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Master Agreement for Subcontracted Services Statement of Work

Consulting Services Agreement


Master Agreement for Subcontracted Services

Statement of Work
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This Consulting Services Agreement involves

CHORDIANT SOFTWARE INC

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Title: Master Agreement for Subcontracted Services Statement of Work
Governing Law: New York     Date: 2/9/2007
Industry: Software and Programming    

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Exhibit 10.47

[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

Master Agreement for Subcontracted Services

Statement of Work

MASS Agreement #4902A20003

SOW #4906AT0073

 

This Statement of Work ("SOW")#4906AT0073 adopts and incorporates by reference the terms and conditions of the Master Agreement for Subcontracted Services - IBM as Prime # 4902A20003 (the “Agreement” or “MASS”), between International Business Machines Corporation (“IBM” or “Buyer”), and Chordiant Software, Inc. (“Supplier” or “Chordiant”). This SOW is effective beginning on the latest date of signature by both parties and will remain in effect until [*] (the “Initial Term”). Transactions performed under this SOW will be conducted in accordance with and be subject to the terms and conditions of this SOW, the Agreement, and any other applicable attachments or amendments. In the event of any conflict between this SOW, or the Agreement, this SOW will govern and any applicable Work Authorizations (“WAs”). This SOW is not a WA.

 

Not withstanding anything in the MASS to the contrary, the MASS shall remain in effect with respect to this SOW through the term of this SOW.

 

1.0  

SCOPE OF WORK

Supplier resources will assist Buyer with the following services for the Call Center Application (CCA) Tower Project for CIGNA Corporation (“CIGNA” or “Customer”):

 

1.1  

Support of JSF SDK to Enable Portlet Development

 

Supplier will provide JSF SDK support in Chordiant Foundation which will provide the platform on which to build portlets for the reference CIGNA Architecture. Chordiant will demonstrate JSF/SDK test scenarios in lab environment.

 

Definition of Chordiant JSF SDK

The JSF SDK allows developers to build Java Server Faces user interfaces which connect with Chordiant processes (via the Interaction Controller), and Chordiant business services. JSF SDK pages can be hosted by the existing Chordiant Cafe desktop, or alternative custom desktops. The contents of this JSF SDK are:

-   [*]

 

The JSF SDK will be used by Buyer, with Supplier’s support, to deliver a Reference Build. The reference build will provide the following:

-   [*]

 

 

1.2  

Services Support for CIGNA Development & Build Effort

 

Supplier will assist Buyer in the following activities of the CIGNA Call Center Application (CCA) Tower Project:

·  

Support the baseline Portlet development by providing [*] hours of architect support to assist with initial JSF SDK implementation, the Reference Architecture outlined above and the Portlet development. (These hours are included in the total hours noted in Section 3.0.)

 

·  

Assist with the high and low level design of the Chordiant functional solution

 

·  

Provide guidance and mentoring on how to maximize the value from the Chordiant product

 

·  

Assist with the high and low level design of Chordiant software integration in the overall architecture

 

·  

Provide guidance and mentoring on techniques to extend the Chordiant Physical Data Model and the Chordiant Business Object Model

 

·  

Assist with the extension of the Chordiant Physical Data Model and the Chordiant Business Object Model

 

·  

Assist with the design and development of Chordiant Business Flows and Chordiant Business Services

 

·  

Assist with design and development of Chordiant Queue management

 

·  

Assist with the installation and configuration of the Chordiant solution in the customer environments

 

·  

Assist with performance testing and tuning the Chordiant solution

 

·  

Provide Subject Matter Expertise for Information Technology Governance related to managing a Chordiant engagement leveraging Harmony Methodology, Chordiant Product and Chordiant Integration Architecture

 

2.0  

SUPPLIER ROLES

 

Supplier will provide consultants for the following type(s) of roles:

 

o  

Technical Architect

 

o  

Functional Architect

 

o  

Consultancy Services Manager

 

o  

Data Architect

 

o  

Portal Architect

 

o  

Application Architect

 

o  

Business Analyst

 

o  

Class Modeler

 

o  

Interaction Flow Designer

 

o  

Business Services Designer

 

o  

Performance Tuning Specialist

 

o  

Infrastructure Architect

 

3.0  

COMPLETION CRITERIA

Supplier will have fulfilled its obligations under this SOW when anyone of the following first occurs:

·  

IBM has agreed that Supplier has provided the hours as defined in Section 5.0 below in this Statement of Work or

 

·  

Either party terminates the SOW in accordance with the provisions of the Master Agreement for Subcontractor Services, or IBM terminates the SOW upon thirty days prior written notice.

 

 

4.0  

SUPPLIER’S RESPONSIBILITIES

In addition to delivering the Services on schedule, Supplier will:

·  

Participate in progress reviews, as requested by Buyer, to demonstrate Supplier’s performance of its obligations;

 

·  

As part of Supplier’s importation requirements, provide to Buyer on the commercial invoice:

 

·  

An invoice description that provides enough detail to verify the effort and time period expended for the month.

