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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.