted or violating use or
disclosure of, and to protect against unauthorized access to or
accidental or unlawful destruction, loss, or alteration of, the Personal
Data created for or received from or on behalf of Customer in
connection with the services, functions, or transactions to be provided
under or contemplated by this Agreement. Such safeguards shall meet
all applicable legal standards (including any encryption requirements
imposed by law) and shall meet or exceed accepted security standards
in the industry. Vendor will document and keep these safeguards
current and shall make them available to Customer upon request.
Vendor shall ensure that only such of Vendor’s employees or
929
representatives who may be required to assist it in meeting its
obligations under this Agreement shall have access to the Personal
Data.
1.6
Security Incidents. Vendor will report to Customer any privacy or
security Incident of which it becomes aware. A privacy or security
“Incident” is an unauthorized access, use, disclosure, modification,
destruction of information or interference, or any other breach of
privacy or security, in connection with any Personal Data. Vendor will
make the written report to the designated contact indicated in this
Agreement as soon as possible and in no event more than five (5) days
after Vendor learns of such non-permitted or violating use or
disclosure. Vendor’s report will contain information concerning the
nature and impact of the Incident, including but not limited to
identifying the Personal Data relating, directly or indirectly, to the
Incident and all governmental and agency reporting or disclosing
relating to the Incident that has occurred or is being contemplated, and
Vendor’s steps to mitigate this impact. Further, Vendor shall cooperate
as reasonably requested by Customer in order to further investigate
and resolve the Incident. In the event of an Incident, Vendor agrees to
pay all costs and expenses associated with the Incident, including but
not limited to notification costs and costs relating to credit monitoring.
Vendor agrees to secure and preserve all evidence and logs pertaining
to such Incident, to take no action that would impair evidence or the
tracking and tracing of the Incident, to make no public statements to
the press regarding the Incident without approval from Customer, and
to inform Customer without delay of any and all interactions with law
enforcement in connection with such Incident.
1.7
Contact with Third Parties.
1.7.1 In the event that Vendor receives a request from a third party
(including an individual) to access any Personal Data in
Vendor’s possession, Vendor will promptly forward a copy of
such request to Customer and will cooperate with Customer in
responding to any such request. Upon Customer’s request,
Vendor will make Personal Data in its possession available to
Customer or any third party designated in writing by Customer
and will update Personal Data in Vendor’s possession in
accordance with Customer's written instructions. If any
government or competent authority requests Vendor to disclose
or allow access to Customer Personal Data, Vendor shall
immediately notify Customer of such request and shall not
disclose or allow access to such Customer Personal Data
without first giving Customer an opportunity to consult with
such government or authority to seek to prevent such
disclosure or accessing. The Parties shall discuss and agree to
any actions or steps which may be taken to avoid or prevent
such disclosure or accessing.
1.7.2
Vendor shall promptly notify Customer if any complaints are
received about the processing of Personal Data from third
parties, and Vendor shall not make any admissions or take any
action that may be prejudicial to the defense or settlement of
any such complaint and shall provide to Customer such
reasonable assistance as it may require in connection with such
complaint.
1.8
Subcontractors. Vendor will require any of its affiliates, subsidiaries,
subcontractors, and agents, to which Vendor is permitted by this
Agreement or in writing by Customer to disclose any of the Personal
Data Vendor creates for or receives from or on behalf of Customer, to
provide reasonable assurance, evidenced by written contract, that such
affiliate, subsidiary, subcontractor, or agent will comply with the same
confidentiality, privacy and security obligations as Vendor with
respect to such Personal Data as set forth in this Agreement.
1.9
Breach of Agreement. Vendor agrees that any access, use, disclosure,
handling, Processing, storage, transfer, disposal, loss, or acquisition of,
Personal Data in violation of this Section 1 shall constitute a material
breach of this Agreement and may cause immediate and irreparable
harm to Customer for which monetary damages may not constitute an
adequate remedy. Therefore, the Parties agree that Customer may seek
specific performance and/or injunctive or other equitable relief for
such violation, in addition to its remedies at law, without proof of
actual damages. Vendor agrees to waive any requirement for the
security or posting of any bond in connection with such remedy.
3. Data Protection – Informal Tone
We may collect, use, transfer, store or otherwise process (collectively,
“Process”) Customer Information that can be linked to specific individuals
(“Personal Data”). We may Process Personal Data in various jurisdictions in
which we operate (which are listed at www.vendor.com). We will Process
Personal Data in accordance with applicable law and professional regulations,
931
including, where applicable, the European Union Safe Harbor program of the
U.S. Department of Commerce, in which we participate. We will require any
service provider that Processes Personal Data on our behalf to adhere to such
requirements. If any Customer Information is protected health information
under the Health Insurance Portability and Accountability Act, as amended,
this Agreement is deemed to incorporate all of the terms otherwise required to
be included in a business associate contract relating to such information.
You warrant that you have the authority to provide the Personal Data to us
in connection with the performance of the Services and that the Personal Data
has been Processed in accordance with applicable law. If you become legally
obligated to require us to implement or maintain certain policies or practices
relating to data privacy or data security in connection with our provision of
particular Services (“Data Privacy Requirements”), you shall notify us of
the Data Privacy Requirements. We shall either (i) comply with the Data
Privacy Requirements or (ii) notify you of our determination that we are
unable to do so, in which case either of us may terminate other provision of
the relevant Services.
4.
1
1.1
Data Privacy – Comprehensive Language
Customer Personally Identifiable Information
Definitions
(i) “Customer Personally Identifiable Information” (“Customer PII”)
means any information that is linked or linkable to an individual by name
or other identifying information. Examples of Customer PII include, but
are not limited to, the following linked or linkable information:
 Social security number, driver’s license, passport or other government
issued identification number;
 Financial institution account number with or without access code;
 Credit or debit card number;
 Personal contact information, such as address, phone number, personal
email account etc.
 Health or medial information in electronic or physical form relating to
an individual’s medical history, medical treatment, mental or physical
condition, or diagnosis, or payment for provision of health care
 Biometric data;
 Date of birth;
 Gender or ethnicity;
 Personnel records, including employment history;



Password, access code, or other information allowing access to account or network containing other Customer PII;
Investigative records, including financial background check and criminal history records/information; and,
Compensation or tax information.
Customer PII does not include the name, title, business contacts, or business activities of that individual.
(ii) “Incident” means any a) actual or suspected loss of; or, b) any unauthorized disclosure, use, acquisition of, or access to, Customer PII, in paper or
electronic form or otherwise, by Vendor or any of its employees, agents or
subcontractors.
1.2
General Standards for Protecting Customer PII
It is the responsibility of all officers, employees and agents of Vendor assigned to perform services under the Agreement to treat any Customer PII
with confidentiality and discretion. Vendor’s responsibility for Customer PII
applies to all Customer PII in electronic or paper form, maintained or otherwise handled or possessed by Vendor on behalf of Customer. Vendor shall
hold all Customer PII confidential and shall not disclose any Customer PII to
any person, firm, corporation or other entity, nor use for its own business or
benefit any Customer PII obtained or generated by it during the term of this
Agreement without Customer’s prior written consent. Vendor shall develop,
implement, and maintain a comprehensive information security program covering Customer PII that contains administrative, technical, and physical safeguards taking into account (a) the size, scope, and type of business; (b) the
amount of resources available; (c) the type and amount of stored data; and (d)
the requirements of this Section for security and confidentiality of Customer
PII. The safeguards contained in such program must be consistent with the
safeguards for protection of personal information and information of a similar
character set forth in any state or federal regulations applicable to the Vendor,
its employees and agents, as well as any state or federal regulation that governs the Customer PII, including without limitation, the Gramm-Leach-Bliley
Act, the Health Insurance Portability and Accountability Act, and applicable
state privacy laws. Vendor shall obtain from each of its employees or agents
that provide services to Customer hereunder a signed agreement sufficient to
protect Customer PII disclosed under this Agreement. Failure to carry out the
requirements of this provision may result in the immediate termination of this
Agreement and the exercise of remedies at law or equity available to Customer. The disclosure of Customer PII may subject Vendor or its employees or
933
agents to civil or criminal penalties and/or prosecution. Customer, in addition
to any other remedy available to it by law, shall be entitled to injunctive relief
to enforce this provision. Vendor agrees to pay all costs, expenses, and attorney’s fees incurred in enforcing this Section. The provisions of this Section
shall survive the termination or expiration of this Agreement.
1.3.1
Notification of an Incident
(i) The Vendor must notify Customer immediately when the Vendor, its
employees, agents or subcontractors become aware of an Incident, regardless
of whether the Incident appears to present a risk of harm or loss. This notification must occur without delay on account of business hours, holiday or otherwise even if it means notifying Customer before the Vendor has commenced
or completed its own investigation into the cause or extent of the Incident.
Notice should be given to _______________________________.
(ii) Vendor shall report any Incident regardless of whether the Incident
appears to present a risk of harm or loss.
(iii) Vendor will (a) investigate the Incident; (b) regularly report detailed findings as to the cause and impact of the Incident; (c) cooperate with
Customer in its efforts to remediate and make proper notifications to individuals; and (d) provide frequent progress reports and as requested to Customer
regarding any remediation efforts.
1.4 Specific Standards for Handling and Storing Customer PII
Vendor, its employees, agents and subcontractors shall not access or maintain Customer PII on laptops or other mobile computing devices. If necessary
for the provision of services under this Agreement, Vendor may access or
maintain Customer PII on laptops or other mobile computing devices ONLY
with specific, individual, written authorization from Customer's data privacy
officer or other Customer designee. In the event such prior written authorization is granted, Vendor, its employees, agents and subcontractors so authorized shall comply with the following authorizations and minimum standards
when accessing, using or storing Customer PII.
(i) Minimum Standards for Storage on Laptops and Mobile Computing
and Mobile Storage Devices.
Vendor, its employees, agents and subcontractors who have been granted
prior written authorization and their supervisors shall sign at least annually a
document clearly describing their responsibilities with respect to data security.
Vendor must use and have a written policy requiring the use of encryption and
physical access controls (e.g., within a locked office, desk, filing cabinet, or
file room) for storage on laptops and mobile computing and mobile storage
devices.
(ii) Minimum Standards for Printing.
Printed Customer PII requires a conspicuous label that Vendor would ordinarily use to indicate the sensitivity and confidentiality of its own information. Where technically and operationally feasible, the labeling or marking
must be on every page, including any cover memorandums or title pages; otherwise a conspicuous cover sheet labeled or marked as Vendor would its own
sensitive and confidential information must be attached.
(iii) Minimum Standards for Marking Digital Versions.
A label indicating that the data or digital information is sensitive and confidential must be provided when the Customer PII is to be accessed or displayed on screen. Where technically and operationally feasible, a label commensurate with what Vendor would use to indicate the sensitivity and confidentiality of its own information should be included within the header of a
document or at the top of a screen or page of web content; otherwise, a banner
label must be displayed on the login screen of systems containing Customer
PII, or on the first screen after login. The banner label must conspicuously
state that the system contains sensitive and confidential information and that
by continuing, the user acknowledges that unlabeled information within the
system must be handled appropriately.
(iv) Minimum Standards for Transmission.
Customer PII in digital form, including email and fax, must be encrypted
during transmission.
Customer PII information sent via fax must use secure, encrypted fax with
receipt confirmation.
Encrypted email and secure fax with receipt confirmation requirements
may be waived by the individual to whom the Customer PII applies or if the
Customer has specifically authorized the unencrypted transmission or use of
unsecure fax.
(v) Minimum Standards for Storage in Print and Digital Formats.
935
Storage of Customer PII information on printed media requires physical
access controls (e.g., within a locked office, desk, filing cabinet, or file room).
Storage of Customer PII information on fixed media requires the use of technical access controls.
(vi) Minimum Standards for Media Sanitation.
Customer PII stored on electronic media or similar equipment to be reused, repaired, or disposed of must be cleansed or sanitized using a secure
method, for example, degaussing or data overwrite. This includes computers,
printers, fax machines, BlackBerrys, Phones, and any other devices that have
memory or storage that may contain Customer PII.
(vii) Minimum Standards for Remote Access.
If authorized, remote access to Customer PII must be through a remote
access system that requires two-factor authentication where one of the factors
is provided by a device separate from the computer gaining access or where a
greater security standard is applied, uses a “time-out“ function and requires
user re-authentication after no more than 30 minutes of inactivity.
1.5
Indemnification, Compliance with Laws.
Notwithstanding any limitation on indemnification or damages provided
elsewhere in this Service Agreement, Vendor shall be liable for and agrees to
indemnify, defend, and hold the Customer’s customers harmless from and
against the cost of notification to affected individuals, credit monitoring for
affected individuals, the determination of which will be made in the sole discretion of Customer, and any third party claims resulting in any way from the
Incident, except to the extent that such third party claims arise out of or relate
to acts or omissions of Customer.
5.
Data Privacy – Mutual – Short Form
If personal data of either party’s employees, a Customer or a Customer’s
employees is disclosed to the other party, the receiving party agrees to comply
with applicable data protection laws when collecting, storing, transferring,
sharing, and/or otherwise processing such personal data. Unless expressly
agreed otherwise, any personal data we disclose may only be used in
accordance with the then current Vendor privacy policy available on the
Vendor web site, and Vendor privacy statement posted on the Vendor Partner
Portal. We will respect your privacy and the privacy of customers as detailed
in our privacy policy.
6. Data Privacy - Mutual
The Receiving Party agrees to treat Personal Information (as defined below)
in accordance with the provisions set forth below. With respect to Personal
Information that is also Confidential Information, the following obligations
shall be in addition to the obligations set forth above (the parties agreeing that
in the event of any conflict, the provision affording the greater protection to
the information shall control):
a) Pursuant to this Agreement or any Related Agreement, the Receiving Party may receive or have access to certain personal, individually-identifiable
information in the Disclosing Party’s possession (not including United States
information), with respect to which the Disclosing Party has made certain
commitments regarding data privacy, confidentiality, and security (the "Personal Information").
b) the Receiving Party shall obtain no title or other property rights in the Personal Information;
c) the Receiving Party shall only use the Personal Information for the purpose of this Agreement or a Related Agreement. The Receiving Party shall
only use or disclose the Personal Information as necessary to perform this
Agreement or a Related Agreement, or pursuant to the unambiguous prior
consent of the individual (for which the Receiving Party has the responsibility
of obtaining), or as otherwise required by law. If pursuant to this Agreement
or any Related Agreement, the Receiving Party transfers Personal Information
to any third party, the Receiving Party shall supply Disclosing Party with the
identity of the proposed recipient, and the recipient shall be required to adhere
to the provisions of this Section __. If the Receiving Party collects additional
Personal Information from an individual pursuant to this Agreement or a Related Agreement, then the Receiving Party's collection, use, and disclosure of
such Personal Information shall be pursuant to the prior unambiguous consent
of the individual (for which the Receiving Party shall have the responsibility
of obtaining);
d) the Receiving Party shall implement reasonable precautions to protect the
Personal Information from loss; misuse; and unauthorized access, disclosure,
alteration, or destruction. The Receiving Party shall promptly report to the
937
Disclosing Party any improper or prohibited use or disclosure of the Personal
Information of which it becomes aware;
the Personal Information shall be promptly and irretrievably deleted once
it is no longer needed to perform this Agreement or any Related Agreement.
In no event shall the Personal Information be retained after the expiration or
termination of this Agreement or any Related Agreement; and the Receiving
Party's obligations under this Section __ shall survive the expiration or termination of this Agreement.
e)
7.
Data Privacy – EU Directive on Data Privacy
a.
In the course of doing business during the Term of this Agreement,
Vendor and its affiliates and/or subsidiaries within its enterprise may collect,
store, process and use certain personal data or contact information regarding
Licensee’s employees anywhere such employees do business, provided that
the country in which Vendor and/or its affiliates and/or subsidiaries are collecting, storing, processing and/or using said personal data/contact information or being provided the personal data/contact information is a member
of the European Economic Area (“EEA”) and such country is in compliance
with the European Union Directive on Data Privacy 95/46/EC (the “Directive”), and the Commission Decision of 27 December 2001 regarding the
transfer of personal data to processors in third countries under the Directive
and all other data privacy laws.
b.
This data (electronic or manual records) might include, for example,
an individual’s name, business or home address, business or home telephone
numbers, e-mail address, or other personal data/contact information about a
Licensee employee. As a global company, Vendor’s business processes extend to more than one country and may result in worldwide processing and
internal use of such personal data/contact information. Subject to any rights
and obligations of either party with respect to a signed non-disclosure agreement between the parties, Licensee agrees that Vendor may use and share
such Licensee employee personal data/contact information within its enterprise solely in connection with and for the implementation of this Agreement
provided it complies with all applicable data privacy laws.
c.
Notwithstanding the foregoing, Vendor shall not [store or host]
[transfer or share] any personal data/contact information to/with any of its
affiliates and/or its subsidiaries and/or its personnel who are located in a country outside the EEA unless such country ensures an adequate level of protec-
tion of said personal data/contact information, as defined in the Act and/or the
Directive, as a result of legislation ensuring compliance with the Act.
d.
In the event Vendor desires to use or transfer the personal data/contact
information outside the EEA or transfer or share personal data/contact information to/with its affiliates and/or its subsidiaries and/or its personnel who are
located in a country which does not provide adequate protection for the personal data/contact information under the law, Vendor shall obtain the advanced express and explicit written consent of Licensee and, if applicable, Licensee’s Customer. Vendor and Licensee agree to use commercially reasonable efforts to fulfill the aforementioned legal requirements necessary to facilitate the disclosure, use and/or transfer of such personal data/contact information and to attempt to make such disclosure, use and/or transfer legal.
e.
Licensee reserves the right to audit Vendor’s compliance with the provisions of the Commission’s Decision of 2001 regarding the transfer of personal data/contact information to processors in third countries under the Directive, the corresponding national data protection law, and the provisions of
this Section. Further, any and all personal data/contact information Vendor
collects during the Term of this Agreement, shall not be retained by Vendor
for a period exceeding six (6) months at which time Vendor shall surrender all
such personal data/contact information to Licensee and delete all files (electronic and/or paper) containing such personal data/contact information and
destroy same. Vendor shall furnish to Licensee a certification signed by an
Officer of Vendor certifying that such deletion and destruction has taken place
and that Vendor has not retained any such personal data/information. The
remedy for breach of the material contractual obligation contained in this Section shall be immediate termination of this Agreement. However, such termination shall not limit money damages or other remedies Licensee may have
under law or in equity.
To this end the Parties agree and acknowledge that they maintain and shall
continue to maintain appropriate and sufficient technical and organizational
security measures to protect such personal data or information against
accidental or unlawful destruction or accidental loss, damage, alteration,
unauthorized disclosure or access, in particular where processing involves the
transmission of data over a network, and against all other unlawful forms of
processing.
8.
Data Security – Vendor Obligations
939
Without superseding or limiting the specificity in Section __ (“Data
Protection and Privacy”) of this Agreement in regards to Personal Data:
1.1
Vendor shall implement organizational, operational, and technical
security measures to protect the integrity, availability, confidentiality
of its networks, applications, and all data provided by Customer,
including Customer Sensitive Information.
1.2
Vendor shall ensure that only such of Vendor Personnel who may be
required to assist it in meeting its obligations under this Agreement
shall have access to the Customer data.
1.3
Vendor shall take all reasonable steps to ensure that all Vendor
Personnel used to provide the Software, Support Services, Hosted
Services, or Professional Services under this Agreement have
undergone security checks and have been deemed trustworthy,
experienced, and of suitable character and integrity to handle
Customer data, especially Customer Sensitive Information, and have
undergone training in information security, privacy and data
protection, and the care and handling of Sensitive Information.
9.
Data Security
Without superseding or limiting the specificity in Section ______ (“Data
Protection and Privacy”) of this Agreement in regards to Personal Data:
(a) Licensor shall implement organizational, operational, and technical securi-
ty measures to protect the integrity, availability, confidentiality of its networks, applications, and all data provided by Licensee, including Licensee
Sensitive Information.
Licensor shall ensure that only such of Licensor Personnel who may be
required to assist it in meeting its obligations under this Agreement shall have
access to the Licensee data.
(b)
(c) To the extent permissible by law, Licensor shall take all reasonable steps
to ensure that all Licensor Personnel used to provide the Software, Support
Services, Hosted Services, or Professional Services under this Agreement
have undergone security checks and have been deemed trustworthy, experienced, and of suitable character and integrity to handle Licensee data, espe-
cially Licensee Sensitive Information, and have undergone training in information security, privacy and data protection, and the care and handling of
Sensitive Information.
(d) On expiry or termination of the Agreement, howsoever caused, Licensor
shall (subject to the termination provisions herein) immediately cease accessing, using, and processing Licensee data and, at Licensee’s option or direction, arrange for the prompt and safe return and/or destruction of such data
and certify that such destruction has taken place.
(e) SSAE 16 / ISAE 3402. [THIS SECTION SHOULD ONLY BE USED
WHEN THE SOFTWARE WILL BE HOSTED IN A THIRD PARTY
FACILITY.] Licensor shall ensure that the operations center from which the
Services for Licensee are provided (“Hosting Facility”) is audited on a yearly
basis under SSAE 16 or ISAE 3402 and shall provide Licensee with each annual SSAE 16 or ISAE Type II report (the “Report”) for its Hosting Facility
during the Term. If a Report states that the Hosting Facility has failed to materially satisfy one or more control objectives, Licensor shall promptly provide
Licensee with a remediation plan with the necessary steps to satisfy such control objectives and use commercially reasonable efforts to cause the Hosting
Facility to materially satisfy all control objectives. If, despite Licensor’s efforts, the Hosting Facility cannot materially satisfy all relevant control objectives, Licensor will move the Hosting Services to a mutually agreed alternate
Hosting Facility which materially satisfies all control objectives with minimum disruption and at no cost to Licensee. The failure to move the Hosting
Services to a mutually agreed alternate Hosting Facility within a reasonable
time will be a material breach of this Agreement.
Security Risk Review
[UTILIZE IN CONJUNCTION WITH THE SSAE 16 PROVISION
(NOT INSTEAD OF IT) WHEN THERE ARE HEIGHTENED
SECURITY REQUIREMENTS.]
Without superseding or limiting the specificity in Section _______ (“Data
Protection and Privacy”) of this Agreement in regards to Personal Data:
a. During the term of the Agreement at any time upon at least five (5) business day’s notice, the Parties shall meet to review data security issues. Should
941
any data security review result in the discovery of material security risks to
the systems, equipment, software, network(s), or facilities used by Licensor or
its contractors to provide the Services (as such materiality is determined by
Licensee), Licensee shall promptly notify Licensor of such risks, and Licensor
shall respond to Licensee in writing within three (3) days with Licensor’s plan
to take reasonable measures to promptly correct, repair, or modify the applicable system, equipment, software, network, or facility to effectively eliminate such material security risks without additional charge to Licensee. Upon
Licensee’s approval, Licensor shall implement such plan as quickly as practicable. Should Licensor fail to take reasonable measures to remedy the identified risk pursuant to such approved plan, Licensee may terminate this Agreement for cause effective upon a date provided in a written notice.
b. The Parties shall also develop and agree upon an action plan to promptly
address and resolve any non-material deficiencies, concerns, and recommendations in such review and Licensor shall undertake remedial action in accordance with such action plan and the dates specified therein. Any action resulting from a review that relates to Licensor’s failure to comply with a thenexisting obligation of Licensor under this Agreement shall be made at Licensor’s sole expense. The actions and remedies contemplated by this Section are
in addition to all other rights that Licensee may have in respect of Licensor’s
failure to meet its obligations under this Agreement.
10. Data Security – Comprehensive Language
A.
Security Standards. Vendor’s information security program
(“Info Security Program”) has been designed and implemented, and during
the term of this Agreement will continue to be designed and implemented, to:
(i) reasonably and adequately mitigate the risks identified by either of the
Parties related to the Services and the Customer Confidential Information
disclosed to Vendor, and (ii) maintain adequate controls and safeguarding
practices to reasonably and adequately protect the Services and the Customer
Confidential Information in the following areas: security policy; organization
and administration of information security (including the use of safeguards
such as encryption or other technologies against the destruction, loss, or
alteration of, or unauthorized disclosure of or access to Customer data in the
possession of Vendor Personnel, including while transmitted or in transport,
or while being stored, processed or managed on Vendor equipment (“Data
Safeguards”)); asset management; human resources security; physical and
environmental security; communications and operations management; access
control; information systems acquisition, development and maintenance;
information security incident management; business continuity management;
and compliance, (iii) include provisions describing and reporting on its own
risk assessments, risk management, control, and training of Vendor Personnel
in compliance with Vendor’s Info Security Program, security oversight
regarding subcontractor arrangements, and the process for the annual
certification of the Vendor’s Info Security Program, all in a manner consistent
with Customer’s own information security standards in place from time to
time for the same or similar services (collectively, the “IS Standards”).
1. Review. Vendor will disclose those portions of its Info Security Program
to Customer relative to the Services at issue no later than the Effective Date of
the corresponding Transaction Document, and will disclose any changes
thereto to Customer no later than ten (10) days after the effective date of such
changes.
2. Modifications. Notwithstanding, during the term of this Agreement,
Vendor will not modify its Info Security Program in a manner that would
degrade or adversely impact Customer Confidential Information, or
discontinue any Data Safeguards, without Customer’s prior written approval,
which may be withheld for any reason.
B. Risk Assessments.
1. Assessments. Customer reserves the right to conduct (i) an initial risk
assessment prior to receipt of Products or Services under any Transaction
Document(s), (ii) additional periodic risk assessments, at least annually
thereafter, and (iii) risk assessments upon material modification of Products or
Services, in order to identify the risks associated with the Products or Services
to be provided, and, depending on the results of such risk assessments,
Customer may also conduct site audits, source code audits or other evaluations
of Vendor’s Info Security Program related to the Products or Services
(collectively, “Risk Assessments”). Vendor Personnel will cooperate with
Customer in such Risk Assessments, which will be conducted using the IS
Standards as the basis for evaluation.
a.
Network Connections. If a network connection is established
between Customer and the computing environment(s) used by Vendor and
Vendor Personnel to provide Products or Services, Customer may perform
Risk Assessments of such computing environment(s) based on a mutuallyagreed schedule, but at least annually. Vendor will maintain an alert status
regarding the security of such computing environments, including all
vulnerabilities and security patches or corrective actions, by subscribing to an
943
industry-recognized service, such as CERT (Computer Emergency Response
Team) or CIAC (Call Center Industry Advisory Council).
b.
Penetration Testing. Vendor will permit Customer to conduct
appropriately-scoped penetration testing on a mutually-agreeable schedule, or
will furnish Customer with reports (including a description of any material
vulnerabilities) prepared by a nationally-known independent auditor of such
testing of its systems, which testing must occur on at least an annual basis.
2. Risks. The Risk Assessments will be conducted by Customer or its
designee (who will be a nationally known security firm) at such times as
Customer deems reasonably appropriate. Should any Risk Assessment reveal
material security risks in Customer’s reasonable determination, Customer will
promptly so notify Vendor, and Vendor will (i) respond to Customer in
writing within five (5) days with Vendor’s plan to promptly eliminate the
risks, and (ii) immediately thereafter, eliminate such risks. In addition,
Customer may remove access by Vendor Personnel to the Customer network
until Vendor satisfactorily complies with the IS Standards.
C. Systems/Facilities Access. If Vendor Personnel are given access to any
Customer physical location, computing equipment, applications (e.g., e-mail,
word processing, spreadsheet, presentation, database software, etc.), or the
Customer computer network, Vendor will ensure that Vendor Personnel
comply with Customer’s policies and procedures for such use and access (e.g.,
mobile devices require hard-disk encryption, such as PointSec). Further, if
Vendor is to be provided access to Customer’s computing environment or
other restricted access area or is permitted to telecommute to provide Services,
Vendor will ensure such individuals provide all data Customer requires and
execute all documents (such as a systems access agreement) Customer
requires for such access. Except as may be specifically set forth in an
Attachment or Transaction Document, Vendor represents and warrants that:
(i) it will not alter or disable any hardware or software security programs
residing on Customer’s hardware or systems, and (ii) it will not allow
unauthorized ingress or egress into or out of Customer’s networks. If Vendor
breaches the foregoing obligation, Customer may immediately terminate such
access. Vendor agrees that it will prohibit Vendor Personnel from possessing
weapons or firearms of any kind on Customer’s premises.
D. Review of Control Standards.
1. Internal Monitoring. In the event Vendor processes, possesses, or
maintains Customer’s Confidential Information at a non-Customer site,
Vendor, at its cost, will: (a) periodically test and validate key controls related
to safeguarding such information; (b) establish and maintain appropriate
application and system logs to capture testing information; (c) ensure that all
facilities used in the provision of Products or Services are in compliance with
this Agreement.
2. Independent/Third Party Review. In the event Vendor processes,
possesses, or maintains Customer’s Confidential Information at a nonCustomer site, Vendor, at its cost, will: (a) procure a mutually-acceptable
third-party independent audit/evaluation that tests and validates Vendor’s key
controls in relation to the safekeeping of such Confidential Information or
SSAE 16 report, or other generally-accepted control assessment in the
financial services industry) at each such site; (b) permit Customer to include
Customer-specific audit criteria in such review; and (c) update this audit
report annually (or more frequently as agreed by the Parties), and provide
Customer with such updated reports.
3. Vendor Personnel. If Vendor uses any non-employees entities to provide
Products or Services hereunder, Vendor will conduct its own audits to test the
adequacy of Vendor Personnel’s control environments, at least annually.
These assessments may include a SSAE 16 report or other generally-accepted
control assessment in the financial services industry. Upon request, Vendor
will provide Customer with a copy of these assessments or audits, and if such
documents indicate Vendor Personnel’s performance of obligations under the
Agreement is non-compliant or materially unsatisfactory, Vendor will
immediately notify Customer and provide to Customer Vendor’s plans to
ensure Vendor Personnel’s performance meets the standards of this
Agreement and the noted deficiencies in the audit/assessment. Vendor will
ensure Vendor Personnel implement such plans within the agreed-upon time
frame set forth in the plan(s), at Vendor or Vendor Personnel’s cost.
E. Equipment.
1. Customer. If Vendor connects to any Customer network, Customer may,
in its sole discretion, require Vendor to use Customer-owned or-leased
computer equipment and software (“Customer Equipment”). The Customer
Equipment will remain the property of Customer, and Vendor will acquire no
right, title, or interest in the Customer Equipment.
2. Vendor. Vendor-supplied equipment must meet the specifications in the
IS Standards and the applicable Transaction Document. Except as otherwise
indicated in a Transaction Document, the equipment supplied by Vendor will
remain the property of Vendor and Customer will acquire no right, title or
945
interest in it.
F. Additional Requirements. The terms of Section________ (“Security”)
may be updated and revised by Customer from time to time, and may be augmented by additional terms in the Attachment or the applicable Transaction
Document.
11. Data Security – Alternate Language (§ 12)
To the extent that Licensor or any of its personnel is provided access to any of the
automated information systems, data or voice networks or telecommunications facilities
or computer systems or related equipment of Licensee located at any Licensee facility or
used by or for Licensee, or any part thereof, along with any data the foregoing contain
(collectively, the “Licensee Network”), the following provisions shall apply to Licensee
and its personnel (and Licensee shall be responsible for its personnel’s compliance
therewith): (i) such access will be provided by Licensee solely to allow Licensor to
provide the services to and for Licensee; (ii) Licensor shall not access or modify the
Licensee Network or any data on the Licensee Network without express written
authorization from Licensee; (iii) Licensor shall not break, bypass, or circumvent, or
attempt to break, bypass, or circumvent, any security system or measure of Licensee;
(iv) Licensor shall not obtain, or attempt to obtain, access to any hardware, program or
data other than that which Licensor owns, is maintaining pursuant to this Agreement, or
to which Licensor has been given access intentionally by Licensee; (v) Licensor shall
observe and comply with all security, conduct and safety measures, procedures and
regulations including encryption of data as Licensee may establish or provide to
Licensor from time to time; and (vi) in the event that Licensor learns that it or any of its
personnel have breached any of the foregoing restrictions, Licensor shall (A) promptly
notify Licensee of the details for the same of which it is aware, and (B) cooperate as
requested by Licensee in any investigation thereof.
COMMENT: Data security is assuming increasing importance with the
adoption of both federal data protection and privacy laws such as
HIPAA, Gramm-Leach-Bliley, and state data protection and privacy
laws. A party wrongfully disclosing protective information must ensure
the necessary protective measures have been taken to avoid liability.
12. Data Security and Privacy (§ 12)
1.1 “Licensee Data” Defined. “Licensee Data” means all data in any form,
whether or not Confidential Information, collected by any Licensor Personnel in
performing the Services or furnished, disclosed, or otherwise made available to
Licensor Personnel, directly or indirectly, by or on behalf of Licensee or a Service
Recipient, including data of or pertaining to Licensee’s or its Affiliates’ customers
and any Derivative Works of such data.
1.2 Licensee Data, Generally. As between the Parties, Licensee Data will be
and remain the property of Licensee. No Licensor may use Licensee Data for any
purpose other than to render the Services. No Licensee Data may be sold, assigned,
leased, or otherwise disposed of to third parties or commercially exploited by or on
behalf of any Licensor. No Licensor may possess or assert any lien or other right
against or to Licensee Data. Without limiting the generality of the foregoing, each
Licensor may only use personal identifying information as strictly necessary to render the Services and must restrict access to such information to Licensor Personnel
on a strict need-to-know basis.
1.3 Data Security.
1.3.1 The parties’ respective responsibilities for data and systems security
are as set forth in Schedule A to the Services Agreement. Each Licensor agrees to
abide by and is responsible for its performance of the responsibilities for data and
systems security are as set forth in Schedule A to the Services Agreement.
1.3.2 When present at Licensee Facilities or accessing Licensee Data or
Licensee systems, each Licensor will observe and comply with Licensee’s security
procedures that have been communicated to such Licensor.
1.3.3 Each Licensor will establish and maintain safeguards against the
destruction, loss, or alteration of Licensee Data in its possession or control that are no
less rigorous than those maintained by Licensee as of the Effective Date and are no
less rigorous than those maintained by such Licensor for its own data of a similar
nature. Licensee may keep backup Licensee Data in its possession if it chooses and
establish backup security for Licensee Data.
1.3.4 Without limiting the generality of the foregoing, each Licensor will
use Commercially Reasonable Efforts, including through systems security measures,
to guard against the unauthorized access, alteration, or destruction of Software and
Licensee Data. Such measures will include the installation of Software that: (A)
requires all users to enter a user identification and password prior to gaining access to
the information systems; (B) controls and tracks the addition and deletion of users;
and (C) controls and tracks user access to areas and features of the information
systems.
1.3.5 Licensor Personnel will not attempt to access, or allow access to, any
Licensee Data that they are not permitted to access under any of the Various Agreement. If such access is attained, the applicable Licensor will immediately report such
incident to Licensee, describing in detail the accessed Licensee Data, and take all
necessary measures to stop the access, prevent recurrences, and return to Licensee
any copied or removed Licensee Data.
1.4 Compliance with Data Privacy and Data Protection Laws, Regulations, and Policies. In carrying out their activities under each of the Various Agreement, each Party will observe and comply with all applicable data privacy and data
protection laws and regulations. In addition, when accessing or handling any Licensee Data that contains personal identifying information, each Licensor will comply
with all policies of Licensee that have been disclosed to the Licensor relating to the
use and disclosure of such information, specifically including Licensee’s cardholder
information security program (CISP) and PCI Data Security Standard.
1.5 Protection of LPNI. Notwithstanding any other provision herein: (a) each
Licensor shall not disclose without Licensee’s prior written approval any Licensee
Proprietary Network Information (LPNI) or personally identifiable information of any
End User (past or present), including without limitation mobile directory numbers
(MDNs) (collectively, PII) to any person, except that a Licensor may disclose LPNI and
PII without prior Licensee approval to its employees, agents and employees who have a
need to know to perform the Licensor’s obligations under any of the Various
Agreements or to the extent the Licensor is required to do so by force of law; (b) each
Licensor shall require any person or entity to whom the Licensor discloses LPNI or PII
to be bound by a nondisclosure obligation that prohibits the disclosure or use of the
LPNI or PII; (c) without limiting the Licensor’s liability or obligations with respect to
LPNI and PII, each Licensor shall disclose to Licensee in writing any disclosure or use
947
of LPNI or PII that is in violation of any of the Various Agreements by persons or
entities to whom the Licensor disclosed LPNI or PII, promptly upon obtaining
knowledge of such violative disclosure or use; and (e) each Licensor shall comply with
all applicable federal and state privacy laws and Licensee policies governing access to,
disclosure of, and use of, LPNI or PII of which Licensor is informed in writing by
Licensee.
1.6 Personal Information. Each Party shall implement and maintain reasonable security procedures and practices appropriate to the nature of the information, to
protect any “Personal Information” obtained hereunder from unauthorized access, destruction, use, modification, or disclosure. For purposes of this section: “Personal
Information” means an individual’s first name or first initial and his or her last name in
combination with any one or more of the following data elements, when either the
name of the data elements are not encrypted or redacted: (1) social security number, (2)
driver’s license number or California identification card number, (3) account number,
credit, or debit card number, in combination with any required security code, access
code, or password that would permit access to an individual’s financial account, (4)
“Medical Information,” meaning any individually identifiable information in electronic
or physical form, regarding the individual’s medical history or medical treatment or
diagnosis by a health care professional; or (5) personally identifiable information as
such term is used in Section 631 of the Cable Communications Policy Act of 1984, as
amended (47 U.S.C. § 551). Personal Information does not include publicly available
information that is lawfully made available to the general public from federal, state or
local government records.
13. Publishing of Web Content
Should Licensor be granted access to Licensee’s network, it shall use such access
solely to meet its obligations under this Agreement, including the applicable SOW.
Notwithstanding the foregoing, however, Licensor shall have neither the right nor the
obligation to make the final decision as to whether a particular content or date shall
be posted on a Licensee website that is available on the Internet or an Extranet; only
a Licensee employee shall be deemed a website Publisher, as such term is defined in
Licensee’s Website Policy. A copy of the policy will be made available to Licensor,
as necessary, upon request. Finally, should a SOW require Licensor to create or
modify software, data or content to be used on or to support Licensee’s website,
Licensor shall make every reasonable effort to comply with Licensee’s applicable
policies, procedures and standards; and, if it cannot do so, it shall promptly notify
Licensee.
14. Attorney-Client Privileged Documents
Licensor recognizes that it may obtain access to client documents, data and databases
created by and for Licensee and associated communications related thereto and which
may be marked as “Attorney Work Product” or “Attorney-Client Privilege” (collectively, “Privileged Document Deliverables”) which are confidential attorney work product
or subject to the attorney-client privilege.
Licensor shall not intentionally
reveal Privileged Document Deliverables to third parties and Licensor shall institute
reasonable safeguards to prevent the unintentional disclosure of Privileged Document
Deliverables to third parties. The only project staff who may have access to Privileged
Document Deliverables shall be those for whom such access is necessary for the
purpose of providing services to Licensee as provided in this Agreement. Licensor
recognizes that Privileged Document Deliverables have been prepared in anticipation
of litigation and that Licensor is performing the Services in respect of Privileged Document Deliverables as an agent of Licensee, and that all matter related thereto is
protected from disclosure by Rule 26 of the United States Federal Rules of Civil Procedure (or any similar Law in other local jurisdictions). Should Licensor ever be notified of any judicial or other proceeding seeking to obtain access to Privileged Document Deliverables, Licensor shall (1) promptly notify Licensee and (2) at Licensee’s
expense, take such reasonable actions as may be specified by Licensee to resist providing such access. Licensee shall have the right and duty to represent Licensor in such
resistance or to select and compensate counsel to so represent Licensor or to reimburse
Licensor for reasonable attorneys’ fees and expenses incurred in resisting such access.
(a) Licensor represents that it is not a citizen of an embargoed country or a
prohibited entity under applicable United States anti-terrorism laws, regulations or lists.
(b) Licensor warrants that no representative sent on site to work at Licensee
has been convicted of a felony under state or federal law.
15. Ownership of Customer Data
All Customer Data (defined below) is, will be and will remain the property of
Customer or its designees and will be deemed Confidential Information of such parties.
Customer or such designees shall have all right, title and interest in and to, including
worldwide ownership of trade secret rights, copyrights, patents and other proprietary
rights in the Customer Data and all copies thereof. At Vendor’s expense, Vendor will
promptly notify Customer and correct any errors or inaccuracies in the Customer Data
and the reports delivered to Customer under an applicable Statement of Work, to the
extent caused by Vendor. At the request of Customer, Vendor will promptly correct
any other errors or inaccuracies in the Customer Data or such reports in accordance
with applicable Customer policies and procedures. “Customer Data” means all data and
information (i) submitted to Vendor by or on behalf of Customer and its affiliates,
successors or agents, or (ii) obtained, developed or produced by Vendor in connection
with an Statement of Work to the extent such data or information is based on,
summarizes or includes data and information of Customer or its affiliates or Customer
agents submitted to or obtained by Vendor under an Statement of Work.
16. Data Privacy and Data Security Questionnaire
1.1 As applicable, Vendor shall complete the Customer Data Security Standards Questionnaire and/or execute the Data Privacy and Protection Agreement
(“DPPA”) or Data Privacy, Protection and Connection Agreement DPPCA
prior to execution of this Agreement
1.2 Unless additional safeguards are required by Buyer, Vendor shall establish
and maintain safeguards against the destruction, loss, or alteration of Buyer
949
sensitive data (“Buyer Data”) in the possession of Vendor which shall be no
less rigorous than those maintained by Vendor for its own data of a similar
nature, but in any event no less than a commercially reasonable manner. Buyer shall have the right to establish backup security measures for Data and to
keep backup data and data files in its possession if it chooses.
1.3 Without limiting the generality of this Section:
A. Vendor Personnel shall not attempt to access, or allow access to,
any Data, files or programs within Buyer’s information technology environment to which they are not entitled under this Agreement. If such
access is attained, Vendor shall, upon having knowledge of such, immediately report such incident to Buyer’s representative, describe in
detail any accessed materials, and return to Buyer any copied or removed materials that such Vendor Personnel have in their possession.
B. Vendor shall institute best-in-class systems security measures to
guard against, identify, promptly notify Buyer of, and, at Buyer’s request, promptly terminate the unauthorized access, alteration or destruction of Buyer’s network, any software used to provide the Services, or Buyer’s Data. Such measures shall, at Buyer’s request and at
no additional charge to Buyer, include the installation of software
which: (x) requires all users to enter a user identification number and
password prior to gaining access to the information systems; (y) controls and tracks the addition and deletion of users; and/or (z) controls
user access to areas and features of the systems. Additions and modifications to such practices shall be subject to mutual written agreement
of the Parties.
17. Data Protection and Privacy - HIPAA
“Protected Health Information” means any protected health information, as
defined in 45 C.F.R. Section 164.501, or individually identifiable health information, as defined in 42 U.S.C. Section 1320d, and including any similar
concepts under applicable state or local laws, rules or regulations in effect as
of the Effective Date or thereafter, each as amended from time to time.
1. Books, Records, and Compliance.
1.1 To the extent the requirements of 42 C.F.R. § 420.300 et seq. are
applicable to the transactions contemplated by this Agreement, Vendor
agrees to make available to the Secretary of Health and Human Services (“HHS”), the Comptroller General of the Government Account-
ing Office (“GAO”) and their authorized representatives, all contracts,
books, documents and records relating to the nature and extent of costs
hereunder until the expiration of four (4) years after Services are furnished under this Agreement.
1.2 If Vendor carries out its obligations under this Agreement through
a subcontract worth $10,000 or more over a twelve-month period with
a “related” organization, the subcontract will also contain clauses substantially identical to provisions of this Section __ and Section __
(Compliance Measures/Audit) to permit access by Customer, HHS,
GAO and their representatives to the “related” organization’s books
and records.
1.3 Vendor agrees to comply at all times with the regulations issued by
the Department of Health and Human Services published at 42 C.F.R.
1001, and which relate to Vendor’s obligation to report and disclose
discounts, rebates and other reductions to Customer and Customer Affiliates for products and Services received under this Agreement.
Where a discount or other reduction in price of the Services is applicable, the parties also intend to comply with the requirements of 42
U.S.C. §1320a-7b(b)(3)(A) and the “safe harbor” regulations regarding
discounts or other reductions in price set forth at 42 C.F.R.
§1001.952(h).
1.4 Vendor represents and warrants to Customer and Customer Affiliates that Vendor and its directors, officers, employees, and permitted
subcontractors (i) are not currently excluded, debarred, or otherwise
ineligible to participate in the Federal health care programs as defined
in 42 U.S.C. § 1320a-7b(f) (the “Federal healthcare programs”); (ii)
have not been convicted of a criminal offense related to the provision
of healthcare items or services but have not yet been excluded, debarred, or otherwise declared ineligible to participate in the Federal
healthcare programs, and (iii) are not under investigation or otherwise
aware of any circumstances which may result in Vendor being excluded from participation in the Federal healthcare programs. This shall be
an ongoing representation and warranty during the term of this
Agreement and Vendor shall immediately notify Customer of any
change in the status of the representations and warranty set forth in this
section. Any breach of this section shall give Customer the right to
terminate this Agreement immediately for cause.
951
1.5 Vendor represents and warrants that it has not made, is not obligated to make, and will not make any payment or provide any remuneration to any third party in return for Customer entering into this Agreement or for any business transacted under this Agreement.
1.6 Customer rights under this Section 1 shall survive for a period of
four (4) years after termination or expiration of this Agreement.
2.
HIPAA Requirements.
2.1 Vendor acknowledges that many Customer Affiliates are “covered
entities” as that term is defined at 45 C.F.R. Part 160.103. Vendor
agrees to comply with the Health Insurance Portability and Accountability Act of 1996, as codified at 42 U.S.C. § 1320d (“HIPAA”) and
any current and future regulations promulgated thereunder including
without limitation the federal privacy regulations contained in 45
C.F.R. Parts 160 and 164 (the “Federal Privacy Regulations”), the
federal security standards contained in 45 C.F.R. Part 142 (the “Federal Security Regulations”), and the federal standards for electronic
transactions contained in 45 C.F.R. Parts 160 and 162, all collectively
referred to herein as “HIPAA Requirements”. Vendor agrees not to
use or further disclose any Protected Health Information, other than as
permitted by HIPAA Requirements and the terms of this Agreement.
2.2 Vendor will make its internal practices, books, and records relating
to the use and disclosure of Protected Health Information available to
the Secretary of Health and Human Services to the extent required for
determining compliance with the Federal Privacy Regulations.
2.3 Subject to Sections ___ (“Subcontracting/Outsourcing”) and __
(“Offshore Services Provisions”), if Vendor subcontracts or outsources any of the Services or any other of its obligations under this
Agreement which, by their nature, involve use of, custody of, disclosure of, creation of, or afford access to Protected Health Information,
the provisions of this Section __ (“HIPAA Requirements”) shall apply to such subcontractors or outsource providers. Further, Vendor
shall obtain and maintain enforceable agreements with its permitted
subcontractors and outsource providers whose duties, by their nature,
involve use of, custody of, disclosure of, creation of, or afford access
to Protected Health Information to ensure that its subcontractors and
outsource providers are bound to adhere to and comply with the confidentiality rights in data, audit, and regulatory compliance obligations
assumed by Vendor under this Agreement and that such subcontractors
and outsource providers are prohibited from further subcontracting or
outsourcing their services without the prior written consent of Vendor.
Vendor shall not consent to such further subcontracting or further outsourcing without Customer’s approval.
3.
Data Security
In the event Vendor accesses Customer’s network in performance of
its obligations hereunder, the parties shall enter into an information security agreement in the form attached hereto as Exhibit __- Information Security Agreement.
4. Compliance Measures and Audit
4.1 Vendor shall implement appropriate internal operational measures,
safeguards and procedures with respect to its performance of Services
and use of its data systems containing Confidential Information received in connection with providing Services, to ensure compliance
with the HIPAA Requirements, and the confidentiality and security
obligations under this Agreement (including those specifically described in Sections __ (“Confidentiality”), __ (“HIPAA Requirements”) and __ (“Data Security”), and to otherwise prevent unauthorized access to and disclosure of Confidential Information and unauthorized access to the Customer’s computer network. Vendor shall
promptly report to Customer any use or disclosure of Confidential Information or a patient’s Protected Health Information in violation of
HIPAA Requirements or the terms of this Agreement. In the event
Vendor, with Customer’s approval, contracts with any third party to
whom Vendor provides a Confidential Information, Vendor shall include provisions in such agreements whereby the Vendor and the third
party agree to the same restrictions and conditions that apply to Vendor with respect to such Confidential Information.
4.2 At the request of Customer, Vendor shall make its security
measures, safeguards and procedures available to Customer for review
and verification of compliance with the terms of this Agreement and
that sufficient measures have been taken to prevent unauthorized access to and disclosure of Confidential Information and unauthorized
access to the Customer computer network.
4.3 Customer shall have the right, at its expense, during normal business hours and with reasonable advance notice, to conduct an audit on
Vendor’s premises for the purpose of verifying provider’s compliance
953
with its security and confidentiality obligations under this Agreement.
Such audit, at Customer’s discretion, may encompass a review of
Vendor’s books, documents, records, information systems, and policies pertaining to the accounts of Customer or its Affiliates, the fees
payable to Vendor by Customer or its Affiliates, the Services provided
by Vendor hereunder, and compliance with the security and confidentiality obligations hereunder. In connection with such audit, Customer
shall have the right to inspect, evaluate, test, operate, execute and review at Vendor’s premises, the object code, source code, notes to the
source code, development tools, documentation, systems and any other
information or equipment related to the development, design, compilation, maintenance, correction of errors, service and support in connection with the provision of Services. If Services to be provided by
Vendor under this agreement include the processing of data provided
by any Customer and/or transfer of other electronic information between the parties, Customer’s audit rights hereunder shall include the
right to review and audit Customer’s electronic transaction transmission processes (e.g., internet, EDI and wire transfer) to verify transaction integrity and appropriate application of system development and
security controls. Customer shall have the right to conduct such audit
by use of its own employees and internal audit staff, or by use of outside consultants and auditors. In conducting such audit, Customer
shall have the right to execute copies of programs used to provide Services on Vendor’s computer systems, at no cost to Customer. Vendor
agrees to cooperate with Customer, to provide the above stated materials, and to provide otherwise provide any reasonable assistance to Customer necessary for Customer to carry out any audit as permitted herein, at no additional cost to Customer. The cost of any audit, including
the cost of the auditors and reasonable cost of copies of books, documents, and records shall be paid by Customer. Customer shall have no
obligation to pay any other costs incurred by Vendor, or its employees
and agents in cooperating with Customer in such audit. Customer
agrees that with respect to any information received and/or disclosed
in the course of such audit, Customer, its employees, and its outside
consultants and auditors shall be subject to the confidentiality provisions of Section ___ (“Confidentiality”).
18.
Security Breach – Vendor Notification Obligations
In the event Vendor becomes aware of any actual or suspected security breach
that compromises, or could compromise, Customer’s Confidential
Information, including Customer/Consumer Information (e.g., physical
trespass on a secure facility, computing systems intrusion/hacking, loss/theft
of a PC (laptop or desktop), or loss/theft of printed materials) (collectively, a
“Security Breach”), Vendor will immediately notify Customer security
personnel of such Security Breach at the following twenty-four (24) hour
phone number: 800-xxx-xxxx (within U.S., its territories and Canada) or 00-1xxx-xxx-xxxx (from other international locations) (or other number provided by
Customer to Vendor from time to time), and will immediately investigate and
remedy the Security Breach, in cooperation with or as directed by such
Customer security personnel. Subject to the terms of Section ____ (“Legal
Proceedings”), Vendor agrees that it will not inform any third party of such
Security Breach without Customer’s prior written consent; provided that if
disclosure is compelled, Vendor will obtain Customer’s approval regarding
the content of such disclosure to minimize the adverse impact to Customer, its
clients and customers. Vendor will maintain records of known and suspected
security breaches in accordance with commercially-accepted industry
practices, and if not prohibited by Law, will make such records available upon
Customer’s request. Customer may suspend or terminate the access,
processing, or storage of Customer’s Confidential Information by Vendor, or
take other appropriate action, pending resolution of any Security Breach.
19. International Cross Border Transfer of Data
Except as provided for in Section __ (“Data Protection and Privacy”), Licensee is solely responsible for the content of any of its data transmitted or
transferred across international borders. Licensor is solely responsible for
providing equipment and/or software capable of sending, receiving, transmitting and transferring such Licensee and customer data across international
borders. Licensor’s equipment and/or software shall be in compliance with all
applicable local, country and international law. Furthermore, the Parties will
not communicate (send/receive/transfer/transmit) data across any international
borders in violation of any applicable local, country or international law.
20. Vendor Compliance with Identified Standards
1.1 Applicable Certifications. Vendor acknowledges that Sensitive Information is subject to the following certifications (or their successors):
(a)
Payment Card Industry (PCI) Data Security Standard
(b)
ISO 27001
(c)
Systrust
955
(d)
TRUSTe
(e)
SSAE 16
1.2 Vendor Obligations.
(a) US Safe Harbor. Vendor shall adhere to the US Safe Harbor principles and shall promptly notify Customer of any such failure to do so.
(b) EU Directive. If Vendor cannot comply with Section __ (“US
Safe Harbor”), above, as determined in Customer’s sole reasonable discretion, to the extent applicable for Customer to comply with Directive 95/46/EC
of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the
free movement of such data (the “EU Directive”), Vendor will execute the
necessary document containing the standard contract clauses for the transfer
of personal data to third countries under the EU Directive to the extent, and as
determined in Customer’s sole reasonable discretion, Vendor is deemed a data processor under the EU Directive.
(c) HIPAA. Recognizing that Customer acts as a business associate
with respect to certain Customer customers and that Sensitive Information may
include protected health information subject to the Health Insurance and Portability Act of 1996 (“HIPAA”) and the regulations promulgated thereunder,
Vendor shall, in addition to the obligations set forth in this Agreement, make
its internal practices, books and records relating to the use and disclosure of
Sensitive Information available to the U.S. Department of Health and Human
Services, as required by HIPAA.
(d) PCI-DSS. The Vendor will at all times be in compliance with applicable Payment Card Industry Data Security Standards (“PCI DSS”) and
any standards imposed by federal, state or local law. Vendor will have an annual assessment performed by a qualified security assessor certified by the
PCI council (“QSA”). Upon request by Customer, Vendor will provide Customer with a PCI Attestation of Compliance (“AOC”) or such other documentation as reasonably requested by Customer to evidence its continuing compliance.
21.Requirements for Encryption
Vendor shall encrypt its personal computers, laptops, handheld electronic
devices (PDAs, cell phones, etc.) and/or removable data storage media that
contain Customer Confidential Information, as defined in this Article __,
utilizing at a minimum, 128-bit encryption techniques. Customer Confidential
Information is defined as any information about Customer or a Customer
customer, vendor or business partner that is obtained from Customer and that
Vendor cannot verify and confirm as being in the public domain. Customer
Confidential Information includes electronic information obtained from a
Customer employee or a Customer customer’s employee and notes typed by
Vendor on his/her personal computer or laptop during, or after a conversation
with a Customer employee or a Customer customer employee. Examples of
Customer Confidential Information include, but are not limited to:
 Customer or its customers’/vendors’/business partners’ intellectual property

Customer or its customers’/vendors’/business partners’ business plans

Customer or its customers’/vendors’/business partners’ operating plans

Customer or its customers’/vendors’/business partners’ acquisition strategies

Customer or its customers’/vendors’/business partners’ pricing
data

Customer or its customers’/vendors’/business partners’ financial data

Customer or its customers’/vendors’/business partners’ business solutions

Customer or its customers’/vendors’/business partners’ concepts, designs, approaches, proposals and project plans