 

5.0  

PAYMENTS

Supplier services will be payable and invoiced to Buyer on a time and materials basis at rates provided in the table below per consultant, plus applicable sales taxes and expenses; total estimated to be [*] for Supplier Services as follows:

 

Table 1

 

Positions

Roles

Estimated Hours

Hourly Rates

Technical Architect

Technical Architect

Functional Architect

Performance Tuning Specialist

Data Architect

Portal Architect

Application Architect

Infrastructure Architect

Interaction Flow Designer

Business Services Designer

[*]

$ [*]

Consultancy Services Manager

Consultancy Services Manager

[*]

$ [*]

Business Analyst

Business Analyst

Class Modeler

[*]

$ [*]

Total Estimated Hours

 

[*]

 

 

   The service fee estimate related for the Supplier Services described under this SOW is intended to be an estimate for Buyer's budgeting and Supplier's resource scheduling purposes; the estimate does not include expenses or taxes. Once fees for services reach this estimate, Supplier will cooperate with Buyer to provide continuing services on a time and materials basis or at Buyer’s direction, stop performing services. In the event that additional services are required, Buyer and Supplier will handle such services through the Change Control Process and such additional services will be mutually agreed to by both parties. All amounts due to Supplier hereunder will be invoiced monthly. All such invoices shall be payable net 45 days for this SOW only. Actual travel and living expenses are in addition to the service fees. Chordiant will be reimbursed for actual expenses incurred and adhere to the IBM expense policy. Chordiant will work with IBM to manage expenses.

  

   All travel and living invoices are at actual cost with no mark-up. (Buyer will reimburse Supplier for the following travel expenses only, provided they are incurred in performance of this SOW and with Buyer’s prior written approval: (i) tolls, parking fees, taxis, buses or auto rentals fees for autos rented from a Buyer designated rental company; (ii) personal automobile use under the applicable automobile allowance plan, excluding normal commutation; (iii) air transportation at the economy, tourist or coach class rate for the most direct route of a scheduled airline; (iv) reasonable lodging charges for the immediate area; (v) reasonable and actual meal expenses; (vi) necessary business calls made on Buyer’s behalf; (vii) reasonable tipping; (viii) reasonable valet and laundry charges if a trip extends beyond four consecutive (4) days. Supplier must submit an invoice listing all travel expenses, and all applicable receipts for lodging, airline travel, rental cars or any other reimbursable expenditure to the Technical Coordinator. Buyer will not reimburse Supplier for personal expenses.)

 

The rates provided in the above table are only relevant to the SOW. Buyer may request up to an additional 10,000 hours based on the rates in the table above. Any additional hours beyond the table above and 10,000 hours will be billed at the following rates:

 

Table 2

 

 

Positions

Hourly Rates

Technical Architect

$ [*]

Consultancy Services Manager

$ [*]

Business Analyst

$ [*]

Developer

$ [*]

 

For services billed under Table 2, a ctual travel and living expenses are in addition to the service fees.

 

 

6.0  

SUPPLIER SOFTWARE

 

Buyer and Supplier will enter into an order form regarding the purchase and resale of Supplier Software by Buyer to Customer in the form attached as Exhibit 4-D hereto (the “Order Form”), and Supplier and Customer will enter into a software license agreement in the form attached as Exhibit 4-E hereto (the “End User Agreement”), which End User Agreement contains the terms and conditions, including warranty and indemnification, governing Customer’s use of the Supplier Software.

 

6.1   Documentation .

 

Following execution of the Order Form and the End User Agreement, Supplier shall deliver to Buyer on behalf of the Customer one copy of the Supplier Software (via CD-Rom or electronic download) and all necessary and reasonable documentation, including user, systems, operating and program manuals for the Supplier Software which Supplier customarily provides to end user licensees of the Supplier Software.

 

7.0  

ASSET PROTECTION

In the event that assets are loaned to Supplier and there is no separate loan agreement in place between Buyer and Supplier for those assets, Supplier will be responsible for risk of loss and for the return of those assets to Buyer.

 

8.0  

SUPPLIER SUPPORT SERVICES

 

The ongoing support and maintenance obligations for the Supplier Software are set forth in Exhibit 1 hereto (the “Service Level Agreement”). So long as Buyer has paid the annual support and maintenance fee under the Order Form, Supplier is then offering support and maintenance services for the Supplier Software and neither Buyer nor Customer has otherwise breached any provision of the End User Agreement, Supplier shall provide the support and maintenance services specified on the Service Level Agreement to Buyer on behalf of Customer. With regard to the provision of support and maintenance services under the Service Level Agreement, for so long as the Service Level Agreement is in effect, Supplier shall comply with Sections 16 (Security), 27 (Audit), 25 (Compliance), 38 (Confidentiality) and 39 (IBM Data). The Service Level Agreement shall survive the termination of this SOW, so long as Buyer has paid the annual support and maintenance fee under the Order Form, Supplier is then offering support and maintenance services for the Supplier Software and neither Buyer nor Customer has otherwise breached any provision of the End User Agreement.

 

10.0 Buyer's Responsibilities

 

Responsibilities . Attachment A-1

 

Buyer and the IBM team when necessary has the right to interview and approve staffing before supplier personnel are brought onto the project.

 

In addition to Buyer's responsibilities as expressly set forth elsewhere in this SOW or the Base Agreement, Buyer shall be responsible for the following:

 

 

Buyer shall designate one individual to communicate directly with the Supplier Account Executive, to whom all Supplier communications concerning this SOW shall be addressed ( “the Relationship Manager").

 

 

Buyer shall cooperate with Supplier, including by making available timely management decisions, information, approvals and acceptances, as reasonably requested by Supplier so that Supplier may accomplish its obligations and responsibilities hereunder. The Relationship Manager, or his or her designee, will be the principal point of contact for obtaining such decisions, information, approvals and acceptances. Only personnel as expressly so designated by Buyer will be authorized to make commitments on the part of Buyer that amend this SOW.

 

 

12.0 Communications

All communications between the parties will be carried out through the following designated coordinators. All notices required in writing under this Agreement will be made to the appropriate contact listed below at the following addresses and will be effective upon actual receipt. Notices may be transmitted electronically, by registered or certified mail, or courier. All notices, with the exception of legal notices, may also be provided by facsimile.

 

 

 

Business Coordinators

FOR SUPPLIER

 

FOR BUYER

 

Name

   [*]

Name

   [*]

Title

   Sales Manager

Title

   Partner

Address

   8 Commerce Drive

   Bedford, NH 03110

Address

   55 Main St, 1 Financial Plaza, Hartford, Ct.

Phone

   [*]

Phone

   [*]

Fax

   [*]

Fax

   [*]

E-mail

   [*]

E-mail

   [*]

 

Legal Coordinators

FOR SUPPLIER

 

FOR BUYER

 

Name

   Derek Witte

Name

   [*]

Title

   General Counsel

Title

   Procurement Solution Advisor

Address

   20400 Stevens Creek Blvd.

   Cupertino, CA 95014

Address

 

Phone

   [*]

Phone

   [*]

Fax

   [*]

Fax

 

E-mail

   [*]

E-mail

   [*]

 

Technical Coordinators

FOR SUPPLIER

 

FOR BUYER

 

Name

   [*]

Name

   [*]

Title

   Sales Manager

Title

   same as above

Address

   8 Commerce Drive

   Bedford, NH 03110

Address

 

Phone

   [*]

Phone

 

Fax

   [*]

Fax

 

E-mail

   [*]

E-mail

 

 

 

13.0 Electronic Commerce

 

Unless previously submitted by Supplier, in order to initiate electronic transfer of payments associated with this SOW, Supplier will complete the attached form entitled “Authorization for Electronic Funds Transfer” and fax the completed form to Accounts Payable at the number included on the form.

 

Unless previously submitted by Supplier, in order to initiate electronic transfer of payments associated with this SOW, Supplier will provide the required information in the attachment entitled “Electronic Funds Transfer.”

 

14.0   Training .

 

Supplier shall be responsible for the training of Supplier Personnel at no additional cost to Buyer. This training includes all new-hire training of all types (including with respect to technical and domain requirements and necessary cultural and communication skills) prior to the point when the Supplier employee is qualified to meet the skill set requirements for his or her respective activities under the Subcontract, including so that such Supplier Personnel has expertise with Supplier’s then-in-effect architecture and technology. Supplier shall provide training necessary to meet all compliance requirements mandated on a country, state, federal or local level for the duties performed in connection with the Supplier’s Supplier Services.

 

Any training required on Supplier Software for Buyer or Customer personnel will be charged at the following rates:

 

Course

# Days

Tuition

per person per course

Chordiant Foundation Server

 

 

CSF - Technical Developer

[*]

$ [*]

CSF - Technical Developer Sandpit

[*]

$ [*]

CSF - Design

[*]

$ [*]

Business Analyst

[*]

$ [*]

Business Analyst Sandpit

[*]

$ [*]

 

 

 

Chordiant Certifications

 

 

Technical Developer (CCTD)

[*]

$ [*]

Business Analyst (CCBA)

[*]

$ [*]

 

 

Subcontractor shall retain IBM specific training materials and other documentation used in connection with the Subcontractor’s Subcontractor Services in accordance with IBM provided record retention policies and CIGNA’s seven year retention requirement.

 

16.0 Security .  

 

Throughout the Subcontract Term and the Termination Assistance Period, Supplier shall, at no additional cost to Buyer, maintain the security requirements specified in Exhibit 4-C.  

 

17.0   Supplier Personnel Equipment .

 

Except for the IBM Equipment Buyer shall provide pursuant to the Subcontract (including CIGNA Equipment provided by Buyer), Supplier shall provide to Supplier Personnel all standard desktop computer Equipment and Software required to perform the Supplier Services (including standard Microsoft Office products or compatible, functionally equivalent products that are compatible with IBM identified systems, e-mail and LAN/WAN servers). Buyer and Supplier shall agree on the necessary set of application-specific tools, and which items Supplier shall provide and which items Buyer shall provide. Supplier shall provide all office equipment (including PCs), consumables, services and the like required to support Supplier Personnel at Supplier Service Locations.