Personal data from which one can identify individuals (whether
employees of Customer, employees of Customer customers/vendors/business partners or other private individuals) including but not limited to home address, salary history, government issued identification number, performance ratings,
medical information and date of birth, etc.
Such servers, personal computers, laptops, handheld electronic devices
(PDAs, cell phones, etc.) and removable data storage media must be in
compliance with this encryption requirement as of the Effective Date and
remain compliant throughout the Term of this Agreement. However, servers,
957
work stations, and non-removable data storage media and devices are exempt
from this encryption requirement if they are located in a physically secured
facility, behind a corporate fire wall, and only accessed using a strong
password.
22. Requirements for Encryption – Alternative Language
a. Licensor shall encrypt its laptops and other portable devices and media
capable of data storage and transmissions that contain Licensee Confidential
Information, Intellectual Property, PHI, Licensee customer's data, and Personal Data (“Licensee Sensitive Information”), utilizing, at a minimum, industry
standard 256-bit encryption techniques. Licensee Sensitive Information includes electronic information obtained from Licensee personnel and notes
typed by Licensor’s Personnel on a laptop during or after a conversation with
Licensee personnel.
b. Where Licensee Sensitive Information is stored on non-portable devices
and media capable of data storage and transmissions, Licensor shall ensure
that such devices and media are protected to prevent unauthorized logical and
physical access. When such data storage mediums are destroyed or repurposed, any Licensee Sensitive Information contained therein is to be deleted
or destroyed to industry standards that render it unreadable.
23. Global Data Protection and Privacy
1.1. Subject to Section 1.2, the Parties agree that if, at any time during the term of this
Agreement, Licensor and/or any of its Related Companies has the ability to access or
actually accesses, uses, stores or otherwise transmits or processes Licensee Personal
Data relating to or concerning individuals with residence outside the Unites States,
(“Non-US Personal Data”) Licensor shall comply with the terms of Schedule B and
complete and execute the Data Processing Agreement substantially in the form of
Schedule ___ (“Data Processing Agreement “) attached to this Agreement (“Data
Processing Agreement”), which agreement, together with the terms of this
Agreement, will govern the processing of any and all Licensee Personal Data in
connection with the Services.
1.2. Subject to the terms of Sections 1.5 and 1.6, if Licensor certifies and
continues to certify during the terms of this Agreement that Licensor and each of its
Related Companies adhere to the Safe Harbor Agreement between the U.S.
Department of Commerce and the European Commission with respect to personally
identifiable information that is transferred from the European Economic Area to the
United States (the “Safe Harbor”) in accordance with the terms set forth in Schedule
__ (“Safe Harbor Certification”), Licensor need not execute the Data Processing
Agreement. In lieu of executing the Data Processing Agreement, Licensor shall
comply with the terms of Schedule ____ (“Safe Harbor Certification”) which,
together with the terms of this Agreement, shall govern the processing of any and all
Licensee Personal Data terms under this Agreement (the “Safe Harbor
Certification”).
1.3. For avoidance of doubt, the Security Schedule shall apply to the processing of
any Licensee Personal Data, irrespective of which jurisdiction the data subject resides
and notwithstanding the fact that the Licensor has executed the Data Processing
Agreement or, alternatively, complies with the terms of the Safe Harbor Certification.
1.4. To the extent that it is determined by any data protection authority that this
Agreement, the Data Processing Agreement or the Safe Harbor Certification is
insufficient to comply with the applicable Data Protection and Privacy Laws or to the
extent required otherwise by any changes in the applicable Data Protection and
Privacy Laws or the enactment of new Data Protection and Privacy Laws during the
Term, the Parties agree to work cooperatively and in good faith to amend this
Agreement or execute Data Processing Agreements, if any, in a mutually agreeable
and timely manner or to enter into further mutually agreeable data processing
agreements in an effort to comply with any Data Protection and Privacy Laws
applicable to the Parties .
1.5. Licensor shall take such actions, without further consideration and at Licensor’s
expense, necessary to protect Licensee Personal Data against unauthorized or
unlawful processing and accidental or intentional loss, destruction or damage as are
appropriate to Licensee as data controller or owner of the Licensee Personal Data
and/or satisfy within a timely manner requests or requirements of relevant
governmental or data protection regulatory authorities, provided that Licensor shall
not be obliged to take any measures higher than that required by law, without
additional charge to Licensee.
1.6. Licensee shall have the responsibility to notify all its employees, contingent
workers or participants as may be required by applicable Data Protection and Privacy
Laws of the collection and intended usage of their personal data. Licensor shall
provide Licensee with any and all information, including applicable Licensee
959
Personal Data, which Licensee requires to respond, in a timely manner and in
compliance with applicable Data Protection and Privacy Laws, to any inquiries,
notices, claims or demands brought by a data subject in connection with the usage of
their personal data.
1.7. Upon the request of Licensee or one of its Related Companies, Licensor shall:
(a) enter into additional Data Processing Agreements as Licensee may require
and,
(b) use reasonable efforts to cooperate in connection with the preparation of the
additional Data Processing Agreements and any required annexes to such
additional Data Processing Agreements, including providing any additional
information requested by the relevant data protection authorities within the
period of time specified by such authorities, or, if no time period is specified by
the applicable data protection authorities, within a reasonable time.
24. Personally Identifiable Information – Compliance with Applicable
Privacy and Data Security Laws
The parties acknowledge that in providing the Service, Vendor may
obtain or have access to, or otherwise store, process or transmit, Customer
data that includes personally identifiable information of Customer, its
employees, agents, officers, contractors, customers, potential and prospective
customers, suppliers, and/or other persons, which information may include
without limitation name, address, other contact information, financial account
information, social security number, driver’s license or non-driver
identification card number, mother’s maiden name, date of birth, passwords,
biometrics, electronic serial number, personal identification number or code
and/or any other account information and/or account activity information or
other information or data that can be used for identity theft (even that which is
not personally identifiable) and other sensitive information regarding such
persons (collectively, “Personal Information”). Notwithstanding anything to
the contrary, all Personal Information is and shall remain the sole and
exclusive property of Customer and shall be deemed Customer’s confidential
information. Vendor agrees that (i) at all times during the term of this
Agreement, including any renewal term(s) and thereafter, it will comply with
its obligations under all Applicable Privacy and Data Security Laws (as
defined below) in relation to Personal Information, (ii) it will not use or permit
the use of Personal Information for any purpose other than for the purpose of
performing the Services, and (iii) it will access, and permit access to, Personal
Information on a need-to-know basis only. The term “Applicable Privacy and
Data Security Laws” means all privacy, security and data protection laws,
rules and regulations of any applicable jurisdiction applicable to privacy,
security and protection of Personal Information, including the collection,
processing, storage, protection and disclosure of Personal Information.
25. Language Providing for Notice of “Unauthorized Use”
(a) Customer agrees to notify Vendor immediately of the unauthorized
access to or use of any component of the Service to which Customer is given
access under this Agreement and of other information made available to
Customer under this Agreement, by any person or organization not authorized
by this Agreement to have such possession, use or knowledge. Customer will
promptly furnish full details of such access and/or use to Vendor, will assist in
preventing the recurrence of any such access and/or use, and will cooperate
with Vendor, at Vendor’s expense, in any litigation against third parties
deemed necessary by Vendor to protect its proprietary rights. Customer's
compliance with this Section __(a) shall not be construed in any way as a
waiver of any right by Vendor to recover damages or obtain other relief
against Customer for any act or omission which may have resulted in the
unauthorized access to or use of any component of the Assets or the Service.
(b) Vendor agrees to notify Customer immediately of the unauthorized
possession, use, or knowledge of any Customer data furnished to Vendor by
Customer or otherwise accessible by Vendor under this Agreement and of
other information made available to Customer under this Agreement, by any
person or organization not authorized by this Agreement to have such
possession, use or knowledge. Vendor will promptly furnish full details of
such possession, use or knowledge to Customer, will assist in preventing the
recurrence of such possession, use or knowledge, and will cooperate with
Customer, at Customer’s expense, in any litigation against third parties
deemed necessary by Customer to protect its proprietary rights. Vendor's
compliance with this Section __(b) shall not be construed in any way as a
waiver of any right by Customer to recover damages or obtain other relief
against Vendor for any act or omission which may have resulted in the
unauthorized possession, use or disclosure.
26. Breach Notification Obligations
Each party will: (a) notify the other party promptly of any material
unauthorized possession, use or knowledge, or attempt thereof, of the other
party’s Confidential Information by any person that may become known to
such party; (b) promptly furnish to the other party details of the unauthorized
possession, use or knowledge, or attempt thereof, and use reasonable efforts to
assist the other party in investigating or preventing the recurrence of any
961
unauthorized possession, use or knowledge, or attempt thereof, of
Confidential Information; (c) use reasonable efforts to cooperate with the
other party in any litigation and investigation against third parties deemed
necessary by the other party to protect its proprietary rights; and (d) promptly
use reasonable efforts to prevent a recurrence of any such unauthorized
possession, use or knowledge of Confidential Information.
Q.
1.
Delivery
Software Delivery
Licensor agrees to deliver the Software solely by (a) electronic transmission
or (b) a “load and leave” procedure whereby Licensor loads the Software onto
Company’s and/or its Affiliates’ systems using Licensor’s own media, over
which media Licensor at all times retains possession and control. In the case
of delivery under option (b) above, Licensor shall remove such media from
Company’s premises promptly following completion of such loading procedure. Accordingly, Licensor shall, within ten (10) days of delivery, execute
and provide to Company a certificate in the form of Exhibit __ – Software
Transfer Statement, attached hereto and incorporated herein by this reference.
2. Delivery, Installation and Use
1.1 Licensor will make, and Customer will take, delivery of one copy of the
most current Release of the Licensed System. Delivery shall be made
as follows:
[ ] Delivery of physical media
[ ] Electronic delivery via dedicated circuit, internet connection or
otherwise (describe _________
[ ] Delivery by Licensor personnel, installation on Customer’s
electronic devices and removal of physical media from Customer’s
site (“Load and Leave”)
[ ] Other (describe) ______________________
Installation and implementation of a System shall be Customer’s
responsibility. Customer may separately contract with Licensor for
implementation assistance if Customer so desires. Initial delivery of
each System shall constitute fulfillment of Licensor’s obligation under
this paragraph relative to such System.
1.2
A System licensed to Customer shall be the United States of America
version of the System, unless otherwise expressly provided in an
Attachment.
1.3
Subject to the terms hereof, each System is licensed for use on the
hardware and operating system platform set forth in such System’s
Documentation. The license shall be limited to the use of a System at
the Authorized Location, and if it contains Internet Components, the
web components of a System by way of a secure web connection, in
each case only for the processing of data arising from the Authorized
Lines of business underwritten and risk assumed in the United States of
America by Customer and any Authorized Company.
1.4
Customer acknowledges that each System (and the components thereof)
contains unique, confidential and secret information and is the trade
secret and confidential proprietary product of Licensor. Customer shall
not allow any person or entity to copy the System in whole or in part in
any manner except as expressly permitted in this Agreement. Customer
shall not disclose or otherwise make a System available to any person or
entity other than (i) employees of Customer, (ii) employees of an
Authorized Company, or (iii) as to internet enabled components of a
System only, Customer’s insurance agents accessing a System via a
secure web site and, in each of the three cases above, only to the same
required to have such knowledge for normal use of the System.
Customer agrees to obligate each such employee and each Authorized
Company and each such insurance agent to a level of care sufficient to
protect the System from unauthorized use or disclosure. These
obligations are independent covenants and shall continue after this
Agreement is terminated.
1.5 Customer may copy a System as reasonably necessary for testing and
back-up purposes and Customer may make object code copies of
workstation or internet enabled components of a System for use at
Remote Locations, however, Customer may only use one copy of the
core components of a System, if any, at any time to process production
data. Core components are those components of the System that are not
internet enabled. If the computer facility at the Authorized Location is
963
unusable, Customer may transfer a System to a back-up computer
facility which is owned and operated solely by Customer or an
Authorized Company in the United States. If Customer's anticipated
back-up facility is not owned and operated by Customer or an
Authorized Company in the United States, Customer shall obtain
Licensor's prior written approval for such use of such facility. Customer
shall not operate the core components of a System, if any, at more than
one facility at any time.
1.6 The above described rights to copy a System are subject to the following
conditions: (i) all such additional copies shall be made at Customer's
cost and expense; (ii) all such copies shall reproduce any copyright,
proprietary and confidentiality legends (whether printed or machine
readable) placed upon or contained in a System; (iii) all such additional
copies shall be the property of Licensor; (iv) Customer shall maintain
appropriate written records of the number and location of all such
copies, and shall furnish such information to Licensor upon request; and
(v) except as provided herein, all terms and conditions of this Agreement
shall apply to all such copies except, Licensor shall have no obligation
or responsibility to render or provide warranty services for such
additional copies.
1.7 Customer has sole responsibility for Customer's use and operation of a
System, including monitoring and verifying input and output data,
back-up of input and output data, providing data for any files or tables of
such System, and for maintaining the required System operating
environment. Customer shall establish and maintain a System in the
library structure, if any, described in the System Documentation.
1.8 Customer may modify the System however any modified System shall
remain subject to the provisions of Sections 1.2 and 1.3 hereof.
Customer may not reverse engineer, reverse assemble or reverse compile
any object code components of a System.
3. Electronic Delivery of Software.
Delivery of software shall be made by electronic delivery. The date of delivery of the Software to Licensee shall be deemed the date by which both of the
following conditions have been met: (a) Licensee has been granted electronic
access to the Software; and (b) Licensee has received passwords or other permissions necessary to access and use the Software, if applicable.
4.
Electronic Delivery- Alternative Language
In consenting to electronic delivery as set forth above, each Party acknowledges that
information transmitted over the internet may not be entirely secure. Generally, email messages are not secure and may contain computer viruses or other defects,
may not be accurately replicated on other systems, or may be intercepted, deleted or
interfered with without the knowledge of the sender or the intended recipient. Each
Party also acknowledges that an email or other electronic communication from the
other, or any of its designees, may be accessed by recipients other than the intended
party and may be interfered with, may contain computer viruses or other defects and
may not be successfully replicated on other systems. Neither Party nor any of their
designees gives any warranties in relation to these matters. Licensor reserves the
right to intercept, monitor and retain e-mail messages to and from its systems as
permitted by applicable law. The Licensor is not be responsible for any damages
suffered by the Licensee including loss of data resulting from delays, non-deliveries,
service interruptions or any misused information including but not limited to information sent to unauthorized e-mail addresses provided to the Licensor on the Licensee’s behalf. The Licensor exercises no control whatsoever over the information
passing through its network or over the internet. Although the Licensor has offered a
secure alternative for sending confidential information and communicating, the Licensee is electing to have such information sent in insecure e-mails at its sole risk
and agrees that the Licensor shall have no liability and the indemnification set forth
in Paragraph __ (“Indemnification”) shall apply. If the Licensee is unwilling or unable to accept this exposure, it should contact Licensor to arrange for another means
for the Licensor to provide the information. Furthermore, in no event shall the Licensor be liable for any special, consequential, indirect or punitive damages.
Communications delivered electronically may be formatted in Adobe Acrobat’s
portable document format (“PDF”), hypertext mark-up language (“HTML”) or other
file formats the Licensor deems appropriate. In order to view or print
Communications provided in PDF, the Licensee will have to obtain the Adobe
Acrobat Reader, which is available free of charge at Adobe’s website (located at
www.adobe.com), and install it on a computer. The Licensee is responsible for
having any necessary hardware, software or other technology to access the
information sent electronically, including a printer or other device to download and
save any information that it may wish to retain.
5.
Time Boxing
In order to accommodate Customer’s four-month timeframe, Customer and
Vendor will manage the activities of this Project through the use of timeboxing. Time-boxing is a project management technique that uses a firm,
fixed time allotment to control activity size, duration, and complexity.
Specifically it bounds the scope of an activity to a specific duration with a
specified level of resources. Using this technique combined with the
965
experienced team, the Customer and Vendor teams will build the deliverables
to the appropriate level of detail within the allotted time.
R.
Development (Chapters 7.B and 13)
1.
Software Interfaces
Upon Company's written request, Licensor shall provide Company with the
interface information needed to achieve interoperability between the Software
and other independently created programs at no additional charge. Company
shall observe strict obligations of confidentiality with respect to such information and shall use such information for is internal business purposes only.
Company may, at its option and subject to Licensor’s agreement, have Licensor develop such interfaces subject to a separate agreement for such services.
2.
Development and Enhancements
Vendor acknowledges that one of the principal considerations to Customer in
entering into this agreement with Vendor rather than obtaining the software
from another third party or developing it itself is the willingness of Vendor to
commit to the provisions of this section concerning development of additional
software and documentation for use by Customer. Vendor agrees that it will
develop extensions, modification or enhancements (collectively the
“Extensions”) to the Vendor Software as requested by Customer from time to
time pursuant to a Statement of Work in the form set forth as attached
Exhibit _ - Form of Statement of Work. Vendor’s agreement to develop
Extensions shall be contingent upon the mutual agreement of the parties
concerning each party’s expected effort to develop the Extensions, the
reasonable cost to each party for such work, and the anticipated compensation
to Vendor resulting either from: (i) license of the Extensions to Target
Customers in accordance with the payment terms detailed in Exhibit __-_
Payment Terms; or (ii) commercially reasonable one time compensation paid
by Customer to Vendor for all of Vendor’s efforts related to the Extensions in
lieu of the compensation detailed in (i). The parties agree that all Extensions
shall be owned by Vendor; however Vendor hereby grants to Customer a
perpetual, irrevocable, fully paid-up, non-exclusive, transferable, worldwide
source code license to use, copy, modify, enhance, prepare derivative works
from and with respect to, license, sublicense and otherwise distribute such
Extensions.
3.
Custom Products - Reseller
Reseller shall provide Target Customers with any requested Custom Work. In
the event Reseller is not able to provide the Custom Work, in whole or in part,
as requested by the Target Customer, Reseller agrees to solicit the assistance
of Licensor as a subcontractor to Reseller to provide the Custom Work before
contacting any third party. Licensor shall have two (2) business days from the
date of contact by Reseller to respond to Reseller’s request for assistance with
respect to the delivery of the proposed Custom Work. In the event that
Licensor elects not to participate in the delivery of the Custom Work, or in the
event that Licensor does not respond to Reseller within the period specified
above, Reseller shall be free to subcontract with other third parties with
respect to the delivery of the proposed Custom Work to the Target Customer.
In the event that Licensor elects to subcontract with Reseller to provide the
Custom Work, Reseller and Licensor shall execute a Statement of Work with
regard to the Custom Work detailing: i) each party’s obligations with regard to
the Custom Work; ii) all required payments and payment schedules associated
with the Custom Work; iii) the ownership of any intellectual property rights
arising with respect to the Custom Work; and, iv) any other relevant matters.
4.
Commercialization of Software
1.1 Commercialization.
Licensee shall plan and implement appropriate research and development,
testing and production efforts directed toward commercialization of the
Licensed Software at a commercially practicable date and shall provide to
Licensee a copy of such plan.
1.2 Plan Implementation; Termination for Failure to Implement.
Commencing with the Effective Date, Licensee shall implement in reasonable
commercial fashion and with reasonable commercial dispatch the plan for
developing and commercializing the software. Licensee shall be entitled to
terminate this Agreement in accordance with Section ___ (“Termination”) in
the event that either:
(a)
Licensee gives written notice to Licensee that it intends to elect to
terminate the license because of Licensee’s failure to implement the
plan in any material respect and Licensee, after such written notice
967
from Licensee as provided in Section ____(“Termination
Provision”), fails to provide written evidence to Licensee of present,
attempted or anticipated commercialization in a manner and on a
schedule reasonably commensurate with the scope of the country or
countries in question and Licensee’s resources. Licensee agrees that:
(1) evidence provided by Licensee that it has an ongoing and active or
anticipated research, development, manufacturing, marketing or
licensing program as appropriate, directed toward the license of
software shall be deemed satisfactory evidence;
(2) in the discretion of Licensee commercialization efforts may be
directed first to industrialized nations of the world commencing with
the United States of America, and only subsequently to other regions
as reasonably and commercially desirable for Licensee given its
strategies and resources; and,
(3) that Licensee may in the exercise of prudent business judgment
elect to defer commercialization efforts in particular fields until the
software has undergone substantial and appropriate further
development; or
(b)
Licensee shall fail to make the first commercial sale within [one (1)]
year from the receipt of approval from the U.S. Food and Drug
Administration (“FDA”) for a Licensed Product, if such approval is
required for the Licensed Product, or within [one (1)] year from the
completion of the Licensed Product if FDA approval is not required
for the Licensed Product, and such failure is not excused by:
(1) causes beyond Licensee’s direct control;
(2) Licensee’s failure to meet its obligations hereunder;
(3) infringement of third party patents; or,
(4) actions or inactions of any federal or state agency whose approval is
required for commercial sales.
1.3 Status Reports. Licensee shall provide periodic status reports to
Licensee, at least annually, indicating progress and difficulties to date in
commercialization, and a forecast and schedule of major events required to
market the software.
1.4 Abandonment or Suspension. If at any time Licensee abandons or
suspends its marketing or its intent to market the Software for a period
exceeding [45] days, Licensee shall immediately notify Licensor giving
reasons and a statement of its intended actions.
1.5 Secondary Fields. Regarding Licensee’s efforts toward
commercialization of the Software, the parties agree that Licensee shall have
up to [one (1)] year from the date hereof in which to provide to Licensor a
proposed plan for developing and commercializing the Software. If Licensee
provides Licensor with such a business plan within [one (1)] year, Licensee
shall then implement with commercially reasonable diligence the plan for
such development and commercialization of the Software. However, in the
event the Licensee does not provide Licensor with such a business plan within
[one (1)] year, the Licensor may give notice to Licensee pursuant to Section
(“Termination”) of its intent to terminate its grant of license in the Software.
The license granted to Licensee hereunder in respect of the Software, shall not
be affected by the provisions of this Section ___.
5. Continued Development – Material Inducement for
Customer to Enter Into Agreement
A material inducement for Customer to enter into this Agreement with the
Vendor is Vendor’s commitment to work with Customer to create an OCI
compliant Product and Services catalogue from which Customer can (i) send
electronic Purchase Orders for the Vendor’s Products and Services, (ii)
receive an electronic Product shipment confirmation (also known as advanced
shipping notice), (iii) receive an electronic proof of delivery and (iv) receive
an electronic invoice. The Vendor’s failure to implement this end to end Ebusiness process in a timely manner shall be considered sufficient cause for
Customer to terminate the Agreement in accordance with the terms of the
Agreement. OCI refers to Open Catalogue Interface, a type of punch-out
technology developed by SAP, Inc.
S.
Disaster Recovery/Business Continuity
(Chapter 7.H; § 35)
1. Movement of Licensor Personnel
Licensee may, for any reasonable reason whatsoever, request that Licensor move all
or some of the Licensor Personnel engaged on efforts listed in Task Order __ attached hereto to a location reasonably selected by Licensee (the “Contingency Location”) including, without limitation, a Licensee Location in the United States or off-
969
shore, a Licensor Service Location in the United States or the country in which Licensor is performing the Services or a third party location reasonably equipped to
facilitate performance of the Services. In the event of such a request, Licensor agrees
that it shall (a) continue to provide the Services without any disruption, (b) promptly
commence arrangements to move such personnel to the Contingency Location and
(c) use commercially good faith efforts to have such resources or a significant portion
thereof relocated in no more than ninety-six (96) hours from the time of the request.
The parties acknowledge and agree that the Licensor Personnel may change from
time to time upon mutual agreement of the Parties. A current list of the agreed upon
Licensor Personnel shall at all times remain with the Licensee Task Order Manager
and the project manager, if any. In the event that any Licensor Personnel are relocated pursuant to the foregoing to a location outside of the country in which such Licensor Personnel was performing services, Licensee shall pay Licensor the then
applicable onsite rate for the applicable location. Licensor agrees that at all times
during the Task Order Term all Licensor Personnel shall (a) be authorized to work in
the United States (b) maintain valid visas or such other similar work permits as may
be required by the relevant jurisdiction in the United States to permit such personnel
to travel upon notice to such locations. A Force Majeure Event shall only excuse
Licensor’s obligations to relocate personnel as described herein as set forth in Section
____ (Force Majeure) including that Licensor use reasonable precautions to prevent
such events and that Licensor agree to use commercially good faith efforts to take
such reasonable precautions.
2.
Disaster Recovery - Creation of Copies of Software
a.
Licensee may copy the Software for disaster recovery and back-up
purposes, including disaster recovery testing and may make one copy of the
Software for archival purposes. Licensee may, if appropriate, provide to its
disaster recovery contractor a copy of the Software for installation, disaster
recovery, disaster recovery testing and back-up purposes. The disaster recovery contractor shall not receive support from Licensor, except in the event of
an actual disaster.
b.
For the purpose of disaster recovery testing, Licensee will contact Licensor to receive the applicable passwords, if required, so as to operate the
Software for such testing activity. Licensee shall, at Licensor’s request, provide Licensor the name and address of the disaster recovery contractor before
delivery of the Software to that disaster recovery contractor. Licensee shall
also provide Licensor with the name and address of the Disaster Recovery
contractor within twenty (20) days after the declaration of an actual disaster.
In the event of a disaster, Licensee shall contact Licensor for passwords,
where applicable, to operate the Software during any such disaster and Licensor agrees to provide such passwords in a timely manner. The identical copyright notices found on the original Software media shall be reproduced on all
copies authorized under this Section __.
c. Licensee is authorized to continue to use the Software in production for all
of its Licensees during any Disaster Recovery Testing and to use the Software
for the named Licensee during an actual disaster in order regain its production
capacity.
3.
Disaster Recovery and Business Continuity Plan
Vendor maintains, and will continue to maintain throughout the Term, (i) a
written disaster recovery plan (“Disaster Recovery Plan”), which Disaster
Recovery Plan is designed to maintain Customer’s access to the Services and
prevent the unintended loss or destruction of Customer data and (ii) a written
business continuity plan (“BCP”) in a form reasonably acceptable to Customer that permits Vendor to recover from a disaster and continue providing Services to customers, including Customer, within the recovery time objectives
set forth in the BCP, or other recovery time objectives as mutually agreed to
by the Parties. Vendor shall provide Customer with copies of the Disaster Recovery Plan and BCP upon Customer’s request.
The Disaster Recovery Plan shall provide for, at a minimum, once-daily backup of Customer data and archival of such Customer data at a secure facility.
Vendor shall (i) update and test the operability of the Disaster Recovery Plan
at least once every 12 months, and the results of any testing performed shall
be provided to Customer upon its reasonable request, (ii) upon Customer’s
request, no more than once every 12 months, certify to Customer that the Disaster Recovery Plan is fully operational, and (iii) implement the Disaster Recovery Plan upon the occurrence of a disaster. The Disaster Recovery Plan
shall provide for, and be followed by Vendor, such that in no event shall the
Services and the Customer data be unavailable to Customer for a period in
excess of twenty-four (24) hours.
Vendor warrants and represents that in the event of a disaster, Customer will
be among the first ten percent (10%) of Vendor’s customers restored to service at the levels set forth in this Agreement and the applicable SOW. The
BCP must include, without limitation, an outline of the procedures (including
notice and escalation procedures) that Vendor and Vendor Personnel shall follow and implement in the event of an epidemic, disease, quarantine or government health alert that prohibits or restricts travel or prevents any individual
from reporting to a work location. Vendor will test the operation and effectiveness of the BCP at least annually. On each anniversary date of the Effective Date, Customer shall have the right to review Vendor’s then current BCP.
If Customer identifies any material deficiencies associated with the BCP,
Vendor will respond within 30 days on steps that will be taken to mitigate recovery deficiencies within a reasonable time frame acceptable to Customer.
Vendor will continue to provide the Services if Customer relocates its operations to an interim or substitute facility or otherwise implements any of its internal disaster recovery plans. Vendor agrees that it will comply with all obli971
gations in this provision at no additional cost to Customer. Failure to comply
with this Section shall constitute a material breach of this Agreement.
4.
Business Continuity Plan
Vendor will provide business continuity, disaster recovery, and backup
capabilities and facilities, through which Vendor will be able to perform its
obligations hereunder (including service level agreements in the Attachments
or License Agreement) with minimal disruptions or delays. Vendor represents
and warrants that it will comply with, provide, and adequately fund its
business continuity plan (“BCP”) commensurate with the sensitivity of the
Products and Services provided by the Vendor. Vendor agrees to deliver a
copy of its executive summary of the BCP for the Products and Services upon
request, and will meet with Customer representatives to review said BCP.
Vendor will maintain and exercise the BCP at regular intervals (no less
frequently than annually), and will provide Customer with documented results
of the BCP tests that relate to the Products and Services provided hereunder.
In addition, Vendor will provide Customer with sufficient notice to allow
Customer to participate in and/or monitor its BCP exercises. Vendor will
promptly revise its BCP to conform to new governmental regulations, if
applicable. If Vendor becomes aware that it is not in compliance with its
BCP, Vendor will (i) notify Customer in writing immediately, and (ii) cure
any such non-compliance within ten (10) calendar days thereafter. If the noncompliance cannot be cured within such period, Vendor will use its best
efforts to cure that non-compliance as soon as practicable. Notwithstanding
the foregoing, the Parties agree that if any non-compliance is not cured within
ten (10) calendar days after notice is provided, Customer will have the right to
terminate this Agreement in whole or in part, effective immediately upon
written notice to Vendor.
5. Business Continuity Plan – Comprehensive Language
1.1 Contingency Plans. Vendor will, at its sole expense, establish and
maintain (i) written business continuity plans for the Services and supporting
facilities, (ii) written disaster recovery plans for critical technology and
systems infrastructure, and (iii) proper risk controls to enable continued
performance under this Agreement in the event of a Disaster (as defined
below). All three components set forth above shall be collectively referred to
herein as the “Contingency Plans”.
The Contingency Plans include, but are not limited to, advance
procedures and information that are developed, compiled, certified and
maintained in readiness for use in the event of a Disaster, which is focused on
the core business processes, information technology systems, infrastructure,
and related personnel.
1.2 Disaster. As used herein, the term “Disaster” is defined as an
unanticipated incident or event, including, without limitation, force majeure
events, technological accidents, or human-caused events, that may cause a
material service or critical application to be unavailable without any
reasonable prediction for resumption, or that causes data loss, property
damage or other business interruption without any reasonable prediction for
recovery, within four (4) hours or such other period as determined by
Customer, in its sole discretion.
1.3 Plans Provided to Customer. Vendor has provided to Customer
prior to the Effective Date a copy of the applicable Contingency Plans. In
addition, Vendor will provide an updated copy of the applicable Contingency
Plans as such plans are amended, but no such amendment will apply to the
performance under this Agreement unless approved by Customer. Vendor
shall comply with the Contingency Plans.
1.4 Notification. If at any time Vendor becomes aware that it is not in
compliance with its plans, Vendor will notify Customer in writing
immediately and provide a corrective action plan. Vendor will cure such noncompliance within ten (10) days after sending Customer such notice, or, if
such non-compliance cannot be cured within such period, will immediately
commence and continue diligent efforts so that such non-compliance is cured
in Customer’ discretion within a commercially reasonable time. Customer
may terminate this Agreement immediately and without penalty if Vendor
cannot, or does not, cure non-compliance with its Contingency Plans within a
973
commercially reasonable time but not more than fifteen (15) days.
1.5 Testing of Plans. Vendor will (1) update and test the operability
of any applicable Contingency Plan at least annually, (2) certify to Customer
upon completion of each such test that each such plan is fully operational, and
provide Customer with a copy of its most recent test results, and (3)
implement each such plan upon the occurrence of a Disaster. Customer will
have the right to participate in the testing of the Contingency Plans to the
extent requested by Customer.
1.6 Notification of Disaster. Vendor will notify Customer
immediately of the occurrence of any Disaster that affects or could affect
Vendor’s performance of the Services and report to Customer frequently with
respect to the effectiveness of its Contingency Plans. In the event of a
Disaster, Vendor must execute the applicable Contingency Plans without any
additional charge to Customer.
1.7 Service Level Agreements. Any Service Levels set forth in
Exhibit ___ - Service Levels will not apply during the forty-eight (48) hour
period beginning when a Disaster occurs.
1.8 Effect of Disaster. If a Disaster occurs and Vendor is unable to
provide the Services, or a portion of the Services, in accordance with the
terms of this Agreement for a period in excess of forty-eight (48) hours,
Customer may, at its option, with written notice to Vendor take such action as
is reasonably necessary to restore the impacted Service, including, without
limitation, taking control of the impacted Service or engaging a third party
service provider, in which case Vendor will reimburse any reasonable
expenses that Customer incurs itself or in engaging any other third party
service provider to provide the Services during the period from the occurrence
of the Disaster until such time as Vendor resumes providing the Services
(“Recovery Period”). Customer will provide reasonable substantiation for
any such expenses and will use reasonable efforts to mitigate any damages
under this Section. Customer may adjust fee payments in an amount equal to
the pro rata percentage of the fees based upon the number of days in the
Recovery Period divided by the total number of days in the applicable
payment period (e.g., impacted month). If a Disaster causes Vendor to
allocate limited resources between or among its customers, Customer shall
receive at least the same priority as such other customers in respect of such
allocation.
1.9 Termination of Agreement. If a Disaster occurs and Vendor is
unable to provide the Services, or Customer is unable to perform or receive
the Services from a third-party for a period of five (5) days or more, Customer
may, in its sole discretion and effective upon notice to Vendor, terminate this
Agreement or remove such impacted Service from the scope of this
Agreement. Customer will not be liable to Vendor for any early termination
fee for any such termination. Customer’ rights under this Section __ shall be
cumulative with all of its other rights and remedies under this Agreement.
1.10 Participation in Testing. At Customer’ sole discretion,
Vendor will participate in tests of Customer’ business continuity planning and
disaster recovery plans.
T.
Disputes and Dispute Resolution (Chapters 23
and 24) (See also Section D.)
1. Dispute Resolution Process – Shortened
Time Frames
1.1 Expedited Dispute Resolution Process
1.1.1 IT and Regional Managers. All disputes relating to a
Site shall initially be referred by either Party to the Customer IT manager and
the Vendor Services manager for the applicable Site. If the Customer IT
manager and the Vendor Services manager are unable to resolve the dispute
within twenty Business Day(s) after referral of the matter to them, notice shall
be given to the Vendor Regional Manager and the Customer Regional
Manager. If the Vendor Regional Manager and the Customer Regional
Manager are unable to resolve the dispute within an additional ten Business
Days, the dispute shall be submitted to the Project Executive and the Account
Executive pursuant to Section 1.1.2 below.
1.1.2 Account and Project Executive. All disputes not
resolved pursuant to Section 1.1 shall be referred to the Vendor Account
Executive and the Customer Project Executive. If the Vendor Account
Executive and the Customer Project Executive are unable to resolve the
dispute within ten Business Days after referral of the matter to them, the
Parties shall submit the dispute to the Management Committee for immediate
review.
1.1.3 Management Committee. The Management
Committee shall meet at least once every quarter during the Term (or at such
975
other time as either Party may designate in a notice to the other Party) for the
purpose of resolving disputes that may arise under this Agreement or any
Work Order. The Management Committee shall consider disputes in the order
such disputes are brought before it. In the event the Management Committee
is unable to resolve a dispute within ten Business Days of the date of the
meeting during which such dispute was considered, the Parties shall submit
the dispute to the Group Vice President and Group Executive level of each
Party’s organization for immediate review.
1.1.4 Group Vice President/Executive. All disputes not
resolved pursuant to Section 1.1.3 shall be referred to the appropriate
representative at the Group Executive level at Customer and the Group Vice
President level at Vendor. If the Customer Group Executive and the Vendor
Group Vice President are unable to resolve the dispute within ten Business
Days after referral of the matter to them, either Party may pursue the remedies
available under this Agreement and Laws.
1.2 Expedited Dispute Resolution Process. In the event
that a provision of this Agreement requires the Parties to utilize the Expedited
Dispute Resolution Process, the foregoing procedure shall apply:
1.2.1 IT and Regional Managers. All disputes relating to a
Site shall initially be referred by either Party to the Customer IT manager and
the Vendor Services manager for the applicable Site. If the Customer IT
manager and the Vendor Services manager are unable to resolve the dispute
within ten Business Day(s) after referral of the matter to them, notice shall be
given to the Vendor Regional Manager and the Customer Regional Manager.
If the Vendor Regional Manager and the Customer Regional Manager are
unable to resolve the dispute within an additional five Business Days, the
dispute shall be submitted to the Project Executive and Account Executive
pursuant to Section 1.2.2.
1.2.2 Project Executive. All disputes not resolved pursuant
to Section 1.2.1 shall be referred to the Vendor Account Executive and the
Customer Project Executive. If the Vendor Account Executive and the
Customer Project Executive are unable to resolve the dispute within ten
Business Days after referral of the matter to them, the Parties shall submit the
dispute to the Group Vice President and Group Executive level of each Party’s
organization for immediate review.
1.2.3 Group Vice President/Executive. All disputes not
resolved pursuant to Section 1.2.2 shall be referred to the appropriate
representative at the Group Executive level at Customer and the Group Vice
President level at Vendor. If the Customer Group Executive and the Vendor
Group Vice President are unable to resolve the dispute within five Business
Days after referral of the matter to them, either Party may pursue the remedies
available under this Agreement and Laws.
Expedited Dispute Resolution Process – Alternative
Language
2.
Upon receipt of a dispute notice from Customer Services, if Vendor disagrees
with the basis for Customer Services withholding payment of the disputed
charges (a “Payment Dispute”) and the amount withheld exceeds ____
Dollars ($_______) (or, in the case of a Local Entity Agreement, an amount
equal to the average total monthly Charges under such Local Entity
Agreement) Vendor may implement expedited payment dispute escalation
procedures as described in Exhibit ___ – Expedited Dispute Resolution
Process.
ADD THE FOLLOWING EXHIBIT TO THE AGREEMENT
Exhibit _ - Expedited Dispute Resolution Process:
1.1
Expedited Dispute Resolution Process.
(a)
General.
(i)
Within five (5) business days after Vendor’s receipt of
a dispute notice, as set forth in Section ___ (“Disputed
Charges”) of the Agreement, Vendor may provide a
written notice to Customer of a Payment Dispute and
that it wishes to commence the dispute resolution
process described in this Exhibit __.
(ii)
If (A) the amount withheld pursuant to such dispute
notice exceeds ________ Dollars ($_________), (B)
the disputed Charges have remained unpaid for thirty
(30) days past the due date, and (C) the Payment
Dispute has not been resolved pursuant to the dispute
resolution process described in this Exhibit ____
within thirty (30) days after the commencement of such
process, then, at Vendor’s request, the Payment Dispute
will be referred to a neutral expert referee under the
process described in Section (b) below.
977
(b)
Appointment of Expert Referee.
(i)
The decision of the expert referee will have no force or
effect other than for the limited purposes stated in this
Section.
(ii)
Either Party may initiate the review by an expert referee
by sending notice of such request to the other Party.
(iii)
For five (5) business days after delivery of the abovereferenced notice, the Parties each shall use good faith
efforts to mutually agree upon an expert referee. If the
Parties are not able to agree upon an expert referee
within such period of time, such referee shall be
selected in accordance with the American Arbitration
Association’s Commercial Arbitration Rules and
Mediation Procedures (including, if agreed by the
Parties, the Expedited Procedures).
(iv)
The expert referee shall possess at least ten (10) years
of relevant experience in technology, finance and/or
law applicable to the Services or similar services or
transactions.
The expert referee shall not have
represented or acted on behalf of either Party, or be
otherwise affiliated with or interested in either Party.
(v)
Upon selection of the expert referee, the Parties will
agree on a schedule to present the dispute to the expert
referee and obtain a decision as described herein,
during a time frame of no more than twenty (20) days.
Each Party shall simultaneously submit a memorandum
to the expert referee that is not more than ten (10) pages
in length, accompanied by relevant documents and not
more than three (3) affidavits. After receiving and
reviewing the memoranda and supporting information,
the expert referee will conduct a hearing of no more
than four (4) hours, that will include not more than two
(2) representatives of each Party, at which the Parties
may present their case and will submit to questioning
by the expert referee. The expert referee will render his
or her decision within seventy-two (72) hours of the
hearing.
(vi)
The standard under which the expert referee will render
his or her decision shall be whether it was reasonable
for Customer to withhold the disputed Charges (or parts
thereof). The expert referee will issue his or her
decision in the form of a ruling on that single issue, and
will not provide any written basis or support for his or
her opinion. If the expert referee determines that
Customer had a reasonable basis for withholding the
disputed Charges (or parts thereof), then such sums
shall remain in Customer possession or, to the extent
required in Section ____ of the Agreement (“Disputed
Charges - Escrow of Customer Fees”), in escrow. If the
expert referee determines that Customer did not have a
reasonable basis for withholding the disputed Charges
(or parts thereof), then Customer will pay or, if
applicable, direct the escrow agent to pay Vendor such
sums (including any accrued interest thereon) under
reservation of rights within ten (10) days after the date
of the expert referee’s decision.
(vii)
The decision of the expert referee and all
communications,
memoranda
and
supporting
documentation exchanged in connection with this
expedited process will be exchanged on a without
prejudice basis and will be inadmissible in any respect
in any subsequent proceeding. Each Party may pursue
any and all rights associated with the Payment Dispute
through the dispute resolution process described in
Article ___ of the Agreement (“Dispute Resolution”)
and this Exhibit ___.
(viii) All
communications,
memoranda,
supporting
documentation, and the expert referee’s decision will be
deemed to be Confidential Information under the
Agreement. The expert referee will be compensated at
his or her applicable billing rate, which will be split
equally between the Parties. Any costs incurred by
either Party will be borne by that Party.
(c)
Other Terms
979
(i)
3.
Vendor’s failure to commence or pursue an expedited
process, as set forth in this Section ___, will not
constitute, operate or be construed as a waiver of any
right Vendor may have under the Agreement (including
the right to commence litigation).
Dispute Resolution
Subject to the terms of Section ______ (“Injunctive Relief”) and Section
________ (“Remedies Upon Default”) set forth above, any action, dispute,
claim or controversy of any kind, whether in contract or tort, statutory or
common law, legal or equitable, or under any Law, now existing or hereafter
arising under or in connection with, or in any way pertaining to, this
Agreement (“Dispute”) will be resolved expeditiously, amicably, and at the
level within each Party's organization most knowledgeable about the Dispute,
in accordance with the procedures outlined below. The Parties do not intend
for the procedures outlined below to supplant the routine handling of inquiries
and complaints through informal contact with customer service
representatives or other designated personnel of the Parties.
1. General. The complaining party's representative will notify the other party’s representative in writing of the Dispute, and the non-complaining party
will exercise good faith efforts to resolve the matter as expeditiously as possible. In the event that such matter remains unresolved ten (10) days after the
delivery of the complaining party's written notice, senior representatives of
each party will confer in an effort to resolve the Dispute. If they are unable to
reach a resolution of the Dispute, it will be resolved by binding arbitration in
accordance with the terms of this Section _______ (“Dispute Resolution”),
except as otherwise set forth below. A party who fails or refuses to submit to
arbitration following a lawful demand by any other party will bear all costs
and expenses incurred in compelling arbitration of any Dispute.
2. Governing Rules. Arbitration proceedings n the United States will be
administered by the American Arbitration Association (“AAA”) or such other
administrator as the parties may mutually agree upon. United States-based
arbitrations will be conducted in accordance with the AAA Commercial Arbitration Rules. If there is any inconsistency between the terms hereof and any
such rules, the terms herein will control. All Disputes submitted to arbitration
will be resolved in accordance with the Federal Arbitration Act (Title 9 of the
United States Code). The arbitration will be conducted at a mutually-agreed
upon location in the jurisdiction whose Law governs the Master Terms (“Arbitration Location”), or as selected by the AAA or other administrator if no
agreement can be reached; the parties hereby waive any claim of forum non
conveniens. All statutes of limitation applicable to any Dispute will apply to
any arbitration proceeding. All discovery activities will be expressly limited
to matters directly relevant to the Dispute being arbitrated. Judgment upon
any award rendered in an arbitration may be entered in any court having jurisdiction; provided however, that nothing contained herein will be deemed to be
a waiver, by any party that is a bank, of the protections afforded to it under 12
U.S.C. §91 or any similar Law.
[For Offshore Activities, if arbitration is to be held outside the United
States, the Attachment for Offshore Activities in such country will so specify, and the governing Law, Arbitration Location and any other applicable
rules will be as set forth in such Attachment for Offshore Activities.]
3. No Waiver; Provisional Remedies. No provision hereof will limit the
right of any party to obtain provisional or ancillary remedies, including injunctive relief, attachment or the appointment of a receiver, from a court of
competent jurisdiction in the Arbitration Location or elsewhere, whether before, after or during the pendency of any arbitration or other proceeding. The
exercise of any such remedy will not waive the right of any party to compel
arbitration or reference hereunder.
4. Arbitrator Qualifications and Powers; Awards. Arbitrators must be
active members of the official licensing organization for attorneys (Bar or
equivalent) in the Arbitration Location or retired judges of the judiciary of the
Arbitration Location, with expertise in the substantive Law applicable to the
subject matter of the Dispute. Arbitrators are empowered to resolve Disputes
by summary rulings in response to motions filed prior to the final arbitration
hearing. Arbitrators (a) will resolve all Disputes in accordance with the substantive Law of the Arbitration Location, without regard to such jurisdiction’s
conflict of Law provisions, (b) may grant any remedy or relief that a court of
the Arbitration Location could order or grant and such ancillary relief as is
necessary to make effective any such award (but in no event will the arbitrator
have the authority to award damages that exceed the scope of this Agreement), and (c) will have the power to award recovery of all costs and fees, to
impose sanctions and to take such other actions as they deem necessary to the
same extent a judge could pursuant to the Federal Rules of Civil Procedure,
and the Rules of Civil Procedure in the Arbitration Location. Any Dispute in
which the initial amount in controversy is Five Million Dollars ($5,000,000)
or non-United States currency equivalent or less may be decided by a single
arbitrator. Any Dispute in which the initial amount in controversy exceeds
Five Million Dollars ($5,000,000) or non-United States currency equivalent
will be decided by majority vote of a panel of three arbitrators; provided how981
ever, that all three arbitrators must actively participate in all hearings and deliberations.
5. Judicial Review. Notwithstanding anything herein to the contrary, in any
arbitration relating to the ownership of intellectual property rights or in which
the amount in controversy exceeds Five Million Dollars ($5,000,000) or nonUnited States currency equivalent, the arbitrators will be required to make
specific, written findings of fact and conclusions of Law.
6. Miscellaneous. To the maximum extent practicable, the arbitrators and
the Parties will take all action required to conclude any arbitration proceeding
within one hundred and eighty (180) days of the filing of the Dispute. No arbitrator or other party to an arbitration proceeding may disclose the existence,
content or results thereof, except for disclosures of information by a party required in the ordinary course of its business, by Law, or to the extent necessary to exercise judicial review rights as set forth herein. This arbitration provision will survive termination, amendment or expiration of this Agreement or
any relationship between the parties.
7. Fees. In all Disputes, the prevailing Party is entitled to recover its
reasonable legal counsel fees (including, if applicable, reasonable charges for
in-house counsel), court costs and other legal expenses from the nonprevailing Party.
4.
Escrow - Offset
a) Licensee agrees that, should a third party institute any Litigation
against Licensee or any of its affiliates or sublicenses, that gives rise to
an Indemnification obligation of Licensee pursuant to Section __
(“Indemnification”), Licensee shall have the right during the pendency of such litigation to withhold in escrow in an interest bearing account such amounts of the royalties in respect of Net Sales in such
country then due Licensee that equal Losses incurred by Licensee
through the time such royalties are due.
b) In the event that such Litigation is successfully defended, Licensee
shall, upon final determination thereof, pay to Licensee all royalties
held in escrow, less the attorneys’ fees and costs incurred by Licensee
in connection with such Litigation, which fees and costs will not exceed the total amount of royalties held in escrow.
c) In the event that such Litigation is not successfully defended, the escrowed royalties provided for in this Section ___ shall be used first to
pay the reasonable attorneys’ fees and costs incurred by Licensee in
connection with such Litigation, and then to pay damages, settlement
fees or license fees that Licensee must pay to a third party as a result
of the unsuccessful defense of Litigation. Licensee shall pay the remainder of the escrowed royalties, if any, to Licensee.
d) In the event that an Indemnitee is entitled to any payment in respect of
the indemnification granted pursuant to Sections __ ___ (“Indemnification”) or ___(“Intellectual Property Indemnification”) hereof,
such amount shall be promptly paid by the Indemnitory. Without limiting the generality of the foregoing, if the Indemnitor shall fail to
properly pay such amounts, the Indemnitee shall be entitled to offset
such amounts against any amounts payable to the Indemnitee hereunder.
5.
Legal Hold
Vendor acknowledges that at any time, and from time to time in connection
with a Dispute hereunder or an independent dispute, investigation or litigation
involving Customer or a third party, including but not limited to a Customer
customer, Customer may have cause to issue a preservation order (also called
a "legal hold") to Vendor requiring Vendor to retain the information specified
therein for possible use in connection with pending or future litigation. In any
such instance, Vendor agrees to comply fully with the instructions contained
in the preservation order and to retain all necessary information to meet the
requirements thereof. Vendor acknowledges that legal sanctions may apply for
failure to comply with a preservation order.
6.
Legal Fees
In any action to enforce this Agreement, the prevailing party shall be awarded
all court costs and reasonable attorneys' fees incurred, including such costs
and attorneys' fees incurred in enforcing and collecting any judgment.
7.
Legal Fees – Alternative Language
In any action in litigation to enforce or interpret any of the terms of
Agreement, the prevailing Party shall be entitled to recover from
unsuccessful Party all costs, expenses, (including expert testimony)
reasonable attorneys fees (including fees and disbursements of in-house
983
this
the
and
and
outside counsel) incurred therein by the prevailing Party.
8. Waiver of Jury Trial (Chapter 6.G)
THE PARTIES HEREBY UNCONDITIONALLY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION ARISING DIRECTLY OR INDIRECTLY OUT OF, RELATED
TO, OR IN ANY WAY CONNECTED WITH, THE PERFORMANCE OR
BREACH OF THIS AGREEMENT, OR THE RELATIONSHIP THAT IS
BEING ESTABLISHED BETWEEN THEM. The scope of this waiver is intended to be all encompassing of any and all disputes that may be filed in any
court or other tribunal (including, without limitation, contract claims, tort
claims, breach of duty claims, and all other common law and statutory claims).
THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, AND
RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THIS TRANSACTION OR ANY
RELATED TRANSACTION. In the event of litigation, this Agreement may be
filed as a consent to a trial by the court.
9. Tolling of Statute of Limitations for Matters
Submitted to Arbitration
The statute of limitations with respect to any claim or matter submitted to arbitration shall be suspended as of the date of a demand for arbitration hereunder (or, if not determinable, as of the date of Receipt of such request), and
shall be tolled until the date of any formal settlement agreement entered into
by the Parties or the date of any final determination issued by an arbitrator, as
the case may be, but in any event not longer than six (6) months from the date
such statute of limitations was suspended, unless the Parties specifically agree
in writing to a different tolling period.
10. Intellectual Property Disputes Not Subject to
Arbitration
Notwithstanding any provision in this Agreement, in no event shall any
claims, disputes or controversies between the Parties which potentially
concern the validity, enforceability, infringement or misappropriation of any
Intellectual Property rights, including any rights protectable under Intellectual
Property law anywhere throughout the world such as patent, copyright, trade
secret and trademark law, be subject to resolution by arbitration.
U.
Employee Related Terms (Chapter 21)
1. Hiring Employees of Other Party – Exclusive Remedy
This Section ___ sets forth the exclusive remedy of Licensor and Licensee in each
instance in which a party hires a present or former employee of the other, provided,
however, that the parties shall not waive the additional right to pursue appropriate legal
action and/or equitable relief (i) if a former employee uses or discloses confidential or
proprietary information or trade secrets in breach of any employment agreement or the
common law, or (ii) any claim against the other party for tortious interference with
such contractual relations arising out of such breach. The parties expressly agree that a
fee calculated in accordance with this Article is reasonable and adequate.
2. Hiring Employees of Other Party- Liquidated
Damages Calculation
Licensee may offer employment and employ, from time to time, any of Licensor’s
contractors performing Services for Licensee pursuant to this Agreement. In the event
Licensee employs any of such Licensor’s contractors, Licensee shall pay to Licensor a
finder’s fee calculated by taking the applicable percentage set forth below of such
individual’s new full-time annual salary, to be paid by Licensee to said individual
pursuant to said offer of employment (“Finder’s Fee”), and such Finder’s Fee will be
payable within thirty (30) days after such individual officially commences employment
with Licensee. The Finder’s Fee percentage payment will be based on the time period
from start of contractor’s services at Licensee until the individual’s official
employment start date.
Effective date of employment with
Percentage of individual’s annu-
Licensee, calculated from
1st day of employee’s assignment
salary paid by Licensee
al
1–30 calendar days
31–60 calendar days
61–90 calendar days
91–120 calendar days
121–150 calendar days
151–180 calendar days
25.0%
20.0%
15.0%
10.0%
5.0%
2.5%
Licensee will give Licensor prior notice of Licensee’s intent to make a formal,
written offer of employment to Licensor’s then-current contractor(s).
Notwithstanding the foregoing, Licensee may employ any of Licensor’s contractors who respond directly to public employment offers from Licensee and who
are subsequently hired by Licensee through its standard hiring processes, without any
percentage payments of such contractor’s new employee salary at Licensee.
985
3. Violent Crime Control and Law Enforcement Acts –
Insurance Industry
Licensor acknowledges that under 18 U.S.C.A. § 1033, it may be a federal criminal
offense for Licensee to willfully permit an individual who has been convicted of a
felony involving dishonesty or breach of trust to perform any act for it which is incidental to the writing of insurance. Licensor will not assign any officers, directors,
agents, or employees that it knows have ever been convicted of any felony involving
dishonesty or breach of trust to perform the Services hereunder. Licensor shall notify
Licensee in writing promptly if at any time Licensor becomes aware that any such
officers, directors, agents or employees is convicted of a felony involving dishonesty
or breach of trust, by any court in any state or country, or subsequently learns that
any such officers, directors, agents, or employees have ever been convicted of such.
This obligation shall be continuing and shall be binding on Licensor’s assignees and
successors in interest.
4. Workplace Violence
Vendor shall (1) advise its employees and those of its subcontractors that it is the
policy of Customer to provide a safe workplace for all people on its site and avoid
violence in the workplace; (2) discourage its employees and those of its subcontractors
from confronting or engaging in physical and/or verbal confrontations with violent
or potentially violent individuals; and (3) address any reports of such behavior on
the part of its employees or those of its subcontractors immediately in a reasonable
and confidential manner. If a Customer employee is involved, Vendor shall notify the
appropriate Customer supervisor immediately. Joint action will be taken to ensure fair
and timely treatment of all involved.
5. Pre-Approval of Licensor’s Personnel
Licensee shall have the right, but not the obligation, to pre-approve all employees and
personnel to be used by Licensor to perform the Services. If Licensee is at any time
dissatisfied for any reason with Licensor’s personnel providing any of the Services
(including the Licensor Account Executive), Licensee will notify Licensor of such
dissatisfaction. Upon receipt of Licensee’ notice, Licensor will promptly discontinue
using such objectionable person to perform any Services hereunder and promptly
replace such person with someone of suitable skill and experience. In addition,
Licensor shall not at any time remove from any Licensee project or reassign any
Licensor employees then currently providing Services without the prior written consent
of Licensee, not to be unreasonably withheld. If personnel who have been providing the
Services are replaced with other personnel, hourly fees for the Services provided by the
replacement personnel, if applicable, shall be at the rates for the Services provided by
the replaced personnel or at such other rates as the Parties may agree; provided, that
Licensee shall not be obligated to pay for any time that replacement personnel spend
performing Services until such time as the replacement personnel have reached the
level of proficiency required to effectively perform their required roles.
6. Pre-Approval of Licensor’s Contractors
Licensor may not subcontract any portion of the Services to any Contractors, including
Affiliates of Licensor, without Licensee’s express prior written consent. All such
approved Contractors shall be required to execute a binding written agreement to
(i) protect the Confidential Information and Proprietary Information of Licensee to
at least the same extent as Licensor is required to protect such information pursuant
to the terms of this Agreement, (ii) assign all Results to Licensee to the fullest extent
required by Section ___ (Ownership of Intellectual Property) below and (iii) comply
with all other obligations, duties and responsibilities required of Licensor under this
Agreement and in any applicable Statement of Work with respect to the Services to be
performed or delivered by such Contractor. Licensor will not disclose any Confidential
or Proprietary Information of Licensee to any Contractor or permit any Contractor
to perform any Services unless and until such Contractor has executed such binding
written agreement. Notwithstanding the foregoing, Licensor will remain responsible
for the obligations performed by any of its Contractors to the same extent as if such
obligations were performed by Licensor’s personnel.
7. Required Employee Screens – Not Reimbursable (§ 9)
Costs associated with completing, as appropriate, medical (except drug screens,
which shall be performed by Licensee’s approved medical facility, invoiced direct to
Licensor and reimbursed by Licensee at actual cost), and background investigation
requirements under Licensor’s program, shall not be directly reimbursable under the
Contract and shall be included in Licensor’s overhead costs. For any screening activity
which Licensor has not approved, reimbursement shall be as set forth in Paragraph
(i) above, as applicable. All self-screening must be pre-approved by Licensee’s Security Department.
Fingerprinting and General Employee Training (GET) will be provided by
Licensee to all Licensor personnel at no cost to Licensor. Time associated with access screening/training time for all Licensor personnel shall be compensated as set
forth in the Contract compensation provisions. Licensor will not be reimbursed any
cost or expense of any kind to replace individuals who terminate their assignment for
any reason prior to the scheduled assignment completion date (including termination
for cause by Licensee), for personnel used to accommodate vacations and other absences, except for actual hours worked, or for personnel who fail to satisfy Licensee’s
site access requirements.
8. Workers on Denied Persons List
No employee or temporary worker of either Vendor or a subcontractor of
Vendor (“Vendor Resource”) shall have access to any information provided
by Customer, if his or her name appears on the Denied Persons List or the
Specially Designated Nationals List of the US Department of Commerce –
Bureau of Industry and Security, which can be located at:
http://www.bis.doc.gov/ComplianceAndEnforcement/ListsToCheck.htm (the
“Denied Persons Lists”).
987
9. Employee Access to Data by Employee on Denied
Persons List
No employee or temporary worker of Vendor or a subcontractor of Vendor
(“Vendor Resource”) shall have access to any information provided by
Vendor, if his or her name appears on the Denied Persons List or the Specially
Designated Nationals List of the United States Department of Commerce –
Bureau of Industry and Security, which can be located at:
http://www.bis.doc.gov/ComplianceAndEnforcement/ListsToCheck.htm (the
“Denied Persons Lists”).
For all Services provided by Vendor, Vendor shall specify in writing any data
or information which can be accessed by Vendor resources who are not
citizens or permanent residents of the United States. All other data or
information will be only accessed by Vendor resources who are citizens or
permanent residents of the United States.
10. EICC Code of Conduct
Vendor recognizes having been made fully acquainted with the Electronics
Industry Citizenship Coalition Code of Conduct (“EICC Code of Conduct”)
version 3.0 (as attached hereto as Exhibit __). Vendor undertakes, in
particular, to apply the standards set out in sections A through E of the EICC
Code of Conduct with respect to the performance of this Agreement as such
relates to labor, environmental health and safety (“EH&S”) and ethics.
Vendor undertakes to promote the listed standards amongst its suppliers
and/or subcontractors and to provide Customer with evidence of such
promotion upon request. Vendor acknowledges and recognizes that failure to
comply with the standards listed in sections A and E will be a material breach
of this Agreement.
11.
Vendor Personnel - Key Personnel, Qualifications, Non-Competition
Vendor’s Key Personnel, together with their respective positions, locations,
contact information and areas of responsibility are listed in Attachment __Key Personnel.
Key Personnel Management. [NAME] shall serve, on a full-time basis, as
the primary Vendor representative under this SOW located at all times at the
Customer locations. Vendor’s appointment of any Key Personnel shall be
subject to Customer’s prior approval. [NAME] shall (a) have overall responsibility for managing and coordinating the performance of Vendor’s obligations under this SOW and (b) be authorized to act for and on behalf of Vendor
with respect to all matters relating to this SOW. [NAME] shall serve as Customer’s primary point of contact for all matters relating to the Vendor’s performance of the Services. At least once each calendar month (or more often
as requested by either of the Parties from time to time, but in any event, not
more frequently than once each week), [NAME] shall meet with the Customer
designated contract manager and [NAME], as well as such other additional
personnel as the Parties may invite to such meetings, in person or by telephone, as Customer shall indicate, to discuss the performance of their respective obligations during the preceding month, planned changes, future performance of the Parties and to exchange information needed for such performance.
With respect to the Key Personnel, the Parties agree as follows:

Each Key Personnel shall be dedicated to the Customer account on a
full-time basis.

Before assigning an individual to a Key Personnel position, whether as
an initial assignment or as a replacement, Vendor shall (a) notify Customer of the proposed assignment, (b) introduce the individual to appropriate representatives of Customer designated by Customer, (c)
provide Customer with a résumé and any other information regarding
the individual that may be reasonably requested by Customer and (d)
obtain Customer’s approval for such assignment.

Vendor shall not replace or reassign Key Personnel for eighteen (18)
months from the date of his or her appointment, unless Customer consents to such reassignment or replacement or such Key Personnel (i)
voluntarily resigns from Vendor, (ii) is dismissed by Vendor for misconduct (e.g., fraud, drug abuse, theft), (iii) fails to perform his or her
duties and responsibilities pursuant to this SOW, or (iv) dies or is unable to work due to his or her disability.

If Customer decides that any Key Personnel should not continue in
that position, then Customer may in its sole discretion and upon notice
to Vendor require removal of such Key Personnel. Vendor shall, as
989
soon as reasonably practicable, replace such Key Personnel following
the procedures set forth above.