 

20.0 IBM/CIGNA Facilities

 

   20.1 Use of IBM/CIGNA Service Locations . The IBM/CIGNA Service Locations shall be made available to Supplier on an “as is, where is” basis. Supplier shall follow any directions of Buyer with respect to the use of such space. Supplier and Supplier Agents shall: (a) keep the IBM/CIGNA Service Locations in good order; (b) not commit or permit waste or damage to such facilities; (c) not use such facilities for any unlawful purpose; and (d) act and comply with all of Buyer’s and CIGNA’s standard policies and procedures, which have been provided to Supplier in writing (for the avoidance of doubt, electronic notification is considered “in writing”), as in effect from time to time, including procedures for the physical security of the IBM/CIGNA Service Locations, including those set forth on Exhibit 3 hereto. Supplier shall be responsible for damage to the IBM/CIGNA Service Locations caused by Supplier or Supplier Agents, subject to reasonable wear and tear. Subcontractor shall not make any improvements or changes involving structural, mechanical or electrical alterations to such space without IBM’s or CIGNA’s prior written consent. Improvements to the IBM/CIGNA Service Locations shall become the property of IBM or CIGNA (as applicable). When the IBM/CIGNA Service Locations are no longer required for performance of the Subcontractor Services, Subcontractor shall return the IBM/CIGNA Service Locations to IBM or CIGNA in substantially the same condition as when Subcontractor began use of the facilities, subject to reasonable wear and tear. Supplier shall permit Buyer of CIGNA and Buyer’s or CIGNA’s designees to enter into those portions of the IBM/CIGNA Service Locations occupied by Supplier’s staff at any time. Except for the IBM/CIGNA Service Locations described in this Subcontract which shall be made available to Supplier, Supplier shall be responsible for providing all other space that is necessary to provide the Supplier Services at Supplier’s own or other facilities. Supplier acknowledges that the location of the IBM/CIGNA Service Locations may change and Supplier shall provide the Supplier Services with respect to any such relocated IBM/CIGNA Service Locations at the same cost, subject to Buyer being financially responsible for Supplier’s incremental expenses for a Buyer-initiated relocation of the Supplier Services to any such relocated IBM/CIGNA Service Location, but Subcontractor shall use commercially reasonable efforts to avoid any significant incremental expenses above the expense estimate set forth in Section 5.0 above and shall notify IBM the of any incremental expense increase and additional Subcontractor Services Charges, if any, for compliance with IBM’s direction to relocate such Subcontractor Services.

 

   20.2 Use of IBM/CIGNA Facility Items . Buyer and CIGNA shall provide reasonable use of IBM/CIGNA Facility Items substantially equivalent to those made available by Buyer or CIGNA to its own personnel who perform similar functions. Supplier may only use the IBM/CIGNA Facility Items for the sole and exclusive purpose of providing the Supplier Services. Any other uses are subject to the prior written approval of Buyer or CIGNA in their discretion. Supplier shall keep and use the IBM/CIGNA Facility Items in a reasonable and efficient manner. Supplier shall not commit waste or damage to the IBM/CIGNA Facility Items or use them for any unlawful purpose or act. Supplier is responsible for any damage to IBM/CIGNA Facility Items resulting from the abuse, misuse, neglect or gross negligence of Supplier (or its subcontractors or other guests) or other failure to comply with its obligations respecting such resources. Supplier shall (and shall cause Supplier Personnel to) review, be knowledgeable of and comply with Buyer’s and CIGNA’s policies and procedures regarding access to and use of the IBM/CIGNA Facility Items which have been provided to Supplier in writing, including procedures for physical and logical security, including those set forth on Exhibit 2 hereto, and shall follow any of Buyer’s reasonable directions with respect to the use of such items.

 

   20.3 No Violation of Laws . Supplier shall: (a) treat, use and maintain the IBM/CIGNA Service Locations in a reasonable manner, but in no event to a lesser standard than it maintains for its own locations; and (b) not commit, and use all reasonable efforts to ensure that no Supplier employees nor Supplier Agents commit, any act in violation of any Laws in such Supplier occupied IBM/CIGNA Service Location or any act in violation of Buyer’s of CIGNA’s insurance policies or in breach of Buyer’s or CIGNA’s obligations under the applicable real estate leases for such Supplier occupied IBM/CIGNA Service Locations, in each case of which Supplier is apprised in writing by Buyer.

 

   22.0 Safety and Security Procedures. 

 

 

22.1 While at the IBM/CIGNA Service Locations, Supplier’s employees and the Supplier Agents shall comply with Buyer’s and CIGNA’s reasonable requests, rules and regulations regarding personnel and professional conduct (including the wearing of an identification badge and adhering to regulations and general safety practices or procedures), which have been provided to Supplier in writing (for the avoidance of doubt, electronic notification is considered “in writing”), including the regulations set forth in Exhibit 4-C hereto and otherwise conduct themselves in a businesslike and professional manner.

 

 

 

 

22.2     Except as otherwise designated, at IBM/CIGNA Service Locations, smoking is prohibited inside all buildings operated or occupied by Buyer or CIGNA, including leased offices and at off-site IBM/CIGNA sponsored conferences and meetings.

 

22.3 If operating at a IBM/CIGNA Service Location, Supplier shall be responsible for adhering to all individual IBM and CIGNA Safety, Occupational Health, Environmental and Operational procedures provided to Supplier in writing in a manner timely enough to enable compliance and updated regularly to allow Buyer to ensure their currency and to all local, state, and federal laws and regulations, including Occupational Safety and Health Act (OSHA) and Environmental Protection Agency (EPA).

 

 

22.4 If located at an IBM/CIGNA Service Location, Supplier shall immediately notify Buyer or CIGNA security department (as appropriate) in the event of a fire or other emergency by calling the emergency telephone number. Supplier shall train all employees located at IBM/CIGNA Service Locations to respond to fire, civil defense, bomb threats, evacuations, and other emergencies alarms, based on procedures established by Buyer or CIGNA which have been provided to Supplier in writing (for the avoidance of doubt, electronic notification is considered “in writing”).

 

 

 

 

22.5 If the Supplier notices any condition at an IBM/CIGNA Service Location that is unsafe, unhealthy, or in any other way could cause an accident, Supplier shall notify Buyer immediately, if correction of the condition shall take more than routine attention, or remedy the condition, if correction of the condition shall take only minimal attention.

 

23.0 Cooperation.

 

To the extent Buyer performs any of the Supplier Services, or retains IBM Third Party Contractors to do so, Supplier shall fully cooperate with and work in good faith with Buyer and IBM Third Party Contractors as reasonably directed by Buyer. Such cooperation may include (subject to Supplier’s reasonable and appropriate security and confidentiality requirements): (a) providing access to any facilities being used to provide the Supplier Services, as necessary for IBM Third Party Contractors to perform the work assigned to them; (b) providing access (remotely or onsite as requested by Buyer) to the Equipment, Software and/or systems used to provide the Supplier Services; (c) reasonable integration activities to ensure compatibility of systems/products/services of the total solution; and (d) providing written requirements, standards, policies or other documentation for the Supplier Services and for the Equipment, Software or systems procured, operated, supported or used by Supplier in connection therewith. The Parties shall cooperate in good faith to ensure smooth performance of the Supplier Services. To that end, there shall be a continuous exchange of information between the Parties with respect to, but not limited to, the Supplier Services, quality control and encountered difficulties. Supplier will provide the cooperation called for in this Section 23.0 on a time and materials basis for services performed at the rates provided in Section 5.0 above, and on the basis of actual cost for expenses incurred. Supplier will inform and discuss any additional work or expenses with Buyer before incurring such cost or expense.

 

24.0   Notification.

 

Supplier shall immediately notify Buyer when it becomes aware that an act or omission of an IBM Third Party Contractor shall cause, or has caused, a problem or delay in providing the Supplier Services, and shall use commercially reasonable efforts to work with Buyer to prevent or circumvent such problem or delay. Supplier and Buyer shall cooperate with each other to resolve differences and conflicts arising between the Supplier Services and other activities undertaken by Buyer or any of the IBM Third Party Contractors. 

 

25.0 COMPLIANCE 

 

25.1 Governmental Approvals . Supplier shall obtain, provide, file and maintain all Governmental Approvals that are necessary for Supplier or Supplier Agents to commence and complete the Supplier’s provision of the Supplier Services. Upon Supplier’s reasonable request, Buyer shall cooperate with and assist Supplier in obtaining any Governmental Approvals, to the extent reasonably possible. Supplier shall have financial responsibility for all fees and taxes associated with obtaining and maintaining all Governmental Approvals.

 

(a) Without limiting Supplier’s obligations under this Section, Supplier shall be responsible for monitoring and properly notifying Buyer of any Governmental Approvals required in connection with providing the Supplier Services from the Offshore Locations.

 

(b) Buyer shall have the right to terminate upon notice to Supplier the relevant portion of any SOW if the foregoing Governmental Approvals are not obtained or provided within the required time frames, and the charges thereafter will be equitably adjusted to reflect such removal.

 

25.2 Compliance with Laws . Supplier (and Supplier’s Affiliates) and Supplier Personnel shall comply with all laws. If Supplier becomes aware of non-compliance with any laws, Supplier shall promptly notify Buyer in writing. Supplier shall provide Buyer with, upon request, data and reports necessary for Buyer to comply with all laws. If Supplier maintains any records required in electronic form, such records and their confidentiality shall comply with all applicable laws. Supplier shall be responsible for any fines and penalties imposed on Supplier resulting from the failure of Supplier, Supplier Personnel to comply with laws.

 

25.3 Compliance with Laws in Offshore Locations . Supplier shall be responsible for monitoring and complying with all laws relating to licensing, import-export, data flows, technology transfers (but excluding tax laws), applicable to its performance of the Supplier Services from the Offshore Locations. All costs relating to the compliance with such laws shall be paid by Supplier, except that conforming changes to IBM/CIGNA systems to receive the Supplier Services shall be handled by Buyer or CIGNA at their own cost unless the change is a part of the Supplier Services under a Statement of Work. Buyer shall provide reasonable assistance to Supplier in connection with such compliance as requested by Supplier.

 

25.4 Compliance with Privacy Regulations . Subcontractor shall comply with: (a) the European Commission Data Protection Directive (95/46/EC) or Data Protection Act 1998 or any implementing or related legislation of any member state in the European Economic Area; (b) the Health Insurance Portability and Accountability Act of 1996; (c) subject to 15.5, the Sarbanes-Oxley Act of 2002 (Pub. L. 107-204, 116 Stat. 745); and (d) any other applicable data protection laws or regulations to the extent applicable to Subcontractor’s provision of the Subcontractor Services. Specific provisions relating to HIPAA and data protection laws are set forth in Exhibit 13 hereto.