Vendor shall maintain backup procedures and conduct the replacement
procedures for the Key Personnel in such a manner so as to assure an
orderly succession for any Key Personnel who is replaced. Upon request, after a determination that a Key Personnel will be replaced,
Vendor shall make such procedures available to Customer.
Vendor Staff. Vendor shall appoint individuals to the Vendor’s staff that will
provide the Services who have the requisite knowledge, expertise and skill
and appropriate qualifications to perform the Services. Each calendar quarter
Vendor shall provide Customer with a list of all Vendor personnel dedicated
to perform the Services and, at any time between such quarterly intervals,
within five (5) Business Days after receiving a request from Customer.
Except as otherwise approved by Customer (in its sole discretion), those
Vendor personnel located on Customer’s premises may only provide services
on such premises which support Customer’s operations. Vendor will not
move any resource from Customer’s assignment without approval from
Customer management. In case of a planned resource move, Vendor will
present the case to Customer and Customer may decide to approve or
disapprove the planned move.
Use of Customer Personnel. Vendor will provide the Services with the
assistance from Customer Personnel, to the extent available and employed by
Customer, including, without limitation, production support, preventive
maintenance, error or defect correction, New Application or Major
Enhancement development projects, creation of business requirements or
technical specifications. Vendor shall also rely upon Customer Personnel to
conduct any user acceptance testing and to develop and test any integration (a)
between Applications in the Application Portfolio and (b) between
Applications and any other applications outside of the Application Portfolio.
Non-Competition. Vendor shall not assign a Key Personnel or member of
the Vendor’s personnel to the account of any competitor of Customer without
Customer’s prior consent (1) while such Key Personnel or such member of the
Vendor’s personnel, as the case may be, is assigned to provide the Services to
Customer and (2) for a period of one (1) year following the date that such
Key Personnel or such member of Vendor’s personnel, as the case may be, is
removed from, or ceases to provide Services in connection with, Customer.
12. Compliance with Immigration Requirements
Vendor is solely responsible for ensuring that all of its personnel who provide
Services to Customer are in compliance with the Immigration Reform and
Control Act of 1986 (“IRCA”) and other applicable laws. Vendor will
provide to Customer only workers for whom Vendor has confirmed legal
eligibility to perform services as employees in the United States and/or other
applicable jurisdictions, and for whom all required record keeping under
IRCA has been performed and maintained.
13.
dates
Customer Review of Vendor Employee Candi-
Vendor agrees to present to Customer candidates for employment for such
positions as Customer may from time to time request. Customer shall provide
all relevant information as requested by Vendor concerning the employment
position for each candidate. Vendor shall verify employment references and,
where applicable professional licenses and perform such other resume
verification or skills testing as may be requested in writing by Customer and
acknowledged in writing by Vendor. Resumes and other materials concerning
candidates presented by Vendor shall be forwarded to contact person(s)
designated by Customer.
14. Limitations on Use of Vendor Personnel –
Immigration Status and Location
(a) Individuals. Subject to the terms of this Agreement, Vendor may not use
any individual in the provision of Products or Services who is not an
employee or contractor of Vendor. For individuals performing Services
outside the United States, any additional restrictions will be set forth in any
applicable country-specific Attachments. The following subsections apply
only to individuals performing Services within the United States:
(i) Vendor may not generally use any individual who is in the United States
pursuant to the L-1 category of visa (or any successor legislation or
regulations, or any similar provision under any Law) in the provision of
Products or Services at Customer facilities. Vendor may make a written
request for an exception to this provision in writing by providing the name of
the Vendor Personnel and, additionally for L-1 Vendor Personnel, the name of
the manager who is overseeing the L-1 Vendor Personnel, the specialized
991
skills supporting the L-1 visa, and the number of years the L-1 Vendor
Personnel has worked for the Vendor. If Customer consents to use such an
individual, that individual’s name and visa category will be specifically noted
in the applicable Transaction Document.
(ii) Vendor may not generally use any individual who is in the United States
pursuant to the B-1 category of visa (or any successor legislation or
regulations, or any similar provision under any Law) in the provision of
Products or Services. Vendor may make a written request for an exception to
this provision in writing by providing the name of the Vendor Personnel and,
additionally for B-1 Vendor Personnel, the name of the manager who is
overseeing the B-1 Vendor Personnel, the specialized skills supporting the B1 visa, and the number of years the B-1 Vendor Personnel has worked for the
Vendor. If Customer consents to use such an individual, that individual’s
name and visa category will be specifically noted in the applicable
Transaction Document. Upon request, Vendor will provide Customer a
complete listing of all Vendor Personnel providing Products or Services for
Customer in the United States during the entire previous calendar quarter,
regardless of type of visa, which list will contain the name of the Vendor
Personnel, type of visa, visa expiration date, and the Customer Transaction
Document(s) under which such Vendor Personnel are providing the Products
or Services.
(iii) If the Products or Services relate to encryption technologies (hardware or
software) provided by Customer to Vendor of greater than 56-bit encryption,
then Vendor will not utilize any individual who is a foreign national in the
provision of such Products or Services, absent Customer’s prior written
consent.
(b) Location
Except for those Offshore Activities set forth in Section _____ (“Offshore
Activities Exceptions”) below, Vendor warrants that Vendor and Vendor
Personnel will not provide Offshore Activities at a location that is not an
Authorized Services Location. Vendor Personnel’s provision of Offshore
Activities at a location that is not an Authorized Services Location will be
deemed a material breach of this Agreement and (i) Customer, at its sole option,
may immediately terminate for cause this Agreement, in whole or in part, in
written notice to Vendor; (ii) Customer may require that the Offshore Activities
be provided within the United States or from the Authorized Services
Location(s) and Vendor will immediately comply with any such requirement; or
(iii) the Parties will execute an amendment to this Agreement to incorporate
Customer’s requirements with respect to the provision of Offshore Activities
from a new Authorized Services Location. In addition, if Vendor subcontracts
the Offshore Activities or any portion thereof, and such subcontracting compels
Customer, pursuant to the IS Standards (as defined below), to perform additional
Risk Assessment(s) (as defined below), Vendor will bear all reasonable costs
associated with conducting such Risk Assessments.
15.
Background Checks
1. General. Vendor represents and warrants that it will have a third-party
background check provider conduct a criminal background check on each
Vendor Personnel prior to performing certain Services, as explained in
subsection 2 below. The scope of each individual’s background check must
(a) search available court records for crimes committed since the age of 18
(although timeframes for determining eligibility may not reach back that far;
see explanations at www.customer.com/vendor/background-check for more
detailed information), (b) check the Social Security number (SSN) of the
Vendor Personnel to help ensure his/her identity is accurate, and (c) when
requested by Customer, verification of work authorization through the Federal
E-Verify® program. The SSN check must include an examination of state
and year of issuance to verify the SSN is in a valid range and is not in the
Social Security Death Index. For non-U.S. locations where SSN is not used, a
check of a government-issued identity card (such as passport or visa) must be
performed to ensure valid identity.
2. Application of Background Check Results.
warrants:
Vendor represents and
(a)
Dishonesty Check. Where Services require or reasonably permit
access to (i) Restricted Information or Confidential Information, including
Customer/Consumer Information, or (ii) Customer’s computer networks,
information systems, databases or secure applications under circumstances
that would permit modifications thereto, Vendor will ensure that no Vendor
Personnel who have been convicted of any criminal offense involving
dishonesty, a breach of trust, or money laundering, or who have entered into a
pre-trial diversion or similar program in connection with a prosecution for
such offense, will perform such Services; and/or
(b)
Violence Check. Where Services require or may involve unsupervised
access within the non-public areas of a Customer facility, Vendor will ensure
than no Vendor Personnel who have been convicted of a felony involving
993
violence or harassment, or certain repeated misdemeanors involving violence
or harassment, will perform such Services.
(c) Crimes. A list of the crimes relating to the checks described above, along
with additional explanatory information, may be accessed at the following
link: https://www.customer.com/vendor/background-check.
3. Additional Requirements: In addition, Customer in its sole discretion
may require background checks for other Services, and this will be noted in
the applicable Transaction Document. In the event that the Services described
above are to be performed by individuals located outside the United States,
Customer may impose different background check requirements on such
individuals to ensure that the Vendor obtains a background check that most
closely resembles the check described in this provision, and which is
consistent with the Law in such non-U.S. jurisdiction(s); these requirements
will be communicated to Vendor. Upon request, Vendor will provide written
evidence that all Vendor Personnel providing the Services described above
have undergone criminal background checks and are eligible to provide such
Services (but not the actual results of the checks themselves).
4. Right to Terminate. If Vendor breaches any aspect of this Section _____
(“Background Checks”), Customer has the right, in its sole and absolute
discretion, to terminate all or part of this Agreement immediately, without
further liability.
16.
Limiting Employee Access to Employer’s
Systems – CFAA Language – Casual Tone
I understand that the Company maintains information systems for business
purposes and that my authorization to access and use the Company’s business
information stored on the Company’s information systems is limited to such
business purposes for the benefit of Company. I agree that any access to the
Company’s information on the Company’s information systems that I
undertake for my personal use or for any third-party for other than the
Company’s business purposes exceeds my authorization to access and use the
Company’s information systems. I agree that I am not entitled to obtain or
alter any Company information that I access, or assist others in accessing, in
excess of my authorized access as set forth in this Agreement.
17.
Employee Prohibition on the Use of Third
Party Confidential Information – Casual Tone
It is a Customer policy (i) not to use, or permit its employees to use in the
course of their services to Customer, any confidential or proprietary
information or documents that are the property of other persons or companies,
and (ii) not to permit its employees to bring with them at the commencement
of employment, or to obtain in any manner during their employment, any
confidential or proprietary documents, files or other materials of any other
person or company. If you are in possession of any documents, files or other
materials that contain any confidential or proprietary information of any other
person or company, you may not bring them to our offices or make reference
to them in the course of rendering your services to Customer. If you are
currently working or have previously worked for a company that is a client of
Customer' and/or a vendor or competitor to Customer (for example, an
automobile manufacturer or dealer, an advertising agency for a manufacturer
or dealers, or a company that operates an automotive website or that sells or
distributes vehicle leads), the foregoing is particularly applicable to you.
Your execution of this letter will constitute your agreement that you will
comply with this policy. If you have any questions concerning the foregoing,
please be sure to obtain clarification from Customer' Human Resources
department.
18.
Vendor Employees to Remain on Project
Vendor agrees that Vendor Representatives assigned to perform the Services
for Customer under this Agreement shall be available to Customer from
Service provider until completion of the task(s) intended to be performed by
such personnel and Vendor shall use commercially reasonable efforts to
maintain consistency of (assigned) Representatives (including any
subcontractors), except that the foregoing shall not apply if such personnel are
promoted or terminated by Vendor, if such personnel voluntarily discontinue
or request modification of their employment with Vendor, or are otherwise
not available due to personal circumstances or medical leave or other similar
type of leave.
V. Exclusivity\ Work For Competitors (Chapter
7.Q; § 9.12)
1. Prohibition on Vendor Providing Services to
Customer Competitors
995
Except to the extent Vendor has a pre-existing relationship with such
Customer which can be substantiated in writing to Vendor’s reasonable
satisfaction, Vendor agrees not to compete with Vendor to provide services or
personnel to any Customer to which Vendor has provided Vendor Personnel
hereunder (regardless of whether Vendor shall seek to provide different
personnel to such Customer), during the term of this Agreement and for a
period of one (1) year thereafter, without Vendor’s prior written consent,
which consent may be withheld in Vendor’s sole discretion. The foregoing
restriction shall in no way prohibit Vendor from responding to any Customerissued Request for Information, Request for Proposal, Request for Quotation
or other Customer-issued solicitation.
2. Prohibition on Vendor Personnel Working For Customer
Competitors
Vendor shall not, without Customer’s prior consent in writing, assign any
Vendor Personnel to the account of an Customer competitor during a project
or for a period of 6 months after leaving an assignment under this Agreement,
nor will it assume any such obligation or restriction that would in any way interfere with or be inconsistent with, or present a conflict of interest concerning, the performance of Services the provision of any Deliverables under this
Agreement or any SOW.
3.
No Prohibition on Licensor Employees Providing
Services to Other Parties (§ 9.12)
Licensee recognizes that Licensor’s employees performing the Services under
this Agreement and the Statements of Work issued hereunder may perform
similar services for others, and this Agreement shall not prevent Licensor
from providing services or developing materials that are competitive with
those developed or provided hereunder regardless of any similarity to such
services or materials, provided, however, that Licensor shall not use or
infringe upon any Confidential Information of Licensee, any Deliverable or
any of Licensee’s other proprietary and intellectual property rights in the
performance of such services for others.
COMMENT: The licensor should seek to include an affirmative statement in the
license agreement that the licensor can provide similar services to other potential
customers regardless of whether the potential customer is a competitor of the customer. By addressing this issue in the contract, the licensor can avoid any subsequent problems that may arise if the customer later seeks to limit the licensor’s
ability to provide services to the third parties.
4. Vendor Exclusive Right to Provide Services
Vendor shall be the exclusive provider to Customer of each of the Services
described in this Agreement. Notwithstanding the foregoing, this Section
shall not be construed to prohibit Customer from
______________________________.
Customer acknowledges and agrees that it will not provide, directly or indirectly, or engage any other third party, to provide to Customer any service
that is similar to one of the Services provided by Vendor, including without
limitation, claims processing. Customer acknowledges and agrees that a
breach of this Section ____ shall be deemed a material breach of this Agreement and shall entitle Vendor to modify pricing terms pursuant to Section
____ (“Pricing Assumptions”) of this Agreement.
5. Vendor Exclusive Right to Provide Services –
Alternative Language
As Vendor has agreed to facilitate Customer’s acquisition of the [third party]
software licenses, Customer agrees that Vendor is the exclusive service
provider for the Software implementation. Notwithstanding the foregoing,
Customer’s has the right to terminate this SOW in the event that Customer
elects not to continue the project upon thirty (30) days’ written notice to
Vendor. In the event of such termination, Customer shall pay for all services
rendered and all work products provided, together with all expenses incurred,
through the effective date of termination. Vendor shall promptly deliver to
Customer all materials and information supplied by Customer’s in connection
with the terminated SOW, together with all deliverables in process at the
effective date of termination, whether or not complete.
6.
No Minimum Commitment by Customer
Vendor acknowledges and agrees that (i) Customer offers no commitment or
guarantee of any minimum volume of purchases or revenue under this
Agreement and (ii) Vendor will not be Customer’s sole supplier of goods and
services, even if substantially similar to the Services provided hereunder.
7. No Minimum Commitment by Customer –
Alternative Language
This Agreement is non-exclusive and without any minimum commitment by
997
Customer as to volume, scope or value. Nothing herein shall be construed as
a requirements contract, or be interpreted to prevent Customer from obtaining
from third parties, or providing to itself, any of the Services or services similar
thereto. Without limiting its rights under this paragraph, upon ten (10) days’
notice to Vendor, Customer may withdraw Services from Vendor at
Customer’s request. In the case of Customer’s withdrawal of Services from
Vendor, the Fees shall be reduced using the charging methodology set forth in
the applicable Statement of Work or otherwise in an equitable manner if and
to the extent such charging methodology does not apply to the withdrawn
Services.
8.
Reseller May Obtain Similar Services/Products
From Other Parties
Licensor agrees that this Agreement shall not prevent Reseller from providing
any services or developing or obtaining from any other third party any software, documentation or other materials (collectively “Other Resources”) that
perform functions the same or substantially similar to those performed by the
Software and Documentation and/or are competitive with those developed or
provided by Licensor hereunder, provided, however, that in so doing Reseller
shall not implement use thereof with respect to the Target Customers and Target Platforms during the term of this Agreement or use or infringe upon any
Confidential Information of Licensor. For the avoidance of doubt, the parties
agree that Reseller shall be free to utilize Other Resources during the term of
this Agreement: a) with respect to the Target Customers for platforms other
than the Target Platforms; and b) for any customers other than the Target Customers. The restrictions in this Section __ shall not apply after the termination
or expiration of the term of this Agreement.
9.
No Limit On Customer Use of Third Party
Vendors
Vendor acknowledges and agrees that nothing in this Agreement shall
preclude or limit Customer’s right to engage other suppliers of software,
equipment and services (including suppliers of outsourcing, facility
management, disaster recovery and backup services) (collectively, “Third
Party Vendors”). Vendor further acknowledges and agrees that,
notwithstanding anything to the contrary contained herein, Customer may
designate one or more Third Party Vendors as Customer’s agent for the
administration of this Agreement and the receipt of Services under this
Agreement or assign its rights and delegate its responsibilities hereunder, in
whole or in part, to a Third Party Vendor. Vendor will, to the extent
reasonably requested by Customer, and at no additional cost or expense to
Customer, cooperate with Customer’s Third Party Vendors as reasonably
required in order for such Third Party Vendors to perform services efficiently
and effectively for Customer and its customers. Such cooperation may include
providing access to facilities and documentation providing technical
information and performing integration services. Upon Vendor’s request,
Customer will require any such Third Party Vendor to agree to confidentially
obligations with respect to the Services and Documentation at least as
restrictive as those contained in this Agreement.
10. Agreement Does Not Grant Licensor Exclusive Right to
Licensee’s Business
This Agreement with Licensor is not exclusive, and Licensee may, at its sole
discretion, elect to utilize the services of additional vendors to perform services such as the Services performed by Licensor hereunder.
W. Export (Chapter 7.N)
1. Compliance with Export Controls
Each party shall be responsible for ensuring that its actions with respect to the
Licensed Software are in compliance with the export control Laws of the United
States (“Export Control Laws”). Licensor immediately shall notify Licensee in
writing if the Licensed Software is or becomes subject to export control restrictions
under any Export Control Laws, and shall provide Licensee with reasonable cooperation and information, at no additional cost or expense to Licensee, to assist Licensee
in complying with any licensing or similar requirements that may be imposed under
such Export Control Laws, including promptly furnishing to Licensee upon request
any export control classification numbers applicable to the Software. Licensor covenants to Licensee that, as of the Effective Date, the License Software is not subject to
export
control
restrictions
under
any
Export
Control
Laws.
2. Compliance with Export Controls – Alternative
Language
The Parties understand and acknowledge that Confidential Information
exchanged under this Agreement may be subject to compliance with any and
all applicable United States laws, regulations, or orders, including those that
may relate to the export of technical data. The Parties agree to comply with all
999
such laws, regulations, and orders, including, if applicable, all requirements of
the International Traffic in Arms regulations and/or the Export Administration
Act, as may be amended. Each Party further agrees to comply with any export
license requirements that govern the export, re-export, transfer, or release of
Confidential Information provided hereunder. Each Party agrees to provide
an Export Classification Number (“ECCN”) or USML Classification Number
to the receiving Party in writing for all Confidential Information that is
classified with an ECCN other than EAR99 or is classified on the USML.
The ECCN and USML Classification, if required shall be provided at the time
the Confidential Information is provided to the receiving Party. If a disclosing
Party provides Confidential Information subject to the terms of an export
license or other export authorization, the disclosing Party shall notify the
receiving Party in writing of any restrictions on the use, transfer, distribution,
or re-export of the Confidential Information contained in said export license
or authorization. Neither Party shall be obligated to perform any obligations
hereunder if and to the extent that any such performance is prohibited by or
contrary to any applicable U.S. laws or regulations, including U.S. export
regulations.
3.
Compliance with Export Controls - Encryption
If Vendor-furnished technology or equipment contains 56-bit or higher encryption (or is subject to the federal Export Administration Regulations
(“EAR”)), then Vendor warrants and agrees that Vendor has researched and
accurately determined all Export Control Classification Numbers (“ECCN”)
classifying that technology or equipment under the EAR, and that a true and
complete list of those ECCNs is attached hereto as an exhibit. Vendor further
warrants and agrees that the above-described technology or equipment is licensed for export pursuant to the EAR (either because it is categorized as “No
License Required” or as a “License Exception”), and that any exceptions to
that license (e.g., embargoed destinations) are listed in an attached exhibit. To
the extent Vendor-furnished technology or equipment is updated or modified
during the term of this Agreement, Vendor will update the list of ECCNs classifying that technology or equipment, and the Parties will amend the exhibit
accordingly. If Vendor has not previously been able to accurately determine a
comprehensive list of ECCNs classifying any Vendor-furnished technology or
equipment at issue, and Customer indicates that it intends to export that technology or equipment, Vendor will promptly qualify the technology or equipment for export by complying with the EAR as applicable and will report to
Customer all Commodity Classification Automated Tracking System numbers
associated with that technology or equipment. Vendor will keep Customer
reasonably apprised of its progress in doing so. If Vendor does not qualify the
technology or equipment at issue for export, Vendor will reimburse Customer
for its actual costs in conducting all necessary research and procuring licenses
or authorizations that Customer reasonably deems necessary for export of the
technology or equipment at issue.
4. Compliance with USA Patriot Act and OFAC
Vendor will not perform any Services, or subcontract with any third party to
perform any Services, from a location in any country that is (i) subject to Office of Foreign Assets Control sanctions that prohibit contractual arrangements such as those contemplated by this Agreement, or (ii) designated as being of primary money laundering concern pursuant to the provisions of the
United and Strengthening America by Providing Appropriate Tools Required
to Intercept and Obstruct Terrorism Act of 2001 “USA Patriot Act”.
X. Force Majeure (Chapter 6.D)
1. Force Majeure – Short Form
Neither party will be liable to the other party for any delay or failure to
perform any non-monetary obligations which delay or failure is due to causes
or circumstances beyond its reasonable control including acts of civil or
military authority, national emergencies, labor disruptions, strikes, fire, flood
or catastrophe, epidemics, acts of God, insurrection, war, acts of terrorism,
riots or failure of transportation, heat or air conditioning, communication or
power supply or other similar or dissimilar causes.
1001
2. Force Majeure – Comprehensive Language
1.1 Definition of Force Majeure Event. “Force Majeure Event” means any
of the events or circumstances described in this Section ___ that are beyond
the control of an affected Party and which prevents the performance of any of
the affected Party’s obligations under this Agreement after that Party has
taken commercially reasonable steps to perform notwithstanding the impact of
the event:
(A) Events or circumstances that may give rise to a Force Majeure Event are
limited to the following:
(1) Earthquakes, hurricanes, fires, storms, tidal waves, floods, epidemics,
or other physical natural disasters.
(2) Acts of war (whether declared or undeclared), terrorism, riot, civil war,
blockade, insurrection or civil disturbances.
(3) Acts of a governmental entity, agency or other local authority that prevent or makes unlawful a Party’s performance under this Agreement. and
(4) Strikes or labor disputes of Company personnel and strikes or labor
disputes at the national or industry-wide level, as well as at carriers, internet
providers and utilities, excluding any strike or dispute of Vendor or its Affiliates or Subcontractors.
(B) The Parties confirm that Force Majeure Events do not include any of the
following events or circumstances:
(1) The mere shortage of or inability to obtain labor, equipment, materials
or transportation which is not itself caused by a Force Majeure Event.
(2) The insolvency or change in economic circumstances of the affected
Party.
(3) Change in market conditions.
1.2 Excuse of Performance due to a Force Majeure Event. Subject to
compliance with Section 1.3, neither Party is liable for any delay in
performing or failure to perform its obligations under this Agreement
(excluding indemnification obligations and the continuing obligation to pay
invoices under this Agreement once the Force Majeure Event that prevents
payment has ceased) if and to the extent that the delay or failure is caused by a
Force Majeure Event. A Party is excused from its performance obligations
that are prevented by a Force Majeure Event for as long as the Force Majeure
Event continues.
1.3 Notice and Mitigation. If a Party seeks relief from its obligations to
perform under Section 1.2, it shall:
(A) Give prompt notice to the other Party, which must include all of the
following information:
(1) The event that the Party considers constitutes a Force Majeure Event
and its likely effect on the performance of obligations under this Agreement.
(2) A good faith estimate of the duration of the Force Majeure Event.
(3) The actions being taken (or proposed to be taken) to satisfy this Section 1.3.
(B) Use commercially reasonable efforts to perform notwithstanding the Force
Majeure Event and to mitigate its effects.
(C) If the Force Majeure Event continues, give periodic notices in accordance
with this Section 1.3, with a frequency as directed by Company
Representative.
(D) Give the other Party prompt notice of the conclusion of the Force Majeure
Event and resume performance of the Services as soon as reasonably possible
after its conclusion.
1.4 Payment Obligation During Force Majeure Event. Company has no
obligations to make payments to Vendor under this Agreement for Services
which Vendor is unable to perform because of a Force Majeure Event.
1.5 Failure to Mitigate. If a Force Majeure Event prevents performance of
Services necessary for functions agreed as critical to Company’s business
operations for longer than the recovery period specified in any disaster
recovery plan specified in a Service Addendum or Service Order, for more
than ninety (90) consecutive days, then Chevron may direct Company to
procure such Services from an alternate source for as long as the interruption
in performance continues, but only for a maximum of ninety (90) days. If
Vendor is not able, for any reason, to resume such functions (whether through
1003
the alternate source or otherwise) within ninety (90) days of such direction by
Company to procure Services from an alternate source, Chevron may then
terminate the affected Services upon twenty-four (24) hours’ notice, subject to
payment of any termination fees as specified in the applicable Service
Addendum or Service Order.
With respect to procurement of an alternate source in accordance with this
Section, if the applicable Force Majeure Event impacts (x) an Area of
Operations, then Company shall bear any incremental costs of the alternate
source (e.g., Vendor shall pay the alternate source, and Company shall
reimburse Vendor for the cost of the alternate source instead of Vendor’s
charges for the affected Services); and (y) a Vendor facility, then Vendor shall
bear financial responsibility for any incremental costs of the alternate source
(e.g., Company shall continue paying Vendor the fees for the affected
Services, and Vendor will be responsible for paying the fees of the alternate
source).
3.
Force Majeure - Mitigation
Each party will exercise its reasonable efforts to mitigate the extent of
the excusable delay or failure and its adverse consequences provided, however, that should any such delay or failure which materially impacts Services
continue for more than 90 calendar days, the portion of the Services materially
affected may be terminated by the non-delaying party in accordance with the
change processes in Section ___ (“Change Orders”).
Y.
Governing Law (Chapter 6.H) (UCITA Chapter 11; §16.1.4.A)
1. Governing Law - Uniform Computer Information
Transactions Act (“UCITA”)
The validity and interpretation of this Agreement shall be governed by the
laws of the State of Maryland (without regard to its conflict of laws
provisions). Pursuant to Md. Code Ann. Section 22-104, the parties hereby
expressly agree to opt out of application of the Maryland Uniform Computer
Information Transactions Act (“MUCITA”), Md. Code Ann. Commercial
Law Sections 22-101 through 22-816, except to the extent that Section 22104(2) of the Act applies. The parties further agree that this Agreement shall
be governed by the common law of Maryland relating to written agreements
and Maryland statutes other than MUCITA which may apply. The United
Nations Convention on Contracts for the Sale of Goods shall not apply to this
Agreement.
2. Opt Out of UCITA
The Parties hereby agree to waive and opt-out of any application of the Uniform
Computer Information Transactions Act (UCITA), or any version thereof, adopted by
any State in any form.
3. Opt Out of UCITA – Alternate Language
TO THE MAXIMUM EXTENT PERMITTED UNDER APPLICABLE LAW, THE
PARTIES DISCLAIM AND NONE OF THIS AGREEMENT SHALL BE SUBJECT
TO THE UNIFORM COMPUTER INFORMATION TRANSACTIONS ACT
(“UCITA”) (PREPARED BY THE NATIONAL CONFERENCE OF
COMMISSIONERS ON UNIFORM STATE LAWS) AS CURRENTLY ENACTED
OR AS MAY BE ENACTED, CODIFIED OR AMENDED FROM TIME TO TIME
BY ANY JURISDICTION. TO THE EXTANT THAT ANY ASPECT OF THIS
AGREEMENT OR ANY LICENSE GRANTED UNDER THIS AGREEMENT IS
UNCLEAR OR DISPUTED BY THE PARTIES AND UCITA, IF APPLIED,
WOULD CLARIFY SUCH LICENSE OR RESOLVE SUCH DISPUTE, THE
PARTIES AGREE TO CLARIFY SUCH LICENSE OR RESOLVE SUCH
DISPUTE INDEPENDENTLY OF UCITA BY APPLYING THE INTENT OF THE
PARTIES AT THE TIME THAT THEY ENTERED THIS AGREEMENT.
4. Adoption of UCITA Subsequent to Execution of
Agreement
If any version of the Uniform Computer Information Transactions Act (“UCITA”) is
enacted as a part of the law of the aforementioned state, said statute shall not govern
any aspect of this Agreement or any license granted hereunder, and instead the laws
that existed prior to such enactment shall govern.
5. Governing Law
This Agreement, including, without limitation, its validity, construction and
performance, is and shall be governed by and construed in all respects under
the laws of the State of New York without regard to the laws that would
otherwise apply under applicable choice-of-law principles. Licensor and
Licensee hereby submit to the exclusive jurisdiction of the federal and state
courts located in New York County, New York in connection with any
matters arising out of this Agreement and hereby agree not to assert a defense
1005
of forum non conveniens, sovereign immunity, Act of State or analogous
doctrines in connection with any action between Licensor and Licensee
related to this Agreement.
6. Governing Law and Jurisdiction – Providing for
English Law and Arbitration
This Agreement shall be governed by and construed in accordance with the laws of
England, to the exclusion of the Rules on the Conflict of Laws (“Private International Law”) that lead to the application of the laws of any other jurisdiction. All
disputes arising out of or in connection with this Agreement shall be finally and exclusively settled through arbitration in accordance with the rules of the London Court
of International Arbitration. The arbitral tribunal shall be composed of three (3) arbitrators and the place of arbitration shall be London, England. The language to be used
in the arbitral proceedings, as well as of the award, shall be English.
The award rendered in any arbitration commenced hereunder shall be final and
conclusive, and enforcement thereof may be entered in any court or authority having
jurisdiction for its enforcement.
8. Selection of New York Business Court
The parties agree that any action related to or arising from this Agreement
shall be filed, and that venue properly lies, exclusively in the Commercial
Division of the Supreme Court of the State of New York, County of New
York, or in the United States District Court for the Southern District of New
York, and the parties hereby consent and submit to the personal jurisdiction of
such courts. The parties hereby waive the defense of an inconvenient forum
with respect thereto.
Z. Indemnity – General (Chapter 5.B; § 15)
1. General Indemnity – Balanced
Each party (the “Indemnifying Party”) shall indemnify and hold harmless the
other party and all of its officers, directors, partners, principals, employees,
representatives and agents (collectively, the “Indemnified Party”) from and
against any and all demands, claims and actions by third parties, and all liabilities, judgments, damages, costs and expenses (including reasonable attorneys’ fees) incurred in connection therewith, arising or resulting from personal injury or death, or damage to tangible personal or real property, caused by
the Indemnifying Party. Neither party’s indemnification obligation shall extend to Claims to the extent resulting from the fault of the Indemnified Party.
The Indemnified Party shall provide prompt written notice of a Claim to the
Indemnifying Party. The Indemnifying Party shall have sole control of the
defense and settlement of such Claim, provided that the Indemnifying Party
shall not settle any such Claim without the prior written consent of the Indemnified Party, which shall not be unreasonably withheld, delayed or conditioned. The Indemnified Party shall reasonably cooperate with the Indemnifying Party in the defense and settlement of such Claim.
2. Indemnity - General
1.1 Except as caused by the Company, as between Company and
Vendor, Vendor shall indemnify, defend and hold Company, and its current
and future parent company, subsidiaries, affiliates and their respective
directors, officers, shareholders, employees, representatives, successors and
assigns (collectively, the “Company Indemnitees”) harmless from and
against any and all third party: claims, actions, suits, proceedings, losses,
liabilities, penalties, fines, damages, costs or expenses including without
limitation, reasonable attorneys fees (including fees and disbursements of
outside counsel) of any kind whatsoever (collectively, “Damages”) resulting
from: (a) injuries to or death of any and all individuals, including, without
limitation, members of the general public, or any employee, agent,
independent contractor or consultant or affiliate of either Company or Vendor,
arising out of or connected in any manner with the breach of this Agreement
caused by Vendor, negligent performance or willful misconduct of Vendor, its
subcontractor or any other person performing on behalf of Vendor, or
(b) damage to, loss, and/or destruction of property, including, without
limitation, to, property of Company (whether tangible or otherwise, but
excluding damages for lost data), or Vendor arising out of or connected in any
manner with the breach of this Agreement, negligent performance or willful
misconduct of Vendor, its subcontractor or any other person performing on
behalf of Vendor excluding Company employees.
In the case of and to the extent caused by Third Parties’ use of the System,
Company shall not be indemnified and held harmless hereunder, and to the
extent Company’s own willful misconduct or negligence relating to such use
by Third Parties, Company shall indemnify, defend and hold Vendor, its
subsidiaries, affiliates and their respective directors, officers, shareholders,
employees, agents, subcontractors, representatives, successors and assigns
(collectively, including Vendor, the “Vendor Indemnitees”) harmless from
1007
and against any and all Damages resulting from: (a) injuries to or death of any
and all individuals, including, without limitation, members of the general
public, or any employee, agent, independent contractor or consultant or
affiliate of either Company or Vendor, (b) damage to, loss, and/or destruction
of property, including, without limitation, to, property (whether tangible or
otherwise) of Company or Vendor, or (c) third party claims of any kind,
whether based upon negligence, strict liability or otherwise.
1.2 Vendor shall indemnify, defend and hold the Indemnitees harmless from
and against any and all Damages arising from or in connection with: (a) actual
or alleged infringement or misappropriation by Vendor or any subcontractor
of any United States patent, copyright, trade secret, trademark, service mark,
trade name, or other intellectual property right in connection with the System,
including without limitation, any deliverable or related “work product”; and
(b) Vendor’s violation of any third party license to use intellectual property in
connection with the System, including, without limitation, any deliverable or
related “work product”.
Notwithstanding the foregoing, this indemnification obligation shall not
apply to the extent that the infringement or other violation is caused by actions
of Company or third parties retained by Company, including (i) the
combination, operation or use with equipment or components not supplied by
Vendor or contemplated under this Agreement, or (ii) specifications not
supplied by Vendor or contemplated under this Agreement, or (iii)
modifications not performed or approved by Vendor. Company agrees that, if
an actual or alleged infringement or misappropriation not contemplated under
this Agreement is brought, or in Vendor’s opinion, is likely to be brought,
Vendor may, at Vendor’s option and expense, (i) procure the right for
Company to continue use the infringed equipment or System components, or
(ii) modify or replace the equipment or System components in order to
become non-infringing provided that such modifications or replacement allow
the System to operate in a functionally equivalent manner; or (iii) if neither of
the foregoing remedies are reasonably available, despite Vendor’s reasonable
efforts, terminate this Agreement as to the infringing matter and refund to
Company all amounts paid hereunder in respect to System components whose
functionality is materially impacted by such infringing matter in full
satisfaction of all liability to Company with respect to infringement. THE
FOREGOING ARE VENDOR’S SOLE AND EXCLUSIVE OBLIGATIONS
AND COMPANY’S SOLE AND EXCLUSIVE REMEDIES WITH
RESPECT TO INFRINGEMENT.
1.3 If any indemnified claim or action is brought against a Party indemnified
hereunder, then the indemnitor shall be entitled to participate in, and, unless in
the opinion of counsel for the indemnitor a conflict of interest between the
indemnitee and the indemnitor may exist with respect to such claim or action,
assume the defense of such claim or action, with counsel reasonably
acceptable to indemnitor. If the indemnitor does not assume the defense of the
indemnitee, or if a conflict precludes the indemnitor from assuming the
defense, then the indemnitor shall reimburse the indemnitee on a monthly
basis for the indemnitee’s reasonable out of pocket defense costs through
separate counsel of the indemnitee’s choice. Even if the indemnitor assumes
the defense of the indemnitee with acceptable counsel, the indemnitee, at its
sole option and expense, may participate in the defense with counsel of the
indemnitee’s own choice without relieving the indemnitor of any of its
obligations hereunder.
1.4
Without limiting the generality of this Article ___, Vendor shall
indemnify, defend, and hold Company Indemnitees harmless from and against
any Damages resulting from any mechanics lien or stop notice claim
(including fees and disbursements of in-house and outside counsel) by
Vendor, subcontractors, employees or agents pertaining to the Services or
Equipment. If at the time of completion of the work hereunder, Vendor upon
request by Company, does not provide satisfactory evidence that all claims of
all such persons or entities have been paid, such amount as may be necessary
to meet such lien or claim shall be retained from any amount due to Vendor
hereunder until all such liens or claims have been fully discharged.
1.5 Each Party’s obligation to indemnify the other Party under this Article __
shall not be limited in any way by any limitation on the amount or type of
damages, compensation, penalty or benefits payable by or for Vendor under
any statutory scheme, including without limitation, any Workers
Compensation Acts, Disability Benefit Acts or other Employee Benefit Acts.
3. Indemnity – Not Dependant on Application of Fault
The duty of the Licensor to defend, indemnify and hold harmless the
Licensee, its agents and employees under this Section shall exist regardless of
whether or not the act giving rise to this duty is caused or claimed to have
been caused, in part, by a party indemnified hereunder and such duty shall be
determined without regard to any apportionment of liability under the laws
relating to Comparative Fault; however, this provision does not apply to
claims arising out or caused by the sole negligence or willful misconduct of
any indemnities.
1009
4. Indemnification Rights Not Applicable Upon Failure to Mitigate
Notwithstanding anything contained herein to the contrary, the
indemnification rights granted pursuant to this Section __
(“Indemnification”) shall not apply with respect to any cost, expense or
business detriment that the Indemnitee had an opportunity, but failed, in good
to mitigate, including but not limited to its failure to use commercially
reasonable efforts to recover under a policy of insurance or under a
contractual right of set-off or indemnity, to the extent that failure to so
mitigate would result in a reduction in damages recoverable under applicable
principles of contract law.
5. Indemnity – Employment
Vendor shall defend, indemnity and hold harmless Customer, and their
respective directors, officers, and employees from and against all claims,
liabilities, suits, losses, damages and expenses, including costs and reasonable
attorney’s fees (collectively, “Claims”), relating to or resulting from:
Vendor’s failure to perform obligations arising from its employment
relationship with its Personnel, including any Claims by Vendor’s Personnel
for wages or for benefits under any Customer benefit plan and Claims by a
taxing authority for withholding, unemployment or other taxes or for interest
or penalties thereon or for any alleged failure to withhold taxes or make
payments.
6. Indemnity – Employment – Alternative Language
Licensor shall indemnify, defend and hold harmless Licensee from and
against all claims and actions and all damages, costs and expenses incidental
to claims or actions (including reasonable attorneys’ fees) based upon or
arising out of any employment related claims by Licensor’s Personnel or
subcontractors, or Personnel of Licensor’s subcontractors, including without
limitation, for any medical coverage, life insurance, or other benefits from
Licensee which may be afforded to Licensee’s Personnel and other matters for
which Licensor is responsible pursuant to this Agreement, including Section
2.8 and any immigration and employment related issues and requirements
which may arise in connection with such Personnel.
7. Indemnity (Mutual) – Personal Injury and Property
Damage
Each party (an “Indemnifying Party”) shall indemnify, defend and hold
harmless the other party, and the directors, officers and employees of the other
party, from and against any and all third party claims and associated liabilities,
damages and expenses, including reasonable attorneys’ fees, for bodily injury
or damage to real or tangible personal property to the extent caused by the
negligence or willful misconduct of the Indemnifying Party or its directors,
officers, employees or contractors.
8. Survival of Indemnification Obligations
The provisions of this Section ___ (“Indemnification”) shall not survive the
termination of this Agreement (except for termination pursuant to Section ___
(“Termination for Breach”), or expiration of the License Term in each country in the Territory.
10. Customer Indemnification of Vender for Vendor’s
Negligence.
No Claims; Indemnification; Relief from Service. Notwithstanding
any other provision of this Agreement: (a) subject to Customer’s right to the
benefit of Service Level Credits pursuant to Exhibit __, Customer will have
no claim for indemnity, damages, specific performance, injunction, or other
remedy against any Vendor Indemnified Party for any liability Customer
incurs from a Deficiency with respect to any claim arising prior to Acceptance
of the Services with respect to all software, hardware, equipment,
microprocessors and the computing environment utilized for the provision of
Services (“System Acceptance”); (b) Vendor’s performance warranties under
Section ___ (Service Levels) will, until System Acceptance, be qualified to
the extent that any alleged breach that results from a Deficiency will not
constitute a breach of such warranties; and (c) except with respect to Service
Level Credits as provided in Subsection ___, Customer will indemnify the
Vendor Indemnified Parties from and against any and all Claims (to the extent
such Claims arise out of a Deficiency) made against any Vendor Indemnified
Party by (i) Customer or Customer’s officers, directors, employees or
shareholders; (ii) third parties whose Claims are substantially related to the
Services provided to Customer, or (iii) a Customer customer (which Claims,
in the case of a customer of a Customer customer, arise out of its customer
relationship with Customer and not out of another relationship with Vendor),
whether the Claim is based on contract, warranty, tort (including negligence),
1011
strict liability or other legal theory.
IT IS THE INTENTION OF CUSTOMER AND VENDOR THAT THE
PROVISIONS OF THIS SECTION ___ WILL (i) APPLY TO THE
NEGLIGENCE (BUT NOT THE GROSS NEGLIGENCE) OF VENDOR IN
CONNECTION WITH DEFICIENCIES, AND (ii) BE EFFECTIVE
WHETHER OR NOT THE CLAIM ARISES FROM, IS TO ANY EXTENT
(IN WHOLE OR IN PART) CAUSED BY, OR OTHERWISE IS
CONNECTED WITH ANY NEGLIGENT ACT OR OMISSION OF ANY
KIND WHATSOEVER (BUT NOT ANY GROSSLY NEGLIGENT ACT
OR OMISSION OF ANY KIND WHATSOEVER) OF VENDOR
(WHETHER SOLE OR CONCURRENT WITH THE NEGLIGENCE OF
CUSTOMER).
AA. Indemnity – Intellectual Property (Chapter 5.C. §
14)
1. General and Intellectual Property Indemnity – Neutral
1.1 General Indemnifications. Licensor shall indemnify, defend and hold
Licensee, its Affiliates and their respective directors, officers, shareholders,
members, employees, successors and assigns (collectively, “Licensee Indemnified
Parties”) harmless from and against, and shall pay any and all Losses sustained or
incurred by any of the Licensee Indemnified Parties, based upon, relating to or
arising from, any and all third party claims, actions, suits, proceedings or
investigations in connection with or pertaining to any of the following: (a) any actual
or alleged bodily injury or death, or damage to tangible personal or real property,
notwithstanding the form in which any such action is brought (e.g., contract, tort or
otherwise), to the extent such injuries or damages arise directly or indirectly from
acts, errors or omissions that constitute negligence, willful misconduct or violations
of Law by Licensor; (b) any actual or alleged breach of the following Licensor
warranties – Sections ____________ (“Warranties”); (c) Licensor’s breach or
failure to perform any of the obligations set forth in Section ___ (“Confidential
Information”); (d) any breach or failure by Licensor to comply with its obligations
under Section ___, and any fines, penalties, sanctions, underpayments and/or other
remedies to the extent such fines, penalties, sanctions, underpayments and/or other
remedies relate to any breach of any Laws by Licensor or any Licensor Personnel;
and (e) any failure by Licensor to pay applicable taxes, together with any interest and
penalties, assessed or imposed against Licensee for which Licensor has responsibility
pursuant to Section ___ (“Taxes”) or applicable Laws.
1.2 Indemnification Against Liability for Infringement. Licensor shall
indemnify, defend and hold the Licensee Indemnified Parties harmless from and
against, and shall pay, any and all Losses sustained or incurred by any of the Licensee
Indemnified Parties, based upon, relating to or arising from, any and all third party
claims, actions, suits, proceedings or investigations alleging that the Licensed Software
infringes, misappropriates and/or violates and/or Licensee’s use of the Licensed Software in accordance with the terms of this Agreement constitutes a misappropriation,
infringement and/or violation of any Intellectual Property Right of any third party.
2. Intellectual Property Indemnity –
Licensee Oriented (§ 14)
Licensor shall promptly and fully defend, indemnify and hold harmless Licensee and
its affiliates and their respective officers, directors, agents and employees (the “Indemnified Parties”) against all claims, demands and judgments made or recovered against
them for damages to or loss of real or tangible personal property, including Licensee’s
Confidential Information, data files, web content, software applications or for bodily
injury or death to any person arising out of, or in connection with this Agreement, to
the extent that such damage, injury or death was caused by an action or omission of
Licensor, its subcontractor or its employees or agents, or on the issue of infringement
of any patent, copyright, trade secret, trademark, or trade dress related to a Deliverable
or the Services. Licensee shall notify Licensor of any such written claim or demand
received by Licensee, and give Licensor reasonable control of the defense of any action
or such claim or demand provided that any settlement or compromise which requires
contribution from the Indemnified Parties must be approved by the Indemnified
Parties and the Indemnified Parties shall, at Licensor’s expense, cooperate with the
indemnifying party in a reasonable way to facilitate the settlement or defense of such
claim or demand. The Indemnified Parties may, at their expense and option, use counsel of their choosing to observe the defense of any such claim, and will have reasonable
access to all defense documents during the defense.
3. Intellectual Property Indemnity – Long Form (§ 14)
Licensor represents and warrants to Licensee the following:
1.1 Licensor is the developer and owner of the Software or Licensor has the
authority to grant the licenses to be granted hereunder, free and clear of any liens,
claims and encumbrances, (a) there is no claim or proceeding pending or threatened
with respect to the Software or any component thereof and (b) the Software does not
infringe or violate any patents, copyrights, trademarks, trade secrets, or other
proprietary rights of any third party. There are no open source components
included in the Software.
1.2 Licensor will indemnify and hold harmless Licensee, Affiliates and its and
their officers, employees, directors, shareholders, representatives, attorneys, successors,
and assigns from all damages, costs, losses, expenses (including refunds of license
fees, settlement awards and attorneys’ fees) and other liabilities arising from or in
connection with (i) any breach of the warranty set forth in Section _____ (Warranties)
above, (ii) any claim that Licensor does not have sufficient right or interest in the Software to enter into or perform this Agreement, or (iii) any claim that the Software or any
component thereof infringes or violates any patent, copyright, trademark, trade secret,
or other proprietary right of a third party.
1.3 Licensor will, with counsel selected by Licensor and approved by
Licensee, which approval shall not be unreasonably withheld, defend, at its own
expense, any suit or proceeding brought against Licensee or any Affiliate based on any
breach of the warranty set forth in Section 1.1 above, any claim that Licensor does not
have sufficient right or interest in the Software to enter into or perform this Agreement
or any claim that the Software or any component thereof infringes any patent,
copyright, mask work right, trademark, trade secret, or other proprietary right of a third
party. Licensee will give Licensor prompt written notice of any such claim and
shall give Licensor reasonable cooperation and assistance (at no cost to Licensee)
1013
with respect to such defense. Licensor will pay all damages and costs awarded against
Licensee with respect to any such suit, proceeding or claim. Such indemnification will
include all actions brought alleging an infringement or violation by Licensor of any
patents, copyrights, trademarks, trade secrets, or other proprietary rights of any third
party.
COMMENT: This language benefits the licensee as it provides that any
support given to vendor shall be “at no cost to Licensee.” It is unclear
whether the Licensor must reimburse the Licensee for its out-of-pocket
costs as well as its internal/overhead costs. Further, is the Licensee
relieved from its obligation of cooperation if such cooperation will incur
a cost for the Licensee?
1.4 Licensor shall have the full responsibility for the defense of any such suit
or proceeding; provided, however, that (i) such defense shall be conducted at Licensor’s sole cost and expense, (ii) Licensor shall keep Licensee informed of, and consult with Licensee in connection with, the progress of such litigation; and (iii) Licensor shall not have the right to settle any such claim if such settlement arises from or is
part of any criminal action, suit or proceeding or contains a stipulation to, or admission or acknowledgment of, any wrongdoing (whether in tort or otherwise) on the
part of Licensee or any Affiliate.
1.5 Written notice of Licensor’s intention to defend, accompanied by an
acknowledgment, in writing, reasonably satisfactory to counsel for Licensee,
that such claim is, subject to the provisions of Section 1, covered in its entirety
by this indemnity (the “Acknowledgment”), shall be delivered to Licensee within
10 days from the date of Licensor’s notice of the institution of the claim. Until
Licensee receives the Acknowledgment, Licensee shall be entitled to defend such
claim at Licensor’s cost and expense, and Licensor shall be bound in the manner
set forth in Section 1.6, below, except that Licensee shall not be entitled to settle
such claim without the written consent of Licensor (which consent will not be
unreasonably delayed or withheld).
1.6 If Licensor fails to deliver the Acknowledgment within the specified period
or otherwise provide the defense or follow the procedures required by this Section 1,
or if Licensee reasonably concludes that Licensor will be unable to indemnify or
defend them as required hereby or Licensor gives its written consent, then
Licensor shall not thereafter be entitled to control such defense, and Licensee shall be
entitled, upon written notice to Licensor specifically referencing this Section 1.6, to
assume and control the defense, at Licensor’s expense, with counsel of Licensee’s
own choosing. In such event, Licensee may contest or settle the claim as it may
choose, and Licensor shall be bound by and shall be liable for the results obtained by
Licensee, including, without limitation, the amount of any judgment or good faith, outof-court settlement or compromise, and all costs and fees of counsel. Licensor, at its
own expense, shall be entitled to be present at such litigation, and Licensee shall keep
Licensor informed of, and consult with Licensor in connection with, the progress of
such litigation and settlement, and shall exercise reasonable efforts to minimize costs
and fees incurred in connection with such defense and settlement.
1.7 Licensor shall have no liability for any claim of infringement based on: (i)
modifications of the Software by Licensee if such infringement would have been
avoided by the use of the Software without such modifications; or (ii) the combination, operation, or use of the Software with non-Licensor provided programs, data,
or documentation if such infringement would have been avoided by the use of the
Software without combination with such programs, data or documentation, unless
such combination was contemplated by the Design Specifications.
1.8 Licensor shall either procure, at its own expense, the right for Licensee to
continue using the Software or shall replace or modify the Software with functionally
equivalent software so that it becomes non-infringing. If neither of the foregoing
alternatives is feasible without undue expense, Licensor will accept the return of the
Software and grant Licensee a refund based on the payments made by Licensee for
the Software, as depreciated over a 60-month period.
4. Intellectual Property Indemnity – Licensor Oriented
1.1 Third Party Infringement Claims. Licensor will defend at its own expense any action against Licensee brought by a third party to the extent that the action is based upon a claim that the Licensed Software directly infringes any U.S.
copyright or misappropriates any trade secret recognized as such under the Uniform
Trade Secret Law, and Licensor will pay those costs and damages finally awarded
against Licensee in any such action that are specifically attributable to such claim or
those costs and damages agreed to in a monetary settlement of such action.
1.2 Conditions. Licensor’s obligations under the preceding paragraph with
respect to an action are conditioned on (a) Licensee notifying Licensor promptly in
writing of such action, (b) Licensee giving Licensor sole control of the defense
thereof and any related settlement negotiations, and (c) Licensee cooperating with
Licensor in such defense (including, without limitation, by making available to
Licensor all documents and information in Licensee’s possession or control that are
relevant to the infringement or misappropriation claims, and by making Licensee’s
personnel available to testify or consult with Licensor or its attorneys in connection
with such defense).
1.3 Licensor’s Options. If the Licensed Software becomes, or in Licensor’s
opinion is likely to become, the subject of an infringement or misappropriation claim,
Licensor may, at its option and expense, either (a) procure for Licensee the right to
continue using [distributing] the Licensed Software, (b) replace or modify the Licensed
Software so that it becomes non-infringing, or (c) terminate Licensee’s right to use
[distribute] the Licensed Software and give Licensee a refund or credit for the
license fees actually paid by Licensee or Licensor for the infringing components of
the Licensed Software less a reasonable allowance for the period of time Licensee
has used the Licensed Software.
COMMENT: See Clause 6 below for language providing for a pre-rated
refund.
1.4 Exclusions. Notwithstanding the foregoing, Licensor will have no obligation or otherwise with respect to any infringement or misappropriation claim based upon (a) any use [or distribution] of the Licensed Software not in accordance with
the Agreement or for purposes not intended by Licensor, (b) any use of the Licensed
Software in combination with other products, equipment, software or data not supplied
by Licensor, (c) any use [or distribution] of any release of the Licensed Software other
than the most current release made available to Licensee, or (d) any modification of the
Licensed Software made by any person other than Licensor.
1.5 THIS SECTION STATES LICENSOR’S ENTIRE LIABILTY AND
LICENSEE’S SOLE AND EXCLUSIVE REMEDY FOR INFRINGEMENT
AND MISAPPROPRIATION CLAIMS AND ACTIONS.
1015
5. Intellectual Property Indemnity – Licensee Oriented
1.1 Indemnification. Licensor will indemnify and hold Licensee [and its
distributors, sub-distributors, and customers] harmless from and against any and all
claims, losses, liability, damages, costs, and expenses (including attorney’s fees, expert
witness fees, and court costs) directly or indirectly arising from or related to any actual
or alleged infringement (including contributory infringement), misappropriation, or
violation of any third party’s patents, copyrights, trade secret rights, trademarks, or
other intellectual property or proprietary rights of any nature in any jurisdiction in the
world, resulting from the use [or distribution] of the Licensed Software by Licensee
[or any of its distributors, sub-distributors, and customers]. If Licensee’s continued use
[or distribution] of the Licensed Software is restricted or prohibited as a result of any
such infringement, misappropriation, or violation of third party rights, Licensor
shall, at Licensee’s option and at no charge to Licensee, and in addition to Licensee’s
other rights and remedies, (a) secure for Licensee the right to continue using [and
distributing] the Licensed Software as allowed under this Agreement, (b) modify or
replace the infringing components of the Licensed Software so that they are noninfringing with no loss or degradation of features, functionality, or performance, or (c)
refund to Licensee all amounts paid by Licensee [or its customers] for the Licensed
Software.
1.2 [Exclusions. Notwithstanding the foregoing, Licensor will not be obligated
to indemnify Licensee to the extent that an infringement or misappropriation claim is
based upon (i) use [or distribution] of the Licensed Software in breach of this
Agreement, if such infringement or misappropriation would not have occurred but for
such breach; (ii) use of the Licensed Software in combination with other products not
supplied or recommended by Licensor or specified by Licensor as being compatible
with the Licensed Software, if such infringement or misappropriation would not have
occurred but for such combined use; (iii) use [or distribution] of any release of the
Licensed Software other than the most current release made available to Licensee, if
the most current release was furnished to Licensee specifically to avoid such
infringement or misappropriation and if such infringement or misappropriation would
have been avoided by use [or distribution] of the most current release; or (iv) any
modification of the Licensed Software made by Licensee (other than at Licensor’s
direction), if such infringement or misappropriation would not have occurred but for
such modification.]
1.3 Defense of Third Party Suits. Licensee will use reasonable efforts to notify
Licensor promptly of any third party claim, suit, or action (a “Claim”) for which
Licensee believes it is entitled to indemnification under this Section __ and which
Licensee desires Licensor to defend. However, Licensee’s failure to provide such
notice or delay in providing such notice will relieve Licensor of its obligations under
this Section __ only if and to the extent that such delay or failure materially prejudices
Licensor’s ability to defend such Claim. If Licensee tenders the defense of a Claim to
Licensor, Licensor will have the right and the obligation to defend such Claim with
counsel of its choice; however, Licensee may participate in the defense of the Claim
with its own counsel and at its own expense. Once Licensor assumes defense of a
Claim, it will be conclusively presumed that Licensor is obligated to indemnify
Licensee for such Claim, and Licensee will cooperate with Licensor, at Licensor’s
reasonable request and at Licensor’s expense, in the defense of the Claim. No
settlement of a Claim will be binding on Licensee without Licensee’s prior written
consent.
6. Intellectual Property Indemnity – Prorated Refund of
License Fee
. . . refund the License Fees paid to Licensee in respect of the Software to which the
claim pertains, depreciated from the time of payment on a three-year, straight-line
basis, to the extent that Licensor is obligated to issue corresponding refunds to End
Users in respect of the software.
7. Intellectual Property Indemnity - Exclusions
Licensor’s foregoing indemnification obligations shall not apply to the extent the claim
is based on: (a) modification of the Deliverables by the Licensee that did not receive
prior express written authorization from the Licensor, (b) use of the Deliverables by the
Licensee that is not compliant with the written usage recommendations provided by the
Licensor or which violates the provisions of this Agreement, (c) specifications supplied
by the Licensee and on the basis of which the disputed Deliverables were developed,
(d) use of the disputed Deliverables in association with products or services not
previously recommended or supplied by the Licensor, or (e) Licensee’s failure to take
the necessary actions to protect its rights in the Deliverables (e.g., filing patent
applications).
Intellectual Property Indemnity – Exclusions –
8.
Alternative Language
The foregoing indemnity will not apply to the extent an infringement is
caused by: (a) items specifically requested or supplied by the Company that
are substantially different from the Vendor’s customary services in the area;
(b) combinations with items or modifications or use of items that could not be
reasonably be anticipated by Vendor in light of the scope of Services, or that
were not otherwise approved by Vendor; (c) the Company Indemnitees’
failure to use an updated non-infringing version of an item offered by Vendor
for no additional cost to the extent notified that the update cured an
infringement and given a reasonable amount of time to implement the update;
or (d) the Company Indemnitees’ failure to follow the Vendor’s reasonable
instructions regarding proper use of an item.
Intellectual Property Indemnity – Vendor Use of
9.
Customer Software
Customer agrees to defend, indemnify and hold harmless, at its expense,
Vendor and Vendor Affiliates and Vendor’s and Vendor’s Affiliates’
respective officers, directors, employees, agents, successors and assigns
1017
against any and all liabilities, damages, losses, and all related costs and
expenses (including but not limited to reasonable attorneys’ fees) based upon
any third party claim that the access and use by Vendor of any Customer
Software provided by Customer and used by Vendor in the performance of
Services as specifically authorized by Customer, results in any infringement
or misappropriation of any intellectual property rights of any third parties.
Customer shall have no liability for any claims to the extent arising from (a)
any unauthorized use of the Customer Software, Customer Equipment and/or
Customer Data by Vendor, Vendor India, Vendor Affiliates and any Vendor
subcontractors. Customer shall have no liability for any claims to the extent
arising from any (i) unauthorized use, unauthorized export, diversion, and/or
re-export of any Customer Software by Vendor, Vendor Personnel and/or
Vendor Affiliates or (ii) breach by Vendor, Vendor Personnel and/or Vendor
Affiliates of its obligations as set forth in Section ___(“Obligation to Check
Vendor Personnel Against Denied persons List”) and ___(“Export”).
Procedures for Notice of Intellectual Property
10.
Indemnity Claim
With respect to third-party claims which are subject to indemnification
pursuant to this Section ___, the following procedures shall apply:
(a) Notice. Promptly after receipt by any entity entitled to indemnification
under Section __ (“Indemnification”) of notice of the assertion or the
commencement of any legal action, proceeding or other formal legal claim by
a third party in respect of which the indemnitee will seek indemnification
pursuant to any such Section, the indemnitee shall promptly notify the
indemnitor of such claim in writing. No failure to so notify an indemnitor
shall relieve it of its obligations under this Agreement except to the extent that
it can demonstrate damages attributable to such failure. Within fifteen (15)
days following receipt of written notice from the indemnitee relating to any
claim, but no later than ten (10) days before the date on which any response to
a complaint or summons is due, the indemnitor shall notify the indemnitee in
writing if the indemnitor acknowledges its indemnification obligation and
elects to assume control of the defense and settlement of that claim (a “Notice
of Election”).
(b) Procedure Following Notice of Election. If the indemnitor delivers a
Notice of Election relating to any claim, the indemnitor shall be entitled to
have sole control over the defense and settlement of such claim; provided that
(i) the indemnitee shall be entitled to participate in the defense of such claim
and to employ counsel at its own expense to assist in the handling of such
claim; and (ii) the indemnitor shall obtain the prior written approval of the
indemnitee before entering into any settlement of such claim or ceasing to
defend against such claim. After the indemnitor has delivered a Notice of
Election relating to any claim in accordance with the preceding paragraph, the
indemnitor shall not be liable to the indemnitee for any legal expenses
incurred by the indemnitee in connection with the defense of that claim. In
addition, the indemnitor shall not be required to indemnify the indemnitee for
any amount paid or payable by the indemnitee in the settlement of any claim
for which the indemnitor has delivered a timely Notice of Election if such
amount was agreed to without the written consent of the indemnitor.
c. Procedure Where No Notice of Election Is Delivered. If the indemnitor
does not deliver a Notice of Election relating to a claim, or alternatively fails
to acknowledge its indemnification obligation or to assume the defense of a
claim, the indemnitee shall have the right to defend the claim in such manner
as it may deem appropriate, at the cost and expense of the indemnitor,
including payment of any judgment or award and the costs of settlement or
compromise of the claim. The indemnitor shall promptly reimburse the
indemnitee for all such costs and expenses, including payment of any
judgment or award and the costs of settlement or compromise of the claim.
BB. Insurance (Chapter 6.C; § 38)
1. Licensor’s Insurance Coverage
A. General Requirements. Within ten days of the Effective Date and upon
request, Licensor shall provide to Licensee evidence of all insurance required hereunder.
The insurance companies providing such insurance shall have an A.M. Best rating of
A-X or better and be licensed or authorized to conduct business in all states in which
Licensee or its affiliates conduct business. Licensee shall have the right to require
Licensor to obtain the insurance required under this section from another insurance
carrier in the event Licensee determines that Licensor’s then current insurance carrier
does not have an A.M. Best rating of A-X or better or is not licensed or authorized to
conduct business in all states in which Licensee and its affiliates do. All policies and
certificates of insurance shall be written as primary policies with Services performed
and deliverable items produced by Licensor and its subcontractors and not written as
policies contributing to, or to be used in excess of Licensee’s insurance policies or any
self-insurance program in which Licensee may participate with respect to such Services
and Deliverable. The insurance requirements under this section are mandatory; failure
of Licensee to request certificates of insurance shall not constitute a waiver of
Licensor’s obligations and requirements to maintain the minimal coverages specified.
B. Types and Amounts. During the term of this Agreement, and at its own
cost and expense, Licensor shall obtain and maintain the following insurance cover-
1019
ages or self-insurance:
i. Commercial General liability insurance with a combined single annual
aggregate limit of not less than Five Million Dollars ($5,000,000).
ii. Errors and Omissions insurance in amounts not less than Two Million
Dollars ($2,000,000) per claim and not less than Five Million Dollars
($5,000,000) in the aggregate.
iii. Workers’ compensation insurance and other insurance as required by
statutes in the states in which the work will be performed. Coverage
shall include Employers Liability with a limit not less than
$1,000,000 for each occurrence.
iv. Business Automobile Liability Insurance covering owned and unowned vehicles with a combined single limit of not less than One
Million Dollars ($1,000,000).
v. If Licensor purchases “claims made” insurance, all acts and omissions
of Licensor and its representatives and agents, shall be, during the term
of this Agreement, “continually covered” notwithstanding the termination of this Agreement or the provisions of this Agreement allowing
Licensor to purchase “claims made” insurance coverage. In order for
the acts and omissions of Licensor and its representatives and agents to
be “continually covered” there must be insurance coverage for the entire period commencing on the Effective Date of this Agreement and
ending on the date that is at a minimum of three (3) years after the final
date that this Agreement is effective, including any extensions or
renewals hereof, and such insurance must satisfy the liability coverage
requirements provided for in this Agreement. Licensor acknowledges
and agrees that the provisions of this Paragraph B may require Licensor
to purchase “tail insurance” if its coverage lapses or “nose insurance”
and/or “tail insurance” if Licensor changes insurance carriers, even
after this Agreement is terminated.
C. Subcontractors. Licensor agrees to require any subcontractors it uses to
perform work at Licensee‘s premises, if any, to carry, or Licensor will carry on behalf of said subcontractors, at a minimum, the following limits of insurance:
i. Workers’ Compensation and other insurance in the amount required
by statute in the state in which the work will be performed.
ii. Commercial General Liability Insurance, including independent contractors coverage, written on a broad form basis in a combined single limit
of One Million Dollars ($1,000,000) per occurrence with an aggregate
of not less than Two Million Dollars ($2,000,000).
iii. Business Automobile Liability Insurance covering any auto with
a combined single limit of not less than One Million Dollars
($1,000,000).
D. Policy Requirements. Licensee shall be listed on all such insurance policies obtained by Licensor (except worker’s compensation) as “Additional Insureds”
up to the amount required of Licensor in this Exhibit __ of this Agreement. Licensor
shall similarly require certain subcontractors to list Licensee as “Additional Insureds”
if Licensor does not carry on behalf of such subcontractors the insurance required in
Paragraph C of this Exhibit __. The provisions of this Exhibit __ shall not be deemed
to limit the liability of Licensor hereunder, or limit any rights that Licensee, or its
affiliates may have including, without limitation, rights of indemnity or contribution.
Notwithstanding any other provisions of this Agreement, the provisions of this
Exhibit __ shall survive termination of this Agreement.
2. Licensor’s Insurance Coverage – Alternate Language
1.1 Insurance. Licensor shall, throughout the Master Term, maintain in full
force and effect from a third party that is rated “A-” or better in Best’s Insurance
Guide, or otherwise reasonably acceptable to Licensee, the following insurance coverage for its operations worldwide:
1.1.1 Workers’ Compensation complying with all statutory requirements
of the state(s) in which work is to be performed and Employer’s Liability insurance.
The Employer’s Liability shall be provided in amounts of $500,000.00 per occurrence.
1.1.2 Automobile liability covering all vehicles owned, non-owned, hired
and leased in an amount of $1,000,000.00 per claim (combined single limit for bodily
injury and property damage).
1.1.3 Commercial general liability insuring and the Umbrella policy against
bodily injury, property damage, contractors’ completed operations and contractual
liability (covering Licensor’s indemnification obligations contained herein) with a
combined single limit of $5,000,000.00 per claim. This constitutes commercial general
liability with a basic cover of U.S. $1,000,000 per occurrence and U.S. $ 2,000,000 as
general aggregate.
1.1.4 Professional liability and errors and omissions insurance in an
amount of $5,000,000.00 per claim.
In addition, Licensor, at Licensor’s expense, shall forthwith procure and thereafter
keep in full force and effect a fidelity bond or insurance policy reasonably satisfactory
in form to Licensee, payable to Licensee, and issued by a bonding, insurance, or casualty company satisfactory to Licensee, pursuant to which Licensee will be held harmless
by the surety or insurer in an amount of at least Five Million Dollars ($5,000,000.00)
from any loss of money or other personal property belonging to Licensee or for which
Licensor is legally liable, caused by larceny, embezzlement, forgery, misappropriation,
wrongful abstraction, or any dishonest or fraudulent acts committed on or after the date
hereof, by Licensor, its officers, directors, shareholders, or Employees.
1.2 Inspection. Licensor shall allow Licensee and Licensee or their representatives or property insurance company representatives, at any time with reasonable
advance notice, to inspect, test or examine fire protection and security equipment,
systems and procedures at the Licensor Service Location.
1.3 Certificates. Licensor shall within 15 Business Days following the Master
Effective Date provide to Licensee certificates of insurance evidencing the above
coverage, including a written acknowledgement from the insurance providers that
Licensor’s operations are covered worldwide (including India). Licensee and Licensee
shall be listed as an additional insured on the policies noted in 1.1.2 and 1.1.3, above.
Certificates furnished by Licensor shall provide that the policies shall not be materially
changed or cancelled without providing 30 days written notice to Licensee.
1.4
Use of Proceeds. Proceeds received by Licensor from any claims under
the insurance policies referenced in this Section shall be used to rapidly affect necessary repairs or replacement or to reimburse the affected Licensee Entities.
3.
Insurance Does Not Limit Liability
The insurance carried by Vendor’s Subcontractors shall not in any way limit
Vendor’s liability (inclusive of its Subcontractors) to Indemnitees under this
Agreement or the insurance requirements of Vendor under this Section __.
1021
4.
Self Insurance
Vendor may not self-insure without Customer’s prior written consent. If after
obtaining such consent, Vendor opts, when permitted by law, to self-insure
any or all of the foregoing risks, in lieu of certificates of insurance as stipulated above, Vendor shall provide Customer: (i) the self-insurance registration
identification number assigned by each State in which Vendor desires to provide Services to Customer; (ii) a letter of certification from Vendor’s insurance carrier or self-insurance administrator that Vendor is self-insured for the
coverages and amounts as stipulated in this Agreement, including that Customer, its subsidiaries and Affiliates are additional insureds and shall be indemnified and saved harmless from all claims, suits, and liability as set forth
within this Agreement; and (iii) a notification of the States in which Vendor is
provided coverage under its self-insurance.
CC. Intellectual Property (Chapter 3)
1. Copyright Notices
Licensor will affix the following Copyright Notice to the Developed Works developed
under this Section and all accompanying documentation: “Copyright © [year] by the
Licensee. All Rights Reserved.” This notice shall appear on all tangible versions of the
Developed Works delivered under this Agreement and any associated documentation.
It shall also be programmed into any all Developed Works delivered hereunder so that
it appears at the beginning of all visual displays of such Developed Works.
2. Trademark Protection
(a) Limited License. The parties acknowledge that Licensor may be required
to reproduce and otherwise use certain trademarks and service marks of Licensee,
including, without limitation, [Name of Mark] and [Name of Mark] (collectively, the
“Trademarks”) in the course of performing the Services. Licensee hereby grants
Licensor a nonexclusive license to reproduce and display the Trademarks in such
manner as Licensee may specifically direct from time to time. Licensor
acknowledges the limitations on the scope of the foregoing license and shall make no
use of any of the Trademarks beyond the scope of such limited license or otherwise
not expressly approved by Licensee pursuant to the provisions of this Agreement.
(b) Rights in Trademarks. Licensor acknowledges that, as between Licensor
and Licensee, all right, title, and interest in the Trademarks and the goodwill that they
symbolize shall belong exclusively to Licensee and that all uses of the Trademark
shall inure to the benefit of Licensee for all purposes. Licensor shall take no actions
inconsistent with Licensee’s ownership of and rights in the Trademarks. Licensor
shall not file any application for registration of the Trademarks (or challenge any
existing registrations or applications to register any of the Trademarks). Rather,
Licensor shall, at Licensee’s expense, fully cooperate with Licensee in maintaining
and defending the validity and ownership of, and prosecuting any applications to
register any of the Trademarks.
(c) Specifications and Requirements. Licensor will use the Trademarks
strictly in accordance with such reasonable specifications and requirements as Licensee
may from time to time prescribe. Any proposed use of the Trademarks by Licensor that
is essentially the same as, and does not materially differ from, a prior approved use
thereof shall be deemed acceptable to Licensee; provided, however, that Licensor shall
provide Licensee with samples of such use sufficiently in advance of mass production
thereof that Licensee may effectively object in the event it deems the use not to be
essentially the same as one previously approved.
(d) Quality Control. In order to ensure that the use of the Trademarks is in
compliance with the specifications and requirements prescribed by Licensee,
Licensor shall send Licensee such samples of Licensor’s use thereof as Licensee may
reasonably require for the purpose of allowing Licensee to verify that such samples
conform to such specifications and requirements. If any such samples do not conform
to such specifications and requirements, Licensee shall so notify Licensor in a writing
which describes the nonconformance, and Licensor shall promptly take appropriate
steps to cause such its use of the Trademarks to so conform. In addition, Licensor
shall permit duly authorized representatives or agents of Licensee at reasonable times
during normal business hours and on reasonable written notice to visit Licensor’s
premises, review records relevant to the use of the Trademarks and meet with
Licensor’s personnel to oversee the use of the Trademarks.
3. Jointly Owned Software – Use and Copyright Notice
Upon acceptance by Customer, ownership of any Custom Software which consists
partially of Vendor’s Standard Software (“Vendor Portion”) and partially of Customer
Software specifically written by Vendor for Customer (“Customer Portion”), shall be
as follows:
(a) The Customer Portion shall become the exclusive property of Customer,
including title to copyrights and right to register the copyright in all copyrightable
material in the Customer Portion. The ownership of all rights to the Customer Portion, including but not limited to copyrights, is hereby assigned to Customer.
(b) The Vendor Portion shall be specifically identified as being Vendor’s
Standard Software in Exhibit B and shall remain the exclusive property of Vendor;
provided, however, that Customer shall have an unrestricted nontransferable,
nonexclusive, royalty free, perpetual license to reproduce, use, modify, and sublicense
the Vendor Portion, including any software provided to Vendor under the license from
another supplier.
(c) If the Vendor Portion contains Software provided to Vendor under license
from another supplier, such software shall be deemed Standard Software and shall
remain the property of such other supplier. Any such Standard Software is identified
in Exhibit B.
Vendor shall place the following notice on all disks or other media containing a
copy of the Custom Software, which includes Vendor’s Standard Software, and on all
program material and shall embed it in the Customer Software so that it appears
when the Custom Software is run or printed out:
“This contains material which is the confidential, unpublished property
1023
licensed to Customer. Receipt or possession of it does not convey any
rights to divulge, reproduce, use or allow others to use it without the
specific written authorization of Customer, and use must conform strictly
to the license agreement between user and Customer.
Copyright © 20__ [Vendor Legal Name]. All rights reserved
Copyright © 20__ [Customer Legal Name]. All rights reserved”
Any portion of Custom Software which is not designated as being Vendor Portion
shall be deemed to be Customer Portion.
4. Ownership of Intellectual Property – Joint Ownership
Vendor and Customer agree that all the right, title and interest in and to the
Deliverables hereunder shall be jointly owned by Vendor and Customer.
Vendor hereby grants to Customer co-ownership of the Deliverables and
assigns to Customer, while retaining for Vendor, undivided intellectual
property rights in and to the Deliverables, subject to the provisions of Section
__ (“Vendor Proprietary Materials”). The grant and assignment to
Customer herein shall become effective, as to a specific Deliverable, at the
time of delivery of such Deliverable to Customer and receipt by Vendor of
full payment for such Deliverable. Each party’s ownership of the Deliverables
and the intellectual property rights therein is without restriction and without
obligation to account to the other party. If either Vendor or Customer files a
patent application based upon any invention expressed or embedded in a
Deliverable, the filing party shall name the other as co-owner of the invention.
Ownership of Intellectual Property – Alternative Language
– Comprehensive Language
5.
1.1 Customer Proprietary Materials
(a) All Customer Proprietary Materials, all Derivative Works thereof and all
Intellectual Property Rights with respect to the foregoing and those policies,
processes, work flows, and any interpretation of law unique to Customer that
is designated as such a unique interpretation in writing (or via email) by Customer and acknowledged in writing by Vendor as the same, shall be, as between Customer and Vendor, the exclusive property of Customer. Notwithstanding anything to the contrary in this Section 1.1 (a), Customer Proprietary
Materials will not include any Vendor Proprietary Materials.
(b) All Policyholder Data shall, as between Customer and Vendor, be deemed
to be Customer Proprietary Materials.
(c) Subject to Clause 1.3.1(c) below, to the extent Vendor creates modifications to or Derivative Works from any Vendor Software which include any of
Customer Proprietary Materials, Customer shall nevertheless retain all Intellectual Property Rights in such Customer Proprietary Materials as disclosed
by Customer or as otherwise made available by Customer to Vendor and Vendor shall have no claim to any Intellectual Property Rights in such Customer
Proprietary Materials, except as stated in Clause 1.3.1(c) below.
(d) Customer grants to Vendor to the extent necessary for the provision of the
Services, during the Term and the Termination Assistance Period, a nonexclusive, non-transferable and limited right to use and to permit Subcontractors to use, access, copy, maintain, modify, enhance and create Derivative
Works of Customer Proprietary Materials, in each case solely for the purpose
and in connection with and solely to the extent necessary for Vendor’s provision of the Services, Customer Proprietary Materials.
(e) Vendor may not use Customer Proprietary Materials for any other purpose, and may not sublicense any rights with respect to Customer Proprietary
Materials. Customer reserves all rights in Customer Proprietary Materials not
expressly granted in the Set of Agreements.
(f) Upon expiration or termination in whole or in part for any reason of the
Set of Agreements or relevant parts thereof, to the extent Vendor no longer
needs Customer Proprietary Materials to perform the remaining Services, the
respective licenses granted by Customer to Vendor will immediately terminate
and revert to Customer and Vendor will:
(i) deliver to Customer, at no cost to Customer, a current copy of all
such Customer Proprietary Materials in the form(s) in use as of the
date of such expiration or termination; and
(ii) irremediably destroy or erase (using a file erasure program that
renders previously stored data irretrievable) all other copies of such
Customer Proprietary Materials in the possession or control of Vendor
or Subcontractors upon Customer’s written confirmation that Customer has received such current copy.
Vendor will certify to Customer in writing that it has returned and/or destroyed/erased all such Customer Proprietary Materials.
1025
(g) For the avoidance of doubt, nothing in this Clause 1.1 shall restrict Vendor
or its Affiliates from using any data processing techniques, business and policy administration policies, practices, procedures, processes, techniques and
work flows and ideas and know-how contained or reflected in the foregoing
which: (i) are in the general public domain other than as a result of a public
disclosure by Vendor or its Affiliates; (ii) were demonstrably known to Vendor or its Affiliates previously, without a duty of confidentiality of any nature
to Customer; (iii) are independently developed by Vendor or its Affiliates or
any of its or their officers, directors, employees, agents, or other representatives without use of or access to Customer Proprietary Materials; or (iv) are
rightfully obtained by Vendor or its Affiliates from one or more third parties
without, to the knowledge of Vendor or its Affiliates, breach by such third
party of a duty of confidentiality of any nature to Customer or its Affiliates.
1.2 Customer Designated Third Party Proprietary Materials
(a) All Customer Designated Third Party Proprietary Materials shall be the
property of such third party and governed by the applicable third party license
agreement(s).
(b) Customer grants to Vendor to the extent necessary for the provision of the
Services, during the Term and the Termination Assistance Period, a nonexclusive, non-transferable and limited right to use and permit Subcontractors
to use, in each case solely for the purpose and in connection with and solely to
the extent necessary for Vendor’s provision of the Services, Customer Designated Third Party Proprietary Materials subject to the extent Customer obtains
any Required Consents or permissible under the applicable third party agreements.
(c) In the event a restriction prevents the use of any Customer Designated
Third Party Proprietary Materials for the Services to be performed by Vendor,
Customer may, at its expense, but will not be required to obtain any Required
Consents or propose a workaround or provide an alternative.
(d) Vendor will co-operate with Customer in obtaining Required Consents or
in implementing such workaround or alternative. Vendor shall comply (and
will procure that its subcontractors will comply) with the terms of the applicable license or other agreement concerning the use of the Customer Designated
Third Party Proprietary Materials.
(e) Customer hereby reserves all rights it may have in Customer Designated
Third Party Proprietary Materials not expressly granted to Vendor.
(f) Upon expiration or termination in whole or in part for any reason of the
Set of Agreements or relevant parts thereof, to the extent Vendor no longer
needs Customer Designated Third Party Proprietary Materials to perform the
remaining Services, the respective rights granted to Vendor will immediately
terminate and to the extent legally permitted Vendor will:
(i) deliver to Customer, at no cost to Customer, a current copy of all
such Customer Designated Third Party Proprietary Materials in the
form(s) in use by Vendor as of the date of such expiration or termination;
(ii) immediately destroy or erase (using a file erasure program that
renders previously stored data irretrievable) all other copies of such
Customer Designated Third Party Proprietary Materials in the possession or control of Vendor or Subcontractors upon Customer’s confirmation that Customer has received such current copy; and
(iii) certify to Customer in writing that it has returned and/or destroyed/erased all such Customer Designated Third Party Proprietary
Materials.
1.3 Vendor Proprietary Materials
1.3.1 General
(a) All Vendor Proprietary Materials, all Derivative Works thereof and Intellectual Property Rights with respect to the foregoing, shall be, as between
Customer and Vendor, the exclusive property of Vendor. Notwithstanding
anything to the contrary in this Section 1.3.1 (a), Vendor Proprietary Materials will not include any Customer Proprietary Materials.
(b) Where required to secure Vendor’s ownership in any Derivative Works of
Vendor Proprietary Materials or the Intellectual Property Rights therein or in
the event that Applicable Law, any court, administrative agency or any other
adjudicative body will determine that all or parts of the Derivative Works or
any of the Intellectual Property Rights therein requires a legal transfer or assignment, then Customer hereby assigns and transfers to supplier at no additional cost and without limitation all of its rights to (including title and interests) in such Derivative Works or any Intellectual Property Rights therein upon their creation. Customer will, where required, undertake any further confirmations and provide any assistance for the formal assignment of all rights to
Vendor.
1027
(c) Subject to Clause 1.1(a) above, to the extent any modifications or Derivative Works are created from any Vendor Software (regardless if created by
Customer, Customer Affiliate, Vendor or any third party) which include any
of Customer’s processing techniques, business and policy administration policies, practices, procedures, processes, techniques, or work flows or any Customer Standards and Procedures, Vendor Proprietary Materials shall include
the embodiment of such techniques, business and policy administration policies, practices, procedures, processes, techniques, or work flows or any Customer Standards and Procedures in Vendor Software, subject to restrictions
declared via Clause 1.3.4 below relating to competitive developments, and
Customer shall have no claim to the Vendor Software, but Customer shall
nevertheless retain all Intellectual Property Rights in such processing techniques, business and policy administration policies, practices, procedures,
processes, techniques, work flows and Customer Standards and Procedures as
disclosed by Customer or as otherwise made available by Customer to Vendor.
(d) For the avoidance of doubt, nothing in this Clause 1.3 shall restrict Customer or its Affiliates from using any data processing techniques, business
and policy administration policies, practices, procedures, processes, techniques and work flows and ideas and know-how contained or reflected in the
foregoing which: (i) are in the general public domain other than as a result of
a public disclosure by Customer or its Affiliates; (ii) were demonstrably
known to Customer or its Affiliates previously, without a duty of confidentiality of any nature to Vendor or its Affiliates; (iii) are independently developed
by Customer or its Affiliates or any of its or their officers, directors, employees, agents, or other representatives without use of or access to Vendor Proprietary Materials; or (iv) are rightfully obtained by Customer or its Affiliates
from one or more third parties without, to the knowledge of Customer or its
Affiliates, breach by such third party of a duty of confidentiality of any nature
to Vendor or its Affiliates.
1.3.2 Vendor Proprietary Materials Created During the Term of the Set
of Agreements and the Termination Assistance Period
(a) To the extent Vendor Proprietary Materials used for the provision of the
Services (including Tools) individually, including modifications and enhancements to Vendor Proprietary Materials made for Customer during the
Term of the Set of Agreements or the Termination Assistance Period are necessary for Customer to receive the Services, Vendor grants to Customer during the Term and the Termination Assistance Period, a non-exclusive, nontransferable and limited right to use and to permit its contractors to use, access, copy, maintain, and create Derivative Works of the record layout formats
or data input structure or data call codes to the Vendor Proprietary Materials
necessary to create automated interfaces between Vendor Proprietary Materials and Customer Proprietary Materials, in each case solely for the purpose
and in connection with and solely to the extent necessary for Customer to receive the Services (the “Data Interface Formats”). The license granted in
this Clause permits:
(i) Customer’s agents and representatives to use, access, copy, maintain, and create Derivative Works of Data Interface Formats; and
(ii) any other independent provider of technical support services to
use, access, copy, maintain, and create Derivative Works of Data Interface Formats; and
(iii) to sublicense third parties to do any of the foregoing.
In each case only during the Term and Termination Assistance Period and
solely for the purpose and in connection with and solely to the extent necessary for Customer to receive the Services. Customer acknowledges that the
use of the Data Interface Formats and all resulting Derivative Works thereof
shall be governed by the terms and conditions of the Set of Agreements.
(b) In case:
1) Vendor Proprietary Material has any Vendor Designated Third
Party Proprietary Material embedded; or
2) Customer desires to use the Vendor Proprietary Material beyond
the scope of the Set of Agreements; and
3) Vendor is entitled to additional use or license fees or may have to
pay to the third party licensor any fee for such additional use,
then Vendor will be entitled to such additional license fees from Customer for
such use by Customer beyond the scope contemplated by the applicable license agreement referenced in Clause 1.3.2(c) below.
(c) In addition to the license granted by Vendor to Customer as stated in
Clause 1.3.2 above, and except as otherwise expressly agreed otherwise in accordance with the Change Management Procedures, for all modifications to or
Derivative Works created from any Vendor Software to the extent such modifications to or Derivative Works are not otherwise owned by Customer or its
Affiliates and are made during the Term of the Set of Agreements or the Ter1029
mination Assistance Period in connection with the Set of Agreements and are
used in providing the Services, Vendor does hereby grant, and upon their
creation Vendor shall automatically grant without any further consideration, to
Customer and its Affiliates a license to use all such modification and Derivative Works relating to Vendor Software on the terms and conditions in the
Transformational Tools License Agreement. Except as expressly agreed otherwise in accordance with the Change Management Procedures, none of the
modifications to or Derivative Works created from any Vendor Software
which may be designated as governed by the License Agreement shall be
considered as designed for general commercial use by Vendor and part of the
Vendor “Software Product,” as that term is defined in the License Agreement and any related and in-force maintenance arrangements thereunder.
(d) For any Vendor Proprietary Materials being used to provide Services
which are Software, and for which the source code is not generally available
to Customer under the License Agreement, a current copy of such source code
will be maintained in escrow pursuant to any escrow arrangement with a third
party escrow agent mutually agreed upon by Customer and Vendor. The materials put into escrow will be on a mutually acceptable media in a format that
is accessible by commercially available software and will include a copy of
the commercially available software used to generate the copy on the media
and all program source code and a detailed description of system, operational
and user level documentation that would enable experienced programmers to
modify, compile, operate and maintain such Software independently of Vendor in the event that the escrow release provisions were enforced (“Vendor
Escrow Materials”).
(e) Vendor will deliver a sealed copy of the Vendor Escrow Materials to the
third party escrow agent to keep in a secure location and protect from disclosure to anyone. Customer will have the right to observe Vendor’s preparation
of the media on which the Vendor Escrow Materials are copied confirming the
accuracy and completeness of the Vendor Escrow Materials. To the extent
that the Vendor Escrow Materials, or part thereof, were modified in the applicable period, Vendor will refresh the Vendor Escrow Materials as requested
by Customer, but at least every quarter of a calendar year. In case of major
new versions or/and new releases Customer may request an earlier refresh.
All replacement copies of the media will contain a complete copy of the Vendor Escrow Materials, including any new and/or newly updated Vendor Escrow Materials created since the prior Vendor Escrow Materials were delivered to the third party escrow agent.
(f) The Escrow Agreement will be agreed upon by Customer, Vendor and the
third party escrow agent which will include the obligation for the escrow
agent to deliver the Vendor Escrow Materials to Customer in the event Vendor:
(i) ceases in whole or in part providing enhancement and support services as per the Set of Agreements for the Vendor Escrow Materials,
and
(ii) is no longer in business; or
(iii) is the subject of an Insolvency Event.
(g) Customer acknowledges and agrees that use of the source code is subject
to all of the terms and conditions of the Set of Agreements and the applicable
License Agreement or Transformational Tools License Agreement.
1.3.3 Vendor Proprietary Materials Being the Object of the Services
Any other license agreements between Customer and its Affiliates, on one
hand, and Vendor and its Affiliates, on the other hand, including the Agreement and the Transformational Tools License Agreement, pertaining to the
Vendor Proprietary Material used in performing the Services, whether concluded before or after Effective Date, will govern the terms and conditions of
the license, the escrow obligations and all other rights and obligations.
1.3.4 Competitive Developments
Notwithstanding the above, from time to time Customer may request Vendor
to assist Customer in developing Vendor Proprietary Materials which may
contain ideas or know-how which Customer states would give Customer a
competitive advantage. For such developments specifically identified by the
Parties as being a competitive development subject to this Clause in accordance with the Change Management Procedures (“Competitive Developments”), if Vendor develops such Competitive Developments, the rights and
obligations of the Parties shall be as specified in such writing executed in accordance with the Change Management Procedures. Vendor acknowledges
that such obligations may include Vendor’s covenant not to make available to
any competitor of Customer such Competitive Development for a period of
years, but that such covenant will not preclude Vendor from independently
developing similar functionality for any person, including a competitor of
Customer.
1.4 Vendor Designated Third Party Proprietary Materials
1031
(a) All Vendor Designated Third Party Proprietary Materials shall be the
property of such third party and governed by the applicable third party license
agreement(s).
(b) Upon written request from Customer, not more frequently than once every
quarter during the Term and the Termination Assistance Period, Vendor will
deliver to Customer, at no cost to Customer, a list of all of Vendor Designated
Third Party Proprietary Materials being used to provide the Services as of the