 

25.6 Interpretation of CIGNA Laws . CIGNA shall have final approval over the interpretation and application, and the appropriate method for complying with any CIGNA Laws (i.e., laws that are specific to CIGNA’s business). Supplier (and Supplier’s Affiliates), Supplier Agents, and Supplier Personnel shall comply with all such CIGNA written directions in this regard.

 

27.0 AUDIT

 

27.1 Books and Records . Supplier shall keep and maintain, in accordance with generally accepted accounting principals and practices, and make available for the inspection, examination and audit by Buyer, its authorized employees, agents or representatives and auditors (“IBM Auditors”), upon reasonable notice, complete and accurate books and records in connection with the Service, as necessary to: (a) demonstrate Supplier’s compliance with its obligations under this Subcontract; (b) verify volumes, charges and resource utilization and payment by Supplier of all license, maintenance and other service fees required in connection with the performance of the Supplier Services in accordance with this Subcontract; (c) comply with all applicable Laws; and (d) verify data security measures, pre-placement checks physical security measures related to this Subcontract. Supplier shall permit and cooperate with any audit conducted by Buyer or IBM Auditors. Upon reasonable notice, but not more than once annually, at the sole expense of Buyer, IBM Auditors shall have the right to inspect and audit Supplier’s books, records, systems and operations related to the Supplier Services.

 

27.2 Facilities and Personnel . Supplier shall provide to IBM’s Auditors access upon request to any facility or part of a facility at which Supplier is providing the Supplier Services, to Supplier Personnel, and to data and records relating to the Supplier Services for the purposes of performing audits and inspections of Buyer and its business to verify the integrity of IBM Data and to examine the systems related to the Supplier Services that process, store, support and transmit that data. The foregoing audit rights shall include audits: (a) of practices and procedures; (b) of systems; (c) of security practices and procedures; (d) of disaster recovery and backup procedures; (e) necessary to enable Buyer to meet applicable Laws; and (f) of any Supplier quality assurance processes. 

 

27.3 Fee Audit .

 

a. Upon Buyer’s request, Supplier shall provide IBM’s Auditors with access to such financial records and supporting documentation to the extent necessary to ascertain the correctness of fees due and payable to Supplier hereunder, as may be requested by Buyer or IBM’s Auditors. Such IBM Auditors may audit any of the charges charged to Buyer to determine if such fees are accurate and in accordance with this Subcontract.

 

b. If it is determined that Supplier has overcharged Buyer, IBM shall notify Supplier of the amount of such overcharge and Supplier shall promptly pay to Buyer the amount of the overcharge, plus interest at the rate of 1.5% per month calculated from the date of receipt by Supplier of the overcharged amount until the date of payment to Buyer.

 

c. In addition to Buyer’s rights set forth in Section (b) above, if any such audit reveals an overcharge to Buyer of 5% or more of the aggregate fees being audited Supplier shall, at Buyer’s option, issue to Buyer a credit against the Service Charges or reimburse Buyer, in either case, for the reasonable cost of such audit, provided such audit is not performed on a contingency fee basis.

 

27.4 Cooperation

 

a. Supplier and Supplier Personnel shall assist and cooperate with Buyer or its designees in connection with audit functions and with regard to examinations by regulatory authorities. Supplier shall provide such assistance as reasonably required to carry out the audits, including: (i) providing use of Supplier locations, facilities and resources, including space, office furnishings (including lockable cabinets), telephone and facsimile services, utilities, office-related equipment and duplicating services; and (ii) installing and operating audit software. For the avoidance of doubt, reasonable audit cooperation is part of the Supplier Services (including participation from accountants and other Supplier finance personnel) and shall not be counted against resource utilization. Any actual and reasonable expenses incurred by Supplier outside ordinary course of business expenses as a result of such audit will be reimbursed to Supplier by Buyer.

 

b. Other than in connection with a sales or use tax audit, Supplier shall notify Buyer promptly by telephone or by email if any governmental or regulatory authority requests an inspection or makes written or oral inquiries of Supplier regarding any aspect of Buyer’s activities pursuant to this Subcontract, so long as such notification does not violate any applicable Laws or breach any obligation of confidentiality to a third party. Unless otherwise required by applicable Laws, Subcontractor shall not allow physical access to any governmental or regulatory authority relating to such activities without giving IBM the right to have a representative present. Supplier and Buyer shall cooperate in resolving any concerns of any governmental or regulatory authority. Supplier shall notify Buyer promptly by telephone or by email if Supplier 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 Supplier’s ability to perform the Supplier Services.

 

c. At the conclusion of a Buyer audit or examination provided for in this Subcontract or any applicable Statement of Work and prior to issuing the final audit report, Buyer shall conduct, or request its external auditors or examiners to conduct, an exit conference with Supplier to discuss issues identified in the review. Supplier and Buyer shall meet to review each final audit report promptly after the issuance thereof and to mutually agree upon an appropriate and effective manner in which to respond to the deficiencies identified and changes suggested by the audit report.

 

d. If any audit by an auditor designated by Buyer or a regulatory authority results in Supplier being notified that Supplier is not in compliance with the terms of this Subcontract or other required compliance requirements, Supplier shall comply with such terms after having a reasonable opportunity to contest such audit finding should such finding be upheld. Subcontractor shall bear the expense of any such response, and any remedial actions, to the extent that Subcontractor was not in compliance with the terms of this Subcontract or the required compliance requirements.

 

27.5 General Procedures . Notwithstanding the intended breadth of Buyer’s audit rights, Buyer and its internal and external auditors, inspectors, regulators and other representatives shall not be given access to: (i) the proprietary information of other Supplier customers; (ii) Supplier locations that are not related to Buyer or the Supplier Services; or (iii) Supplier’s internal costs, except as to the extent such costs are the basis upon which Buyer is charged. In performing audits, Buyer shall endeavor to avoid unnecessary disruption of Supplier’s operations and unnecessary interference with Supplier’s ability to perform the Supplier Services. The external auditors and inspectors designated by Buyer under this Article 27 to conduct operational and/or financial audits shall not be Supplier Competitors. Buyer’s auditors shall comply with Supplier’s applicable, reasonable security requirements, including, where appropriate, execution of a non-disclosure agreement reasonably acceptable to Supplier.

 

27.6 Record Retention . Until: (a) seven years after expiration or termination of this Subcontract; (b) pending matters relating to this Subcontract (e.g., disputes) are closed; or (c) no longer required to meet Buyer’s records retention policy (as modified from time to time), whichever is later, as notified to Supplier, Supplier shall maintain and provide access upon request to the records, documents and other information required to meet Buyer’s audit rights under this Subcontract.

 

27.7 Legal Discovery . Buyer is required to preserve and produce electronic data in support of its legal discovery obligations, as they may arise, for investigations and/or litigation. As part of the Supplier Services, Supplier shall cooperate with any legal discovery requests made by any IBM Entity, including the dissemination of preservation requests, collection of data, imaging of systems, back-up of electronic information, maintenance, retention and production of any such data. Supplier shall keep detailed records of its efforts to preserve data required for legal discovery. 

 

28.0 Change Control Procedures.   

 

28.1 Buyer and Supplier shall comply with the following Change Control Procedures:

 

a. Change Control Procedures shall provide, at a minimum, that: (A) no Change shall be implemented without written agreement by both Parties, except as may be necessary on a temporary basis to maintain the continuity of the Supplier Services; (B) with respect to all Changes, Buyer and Supplier shall: (I) other than those Changes made on a temporary basis to maintain the continuity of the Supplier Services, schedule Changes so as not to unreasonably interrupt Buyer’s business operations; and (II) monitor the status of Changes against the applicable schedule; (C) with respect to any Change made on a temporary basis to maintain the continuity of the Supplier Services, Supplier shall document and provide to Buyer notification (which may be given orally provided that any oral notice must be confirmed in writing to Buyer within five Business Days) of the Change no later than the next Calendar Day after the Change is made; and (D) Supplier shall update the Change Control Procedures as necessary and shall provide such updated Change Control Procedures to Buyer for its approval.

 

30.0 Pre-Placement Checks

 

30.1 Supplier recognizes Buyer’s desire to maintain a safe and secure working environment for Buyer employees. For purposes of this Subcontract, “Certain Supplier Personnel” means any Supplier Personnel who: (i) are to have behind-the-firewall access to Buyer or CIGNA or their Affiliates’ computer and telecommunications network (e.g., Buyer or CIGNA Equipment, Software or Buyer or CIGNA Data), whether such access is provided through an on-site or remote connection; or (ii) perform certain Software development projects Buyer deems to be highly sensitive to Buyer’s or CIGNA’s business operations.

 

30.2 Supplier shall have administrative responsibility for conducting the background checks. Supplier does not conduct drug testing on its personnel. Buyer may conduct drug testing and background checks itself, at Buyer’s expense, on any Supplier personnel scheduled to work at IBM/CIGNA Service Locations. Supplier will make such personnel available for the drug tests and background checks. Buyer shall have financial responsibility therefore and shall reimburse Supplier for the check and test costs on a Pass-Through Expense basis.

 

30.3 Supplier shall permit and cooperate with Buyer’s audits of Supplier compliance with the background screening stated herein.

 

34.0 Replacement, Qualifications and Retention of Supplier Personnel. 

 

34.1 If Buyer determines in good faith that the continued assignment to Buyer of any particular Supplier Personnel is not in the best interests of Buyer, then Buyer shall give Supplier written notice to that effect requesting that such Supplier Personnel be replaced; provided, however, upon Buyer’s request, Supplier shall immediately reassign any individual from the Buyer account so long as Buyer demonstrates to Supplier the need for such immediate reassignment. Promptly after its receipt of such a request by Buyer, Supplier shall investigate the matters stated in the request and discuss its findings with Buyer. If requested to do so by Buyer, Supplier shall immediately remove the individual in question from performance of the Supplier Services pending completion of Supplier’s investigation and discussions with Buyer. If, following discussions with Supplier, Buyer still in good faith requests replacement of such Supplier Personnel, Supplier shall promptly replace such Supplier Personnel with an individual of suitable ability and qualifications. Nothing in this provision shall operate or be construed to limit Supplier’s responsibility for the acts or omissions of Supplier Personnel.