date of such delivery. To the extent known by Vendor, this list will be detailed according to the licensing requirements of the third party vendor and
will include full product description and third party vendor’s part-number, licensing metric and quantity of licensed and installed units per this Agreement
and applicable Work Orders. Customer will be required to pay any required
transfer, license or use fees.
(c) In addition to the requirements of clause (b) above, upon written request
from Customer, Vendor will assist Customer in obtaining maintenance and
support services from the third party licensor upon the expiration or termination of the Set of Agreements, in whole or in part. To the extent necessary
and requested by Customer, Vendor will assist Customer in negotiating with
any third party maintenance and support provider about obtaining such
maintenance and support.
(d) Upon written request from Customer Vendor will assist Customer in obtaining the rights to obtain and use, and upon Customer obtaining such rights,
Vendor shall provide to Customer the appropriate interfaces and related information, documentation and other technical details reasonably required to
enable Customer to use, develop or replace any of the above Vendor Designated Third Party Proprietary Materials as permitted under the relevant license
with the third party. Customer will be required to pay any required transfer,
license or use fees.
1.5 Work Products.
(a) Any proprietary rights, in particular Intellectual Property Rights, in connection with and related to:
(i) any enhancements or modifications to the Customer Materials delivered to Customer by Vendor;
(ii) any other newly developed Materials to the extent not modifications to or Derivative Works of Vendor Proprietary Materials made by
Vendor for Customer in performing the Services and/or jointly devel-
oped by Customer and Vendor in relation to the Set of Agreements;
and
(iii) any related documentation,
will as between the Parties hereby vest initially with and be exclusively owned
by Customer or as directed by Customer, its third party licensors and consequently the terms set out under Clause 1.1 (“Customer Proprietary Materials”).
(b) Where required to secure Customer ownership in any Derivative Work of
Customer Proprietary Materials the Work Products or the Intellectual Property
Rights therein or in the event that Applicable Law, any court, administrative
agency or any other adjudicative body will determine that all or parts of the
Work Products or any of the Intellectual Property Rights therein requires a
legal transfer or assignment, then Vendor hereby assigns and transfers to Customer at no additional cost and without limitation all of its rights to (including
title and interests) in such Work Products or any Intellectual Property Rights
therein upon their creation. Vendor will, where required, undertake any further confirmations and provide any assistance for the formal assignment of all
rights to Customer. Vendor will include a respective Customer copyright
statement in all Work Products, in particular in any source code and documentation.
(c) For the duration of the Term and the Termination Assistance Period, and
to the extent required for performing the Services, Customer hereby grants
Vendor a non-exclusive worldwide, royalty free license to use and modify the
Work Products, including the right to sublicense to third parties to do the same
on the terms and conditions stated in Clause 1.1 above.
(d) Upon Customer’s written request, Vendor will deliver to Customer, at no
cost to Customer, a current copy of all such Work Products in the form(s) in
use by Vendor in connection with the Services as of the date of such delivery.
(e) For any Work Product which is Software, Vendor will promptly as it is
developed by Vendor, provide Customer with the source code of the Software.
Such source code includes the program source code, a detailed description of
the system level and user level documentation that would enable experienced
programmers to modify, compile and maintain such Software and documentation for the Software.
(f) Vendor will not incorporate third party Materials, including but not limited to free or open source software into any of the Work Products without the
1033
advance written consent of Customer, or expressly identified as such in Customer approved Work Product functional specifications.
(g) Upon expiration or termination in whole or in part of the Set of Agreements or relevant parts thereof and at the end of any Termination Assistance
Period, Vendor will:
(i)
deliver to Customer, at no cost to Customer, a current copy of all
such Work Products (including a detailed description of any underlying
processes and controls that would enable experienced operations staff to
modify, compile and maintain the Services documented in any such
Work Products) in the form in use by Vendor in connection with the Services as of the date of such expiration or termination; and
(ii) irremediably destroy or erase (using a file erasure program that
renders previously stored data irretrievable) all other copies of the Work
Products in the possession or control of Vendor upon Customer’s confirmation that Customer has received such current copy. Upon Customer’s
request Vendor will offer to Customer to enter into a maintenance agreement, the maintenance being limited to corrective maintenance, and support agreement under fair terms and conditions, such terms not being less
advantageous to Customer as the terms and rates agreed to in the Set of
Agreements for comparable services or as the terms and rates offered to
other clients of Vendor, whichever is more favorable to Customer
1.6 Changes to Materials
(a) Except as specified in a Work Order or as may be otherwise approved in
writing by Customer or as otherwise provided in the Policies and Procedures
Manual, Vendor will not make any changes or modifications to:
(i) Customer Proprietary Materials;
(ii) Customer Designated Third Party Proprietary Materials, or
(iii) the Work Products,
that would alter the functionality of or degrade the performance of (i),
(ii) or (iii) above, or materially affect the Services or the day-to-day
operations of the business of Customer and/or any Customer Service
Recipients.
(b) Vendor will be responsible, at no charge to Customer, for any modification or enhancement to, or substitution for, Customer Proprietary Materials or
Customer Designated Third Party Proprietary Materials, the Work Products,
or any other hardware or Software for the provision and/or receipt of the Services necessitated by:
(i) unauthorized changes made by Vendor to Customer Proprietary
Materials, Customer Designated Third Party Proprietary Materials or
the Work Products; or
(ii)
changes to any Vendor Proprietary Materials or Vendor Designated
Third Party Proprietary Materials or related operating environments, it being
understood that Vendor may either modify the Materials or reverse the
changes and return to the version prior to such changes being made.
6. Title to Developed Materials Vests in Customer
1.1 Title and sole and exclusive ownership of any invention, device, design or
idea developed by Licensor while performing services hereunder, whether patentable or
otherwise, shall vest in Customer and Licensor agrees to take all necessary steps, and
execute all documents reasonably required by Customer to effectuate the vesting of
such title and ownership; provided, however, that in no event shall Licensor appoint
Customer its attorney-in-fact. Any development, modification or translation by
Licensor of copyrightable material shall be considered a “work for hire” under the U.S.
copyright laws and the copyright in and to such material shall belong to Customer. To
the extent the development, modification or translation may not be deemed a “work
for hire”; Licensor shall be deemed to have assigned all copyright rights therein to
effect such assignment. Licensor shall promptly provide Customer with copies of all
developments, modifications or translations made by or for Licensor. This ownership
shall not prevent Licensor and its agents from using technology or techniques of
general applicability to develop similar products for others.
COMMENT: Licensors should never agree to language appointing the
customer as its attorney in fact as the Licensor has no control over the
customer’s actions. A more prudent approach is to state that the failure
to cooperate shall constitute a material breach of the agreement.
1.2 Licensor shall not, without the written consent of Customer incorporate
any Publicly Available Software (defined below) into any part of the product or the
end result of the services that are delivered to Customer, except to the extent already
incorporated by Customer in the underlying product or services. As used herein, the
term “Publicly Available Software” means any software that requires as a condition
of use, modification or distribution that such software or other software incorporated
into, derived from or distributed with such software: (a) be disclosed or distributed in
source code form, (b) be licensed for the purpose of making derivative works, or (c)
be redistributable at no charge. If Licensor incorporates Publicly Available Software
except as described in this paragraph without Customer’s written consent, then any
such Publicly Available Software will be deemed to be considered “Software Product” with regard to the terms and conditions of Sections ___ (Authorized Agents of
1035
Customer), ___ (Intellectual Property Indemnification), ___ (Usage and Distribution)
and ___ (Warranty) below.
1.3 Licensor shall not, without the written consent of Customer, incorporate
any third party product into any part of the product or the end result of the services
that are delivered to Customer, except to the extent already incorporated by Customer
in the underlying product or services. If Licensor incorporates any third party product except as described in this paragraph without Customer’s written consent, then
any such third party product shall be deemed to be considered “Software Product”
with regard to the terms and conditions of Sections ___ (Authorized Agents of Customer), ___ (Intellectual Property Indemnification), ___ (Usage and Distribution) and
___ (Warranty) below.
1.4 Licensor and its agents shall own all right, title and interest, including all
worldwide intellectual property rights, in and to any pre-existing software,
documents, coding, processes, template tools and methodology, and any enhancements or improvements thereto not conceived of or developed under this
Agreement (“Intellectual Capital”). With respect to any Intellectual Capital,
Licensor hereby grants to Customer and to any Customer Affiliate a nonexclusive, non-transferable, limited, perpetual, royalty-free license to use such
Intellectual Capital in the normal course of Customer’s business. Intellectual
Capital shall not include Licensor’s commercial software products, which
shall be licensed in accordance with Licensor’s commercial license terms as
may be separately agreed between the parties.
7. Ownership of Software Modifications (§§ 3.5, 6.4)
In the event Licensee desires Licensor to develop a Modification to the System
for Licensee’s sole use, Licensee must advise Licensor of this restriction prior to
development. Upon receipt of such notice, the Modification shall be designated
as a “Licensee-Specific Modification” and identified as such in the associated
Work Order. The parties agree that the Licensee-Specific Modification shall
remain the sole property of Licensor; however, Licensee shall retain a license to
use such Licensee-Specific Modification for so long as Licensee retains a license
to use the System to which such Licensee-Specific Modification is made. Licensor
agrees that it shall not make a Licensee-Specific Modification available or disclose a
Licensee-Specific Modification to a third party without Licensee’s prior written
consent. At Licensee’s election, Licensee may retain the only copy/copies of a
Licensee-Specific Modification and upon termination or expiration of the license for
such Licensee-Specific Modification, Licensee may elect to either return such
Modification to Licensor or destroy such Modification and all copies thereof and
provide Licensor with an affidavit of such destruction. Notwithstanding the
foregoing, Licensee acknowledges that Licensor is in the business of providing
computer software and services to the insurance industry and nothing contained
herein shall prevent Licensor from independently developing computer software
that performs the same or similar function(s) as the Licensee-Specific
Modification(s).
COMMENT: Licensors who are marketing a product should insist on
including language to this effect to maintain the sanctity of their product. Licensors cannot effectively license and market their product if individual components are owned by many different clients. Licensees
should not be overly concerned about owning a module of the product,
as their goals (i.e., exclusivity, royalties, rebates, etc.) can usually be
achieved by other means.
8. Waiver – Moral Rights (Chapter 7.A.2)
If, by operation of Law, Vendor Personnel are deemed to retain any right in
any Deliverables or Intellectual Property Rights in such Deliverables, Vendor
hereby waives, and agrees to cause Vendor Personnel to waive, all such rights.
However, if waiver is not permissible under Law or does not grant to Customer the exclusive right to make, have made, sell, use and disclose, reproduce,
modify, prepare derivative works from, distribute, publicly perform or publicly display the Deliverables, Vendor hereby agrees not to assert, and to compel
Vendor Personnel to refrain from asserting, claims with regard to any Retained Rights, in any manner whatsoever.
COMMENT: Under the Berne Convention, moral rights may not be assigned, only waived. As such, the licensee should obtain a waiver of all
moral rights by the licensor and the licensor’s employees and subcontractors if any deliverable which the licensee will own is created outside
of the United States. The United States does not recognize and enforce
all of the provisions of the Berne Convention and thus a waiver is not
necessary if the work is performed within the United States. Nonetheless, a prudent licensee will include the above language in the relevant
agreement to provide comprehensive protection.
9. Waiver of Moral Rights
LICENSOR HEREBY WAIVES IN FAVOR OF LICENSEE ANY AND ALL
ARTIST’S OR MORAL RIGHTS (INCLUDING WITHOUT LIMITATION, ALL
RIGHTS OF INTEGRITY AND ATTRIBUTION) IT MAY HAVE PURSUANT TO
ANY STATE OR FEDERAL LAWS OF THE UNITED STATES IN RESPECT OF
ANY DELIVERABLES AND ALL SIMILAR RIGHTS UNDER THE LAWS OF ALL
OTHER APPLICABLE JURISDICTIONS.
10. Residual Knowledge
Notwithstanding any other provision of this Agreement to the contrary, each
party shall be free to use in its business, and to disclose to the extent inherently disclosed in the products and services offered to its customers, the “Residuals” (as defined below) from any deliverable, Work Product, or Confidential
Information produced or disclosed under the Set of Agreements relating to
1037
processing techniques, concepts and methods, subject only to the obligation
not to otherwise disclose, publish, or disseminate separately such information.
“Residuals” means that information in non-tangible form retained in the unaided mental impressions of such party’s personnel relating to the Services.
The foregoing shall not, however, authorize either party to disclose:
(a) the source of the Residual information or any information reasonably likely to reveal the source of such information;
(b) any of Customer’s financial, statistical, customer, personnel or other business related data;
(c) the business plans of Customer;
(d) any Policyholder Data;
(e) any confidential information of a third party, including Customer Designated Third Party Proprietary Materials or Vendor Designated Third Party
Proprietary Materials; or
(f) information intentionally committed to the memory of a person so as to
reduce it to tangible or intangible form to avoid the obligations otherwise contained in the Set of Agreements.
11. Residuals – Short Form (§ 12.7)
Nothing in this Agreement shall prohibit or restrict either party’s right to
develop, make, use, market, license or distribute products or services similar
to or competitive with those of the other party disclosed in the Confidential
Information as long as it shall not thereby breach this Agreement. Each party
acknowledges that the other may already possess or have developed products
or services similar to or competitive with those of the other party disclosed in
the Confidential Information. Further, either party shall be free to use for any
purpose the residuals (defined below) resulting from access to or work with
Confidential Information disclosed hereunder. The term “residuals” means
information in non-tangible form which may be retained in the unaided
memory by persons who have had access to the Confidential Information so
long as such persons have not studied the information for the purpose of
replicating the same from memory. Neither party shall have any obligation to
limit or restrict the assignment of such persons or to pay royalties for any
work resulting from the use of residuals.
12. Residuals – Unilateral – Feedback (§ 12.7)
During the course of this Agreement, Licensor may provide or Licensee may
solicit Licensor’s input regarding Licensee’s Software, products, services,
business or technology plans, including, without limitation, comments or
suggestions regarding the possible creation, modification, correction,
improvement or enhancement of Licensee Software, products and/or services, or
input as to whether Licensor believes Licensee’s development direction is
consistent with their own business and IT needs, the technology marketplace in
general, and the like (collectively “Feedback”). Licensor acknowledges and
agrees that any information disclosed by Licensee during discussions related to
Feedback shall be considered Licensee Confidential Information and shall be
protected from disclosure in accordance with the terms of this Agreement. In
order for Licensee to utilize such Feedback, Licensor grants to Licensee a nonexclusive, perpetual, irrevocable, worldwide, royalty-free license, with the right
to sublicense to Licensee’s licensees and customers, under all relevant Licensor
intellectual property rights, to use, publish, and disclose such Feedback in any
manner Licensee chooses and to display, perform, copy, make, have made, use,
sell, and otherwise dispose of Licensee’s and its sublicensee’s products or
services embodying Feedback in any manner and via any media Licensee
chooses, without reference to the source. Licensee shall be entitled to use
Feedback for any purpose without restriction or remuneration of any kind with
respect to Licensor and/or its representatives. Licensor acknowledges that the
information related to Licensee’s Software, products, services, business or
technology plans, disclosed to it under this Agreement, is only intended as
possible strategies, developments, and functionalities of the Licensee products or
services and is not intended to be binding upon Licensee to any particular course
of business, product strategy, and/or development.
13. Residuals – Expanded (§ 12.7)
Nothing in this Agreement shall restrict any employee or representative of a
Party from using general ideas, concepts, practices, learning, or know-how
relating to the Services that are retained in the unaided memory of such
employee or representative after performing the obligations of such Party under
this Agreement, except to the extent that such use infringes upon any patent,
copyright, or other intellectual property right of a Party or its Affiliates (or, in
the case of Licensor, any Eligible Recipient); provided, however, that this
Section ___ shall not (i) be deemed to limit either Party’s obligations under this
Agreement with respect to the disclosure or use of Proprietary Information, or
(ii) operate or be construed as permitting an employee or representative of
Licensor to disclose, publish, disseminate, or use (a) the source of any
1039
Proprietary Information of Licensee or an Eligible Recipient, (b) any financial,
statistical, or personnel information of Licensee or an Eligible Recipient, or (c)
the business plans of Licensee or the Eligible Recipients. An individual’s
memory is unaided if the individual has not intentionally memorized the
Proprietary Information for the purpose of retaining and subsequently using or
disclosing it and does not identify the information as Proprietary Information
upon recollection. For avoidance of doubt, the foregoing would not permit
Licensor Personnel to use Proprietary Information of Licensee or an Eligible
Recipient (other than ideas, concepts, practices, learning, and know-how
relating generally to application management, selection and design, IT
Infrastructure services, enterprise resource planning, and clinical application
and revenue cycle services and systems) for any purpose other than the
provision of Services under this Agreement.
14. Security Interest for Trial Testing
Title and full ownership rights to the Software are and shall remain with
Licensor. Licensor hereby reserves, and Customer hereby agrees that
Licensor shall have, a security interest in the Software, and Customer further
agrees to execute and deliver, upon request, any UCC-1 statements, financing
statements or any other instruments, recordings or filings deemed necessary
by Licensor to perfect and preserve its right, title, and interest in and to the
Software under applicable local law. Customer shall not allow any other
security interest to be established with respect to the Software. Customer
shall not move the Software or any portion thereof from the Site without the
prior written approval of Licensor.
DD. Limitation of Liability (Chapter 5.I)
1. Damages Payable by Vendor for Breach of Privacy
Obligations
To the extent such unauthorized disclosure or access is attributable to a breach
by Vendor or Vendor Personnel of Vendor’s obligations under this Agreement
with respect to Personal Data, Vendor shall bear (A) the costs incurred by
Vendor in complying with its legal obligations relating to such breach and (B)
in addition to any other damages for which Vendor may be liable for under
this Agreement (except to the extent such disclosure is due to Customer’s
failing to provide (including through authorization to provide as part of the
Services) the level of encryption required under applicable Law to protect
such data), the following costs incurred by Customer in complying with their
legal obligations relating to such breach, to the extent applicable, (1) the cost
of providing notice to affected individuals, (2) the cost of providing such
affected individuals with credit monitoring services for twelve (12) months,
(3) the cost of providing such affected individuals with $50,000 of identity
theft insurance, (4) call center support for such affected individuals for thirty
(30) days, and (5) any other Losses for which Vendor would be liable under
Sections __ (“Vendor Indemnity For Breach of Vendor Confidentiality and
Data Protection Obligations”) and __ (“Carve Out From Limitation of
Liability For Breach of Vendor Confidentiality and Data Protection
Obligations”)
2. Breaches of Data Privacy Obligations Subject to
Limitation of Liability
. . . and (v) Losses occasioned by any breach of a Party’s obligations under
Article __ (”Confidentiality”); provided that breaches by Vendor in respect
of Customer Processed Data that (1) arise out of performance or nonperformance of the Services and (2) are not the result of fraud, gross
negligence or willful misconduct shall be subject to the Liability Cap.
For purposes of the preceding clause (v), “Customer Processed Data” means
information entered into Software or Equipment by or on behalf of Customer,
as well as information derived from this information, including any such
information as stored in or processed through Equipment or Software.
3. Breaches of Data Privacy Obligations Subject to
Limitation of Liability – Alternative Language
IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY SPECIAL
OR CONSEQUENTIAL DAMAGES, REGARDLESS OF THE FORM OF
ACTION, WHETHER IN CONTRACT, IN TORT INCLUDING
NEGLIGENCE, BY STATUTE OR UNDER ANY QUASICONTRACTUAL THEORY OF LIABILITY, EVEN IF A PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. The
foregoing limitations of liability will not apply and nothing in this Agreement
shall affect either party’s liability: (i) for Vendor’s indemnification obligations
specified in this Agreement; (ii) for any damages caused by the intentional or
grossly negligent acts or omissions of such party; (iii) for any non-operational
breach of any confidentiality obligation specified herein; or (iv) to the extent
1041
prohibited by applicable law.
4.
Limitation of Liability - General
(a) Except for (i) any damages arising out of Vendor’s gross
negligence or willful misconduct, (ii) any damages resulting from a
breach of Vendor’s indemnification obligations set forth herein and
(iii) any damages resulting from Vendor’s breach of its privacy,
confidentiality or security obligations hereunder (including protection
of Protected Health Information under the Business Associate
Agreement), in no event shall Vendor’s liability arising out of or
related to this Agreement, whether in contract, tort or under any other
theory of liability, exceed the total amount paid and payable by
Customer hereunder.
(b) Except for (i) any damages arising out of Customer’s gross
negligence or willful misconduct, and (ii) any damages resulting from
customer’s negligent breach of its confidentiality obligations
hereunder, customer’s total cumulative liability arising out of or
related to this Agreement, whether in contract, tort or under any other
theory of liability, shall not exceed the total amounts paid (less any
refunds or credits) by customer hereunder during the 12 month period
preceding the date of the claim.
1.1 Exclusion of Damages.
(a) Except for (i) any damages arising out of Vendor’s gross
negligence or willful misconduct, (ii) any damages resulting from a
breach of Vendor’s indemnification obligations set forth herein and
(iii) any damages resulting from Vendor’s negligent breach of its
privacy, confidentiality or security obligations hereunder (including
protection of Protected Health Information under the Business
Associate Agreement), in no event shall Vendor have any liability to
customer for any lost profits or revenues or for any indirect, special,
incidental, consequential, cover or punitive damages however caused,
whether in contract, tort or under any other theory of liability, and
whether or not has been advised of the possibility of such damages.
The foregoing disclaimer shall not apply to the extent prohibited by
applicable law.
(b) Except for (i) any damages arising out of Customer’s gross
negligence or willful misconduct, and (ii) any damages resulting from
Customer’s negligent breach of its confidentiality obligations
hereunder, in no event shall Customer have any liability to vendor for
any lost profits or revenues or for any indirect, special, incidental,
consequential, cover or punitive damages however caused, whether in
contract, tort or under any other theory of liability, and whether or not
customer has been advised of the possibility of such damages. The
foregoing disclaimer shall not apply to the extent prohibited by
applicable law.
1.3
The remedies specified in this Agreement are cumulative, and in
addition to any remedies available in law or equity.
5. Limitation of Liability – General – Alternative Language
EACH PARTY’S LIABILITY FOR DAMAGES UNDER AND
RELATED TO THIS CONTRACT (INCLUDING ALL STATEMENTS OF
WORK) AND ITS/THEIR SUBJECT MATTER FOR ALL EVENTS,
ACTS, OR OMISSIONS WILL BE LIMITED TO DIRECT DAMAGES IN
AN AMOUNT EQUAL TO THE GREATER OF ________ MILLION
DOLLARS, AND THE TOTAL CHARGES PAYABLE TO LICENSOR
PURSUANT TO THE STATEMENTS OF WORK UNDER WHICH THE
EVENT GIVING RISE TO THE LIABILITY OCCURRED , WHETHER
BASED ON ONE OR MORE ACTIONS OR CLAIMS IN CONTRACT,
EQUITY, WARRANTY, STRICT LIABILITY, NEGLIGENCE OR OTHER
TORT, OR OTHERWISE. FOR PURPOSES OF CLARIFICATION, THE
MONETARY LIMITATION OF LIABILITY SET FORTH ABOVE IS AN
AGGREGATE “CAP” FOR ALL CLAIMS BY ONE PARTY AGAINST
THE OTHER PARTY UNDER AN INDIVIDUAL STATEMENTS OF
WORK; THE SIZE OF THE CAP MAY VARY FROM TIME TO TIME
BASED UPON THE CHARGES AND WILL BE DETERMINED AS OF
THE POINT IN TIME WHEN THE ACT OR OMISSION GIVING RISE TO
SUCH LIABILITY OCCURRED, AND THE CAP AS TO A PARTY’S
LIABILITY WILL BE REDUCED FOR EACH CLAIM PAID BY SUCH
PARTY UNDER AN INDIVIDUAL WORK ORDER UNDER THIS
PROVISION.
Limitation on Liability – Broken Out by Type Including
Personally Identifiable Information (“PII”) and Failure to Comply
with Laws
6.
1.1 Consequential Damages. Neither Customer nor Licensor shall be li1043
able for any indirect, incidental, special, or consequential damages, arising out
of or relating to its performance or failure to perform under this Agreement,
even if advised of the possibility of such damages.
1.2 Direct Damages
(a) Definition of Direct Damages. Notwithstanding the provisions
of Section 1.1 (Consequential Damages), each Party shall be liable to the
other Party for any direct damages arising out of or relating to such Party’s
performance or failure to perform under this Agreement, which damages include: (i) costs of reconstructing or reloading data; (ii) costs of implementing
and performing work-arounds regarding a service failure; (iii) costs of replacing lost, stolen or damaged goods or materials; (iv) costs to procure replacement services from an alternate source as a result of a failure to perform, to
the extent in excess of the applicable Fees; (v) overtime, straight time and related expenses and allocated overhead (including travel, lodging, wages) as a
result of a failure to perform; and (vi) payments or penalties imposed by a
governmental or regulatory body as a result of a failure to comply.
(b) Cap on Direct Damages. Notwithstanding Section 1.2(a) (Definition of Direct Damages) and subject to Section 1.2(c) (Cap for PII Claims
and Claims for Failure to Comply With Laws), the liability of Customer and
Licensor, whether based on an action or claim in contract, equity, negligence,
tort or otherwise, for any event, act or omission shall not exceed an amount
equal to the sum of the aggregate of: (i) Fees paid for the 12 consecutive month
period immediately preceding the date of the first occurrence of the applicable
event, act, or omission giving rise to such damages (or if less than 12 months
have elapsed since the Effective Date, then 12 times the average monthly Fees
paid during the elapsed time since the Effective Date); and (ii) the Service Level
Credits incurred to date by Licensor on the date such damages are awarded; and
(c) Cap for PII Claims and Claims for Failure to Comply With
Laws. Notwithstanding Sections 1.2(a) (Definition of Direct Damages) and
1.2(b) (Cap on Direct Damages), the liability of Licensor, whether based on an
action or claim in contract, equity, negligence, tort or otherwise, for (i) PII
Claims; (ii) any other claims arising out of a breach of Licensor’s obligations
under Sections [cross-reference to sections addressing compliance with laws,
change in laws, representation regarding compliance with law, covenant
regarding compliance with laws (i.e., obtaining permits)], or; and (iii) the
indemnity obligations set forth in: (A) Section [cross-reference to indemnity
related to representation regarding compliance with law], (B)
Section [cross-reference to indemnity for violation of laws for employment
claims (e.g., protected classes)], to the extent such claims arises out of a failure
of Licensor to comply with applicable Laws as set forth therein; and (C)
Section [cross-reference to indemnity related breach of Licensor’s
obligations with respect to Customer Data], to the extent such Customer Data
constitutes PII; collectively, shall not exceed the greater of: (1) an amount
equal to the sum of the aggregate of the amount determined in accordance with
Section 1.2(b) (Cap on Direct Damages) plus an additional amount equal to
the Fees paid by Customer to Licensor for the 18-month period immediately
preceding the date of first occurrence of the applicable event, act or omission
giving rise to such damages (or if less than 18 months have elapsed since the
Effective Date, then 18 times the average monthly Fees paid during the elapsed
time since the Effective Date); or (2) $______________. Notwithstanding the
foregoing, the amount specified in clause (2) above shall be reduced by the
amount of any damages paid by Licensor that are subject to the damages caps
set forth in Section 1.2 (b) (Cap on Direct Damages) and in clause (1) of this
Section 1.2 (c).
1.3 Exclusions. The limitations or exculpations of liability set forth in
Section 1.1 (Consequential Damages) and Section 1.2 (Direct Damages) shall
not apply to: (a) the failure of: (i) Customer to make payments of undisputed
Fees; or (ii) Licensor to issue credits (including Reduced Resource Credits and
Service Level Credits) or otherwise make payments due under this Agreement;
(b) a Party’s indemnification obligations, as set forth in Sections [crossreference to specified indemnities] (other than the indemnity obligations
which are subject to the cap in Section 1.2(c) (Cap for PII Claims and Claims
for Failure to Comply With Laws) as described therein); (c) breaches of
Article [cross-reference to intellectual property article], Article [crossreference to confidentiality article] (other than with respect to a PII Claim,
which shall be subject to the cap set forth in Section 1.2(c) (Cap for PII
Claims and Claims for Failure to Comply With Laws); (d) Licensor
obligations with respect to Customer Data (other than PII Claims); (e) liability
resulting from the fraud, gross negligence, recklessness, or intentional or willful
misconduct of a Party; (f) damages occasioned by Licensor’s wrongful
termination of the Agreement, abandonment of work performed or to be
performed, or willful refusal to provide the Services; (g) any amounts, including
taxes, interest and penalties, assessed against a Party that are the obligation of
the other Party pursuant to Article [cross-reference to taxes article]; (h)
relating to personal injury (including death) or real or tangible personal
(excluding data) property loss or damage resulting from the acts or omissions of
a Party or its Affiliates or, in the case of Customer, the Customer Agents and in
the case of Licensor, the Licensor Agents; (i) fines, sanctions, damages,
judgments or other penalties imposed on a Party by a Governmental Authority
or arbitrator as a result of a breach of such Party’s obligations under this
Agreement; and (j) otherwise to the extent that such limitation is not permitted
by applicable Law.
“PII” means any information which identifies or is capable of identifying
an individual, or is otherwise defined as “personal data” by applicable Laws
(including the European Union Data Protection Directive (Directive
95/46/EC)) that is disclosed to or accessed by Licensor by or on behalf of, or
collected by Licensor from, Customer, Customer’s Affiliates or any Customer
Agents, including: (a) an individual’s name, address, phone number, e-mail
address, initials, social security number, ID number or credit card information;
and (b) information, data and materials, including demographic, medical and
financial information, that relate to the past, present, or future physical or
mental health or condition of an individual or the provision of health care to
an individual.
“PII Claim” means any claim by Customer or a third party that arises out
1045
of or in connection with a breach by Licensor of its data privacy and data
security obligations under the Agreement, including Licensors’
obligations under Section ___ (Confidentiality) and ____ (Data Privacy and
Security) of the Agreement that relates to or involves PII.
7. Limitation of Liability- Definition of Damages
To the extent not prohibited by applicable law, in no event shall either Party
have any liability to the other Party for any indirect, incidental, consequential,
special or punitive damages, including without limitation damages for lost
profits, arising out of or relating to this Agreement, except that Vendor shall
be liable, subject to the quantitative limits contained in this Article __ for all
Other Damages listed in categories (a)-(d) and Company shall be liable,
subject to the quantitative limits contained in this Article __, for all Other
Damages listed in category (d).
"Other Damages" means: (a) costs of cover and technological and manual
work-arounds with respect to the items to the extent effected by a Vendor
Default, irrespective of whether or not they are deemed to be direct damages,
incurred by Company in completing the System following a Vendor default;
(b) in the event of a Vendor default, stranded, actual, out-of- pocket costs
reasonably incurred by Company following the Effective Date of this
Agreement to the extent contemplated under or reasonably connected to the
Scope of Work, on third party goods and services or site leases, licenses and
permits in anticipation of System completion, without material breach by
Vendor, solely to the extent it is not commercially reasonable to reallocate
such goods and services to other Company uses; (c) fines and penalties
imposed by governmental and regulatory authorities, whether or not
indemnified under Article __ (“Indemnity”); and (d) all amounts indemnified
under Sections ________ (“General Indemnity” and “Intellectual Property
Indemnity”) by the applicable indemnifying Party hereunder, whether or not
deemed to be indirect, incidental, consequential, special or punitive damages,
including without limitation damages for lost profits.
All liabilities shall be calculated after giving effect to any mitigation benefits
received by either Party hereunder in exercising its rights pursuant to this
Article __, and in no event shall either Party’s liability to the other Party
hereunder with respect to any obligation arising hereunder exceed the value of
this Agreement. Notwithstanding the foregoing or anything herein to the
contrary, the limitations of liability provided for herein shall not be applicable
to either Party hereto with respect to matters as to which such limitations are
not enforceable under applicable law and to Vendor’s indemnification
obligations under Sections ___and ____ (“General Indemnity” and
“Intellectual Property Indemnity”).
8.
Disclaimer of Liability - Use of Services
By undertaking this engagement, Vendor agrees to provide Customer with the
assessment services and mitigation strategies described herein to be used by
Customer in its sole discretion. These services are intended only to provide
guidance, and cannot be deemed to guarantee outcomes. Customer agrees to
review and approve the clinical accuracy of any recommendations provided to
it and to ensure the suitability of such recommendations for use in its
hospitals, consistent with all other hospital procedures, policies and protocols.
Vendor assumes no responsibility for, nor shall Vendor be held liable to
Customer for the success or failure of any actions it takes in reliance on our
services, including as relates to its compliance with [Governmental Entity]
mandates or state licensure proceedings generally.
9.
Disclaimer of Liability - Dangerous Applications
The Licensed Materials are not designed, intended, or certified for use in
components of systems intended for the operation of weapons, weapons
systems, nuclear installations, means of mass transportation, aviation, lifesupport computers or equipment (including resuscitation equipment and
surgical implants), pollution control, hazardous substances management, or
for any other inherently dangerous application in which the failure of the
Licensed Materials could create a situation where personal injury or death or
physical damages to property may occur ("Dangerous Applications").
Licensee understands that use of the Licensed Materials by Licensee in
Dangerous Applications is fully at the risk of Licensee. It shall be Licensee's
responsibility to obtain any and all certifications and/or approvals required
and to take all appropriate fail-safe, backup, redundancy and other measures
to ensure the safe use of such applications if the Licensed Materials is used for
Dangerous Applications, and Licensor disclaims liability for any damages
caused by such use of the Licensed Materials.
1047
10.
Disclaimer of Liability- Hazardous Applications
1.1
Customer acknowledges that Licensor is licensing Products to
Customer for the purpose of reducing the design and implementation time that
would otherwise have been required in making Customer’s designs.
Customer agrees that Licensor has no control over Customer’s testing or the
specific applications and use that Customer will make of Products. Licensor
Products are not specifically designed for use in the operation of nuclear
facilities, aircraft navigation or communications systems, air traffic control,
life support systems, medical devices or other equipment in which the failure
of Licensor Products could lead to death, personal injury, or severe physical or
environmental damage (“Hazardous Applications”).
1.2
CUSTOMER ACKNOWLEDGES IT IS SOLELY RESPONSIBLE
FOR TESTING PRODUCTS USED IN HAZARDOUS APPLICATIONS
AND SHALL BE SOLELY LIABLE FOR ANY DAMAGES RESULTING
FROM SUCH USE. NEITHER LICENSOR NOR ITS LICENSORS SHALL
BE LIABLE FOR ANY DAMAGES RESULTING FROM OR IN
CONNECTION WITH THE USE OF PRODUCTS IN ANY HAZARDOUS
APPLICATION. THE PROVISIONS OF THIS SECTION __ SHALL
SURVIVE THE TERMINATION OF THIS AGREEMENT.
EE.
Maintenance (Chapter 15)
1. Reinstatement of Maintenance – Favors Licensor (§
3.14)
Licensor’s obligation to offer support for the full Committed Support Period is conditional on continuous services; any request by Licensee to reestablish services after
a period of time in which such services were not provided (regardless of whether
within the Committed Support Period or otherwise) shall only be accepted in Licensor’s sole discretion, and shall be subject to payment of a fee specified by Licensor
at the time.
Licensee may reinstate Maintenance Services for any Application hereunder by
paying a reinstatement charge consisting of an amount equivalent to the pro rata
portion of the Annual Maintenance Fee that would have been due hereunder for the
period elapsed since termination; provided, however, that such reinstatement charge
shall not exceed twenty-five percent (25%) of the license fee for such Application in
effect at the time of reinstatement.
Licensee may reinstate any terminated Maintenance Services by giving the
Licensor at least thirty (30) days’ written prior notice. Upon such reinstatement, the
Licensor shall provide Licensee with the most current Upgrades at no additional cost.
There will be no reinstatement penalty or fee. Upon reinstatement, the fees for
Maintenance Services shall not exceed the fees in effect at the time of termination
plus any increases permitted hereunder.
COMMENT: Reinstatement addresses the situation where a customer
ceased purchasing maintenance and later seeks to resume maintenance.
Stopping and starting maintenance is problematic for the licensor as the licensee most likely is no longer operating the most current version of the
software because it did not receive the updates and enhancements that were
implemented during the period it did not purchase maintenance. In general,
most licensors support only the two most recent versions of the supported
product. Licensors want to prevent a customer from “gaming” the system
(i.e., not paying maintenance in the hopes that nothing breaks, or is substantially upgraded), and then resuming maintenance once there is a new
version or some other reason to resume maintenance of the software.
2. Reinstatement of Maintenance – Favors Licensor Alternate Language
In the event that Licensee terminates Maintenance, Licensee may later reinstate
Maintenance provided the Software licensed by Licensee is upgraded to the thencurrent Software Release. The fee charged for such Maintenance reinstatement shall be
equal
to the cumulative standard Maintenance charges applicable for the Maintenance
Terms during which Maintenance lapsed, plus an amount equal to 1.5 multiplied by the
Maintenance charges for the then-current Maintenance Term.
3. Reinstatement of Maintenance – Favors Licensor Alternative Language
In the event that Licensee’s support and maintenance services lapse for any
reason, Licensee shall pay a fee (“Reinstatement Fee”) for reinstatement of
the services provided under this Agreement. Additionally, in order to reinstate Maintenance, Licensee must first migrate its Software licenses to the
then currently available Software version. The Reinstatement Fee shall be
defined as the total Maintenance Fee, calculated at a rate of twenty percent
(20%) of the license fees for Licensee’s Software, per annum, for the period
commencing on the date that support and maintenance services lapsed and
ending on the date of reinstatement of support and maintenance services. In
addition to the Reinstatement Fee, Licensee shall pay Licensor the Support
Fees for a twelve (12) month support and maintenance period, commencing
on the date of reinstatement of support and maintenance services, at Licensor’s then-current support and maintenance prices.
1049
4. Reinstatement of Maintenance – Favors Licensee Alternative Language
There shall be no Maintenance and Support reinstatement penalty if Licensee
desires to reinstate Maintenance and Support previously cancelled for deployed licensed Software capacity. However, Maintenance and Support fees
for reinstated licensed Software capacity will be invoiced and due immediately upon reinstatement based on the pro-rated balance left in the then current
annual Maintenance and Support period.
5. Commitment to Offer Support on Listed Operating
Environments
Licensor shall provide support for the Software on Licensee’s hardware and in Licensee’s current and future operating environments provided those operating environments
are listed by Licensor as supported operating environments for the software.
COMMENT: Licensors should carefully consider making any commitment to maintain “future operating environments” as the licensor may
lack the ability to do so or it may not be cost efficient to do so. The language above provides an element of protection to the licensor as the operating environment is limited to the operating environments listed in the attached exhibit.
6. Maintenance Fee Credit – Arising from Failure of
Software to Achieve Acceptance in a Timely Manner
Licensor and Licensee will work together diligently and in good faith to achieve
acceptance of the Software not later than [date], time being of the essence. In the
event that Licensee provides timely cooperation to Licensor and the Software is not
accepted by [date], then the Maintenance Fees set forth in Exhibit A of this Agreement shall be reduced by one percent (1%) [for the initial Maintenance Term]. In
the event that Licensee provides timely cooperation to Licensor and the Software is
not accepted by [insert a later date than the previously inserted date], then the
Maintenance Fees sets forth in Exhibit A of this Agreement shall be reduced by two
percent (2%) [for the initial Maintenance Term].
COMMENT: This paragraph provides for liquidated damages if the software is not accepted within the contractually required time frame. This language has been carefully drafted to require the licensee’s “timely cooperation” as a condition precedent to the imposition of liquated damages.
7. Rejection of Update (Chapter 15)
Licensee must install patches and any new version of the Software within a reasonable time following commercial release of such new version by Licensor. Licensor
shall not be responsible for maintenance services with respect to the Software if the
Licensee refuses to permit updating of the Software by all applicable maintenance
releases or if Licensee has not ensured that the hardware and network services are
correctly configured and operating according to specifications, and operating system
software and other third party software is current, and has all manufacturer/supplierrecommended updates and patches.
8.
Change of Operating System
During any period for which Licensee has paid for Maintenance and Support,
Vendor shall provide updates, bug fixes and new releases of the Software
licensed by Licensee hereunder, including modifications, enhancements and
corresponding Documentation and telephone technical support at no
additional charge. If any Software is superseded or discontinued or replaced
and, provided that Licensee is current on Maintenance and Support, Vendor
will provide replacement Software, at no additional charge, provided such
replacement Software exists.
FF. Miscellaneous
1. Health Crisis Preparations – Pandemics
1.1 In connection with Customer’s health crisis preparedness and business continuation efforts and to maintain a safe working environment, Vendor agrees to the
following:
(a) Vendor must immediately report to Customer’s Chief Medical Officer or
his/her designee all cases of communicable or infectious diseases that are
required to be reported to any applicable state or federal authorities and
that are contracted by any Employees who have been on-site at Customer
and the location where the Employees provided Services to Customer.
Vendor’s reporting requirement with respect to any individual will
continue for ninety (90) days following the date the individual in
question was at Customer’s site. Vendor should not disclose the name of
the applicable Employee to Customer. Vendor will cooperate with the
Chief Medical Officer or his/her designee in investigating the risk to
Customer’s personnel from possible exposure to Employees.
(b) In the event of a health crisis, only Employees who have been approved
for access to a Customer site by using Customer’s on-line screening tool
found at http://www.XXXXX.com or, alternatively, by completing a
phone or in-person screening of a similar nature will be provided access.
If such Employee(s) or personnel is not approved to access a Customer
site or is advised that Customer’s pandemic or health crisis policies will
prohibit entry onto Customer’s site, Customer shall not be responsible
for making payment to Vendor for such time that the Employee(s) or
1051
personnel was not permitted to enter the Customer site(s).
1.2 Vendor also acknowledges and agrees that Customer may (a) disclose information regarding its facilities and/or personnel to public health authorities as required
by law and/or as the situation requires, and (b) update its pandemic preparedness and
business continuation requirements from time to time and/or as the situation requires.
In furtherance of the foregoing, Vendor at its own cost will take whatever reasonable
remedial action is requested by Customer and in accordance with industry standards
and applicable laws.
COMMENT: With significant media focus on the Swine flu, H1N1 virus
and other health pandemics, many customers are seeking to impose certain
health reporting standards. These issues have raised the question of
whether a health pandemic would qualify as an event of force majeure
given such pandemics they are widely discussed in the media and by
government agencies and are thus foreseeable. Prudent parties will
implement their own policies and implement backup plans to ensure they
can meet their contractual obligations in the event of a health pandemic.
2. Blue Pencil Language
If any restriction set forth in this Section is found by any court of competent
jurisdiction to be unenforceable because they extend for too long a period of
time or over too great a range of activities or in too broad a geographic area,
they will be interpreted to extend only over the maximum period of time,
range of activities or geographic area as to which they may be enforceable.
3.
Non-circumvention of the Agreement
The Parties agree not to act through or in conjunction with third parties to
circumvent or frustrate the purposes of this Agreement, and further agree not
to structure future transactions where the effect of such transaction is to limit
the licenses, rights, releases, covenants, or immunities provided for under this
Agreement.
4.
Location of Performance of Services – Quality
Certifications
Vendor shall perform all Services hereunder either at an Approved Vendor
Facility (as defined below) or at designated Customer Premises. Vendor shall
not relocate any Customer Designated Area (except pursuant to the Business
Continuity Plan) or Vendor Facilities, nor establish a satellite facility, for
providing Services, without the prior written approval of the
Customer. Customer and Vendor agree that initially Services shall be
performed from a Vendor facility located at __________, India or any other
Vendor location in India as preferred and mutually agreed between Vendor
and the Customer and documented in the applicable SOW or Work Order
(“Approved Vendor Facility”) and at the Customer Premises. Vendor shall
be responsible for the compliance of all Vendor Facilities used to perform
Services with the Customer Offshore Security Controls and any other
specifications provided by Customer to Vendor. Unless expressly provided
otherwise in the applicable SOW or Work Order, all Vendor Facilities used to
perform Services shall be certified as CMM Level 5 or better and compliant
with ISO 27001 certification requirements.
5.
Gifts, Gratuities and Conflicts of Interest
Vendor certifies that, to the best of Vendor’s knowledge and belief, no economic, beneficial, employment or managerial relationship exists between
Vendor and any employee of Customer, or between Vendor and any relative
of an employee of Customer, that would tend in any way to influence such
employee in the performance of his or her duties on behalf of Customer in
connection with the awarding, making, amending or making determinations
concerning the performance of this or any other agreement.
The exchange or offering of any money, gift item, personal service,
entertainment or unusual hospitality by Vendor to Customer is expressly
prohibited. This prohibition is equally applicable to Parties’ officers,
employees, agents or immediate family members. Any violation of this
provision constitutes a material breach of this Agreement.
6. Amendment of Agreement - URLs
It is Customer’s responsibility to regularly monitor all applicable URLs
referenced in this Agreement. Customer confirms that it has access to the
Internet and confirms that prior to entering into this Agreement it has read the
policies on the websites referenced above and agrees to the terms and
conditions set out in those policies. Customer undertakes that it will visit the
websites referenced above on a regular basis so that it is aware of any
amendments Vendor may make to those policies from time to time.
1053
7.
Vendor Ability to Perform Dependant on Customer Cooperation
Customer acknowledges that Vendor’s ability to perform the Services requires Customer to timely perform certain tasks and provide certain tangible
and intangible items. Customer will provide, and cause its contractors and
agents to provide, such cooperation and assistance as may be requested by
Vendor or otherwise deemed to be reasonably required by Vendor in the performance of the Services. Such assistance includes the furnishing to Vendor
in a timely manner of all relevant materials in current, accurate and complete
form, and the taking of such actions as shall be specifically required under the
terms of the Statement of Work. Vendor shall be excused from any failure to
properly deliver the Services, or in any delay thereof, that is directly attributable to any failure by Customer to perform its obligations under this Agreement
or any Statement of Work.
9. Financials
Licensor will furnish to Licensee such financial data, information and statements as Licensee may reasonably request in order for Licensee to verify the
financial condition of Licensor and its ability to perform the terms of this
Agreement, including, without limitation and if so requested, audited balance
sheet, statement of income, changes in stockholders’ equity and changes in
financial position for any period reasonably requested by Licensee.
GG. Offshore Labor
1. No Use of Offshore Labor – Warranty
Licensor warrants and represents that any and all Services and Deliverables hereunder
shall only be provided by its employees residing within the United States of America.
Licensor will ensure that any information learned by it as a result of entering into this
Agreement shall never leave the jurisdiction of the United States of America and shall
never be accessed by anyone from outside the United States of America or by anyone
who is not an employee of Licensor. Any modification to the foregoing limitation shall
require the express written consent signed in ink by Licensee’s President, Chief Operating Officer or Executive Vice President. Any breach of the foregoing shall constitute a
material breach of this Agreement.
2. No Use of Offshore Labor
Licensor shall not be permitted to utilize services of non-United States staffing or
contracted labor without the express written permission of Licensee. In the event
Licensor has secured Licensee’s permission to perform some of the tasks in connection with the provision of the Services to Licensee at an offshore location, Licensor
will comply with Licensee’s requirements respecting offshore performance, including
the requirements set out in Exhibit __ (“Security”).
3. Assignment of Foreign Nationals to Project (§§ 9, 43)
Licensor agrees that it will not supply nationals of those countries for which the U.S.
government or any agency thereof requires an export license or other government
approval, who are not permanent residents or citizens of the United States unless
Licensor first notifies Licensee and Licensee specifically agrees that said national
may provide services without requiring an export license (or unless Licensor first
obtains such a license and provides a copy to Licensee). Licensor shall be solely
responsible for determining the nationality of its employees and contractors.
4. Prohibition on Working From Home by Offshore
Employees
Licensor agrees that it will not permit its Offshore employees and Project Managers
delivering Services under Statements of Work to work from home without Licensee’s
prior written approval. Licensee may impose such reasonable conditions and restrictions with respect to any Licensee-approved Onshore work-from-home arrangements as it deems appropriate, in its sole discretion with a thirty (30) days prior written
notice to Licensor.
5. Proof of Right to Work in United States
Licensee reserves the right to ask for and Licensor shall agree to provide such proof
of all Licensor Personnel’s right to work lawfully in the United States. If such right
is not proven, Licensor will cure the breach or immediately find a replacement or
reimburse Licensee, and Licensor shall indemnify, hold harmless and pay any and all
fees and costs, for any loss and damage, directly or indirectly, caused by the breach
(including but not limited to the cost of replacement and training of replacement as
well as any legal cost).
6. Onsite and Onshore Labor – Certification by Licensor
that it can Supply Required Foreign Labor
It is contemplated by the Parties that the services to be provided pursuant to each
Statement of Work will include resources to be provided by Licensor Onsite at Licensee Service Locations designated by Licensee, as well as resources to be provided by
Licensor Onshore at Licensor Service Locations designated by Licensee. Licensor,
upon acceptance of a SOW, represents and warrants that it has the capability to provide
1055
such Onsite and Onshore resources in the number and of the qualifications required to
provide Services under such SOW. Licensor shall have administrative and financial
responsibility for all visa, approval and other activities necessary to provide all Onsite
and Onshore resources.
7. Secondary Displacement
Licensee acknowledges and understands that Licensor may from time to time assign its
employees Onsite throughout the United States on H-1B non-immigrant status to
perform Services. Licensee is therefore subject to the provisions of U.S. Immigration
laws and labor laws pertaining to such non-immigrant visas, including the American
Competitiveness and Workforce Improvement Act (ACWIA). Licensor confirms that it
has not displaced, and does not intend to displace, any U.S. worker in an “essentially
equivalent” position during the 90 days prior to placement of Licensor’s personnel in
H-1B status at Licensee’s facilities in the same geographic region. Furthermore, as of
the date of this Agreement, Licensor does not intend to displace any such U.S. workers
during the 90 days subsequent to such placement.
COMMENT: The ACWIA prohibits certain employers from displacing
full time employees with H-1 B visa holders. The intent of the law is to
protect U.S. workers by preventing the Licensor from displacing any of
the Licensee’s U.S. workers through the use of H-1 B visa holders.
8. Assignment of Copyright Interests – Indian
Employees (Chapter 7.A)
All worldwide right, title and interest in and to all Licensee Intellectual Property and
New Intellectual Property, together with any and all intellectual property rights
inherent in any of the Licensee Intellectual Property and New Intellectual Property
and appurtenant thereto including all patent rights, copyrights, trademarks, knowhow and trade secrets, shall belong exclusively to Licensee perpetually. Licensor
hereby assigns, transfers and conveys irrevocably and perpetually to Licensee all of
its worldwide right, title and interest in and to any and all Licensee Intellectual
Property and New Intellectual Property. Licensor hereby waives any and all of its
rights under (i) Section 57 of the Indian Copyright Act, 1957, as amended, relating to
certain “moral rights” that Licensor may have in any Licensee Intellectual Property
or New Intellectual Property, and (ii) Section 53A of the Indian Copyright Act, 1957,
as amended, relating to rights that Licensor may have in certain resale proceeds of
certain of any Licensee Intellectual Property and New Intellectual Property that may
be deemed to be literary works for purposes of such Section 53A.
9. Transition of Foreign Employees in Event of
Termination
(a) In addition to any other rights set forth in Section ___ (“Transition Services”) or otherwise herein, from the date hereof and through the final expiration of this
Agreement, Licensor shall, and shall cause their officers, directors, employees and attorneys and other personnel, to assist and cooperate with Licensee and its Affiliates,
and its and their employees, agents and legal representatives, with any immigration
process, registration, filing, continuation, extension or other procedure necessary or
desirable to comply with any Legal requirements so that each Rehired Employee who
is a foreign national (including those employees listed in Schedule _____ (collectively,
the “Foreign Employees”) is either in valid non-immigrant status entitling such employee to work for Licensor, or the Licensor’ successor-in-interest for immigration
purposes, (whether in the H1-B, L-1A or L-1B status), or has a valid Employment Authorization Document (EAD) entitling such Foreign Employee to work for Licensor or
for a subsequent employer as a new hire by virtue of a filed application for adjustment
of status pending for more than 180 days, and that all of their dependents can remain
legally in the United States on the Closing Date in accordance with any and all Legal
Requirements.
(b) As soon as possible on or after _______, 20__, Licensor shall, and shall
cause its officers, directors, employees and attorneys and other personnel, to file an
H1-B petitions and change of status applications for the individuals listed on Schedule _____ (the “L-1 Employees”). Licensor hereby agrees that from the Termination
Date through the date that amended H1-B petitions can be and have been filed by
Licensee for the L-1 Employees (no sooner than ___________, 20___ and no later
than __________, 20___), such L-1 Employees shall remain in the Licensor’s employ, and under the supervision of the Licensor to provide transitional services to Licensee. Provision of such services shall not be an arrangement to provide labor for
hire, but rather shall be a placement in connection with the provision of a service for
which specialized knowledge specific to the Licensor employer is necessary to complete the sale of the Business. Throughout this transitional period, the L-1 employees
shall be paid from the Licensor’s payroll and shall continue to be eligible to participate prior to the consummation of the transactions contemplated in this Agreement.
Licensee agrees to reimburse Licensor for all out-of-pocket filing fees required in
connection with the change of status of all L-1 Employees to H-1B and any filing
fees associated with filing for their dependents.
(c) Licensor hereby acknowledges and agrees that it has filed or is in the process
of filing any necessary extensions with respect to any Foreign employee and his or her
dependents whose non-immigration status or employment authorization documents will
expire between the date hereof and ninety (90) days after the Closing Date, except in
the case of all L-1 Employees, which must have their L-1 status extended until at least
____________, 20___.
(d) As soon as possible after the day hereof, Licensor shall advise all Foreign
Employees of the prospective Closing and provide specific information to all Foreign
Employees regarding the implications of travel outside the U.S. to prevent inadvertent
delays overseas in the case of visa expiration or Advance parole expiration prior to the
Closing and/or prior to direct employment with Licensee in the case of the L-1
Employees.
(e) Immediately after the date hereof, and, in the case of the L-1 Employees, until
such employees begin employment directly with Licensee, Licensor will take all steps
necessary to protect to the fullest extent possible, the priority date and all processes
associated with permanent residency applications (in whichever stage) filed on behalf
of all Foreign Employees and their dependents. Without limiting the generality of
the foregoing, Licensor shall, and shall cause their officers, directors, employees and
attorneys and other personnel, to: (i) provide copies of all immigration files of the
Foreign Employees and their dependents retained by the Licensor or its Affiliates; (ii)
assist in obtaining all documentation from each such Foreign Employee (and their
dependents) necessary to make any filing on behalf of such Foreign Employee (and their
1057
dependents); (iii) provide financial documentation of the Licensor’s ability to pay the
wage offered in the labor certification application of such Foreign Employees at the time
the labor certification was filed; (iv) abstain from revoking or withdrawing any pending
or approved labor certification application or I-140 petitions obtained by the Licensor
or its Affiliates on behalf of any of the Foreign Employees (and their dependents); (v)
protect the permanent immigration cases and non-immigrant cases of each Foreign Employee (and their dependents), including, without limitation, any labor certification application, any I-140 petitions and any applications for adjustment of status; (vi) in the
case of any pending labor certification, Licensor shall provide affirmative responses on
the 45-day letter; (vii) provide copies to Licensee of all correspondence pertaining to all
Foreign Employees both to and from Licensor; (viii) provide original approvals received
after Closing of labor certifications or other approvals pertaining to such Foreign Employees and L-1 Employees (and their dependents); and (ix) take any and all other steps
to preserve permanent residence processing and enable Licensee to file documentation
as a successor-in-interest for immigration purposes. Any out-of-pocket third party
expenses incurred by Licensor in order to satisfy their obligations under this Section
_____ shall be reimbursed by Licensee.
Information Protection – Deemed Export Rule – Favors
10.
Vendor
Company acknowledges that under the 'deemed export rule' of United
States law, Company's information shall be considered exported as soon
as it is received by a foreign national (when such foreign national is not a
United States citizen or permanent resident), even if such person is based
In the United States, Company acknowledges that many of Vendor's personnel are foreign nationals for the purposes of the 'deemed export rule.’
Further, Company represents and warrants that it has procured appropriate export licenses/approvals before sharing any Company inform ation
with Vendor and its personnel.
HH.
1.
Offshore Services (Chapter 19)
Offshore Services Provisions
“Offshore” means any location outside of the United States of America, including its territories and possessions.
“Offshore Service” means a Service to be provided by Vendor under this
Agreement which is performed in whole or in part outside of the United States
of America, including its territories and possessions.
1.1 Provider shall have the right, but not the obligation, to perform the Services at Offshore locations, subject to the terms of this Agreement. Provider
shall disclose its intention to perform the Services Offshore by designating the
proposed Offshore location in the applicable Statement of Work. Customer
shall have the right, in the exercise of its reasonable discretion, to either reject
a proposal that specific Services be performed Offshore or to reject any proposed Offshore location. In the event that Customer approves of Provider
providing Services at an Offshore location, Provider shall be responsible for
insuring compliance with any and all applicable statutes, rules and regulations,
specifically including but not limited to those specified in Sections __
(“Books, Records and Compliance”) and __ (“HIPAA Requirements”) of
this Agreement. All Customer proprietary software, data and other materials
shall be physically located within the United States, regardless if any Services
are provided Offshore. Application programming shall be performed on computer equipment located in the United States at locations which are designated
in the applicable Statement of Work.
1.2 The parties acknowledge and agree that the United States government
maintains listings of Offshore locations with which United States entities may
not conduct business as well as a listing of computer software types that may
not be provided to individuals in certain Offshore locations. As between the
parties to this Agreement, Provider shall be responsible for ensuring that none
of its designated Offshore locations are affected by such restrictions and shall
promptly notify Customer if it becomes aware of any of its locations involved
in providing the Services are restricted by government action.
1.3 If Provider commits a material breach of its obligations under this
Agreement with respect to its performance of any Offshore Services and does
not cure such breach in accordance with the provisions of Section ___ (“Termination for Material Breach”) then Customer may, at its option, either: (a)
terminate the Statement of Work pursuant to Section (“Termination for Material Breach”); or (b) require Provider to relocate the performance of the
Services that are the subject of the breach to the United States or to another
Offshore location (where Provider has the necessary facilities and staff to provide such Services). In the event of such a required relocation, Provider shall
be responsible for all transition costs and increased taxes or other expenses, if
any, associated with the relocation of such Services. For the avoidance of
doubt, if the Statement of Work calls for the provision of Services at an hourly
rate, that rate may not increase based on increased labor costs, currency valuation rates, or any other basis because of the relocation, absent Customer’s express written agreement. If Provider fails to relocate the Services as provided
1059
herein, such failure to relocate shall be deemed a material breach of this
Agreement, notwithstanding Customer’s prior approval of the relocation.
1.4 Provider shall establish and maintain a contingency plan to deal with
disruptions of Offshore Services. As of the Effective Date, the current
contingency plan for such Offshore Services is attached hereto as Exhibit ___
- Contingency Plan. If Provider determines after a reasonable period of time
after the occurrence of a disruption that Provider will be unable to restore the
impacted Services at the affected Offshore location(s) for an extended period
of time, Provider will develop a plan to migrate the performance of such
impacted Offshore Services to one or more other Provider service centers in
the United States or other Offshore locations (where Provider has the
necessary facilities and staff to provide such services), which plan shall
include: (i) the identity of such Provider service center(s); and (ii) an
estimated time frame for the completion of such migration. Such plan will be
delivered to Customer no later than forty-five (45) days after the occurrence of
the disruption and will be subject to Customer’s approval, which shall not be
unreasonably withheld. Nothing in this Section is intended to limit
Customer’s termination rights described elsewhere in this Agreement.
Provider shall make arrangements to have suitable insurance for Offshore locations consistent with Section ____ (“Insurance”) of this Agreement, adjusted as necessary to comply with applicable local laws and regulations.
1.5
2.
Approved Offshore Locations
As of the Effective Date, the Parties anticipate that Vendor may perform
Offshore Activities, and desire to facilitate such Offshore Activities by
incorporating the required country-specific terms in the following
Attachments as part of this Agreement:
1. Canada Offshore Services Attachment;
2. India Offshore Services Attachment; and
3. Vietnam Offshore Services Attachment.
3. Offshore Development – Requires Customer Consent
1. Prior Approval Required. Subject to the terms of Section _______
(“Offshore Activities Exceptions”) below, Vendor will not provide Offshore
Activities under this Agreement, whether directly or a via any agent or
subcontractor, without the prior written consent of Customer. If Customer
agrees to provide such consent, it will provide such consent by listing the
Authorized Services Location(s) in the Master Terms, the Attachment or in the
applicable Transaction Document where the Offshore Activities are described.
This consent may be withheld or withdrawn in Customer’s sole discretion.
2. Exceptions. The restrictions in Section __(“Offshore Activities - Prior
Approval Required”) will not apply to (a) Vendor’s efforts to develop or
modify its commercially available software at a location outside the United
States, provided that the development or modification is not specifically
funded by Customer and does not include or reflect any Customer
Confidential Information; (b) Vendor’s manufacture of commercially
available goods at a location outside the United States; or (c) Vendor’s
standard telephone or email technical support of its products or services from
a location outside the United States which does not require: (1) access to
Customer Confidential Information, (2) access to or connectivity with
Customer’s computing environments, or (3) direct communication with any
Customer customer or consumer.
4.
Requirements for Offshore Activities
The additional terms set forth below apply to Vendor’s provision of Offshore
Activities:
1. Language. The Parties hereby confirm their express wish that this
Agreement and all documents, agreements or notices directly or indirectly
related thereto be written in the English language. In the event this
Agreement is also executed, or has been translated to, a local-language
version, the Parties agree that the English-language version maintained by
Customer shall control in the event of any discrepancies.
2. Documentation. If the Offshore Activities include the development of a
Deliverable, including the design for the performance of Services or
specifications for software development, Vendor will contemporaneously
develop and maintain precise, detailed written information relating to the
operation and functionality of a Deliverable, including original specification
and any modifications, updates, or corrections to Products or Services, which
Vendor will deliver to Customer at least once per month, in a format
acceptable to Customer. Vendor will also document, log and report all work,
including all modifications, corrections and enhancements done on any
Deliverable in order to create a comprehensive knowledge base of all
Deliverable(s), problems, errors and corrections. Such documentation will
include all materials Vendor prepares and all materials Vendor prepared and
1061
used internally to develop the Deliverable(s) and will be of the type, quantity
and level of detail sufficient to permit users having a reasonable level of
experience with the relevant computer environment and industry applications
to effectively use the Deliverable(s), and programmers having a reasonable
level of experience with the relevant computer environment and industry
applications to modify and maintain the Deliverable successfully. All such
documentation, logs and reports will be recorded in English.
3. Networks. If a Network Connection (as defined below) is required for the
Offshore Activities, Vendor agrees to pay all costs associated with any
Network Connections established between Customer and the computing
environment(s) used by Vendor and Vendor Personnel. For the purposes of
this section a “network connection” is the connection between Vendor and
Customer’s network(s), or any connectivity used to transmit data during the
provision of Offshore Activities hereunder, and includes equipment (for
networks, demilitarized zone (“DMZ”) networks and DMZ development),
hardware, software, internal support of these networks and systems, security
code reviews, and connectivity charges. In addition, a network connection
includes those costs incurred (i) from the initial network connection build, and
(ii) from maintaining network connection throughout the term of this
Agreement at any transmission or volume levels to any and all Vendor or third
party facilities used for the provision of Services hereunder.
II. Open Source Software (Chapter 10)
1. Restrictions on Open Source Software
The parties contemplate the use of certain open source software, and agree as follows:
1.1 “Non-Permissive Open Source Code” means any software program, or
portion thereof, that is licensed under a license that requires as a condition of use,
modification, and/or distribution of the software subject to the license, that such
software or other software combined and/or distributed with such software be (i)
disclosed or distributed in source code form; (ii) licensed for the purpose of making
derivative works; or (iii) redistributable at no charge.
1.2 “Permissive Open Source Code” means any software program, or portion thereof, that is licensed under a license that (a) grants the user the right to freely
use, copy, modify, distribute and display the source code for a software program and
(b) does not require as a condition of use, modification, and/or distribution of the
software subject to the license, that such software or other software combined and/or
distributed with such software be (i) disclosed or distributed in source code form; (ii)
licensed for the purpose of making derivative works; or (iii) redistributable at no
charge. For purposes of clarity, software subject to the Berkeley Style Database license available on the Open Source Initiative website (www.opensource.org) would
be considered Permissive Open Source Code while software licensed under the General Public License (also available on the Open Source Initiative website) would not.
2.1 The parties acknowledge that a portion of the software to be delivered
under this Agreement may be Permissive Open Source Code. Licensor represents and
warrants that Licensor shall not take any action for the Term of this Agreement that
would alter such software’s status as Permissive Open Source Code as defined above.
2.2 Licensor represents and warrants that any and all software to be delivered
under this Agreement does not, and will not, contain or require to function properly,
any Non-Permissive Open Source Code except as identified on Exhibit __.
2. Request to Use Third Party and Open Source Software
Vendor shall prominently declare in the applicable SOW under a section
entitled “Third Party Intellectual Property” any third party and open source
code or intellectual property: (i) incorporated into any Deliverables or (ii) that
constitutes a dependency for any Deliverable (each a “3PP Dependency”).
Each 3PP Dependency declaration shall include all necessary documentation,
including license terms and copyright notices, for Customer to be able to
adequately determine its rights to the 3PP Dependency. Customer hereby
rejects any Deliverables containing any 3PP Dependency (i) that is not
declared in an SOW; or (ii) that it incompatible with the assignments or
licenses granted in Section __ (“Intellectual Property Rights”). 3PP
Dependencies may only be added by the SOW Change Order process set forth
in the Agreement.
JJ. Outsourcing
1. Transfer of Software Licenses
However, with respect to any Program licensed for outsourcing use under
Section __ (“Outsourcing Use of Programs”), Customer shall have the right
to assign and transfer such Programs to the applicable Outsource Customer for
which such Program licenses were acquired if (i) Customer, the Outsource
Customer (as defined in Section __ (“Outsourcing Use of Programs”) and
Vendor enter into a standard assignment agreement in the form attached
hereto as Attachment __ - Assignment Agreement and incorporated herein
by this reference, and (ii) the Outsource Customer and Vendor have entered
into a Software License and Services Agreement.
2. Use of Programs - Outsourcing
1. Outsourcing Use of Programs
1063
1.1 Outsourcing Use of Programs Licensed by Customer
Vendor acknowledges that Customer is in the business of providing
outsourcing services or other data-processing services to any third party which
is not a competitor of Vendor (each, an “Outsource Customer”) and that an
Outsource Customer may retain Customer as an outsourcing services provider
to perform certain data processing services for the benefit of and on behalf of
the applicable Outsource Customer. Notwithstanding any other provisions of
this Agreement, for each engagement by an Outsource Customer, Customer
shall have the right to order and acquire Programs under the terms of this
Agreement solely for the purposes of using such Programs for the benefit and
on the behalf of the applicable Outsource Customer. Customer agrees that
Programs acquired and used for such purposes shall not be used for the benefit
of more than one (1) Outsource Customer. Further, Customer shall not use
such Programs for its own internal data processing purposes or for any other
purposes which are not solely for the benefit of the applicable Outsource
Customer. On each order for Programs for outsourcing use, Customer shall
designate that the Programs will be used for outsourcing services and shall
identify the applicable Outsource Customer for which the ordered Programs
will be used. As further specified in Section ____ (“Transfer and
Assignment”), Customer may assign and transfer such Programs to the
applicable Outsource Customer.
1.2 Outsourcing Use of Program Assigned to Outsource Customer or
Licensed to Outsource Customer
With respect to (i) Programs assigned and transferred to an Outsource
Customer by Customer under Section ____ (“Transfer and Assignment”) or
(ii) Programs originally licensed by Vendor to an Outsource Customer,
Vendor acknowledges that an Outsource Customer may retain Customer to
perform outsourcing or other data-processing services with such Programs for
the benefit of an on behalf of such Outsource Customer. Notwithstanding any
other provisions of the applicable Vendor Software License and Services
Agreement between Vendor and each such Outsource Customer (the
“Outsource Customer SLSA”), each Outsource Customer shall have the
right to grant access to the Programs to Customer, solely for the purpose of
performing such services for the Outsource Customer. Also, the Outsource
Customer shall have the right to install such Programs on computers owned
by, leased to, or under the sole control of Customer. Customer agrees that its
use of the Programs shall be governed by the terms and conditions of the
applicable Outsource Customer SLSA. The Programs shall only be used on
behalf of and for the benefit of the applicable Outsource Customer. Access to
the Vendor Program(s) shall be limited solely to those employees of Customer
necessary to provide outsourcing or other data-processing services for an
Outsource Customer.
1.3 Termination of Outsourcing Services
Upon termination of Customer’s services for an Outsource Customer,
Customer’s right to use the Programs used for outsourcing or other dataprocessing services on behalf of the applicable Outsource Customer shall also
terminate. If the Programs were licensed under the terms of Section ___
(“License Grant“) and have not been assigned or transferred to the Outsource
Customer prior to the termination of Customer’s services for the Outsource
Customer, within thirty (30) days of date of termination, Customer shall (i)
assign and transfer the applicable Programs to the applicable Outsource
Customer under Section _____ (“Transfer and Assignment”) and (ii) shall
destroy all copies of the applicable Programs used for such Outsource
Customer in its possession. If the Programs used by Customer under Section
1.2 (“Outsourcing Use of Program Assigned to Outsource Customer or
Licensed to Outsource Customer“) on behalf of an Outsource Customer,
within thirty (30) days of date of termination, Customer shall destroy all
copies of the applicable Programs used for such Outsource Customer in its
possession. This requirement applies to copies in all forms, partial and
complete, in all types of media and computer memory, and whether or not
modified or merged into other materials.
3. Customer Requested Software
For any Third Party Software (other than Third Party Software listed in
subsection (i) and (ii) above), that is required to perform Services that will run
on any assets provided by Vendor and used by Vendor Personnel in
performing Services (“Customer Requested Software”), Customer shall
either provide to Vendor access to the Customer Requested Software for use
in performance of Services or request Vendor to obtain licenses for such Third
Party Software directly for use in connection with performance of Services;
provided such Customer Requested Software are made available to Vendor by
the licensor of such Customer Requested Software. In the event Vendor is
requested by Customer in writing to obtain licenses for the Customer
Requested Software, Vendor shall provide to Customer a firm quote from
licensor or resellers of such Customer Requested Software (including license
fee) for obtaining licenses to use such Customer Requested Software for
purposes of providing Services at the Vendor Facilities located in India.
Vendor agrees that prior to execution of the license agreement relating to the
Customer Requested Software, Vendor shall provide a copy of the license
1065
agreement and terms to Customer for review and Customer shall have the
right to approve the terms of agreement relating to licensing of such software
from third parties; provided that Customer’s approval shall not constitute an
opinion as to the legal appropriateness or the adequacy of the terms of such
license agreements
KK. Policies (Forms P 1-14)
1. Customer Policies – General
Vendor agrees to comply with, and cause its Employees to comply, with any and all
Customer policies, procedures and standards, including without limitation, Customer’s
travel and expense policies, privacy and information security policies, Customer’s security procedures applicable to persons performing Services at Customer’s premises,
and Customer’s policies for vendors at http://www.xxxxxx.com, all of which Customer
may update or revise from time to time.
COMMENT: Licensors should be hesitant to agree to be bound by
policies set forth on a URL, as they may change causing the licensor to
be in breach of the agreement or incur additional costs. At a minimum,
the licensor should require the licensee to notify the licensor in advance
of any changes to the policies and compensate the licensor for any
increased costs it incurs in complying with the policy.
2. Use of Internet Access by Licensor Employees
Working at Licensee Site
Licensee acknowledges that Licensor’s workers may have business reasons to access
the Internet on site at Licensee’s during billable work time. Licensee requires that
this Internet access be limited to business use only. Licensee will monitor Internet
usage for compliance with this section. In the event a Licensor worker accesses the
Internet for non Licensee business reasons, Licensor will be notified of the time spent
in non-business related activity. Licensor shall reimburse Licensee for all nonLicensee Internet usage in half hour increments at the current billing rates for nonLicensee usage during billable work time, within thirty (30) days of the reported
violation.
Accessing or attempting to access unauthorized sites such as those containing
adult content and/or any material that would be considered offensive or disrespectful
to others is cause for immediate dismissal of the Licensor worker from Licensee’s
premises and without any required advance notice to Licensor. This type of Internet
usage is considered cause for cancellation of all Licensor contractual obligations by
Licensee with advance notice and opportunity to cure. Licensor will be notified by
Licensee in writing of the immediate dismissal and the objectionable access by its
worker. Licensor shall replace the individual with another equally qualified representative within forty-eight (48) hours.
3. Policy and Procedures Manual
(a) Delivery and Contents. As part of the Services, and at no additional charge
to Licensee, Licensor shall deliver to Licensee for its review, comment and approval
(i) an outline of the topics to be addressed in the Policy and Procedures Manual
within thirty (30) days after the Commencement Date; (ii) a final draft of the sections
of the Policy and Procedures Manual relating to each Functional Service Area within
forty-five (45) days after the initiation of Services in such Functional Service Area; and
(iii) an integrated Policy and Procedures Manual for all Services within ninety (90)
days after the initiation of Services in the last of the Functional Service Areas to be initiated (the “Policy and Procedures Manual”). At a minimum, the Policy and Procedures Manual shall include the following:
(i) a detailed description of the Services and the manner in which each will
be performed by Licensor, including (A) the Equipment, Software, and
Systems to be procured, operated, supported, or used; (B) documentation (including operations manuals, user guides, specifications, policies/procedures, and disaster recovery plans) providing further details
regarding such Services; (C) the specific activities to be undertaken by
Licensor in connection with each Service, including, where appropriate, the direction, supervision, monitoring, staffing, reporting, planning,
and oversight activities to be performed by Licensor under this Agreement; (D) the checkpoint reviews, testing, acceptance, controls, and
other procedures to be implemented and used to assure service quality;
and (E) the processes, methodologies, and controls to be implemented
and used by Licensor to ensure compliance with applicable Laws;
(ii) the procedures for Licensee/Licensor interaction and communication,
including (A) call lists; (B) procedures for and limits on direct communication by Licensor with Licensee personnel; (C) problem management and escalation procedures; (D) Change Control Procedures; (E)
priority and project procedures; (F) Acceptance related procedures
(subject to Section _____); (G) quality assurance procedures and
checkpoint reviews; (H) the project formation process and implementation methodology; and (I) annual and quarterly financial objectives,
budgets, and performance goals; and
(iii) practices and procedures addressing such other issues and matters as
Licensee shall require.
Licensor shall incorporate Licensee’s then-current policies and procedures in
the Policy and Procedures Manual to the extent it is directed to do so by Licensee.
(b) Revision and Maintenance. Licensor shall incorporate any comments or
suggestions of Licensee into the Policy and Procedures Manual and shall deliver a
final revised version to Licensee within fifteen (15) days of its receipt of such comments and suggestions for Licensee’s approval. The Policy and Procedures Manual
will be delivered and maintained by Licensor in hard copy and electronic formats and
will be accessible electronically to Licensee management and Authorized Users in a
manner consistent with Licensee’s security policies.
(c) Compliance. Licensor shall perform the Services in accordance with applicable Laws and Licensee’s then-current policies and procedures until the Policy and
Procedures Manual is finalized and agreed upon by the Parties. Thereafter, Licensor
shall perform the Services in accordance with the Policy and Procedures Manual. In
the event of a conflict between the provisions of this Agreement and the Policy and
Procedures Manual, the provisions of this Agreement shall control unless the Parties
expressly agree otherwise and such agreement is set forth in the relevant portion of the
Policy and Procedures Manual.
1067
(d) Modification and Updating. Licensor shall promptly modify and update
the Policy and Procedures Manual quarterly to reflect changes in the operations or
procedures described therein and to comply with Licensee Standards, the Technology
Plan, and Strategic Plans as described in Section ___. Licensor shall provide the
proposed changes in the manual to Licensee for review, comment and approval. To the
extent such change could (i) increase Licensee’s total costs of receiving the Services;
(ii) have adverse impact or require changes as described in Section ___ (Change
Orders), or (iii) violate or be inconsistent with the Licensee Standards, the Technology
Plan, or Strategic Plans, Licensor shall not implement such change without first
obtaining Licensee’s approval, which Licensee may withhold in its sole discretion.
(e) Annual Review. The Parties shall meet to perform a formal annual review
of the Policy and Procedures Manual on each anniversary of the Effective Date.
4. Policy and Procedures Manual – Alternate Language
1.1 The “Procedures Manual” shall describe how Licensor shall perform and
deliver the Services under this Agreement, the Equipment and Software being used,
and the documentation (e.g., operations manuals, user guides, specifications) that
provides further details of such activities. The Procedures Manual shall describe the
activities Licensor proposes to undertake in order to provide the Services, including
those direction, supervision, monitoring, staffing, reporting, planning, and oversight
activities normally undertaken to provide services of the type Licensor is to provide
under this Agreement. The Procedures Manual also shall include the items described
in Section ____of Schedule ____, descriptions of the acceptance testing and quality
assurance procedures approved by Licensee, and other standards and procedures of
Licensor pertinent to Licensee’s interaction with Licensor in obtaining the Services.
The Procedures Manual shall be suitable for use by Licensee to understand the
Services.
1.2 Within ninety (90) days after the Effective Date, Licensor shall deliver a
draft Procedures Manual to Licensee, for Licensee’s comments and review. Licensor
shall incorporate reasonable comments or suggestions of Licensee and shall finalize
the Procedures Manual thirty (30) days after receiving Licensee’s comments. The
final Procedures Manual shall be subject to the approval of Licensee. Licensor shall
periodically update the Procedures Manual to reflect changes in the operations or
procedures described therein. Updates of the Procedures Manual shall be provided to
Licensee for review, comment, and approval. Licensor shall perform the Services in
accordance with the Procedures Manual. The Procedures Manual shall not be used to
amend this Agreement. In the event of a conflict between the provisions of this
Agreement and the Procedures Manual, the provisions of this Agreement shall
control.
5.
Information Security Requirements
1.1 Security. With respect to Services performed at Vendor Facilities, Vendor
shall comply with the requirements of the Customer Offshore Security Controls
set forth in Schedule __ at all times, as such policy may be revised by Customer
from time to time. In the event of any revisions to the Customer Offshore Security Controls, Vendor shall make all changes necessary to be in compliance with
the then current Customer Offshore Security Controls within thirty (30) days af-
ter receiving notice from Customer. Vendor shall participate and cooperate in
Customer’s periodic review and verification of Vendor Personnel’s access privileges to the Customer Systems.
1.2 Vendor shall report any non-compliance with the Customer Offshore Security Controls to Customer promptly, but in no event later than four (4) hours after
becoming aware of the non-compliance, and shall immediately remediate any
deficiencies in its security controls that are revealed. Continued or repeated noncompliance with the reporting obligations over a period of two (2) months shall
be considered a material breach of this Agreement. For any Services under an
SOW, Vendor agrees to analyze the security requirements and to implement
such additional security requirements reasonably requested by Customer in writing. Specific security requirements for particular SOWs shall be set forth in the
applicable SOW (“SOW Security Requirements”). Vendor shall be in compliance with the specific SOW Security Requirements before commencing work on
the applicable SOW. Vendor agrees that any changes in the timing for implementation of the Customer Offshore Security Controls and any SOW Security
Requirements will need to be approved in advance in writing by the Customer.
Without limitation by the forgoing or any other provision of the Agreement, if
Vendor becomes aware (i) that any unauthorized access, disclosure or use of Patient/Personal Data has occurred in connection with the performance of the Services, and/or (ii) of any issue that may impact patient safety; each such event
described in subsections (i) and (ii), an “Information Security Breach”, Vendor
shall promptly notify (within one (1) hour after any Vendor Personnel, any Vendor employee and/or subcontractor learns of the Information Security Breach)
Customer and the applicable Customer SOW Manager of such Information Security Breach, and, without limiting Vendor’s obligations under this Agreement,
Vendor shall promptly take reasonable corrective actions to mitigate the immediate effects of and prevent further Information Security Breaches.
1.3
Vendor shall train all Vendor Personnel in the protection and security of
Customer Systems, Customer Confidential Information, Customer Data, Related
Documentation, and Deliverables, and in training the Vendor Personnel, Vendor
shall ensure that each Vendor Personnel is knowledgeable on the Customer Offshore Security Controls and its implementation. Security awareness training
shall be completed annually by each Vendor Personnel involved in performing
the Services. Vendor shall maintain records of such training and Customer shall
have the right to audit such training records during normal business hours after
providing reasonable notice to Vendor.
1.4
Vendor shall perform a risk assessment of security risks and an evaluation of Vendor’s security controls for Vendor Facilities, disaster recovery site
1069
and shared resources between Vendor Facilities and Customer’s Facilities. In
addition, Vendor agrees to cooperate and assist with the performance of any risk
assessment conducted by Customer and/or its designees. Vendor shall implement security controls and practices to mitigate risks identified during such assessment. During the term of this Agreement, Vendor shall perform a risk assessment of information technology every six (6) months and of the physical security once every calendar year (the “Risk Assessment”); provided that additional Risk Assessments shall be conducted by Vendor as requested by Customer
in the event of any breach of the Customer Offshore Security Controls and/or
SOW Security Requirements. The Risk Assessment shall (a) describe scenarios
and associated risks of security incidents and the system of controls that Vendor
has implemented to effectively mitigate risks; (b) identify control weaknesses
and plans to implement and resolve control weaknesses; and (c) a description of
information and physical security controls, and action plans to address weaknesses. Vendor shall provide Customer with a copy of the Risk Assessment report.
1.5
Vendor shall provide Services (i) in compliance with CMM Level 5 processes or better and (ii) meeting the certification requirements of ISO 27001.
Vendor shall not separately charge Customer for the development, implementation, testing of the Business Continuity Plan or compliance with CMM Level 5
and ISO 27001. Vendor also shall not charge separately for revision and auditing. Upon Customer’s request, Vendor shall cooperate with Customer in obtaining permission for Customer to review any auditor’s work papers and to interview the audit manager with respect to any audit of such certifications, Vendor
shall submit to Customer the name of the organization from which Vendor shall
obtain ISO 27001 certification and the proposed schedule for obtaining such certification no later than thirty (30) days after the Effective Date.
1.6
Vendor shall (i) provide Virus Detection Software and Malicious Code
Detection Software for the Customer Designated Area in accordance with the
Customer Offshore Security Controls and in accordance with the industry standards; and (ii) ensure that, unless otherwise specifically permitted by Customer in
writing, no portable computing device, including, but not limited to, Personal
Digital Assistant (PDA), laptop computers, Personal Storage Devices (flash
drives, memory sticks, cameras, Digital Music Players, etc.), or cell phones shall
be brought into the Customer Designated Area; and (iii) not store or maintain
any Confidential Information of Customer on any portable computing device.
Under no circumstances shall a portable computing device of any kind be used
to store, maintain, move or manage Customer Data and Confidential Information
of Customer.
1.7
Safeguarding of Customer Data and Records. Vendor shall establish
and maintain safeguards against the destruction, loss, or alteration and unauthorized disclosure of Customer Systems, Customer Data, Tools, Records, and Confidential Information accessible to or in the possession or control of Vendor as
set forth in this Agreement, the Customer Controls and Customer Offshore Security Controls. Customer and/or its designee shall be granted access to Vendor
Facilities and Vendor Systems, to conduct testing of network security and to perform compliance assessments and vulnerability scans on Customer Designated
Areas, Vendor Systems and Customer Systems. Vendor shall have in place and
follow a routine destruction policy for all Customer Confidential Information,
Customer Data, Developed Software, Deliverables and any working papers, correspondence, notes, memoranda, drafts or other material (whether in electronic,
paper or other form) related to Vendor’s performance under this Agreement, as
specifically set forth in this Agreement, the Customer Controls and Customer
Offshore Security Controls. No such materials will be retained unless mandated
under this Agreement or by Applicable Law.
1.8
Access Control. Where access to Customer Equipment, Customer Systems, computer systems, databases or Confidential Information is required for
performance of any of the Services, Vendor will seek the minimum access reasonably required to complete its work. Vendor will comply with all Customer
computer system access and security requirements in accordance with the Customer Controls and Customer Offshore Security Controls, whether such permitted access is on-site or off-site. Customer may modify its access and security requirements during the term of this Agreement and Vendor will be required to
comply with the most recent version of Customer’s security requirements provided to Vendor in writing. Vendor shall ensure and shall take affirmative steps
to insure that no member of the Vendor Offsite Team or other Vendor Personnel
or agent (i) makes any improper use, unauthorized reproduction, photograph,
copy, transmission or other communication (including by e-mail) of any Customer Confidential Information or Patient/Personal Data, (ii) accesses any Customer Systems, Customer Data, Deliverables, source code (including procs,
parms, jcl or other application elements) or other Customer intellectual property
or material that is not within the scope of Services being performed by Vendor.
6. Code of Business Conduct
Licensee has adopted a Code of Business Conduct (“Code”), which governs
the conduct of every employee of Licensee and establishes ethical standards
for its employees. Certain significant provisions of the Code include conflicts
of interest, gifts or gratuities, kickbacks, entertainment, improper payments,
and protecting information.
A copy of the Code is available at
http://www.customercodeofconduct.com. Licensor agrees to support this
1071
Code by avoiding action that could place a Licensee employee in violation of
this Code. Licensor shall promptly notify Licensee if it becomes aware of a
violation of this Code.
COMMENT: At a minimum, the party modifying the URL site should
have the obligation to notify the other party of any changes to the contractual terms set forth in the URL as a condition precedent to the
other party being bound by such changes. Otherwise, the other party
will have to continually monitor the URL to identify potential changes. A party should be hesitant to agree to be bound by a policy set
forth in a URL as the policy will likely change binding the party without regard to cost or effort. See, Margae, Inc. v. Clear Link Technologies, LLC., 2008 WL 2465450 (June 16, 2008 D. Utah 2008)
(amendment of contract between two sophisticated parties by one party posting modifications online not unconscionable). For a more detailed discussion see Chapter 6.O.
LL.
Price/Payment (Chapter 5.J; § 8)
1. Currency Conversion
License fees shall be paid in United States dollars in [City, State] or at such other
place as Licensor may reasonably designate consistent with the laws and regulations
controlling in any foreign country. If any currency conversion shall be required in
connection with the payment of license fees hereunder, such conversion shall be
made by using the exchange rate prevailing at ______________ Bank on the last
business day of the calendar month of the quarterly reporting period to which such
royalty payments relate.
2. Currency Exchange Control
If at any time legal restrictions prevent the prompt remittance of part or all of any
license fees with respect to any country in the Territory where any Software is licensed,
payment shall be made through such lawful means or methods as the parties reasonably
shall determine, the parties agreeing to fully cooperate in effecting such remittance.
COMMENT: Some countries prohibit the export of “hard” currencies
without the approval of the country’s central bank. These approvals can
be quite lengthy and cumbersome. As such, the licensor should carefully
consider this risk prior to entering into a licensing agreement in a third
world country and seek alternate payment mechanisms that do not require
central bank approval.
3. Payment in Local Currency
a.
It is the intent of the parties that all quotations of fees and pricing for
Software, Maintenance and Support and Services, and all invoices shall be in
the local country currency, or the EURO, of the Vendor international business
unit location, using the Licensee pricing terms as set forth in Exhibit __ Pricing, based upon Vendor’s international price list. Moreover, the parties
agree that all payments of any invoices shall be made in the local country currency, or the EURO, of the country in which Vendor is located where the
Software, Maintenance and Support, and/or Service were ordered.
b.
Licensee’s international business units shall retain the right and option
to request quotations and invoicing and to make all payments in local country
currency of the nearest country in which Vendor is located, or the EURO if
the country where the Licensee international business unit is located in the
EU/EEA, or has adopted the EURO as its legal trading currency.
c.
Licensee shall notify Vendor of the country currency, or the EURO,
required on any particular quote and Vendor shall calculate such quote with
the agreed to pricing and terms set forth herein, and shall promptly provide
Licensee with said quote of the fees for Software, Maintenance and Support,
and/or Services.
d.
If currency conversion is required, the parties agree that Vendor shall
use the conversion rate stated in the Wall Street Journal on the day of the
quote (“Conversion Rate”). Vendor agrees that any quotes involving such
currency conversion will be fixed and valid for thirty (30) days from the quote
date and Licensee accepts that, in the event an order is not placed which is associated with such quote within thirty (30) days of the applicable quote’s date,
Vendor shall have the right to re-quote based on the then current Conversion
Rate.
4. Annual Adjustment to Charges – Fee Increase Tied to
White Collar Occupations
A. Adjustment to Charges. Unless otherwise expressly provided in an
Authorization Letter with respect to the charges to be paid thereunder, the Parties
acknowledge and agree to use the Employment Cost Index for Total Compensation
(not seasonally adjusted), Private Industry Workers, White-collar occupations excluding sales, June 1989 = 100 (the “ECI”), as the basis for annual adjustments to
[all] charges to be paid by Licensee to Licensor under each Authorization Letter for
those Services listed in Section E of this Schedule ____ (the “ECI Adjustable Charges”).
The ECI is published by the Bureau of Labor Statistics (the “BLS”) of the U.S.
Department of Labor. For purposes of this Schedule ___, the most recently published
ECI as of any anniversary of the Effective Date is the “ECI Current Index”, and the
“ECI Base Index” is the ECI Current Index from the prior anniversary of the
Effective Date (or, for the first anniversary, the ECI most recently published as of the
1073
Effective Date). If, on any anniversary of the Effective Date, the ECI Current Index
is higher than the ECI Base Index, then, effective as of such anniversary, an
adjustment to the ECI Adjustable Charges will be made by increasing the ECI
Adjustable Charges by the percentage that the ECI Current Index increased from the
ECI Base Index. In calculating the percentage increase, the Parties agree to round to
one decimal place. If, on any anniversary of the Effective Date, the ECI Current
Index is lower than the ECI Base Index, no adjustment to the ECI Adjustable Charges
will be made. If the period from the ECI Base Index to the ECI Current Index is
other than 12 months, an adjustment to a full year will be made in the manner
indicated in the example set forth in Section C of this Schedule ___. The ECI is
published quarterly at the end of the month following the quarter measured, and the
most recently published ECI as of the Effective Date was the ECI published on or
around ____________ [insert month, day and year] for the quarter ending
_____________ [insert month and year]. The Parties acknowledge and agree the
Licensor will adjust the ECI Adjustable Charges and will advise Licensee of such
adjustment in writing so that the new charges will amend this Agreement and become
effective on the applicable anniversary of the Effective Date. If no adjustment is
made on an anniversary date for any reason, Licensor will advise Licensee in writing
of such fact.
B. Adjustment to Charges Example. The following is an example of the
adjustments described in Section A of this Schedule ___. The specific numbers used
in the example are for illustration purposes only and are not necessarily reflective of
an actual calculation hereunder or the actual ECI.
Annual Adjustment on First Anniversary Date:
Example Charge under this Agreement
$1,500.00
ECI Current Index
136.0
ECI Base Index (as of Effective Date)
129.0
Percentage Change
(136.0 – 129.9) / 129.9 – 4.7%
Charge Increased by (1+ Percentage Change)
$1,500.00* (1 + 4.7%)
Equals Adjusted Charge
$1,570.50
Annual Adjustment on Second Anniversary Date:
Adjusted Charge as of First Anniversary Date
$1,570.50
ECI Current Index
143.2
ECI Base Index (as of First Anniversary Date)
136.0
Percentage Change
(143.2 – 136.0) / 136.0 = 5.3%
Charge Increased by (1+ Percentage Change)
$1,570.50* (1 + 5.3%)
Equal Adjusted Charge
$1,653.74
Annual Adjustment on Third Anniversary Date:
Adjusted Charge as of Second Anniversary Date
$1,653.74
ECI Current Index
140.9
ECI Base Index (as of Second Anniversary Date)
143.2
Percentage Change
No adjustment is made
Charge Increased by (1+ Percentage Change)
$1,653.74* (1 + 0.0%)
Equals Adjusted Charge*
$1,653.74
* The ECI Base Index for the fourth anniversary date would be 143.2.
C. Changes to Index. In the event that the BLS should stop publishing the ECI
or should substantially change the content, format or calculation methodology of the
ECI, the Parties will substitute another comparable measure published by a mutually
agreeable source, except as noted below. If the change is to redefine the base period
for the ECI from one period to some other period, the Parties will continue to use the
index but will use the new base period figures for all future adjustments. If the change
is to the name of the ECI, the new name will be used instead of the old name so long as
the numbers previously published for the index have not changed. If the change is to
the publication schedule, the Parties may agree in writing to use a different publication
schedule and to adjust any partial year to a full year, if needed. The adjustment to
convert a partial year to a full year is shown below.
ECI Current Index as of July 20XX
ECI Base Index as of June 20XX-1
Percentage Change (rounded to 3 decimals)
151.0
145.2
(151.0-145.2)/145.2=3.994%
Percent Times 12 Divided # of Months in Period
3.994% * 12 / 13
Equals Percentage Change (rounded to 1 decimal)* 3.7%
* This calculation method will be used instead of the Percentage Change calculation shown in Section B of this Schedule ___ if the period between the ECI Base
Index and the ECI Current Index is other than 12 months.
D. Adjustments Using Davis Index. The Parties acknowledge and agree to
use the percent change in “Total Cash Compensation” for Systems Integrators (the
“Percent Change”) as the basis for annual adjustments to [all] charges to be paid by
Licensee to Licensor under each Authorization Letter for those Services listed in
Section 5 of this Schedule ___ as being subject to this Section D (the “Davis Index
Adjustable Charges”), as the Percent Change is either reported in the Davis and
Neusch Index for Total Cash Compensation (the “Index”) or as such Systems Integrators job information is otherwise made available by the consulting firm of Davis
& Neusch, Inc. no longer make comparable Systems Integrators job information
available). If, on any September 1 during the term of this Agreement, the most recently published or available Percent Change is positive, an adjustment to the Davis
Index Adjustable charges will be made by increasing the Davis Index Adjustable
Charges by such Percent Change. If an adjustment is not made on a September 1 for
any reason, then the basis for measuring the Percent Change for the following September 1 will be same as the basis for measuring the Percent Change for the September 1 on which no adjustment was made. The Parties acknowledge and agree that
Licensor will adjust the David Index Adjustable Charges and will advise Licensee of
such adjustment in writing so that the new charges will amend this Agreement and
become effective on the applicable September 1. If no adjustment is made on a September 1 for any reason, Licensor will advise Licensee in writing of such fact.
E. Service Categories. The Parties acknowledge and agree that the following
Services will be subject to adjustment in accordance with Section A of this Schedule
____: ________________. [NOTE – THESE SERVICES SHOULD BE THOSE
THAT ARE NOT PRIMARILY SYSTEMS ENGINEERING OR SYSTEMS
ADMINISTRATOR RELATED AND ARE TO BE ADJUSTED PURSUANT TO
THE ECI PERCENTAGE CHANGES.] The Parties acknowledge and agree that the
following Services will be subject to adjustment in accordance with Section D above of
this Schedule ___ [NOTE – THESE SERVICES SHOULD BE THOSE THAT
ARE
PRI-MARILY
SYSTEMS
ENGINEERING
OR
SYSTEMS
ADMINISTRATOR RELATED AND ARE TO BE ADJUSTED PURSUANT TO
THE DAVIS INDEX.]
1075
5. Fee Increases Tied to United States CPI (§ 8.4)
Fee increases tied to United States CPI: Notwithstanding the foregoing, in no event
shall the fees for Services in any year increase over the prior year’s fees by more than
the lesser of (a) the Consumer Price Index (All Items) published for the United States
for the prior year; or (b) 3%.
COMMENT: The licensor should clearly state that in the event the CPI
is negative, the licensor’s prices will not be reduced. Further, the licensor may want to provide for a minimum annual increase.
6.
Fee Increase Tied to CPI (§ 8.4)
Unless expressly stated in the Statement of Work or Exhibit __ - Pricing, that
rates are firm for the term of any Statement of Work, increases in Rates
charged for Services may not occur more frequently than annually, and such
increases shall be limited to a maximum of 104% of the previous year’s rates
or the increase in the Consumer Price Index for all Urban Consumers for the
previous twelve (12) month period, plus two percentage points, whichever is
less. If the Statement of Work provides that the rates shall remain fixed for the
duration of Statement of Work, even if the duration of that Statement of Work
is greater than one year, Provider may not increase the Rates for that
Statement of Work.
7. Fee Increases Tied to Indian CPI (§ 8.4)
In addition, the fees, if any, for off-shore resources will not increase by greater than
6% per year or the percentage change in the UNME (as defined below) and the
percentage change in the exchange ratios between the U.S. Dollar and the Indian
Rupee, as described below, whichever is less, and if Licensor increases its rates for
all of its customers. The calculation for the hourly rates relating to Licensor’s
employees providing Services in India shall be determined in two steps by utilizing
the Indian Consumer Price Index for Urban Non-Manual Employees (the “UNME”)
and determining the increase or decrease in the exchange ratio between the U.S.
Dollar and the Indian Rupee. The following calculation shall be done first, the
product of (i) the applicable the applicable hourly rate and (ii) the sum of (x) one (1)
and (y) the quotient of (a) the UNME for January of the current calendar year less the
UNME for January of the prior calendar year (the “Prior Year UNME”) over (b) the
Prior Year UNME. The amount calculated in accordance with the previous sentence
shall be adjusted upward or downward by the percentage increase or decrease in the
exchange rate between the U.S. Dollar and the Indian Rupee from the previous
January 1 to the then current January 1.
8.
Fee Increases Tied to White Collar Occupations Currency and Risk (§ 8.4)
Commencing on the first anniversary of the effective date, Vendor will
calculate an adjustment to the charges for the labor components of the services
to be provided for the next twelve months utilizing U.S. Bureau of Labor
Statistics Consumer Price Index (ECI) ECU 12132A: The Total
Compensation Index for Service Providing Industries: White Collar
Occupations, from the prior period (as applicable); Customer shall be
responsible for up to three percent in adjustment based upon the index. In the
event that the index exceeds six percent (6%), then Vendor may proposal a
solution to Customer to mitigate Vendor’s exposure, including a proposal to
move service delivery to different Vendor Service Locations.
Vendor shall bear any and all currency fluctuation risks inherent in its election
to provide elements of the services from offshore locations and shall be in
accordance with the prices set forth in the pricing exhibit.
9. Labor Rates Fixed For Duration of SOW; Overtime (§ 8.4)
Except as provided in a Statement of Work (“SOW”) , the compensation rates
for a SOW will be fixed for the duration of that SOW. To the extent that the
SOW provides for an increase in compensation rates, Vendor may implement
such increase not more than once in any twelve (12) month period, and then by
not more than three (3%) percent over the rate in effect at the time of the
increase, and only after Vendor gives Customer at least ninety (90) days’ prior
written notice of such rate increase. Vendor will comply with all Laws with
respect to the payment of overtime to Vendor Personnel, but Vendor will not
charge Customer additional amounts for overtime unless the applicable
Attachment or related SOW provides for a specific overtime rate, and
Customer’s approves each instance of overtime in writing, in advance.
10.
Change in Pricing Methodology (§ 8.4)
(a)
Pricing Conversion Option. If Licensor adopts a new pricing model
for Software, which could result in a lower total fee paid by Licensee than the
fees set forth in this Agreement, Licensee may elect to use such lower fee in
the calculation of fees incurred under this Agreement after the date of such
election. Upon such election, Licensor agrees to renegotiate in good faith
with Licensee such fees in accordance with its new licensing pricing model
and any terms and conditions of this Agreement affected thereby. Licensee
shall receive full recognition for licenses previously procured under this
1077
Agreement when converting to the new licensing pricing model. Licensor
shall not charge Licensee any additional fee or other charge for converting
existing licenses to the new pricing model.
(b)
Facilities Management. No fees will be charged if Licensee enters
into a Facilities Management (“FM”) agreement (not Outsourcing), and the
Software associated with such an arrangement will not count against the Licensed Capacity. Under such FM agreement Licensee has no responsibility for
the data center operations, except from a management perspective. Licensee’s
FM customer retains the operational responsibility for the data center; Licensee only manages the center and the people assigned to the center.
11.
Shared Cost Savings
In the event Provider proposes any change in the manner the Services are provided, and Customer agrees to such change, and such change results in an outof-pocket savings in cost to Provider (“Savings”), such Savings shall be allocated as may be agreed by the Parties on a case by case basis. Customer shall
be entitled to apply its portion of such Savings as a credit against the Fees set
forth in the applicable Statement of Work.
12.
Disputed Amounts
If an invoiced amount is disputed in good faith by Licensee then, until resolution of
the dispute, Licensee may suspend disputed payments and toll the running of time for
default by: (a) paying the undisputed amount, if any; and (b) sending a written
statement of exceptions to Licensor. All of Licensor’s obligations shall continue
unabated during the duration of the dispute resolution.
COMMENT: The licensor should seek to limit the amount the licensee
can withhold and provide for interest in the event the licensor prevails in
the dispute.
13.
Disputed Amounts – Alternate Language
Licensee may withhold payment of particular Charges that Licensee
reasonably disputes in good faith subject to the following:
(i) Notice of Dispute.
If Licensor’s invoice includes sufficient detail and supporting
documentation to enable Licensee to reasonably determine whether Licensor’s
Charges are in accordance with this Agreement, Licensee shall notify
Licensor on or before the payment due date of such invoice if it disputes any
of the Charges in such invoice.
(ii) Notice of Insufficient Detail, Documentation and Dispute.
If Licensor’s invoice does not include sufficient detail and supporting
documentation to enable Licensee to reasonably determine whether Licensor’s
Charges are in accordance with this Agreement , Licensee shall so notify
Licensor on or before the payment due date. Licensor shall promptly provide
such reasonable detail and supporting documentation, and Licensee shall
notify Licensor within ten (10) business days after receipt thereof by the
Licensee Contract Executive whether it disputes any of the Charges in
Licensor’s invoice.
(iii) Description and Explanation
.
If Licensee disputes any Licensor Charges, Licensee shall promptly notify
Licensor after becoming aware in accordance with (i) and (ii) above of the
issue and provide a written description of the particular Charges in dispute and
a written explanation, in reasonable detail based upon the information thenavailable to Licensee, of the reason why Licensee disputes such Charges.
Licensor shall promptly notify Licensee if it believes that Licensee has not
provided the detail required by this Section __.
(iv)
Continued Performance.
Each Party agrees to continue performing its obligations under this Agreement
while any dispute is being resolved unless and until such obligations are
terminated by the termination or expiration of this Agreement.
(v) No Waiver.
Neither the failure to dispute any Charges or amounts prior to payment nor the
failure to withhold any amount shall constitute, operate or be construed as a
waiver of any right Licensee may otherwise have to dispute any Charge or
amount or recover any amount previously paid.
(vi) Escrow.
1079
Once disputed amounts withheld by Licensee reach a threshold amount of
_____________________ without regards as to the claim, cause or nature of
the dispute, including any claim, set-off, or other type of deduction (the
“Disputed Charges Threshold”), then at Licensor’s written request to
Licensee’s Chief Financial Officer any amounts disputed by Licensee under
this Section ____ in excess of the Disputed Charges Threshold shall be placed
in an interest-bearing escrow account for the benefit of both Parties, pursuant
to the escrow agreement set forth in Schedule ____- Escrow Agreement,
pending resolution of the dispute relating to such withholding. Such deposit
shall occur within fifteen (15) business days after such request by Licensor to
Licensee’s Chief Financial Officer. Promptly after resolution of such dispute
the (i) amounts withheld and not placed in escrow and (ii) amounts placed in
escrow and the interest thereon shall be allocated to the Parties based on the
resolution of such dispute. If at any time the disputed amount no longer
exceeds the Disputed Charges Threshold, Licensee shall be entitled to remove
the full amount of the withheld amounts (and accrued interest) from such
escrow account. Licensor will be solely responsible for all costs, fees and
expenses associated with the creation and maintenance of, and all other
amounts associated with the performance of Licensor’s obligations under,
such escrow account.
14. Disputed Payment Issue
The Parties agree to work in good faith to resolve any disputed payment issues
on an expedited basis in accordance with the Dispute resolution procedures of
the Contract.
COMMENT: Vendor should propose that the dispute resolution
procedures contain a mechanism for expedited resolution of payment disputes.
15.
Pass-Through Charges
Licensee shall not be responsible for any pass-through charges or license fees to be
paid by Licensor directly to a third party for any Third Party Products or otherwise
unless Licensee has expressly agreed to such charges in Appendix __.
COMMENT: To avoid any financial surprises, the licensee should
avoid agreeing to pay for any third party charges. The licensee should
require the licensor to list any third party fees or products which the
licensee is responsible for purchasing or paying for as an exhibit to the
underlying agreement. The licensor should be responsible for any fees
or products not listed on the exhibit on the time of contract signature.
16.
Liens and Lien Claims
Vendor shall not do or fail to do anything that results in a lien or lien claim by
Vendor or Vendor agents and subcontractors on the real or personal property
of Customer or the other Customer Entities in connection with Vendor’s
performance of, or failure to perform in accordance with, this Agreement.
Should any such lien or lien claim be asserted, Customer may at its sole
discretion (a) pay the amount of such lien or lien claim, in which event
Vendor shall reimburse Customer for such amount promptly upon notice from
Customer, (b) demand a corrected invoice showing a credit for such amounts
from payments due to Vendor, (c) set off the amounts paid by Customer to
satisfy the lien from any amounts owed by Customer to Vendor, and/or (d)
require Vendor to promptly obtain a properly executed release of lien
satisfactory to Customer.
17.
Liens/Security Interests
Licensor shall not file, or by its action or inaction permit, any liens to be filed on or
against property or realty of Licensee. In the event that any such liens arise as a result
of Licensor’s action or inaction, Licensor shall obtain a bond to fully satisfy such
liens or otherwise remove such liens at its sole cost and expense within ten (10) business days. If Licensor fails to do so, Licensee may, in its sole discretion, pay the
amount of such lien, and/or deduct such amounts from payments due to the Licensor.
Licensor has not granted to any third party any security interests over any Intellectual Property Rights (i) used by Licensor in connection with the provision of the
Services to Licensee or (ii) licensed to Licensee under this Agreement.
18.
Liens – Alternative Language
Licensor will keep the premises, facilities, improvements, machinery, and equipment
of Licensee and its affiliates free and clear from any and all liens arising out of the
Services performed or materials furnished hereunder. Licensor will obtain properly
executed waivers and releases from all subcontractors or other persons entitled to
liens for Services or materials furnished in accordance with this Agreement. Licensor hereby indemnifies, defends and holds harmless Licensee and its affiliates against
any and all costs, expenses, losses and all damages resulting from the filing of any
such liens against Licensee or its affiliates. As a condition to payment hereunder,
Licensor will from time to time, upon request by Licensee, furnish waivers or releases of such liens or receipts in full for all claims for such Services or materials and an
affidavit that all such claims have been fully satisfied.
19. Change in Customer’s Credit Rating
1081
In the event Customer’s credit rating falls to the following ratings as published by the
respective rating agencies (i) payment terms shall change to thirty (30) days in advance
of services at an amount equal to the average monthly billing from the previous twelve
(12) months and (ii) any deferred amounts shall immediately become due.
AGENCY
20.
RATING
S&P
BBB-
Moody’s
Baa3
Fitch
BBB-
AM Best
B+
Demotech
<A
Price Reduction for Late Delivery – Favors
Licensee
Licensor and Licensee will work together diligently and in good faith to achieve acceptance of the Software not later than [date], time being of the essence. In the event
that Licensee provides timely cooperation to Licensor and the Software is not accepted
by [date], then all fees accruing thereafter shall be reduced by five percent (5%). In
the event that Licensee provides timely cooperation to Licensor and the Software is
not accepted by [insert a later date than the previously inserted date], then all fees
accruing thereafter shall be reduced by seven percent (7%).
21.
Release and Discharge Upon Payment in Full
Simultaneously with request for final payment hereunder, Vendor shall
execute and deliver to the Customer an instrument releasing the Customer of
and from any and all claims, demands, and liabilities whatsoever of every
name and nature both at law and in equity arising from, growing out of, or in
any way connected with this Agreement; provided that such instrument shall
not release the Customer from its obligations to indemnify Vendor pursuant to
Section _ (“Indemnity”). A copy of such release is annexed hereto and made
a part hereof.
22.
Rebate/Referral Fees For Third Party Products
If Vendor receives a refund, credit or other rebate for goods, services, or
expenses purchased by Vendor in connection with the Services that has not
previously been factored into the Charges, Vendor will promptly notify
Customer and will pay such amount to Customer (or, if applicable, provide a
credit on the next delivered invoice) within thirty (30) days after receipt
thereof.
23.
Early Pay Discount
In the event Customer remits payment to Vendor within ten (10) days of
receipt of a compliant invoice, Customer will receive a discount of five
percent (5%) of the invoiced amount (excluding shipping charges or other
reimbursable items, but any applicable sales tax will be recalculated on the
discounted amount). Additionally for Services, in the event that invoices are
submitted prior to the completion of Services, Customer will be entitled to the
five percent (5%) discount if invoices are paid within ten (10) days of the
receipt of invoice or completion of Services, whichever occurs later.
24.
Invoicing and Payment Terms
a.
Vendor’s invoices shall (i) separate charges as reasonably specified by
Licensee; (ii) set forth applicable taxes as a separate line item; (iii) set forth
travel and expenses as a specific line item, (iv) contain the required/applicable
information as set forth in Exhibit _(“Invoice Requirements”); (v) include
complete supporting documentation for the invoiced charges; (vi) set forth
charges in the currency of the Licensee business entity ordering location (i.e.,
local in-country currency); (vii) set forth the Licensee Purchase Order number
and (viii) be delivered to the Licensee billing location specified on the Purchase Order. Invoices shall include complete supporting documentation for
the invoiced charges, and shall be identified as “Tax Qualifying Invoice” for
Licensee’s business locations in the United Kingdom, Canada and Australia.
Any invoice for a Licensee business unit located in Australia shall include an
Australian Business Number (“ABN”). Invoices that do not contain the required/applicable information will be returned to Vendor for correction.
25.
Use of E-Commerce for Billing and Payment
Vendor will receive POs and submit all invoices in electronic format through
Customer’s then current automated system for purchasing and receiving
goods/services (currently the Ariba Services Network (ASN)) until further
notice from Customer, and will bear costs and expense, if any, associated with
receiving POs or submitting invoices through ASN. Customer will not pay
invoices submitted in any other manner. Customer will provide reasonable
1083
assistance to Vendor in establishing eligibility with ASN to submit invoices.
26. Electronic Purchase Orders
A material inducement for Customer to enter into this Agreement with the Vendor is Vendor’s commitment to work with Customer to create an OCI1 compliant Product and Services catalogue from which Customer can (i) send electronic
Purchase Orders for the Vendor’s Products and Services, (ii) receive an electronic Product shipment confirmation (also known as advanced shipping notice), (iii) receive an electronic proof of delivery and (iv) receive an electronic
invoice. The Vendor’s failure to implement this end-to-end E-business process
in a timely manner shall be considered sufficient cause for Customer to terminate the Agreement in accordance with the terms of the Agreement.
27. Purchase Order Required for Payment
Buyer shall have no obligation to purchase and/or pay for Services until such
Buyer places a Purchase Order authorizing the commencement of such Services.
1.1 Vendor shall meet Buyer’s requirement for the use of electronic data interchange (EDI/WebEDI) to issue and receive Purchase Orders, Purchase
Order acknowledgments, Purchase Order changes and/or invoices. Vendor
shall use Buyer’s designated EDI methodology or webEDI service provider. Vendor shall be responsible for executing its own agreement with the
webEDI service provider and any applicable costs and/or expenses related
to Vendor’s use of such service. Vendor agrees to comply with the license
terms provided by such webEDI service provider in meeting its obligations to Buyer under this Agreement. Each Party shall establish, at such
Party’s own expense, appropriate measures (including but not limited to
fire walls) to ensure all information transmitted to and by a Party under
this Agreement can only be accessed by Vendor and Buyer.
1.2 An electronic Purchase Order will obligate Customer to the same extent as
a signed paper Purchase Order and Customer represents that the person
submitting the Purchase Order has the authority to commit Customer to
purchase the Services, pursuant to the terms and conditions of the Agreement.
1.3 Purchase Orders are subject to acceptance by Vendor. Acceptance shall
1
OCI refers to Open Catalogue Interface, a type of punch-out technology developed by SAP, Inc.
be evidenced by either a written confirmation or commencing performance of what was ordered. Upon acceptance by Vendor, Customer’s
Purchase Order shall constitute a binding commitment for Customer to
purchase and a binding commitment for Vendor to provide the designated
Services at the quoted price.
1.4 Except as otherwise specified in the Agreement, neither Vendor nor Customer is bound by any terms and conditions imprinted on the front or back
of, or embedded in Quotes, Purchase Orders, Purchase Order acknowledgments or other written or oral communications between the parties relating to Purchase Orders.
28. Purchase Order Numbers
Customer will assign a separate purchase order number to each Statement of
Work (each, a “PO Number”). Vendor shall reference the applicable PO
Number on all invoices it submits for payment. The absence of an appropriate
PO Number on any invoice submitted by Vendor to Customer may result in
Customer rejecting the invoice back to Vendor to coordinate a PO Number, or
may delay Customer’s ability to properly process and pay such invoice.
Customer shall not be penalized for any such rejection or delay.
29. Terms Set Forth in Invoices and Purchase Orders
are Non-Binding
Any terms and conditions that are typed, printed, stamped or otherwise
included in any Vendor invoice and/or Customer purchase order issued
pursuant to this Agreement will not be binding, and no action by the other
party (including, without limitation, the payment of any such invoice in whole
or in part) shall be construed as binding with respect to any such term or
condition, unless the specific term or condition has been previously agreed to
by Vendor and Customer in this Agreement, a duly executed amendment
hereto, or in an SOW.
30. Waiver of Termination Fees – Business Downturn
If due to an unexpected business downturn, downsizing, operating
efficiency or divestiture of a subsidiary, Affiliate or significant operating unit
which affects the overall needs of Licensee for Products or Services, such that
Licensee will be unable to meet minimum fee commitments for such Products
1085
or Services, Licensor will waive all termination fees associated with such
Products or Services.
31. Pricing Based on Number of CPU Cores
The number of required licenses shall be determined by multiplying the total number
of cores of the Processor by a core Processor licensing factor specified on the Company Processor Core Factor Table, which can be accessed at http://xxxxx.com/
contracts. All cores on all multi-core chips for each licensed program are to be aggregated before multiplying by the appropriate core processor licensing factor and all
fractions of a number are to be rounded up to the next whole number. When licensing
the Software, a Processor is counted equivalent to an occupied socket; however, in
the case of multi-chip modules, each chip in the multi-chip module is counted as one
occupied socket.
32. Pricing Based on Allocation of Risk
Section __ (“Indemnification”) and this Section __ (“Limitation of
Liability”) allocate the risks under this Agreement between Customer and
Vendor and are viewed by the parties as an integral part of the business
arrangement between them. The pricing and other terms and conditions of
this Agreement reflect this allocation of risk and the limitations specified
herein.
33. Pricing Based on Limit of Liability
Company agrees that the limitations of liability and disclaimers set forth
herein will apply regardless of whether Company has accepted the Software
or any other product or service delivered by Vendor. Company acknowledges
and agrees that Vendor has set its prices and entered into this Sublicense
Agreement in reliance upon the disclaimers of warranty and the limitations of
liability set forth herein, that the same reflect an allocation of risk between the
parties (including the risk that a contract remedy may fail of its essential
purpose and cause consequential loss), and that the same form an essential
basis of the bargain between the parties.
34. Pricing Assumptions – Favors Vendor
NOTE: THIS LANGUAGE IS DRAWN FROM A MEDICARE PART D
CONTRACT AND ADDRESSES CHANGES IN THE COST OF
PHARMACEUTICALS.
PDL is an abbreviation for Preferred Drug List.
AWP is an abbreviation for Average Wholesale Price.
******
In addition to any pricing assumptions set forth in any pricing
implementation or similar document that is executed by Customer:
(a) Modification of Financial Provisions. Upon thirty (30) days prior
written notice to Customer, Vendor may modify or amend the financial
provisions in this Agreement in a manner which accounts for the impact of the
events identified below. Such notice will include Vendor’s explanation of the
manner in which the modification accounts for the impact of the event:
1. Any government imposed or industry wide change that would impede
Vendor’s ability to provide the pricing described in this Agreement, including
any prohibition or restriction on the ability to
___________________________;
2. A change in Customer alignment with Vendor’s PDL;
3. Implementation or addition of a high deductible health plan/consumerdriven health plan option;
4. Implementation or addition of a member paid plan;
5. A greater than twenty percent (20%) decrease in the total number of Plan
Participants from the number provided during pricing negotiations; or
6. A change in any of the pricing assumptions set forth in this Agreement,
including, Exhibit A.
(b) Pricing Benchmarks. The parties acknowledge that the pricing
indices historically used by Vendor are the basis for the financial offer of this
Agreement and are outside the control of the parties.
If Vendor decides to implement, or if Customer requests a change in its
pricing source due to a change in the methodology of the pricing source, the
parties agree that such pricing source change shall maintain the relative
1087
economic positions of the parties as existed immediately before such change.
In implementing such change, Vendor agrees to (1) provide Customer with at
least ninety (90) days notice of the change if the request is Vendor generated;
(2) pass through all financial improvements of the pricing source change, if
any, to Customer; (3) provide Customer with written illustration of the
financial impact of the pricing source change and written statement of the
expected aggregate annual impact of the pricing source change. Vendor will
provide written illustration and statement noted above to Customer within at
least seventy-five (75) days prior to the effective date of the pricing source
change. If the request comes from Customer, Vendor will be required to
implement the change within ninety (90) days of Customer’s request.
If AWP methodology is replaced in the market, the parties agree that
such replacement methodology shall maintain the relative economic positions
of the parties as existed immediately before such replacement. In
implementing such replacement, Vendor agrees to (1) provide Customer with
at least ninety (90) days notice of new pricing methodology implementation
or as much prior notice as is practicable under the circumstances; (2) pass
through all financial improvements of the new pricing methodology change,
if any, to Customer; (3) provide Customer with written illustration of the
financial impact of the pricing methodology change and written statement of
the expected aggregate annual impact of the pricing methodology change.
Vendor will provide written illustration and statement noted above to
Customer within at least seventy-five (75) days prior to the effective date of
the AWP change or as soon as practical based on announcement of change. If
multiple methodologies exist, Vendor agrees to discuss with Customer in
good faith which methodology can be implemented for Customer.
If AWP is reduced as a result of legal action while this Agreement is in
force, the parties agree that Vendor shall modify the pricing terms of this
Agreement to maintain the relative economic positions of the parties as
existed immediately before such replacement. In implementing such
modification Vendor agrees to (1) pass through the entire financial
improvement to Customer, if applicable; (2) provide Customer a statement of
financial impact of the change. The modification will be implemented as
quickly as possible but not sooner than the effective date of the court
decision.
In the event of a pricing methodology change or a pricing source change,
Vendor must use the methodology which maintains the parties’ relative economic positions as existed immediately before the effective date of such
change in methodology or source. If Vendor does not agree to maintain the
parties’ relative economic positions as existed immediately before the effec-
tive date of such change in methodology or pricing source, or if change results in higher gross cost to Customer, then Customer reserves the right to renegotiate contract terms or to terminate this Agreement within ninety (90)
days written notice at any point during the Term without any termination
charges.
35. Material Inaccuracy of SOW - Vendor Assumes Any Cost
Arising From SOW Inaccuracy
Vendor shall ensure that all information including, without limitation,
pricing, provided to Customer in any Statement of Work is materially accurate
and complete as of the date of such Statement of Work, provided that
Customer has provided materially accurate and complete information to
Vendor. In the event Vendor makes an error or omission in such information,
or fails to disclose information, or otherwise does not provide materially
accurate and complete information (provided that Customer has provided
materially accurate and complete information to Vendor), and such error,
omission, failure to disclose or other event has a material and adverse impact
on Customer, Vendor acknowledges and agrees that it shall provide or
perform any software, equipment, product, service or other act necessary
to correct such error, omission, failure or other event, at no cost whatsoever to
Customer.
36. Letter of Credit
The Letter of Credit shall secure the performance of Licensor, including without
limitation performance of the Services in accordance with the Work Plan and
providing Deliverables in accordance with the Specifications, and shall secure
any damages, cost, or expenses resulting from Licensor’s default in performance hereunder or liability caused by Licensor. In the event of default, the
Letter of Credit shall become payable to Licensee for any outstanding damage
assessments made by Licensee against Licensor. An amount up to the full
amounts of the Letter of Credit may also be applied to Licensor’s liability for
any administrative costs and/or excess costs incurred by Licensee in obtaining
similar Software, Deliverables, other products, and Services to replace those
terminated as a result of Licensor’s default. Licensee may seek other remedies
in addition to this stated liability.
37.
Fidelity Bond – For Data Breach
1089
In the event that Vendor will have access to Sensitive Data or Customer’s
computer systems, either remotely or while on Customer’s premises, then
Vendor shall, in addition to the coverage described in Section __
(“Insurance”) and throughout the Term and thereafter until the end of any
Deliverable Warranty Period, maintain in full force and effect from a third
party Fidelity Bond/Blanket Crime coverage of not less than U.S. $5,000,000
per occurrence.
38. Performance Bond (§34)
Customer may, in its sole reasonable discretion, require Vendor to post as
surety a Performance Bond in an amount that Customer reasonably
approximates the value of the Services to ensure Vendor’s compliance with
the provisions of this Agreement. Vendor will furnish written evidence of
such performance bond within fifteen (15) days of Customer’s written request
therefore, and will ensure that the performance bond issuer will include
Customer as an additional party to be notified in the event that such
performance bond is no longer in force.
39. Parent Company Guarantee (§34)
Customer requires that the Vendor entity that is party to this Agreement shall
be a company incorporated in the United States. If the services required under
this Agreement will be provided by an entity other than Vendor’s ultimate
parent company, Vendor must provide a guarantee from its ultimate parent
company in form and substance satisfactory to Customer, which irrevocably
and unconditionally guarantees the complete and proper performance of the
Agreement and the financial liabilities of Vendor.
MM.Quality Assurance (Chapter 7.F; § 9.13)
1. Quality Assurance and Internal Controls (§ 9.13(i))
(a) General. Licensor shall develop and implement Quality Assurance and
internal control (e.g., financial and accounting controls, organizational controls, input/output controls, system modification controls, processing controls, system design
controls, and access controls) processes and procedures, including implementing
tools and methodologies, to ensure that the Services are performed in an accurate and
timely manner, in accordance with (i) the Service Levels and other requirements of
this Agreement; (ii) generally accepted accounting principles (applied in accordance
with SAS-69 and generally accepted auditing standards); (iii) the best practices of
leading providers of services that are the same as or similar to the Services; (iv) the
Laws applicable to Licensee and the Eligible Recipients (including the Privacy
Laws), and (v) industry standards (i.e., QS 9000, ISO 9001/2000, ISO 14000, ISO
17799, and BS 7799) applicable to Licensee and the Eligible Recipients and the performance of the Services, including applicable requirements for certification or accreditation of the Joint Commission on Accreditation of Healthcare Organizations
(JCAHO). Such processes, procedures, and controls shall include verification, checkpoint reviews, testing, acceptance, and other procedures for Licensee to assure the
quality and timeliness of Licensor’s performance. Without limiting the generality of
the foregoing, Licensor shall:
(i) Maintain a strong control environment in day-to-day operations, to
assure that the following fundamental control objectives are met: (1)
financial and operational information is valid, complete, and accurate;
(2) operations are performed efficiently and achieve effective results,
consistent with the requirements of this Agreement; (3) assets are
safeguarded; and (4) actions and decisions of the organization are in
compliance with Laws;
(ii) Build the following basic control activities into work processes: (1)
accountability clearly defined and understood; (2) access properly controlled; (3) adequate supervision; (4) transactions properly authorized;
(5) transactions properly recorded; (6) transactions recorded in proper
accounting period; (7) policies, procedures; and responsibilities documented; (8) adequate training and education; (9) adequate separation of
duties; and (10) recorded assets compared with existing assets;
(iii) Develop and execute a process to ensure periodic control self-assessments
are performed with respect to all Services (such self-assessments to be
performed at least annually unless and until Licensee approves less
frequent self-assessments);
(iv) Maintain an internal audit function to sufficiently monitor the processes
and Systems used to provide the Services (i.e., perform audits, track
control measures, communicate status to management, drive corrective
action, etc.). As part of such internal audit function, Licensor shall:
(1) Develop and execute an annual risk assessment process to evaluate risk in the Services. This assessment shall become the basis to
create an annual risk-based audit plan of Services. The plan shall
be provided to Licensee for its review and approval in sufficient
time to permit Licensee to comply with its obligations and
requirements;
(2) Promptly provide audit reports resulting from subsequent audit
activity to Licensee, and make related work papers available to
Licensee upon request;
(3) Adopt a qualitative methodology (i.e., high, medium, low effectiveness) of reporting the level of controls and internal audit results;
and
(4) Provide to Licensee a summary of planned audit activity, audit
activity performed, associated significant findings, and status of
follow-up activity, and a summary of control incidents (i.e.,
frauds, conflict of interest situations, etc.) and related corrective
action, at least quarterly; and
(v) Conduct investigations of suspected fraudulent activities within Licensor’s organization that impact or could impact Licensee or the Eligible
1091
Recipients. Licensor shall promptly notify Licensee of any such suspected fraudulent activity and the results of any such investigation as
they relate to Licensee or the Eligible Recipients. At Licensor’s request, Licensee shall provide reasonable assistance to Licensor in connection with any such investigation;
(vi) Comply with the Licensee Code of Conduct set forth in Schedule __;
(vii) Comply with all applicable requirements and guidelines established by
Licensee in order to assist Licensee to meet the requirements of the
Sarbanes-Oxley Act of 2002 and implementing regulations promulgated by the Licensee Securities and Exchange Commission and Public
Licensor Accounting Oversight Board; and
(viii) Recommend and, with Licensee’s prior approval, implement compliance measures to satisfy Sarbanes-Oxley requirements, including, certification as to internal controls as requested by Licensee.
(b) Approval by Licensee. Licensor shall submit such processes, procedures,
and controls to Licensee for its review, comment, and approval within thirty (30)
days after the Effective Date and shall use commercially reasonable efforts to finalize
such processes, procedures, and controls and obtain Licensee’s final approval on or
before the Commencement Date. Upon Licensee’s approval, such processes and
procedures shall be included in the Policy and Procedures Manual. Prior to the
approval of such processes and procedures by Licensee, Licensor shall adhere strictly
to Licensee’s then-current policies procedures and controls. No failure or inability of
the quality assurance procedures to disclose any errors or problems with the Services
shall excuse Licensor’s failure to comply with the Service Levels and other terms of
this Agreement.
2. Compliance with Industry Quality Standards
(a) ITIL AND COBIT. Where ISO Standards or the frameworks of Information Technology Infrastructure Library (“ITIL”) and/or Control Objectives
for Information and related Technology (“COBIT”) are applicable to the Services provided hereunder, Vendor shall perform all relevant Services consistent with such applicable standards. Within thirty (30) days of the Effective
Date, Vendor will provide to Customer a listing of the ITIL and COBIT
frameworks and ISO Standards that Vendor considers applicable to the Services being provided under the Agreement.
(b) Health IT Standards. To the extent applicable, all Vendor Software,
Vendor provided Equipment will operate in compliance with, and will enable
Customer and Customer Entities to comply with, the most current versions of
health information technology (“Health IT”) interoperability standards, specifications and criteria published or adopted by a nationally or internationally
recognized standards developing organization (e.g., Health Level 7 or the
World Health Organization with respect to the International Classification of
Diseases), or issued under state or federal law, including, without limitation,
standards published or recognized by the Secretary of the U.S. Department of
Health and Human Services (“HHS”) or by a panel or commission appointed
by HHS for such purpose as specified in the Customer Controls, Work Order,
a SOW, or as otherwise made known to Vendor by Customer in writing. Such
standards shall be implemented upon Customer’s request, in accordance with
a timetable to be discussed and agreed upon in good faith by the Parties, provided that any such timetable shall be in compliance with all applicable state
and federal requirements.
NN. Remedies (Chapter 5.H; § 5.3)
1. Express Remedies
In the event the Licensed Program fails to meet the limited express warranty set forth
in Section ___ (Warranty), Licensor may at its sole discretion choose to (a) use
commercially reasonable efforts to repair or replace (at Licensor’s option) the Licensed Program with computer software that meets such warranty or (b) refund a pro
rated portion of the applicable License Fee calculated across the ninety (90) day period, or in the case of errors in the Documentation, Licensor may in its sole discretion
either (x) correct the Documentation so that it correctly represents the performance of
the Licensed Program or (y) publish errata addressing such errors. Notwithstanding
anything in this Schedule ___ to the contrary, if and to the extent that any part of the
Licensed Program is owned by a third party and licensed to Licensor for distribution,
Licensee agrees (i) to be bound by any terms and conditions of use required by such
third party and (ii) to look solely to such third party for any warranty concerning such
software. With regards to any such third party licensed program, Licensor agrees to
provide notice of each such third party software and if, more restrictive than the
terms contained herein, provide the terms and conditions of such license to
Licensee. THIS SECTION ___ SETS FORTH LICENSOR’S SOLE REMEDIES
FOR A BREACH OF SECTION ___ (“WARRANTY”) REGARDING THE
LICENSED PROGRAM.
2. Remedies Not Exclusive
Subject to Section ___ (“Arbitration and Disputes”), no remedy conferred by any
of the specific provisions of this Agreement is intended to be exclusive of any other
remedy, and each and every remedy will be cumulative and will be in addition to
every other remedy given hereunder or now or hereafter existing at law or in equity
or by statute or otherwise. The election of any one or more remedies will not constitute a waiver of the right to pursue other available remedies.
3. Equitable Relief
Such equitable relief shall be in addition, and without prejudice, to any other remedies
available to the non-breaching Party at law or under this Agreement for any such
breach or threatened breach. If either Party seeks injunctive relief, such action shall
not constitute a waiver of the provisions of this Agreement to arbitrate, which shall
continue to govern any and every dispute between the Parties including, without
limitation, the right of damages, permanent injunctive relief, and any other remedy at
1093
law or in equity. For the avoidance of doubt, and consistent with Section 3 of the
Arbitration Schedule (See Form K.10), the Parties agree that such equitable relief may
be sought from any court of competent jurisdiction.
4. Specific Performance (§ 5.3.4)
Notwithstanding the procedures set forth in Article __ (“Dispute Resolution”), in
the event of any actual or threatened default in, or breach of, any of the terms,
conditions and provisions of this Agreement or any Ancillary Agreement, the party or
parties who are to be hereby or thereby aggrieved shall have the right to specific
performance and injunctive or other equitable relief of its rights under this
Agreement or such Ancillary Agreement, in addition to any and all other rights and
remedies at law or in equity, and all such rights and remedies shall be cumulative.
The other party or parties shall not oppose the granting of such relief. The parties to
this Agreement and any Ancillary Agreement agree that the remedies at law for any
breach or threatened breach hereof or thereof, including monetary damages, are
inadequate compensation for any loss and that any defense in any action for specific
performance that a remedy at law would be adequate is waived. Any requirements for
the securing or posting of any bond with such remedy are waived.
5. Specific Performance – Alternate Language (§ 5.3.4)
The parties hereto agree that irreparable damage would occur in the event any provision of this Agreement were not performed by a party in accordance with the terms
hereof and that, prior to the termination of this Agreement pursuant to Section __
(“Termination”), the parties shall be entitled to specific performance of the terms
hereof, in addition to any other remedy at law or equity. The parties acknowledge
that each party shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement by the other party or to enforce specifically the terms and provisions
of this Agreement, in addition to any other remedies available at law or in equity.
COMMENT: A Licensor should never agree to accept the remedy of
specific performance. Although this language is mutual, in practicality,
it has limited application to the licensee as usually the licensee’s only obligation is payment. If the licensee breaches the terms of the license
agreement or its confidentiality obligations, the licensor will likely be
able to obtain injunctive relief.
6. Set-Off Rights
The Licensee shall have all of its common law, equitable and statutory rights
of set-off. These rights shall include, but not be limited to, the Licensee’s
option to withhold for the purposes of set-off any moneys due to the Licensor
under this contract up to any amounts due and owing to the Licensee with
regard to this contract, any other contract with the Licensee, including any
contract for a term commencing prior to the term of this contract, plus any
amounts due and owing to the Licensee for any other reason including,
without limitation, tax delinquencies, fee delinquencies or monetary penalties
relative thereto. The Licensee shall exercise its set-off rights in accordance
with normal State practices including, in cases of set-off pursuant to an audit,
the finalization of such audit by the Licensee, or its representatives.
7. Electronic Self-Help
Licensor agrees that in the event of any dispute with Licensee regarding an
alleged breach of this Agreement or for any other reason, Licensor will not
use any type of electronic means to prevent or interfere with Licensee’s use of
any system or Deliverable created for Licensee under this Agreement or any
SOW without first obtaining a valid court order authorizing same. Licensee
shall be given proper notice and an opportunity to be heard in connection with
any request for such a court order. Licensor understands that a breach of this
provision could foreseeably cause substantial harm to Licensee and to numerous third parties having business relationships with Licensee. No limitation of
liability shall apply to a breach of this paragraph.
8. Mitigation
Each party has a duty to mitigate the damages and losses that would otherwise
be recoverable from the other party pursuant to this Agreement (including
under any indemnity) by taking appropriate and commercially reasonable
actions to reduce or limit the amount of such damages or amounts.
OO. Representations, Warranties and Covenants
(Chapter 5.A.1; § 16)
1. Survival of Representations, Warranties and
Covenants
Except as expressly set forth in this Agreement, (a) the covenants in this Agreement
and the liabilities for the breach of any obligations in this Agreement and (b) any
covenants, representations or warranties contained in this or any Ancillary Agreement and any liabilities for the breach of any obligations contained in any Ancillary
Agreement, in each case, shall survive the termination of this Agreement and shall
remain in full force and effect.
1095
2. Child Labor (§ 16)
Licensor warrants that it does not employ children, prison labor, indentured labor,
bonded labor, or use corporal punishment or other forms of mental and physical
coercion as a form of discipline. Moreover, Licensor agrees that it will not conduct
business with vendors employing children, prison labor, indentured labor, bonded labor
or who use corporal punishment or other forms of mental and physical coercion as a
form of discipline. In the absence of any national or local law, Licensee and Licensor
agree to define “child” as less than 15 years of age. If local minimum age law is set
below 15 years of age, but is in accordance with exceptions under International Labor
Organization (ILO) Convention 138, the lower age will apply. Licensee has the right to
audit Licensor’s premises to ensure compliance with this paragraph.
3. Documentation
Any Documentation provided by Licensor will be sufficient to allow a reasonably
knowledgeable professional to understand, use, maintain, support and modify, as applicable, the Deliverables or Services to which the Documentation pertains, provided
that, in the event that a Deliverable consists solely of object code and may not be
modified absent the source code, Documentation required for modification of such
code may be included together with any agreed source code escrow.
4. International Warranty/Alliance Partner Warranty
Licensor represents and warrants that it is knowledgeable of the laws of the Country
of (insert country or countries here) as it pertains to the operation and use of
Software, and further that it is knowledgeable as to the copyright laws and other
intellectual property laws governing the use of Software in the Country of (insert
country or countries here) and other countries where the Software may be installed
and operating. Licensor hereby agrees to comply with all applicable copyright and
intellectual property laws in (insert country or countries here) and other countries
where the Software may be installed or in operation. Licensor’s failure to comply
with this provision shall constitute a material breach for which Licensee may
immediately terminate this Agreement in accordance with Section ___ (Termination)
and seek other remedies that may be available to it in law or equity, whether
domestically or internationally.
5. Software Functionality and Performance
Licensor represents and warrants to Licensee that the Licensed Software provided
under this Agreement shall: (a) contain the functionality specified in Appendix __
(Documentation); and (b) for the period of time of sixty (60) days from the effective
date (the “Warranty Period”) operate without material defect in accordance with
Appendix __ (Documentation), and the service level and performance requirements.
Licensor shall correct, at no additional cost or expense to Licensee, any failure of the
Licensed Software to operate in accordance with the warranties set forth above. If
additional software, equipment and/or services are required to remedy Licensor’s
breach of the warranty, Licensor shall provide to Licensee, at no additional cost or
expense to Licensee, the additional software, equipment and/or services required for
the Licensed Software to operate in accordance with the warranties set forth above.
In the event Licensor is unable to correct such failure within thirty (30) days after
receiving notice thereof, Licensee shall have the right to terminate in accordance with
Section __ (Termination). This warranty shall survive the expiration or termination
of this Agreement for the applicable Warranty Period.
6. Software - General
Vendor warrants that each Deliverable will conform in all material respects to
the specifications for such Deliverable, as set forth in the applicable Statement
of Work, at the time of delivery or timely acceptance, whichever is later, and
for a period of thirty (30) days thereafter (the “Warranty Period”). If Vendor is notified, during the applicable Warranty Period, that a Deliverable does
not conform in all material respects to the applicable specifications, Vendor
will analyze the non-conformity and correct the Deliverable, so that it conforms in all material respects to such specifications, without additional charge
to Company. However, this warranty shall not apply in the event that (a) there
is a material change in the relevant system configuration and/or operating system, or (b) the Deliverable is modified, after delivery, by any party other than
Vendor. Whenever Company causes Vendor to perform warranty service, and
the analysis phase of such service reveals that the applicable Deliverable does
not meet the requirements for warranty service, due to the existence of a condition described in subsection (a) or (b) of this paragraph, Company shall pay
Vendor, on a time-and-materials basis, for the analysis phase of the service
and for any subsequent, corrective services rendered by Vendor with respect
to such Deliverable.
7. Intellectual Property Infringement – Knowledge
Limitation
Licensor represents and warrants to Licensee that to the best of Licensor’s knowledge
after due investigation and inquiry, the Licensed Software and Licensee’s use of the
Licensed Software does not and shall not infringe upon any Intellectual Property Rights
of any third party, and Licensor further represents and warrants to Licensee there is
currently no actual or, to the best of Licensor’s knowledge after due investigation and
inquiry, threatened suit against Licensor by any third party based on an alleged
violation of such Intellectual Property Rights.
COMMENT: Representations and warranties related to intellectual property infringement are the subject of significant negotiation between the
parties. Many licensors believe that they are unneeded as the licensor is also indemnifying the licensee in the event of a claim of intellectual property
infringement. Many licensees, however, insist on a “belt and suspenders”
1097
approach to provide the greatest possible protection in the event a problem
arises. To the extent it is able to do so, a licensor should seek to limit its risk
by providing a “knowledge” representation and warranty. A knowledge
limitation is not appropriate for infringement for a United States patent,
copyright or other United States intellectual property right. If the licensor is
asked to make a representation and warranty related to the infringement of
intellectual property rights registered in countries that are not signatories to
the Berne Convention, the licensor should insist on a knowledge qualifier.
8. Intellectual Property Infringement
Each party warrants that all information and materials furnished by such party hereunder and products licensed pursuant to this Agreement will not infringe any third
party’s intellectual property rights issued, honored or enforceable under U.S. laws or
international convention(s) (including but not limited to the Berne Convention, Paris
Convention, Universal Copyright Convention, Patent Cooperation Treaty) including
but not limited to patents, copyrights, trademarks, trade names and trade secrets.
9. Open Source Software
Licensor represents and warrants to Licensee that Licensor has not and will not
incorporate any Software (whether in source code or object code format) into the
Work Product, Deliverables, Developed Software, Licensee Software, Licensor
Software, Licensor Proprietary Materials or any other Software used in connection with
providing the Services (collectively, “Affected Products”), and none of the Affected
Products or any portion thereof is or will be subject to or distributed under any license,
other agreement or understanding, that (i) would require the distribution of source code
with the Affected Products or require source code to be made available when such is
distributed to any Third Party; (ii) would impact, restrict or impair in any way
Licensee’s ability to license the Affected Products (to the extent owned or licensable by
Licensee) pursuant to terms of Licensee’s choosing; or (iii) would impact or limit
Licensee’s ability to enforce Licensee’s patent or other Intellectual Property Rights
against any Third Party in any manner.
10.
Open Source Software – Alternative Language
Unless otherwise agreed by the parties in writing, Licensor warrants to Licensee that
the Licensed Software provided pursuant to this Agreement shall not contain any
“Open Source.” For purposes of this Agreement, “Open Source” means any software
code that: (a) contains, or is derived in any manner (in whole or in part) from, any
software that is distributed as free software, open source software, shareware (e.g.,
Linux), or similar licensing or distribution models; and (b) is subject to any agreement
with terms requiring that such software code be (i) disclosed or distributed in Source
Code or Object Code form, (ii) licensed for the purpose of making derivative works,
and/or (iii) redistributable. Open Source includes, but is not limited to, software
licensed or distributed under any of the following licenses or distribution models, or
licenses or distribution models similar to any of the following: (A) GNU’s General
Public License (GPL) or Lesser/Library GPL (LGPL); (B) the Artistic License (e.g.,
PERL); (C) the Mozilla Public License(s); (D) the Netscape Public License; (E) the
Berkeley software design (BSD) license including Free BSD or BSD-style license; (F)
the Sun Community Source License (SCSL); (G) an Open Source Foundation License
(e.g., CDE and Motif UNIX user interfaces); (H) the Apache Server license; and (I) any
licenses listed at www.opensource.org/licenses.
11.
Services – General
Licensor further warrants that the Services will be rendered by qualified personnel in
accordance with generally-accepted, sound practices in the software services
business, and Licensor will correct any Services not in conformance with the
foregoing provided that (a) Licensee notifies Licensor in writing within thirty (30)
days of such performance, (b) there is no material change in the relevant system
configuration and/or operating system, and (c) the Deliverable is not modified, after
delivery, by any party other than Licensor.
12.
Services - Covenant- Standard of Care
The Licensor shall perform the Services required hereunder with care, skill and diligence, in accordance with the applicable professional standards currently recognized
by such profession, and shall be responsible for the professional quality, technical
accuracy, completeness and coordination of all reports, designs, drawings, plans,
information, specifications and other items and Services furnished hereunder. If
Licensor fails to meet applicable professional standards, the Licensor shall, without
additional compensation, re-perform the Services and/or correct or revise any errors
or deficiencies in the Vendor’s reports, drawings, specifications, designs, deliverables
and other items constituting the Services.
13. Services – Alternative Language
Vendor represents and warrants:
(a) It will perform the Services on a professional best efforts basis and that the
findings, recommendations and Deliverables provided or set forth in the
Services, as well as any other materials provided to Customer, will reflect
Vendor’s best professional judgment based on the information available to
Vendor.
(b) Vendor’s contractors assigned to perform Services under this Agreement
and any SOW have the necessary qualifications, competence, and experience
required to provide the Services and the Deliverables. If Customer, at its sole
discretion, is not satisfied with the performance of any Vendor contractor,
Customer shall notify Vendor and Vendor shall promptly furnish replacement
personnel.
14.
In Absence of Service Levels
1099
(a) Licensor shall provide the Services in compliance with the Service Responsibility Matrix, Service Levels and Credits attached hereto as Exhibit __, as
amended from time to time, for each individual Service. Licensor also agrees to provide the Services in compliance with the aggregate Service Levels set forth in Exhibit
__.
(b) In the event that a Service Level has not been met, Licensor shall (1) perform a root-cause analysis to identify the cause of such failure, (2) promptly correct
such failure within the timeframe set forth in Exhibit __, (3) provide Licensee with
a written report detailing the cause of, and procedure for correcting, such failure
and (4) provide Licensee with reasonable evidence that such failure will not reoccur.
Licensor shall promptly provide to Licensee the report described in (3) and the
evidence described in (4), within fourteen (14) days after such Service Level failure
has occurred.
(c) In the event that the Services have not been provided in accordance with
the applicable Service Levels, Licensee shall receive the credits and payments from
Licensor as identified in Exhibit __.
15. Performance Standards For Delivery of Services –
General Language
All Services without expressly defined Service Levels must be performed at least to
the same degree of accuracy, completeness, efficiency, quality and timeliness as is
provided by well-managed suppliers providing services similar to the Services, so
long as such performance is commercially and operationally reasonable. For where
there are expressly defined Service Levels, or where performance can be
commercially reasonably reported, Licensor will measure and report its performance
against these standards on at least a monthly basis, except as many otherwise be
agreed between the Parties in respect of Services performed less frequently than
monthly.
16. Software/Services
Vendor warrants that the products, Software and services sold hereunder will conform to the requirements of this Agreement and any SOW, are new, of good quality,
free from material defects in materials, workmanship and design (to the extent not
manufactured pursuant to Customer’s custom drawings), are free from all liens and
encumbrances, and in the case of services, are performed by technically competent
personnel in a professional manner. Vendor warrants that Software will correctly
recognize, process, and otherwise support the calendar year 2000 and beyond, and
that any services performed by Vendor under the Agreement will be provided in a
manner that maintains correct future date processing. Vendor agrees that for sixty
(60) days after completion, Vendor shall re-perform any defective or non-conforming
services, reports, and/or deliverables provided hereunder at no additional charge to
Customer within thirty (30) days (or as otherwise defined in the SOW) of Customer
supplying written proof of non-compliance with the original specifications. Vendor
warrants that it is the owner of, or otherwise has a right to license the Software and
services. All representations, warranties and conditions shall survive any inspection,
test, acceptance or use of the products or services, and run to Customer, its successors
and assigns. THE FOREGOING WARRANTIES AND THOSE IN ANY STATEMENT OF WORK ATTACHED HERETO ARE IN LIEU OF ALL OTHER
IMPLIED WARRANTIES, INCLUDING BUT NOT LIMITED TO ANY
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
17.
Third Party Products (Including Indemnities)
For any Third Party Products provided by Licensor to Licensee, Licensor hereby
assigns to Licensee all end-user warranties and indemnities relating to such Third
Party Products. To the extent that Licensor is not permitted to assign any of such
end-user warranties and indemnities through to Licensee, Licensor shall enforce such
warranties and indemnities on behalf of Licensee to the extent Licensor is permitted
to do so under the terms of the applicable third party agreements. The Licensor
obligations set forth in this Section ___ are in addition to and not in lieu of
Licensor’s warranty and indemnification obligations, responsibilities and liabilities
with regard to such Third Party Products under this Agreement. This warranty shall
survive the expiration or termination of this Agreement.
18.
No Conflict of Interest by Licensor
Licensor represents that it has not paid and will not pay any fees or made any payments or rebates to any employee, officer, representative or designee of Licensee.
19. Protection of Customer Goodwill and Trade
Name
Vendor represents and warrants that it shall protect, promote and preserve the
goodwill associated with the Customer trade name and any Customer
customer and/or vendor relationships in connection with its performance of
Services hereunder.
20. Operating Systems Compatibility – Future
Modifications Must Be Compatible With The Releases
of Operating System, Databases, etc. (§ 10.H)
Licensor shall provide to Licensee any and all modifications to each Application that
may be required to enable such Application to operate in conjunction with any new
generally available releases and versions of the operating system, database, and other
computer programs with which the installed version of the Applications is designed
to operate as soon as Licensor has installed and operated said modification for its
own internal use or for the use of any one of Licensor’s other commercial customers.
COMMENT: The licensor should carefully consider whether to accept
this language. The cost of ensuring the compatibility of the licensor’s
application with the licensee’s third party applications could be signifi-
1101
cant especially since the licensor has no control over subsequent enhancements or changes made by such third party vendors.
21. Performance in Hosted Environment
When installed on Licensee’s servers by Licensor pursuant to the terms of this
Agreement, the Software, including Third Party Software that is then part of Licensor’s application, will operate in substantially the same way as such software operates
in Licensor’s hosted environment as of such installation date.
22. Vendor Personnel and Performance of Services
Vendor represents and warrants that: (i) it shall complete all tasks identified in a
Statement of Work unless this Agreement or the Statement of Work is terminated as
permitted by this Agreement; (ii) all services provided by Vendor to Licensee
(including without limitation any installation, support and training) will be performed
in a timely, competent, professional, and workmanlike manner, using qualified
employees in conformity with standards generally accepted in the software industry;
(iii) it has a sufficient number of competent, professional and qualified employees to
provide the services specified in a Statement of Work in a timely manner; and (iv) each
of its employees providing services to Licensee have had full-time working experience
in the computer industry and have had experience in the specific technology required
for the duties to be performed.
23.
Unauthorized Code
Unauthorized Code means computer instructions that alter, destroy or inhibit
Licensee’s processing environment, including, but not limited to, data storage and
computer libraries. Unauthorized Code includes, but is not limited to, instructions
programmed to activate at a predetermined time or upon a specified event such as
time bombs, and programs that self-replicate without manual intervention and/or that
purport to do a meaningful function but are designed for a destructive function, such
as viruses. During the term of this Agreement, Licensor represents and warrants that:
(a) Licensed Software will not contain any Unauthorized Code; (b) Licensor shall
take reasonable steps to test all Licensed Software for the presence of Unauthorized
Code; and (c) Licensor shall not intentionally insert any Unauthorized Code into
Licensee’s environment and/or systems or intentionally invoke any Unauthorized
Code that may be part of Third Party Products provided by Licensor and installed on
Licensee’s environment and/or systems.
24.
Unauthorized Code – Alternative Language
Vendor warrants that when the deliverables are computer software or data, the
deliverables will not contain any feature, program, data or device that will
cause the deliverables to stop functioning, function improperly or slow down
because of (i) the passage of a period of time, (ii) an attempt by Company to
remove the deliverables from a particular CPU or computer environment and
install it on a different CPU or computer environment, (iii) an instruction from
Vendor during a payment dispute, or (iv) the occurrence of any other event.
Vendor further warrants that Vendor will take no action to disrupt or terminate
the functioning of the deliverables without Company's prior written consent or
a court order. This further warranty is given without regard to whether or not
a breach or alleged breach of this Contract has occurred, and without regard to
whether or not Company has paid money due or allegedly due from Company
to Vendor. Because breach by Vendor of either or both of the foregoing
warranties could result in extensive damage to Company's business and
property, Vendor agrees that, notwithstanding any other provision to the
contrary herein or in a Service Order (including any limitation of liability),
Company may pursue all remedies in law and at equity for any breach of
either of these warranties.
25. Viruses – Neutral – Bilateral (§ 16.L)
Each Party will use commercially reasonable efforts to prevent viruses from being coded or introduced into the computer systems used to provide the Services in compliance
with Licensor’s policies regarding virus protection as documented in the SOW.
In the event a virus is found to have been coded or introduced into the computer
systems utilized in connection with the Services delivered by Licensor, Licensor will
use commercially reasonable efforts to eliminate the effects of the virus. If Licensee
is found to have introduced a virus into the computer systems utilized in connection
with the Services, the Licensee will pay Licensor its standard hourly rates to eliminate
the effects of the virus. Licensor will be excused from any SLRs that are negatively
impacted by any virus introduced by Licensee until it is removed, provided that
Licensor uses good faith efforts to remove such virus as soon as possible.
“Virus” means an extraneous piece of computer code knowingly and maliciously
inserted by any person for the purpose of causing undisclosed disruption or other
harm to the operation of a computer program. Nothing in this Section __ will serve
to reduce Licensor’s disaster recovery obligations pursuant to Section __ (Disaster
Recovery).
26. Viruses – Licensor Oriented (§ 16.L)
Notwithstanding any other provision in this Agreement to the contrary, if the
Licensor or any of its employees, subcontractors or consultants introduces a virus or
malicious, mischievous or destructive programming onto the Licensee’s software or
computer networks and has failed to comply with the Licensee software security
standards, and provided further that the Licensee can demonstrate that the virus or
malicious, mischievous or destructive programming was introduced by the Licensor
or any of its employees, subcontractors or consultants, the Licensor shall be liable for
any damage to any data and/or software owned or licensed by the Licensee. The
Licensor shall be liable for any damages incurred by the Licensee including, but not
limited to, the expenditure of Licensee funds to eliminate or remove a computer virus
or malicious, mischievous or destructive programming that result from the Licensor’s
failure to take proactive measures to keep virus or malicious, mischievous or
destructive programming from originating from the Licensor, its servants, agents or
employees through appropriate firewalls and maintenance of anti-virus software and
1103
software security updates (such as operating systems security patches, etc.). In the
event of destruction or modification of software, the Licensor shall eliminate the
virus, malicious, mischievous or destructive programming, restore the Licensee’s
software, and be liable to the Licensee for any resulting damages. The Licensor shall
be responsible for reviewing Licensee’s software security standards in effect at the
commencement of the Agreement and complying with those standards. The
Licensor’s liability shall cease if the Licensee has not fully complied with its own
software security standards.
28. Express Negligence
THE INDEMNIFICATION, RELEASE AND ASSUMPTION PROVISIONS PROVIDED FOR IN THIS AGREEMENT SHALL BE APPLICABLE WHETHER OR
NOT THE LOSSES, COSTS, EXPENSES AND DAMAGES IN QUESTION AROSE
SOLELY OR IN PART FROM THE ACTIVE, PASSIVE OR CONCURRENT
NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT OF ANY INDEMNIFIED
PARTY.
LICENSEE AND LICENSOR ACKNOWLEDGE THAT THIS
STATEMENT COMPLIES WITH THE EXPRESS NEGLIGENCE RULE AND IS
CONSPICUOUS.
29. Use of Licensee as Alpha/Beta Site
Licensor shall not use Licensee as an alpha or beta site for any Software or Services
to be provided, if any, without the prior written consent of Licensee.
30. Obligation to Notify Other Party of Material
Action
Each party warrants that it has disclosed, and agrees it is under a continuing obligation to disclose promptly to the other party, claims or actions against such party that
may adversely affect performance under this Agreement, including claims or actions
alleging intellectual property infringement.
31. Compliance with Laws
Licensor represents and warrants to Licensee that Licensor is not, and covenants that
it shall not be, in violation of any Laws to which it is subject, and has not failed,
and shall not fail, to obtain any licenses, permits, franchises or other governmental
authorizations necessary for the provision of the Licensed Software, ownership of its
properties or the conduct of its business, which violation or failure, either individually or in the aggregate, might adversely affect its business, properties or financial condition, the consummation of the transactions contemplated by this Agreement, or the
performance of its obligations hereunder.
32. Corporate Authority
Licensor represents and warrants to Licensee that: (a) Licensor is a [STATE OF
INCORPORATION] corporation, and is qualified and registered to transact business
in all locations where the performance of its obligations hereunder would require
such qualification; (b) Licensor has all necessary rights, powers, authority, consents,
licenses, approvals and permissions to enter into and perform this Agreement, and
the execution, delivery and performance of this Agreement by Licensor have been
duly authorized by all necessary corporate action; (c) the execution and performance
of this Agreement by Licensor shall not breach any agreement, covenant, court order,
judgment or decree to which Licensor is a party or by which it is bound; and (d)
Licensor has, and promises that it shall maintain in effect, all governmental licenses
and permits necessary for it to provide the Services and/or contemplated by this
Agreement.
33. Authorization to Perform
Vendor warrants it has obtained all licenses, authorizations or permits required to perform its obligation under this Agreement, under all applicable
federal, state, or international country laws, or laws of any political subdivision thereof, and under all applicable rules and regulations of all authorities
having jurisdiction over the licensing of the Software, Services and any other
work contemplated hereunder.
34.
Authorization to Perform – Alternative Language
Vendor will: (1) have obtained all licenses, permits and approvals required of
it in its respective role by any country, state or local licensing, regulatory, or
other agency or authority for performance of the Services; (2) maintain in full
force and effect all such licenses, permits, authorizations and approvals during
the Term until all the Services and/or Deliverables have been accepted by
Customer under this Agreement, and through any period of warranty for the
Services and/or Deliverables (subsections (1) and (2) of this section 8.4 being
referred to as “Authorizations”); (3) inform Customer immediately of the
expiration, termination or non-renewal, denial or revocation of any
Authorization.
Vendor warrants to the extent the Vendor Services incorporates or includes
any third party software, hardware or applications, that Vendor has obtained
all rights necessary to incorporate or include such third party software,
hardware or application, and for Customer and Customer Customers to
receive and use such third party software, hardware or application, as part of
the Vendor Services under this Agreement.
1105
35. Covenant of Further Assurances – Mutual
Licensee and Licensor covenant and agree that, subsequent to the execution and
delivery of this Agreement and without any additional consideration, each of
Licensee and Licensor shall execute and deliver any further legal instruments
and perform any acts which are or may become necessary to effectuate the purposes of this Agreement.
36. Safety
Vendor represents and warrants that it has communicated and translated to all
Representatives all applicable safety, health, and Applicable Laws and jobrelated duties and hazards (including, without limitation, (i) Applicable Laws
and Occupational Safety and Health Administration (“OSHA”) requirements;
(ii) Vendor’s safety program; (iii) any project-specific safety plan; (iv) any
information specific to the Services performed under this Agreement; (v) any
Work Site hazard; and (vi) obligations under this Agreement). To ensure
ready communication of information at all times, if any Representative is nonEnglish-speaking, Vendor agrees that it will ensure the availability of an
English-speaking Representative who is able to communicate with, and
translate for, the non-English speaking Representatives. If non-English
speaking Representatives are divided into separate work groups, Vendor must
make an English-speaking Representative available for each such group.
Vendor agrees to continue this communication and translation program for all
new Representatives and on each project and to provide necessary
informational updates for each project throughout the term of this Agreement.
37 . Vendor Employee Immigration Status
The Vendor represents and warrants that Vendor and all Vendor employees
engaged to perform Services for the Company in the United States are legally
permitted under the laws, statutes, regulations (administrative or otherwise),
and ordinances of the United States and any state in which such Services are
performed. The Vendor will, upon request in writing from the Company,
designate for the Company: Worker’s classification, immigration status, job
responsibilities, and, if applicable to maintaining the Worker’s immigration
status, the Worker’s compensation limitations. The foregoing information is
provided to the Company only so that the Company may verify Vendor’s
compliance with this Paragraph, and the Company has no responsibility to
obtain or maintain any Worker’s immigration status. The Vendor will
indemnify, defend, and hold harmless the Company for any damages,
liabilities, obligations, costs, fees, and expenses (including, but not limited to,
attorney’s fees and costs) incurred as a direct or indirect result of Vendor’s
breach of, or misrepresentation made in, this Paragraph.
38 . Equal Opportunity Employer
Vendor represents and warrants that Vendor is an equal employment
opportunity employer, and Vendor’s employment decisions are based solely
on merit and business needs and not on race, color, gender, age, sexual
orientation, religion, disability or any other factor protected by law.
39. Foreign Corrupt Practices Act
Vendor represents and warrants to Customer that: (i) Vendor and, to the best
of Vendor’s knowledge, Vendor Personnel are currently complying, and have
at all times complied, with the Foreign Corrupt Practices Act of 1977, as
amended, and the rules and regulations and Department of Justice
interpretations thereunder (collectively, the “FCPA”), and to the extent
applicable to Vendor either directly or because of Vendor’s engagement with
Customer, any other Law of any non-United States jurisdiction relating to
anti-corruption or bribery, including the United Kingdom Bribery Act of
2010, as amended (collectively with the FCPA, “Anti-Corruption Laws”),
and Vendor has established and implemented an anti-corruption compliance
program that includes internal controls, policies, and procedures, as well as
appropriate management oversight and monitoring, governance and training,
to ensure compliance with the Anti-Corruption Laws; (ii) neither Vendor, nor
to the knowledge of Vendor after reasonable inquiry, Vendor Personnel, have
in the last five years (a) taken any direct or indirect action that would result in
a violation of Anti-Corruption Laws, including, without limitation, making,
offering or authorizing any bribe, payment, gift, entertainment, rebate, or any
other thing of value to any foreign government official or employee, political
party or official, or candidate, a public international organization, a
commercial entity or individual, regardless of form, whether tangible or
intangible, to obtain favorable treatment in obtaining or retaining business, for
such favorable treatment already obtained, for other unlawful expenses
relating to political activity, or made any other unlawful payment to any of the
foregoing, nor (b) been under, nor is there any basis for, an administrative,
civil or criminal investigation, indictment, information, or audit by any party,
in connection with alleged or possible violations of Anti-Corruption Laws, nor
(c) received notice from, or made a voluntary disclosure to, any governmental
entity, including the U.S. Department of Justice or the U.S. Securities and
Exchange Commission regarding alleged or possible violations of any Anti1107
Corruption Laws; and (iii) the financial records of Vendor are accurate and
complete, represent actual bona fide transactions, and have been maintained in
accordance with sound business practices, including the maintenance of
adequate internal accounting controls.
40.
Date Compliance and Testing
Vendor represents and warrants that the Software as delivered by Vendor to
Licensee: (i) does not have a life expectancy limited by date and/or time format; (ii) will record, store, process and present calendar dates correctly; (iii)
will not lose functionality, data integrity or performance with respect to any
date; and (iv) will be interoperable with other software used by Licensee
which may deliver date records from the Software, or interact with date records of the Software (“Date Warranty”); and (v) this Date Warranty is perpetual. In the event a Date Warranty failure, malfunction, defect, etc. (“Condition”) is reported to Vendor by Licensee and such Condition remains unresolved for three (3) business days, at the sole discretion of Licensee, Vendor
shall send, at Vendor’s sole expense, qualified and knowledgeable representatives to Licensee’s premises where said representatives will continue to address and work to remedy the Condition and/or nonconformity with the Date
Warranty. If the condition remains un-remedied for any additional seven (7)
business days or a total of ten (10) business days, Licensee may terminate this
Agreement in whole or part, or upon demand, receive reimbursement of all the
fees paid by Licensee for such non-conforming Software. In the event of a
breach of this Date Warranty, Vendor shall indemnify and hold harmless Licensee, its officers, directors, employees and representatives from and against
any and all harm, injury, damages, cost, and expenses including reasonable
attorney fees incurred, by Licensee arising out of said breach. This provision
shall survive any expiration or termination of this Agreement.
41. ISAE 3402 / SSAE 16 - Hosting
Vendor warrants that the entity providing hosting services under this
Agreement will take commercially reasonable measures to maintain the
controls environment at its Data Center in a manner that is consistent with
meeting the objectives of such controls, as evaluated in the ISAE 3402 / SSAE
16 audits.
42. Business Continuation
Vendor hereby represents, warrants, and covenants to Customer that it (i) has
and shall maintain a disaster recovery and business continuation plan that
shall enable Vendor to provide the Services and Deliverables in accordance
with the applicable Statement of Work, (ii) shall test the operability of such
plan at least once every 12 months and revise such plan as necessary to ensure
continued operability and (iii) shall activate such plan upon the occurrence of
any event materially affecting Customer’s timely receipt of the Services
and/or Deliverables.
43.
Disaster Recovery/Business Continuity
Licensor represents and warrants that it shall develop and implement, at its
sole expense, an adequate disaster recovery plan to ensure disaster
recovery/business continuity and back-up capabilities for the Services.
Licensor shall provide Licensee with a written copy of its disaster
recovery/business continuity plan and any material modification promptly
upon Licensee’s request. Additional information regarding Licensor’s
disaster recovery/business continuity procedures, including business recovery
timeframes, will be included, as needed, in the applicable Requisition. In the
event of (i) a Force Majeure Event that has had or may have a catastrophic
effect on the ability of Licensor to provide Services to Licensee or Licensee to
receive the Services or receive and use any Deliverable, or (ii) a security
breach of Licensee or Licensor’s facilities or Licensee’s data, Licensor shall
notify Licensee of the same in writing (a “Disaster Notice”) within 24 hours
and shall develop any work-around that is necessary to ensure that Licensee
continues to receive the Services.
44.
Massachusetts Security Standards
Licensor acknowledges that to the extent that it maintains or has access to certain Licensee Personal Data of Massachusetts residents, Licensor is obligated
to comply with the Massachusetts Office of Consumer Affairs and Business
Regulation standards for the protection of personal information of Massachusetts residents, 201 CMR 17.00 (‘Standards”). Licensor represents and warrants that as of the date of this Agreement and for so long as it has Licensee
Personal Data of Massachusetts residents thereafter, it shall be in compliance
with the Standards and that it shall notify Licensee in writing immediately if it
is no longer in compliance with the Standards. Licensor further represents
and warrants that it shall certify to Licensee using the form attached as Schedule C that it is in compliance with the Standards.
1109
45. Warranty Disclaimer – Software Does Not
Operate Error Free
Vendor does not warrant that the Software will meet Customer’s
requirements, that the Software will operate in the combinations which
Customer may select for use, that the operation of the Software will be
uninterrupted or error-free, or that all Software errors will be corrected.
If Customer does not obtain Maintenance services, the Software is distributed
“AS IS.”
46 Warranty Disclaimer - Vulnerability to Hacking
In addition, due to the continual development of new techniques for intruding
upon and attacking networks, Vendor does not warrant that the Software or
any equipment, system or network on which the Software is used will be free
of vulnerability to intrusion or attack.
47. Warranty Disclaimer - General
The Parties hereby agree that, in respect of information and computer programs
provided by one Party to the other Party under this Agreement, and except to the
extent there are express warranties stated in this Agreement, if any: THERE ARE
NO WARRANTIES (A) AGAINST INTERFERENCE WITH ENJOYMENT OF
INFORMATION, (B) AGAINST INFRINGEMENT, (C) THAT INFORMATON,
EITHER PARTY’S EFFORTS, OR SYSTEMS, AS EACH MAY BE PROVIDED
UNDER THIS AGREEMENT, WILL FULFILL ANY OF EITHER PARTY’S
PARTICULAR PURPOSES OR NEEDS, AND (D) WITH RESPECT TO
DEFECTS IN THE INFORMATION OR SOFTWARE WHICH AN
EXAMINATION SHOULD HAVE REASONABLY REVEALED. THE PARTIES
HEREBY
EACH
DISCLAIM
IMPLIED
WARRANTIES
OF
MERCHANTIBILITY, QUALITY, AND ACCURACY. THE INFORMATION
AND COMPUTER PROGRAMS PROVIDED UNDER THIS AGREEMENT ARE
PROVIDED WITH ALL FAULTS, AND THE ENTIRE RISK AS TO
SATISFACTORY QUALITY, PERFORMANCE, ACCURACY, AND EFFORT IS
WITH THE USER OF SUCH INFORMATION AND COMPUTER PROGRAMS.
48. Warranty Disclaimer – Alternative Language
EXCEPT AS PROVIDED IN SECTIONS ___ (“LIMITED WARRANTY”) AND ___
(“INTELLECTUAL PROPERTY WARRANTY”), THE LICENSED PROGRAM AND
THE MEDIA UPON WHICH IT IS SUPPLIED ARE PROVIDED “AS IS”.
LICENSOR EXPRESSLY DISCLAIMS ALL OTHER WARRAN-TIES, EXPRESS OR
IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, COURSE
OF CONDUCT, AND USAGE OF TRADE. LICENSEE UNDERSTANDS THAT
LICENSOR OBTAINS DATA INCLUDED IN THE LICENSED PROGRAM FROM
THIRD PARTIES, INCLUDING GOVERNMENT AGENCIES, AND THAT
LICENSOR IS UNDER NO OBLIGATION TO CONTINUE THE DEVELOPMENT
OF THE LICENSED PROGRAM OR TO CORRECT ANY ERROR, OMISSION OR
MALFUNCTION THEREIN. NEITHER LICENSOR NOR ANY OF ITS SALES
REPRESENTATIVES SHALL BE OBLIGATED TO UPDATE OR SUPPORT THE
LICENSED PROGRAM. LICENSEE EXPRESSLY AGREES THAT LICENSOR
DOES NOT REPRESENT OR WARRANT THAT (i) THE OPERATION OF THE
SOFTWARE OR ANY SUBSEQUENT RELEASES SHALL BE UNINTERRUPTED
OR ERRORFREE, (ii) FUNCTIONS CONTAINED IN THE SOFTWARE SHALL
OPERATE IN COMBI-NATIONS THAT MAY BE SELECTED BY LICENSEE, (iii)
THE SOFTWARE OR THE SOFTWARE RELEASES SHALL MEET LICENSEE’S
REQUIREMENTS, OR (iv) THE SOFTWARE OR THE SOFTWARE RELEASES
SHALL OPERATE ON COMPUTER HARDWARE OR OPERATING SYSTEMS
OTHER THAN THE PLATFORM, IF ANY, SPECIFIED IN THE APPLICABLE
DOCUMENTATION. THE PARTIES ACKNOW-LEDGE THAT EACH OF THE
PROVISIONS OF THIS SCHEDULE __, INCLUDING WITHOUT LIMITATION
THE PAYMENT PROVISIONS HEREOF, WERE BASED, IN PART, ON THE
PROVISIONS OF SECTIONS ___ (“LIMITED WARRANTY”), ___ (“EXPRESS
WARRANTY”), ___ (“INTELLECTUAL PROPERTY WARRANTY”) AND THIS
SECTION ___, AND THAT EACH PARTY FULLY UNDERSTANDS AND
ACCEPTS THE OBLIGATIONS AND LIMITATIONS DESCRIBED IN SECTIONS
___ (“LIMITED WARRANTY”), ___ (“EXPRESS WARRANTY”), ___
(“INTELLECTUAL PROPERTY WARRANTY”) AND THIS SECTION ___, WHICH
SHALL SURVIVE THE TERMINATION, FOR ANY REASON, OF THIS
AGREEMENT.
49. Warranty Disclaimer - Third-Party Software,
Hardware and Equipment.
Customer understands that Vendor may provide to Customer certain thirdparty software, hardware and equipment. Customer acknowledges that
Customer shall be licensing such third-party software and purchasing such
equipment and other hardware directly from such third-party vendors
including the right to use such software in connection with the Licensed
Software, and Vendor is obtaining such software, hardware and equipment
solely as a convenience to Customer. VENDOR MAKES NO
REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR
IMPLIED (INCLUDING BUT NOT LIMITED TO ANY WARRANTY OF
MECHANTABILITY AND/OR FITNESS FOR A PARTICULAR
PURPOSE AND/OR USE), WITH RESPECT TO ANY THIRD-PARTY
SOFTWARE, HARDWARE AND/OR EQUIPMENT, INCLUDING THE
ABILITY OF THE SAME TO INTEROPERATE WITH THE LICENSED
SOFTWARE. AS BETWEEN VENDOR AND CUSTOMER, ANY AND
1111
ALL THIRD-PARTY SOFTWARE, HARDWARE AND EQUIPMENT IS
EXPRESSLY PROVIDED “AS IS.”
To the extent contractually permitted, Vendor agrees to pass-through and
assign to Customer any warranties provided by third-party manufacturers in
connection with any third-party software, hardware and equipment.
50. Performance – No Use of Public Cloud
Licensor represents and warrants and undertakes that (i) the Services provided
hereunder will be performed by qualified Personnel in a good and workmanlike
manner in the estimated and projected time specified; (ii) the Deliverables and
Services will conform to the specifications stated in the Requisitions; (iii) the
Deliverables will process information with respect to securities designated in
multiple currencies; (iv) if applicable, the Deliverables will process information with
respect to securities designated in decimals, (v) neither the Deliverables nor any
update or revision thereof will include any virus or mechanism that is designed to
delete, disable, interfere with or otherwise harm the Deliverables (or Licensee’s
hardware, data or other programs), make it inaccessible to Licensee once the
Deliverable has been installed, or that is intended to provide access to or produce
modifications not authorized by Licensee, (vi) no Deliverable will contain open
source software or freeware unless Licensee has specifically authorized such use in
writing and (vi) Licensor will not use a public cloud in connection with the
performance of the services or the processing of Licensee Confidential Information
unless Licensee has specifically authorized such use in writing.
PP. Reseller (Chapter 8.B.1)
1.
Due Diligence
1.1 Reseller shall use diligent efforts to bring one or more Licensed
Products to market through a thorough, vigorous and diligent program
from exploitation of the software intellectual property rights to attain
maximum commercialization of the Licensed Products.
1.2 Reseller’s failure to perform in accordance with Section ___
(“Reseller Obligations”): shall be grounds for Licensee to terminate
this Agreement pursuant to Section __ (“Termination”) hereof.
1.3 Licensee agrees that in the discretion of Licensee commercialization
efforts may be directed first to industrialized nations of the world
commencing with the United States of America, and only subsequently
to other regions as reasonably and commercially practicable for
Reseller given its strategies and resources.
2. Training Services
Reseller is not currently authorized to provide training on the Licensed Software. To provide training on Licensed Software requires Reseller to license
Licensor Training materials at a license fee of $50,000 per year, which training materials may be modified by Reseller in its sole discretion to reflect any
customization of the Licensed Software as part of the Reseller Solution. In
addition to the purchase of the training materials, Reseller agrees that only
Licensor Certified Instructors are authorized to provide training on the Licensed Software, which certification may be obtained by Reseller Personnel at
cost in accordance with Licensor’s then current training course offerings.
Where such training does not involve the Licensed Software, nothing herein
shall prevent Reseller from providing end-user training with respect to the
Reseller Solution which is independent of the purchase of any training
materials from Licensor or the involvement of any Licensor Certified
Instructors.
3.
Provision of Sublicense Agreements
Licensee agrees to forward to Licensor a copy of any and all sublicense
agreements promptly upon execution by the parties.
4. Restrictions on Referral Fees.
No referral and/or influence fees shall be paid or received by the Parties based
upon any transaction or sale to a Government Customer under the terms of this
Agreement. A Government Customer shall mean a customer or an end user for a
customer that is the government of (i) the United States, (ii) any state of the United
States, (iii) any city, county, town, territory, or other municipality of the United
States, (iv) any corporation, educational institution, or other entity that is owned or
controlled by, or subject to the procurement regulations of any entity in subsections
(i), (ii), or (iii) above, and (v) any prime contractor who holds a contract with any
entity in subsections (i), (ii), (iii), or (iv) above when the fees under this Agreement
1113
are related to sales in support of that contract.
5. Third Party Referral Fees
If Vendor receives a refund, credit or other rebate for goods, services,
or expenses purchased by vendor in connection with the Services that has not
previously been factored into the Charges, Vendor will promptly notify
Customer and will pay such amount to Customer (or, if applicable, provide a
credit on the next delivered invoice) within thirty (30) days after receipt
thereof.
QQ.
RFP/RFI Related (Chapter 2)
1. Vendor Disclaimer Related to RFP Submission
Vendor has reviewed the Master Services Agreement (MSA) attached to this RFP and
believes that at such time as more business details are agreed upon, including the
information to be contained in the various schedules that the parties will be able to
readily come to satisfactory closure on all of the terms contained in the MSA. For
example, and not by way of limitation, Vendor seeks to discuss with Customer: (i) the
scope and application of the indemnifications and the language regarding same, (ii) the
need for deliverable specific changes to the warranty contained in Section ___
(Warranties) and a disclaimer of implied and non-express warranties; (iii) the need for
some more specific detail with regard to Customer’s ownership right in reports
generated by Vendor, including a reservation of right in Vendor’s pre-existing IP, and
industry standard limitations on the party’s liability for any claims arising in connection
with the MSA. Vendor reserves the right to comment in greater detail on these and
other issues in the MSA at such time as is appropriate based on the availability of known
business details and any down selection of Vendor as may occur.
2.
Assignment of Antitrust Claim
As part of the consideration for entering into any contract pursuant to this
Invitation for Bid, the firm named on the front of this Invitation for Bid, acting
herein by the authorized individual, its duly authorized agent, hereby assigns,
sells and transfers to the State of _______ all rights, title and interest in and to
all causes of action it may have under the antitrust laws of the United States or
this state for price fixing, which causes of action have accrued prior to the
date of this assignment and which relate solely to the particular goods or
services purchased or produced by this state pursuant to this contract.
3. RFP/RFI Confidentiality Legend
THE INFORMATION CONTAINED HEREIN IS CONFIDENTIAL,
PROPIETARY AND CONSTITUTES TRADE SECRETS OF VENDOR.
4.
RFP/RFI Exceptions Language
Pursuant to Section ____ (“RFP Rules”), Vendor takes exception to the terms
and conditions of the License Agreement as set forth below. Notwithstanding
the proposed modifications set forth below, Vendor reserves the right to negotiate all contract terms and conditions in the context of the work that is awarded.
Vendor does not agree that the RFP or Vendor’s proposal will be incorporated
“AS-IS” into the final agreement. Rather the parties will negotiate the License Agreement and a corresponding statement of work for each project.
Vendor has prepared this Proposal in good faith based on information made
available to it by Customer and it is intended only for Customer’s review.
Except as expressly agreed in a subsequent signed statement of work, nothing
in this Proposal or any related discussions or correspondence should be construed as a representation that should be relied upon.
5.
RFP/RFI Response – Acceptance of Terms –
Favors Customer
Vendor accepts the terms and conditions as set forth in RFP and Appendices
A, B and C, and agrees to satisfy the comprehensive programmatic duties and
responsibilities outlined in this RFP in the manner set forth in this RFP.
Vendor agrees to execute a contractual agreement composed substantially of
the terms and conditions set forth in the draft contract included in the RFP,
and accepts as non-negotiable the terms and conditions set forth in
Appendices A, B, and C to the draft contract
6. RFP/RFI Response Not Confidential
Customer policy, consistent with that of many corporations, does not
permit our acceptance of proprietary information of others except under
written agreement. Therefore, no specification, drawings, sketches, models,
1115
samples, tools, computer programs, or any other technical, financial or market
information or data, whether written, oral or otherwise, that you furnish to
Customer in response to this RFI shall be marked or identified by you, or
treated by Customer, as confidential or proprietary, unless Customer and
Vendor have entered a written non-disclosure agreement that is specific to this
RFI and you comply with such non-disclosure agreement. Marking of a
proposal as confidential, proprietary or with other similar legend will not be
honored. FAILURE TO COMPLY WITH THE FOREGOING POLICY CAN
RESULT IN THE DISQUALIFICATION OF YOUR RFI RESPONSE.
RR. Service Levels (Chapter 7.G; § 3.10.3.B)
1. Performance Standards For Delivery of Services –
General Language
Licensor will devote commercially reasonable efforts to perform the Services ethically, promptly and diligently and commensurate with professional standards associated
with Licensor’s profession.
Service Level – Severity Levels
2.
Schedule __ sets forth the Service Level Agreement metrics against which
Vendor’s performance will be measured. These metrics include Critical Service Levels (SLAs) and other performance indicators.
The Severity Level described in the SLA Schedule describes the measurement
of how crucial it is to execute the correction or change for a given event.
There are four categories of Severity Levels: Critical, High, Medium, and
Low.

Critical/High Severity Level: means (i) events or problems having a
direct impact on Customer’s ability to do business, or (ii) (a) an event
and/or problem with significant impact to multiple Customer Business
Units, or (b) an immediate and severe impact to a core business process of a single Customer Business Unit or to an operation that is mission critical to the business, or (iii) events or problems that cause a
Customer wide, global or regional outages or a complete loss of service, or (iv) events or problems with no workaround available and processes cannot continue.

Medium Severity Level: means (i) an event and/or problem that results in a major impact to a single Business Unit or to a critical operation, or (ii) an event or problem typically contained within a Business
Unit or a local region, but with major business and functional impact
to the business or area, (iii) events or problems with a workaround is
not available; however, processing can still continue in a restricted
manner.. This is not as widespread as an issue that affects Customer in
its entirety.

3.
Low Severity Level: means (i) an event and/or problem that affects a
single workgroup or functional group, but does not have immediate
impact to a Business Unit as a whole, or (ii) a problem that severely
affects a single Customer who has no other resources available to
perform his or her role, or (iii) minor inefficiencies are encountered,
however a workaround is available and processing can continue.
Severity Level Low is a problem that has limited business impact, is
not critical in nature, and does not have any significant impact to the
organization.
Service Levels – General Terms
If applicable, Vendor shall provide the Services in accordance with the service
levels set forth in the applicable Statement of Work (the “Service Levels”).
Vendor shall measure and report on a monthly basis its performance of the
Services against the applicable Service Levels. Such measurement and
monitoring shall be of sufficient detail to verify compliance with the Service
Levels, and shall be subject to audit by Customer pursuant to Section __
(“Audits”). Any time Vendor fails to meet a Service Level, Vendor shall (a)
promptly investigate and report to Customer on the root cause of the problem;
(b) advise Customer of the remedial efforts being undertaken with respect to
this failure to meet a Service Level; (c) fully and completely correct the
problem and begin meeting the Service Level; and (d) take appropriate
preventative measures so that the problem does not reoccur. If Vendor fails to
meet Service Levels, Customer shall receive a monetary credit against the
Fees payable to Vendor, calculated as set forth in the applicable Statement of
Work (the “Service Level Credits”).
4. Service Level Defaults and Credits.
In the event any termination of this Agreement or other event triggers a
service level credit under the terms of any SOW (“Service Level Credit”),
the Parties agree that such Service Level Credit will not be construed as a
penalty or as liquidated damages and, accordingly, will not be deemed to
constitute Licensee's remedy, exclusive or otherwise, for any damages caused
by a service level default. Service Level Credits will be in addition to any
other monetary and non-monetary remedies available to Licensee under the
Agreement, at law or in equity with respect to a service level default or the
1117
events that result in a service level default; provided, however, that if
Licensee asserts any claim for damages arising from or in connection with a
service level default, Licensee agrees that the amount of damages payable to
Licensee in respect of the claim will be reduced by the amount of any Service
Level Credit given by Licensor with respect to the default. Licensor hereby
irrevocably waives any claim or defense that Service Level Credits are not
enforceable or that they constitute a sole and exclusive remedy for Licensee
with respect to any service level default.
5. Service Level Credit Calculation and Earnback
If Vendor fails to achieve the minimum level of performance for any one or
more of the Service Level Agreements in any month, Customer will receive a
fee reduction (a “Fee Reduction Credit”) from Vendor against the charges
owing to Vendor in the next month. The methodology described below will
be used to determine the applicable Fee Reduction Credit.
For any failure to meet a Service Level Agreement, the Fee Reduction Credit
will be determined as follows:

Fee Reduction Credit = (Sum of the Fee Reduction Percentage
Amounts) multipled by (eight percent (8%) of the monthly invoice
amount)
Where:

Fee Reduction Percentage Amount = the percentage amount set
forth in the SLA table in Exhibit ____.

The total Fee Reduction Percentage Amounts may not exceed
100%. The Fee Reduction Percentage Amounts may be re-allocate
by mutual written agreement between the parties.
For example, if the monthly invoice amount is $100,000 and a
Statement of Work sets a 50% Fee Reduction Percentage Amount to a
Severity 1 Problem Service Level Agreement and a 20% Fee
Reduction Percentage Amount to a Severity 2 Problem Service Level
Agreement, the Fee Reduction Credit for a month in which both
Service Level Agreements were missed would be:
(50% + 20%) * (8% * $100,000) = $5,600
Customer acknowledges and agrees that there may be factors beyond Vendor’s control that prohibit Vendor from meeting Service Level Agreements.
Vendor will inform Customer in writing of any such factors and Customer
will approve exceptions on a case-by-case basis, which approval will not be
unreasonably withheld. Metrics for such approved exceptions will be eliminated from all reporting and Fee Reduction Credit calculation.
Outage Time, as well as the Problem Resolution Service Level Agreements,
involves elapsed time. The elapsed time commences when the problem ticket
is assigned to Vendor’s problem ticket queue within Customer’s problem
ticket tracking system and ends when the person placing the problem ticket
has confirmed that the problem has been resolved. Customer acknowledges
that there are times when responsibility for incident or problem resolution
may be shared between Vendor and Customer or a third party. Vendor will
not be held accountable for the time during which responsibility for incident
or problem resolution has been transferred, albeit temporarily, to Customer or
a third party. In no event does this relieve Vendor from making every reasonable effort to implement a timely resolution of problem tickets assigned to the
Vendor ticket queue, which effort may include escalation to the appropriate
Vendor representative as appropriate.
Earnback
Vendor shall have the opportunity to earn back Service Level Credits
as follows:
1.
At the end of each Contract Year, Vendor shall provide a report
to Customer that will include, with respect to each Service Level
for which there was a Service Level Default during the preceding Contract Year, the following:
a.
Statistics on Vendor’s average monthly performance during
the preceding Contract Year;
b.
The average of Vendor’s performances in that Service Level
during the preceding Contract Year (“Yearly Performance
Average”); and
c.
The total amount of Service Level Credits imposed for Service Level Defaults in that Service Level.
If, during the preceding Contract Year, Vendor achieved a Yearly
1119
Performance Average in a Service Level that was equal to or greater than the
Minimum Service Level in effect for such Service Level during such Contract
Year, Vendor will be entitled to receive an earnback credit (“Earnback
Credit”) equal to all Service Level Credits assessed for that Contract Year for
Service Level Defaults in that Service Level; provided that, in no event will:
(i) the total amount of Earnback Credits for any Contract Year exceed the total
amount of Service Level Credits assessed for Service Level Defaults in that
Critical Service Level for that Contract Year; or (ii) any Earnback Credit carry
forward to subsequent Contract Years or back to previous Contract Years.
Such Earnback Credit shall be applied to the invoice for the next Period
6.
Service Levels Measured By Percentage (“Law of
Small Numbers’)
If a Service Level Performance Measure is based on the calculation of a
percentage of successful events across a total number of events, a sufficient
number of total events must be recorded to permit the potential achievement
of the Service Level with a performance of less than one hundred percent
(100%) (i.e., perfection) (the “Minimum Event Threshold”). A Service Level
failure resulting from violation of the Minimum Event Threshold will not be
considered a Service Level failure in a given month until there are a sufficient
number of events on which to measure performance. For example, if a target
for a Service Level Performance Measure is ninety five percent (95%), there
must be at least twenty (20) measured events for Vendor to potentially
perform less than perfection (in this instance, meeting the Service Level
Performance Measure for nineteen (19) events and only missing one (1) and
still achieving the Service Level. If the Minimum Event Threshold applies to a
Service Level the results and reporting will be carried over to subsequent
month(s) until a sufficient number of total events are recorded in one or more
subsequent months to not have the Minimum Event Threshold apply to such
Service Level. The achievement of the Service Level will then be determined
for the final such subsequent month (and not for prior months) as though the
total number of events all occurred during such month. Failure of the Parties
to agree on whether the Minimum Event Threshold should apply to a Service
Level failure after thirty (30) days will be resolved through the dispute
resolution process.
5. Service Levels Measured By Percentage (“Law of
Small Numbers’) – Alternative Language
Service Level Failures resulting from violation of the “Law of Small
Numbers” will not trigger a Performance Credit. The Law of Small Numbers
is that if the measurement of a Service Level is based on the calculation of a
percentage of successful events across a total number of events, a sufficient
number of total events must be recorded to permit the potential achievement
of the Service Level with a performance of less than 100% (i.e., perfection).
For example, if an objective for a Service Level is 95%, there must be at least
20 measured events for Vendor to potentially perform less than perfection (in
this instance, meeting the Service Level for 19 events and only missing 1) and
still achieve the Service Level. Failure of the Parties to agree on whether the
Law of Small Numbers should apply to a Service Level Failure after thirty
(30) days will form the basis of a dispute. If the Law of Small Numbers
applies to a Service Level Failure the results and reporting will be carried over
to subsequent month(s) until a sufficient number of total events are recorded
in one or more subsequent months to not have the Law of Small Numbers
apply to such Service Level; the achievement of the Service Level will then be
determined for the final such subsequent month (and not for prior months) as
though the total number of events all occurred during such month.
SS.Statements of Work/Work Orders (Chapter
7.D)
1. Manner of Executing Work Orders
Customer may from time to time request Licensor to prepare and submit a proposed
Statement of Work signed by Licensor. Should it choose to comply, Licensor bears
the expense of preparing and submitting the proposal. A proposed Statement of
Work becomes part of the Agreement only if Customer accepts it by:
(i) Signing the proposed Statement of Work (or an identical counterpart).
Customer may then issue a purchase order solely for administrative purposes. If so,
neither the terms and conditions of the purchase order nor anything else about it
affects the agreed Statement of Work.
(ii) Issuing its standard form of purchase order solely for the purpose of accepting the proposed Statement of Work without revision. Neither the terms and
conditions of the purchase order nor anything else about it affects the proposed
Statement of Work.
COMMENT: If a substantial amount of time and effort will be expended
in creating the statement of work, the licensor should consider charging
1121
the customer for preparing the requested statement of work on a time and
materials basis. Otherwise, the licensor bears the financial risk that the
customer does not enter into the statement of work that the licensor
prepared and thus cannot recoup its costs. The licensor should clearly
state that the terms of any purchase order issued by the customer shall not
apply to avoid unknowingly accepting potentially disadvantageous terms.
2. Unauthorized Work; Pre-Contract Work
Authorization
Licensee will not be required to compensate Licensor for any work not described in a Statement of Work, order form, or other appropriate writing signed
by an authorized representative of Licensee, either as originally agreed to or as
changed pursuant to the change control procedures set forth in Section ___
(“Change Control”) herein. An exception to the requirement of an executed
Statement of Work may be made if Licensee determines there is an urgent requirement to commence work and authorizes commencement of work before
the finalization of a written Statement of Work by way of a Pre-Contract Work
Authorization (“PCWA”) duly signed by Licensee; provided, however, that Licensee can terminate the PCWA at anytime if not satisfied with the progress
being made toward finalization of a written Statement of Work.
TT. Subcontractor Issues (Chapter 7.A; 15.A.2)
1. Appropriate Employee and Subcontractor
Agreements
Vendor has enforceable written agreements with all of its employees and subcontractors involved in the performance of the Services under this Agreement: (i) assigning
to Vendor ownership of all Intellectual Property Rights created in the course of their
employment or engagement; and (ii) obligating such employees and subcontractors,
as the case may be, upon terms and conditions equivalent to the confidentiality
obligations of Article __ (Confidential Information) of the Master Agreement, not to
use or disclose any Customer Company Information.
2. Subcontractor Flow downs
The requirements of this Article __ and the requirements in Articles __ (Expenses),
__ (Warranties), __ (Termination without Cause), __ (Termination for Cause), __
(Meetings), __ (Access and Security Requirements), __ (Proprietary Rights), __ (Confidentiality), __ (General Provisions), __ (Independent Contractor), __ (Compliance
with Laws), __ (Regulatory Compliance), __ (Right to Inspect), __ (Licensee Policies),
__ (Publicity), Exhibit __ (Licensee Travel and Expense Policy) and the Licensor Code
of Conduct (Exhibit __) of the Agreement will apply to any subcontractors retained by
Licensor to perform Services, as permitted by this Agreement, and will be included in
any subcontracts (including any independent contractor agreements) entered into by
Licensor for such Services.
3. Cooperation with and Access by Third Parties
Licensee may from time to time hire outsourcers, subcontractors, consultants, or
other third Parties (“Licensee Third-Party Contractors”) to perform services or
provide products relating to Licensee’s business, and which may be integrated with
the Services or Products provided by Licensor hereunder (an “Integrated Project”).
Licensor shall cooperate with and work in good faith with any Licensee Third-Party
Contractor(s) as requested by Licensee. Such cooperation may include knowledge
sharing of standards, policies, quality assurance and testing processes, as applicable,
to ensure smooth deployment of Integrated Projects and/or the smooth and efficient
transition of any Services (or component of Services) to, from, or among Licensee,
Licensor and any Third Party Contractor. Moreover, nothing in the Agreement shall
restrict access by such persons to the Services, Products, and/or Deliverables, as
applicable, as reasonably required for such Third Party Contractors to perform
functions for and on behalf of Licensee; and provided that such Third Party
Contractors shall use or access the Products and/or Services solely for Licensee’s
benefit and shall have agreed to confidentiality provisions no less restrictive than
those contained in this Agreement, and Licensee shall remain responsible for such
Third Party Contractor’s use or access to the Products and/or Services in accordance
with the terms of this Agreement.
COMMENT: A licensor should carefully consider granting third parties
access to the licensor’s proprietary software, information and technology.
In some situations, such as a systems integration project with many subcontractors, it may be justified. In outsourcing transactions providing
such
access may not be prudent. The success of a licensor’s business depends
on maintaining the confidentiality and proprietary nature of the licensor’s
product. As such, the licensor should not provide third parties access to its
intellectual property.
The outsourcer may be a competitor or seek to obtain experience in
maintaining the licensor’s product in order to create a new service offering. Perhaps the only reason a customer seeks to allow a third party access to a licensor’s intellectual property is to reduce the customer’s costs.
At a minimum the licensor should demand financially compensation. In
the event of an outsourcing transaction, a savvy licensor should enforce
the terms of the license, which likely prohibits third party access to its intellectual property, and require the outsourcer to enter into a subcontract
with the licensor for the licensor to continue providing the software and
services pursuant to its contract with the customer. This structure allows
the customer to continue to use the licensor’s product while denying the
outsourcer access to the licensor’s intellectual property.
4.
Subcontractors Bound By Terms of Agreement
1123
Before Customer will consent to a subcontractor, Vendor must provide evidence satisfactory to Customer that the subcontractor has agreed to be bound
by all of the terms and conditions of this Agreement with respect to the services to be provided by the subcontractor, and that the subcontractor has all
the insurance coverage required of Vendor under this Agreement.
UU. TAXES (Chapter 5.I, 15.D; § 8.6)
1. Taxes – Indefinite Work Assignment –
Tax Gross Up (§ 8.6)
If Licensee requires that any person render Services at Licensee’s site for more than
12 consecutive months: (a) Internal Revenue Code (IRC) § 162 will classify all of
that person’s Services as an Indefinite Work Assignment (IWA), (b) beginning with
the thirteenth consecutive month of work at the Licensee’s site, all of that person’s
reimbursed business expenses, including travel, lodging, meals and car rental, must
be treated as taxable personal income to that person under IRC § 162, (c) Licensor
will include these reimbursed expenses in the person’s taxable compensation, and
will increase that person’s compensation to cover those taxes and the personal income and withholding taxes on that increase, and (d) Licensee shall reimburse Licensor for the entire amount of that increase. Invoices shall provide such detail as may
be reasonably required by Licensee. Upon request of Licensee, Licensor shall make
available to Licensee in timely manner documentation for expenses reimbursement
by Licensor. Licensor’s itemized invoices shall be substantially in the form mutually
agreed to by the Parties.
2. Taxes - Indefinite Work Assignment – Alternative
Language
Whenever a Licensor employee is assigned to a Project involving overnight
stays at a location away from home, and the assignment of the employee in
that location is realistically expected to exceed one year or actually exceeds
one year (an “Indefinite Assignment”), the business travel expenses, such as
the costs of transportation, food and lodging, that are paid by the employee
and reimbursed by Licensor, or paid directly by Licensor on behalf of the employee, in connection with the Indefinite Assignment, are considered taxable
income of the employee under United States tax laws. If a Licensor employee
is engaged in an Indefinite Assignment with Licensee, Licensor will adjust the
compensation of the employee to neutralize the tax impact of the Indefinite
Assignment. Licensor will invoice Licensee for each such adjustment.
3. Taxes – Indefinite Work Assignment –
Requirement to Provide Records to Licensee
Licensor shall separately state the amount of tax or other charges in its invoice to Licensee. Licensee is not responsible for payment of any employment, self-employment,
or withholding taxes imposed as a result of the performance of Services under this
Agreement, whether by Licensor, its employees, or assistants. Licensor shall maintain
records of the employee benefits provided to any employee of Licensor performing
Services to Licensee on a substantially full time basis for a period of one year or longer
and such other information needed by Licensee to demonstrate compliance with
the requirements of Internal Revenue Code Section 414(n) and related sub-sections,
as amended from time to time, pertaining to “leased employees”. For this purpose
“on a substantially full time basis” shall mean 1,500 hours in a twelve (12) month
period or such amount specified by U.S. tax regulation or notice in effect during the
term of this Agreement. Licensor shall maintain such records for at least six (6)
years and furnish such data, and such other information as is reasonably related to
this Agreement, including but not limited to Forms W-9 or SBA documentation, to Licensee at its request.
4. Taxes – Licensee Not Responsible For Foreign Taxes
Prices are exclusive of, and Licensee shall pay all applicable sales, use, excise and
other taxes or duties imposed by any U.S. federal, state and/or local Governmental
Authority on the Services, except for taxes based on Licensor’s net income or resulting from Licensor performing or delivering Services or Deliverables from
outside the United States. Notwithstanding the foregoing, Licensee shall be responsible for any taxes or duties disclosed in an SOW to the extent resulting from Licensee specifying in writing that Deliverables be delivered, or Services be used, at a Site
outside of the United States. Licensee shall promptly provide Licensor with any documentation required for exemption from applicable sales, use or other taxes or duties.
The parties shall cooperate with one another in any contest, legal or administrative
proceeding related to the validity, payment or amount of any such taxes or duties.
COMMENT: Occasionally licensees balk at paying non-U.S. taxes a
vendor may incur in the delivery of the services through offshore
employees. Many licensors attempt to have the licensee agree that if the
licensor performs services offshore at the licensee’s request (i.e., use an
India based affiliate or subcontract or to gain the advantage of lower
labor rates), the licensee will pay any taxes levied by the foreign
jurisdiction to the same extent they would for services rendered in the
United States (i.e., the licensee would pay services based taxes such as
VAT, but not the licensor’s foreign income taxes). Many licensees reject
this position arguing that they are contracting with a United States entity
and will pay U.S. taxes only. Although it may be impractical to do so, a
licensor can control its exposure by simply not utilizing offshore resources
for any work to be performed under the contract.
5. Taxes – Licensor Oriented
1.1 Generally.
Except for income taxes levied on Licensor’s net income, Licensee shall pay or
reimburse Licensor for all national, federal, provincial, state, local or other taxes and
1125
assessments of any jurisdiction, including sales or use taxes, data processing taxes,
royalty taxes, property taxes, international withholding taxes (including those in lieu
of income taxes), customs or other import or export taxes, value added taxes and
amounts levied in lieu thereof based on charges set, services performed or to be
performed, or payments made or to be made hereunder. Licensee shall not be
entitled to deduct the amount of any such taxes, duties or assessments from payments
made to Licensor under this Agreement. This provision shall survive the termination
of this Agreement and shall be applicable regardless of the time frame in which the
requirement of the payment of such taxes or assessments is asserted (e.g., a
deficiency assessment by a taxing authority as a result of an audit after the
termination of this Agreement). Licensor will cooperate with Licensee to attempt to
minimize the amount of taxes and assessments payable by the Licensee in accordance
with applicable statutes, rules and regulations.
1.2 Indemnification.
In the event that a taxing authority or other entity asserts that Licensor is responsible
for the payment of any taxes, interest or penalties for which Licensee is responsible
pursuant to this Section, Licensee shall defend, indemnify and hold harmless
Licensor from any and all liability for the payment of such taxes, interest or penalties
and any expenses and fees (including reasonable attorneys’ fees) incurred by
Licensor as a result of such assertion. Licensee shall take all reasonable steps,
including the posting of a bond, to remove any lien from Licensor property, which
arises from such assertion.
1.3 Tax Exempt Entities.
If Licensee is a tax exempt entity or if any transaction covered by this Agreement is a
tax exempt transaction, Licensee will provide a copy of such tax exemption
certificate to Licensor immediately after the execution of this Agreement. If
Licensee has a direct pay certificate that allows the direct payment to the proper
taxing authority of Licensee’s obligations under this Section, Licensee shall provide a
copy of such direct pay certificate to Licensor immediately upon the execution of this
Agreement.
1.4 Tax Status.
Licensee represents and warrants that it has or will provide the following to Licensor:
[ ] Tax exempt certificate
[ ] Direct Pay permit
[ ] Resale Certificate
[ ] Not Applicable (taxes may apply)
6.
Taxes – Licensor Oriented – Alternative Language
Licensor is responsible (and shall not seek reimbursement from
1.1
Company) for all liabilities or Claims for taxes that any taxing authority may
assess or levy against Licensor relating to this Contract, including all of the
following:
(a)
Income/Franchise. Income, withholding, excess profit or other taxes,
charges or imposts assessed or levied on account of Licensor’s earnings, taxable margins, receipts (including gross receipts) or franchise taxes for the privilege or actual conduct of business that are measured by Licensor’s net worth,
capital, surplus or undivided profits.
(b) Personnel. Taxes assessed or levied against, or on account of, compensation or other benefits paid to Licensor’s employees.
(c) Property. Taxes assessed or levied against or on account of, or by reference to the value of, any property, materials or equipment of Licensor except
Import/Export Charges reimbursable by Company under Section __.
(d) Services. Taxes assessed or levied against or on account of, or by reference to the value of this Contract.
1.2
Company’s Taxes. Company is responsible for all liabilities or
Claims for taxes that any taxing authority may assess or levy against
Company relating to this Contract (except for erroneous assessments or levies
of taxes described in Section 1.1 above).
1.3
Transaction Taxes. If any Transaction Taxes apply, these taxes shall
be separately identified on Licensor’s invoices and collected and paid by
Licensor to the appropriate governmental agency as required by Applicable
Law (except to the extent Company advises Licensor that in accordance with
Applicable Laws, Company will be responsible for self-assessing and paying
these taxes). Licensor shall provide Company on a timely basis with invoices,
tax receipts and any other documentation that may be required for Company
to obtain tax reimbursement, credit, abatement or refund of any Transaction
Taxes assessed against Company and collected by Licensor.
1.4
Reports and Withholding. Licensor shall comply with all Applicable
Laws on a timely basis and take all actions necessary to make its tax
payments. Licensor shall provide Company with written proof that it has
made all registrations and reports required for these tax payments if requested
by Company. Subject to Applicable Laws, Licensor shall cooperate with
Company to reduce the amount of applicable taxes and Licensor shall not take
any action that is prejudicial to obtaining an available tax exemption or
Import/Export Exemption. If Licensor claims a tax exemption or
Import/Export Exemption that may affect any obligations of Company,
Licensor shall disclose this exemption to Company on a timely basis and
1127
provide Company with all exemption documentation requested by Company.
Company will, as required by Applicable Laws, report, withhold and pay to
the tax authorities any tax due on account of this Contract based on the
certifications or written representations provided by Licensor and accepted by
Company. Company will provide Licensor with tax receipts (or other proof of
payment if receipts are unavailable) for any withheld taxes, but will not
reimburse Licensor for withheld taxes. Licensor will report, withhold and pay
to the tax authorities any tax required by Applicable Laws to be withheld on
account of any Services performed by any members of Licensor Group and
their vendors.
1.5
Protest Rights. Licensor shall promptly and timely notify Company
of any pending or actual assessment of Transaction Tax or Import/Export
Charges, for which Licensor may seek reimbursement from Company.
“Promptly and timely” means that Licensor’s notice must allow Company
enough time and a reasonable opportunity to appeal, protest or litigate the
pending or actual assessment in an appropriate venue. To the extent Licensor
fails to give prompt and timely notice, Company will not reimburse Licensor
for these taxes, charges or associated costs. At Company’s request and cost,
Licensor shall initiate an appeal, protest or litigation in Licensor’s name if
Licensor is the only party that can legally do so. If Company or another
Indemnitee is required to pay any amount indemnified by Licensor under
Section ___ (“Indemnification”) in order to pursue an appeal, protest or
litigation, Licensor shall reimburse Company or other Indemnitee for that
amount promptly upon receipt of a written request from Company.
1.6 Tax Records. Licensor shall maintain (and ensure that Licensor Group
maintains) Records sufficient to substantiate all taxes, Import/Export Charges,
fees, indemnities or other payments that may affect any obligations of
Company and which are the responsibility of Licensor under this Section __
or Section __(“Import and Export Obligations”) for so long as the longest
applicable statute of limitations remains open with respect to taxes or
Import/Export Charges paid or allegedly due in connection with this Contract.
These Records shall be provided at Company’s request and in the format
requested by Company
7.
Taxes – Licensor Oriented – Alternative Language – Short
Form
Except for Licensor’s: (i) franchise and privilege taxes on its business; (ii)
taxes on real, tangible and/or personal property it owns (legally or beneficial),
leases, or uses in accordance with local law; (iii) intangibles taxes; and (iv)
taxes based upon its net income or gross receipts, including applicable
withholding tax (provided that Customer provides Licensor with the original
withholding tax certificate on a timely basis if withholding tax is applicable to
the transaction and such tax certificate is sent to: Licensor Tax Department,
[ADDRESS], Customer agrees to pay all applicable sales, use, excise, valueadded, services, consumption, and all other similar taxes imposed by
applicable law based upon Customer’s license and/or use of the programs, or
this Agreement (including sales, use, or similar taxes). Such taxes shall be
charged at the appropriate rate by the applicable Licensor group company in
addition to its stated fees and shall be shown separately on the relevant
invoice, and such invoices shall be labeled in accordance with applicable law.
8.
Taxes – Customer Oriented
Any tax or other governmental charges that apply to this Master Agreement or
the compensation payable to Vendor hereunder are conclusively presumed to be
included in such compensation and accordingly, any such tax or governmental
charge shall not be added to any invoice submitted by Vendor. Vendor
acknowledges and agrees that it shall be solely responsible for paying the
appropriate amount of all federal, state, and local taxes with respect to all
compensation paid pursuant to the Project Documents and this Master
Agreement, and that Customer shall have no responsibility whatsoever for
withholding or paying any such taxes for or on behalf of Vendor.
Customer is not responsible for payment of any employment, self-employment,
or withholding taxes imposed as a result of the performance of Services under
this Master Agreement, whether by Vendor, its employees, or assistants.
Vendor shall maintain records of the employee benefits provided to any
employee of Vendor performing Services to Customer on a substantially full
time basis for a period of one year or longer and such other information needed
by Customer to demonstrate compliance with the requirements of Internal
Revenue Code Section 414(n) and related sub-sections, as amended from time to
time, pertaining to "leased employees". For this purpose "on a substantially full
time basis" shall mean 1,500 hours in a twelve (12) month period or such
amount specified by US tax regulation or notice in effect during the term of this
Master Agreement. Vendor shall maintain such records for at least six (6) years
and furnish such data to Customer at its request.
1129
9.
Taxes – Customer Oriented – Alternative Language
(a) Identification of Payee. Upon execution of this Agreement, Vendor
agrees to provide Customer with required tax documentation (“Tax
Documentation”) to enable Customer to comply with applicable federal,
state, local, or other government withholding, reporting, and other tax-related
obligations. Such Tax Documentation must include either (i) a duly
completed IRS Form W-9 (Request for Taxpayer Identification Number and
Certification) (or any updated or successor form) or (ii) a duly completed IRS
Form W-8 (W-8BEN, W-8ECI, W-8EXP or W-8IMY) (or any updated or
successor form), in either case signed under penalty of perjury. Vendor agrees
to notify Customer of any changes in its tax status and, as appropriate, to
provide Customer with new Tax Documentation. To the extent required by
Law, Customer may (a) withhold any applicable federal, state, local, or other
taxes from the Fees paid to Vendor by Customer and (b) report the Fees paid
to Vendor by Customer to any applicable federal, state, local, or other
government authorities.
(b) Responsibilities of Vendor. Vendor shall be solely liable for (i) any
and all federal, state, local, or other taxes based on or measured by Vendor’s
net income or receipts and (ii) SECA (Self Employment Contributions
Account) taxes for Vendor personnel. Fees under this Agreement are
exclusive of federal, state, or local taxes, or other sales, use, value-added,
excise, personal property, or other similar taxes. When applicable, such taxes
will appear as a separate item on Vendor’s invoice. Customer shall have no
liability for and no obligation to withhold at source any federal, state, or local
income tax (or portion of FICA) from any individual assigned by Vendor to
provide Services hereunder, nor shall Customer have any liability for FICA,
FUTA, or SUI (State Unemployment Insurance) contributions on behalf of
any individual assigned by Vendor; provided, however, that nothing herein
shall prevent Customer from imposing backup withholding tax as required by
Law on reportable payments to non-exempt contractors, or from withholding
tax on United States source payments to non-United States persons as required
by applicable Law.
(c) Duty to Cooperate; Survival of Tax Obligations. Vendor shall
cooperate with Customer fully in the defense of any claim by any federal,
state, local, or other government authority against Customer regarding taxes
related to or assessed as a result of payments made or required to be made
under this Agreement. All obligations of Vendor related to tax compliance
described in this Section __ (“Taxes”) shall survive termination of this
Agreement.
10. Taxes – Comprehensive – Favors Licensor
Except for income taxes levied on Licensor’s net income, Licensee shall pay
or reimburse Licensor for all national, federal, provincial, state, local or other
taxes and assessments of any jurisdiction, including sales or use taxes, data
processing taxes, royalty taxes, property taxes, international withholding taxes
(including those in lieu of income taxes), customs or other import or export
taxes, value added taxes and amounts levied in lieu thereof based on charges
set, services performed or to be performed, or payments made or to be made
hereunder. Licensee shall not be entitled to deduct the amount of any such
taxes, duties or assessments from payments made to Licensor under this
Agreement. This provision shall survive the termination of this Agreement
and shall be applicable regardless of the time frame in which the requirement
of the payment of such taxes or assessments is asserted (e.g. a deficiency
assessment by a taxing authority as a result of an audit after the termination of
this Agreement.)
Provided, however, Licensor will, at Licensee’s request and direction,
cooperate with Licensee to attempt to minimize the amount of taxes and
assessments payable by Licensee pursuant to this Section. Examples of such
cooperation may include: (i) clearly designating portions of the Licensed
System as non-customized, “canned”, “off the shelf” or customized, as
appropriate, (ii) clearly designating certain services as taxable or non-taxable
(designation as determined by Licensee), as appropriate (e.g., software
support, help desk or telephone support, either with or without updates,
patches or fixes to memory), or (iii) selecting alternative means of delivery of
a Software Product, such as (a) delivering the Licensed System electronically
(as opposed to delivery on a physical media), via dedicated circuits, over the
Internet or otherwise, (b) delivering the Licensed System by Licensor
personnel on a physical media to Licensee’s location(s), installing the
Licensed System by Licensor personnel on electronic devices owned or
controlled by Licensee and removal by Licensor personnel of such physical
media from Licensee’s location (sometimes called “load and leave”), or (iv)
any other mutually agreeable method in accordance with applicable statutes,
rules and regulations.
In the event that a taxing authority or other entity asserts that Licensor is
responsible for the payment of any taxes, interest or penalties for which
Licensee is responsible pursuant to this Section, Licensee shall defend,
indemnity and hold harmless Licensor from any and all liability for the
payment of such taxes, interest or penalties and any expenses and fees
(including reasonable attorneys’ fees) incurred by Licensor as a result of such
assertion. Licensee shall take all reasonable steps, including the posting of a
1131
bond, to remove any lien from Licensor property, which arises from such
assertion.
If Licensee is a tax exempt entity or if any transaction covered by this
Agreement is a tax exempt transaction, Licensee will provide a copy of such
tax exemption certificate to Licensor immediately after the execution of this
Agreement. If Licensee has a direct pay certificate that allows the direct
payment to the proper taxing authority of Licensee’s obligations under this
Section, Licensee shall provide a copy of such direct pay certificate to
Licensor immediately upon the execution of this Agreement.
In the event that an Exhibit or other attachment to this Agreement specifically
provides for the delivery of equipment or other property to Licensee for the
resale to a third party, and as a result Licensee is not responsible for the
payment of the taxes and assessments under this Section, Licensee shall
provide a copy of such resale certificate to Licensor immediately upon the
execution of this Agreement.
Licensee warrants and represents that it has or will provide the following to
Licensor:



Tax exempt certificate
Direct Pay permit
Resale Certificate
11. Disclosure of Tax Structure
Notwithstanding the foregoing, the parties (and any Representative of any
party to this Agreement) may disclose to any and all persons, without
limitation of any kind, the tax treatment and any facts that may be relevant to
the tax structure of the transaction, provided, however, that no party (and no
employee, representative, or other agent thereof) shall disclose any other
information that is not relevant to understanding the tax treatment and tax
structure of the transaction (including the identity of any party and any
information that could lead another to determine the identity of any party), or
any other information to the extent that such disclosure could result in a
violation of any federal or state securities law.
12.
Sales Tax Exclusion
North Carolina Permit Number ______ and Pennsylvania Permit Number ______ authorize Licensee to accrue and pay its sales tax liability directly to the NC and PA De-
partments of Revenue. Accordingly, Licensor agrees that it will not invoice Licensee
for North Carolina or Pennsylvania sales tax, nor will it invoice Licensee for other sales
or use tax without prior notice, and to the extent any such other sales tax is invoiced it
will be separately itemized. Licensor shall bear all responsibility and liability for all
sales, use, excise, services, consumption, and other taxes and duties payable by Licensor on any goods or services used or consumed by Licensor in providing the Services hereunder where the tax is imposed on Licensor’s acquisition or use of such
goods or services. Licensor shall also bear all responsibility and liability for the
payment of all income taxes due on money received from Licensee hereunder and
filing all appropriate tax returns and other forms with respect thereto.
VV. Term and Termination (Chapter 5.G; § 5)
1. Termination - Change in Licensor’s Financial Status
Notwithstanding any other provision of this Agreement to the contrary, Licensee may
terminate a Statement of Work immediately for cause in the following circumstances:
Upon the Financial Instability of Licensor. For purposes of this Section ___
only, “Financial Instability” shall exist if: (i) Licensor does not meet its undisputed
obligations, including judgments, to third parties as those obligations become due,
(ii) Licensor’s stock is removed or delisted from a trading exchange, (iii) Licensor’s
long term debt goes on a watch or warning list, or (iv) Licensor’s long term debt rating
is downgraded more than two levels from its debt rating as of the Effective Date.
COMMENT: A licensor should never agree to this or similar language
as it is unrelated to the licensor’s performance. Sub-section (iv) is especially overbroad as a licensor’s long term debt maybe placed on a watch
list for reasons totally unrelated to the licensor’s financial solvency. Further, the bankruptcy laws protect the licensee in the event the licensor
declares bankruptcy.
2. Termination - Change of Control of Licensor
“Change of Control of Licensor” means an announcement by Licensor (i) that any
other entity, person or “group” (as such term is used in Section 13(d) of the Securities
Exchange Act of 1934, as amended) will acquire Control, of all or substantially all of
the assets, of Licensor (or any parent company of Licensor), whether directly or indirectly, in a single transaction or series of related transactions, or (ii) that Licensor (or
any parent company of Licensor) will consolidate with, or be merged with or into,
another entity, or will sell, assign, convey, transfer, lease or otherwise dispose of all
or substantially all of its assets to another person(s) or entity(ies). After Licensor
notifies Licensee of a Change of Control of Licensor, Licensee shall make a good
faith evaluation of the ability of the surviving entity to perform under this Agreement, and any risks associated with such new arrangement. If after conducting such
evaluation that Licensee determines is appropriate and after consulting with Licensor,
Licensee concludes that such proposed new arrangement creates a risk that Licensee
is not willing to assume, then at any time within six (6) months after the effective
date of the consummation of the events described in (i) or (ii) above, Licensee may
1133
terminate this Agreement, in whole or in part by giving Licensor at least ninety (90)
days prior written notice specifying the terminated Services and designating the termination date. Such termination shall be without charge, except that Licensee shall
pay any outstanding charges for all Services completed through to the effective date
of
termination
(including
for
work
in
progress).
3.
Termination - Changes in Law
(a) Termination. Either party may terminate this Agreement upon
thirty (30) days prior written notice to the other party if, as a result
of any Change in Law, as defined herein, the rights or obligations
of the terminating party under this Agreement would be materially
adversely affected. For purposes of this Section ___ the term
“Change in Law” means any (i) applicable federal or state law or
regulation enacted after the Effective Date, or any change in any
existing applicable federal or state law or regulation; (ii) change in
judicial or administrative interpretation of any applicable federal
or state law or regulation; or (iii) change in the enforcement of any
applicable federal or state law or regulation, in each case occurring
after the date Vendor begins providing Services or the Effective
Date, whichever is earlier.
(b) Negotiation. Prior to any termination pursuant to Section
____(“Termination”), the parties agree to use prompt, good faith
efforts to renegotiate the terms of this Agreement. If the parties
successfully conclude such negotiations prior to the termination
date, this Agreement shall not terminate and shall be amended to
reflect the negotiated terms. In the event the parties are unable to
successfully conclude such negotiations, this Agreement shall
terminate as provided above.
(c) State Fiduciary Laws. Vendor shall not be obligated at any time
to provide Services to Customer if Customer is located in a state
requiring a prescription benefit manager to be a fiduciary to Customer or a Plan Participant in any capacity contrary to the terms
and conditions specifically identified in this Agreement. In the
event any state law or regulation requires Vendor to be a fiduciary
to Customer contrary to the terms and conditions identified in this
Agreement, Vendor may elect not to provide Services to the impacted Plan Participants upon thirty (30) days prior written notice
to Customer.
4. Termination - Business Downturn
If Licensee exits its current core business for any reason, or all its assets or
substantially all of its assets are sold, it is merged with another business entity,
or in the event Licensee experiences a business downturn, i.e., the loss of revenue associated with the loss of a significant customer, or significant number
of customers, so much so that the Software and Services to be acquired under
this Agreement are no longer needed, Licensee shall have the option to terminate this Agreement, in part or whole or assign this Agreement to the acquiring entity as set forth in Section __ (“Assignment”). Under such circumstances, Licensee may so terminate this Agreement without any penalty of any
kind whatsoever. Moreover, any future financial commitments for Software or
Service shall also terminate as of the effective date of such termination notice
or other date set forth in said notice, provided that Licensee shall be required
to pay for any Software or Service delivered but not yet paid for as of the termination date. In the event Licensee decides to retain this Agreement in
whole or part by assignment or otherwise, the Parties agree to renegotiate in
good faith the pricing and business terms and conditions to better reflect the
then current business environment and apportionment of risk.
5.
Termination Assistance – Short Form
At Customer’s option, for a period of up to 12 months following termination or expiration of a SOW: (i) Customer may direct Vendor to complete, and Vendor will complete, the Services under any or all outstanding SOWs in accordance with their respective terms, (ii) Vendor will cooperate with Customer in an orderly transition and perform any Services
that Customer reasonably requests during such period at mutually agreedupon rates.
6.
Termination Assistance – Alternative Language –
Comprehensive Language
Provider shall, upon Customer’s request, continue to provide any or all of
the Services, as well as any termination and wind down assistance services requested by Customer (the "Wind-Down Services"), (such ongoing Services and the Wind Down Services collectively, the “Termination Assistance Services”) for six months prior to any expiration or termination of the Agreement or any SOW and for up to 12 months after
expiration or termination of the Agreement or any SOW (each such period, the "Termination Assistance Period"). Wind-Down Services shall
1135
be provided on a time-and-materials basis at the rates set forth in the applicable SOW. The fees applicable to the ongoing Services in effect prior
to the applicable expiration or termination shall apply. Provider’s obligations with respect to the Wind-Down Services shall consist, at a minimum, of the following: (a) at Customer’s request, promptly provide Customer with available detailed specifications and documentation for hardware, software or other equipment that Customer may require to properly
perform, or have performed, the services similar to the Services following expiration or termination; and (b) at Customer’s request, provide
training reasonably required by Customer for the personnel who shall be
assuming responsibility for the Services and related operations following
expiration or termination. Provider shall (i) answer questions from Customer regarding the expired or terminated services on an “as needed” basis and (ii) deliver to Customer any remaining Customer-owned reports
and documentation relating to the expired or terminated services. Any
additional exit rights shall be set forth in the applicable SOW. Upon expiration or termination of the Agreement or any SOW issued hereunder,
Provider shall provide to Customer or Customer’s representatives all finished works and works in progress under the Agreement or any SOW issued hereunder in Provider’s (or Provider Agents’) possession or control,
and all of Customer’s Confidential Information.
7. Termination Assistance – Alternative Language –
Favors Licensee
Upon the termination of a Statement of Work for any reason whatsoever (including a
default by either party), (i) Licensor will provide such information, cooperation and
assistance to Licensee, as Licensee may reasonably request, to assure an orderly return or transfer to Licensee or Licensee’ designee of all proprietary data (and related
records and files) and materials of Licensee, and all work product and Deliverables
for which payment has been or is made, in their then current condition, and (ii),
Licensee may notify Licensor that Licensee desires a transition period of up to three
(3) months from the effective date of the termination (“Transition Period”). During
the Transition Period, the parties will continue to be bound by and perform in accordance with the Statement of Work, and Licensor will assist Licensee in the orderly and
efficient transition of the Software and Software Support to Licensee or a third party
designated by Licensee. If Licensee initially designates a Transition Period of less
than three (3) months, it may extend the Transition Period prior to its expiration upon
five (5) days’ advance notice to Licensor, so long as the total Transition Period does
not exceed three (3) months.
8. Improper Termination – Conversion of Termination
for Breach to Termination for Convenience
If it is later determined that the Licensee erred in terminating this Agreement for
default, then the Agreement shall be deemed to have been terminated for convenience
under Subsection (a) above (Termination for Convenience).
COMMENT: This provision protects the licensee in the event it
wrongfully terminates the licensor for breach as it automatically
“converts” the termination to a termination for convenience which under
most agreements limits the licensor’s recovery to the services rendered as
of the termination date. Licensors should not accept this language as
licensees should be fully responsible for their actions if they wrongfully
terminate the agreement. Otherwise, there is no downside to claiming a
termination for breach even when it may not be justified.
9. Licensor Continued Performance
So long as Licensee shall in good faith pursue and fulfill its obligations under (a) and
(b) below in the event of such breach, Licensor shall not, except as specifically
provided under this Agreement, terminate this Agreement or applicable SOW
hereunder, or withhold or refuse to perform Services or intentionally fail to meet any
applicable deadline, requirement, Service Level as defined in any SOW, or other
provision hereof or seek relief through arbitration or by way of equitable relief or
otherwise that has the effect of permitting any of the foregoing; provided that in the
event of a material breach by Licensee hereunder, Licensee shall (a) in good faith
participate in the dispute resolution process set forth in Section ___ (“Dispute
Resolution”) and (b) comply with the disposition of the dispute established pursuant to
that procedure. Upon any termination of this Agreement or the applicable SOW,
Licensee shall be entitled to receive the termination services pursuant to Section ____
(“Transition Services”). The foregoing notwithstanding, Licensor shall not be
obligated to continue to provide those Services if (i) Licensee fails to pay undisputed
amounts by the due date in this Agreement, and (ii) Licensor provides Licensee sixty
(60) days’ prior written notice that such undisputed amounts have not been paid and
Licensor intends to cease providing Services, and (iii) Licensee fails to pay such
undisputed amounts due during such sixty (60) day period.
10. Suspension of Work for Licensee’s Convenience
Licensee may, by written or telephone notice to Licensor, suspend, delay, or interrupt
all or any part of the Work of the Contract for the period of time that Licensee
determines appropriate for Licensee’s convenience. Upon receipt of notification of
suspension Licensor shall, unless notified otherwise, immediately discontinue all
services affected, including delivery or order of equipment and material upon terms
satisfactory to Licensee; provided, however, that Licensor shall continue to perform
any part of the work not otherwise suspended, as well as such services as necessary
in the sole judgment of Licensee to preserve and protect Work in progress, including
equipment, material, and plan constructed or in progress. If the performance of all or
any part of the Work is (for an unreasonable period of time) suspended, delayed, or
interrupted, an equitable adjustment shall be made and the Contract modified in
writing accordingly. However, no adjustment shall be made under this provision for
1137
any suspension, delay, or interruption to the extent that performance would have been
so suspended, delayed, or interrupted by any other cause, including the fault or
negligence of the Licensor, or for which an equitable adjustment is provided for or
excluded under any other provision of this Contract.
COMMENT: While in theory this language may not seem objectionable,
the licensor should avoid being placed in a situation where its development/installation team is placed on hold and becomes unbillable. If the licensor cannot reassign these individuals to a new project because the licensee has not given a start date, the licensor could incur a significant
loss. As such, this language should be modified to allow the licensor to recoup its cost and provide a reasonable time period in which to reassemble
a team to complete the work.
11.
Post-Termination Data Obligations
Within thirty (30) days after the effective date of termination of this
Agreement, Vendor will make available to Customer for download a file
of all Customer and Employee Data, and any other information retained
by Vendor on behalf of Customer, in a format specified by Customer.
Vendor will notify Customer when such data is ready for download and
Customer shall have sixty (60) days to complete the download. Thereafter, Vendor shall use industry-recognized commercially reasonable practices to promptly dispose of or destroy all materials, in any medium,
which contain, embody, reflect or reference any Customer and Employee
Data or any other Confidential Information of Customer. Following
Vendor’s compliance with such requirements above, and upon request by
Customer, Vendor shall provide Customer with a certificate of secure
disposal, signed by the Chief Information Officer (or equivalent role) at
Vendor and certifying that such disposal/destruction of records/data has
been completed pursuant to this Section . Vendor acknowledges that
breach of this provision would result in irreparable harm to Customer for
which money damages would be an insufficient remedy, and that Customer is entitled to seek any and all other remedies, including injunctive
relief, to enforce the provisions of this section.
Termination of Customer for Non-Payment of
12.
Undisputed Fees
Notwithstanding the preceding subsection ___ (“Default”), if the sole reason for
a Default is non-payment of undisputed Fees, then this Agreement may be terminated by Vendor only if the unpaid balance of undisputed Fees owed by Customer to Vendor exceeds [$ ] for more than thirty (30) consecutive days, and
Vendor shall have notified Customer of such default pursuant to the notice pro-
visions herein and Vendor shall have also called (and documented such call)
Customer’s CIO (or the equivalent thereof), during normal business hours, regarding such non-payment. Customer shall have thirty (30) days from receipt of
Vendor’s notices described in the preceding sentence to cure such non-payment
Default. If, notwithstanding Vendor’s compliance with this subsection ____,
Customer has not cured such Default by the end of such thirty (30) day cure period, then Vendor may terminate this Agreement by giving Customer notice of
the termination.
13. Evergreen Term.
Unless terminated under Section __ below, this Agreement is binding on the
parties for one year from the Effective Date and will automatically renew for
successive one-year terms after the initial term unless Supplier provides
written notice at least 60 days prior to the end of the then current term of its
desire that this Agreement not be renewed. Upon receipt of Supplier’s
written notice of non-renewal, Buyer will have the option to extend this
Agreement for an additional 90 days beyond the then current term by giving
notice of the extension to Supplier (“Extended Term”) no later than thirty (30)
days prior to the end of the then current term. If Buyer requests an Extended
Term, this Agreement will terminate at the end of the Extended Term.
WW. Third Party Software/Products (Chapter
5.L)
1. Third Party Content
If Licensor intends to develop a Deliverable in a manner that incorporates or requires
Licensee to use any software or other intellectual property of a third party (including
any open source software) (the “Third Party Content”) in order to use such Deliverable, then Licensor will (i) provide Licensee with prior notice, specifying in reasonable detail the nature of the Deliverable’s dependency on or use of the Third Party
Content, and (ii) provide Licensee with (for no additional cost or on such terms as
may be acceptable to Licensee) a perpetual, irrevocable, royalty-free, non-exclusive
right and license for Licensee and the Licensee Affiliates to use the Vendor provided
Third Party Content in connection with the use of the Deliverable.
2. Licensee Provided Software
Licensee shall obtain all consents required to secure any rights of use of, or access to,
or rights to modify, any third party software provided by Licensee, required by the
1139
Licensor in providing the Software and Services. Licensee will indemnify and defend Licensor from any and all claims against Licensor or Licensee regarding Licensor’s use or modification of such third party software provided by Licensee.
3. Clearance for Certain Licensee Provided Software
If Licensee will provide any software or access to software to Licensor, then before
commencement of Licensor’s Services (if specified on the applicable Statement of
Work) or before such software is accessed or used by Licensor (if the software is not
specified on the applicable Statement of Work), Licensee shall have the opportunity
to ascertain whether it has the license rights to permit Licensor to access and use the
third-party software needed for such Project. Licensee may cancel or postpone any
specific work with Licensor (without any financial penalty and without such cancellation constituting a breach of contract by Licensee) if Licensee determines that it
does not possess the needed license for Licensor to perform the Services for which
such third-party software is needed. Unless explicitly provided for in a Statement of
Work, Licensor is responsible for any software, equipment, supplies, materials or
other provisions it may need in performing Services or providing Deliverables.
4. Third Party Software (§ 16.P)
Third Party Software is provided on a pass through or sublicense basis and may be
subject to separate license agreements or registration requirements and limitations on
copying and use and Licensee agrees to be bound by the terms of any such third party
license agreements. Third Party Software shall be warranted on a pass through basis
in the same manner and for the same period and extent provided by the original software manufacturer.
COMMENT: The licensor should insist on the insertion of this language to ensure it is not obligated to provide a more comprehensive warranty than the warranty it is receiving from the original manufacturer.
5. Third Party Products – Disclaimer
In the event that Vendor provides to Customer third-party hardware or software
products on a pass through basis and only to the extent that such hardware or software is not Software Products as defined in this Agreement the following shall apply:
Vendor makes no representations or warranties as to any third-party hardware or
software provided to Customer, all of which is transferred to Customer on an “AS IS”
basis and subject to any third party terms and conditions. With respect to such third
party hardware or software that is warranted by a third party, Vendor shall (i) obtain
written approval from Customer for the use of such third party hardware or software,
and (ii) use commercially reasonable efforts to pass through any such warranties and
intellectual property rights to Customer. Customer shall look solely to the warranties
and remedies provided by the equipment manufacturer and third-party software
licensor, if any.
6. Third Party Consents
Before commencing any Services, Licensor shall provide Licensee with a written list
of all Licensee software, hardware and other resources to which Service Provider will
require access in order to perform the Services, including any Licensee Content or
Third Party Content and such list shall be included in the applicable Statement of
Work. To the extent that Licensee requires any third party consents in order for Service Provider to access and use such resources in connection with the provision of the
Services, Licensee shall obtain such consents. Licensor shall, and shall ensure that its
Personnel and Approved Subcontractors shall, abide by all restrictions imposed by
third parties regarding such resources including compliance with any licensing or
other terms governing access to any hardware or software.
XX. Use (Chapter 4.C)
1. Changing Business Practices – Limits on Licensor’s
Ability to Restrict Future Uses of Software (§ 3.1)
If Licensor develops future limitations, qualifications, and/or restrictions in how it
licenses the Software to its customers, such future limitations, qualifications, and/or
restrictions shall have no effect on the scope of the license granted herein to Licensee
and Licensor expressly disclaims the right to claim otherwise.
2. Construction of License Grant – Ambiguity
Interpreted Against Licensor (§ 45)
Licensor acknowledges that the intent of the scope of the license is to make Licensee’s rights to the Software as broad as possible and, accordingly, the grant language
shall not be interpreted strictly or narrowly in favor of Licensor, but rather broadly in
favor of Licensee.
3. Source Code Restrictions
In addition to the obligations under Section ___ (Use), Licensee agrees that it will
disclose the Source Code only to those employees and Qualified Developers who
have a need to know such information and who have signed a written confidentiality
agreement prior to receiving access to the Source Code, which is consistent with
the protections required under this Agreement. Licensee shall ensure that all its
employees and Qualified Developers who have access to the Source Code are adequately instructed as to the Source Code handling requirements hereunder and shall
take adequate precautions to prevent unauthorized use or disclosure of the Source
Code. Without limiting the foregoing provisions, Licensee and its employees and
Qualified Developers shall protect the Source Code during the Term by:
(a) keeping all copies of Source Code in secure, locked facilities when such
copies are not in actual use;
(b) marking storage media, printouts, machine-readable files, and other copies
or extracts of the Source Code with a restrictive legend stating that such materials are
1141
proprietary and confidential to Licensor and that their handling is subject to the terms
of this Agreement;
(c) maintaining current records that show: (i) each employee or Qualified Developer authorized to access the Source Code, and (ii) each physical storage media
containing the Source Code and its location (other than such media under the control
of a Qualified Developer); and
(d) implementing appropriate systems security for Source Code which is stored
in soft copy or electronically in information processing systems, including password
protection and completely overwriting any physical storage media containing Source
Code before it is released for reuse.
4. Copyright License – Marketing Materials
Promptly after the Effective Date and from time to time during the Term upon
reasonable written request from Licensee, Licensor shall furnish Licensee with
electronic data files of artwork and information to create materials for use in
connection with the marketing, distribution and sale of the XXXX Product (“Product
Marketing Materials”). Licensor hereby grants to Licensee (including its present
and future affiliates), and Licensee accepts, under Licensor’s copyrights and other
Intellectual Property Rights relating to the Product Marketing Materials, a nonexclusive, sub-licensable and transferable (subject to the provisions hereof) right to
use, reproduce, prepare derivative works (including translations) of, display and
distribute the Product Marketing Materials in the Territory during the Term in
connection with the XXXX Product. If Licensor objects in writing to any versions of
the Product Marketing Materials prepared or used by Licensee, the parties shall
cooperate in good faith to resolve Licensor’s concerns. Licensee agrees to place such
notices on Product Marketing Materials and translated versions thereof as are
reasonably requested by Licensor to protect its copyrights in such materials and in the
Licensed Trademarks used therein. Nothing in this Section __ shall prevent or
restrict Licensee from freely creating, distributing or using any marketing materials
for XXXX Products that do not incorporate the Licensed Trademarks and that do not
infringe on Licensor’s copyrights or other Intellectual Property Rights.
5. Third Party Access – Licensee Oriented
Licensee shall have the right to permit its third party vendors and service providers to
use the Software and Documentation in the performance of their duties, responsibilities and obligations on behalf of and/or for the benefit of Licensee and its Affiliates,
all at no additional cost to Licensee.
6. Third Party Access – Licensor Oriented
Licensee shall not use the Software to process the data of anyone else, such as by
providing service bureau or outsourcing services. Licensee shall not make the Software
available for use by anyone else, whether for the benefit of Licensee or anyone else.
Licensee may make additional copies of Documentation for the Software as reasonably
necessary for use of the Software within the scope of Licensee’s license.
7. Third Party Access – Administrative Services
Licensee agrees that Licensor may use third party suppliers (the “Administrative
Services Licensors”) to perform certain contract administration services and other
Licensor back office functions (the “Administrative Services”). For purposes of the
Administrative Services, Licensor is hereby authorized to disclose and provide [this
Agreement - amend as appropriate for document] to the Administrative Services
Licensors subject that all commercially sensitive information including pricing tables
and information subject to data privacy considerations will be removed and not be
made available to the Administrative Services Licensors. The Administrative
Services would be managed by Licensor and would have no effect upon Licensee’s
receipt of the Services. The costs for the Administrative Services are borne by
Licensor. This Administrative Services Licensors shall be required to satisfy the
same obligations as Licensor with respect to [Confidential and Proprietary
Information and Materials - amend as appropriate to document] and other provisions
of [this Agreement - amend and appropriate to document] applicable to third parties
as required herein.
COMMENT: This language allows a licensor to use a third party for
administrative back office services without violating the terms of the parties’ non-disclosure agreement. A prudent licensor will incorporate language into its agreement providing that it is not required to obtain the licensee’s approval to provide access to the agreement to its administrative
suppliers after the agreement is signed.
8. Conversion of Exclusive License to Non-Exclusive
License
At the end of the exclusive period, the license granted hereunder shall become
nonexclusive and shall extend to the end of the term or terms for which any Patent
Rights are issued, unless sooner terminated as hereinafter provided. The period of
exclusivity may be extended with the written consent of Licensor, on a field of use
basis, which consent shall not unreasonably be withheld, conditioned or delayed,
provided that Licensee is a licensee in good standing, owing no fees, royalties or any
other monies to Licensor, and having met all the diligence milestones pertaining to
the particular field of use in which an extension of the period of exclusivity is under
consideration.
9. Grant of License – Seat License
Licensor grants Customer the right to use the Software for its own business use and
benefit by the number of authorized Users licensed herein. The Software is in use on a
computer when it is loaded or installed into temporary or permanent memory.
Customer may use the Software on file server(s) on a compatible local area network
provided the total number of Users in the system at any time does not exceed the
number of Users of the Software. Except for disaster recovery, in no event may
Customer loan, rent, lease, sublicense or otherwise transfer this license to a nonCustomer entity without the prior written consent of Licensor which consent may be
withheld at its sole discretion.
1143
“User” means the persons using the Product on behalf of Customer and to conduct Customer’s business, including internal and external resources (i.e. staff, agents,
contractors, brokers or service agencies, etc.).
10. Grant of License – Non-Production Use License
Licensor, as of the License Date and for the duration of the Term, grants to Licensee
a nonexclusive and nontransferable license for the sole purpose of using the Licensed
Program for Non-production Use and, to the extent Licensee has received Software
Releases pursuant to Schedule 3, those shall be deemed to be included in the definition of Licensed Program on this Schedule 1.1 for the Approved Use by Qualified
Employees under the conditions set forth in this Schedule 1.1. In no event shall
Licensee use the Licensed Program in a service bureau capacity or provide services
to any third party.
11. Grant of License with Right of Sublicense
(a) Licensor hereby grants to Licensee (including its present and future affiliates), and Licensee accepts, a non-exclusive, world-wide, sub-licensable and transferable (subject to the provisions hereof) license to access, distribute, display, host, translate into local languages in the Territory and otherwise commercially exploit the Software in connection with the manufacture, marketing, distribution and sale of XXXX
Products in the Territory. For clarity, monitoring services may be based outside of the
Territory provided such services are directed at XXXX Products in the Territory.
(b) Licensor grants to Licensee a non-exclusive, non-sublicensable (except as
provided herein) right to use the Source Code to correct, localize, adapt, revise and
update the Source Code, and to compile and distribute object and executable code
versions of the Software based upon such modified Source Code, provided that (i)
Licensee may not disclose any Source Code to any third party other than a Qualified
Developer, and (ii) other than changes to the Software to localize it to other languages
for use in the Territory and to comply with local requirements, safety listings or other
laws or regulations, Licensee shall obtain Licensor’s consent prior to distributing
XXXX Products including such modifications to any third parties. Licensee must
strictly protect the Source Code as confidential pursuant to the terms of Section
10. Licensee may engage reputable third-party software developers located inside or
outside the Territory who (iii) are subject to written confidentiality and non-use
agreements consistent with this Agreement and (iv) meet the qualification requirements
to be mutually agreed upon or attached hereto as Exhibit __ (each, a “Qualified
Developer”) to make permitted modifications of the Source Code. Licensor retains the
rights to the master copy of the Source Code.
12.
Grant of License – Broad Use Rights
(a)
Licensee shall have the right to: (i) grant its subcontractors access
rights to use the Software, (ii) grant its customers and their subcontractors access rights to use the Software, (iii) use the Software for Licensee’s own in-
ternal business operations, (iv) use the Software in providing Outsourcing
Services, Facilities Management and other Licensee Services; and (v) use the
Software for processing of customers’ data.
(b) Licensee may distribute the Software by installation of an Standard
Operating Environment on the hard disk of a computer owned or leased by
Licensee or its customer by either (a) installing one copy of the Software on a
Licensee or customer owned or leased computer file server for the purpose of
downloading and installing the Software onto computers within Licensee’s or
its Licensee’s intranet, or (b) bundling the Software on physical media (such
as a CD-ROM, DVD, hard disk, etc.) with other software or content, through
electronic means (including, without limitation, electronic software download)
or on a stand-alone basis solely on tangible media. In addition, Licensee may
authorize its suppliers and subcontractors (collectively "Agents") to install the
Software as a component of Licensee or its customer's Standard Operating
Environment on the computers that the Agent is providing to Licensee or
customer.
13. Grant of License - General
1.1 Rights Granted
Licensor grants to Licensee a non-exclusive license to use the
Programs Licensee obtains under this Agreement, as follows:
(i.) to use the Programs solely for Licensee’s own internal data
processing operations on the Designated System or on a backup system if the
Designated System is inoperative, up to any applicable maximum number of
designated Users (if any User limitation applies). Licensee may not use the
Programs for third-party training, commercial timesharing, rental or service
bureau use;
(ii.)to use the Documentation provided with the Programs in support of
Licensee’s authorized use of the Programs;
(iii). to copy the Programs for archival or backup purposes; no other
copies shall be made without Licensor’s prior written consent. All titles,
trademarks, and copyright and restricted rights notices shall be reproduced in
such copies. All archival and backup copies of the Programs are subject to the
terms of this Agreement; and
1145
(iv.) to modify the Programs or combine them with other software
products. The Programs of such portions thereof included in such derivative
software products shall remain the property of Licensor and shall be governed
by the terms of this Agreement.
Licensee shall not copy or use the Programs (including the
Documentation) except as otherwise specified in this Agreement.
14. Grant of License – General – Alternative Language
Subject to the terms and conditions of this Agreement, Licensor hereby grants
to Licensee a non-exclusive, fully paid-up, world-wide, perpetual, nonsublicensable (except as provided in Section ___ “Sublicenses”), nonassignable (except as provided in Section ___ “Assignment”), royalty-free
and irrevocable license to, in the conduct of the Licensee’s Business, use,
reproduce, distribute, display and prepare Derivative Works based upon, any
Software that is used in the Licensee Business as of the Effective Date.
15. Grant of License - Evaluation License
Licensor grants Licensee a nonexclusive, nontransferable (without right of
sublicense), royalty-free, restricted, non-revocable license during the term of
this Agreement to use Licensor software, including Improvements thereto and
related documentation for the limited purpose of testing, evaluating and
demonstrating Licensor products and services. Any internal use of the
products for Licensee’s business operations is strictly prohibited by this
Agreement and requires a separate agreement between the parties. Licensee
shall not attempt or allow others under its control to attempt to obtain or
derive source code or any other information from or about the Licensor
products through disassembly, decompiling, reverse engineering or other
means. Product licenses for third party clients shall be handled on a case-bycase basis.
16. Number of Users
Customer cannot have more Workstations or User Login Identifications
(“User Id’s”) accessing the System or DSM(s) than the number of
Workstations provided for on the Schedule of Charges. Users are not
authorized to share the same User Id’s. This License is for use of the System
object code only.
17.
Annual Universal Pass Codes
Where applicable, a universal Software pass code shall be provided to Licensee by Licensor annually, during the Term, on the anniversary of the Effective
Date for all production and test platforms that operate any of Licensor’s Software.
18.
Software Renaming and Bundling/Unbundling
In the event Licensor changes the name of any of the Software licensed pursuant to this Agreement and the renamed Software does not contain substantially
increased functionality over the original Software, Licensee will not be required to repurchase the licensed Software or Maintenance and Support. Prices for the Software and Maintenance and Support will continue at the same or
lower level as if the renaming had not occurred. In like manner, if Licensor
bundles or un-bundles licensed Software, Licensee will, at its discretion, continue to have access to and use of said Software in its original configuration
and Maintenance and Support under the same terms and conditions set forth
herein, and without any increase in price for the Term of this Agreement. This
Section __ shall not be construed to require Licensor to provide other products, modules, improvements, or add-ons to Licensee as long as the licensed
Software, or its functional equivalent continues to be offered by Licensor or a
successor in interest, although Software enhancements or improvements may
be available as part of Maintenance and Support. This Section __ shall also
apply to the provisions of Section __ (“Change of Control”) and Section __
(“Assignment”).
19.
Licensor Assistance with Licensee’s Internal License
Management
Licensor agrees to assist Licensee’s internal license management process by
ensuring that licensed Software products provide an identifying fingerprint or
signature that (i) relates uniquely to the Software product, (ii) can be obtained
electronically by industry standard products that use heuristic scanning
techniques for discovering software products (i.e., does not require a full disk
scan to locate software installation information) and (iii) is removed when the
product is de-installed. Licensor further agrees to, (iv) ensure that executable
1147
files have complete and accurate file header information, e.g., vendor, product
name and version, (v) provide mapping tables that correlate the
fingerprints/signatures to licensed product names and (vi) provide quarterly
updates to the mapping tables and fingerprints/signatures. Licensor agrees that
the audit rights in subsection ___ (“Vendor Audit – Terms of Audit”) above
shall not be applicable to this Agreement, until Licensor is in compliance with
this subsection ___ .
20. Transfer and Assignment of License
(a). Within the United States, a Program license may be transferred to
another computer system of like configuration (same model and operating
system) or the Designated System may be transferred to another location
within Customer’s organization upon written notice to Vendor. All other
transfers, including transfer of a Program license outside the United States
shall be permitted only with Vendor’s prior written consent and shall be
subject to Vendor’s standard transfer fees in effect at the time of the transfer.
(b). The rights granted herein are restricted for use solely by Customer.
Customer may not authorize or allow the use or the remarketing of the
Programs by a third party and may not assign or transfer the Programs or the
Agreement to a third party without the prior written consent of Vendor.
21.
Re-deployment and Transfer of Software
(a.) Licensee may redeploy the licensed Software or any part thereof, between
Licensee Customers without additional license charge, providing the Customer from which the license is being redeployed has terminated its Outsourcing
or Licensee Services agreement for which the license was purchased, and
providing such termination is within three years of the purchase of the license
from Licensor.
(b.) If an Outsourcing or Licensee Services agreement or a part thereof, is
terminated or expires, Licensee may transfer the licensed Software, or any
part thereof, to said Customer without additional license charge, providing
such Customer first enters into a separate licensing agreement with Vendor,
based upon Vendor’s then current and standard licensing terms, unless said
Customer already holds an applicable license agreement with Vendor.
22.
Movement of Software
The Licensor agrees that Licensee may move the Software licensed under this
Agreement inter and/or intra - Licensee data centers, globally. Such movement may be required for operational reasons, to ensure service level
achievement, to support the Licensee base, or load leveling, and/or due to data
center closing, consolidation, opening or relocation. Licensee will furnish
prompt notice of such activity in accordance with the provisions of Section __
(“Notices”).
23.
Software Product Testing – Non Production Copies
Licensee shall have the right to use one non-production copy of each Software
product (current release and any release that Licensee is using internally or for
a customer) at no additional charge for the purpose of integrating such Software into each of Licensee’s Software Product operating environments. Given that the copies of the non-production Software will be operated in Licensee’s non-production environments, Licensor agrees that such copies shall be
provided at no charge. Licensee will notify Licensor during any annual reconciliation, of all Software installed in any Licensee Software Product testing
environment. The Software may be combined with other selected software
products to test inter-software compatibility and operability. Following nonproduction testing, the Software may be distributed by Licensee to its various
computing locations for further local testing and installation on authorized
computers. Licensor shall, upon receipt of such written notice, promptly furnish applicable passwords to permit inclusion of the Software in said testing
and distribution.
24.
Continual Improvement of Technology
Licensee expects that Licensor’s Software will continue to be on or at the
leading edge of its technology for the Term of this Agreement. Licensee’s
technology solutions depend in large measure on Licensor’s ability to ensure
its Software maintains a technologically advanced status throughout the Term
of this Agreement. Accordingly, Licensor agrees to invest in its research and
development program and thereby to continually evaluate advances in technologies associated with the core technology contained in such Software during the Term of this Agreement. The purpose of said research and development program and resultant evaluations is to ensure that the Software licensed
hereunder is enhanced and/or replaced with newly developed Software based
upon advances in technologies. Any enhanced Software will be offered to Licensee for its consideration in the form of upgrades to Software products then
currently licensed by Licensee. Licensor will also offer any newly developed
1149
Software to Licensee in conjunction with all relevant and detailed information
necessary for Licensee to perform an evaluation of such Software to determine if such new Software can be used within Licensee’s IT architecture. In
both instances such Licensor’s offer shall be made under the provisions of
Section ______ (“All Current and Future Software”). The decision as to
whether to accept or reject any upgrades and/or newly developed Software
shall be at the sole discretion of Licensee. In the event Licensor fails to adhere
to the essence of this provision and fails to take any remedial actions, Licensee and Licensor will endeavor to work together to rectify this problem. If, in
the opinion of Licensee, Licensor is unable or unwilling to make the investment of resources to maintain its former technology position in its marketplace Licensee reserves the right to terminate this Agreement without penalty
under Section ____ (“Termination Without Cause”).
25.
International Version of Software
Licensor shall, as applicable, furnish to Licensee, its end-users and/or customers, an international version of the U.S./Canadian domestic version of the
Software when the Software will be used at any Licensee or customer international location. The Software to be used in such locations will indicate on the
“log on” screen that the Software in use is the international version of said
Software. Licensor shall comply with all export, re-export and import laws,
rules, policies and regulations controlling the licensing, provisioning and use
of the Software of each country where Licensee, its end-users and/or customers are located and use said Software.
26.
Scalability and Testing
(a)
The Licensee may conduct scalability and security testing (“Testing”)
on the Software Programs, in conjunction with the Licensor, at the Licensor’s [city, state] office.
(b)
The Testing shall be conducted by the following named individuals in
the Licensee only:
(i)
(ii)
(c)
[
[
]
]
The Testing shall be completed within a 30 day period (the “Test Period”). The Licensee shall give written notice to the Licensor of the
commencement and termination of the Test Period.
(d)
The Testing may encompass the following types of testing:
(i)
Functionality Testing – the Software Programs shall be
tested on an individual basis for functional capabilities and
characteristics;
(ii)
Non- functional Testing:

Integration Testing – the Software Programs shall be
tested for integration by testing the information flows to
and from the Software Programs and between and
among the various modules of such Software Programs;
and

Stress Testing – the Software Programs shall undergo
load testing by transmitting and processing high-volume
operational data in a production-simulated environment
to verify and confirm that the Software Programs are integrated into the operating environment.
For the avoidance of doubt, the Testing does not permit the Licensee to
reverse engineer or decompile the Software Programs.
(e)
The Licensor will, where requested by the Licensee, assist in the Testing
by:
(i)
Walking the Licensee through the design of the Software
Programs in minute detail from a security perspective; and
(ii)
Providing information on what keys and crypto algorithms
are used in the Software Programs, and how keys are stored,
and data is secured and protected.
(f)
All Information (including emails), reports and documentation created
as a result or in connection with the Testing by Licensee shall be provided to Licensor within 5 days of their creation. All such Information
shall become the Licensor’s intellectual property.
(g)
In the event that any significant Defects are identified in the Testing, the
Licensor and Licensee shall work together to resolve the Defect to their
mutual satisfaction.
1151
(h)
The Testing and all result, reports and documentation created in connection therewith shall be considered confidential information of the Licensor and shall be protected from unauthorized disclosure pursuant to
clause ___ (“Confidentiality”) of the Alliance Agreement.
Licensee acknowledges that the existence of the Testing, the process
involved, and the outcome thereof, contain commercially sensitive
information, must be treated as strictly confidential, and may not be
divulged to any parties other than the individuals in the Licensee
named below:
(i)
(ii)
[
[
]
]
Licensee acknowledges that any unauthorized disclosure by Licensee in
connection with the Testing, will result in substantial damage to Licensor.
27.Development of Competing Products
Nothing in this Agreement shall be deemed to prohibit or prevent Licensee
from independently designing, developing, producing, using or marketing
computer software and related documentation and products similar in form or
function to the Software furnished by Licensor, provided that Licensee does
not utilize any Licensor Confidential Information in connection with the
design, development, production, use or marketing thereof.
28. Use of Vendor Tools and Software - Establishment of
Knowledge Repository
1.1In its performance of the Services, Vendor shall (i) make available to Customer, any Tools that are required for use of any Services provided by Vendor
or for use of the Deliverables; (ii) comply with and require all Vendor Personnel and subcontractors to comply with all Customer Controls and the Customer Offshore Security Controls; (iii) perform the Services on each and every
Business Day, and to the extent provided in an Work Order and/or SOW, each
Application Performance Day, (iv) cooperate and provide assistance to any
third party service provider as requested by Customer, including but not limited to any assistance with the transition of Services requested by Customer in
the event of expiration or termination of this Agreement, or any Work Order
or SOW, and (v) provide status reports as required under this Agreement or
any Work Order or SOW regarding the provision of Services in the format
established by Customer. In addition, Vendor shall, with Customer’s participation, conduct operational, governance and executive reviews of Vendor’s
performance under this Agreement according to the frequency, format and
content established by Customer and Vendor shall prepare and provide reports
as requested by the Customer for such review meetings. Video conferencing
shall be an acceptable means for conducting these reviews.
Vendor shall use Customer Software solely for purposes of providing Services to Customer and as expressly permitted by Customer in writing. Vendor
shall not: (i) attempt to copy, decompile, reverse engineer, modify, alter,
translate, create derivative works, adapt, or disassemble, all or any portion, of
the Customer Software, nor attempt to discover or create the source code from
the object code for the Customer Software, in whole or in part, (ii) make the
Customer Software available to third parties over the Internet or any other
similar networking technology, (iii) remove any copyright, trademark or other
proprietary notices from the Customer Software or any media relating thereto,
(iv) rent, lease, distribute, sell, sublicense, assign or transfer any rights to use
Customer Software granted in this Agreement, or authorize all or any portion
of the Customer Software to be copied onto any products or another user’s
computer except as expressly permitted in writing by Customer, or (v) breach
or cause Customer to be in breach of any license agreement between Vendor
and a third party licensor of Tools and/or Vendor Software.
1.1
Vendor shall develop and maintain an electronic knowledge repository of
all information in Vendor’s possession or control related to the Services and to
the performance of this Agreement, including but not limited to processes,
workflows, training manuals, standard operating procedures, performance reporting, Records, Tools, and Related Documentation (“Knowledge Repository”). The Knowledge Repository shall be maintained in accordance with the
Customer Offshore Security Controls , and Customer shall have access to the
1.2
Knowledge Repository at all times.
Vendor shall provide all infrastructure and controls for Customer Designated Areas in accordance with the Customer Offshore Security Controls,
and Vendor, upon Customer’s request, may be required to provide (i) all systems and software as listed on for use on desktops located at Vendor Facilities
and laptops used by Vendor Personnel located at Vendor Facilities, (ii) any
other software specifically listed in any Work Order and/or SOW that Vendor
is required to provide and use in the performance of Services, and (iii) any
Third Party Software (other than Third party Software listed in subsection (i)
and (ii) above), that is required to perform Services that will run on any assets
provided by Vendor and used by Vendor Personnel in performing Services.
1.3
1153
In the event Vendor is requested by Customer to provide any Third Party
Software for performing Services as listed in subsections (ii) and (iii) above,
Customer shall pay to Vendor all reasonable costs and expenses (as preapproved in advance in writing by Customer) incurred by Vendor in licensing
such additional software from third parties. Customer shall have the right to
approve the terms of agreement relating to licensing of such software from
third parties; provided that Customer’s approval shall not constitute an opinion as to the legal appropriateness or the adequacy of the terms of such license
agreements. Vendor agrees to use Commercially Reasonable Efforts to require the licensor of such software to allow (i) transfer of the licenses to Customer or any party designated by Customer; provided the rights, restrictions
and obligations shall be binding upon the successors and assigns of such license agreements, (ii) transfer of the software to another location/site if a location/site is specified in the license agreement, and (iii) for termination of the
license agreement for no cause by providing thirty (30) days prior written notice without incurring any termination penalty or charges. In the event the license agreement does not allow for the transfer of the licenses and software as
set forth above, the Vendor agrees that the license agreement shall be a term
license providing for termination of the license agreement for no cause by
providing thirty (30) days prior written notice without incurring any termination penalty or charges.
1.4 In the performance of the Services, Vendor’s activities shall (i) be performed in
accordance with the Customer Controls and (ii) meet the operational requirements
of the Customer Systems. Vendor shall obtain Customer’s prior written approval
before implementing any deviations from Customer Controls or operational requirements of the Customer Systems.
1.5 As reasonably requested by Customer from time to time (including during the
term of this Agreement and during any Termination/Expiration Assistance period),
Vendor shall, at no cost to Customer, (i) train Customer on Vendor’s knowledge
about Tools, Customer Software, Vendor Software, Deliverables, and Vendor's quality system, and any related improvements, as applicable; provided that the total
time spent annually on such training by Vendor shall not exceed the equivalent of
one percent (1%) of the total time of Vendor Team, engaged in providing Services
during the applicable calendar year (“Training Hours”) and (iii) provide such reasonable training, information and documentation as may be necessary to enable representatives of Customer Entities and, or their agents, who are qualified Information
Technology professionals to understand, operate and provide the Services during or
after the Term. In addition, Vendor shall provide Customer with reasonable training
on the customer-interface for the Tools. Members of the Vendor Onsite Team shall
be competent in providing and shall provide such training to Customer. Vendor has
assumed that the training effort will be split between Vendor Team in the propor-
tion of people deployment. Parties shall use videoconferencing, teleconferencing or
web conferencing to provide training from offshore. Customer will be responsible
for all out-of-pocket expenses incurred in connection with such training services as
approved in advance by Customer. For any additional training that exceeds the
Training Hours, Customer may engage Vendor for a fee as mutually agreed to the by
the Parties in writing. Vendor agrees that the knowledge acquisition cost for Services performed pursuant to a SOW shall be borne by Vendor up to an amount
equal to ten percent (10%) of the total SOW value and shall not be either directly or
indirectly billed to Customer.
1.6 Vendor acknowledges that Customer is a provider of essential medical and
health care services, including first responder services to patients; Customer’s use of
Services and Vendor’s timely provision of Services is vital to the operations of Customer and to the health and safety of Customer’s patients and members; and any
interruption of Customer’s business could result in physical injury to patients and
substantial liability to Customer. Vendor agrees that it shall not at any time (i) during the term of this Agreement, suspend or terminate the Services, (ii) render Deliverables unusable or inoperable (e.g., by use of a license key or time out mechanism)
or in any way deliberately take any action to impede or interfere with the Services
or otherwise impede or interfere with Customer’s businesses, and (iii) otherwise
impede or interfere with Customer’s business, or the provision by Customer of any
medical or health care services.
1.7
In addition to the specific resource commitments of Vendor set
forth in an applicable Work Order or SOW, Vendor shall make available to Customer, at no additional charge, additional offshore personnel resources equal to
or more than ten percent (10%) of the total Vendor Offsite Team listed in the
applicable Work Orders and SOWs, as a contingency reserve or buffer against
unexpected resource limitations to ensure continued performance of the Services
meeting the Service Levels and Performance Standards.
1.8 At no additional charge, Vendor shall provide to Customer
documentation and reports on a regular basis as requested by Customer and/or
specified in the applicable Work Order and/or SOW, including any (a)
financial and cost reports, (b) service and performance reports (including
service level reports), (c) project status and costs reports, (d) issues, problems
and trouble ticket reports, (e) monitoring reports, (f) change management
reports, (g) security reports, and (h) such other reports as Customer may
reasonably request (collectively, whether in written, electronic or other form,
the “Reports”). In addition to the Reports, Vendor shall provide Customer
with access to the data used to compile the reports, including through online
“dashboards” and other electronic monitoring tools, as set forth in this
Agreement.
1155
29.
Creation of Derivative Works – International
(a)
Licensee agrees that it will not and will not authorize others to make
modifications to, create derivative works based on, copy, translate, disassemble, de-compile, reverse engineer or otherwise decode or alter the Software or
the accompanying Documentation, including any derivative work that removes, isolates, severs, deletes or disables any function or component of the
Software. Licensee shall not offer any such function or component in a manner different from the standard functionality and organization of the Software.
(b)
To the extent that any applicable mandatory laws contained within the
body of laws of the European Union, Norway, or any other international governmental entity (such as, for example, national laws implementing EC Directive 91/250 on the Legal Protection of Computer Programs) give Licensee
and/or its Affiliates the right to perform any of the aforementioned activities
without Vendor’s consent in order to gain certain information about the Software for purposes specified in the respective statutes, Licensee hereby agrees
to inform Vendor in writing accordingly, in which case Licensee, in its sole
discretion, will either: (i) request that Vendor perform the work necessary to
achieve the required interoperability or gain the required information at Vendor’s then current consulting rates; or (ii) perform the work itself to reverse
engineer parts of the furnished Software source code to gain such interoperability or required information, provided Licensee performs such work with its
own employees, protects the derived source code in accordance with the provision of Section __ (“Confidentiality”), and promptly, at Vendor’s direction,
returns, deletes or destroys all copies of any derived source code in its possession after the use of such derived source code is complete.
30.
Evaluation and Trial Licenses
Licensor agrees to furnish evaluation and/or trial licenses and applicable documentation, for the Software, at no charge, to Licensee, upon Licensee’s request. Such licenses shall be furnished under agreed to terms and conditions
as set forth in an Evaluation and/or Trial Agreement attached to this Agreement as Exhibit __- Trial Agreement. Licensor further agrees to furnish a
reasonable number of copies of Software at no charge to Licensee for nonproduction demonstration purposes and/or for use in Licensee laboratories as
may be agreed to between the Parties hereto.
31.
Production License Terms
A. General Terms
1.
Definitions.
“Non-production Use” shall mean, Partner may only use Licensed Program
internally for testing and training purposes; not in a production environment.
Partner shall not resell the Licensed Programs nor shall Partner have
ownership rights of the Licensed Program.
“Concurrent Devices/Concurrent Accesses”: shall mean the maximum
number of input devices accessing the Programs at any given point in time. If
multiplexing software or hardware (e.g., a TP monitor) is used, this number
must be measured at the multiplexing front end.
“Named User” shall mean an individual authorized by Partner to use the
Licensed Programs which are installed on a single server or multiple servers,
regardless of whether the individual is actively using the programs at any
given time. A non human operated device will be counted as a Professional
User in addition to all individuals authorized to use the programs, if such
devices access the Licensed Programs. If multiplexing hardware or software
(e.g., a TP monitor or web server product) is used, this number must be
measured at the multiplexing front end. Each Named User will have varying
access to the Licensed Program depending upon the type of Named User
access purchased above.
“Professional Named User” shall mean a Named User who is permitted to
access the Licensed Programs and is able to access all functionality of such
Licensed Programs.
“Query User”: shall mean a Named User with read only access rights to the
applicable Licensed Program so that such Query Named User may run queries
or generate reports from the applicable Licensed Program.
2. Miscellaneous. Licensor shall deliver to the Partner Location specified
above one copy of the software media (“Master Copy”) and one set of Documentation (CD-ROM or bound, whichever is standard) for each Program
currently available in production release as of the Effective Date specified below for use on the Designated Systems. Partner shall be responsible for copying the software media for the Programs and installing the Programs in accordance with the terms specified herein. Partner may copy bound sets and/or
1157
CD-ROM Documentation as is practically required to support the Programs.
The license fees specified above shall be non-cancelable and the sum paid
nonrefundable except as otherwise provided in the License Agreement. Partner agrees to pay applicable sales tax, media and shipping charges. Partner is
responsible for payment of any use or other tax arising from use of the Programs in any other location.
32. Vendor Use of Customer Software and Hardware
“Customer Software” shall mean any Software owned or licensed by Customer
and made available to Vendor for use in the performance of the Services.
1 The Customer Equipment and Customer Software are provided to the
Vendor on an “AS IS, WHERE IS” basis, with no additional warranties of any
kind, including any implied warranties of fitness for a particular purpose, noninfringement or merchantability, except to the extent of any warranties or
indemnities in any Customer Equipment or Customer Software extended by
the original equipment manufacturer which Customer is permitted to passthrough to Vendor.
2 Vendor shall use Customer Software solely for purposes of providing
Services to Customer or as expressly permitted by Customer in writing.
Except as permitted by Customer in writing, Vendor shall not: (i) attempt to
copy, decompile, reverse engineer, modify, alter, translate, create derivative
works, adapt, or disassemble, all or any portion, of the Customer Software,
nor attempt to discover or create the source code from the object code for the
Customer Software, in whole or in part, (ii) make the Customer Software
available to third parties over the Internet or any other similar networking
technology, (iii) remove any copyright, trademark or other proprietary notices
from the Customer Software or any media relating thereto, (iv) rent, lease,
distribute, sell, sublicense, assign or transfer any rights to use Customer
Software granted in this Agreement, or authorize all or any portion of the
Customer Software to be copied onto any products or another user’s computer
except as expressly permitted in writing by Customer, (v) breach or
knowingly cause Customer to be in breach of any terms of any license
agreement relating to such Customer Software that are communicated to
and/or provided to Vendor Engagement Executive (or any other member of
the Vendor management team as mutually agreed to by the Parties) in writing
(which may include email communications) or by such other means as are
generally used by Customer to disseminate such information to its own
employees or contractors, or (vi) breach or knowingly cause Customer to be in
breach of any license agreement between Vendor and a third party licensor of
Tools and/or Vendor Software.
33. Prohibition on Use of Customer Software Without Customer
Consent
Vendor shall not incorporate into the Customer Software any Vendor
Proprietary IP, Third Party Software (including any open source materials),
Confidential Information of Vendor or other third party intellectual property
or confidential information (“Third Party IP”) without Customer’s prior
written consent or unless such Vendor Proprietary IP and Third Party IP is
specifically identified in writing in the applicable SOW or unless such Third
Party Software (including open source materials) or Third Party IP is provided
to Vendor by Customer with specific written instructions to incorporate in the
Customer Software, Customer System and/or Deliverable.
34. LPAR Licensing
1.7
LPAR LICENSING
(a) "LPAR MIPS" shall mean those MIPS used in a particular logical
partition(s) of the mainframe CPU ("LPAR") upon which the Software is
operating.
(b) LPAR MIPS Utilization Calculation. Licensee usage capacity for the
mainframe platform will be measured as LPAR MIPS Utilization, as further
defined herein, rounded up or down to the nearest whole number for
measurement. The percent a CPU is busy in a given period of time is
computed by taking the amount of time the machine was executing
instructions during an interval and dividing it by the total time in that interval.
A series of hourly average percent CPU busies for each LPAR will then be
calculated for the prime shift Monday through Friday within the hours of 6
AM to 6 PM local time. To avoid anomalies within the weekly data caused by
unusually high isolated peak usage periods, the 90th percentile of these 60
hourly periods for the week is used to derive a representative peak percent
busy for that week (“LPAR MIPS Utilization”). The source of the data for
calculating the LPAR MIPS Utilization will be the IBM operating systems
Resource Management Facility (RMF) Type 70 SMF record (PR/SM CPU
utilization),
or
VM
monitor
data,
as
applicable.
(c) Reported LPAR MIPS. The weekly LPAR MIPS Utilization will be
averaged over a period of the first thirteen (13) weeks of each calendar year
1159
resulting in a composite LPAR MIPS Utilization metric ("Reported LPAR
MIPS"). Licensee shall issue a report to Licensor listing the Reported LPAR
MIPS for all applicable LPARS, where the licensed Product is utilized, no
later than April 30 each year during the Term and such report shall satisfy the
annual true-up reporting requirements in this Agreement.
For mainframe
Products not subject to annual true-up reporting requirements, the weekly
LPAR MIPS Utilization will be averaged over a period of four (4) weeks,
commencing sixty (60) days prior to the anniversary date of the annual license
usage fee renewal date, resulting in a composite LPAR MIPS Utilization
metric, which will be reported to Licensor no later than 30 days prior to the
anniversary of the annual license usage fee renewal date.
(d) LPAR Usage Restriction. Access to any Product operating within each
applicable LPAR will be restricted through the use of industry standard access
control software, such as RACF.