 

34.2 Supplier shall maintain and conduct procedures for the replacement of Supplier Personnel in such a manner so as to assure an orderly succession for any Supplier Personnel who is replaced. Upon request, after a determination that a Supplier Personnel shall be replaced, Supplier shall make such procedures available to Buyer. The timing for transfer, reassignment or replacement of Supplier Personnel shall be closely coordinated with the requirements for timing and other elements of the Supplier Services so as to maintain continuity in the performance of the Supplier Services.

 

34.3 Supplier shall use its diligent and reasonable efforts to keep the turnover rate of Supplier Personnel to a reasonably low level. If Buyer believes that Supplier Personnel’s turnover rate is excessive and so notifies Supplier, Supplier shall: (i) determine the cause of the excess; (ii) develop a mutually agreed upon plan to minimize turnover; and (iii) meet with Buyer to discuss the implementation and timely impact of the plan. Supplier shall be responsible for replacing personnel who are retiring, or who otherwise leave the Buyer account, with professional personnel.

 

35.0 Subcontractors. 

 

Except for the subcontractors identified on Exhibit 4 hereto (the “Permitted Subcontractors”), Supplier shall not subcontract its material obligations under this Subcontract or any Supplier Services which involve the use of or access to IBM Data without Buyer’s prior written consent. Supplier may use these Permitted Subcontractors in connection with the provision of the Supplier Services subject to the terms of this Subcontract (including the provisions of this Section). Buyer hereby pre-approves those certain subcontracts between Supplier and third party original hardware/equipment manufacturers and original software licensors who perform routine maintenance and support and that do not materially impact a Buyer or Supplier function that is part of the Supplier Services.  

 

35.1 Supplier shall include in its subcontracts as flow-down provisions, provisions substantially similar to those provisions of this Subcontract relating to Buyer facilities, personnel requirements, Buyer’s intellectual property rights, Buyer’s audit rights, confidentiality, representations and warranties. Supplier shall require each of its Affiliates and all Permitted Suppliers to carry insurance at levels customary and appropriate for the types and volumes of Supplier Services being provided by such Affiliates and Permitted Suppliers.

 

35.2 The Change of Control of a Permitted Subcontractor to an IBM Competitor shall in all cases be deemed good cause for the purposes of this Section. Upon any such revocation, Supplier shall, upon Buyer’s request, replace such subcontractor with a new subcontractor, subject to Buyer’s approval of the new subcontractor, the transition plan, and certain material terms of the subcontract reasonably specified by Buyer. Any revocation of the approval of a subcontractor pursuant to this Section shall not excuse Supplier from providing the Supplier Services and meeting the Service Levels; provided that Buyer gives Supplier 30 days’ notice unless a different notice period has been approved or agreed by Buyer.

 

35.3 No subcontracting shall release Supplier from its responsibility for its obligations under this Subcontract. Supplier shall remain responsible for obligations, services and functions performed by subcontractors to the same extent as if these obligations, services and functions were performed by Supplier employees. Supplier shall be Buyer’s sole point of contact. Supplier shall not disclose Buyer or CIGNA Confidential Information to a subcontractor (including an Affiliate of Supplier) until such subcontractor has executed a nondisclosure agreement in a mutually agreed form.

 

35.4 Supplier shall be responsible for all payments to Supplier Agents under contracts between Supplier and Supplier Agents. Supplier shall promptly pay for all services, materials, Equipment and labor used by Supplier or Supplier Agents in providing the Supplier Services and Supplier shall keep Buyer’s premises free of all liens by Supplier or Supplier Agents.

 

35.5 Nothing in this Subcontract shall prevent, and Subcontractor shall not prevent or inhibit (through damages, penalties or otherwise), IBM or any IBM Entity from contracting directly with any of the subcontractors or third party providers used by Subcontractor in connection with the provision of the Subcontractor Services upon the cessation of a Service or expiration or termination of this Subcontract.

 

36.0 REPRESENTATIONS, WARRANTIES AND COVENANTS

 

36.1 By Supplier . Supplier represents, warrants and covenants to Buyer during the Subcontract Term and the Termination Assistance Period that:

 

a It shall render the Supplier Services with promptness and diligence and shall execute them in a workmanlike manner, in accordance with the practices and high professional standards that are the accepted industry norms applicable to the Supplier Services. Supplier represents and covenants that it shall use adequate numbers of qualified individuals with suitable training, education, experience and skill to perform the Supplier Services.

 

b It is now, and shall be during the Subcontract Term and the Termination Assistance Period, an equal opportunity employer complying with all such applicable Laws.

 

c It shall maintain the Equipment and Software for which it is responsible under this Subcontract so that they operate substantially in accordance with their applicable specifications, including: (i) maintaining Equipment in good operating condition, subject to normal wear and tear; (ii) undertaking repairs and preventive maintenance on such Equipment substantially in accordance with the applicable manufacturer’s recommendations; and (iii) performing Software maintenance substantially in accordance with the applicable Supplier’s documentation, recommendations and specifications, in accordance with the provisions of Section 8 above.

 

f It shall perform its responsibilities under this Subcontract in a manner that does not infringe, or constitute an infringement or misappropriation of, the copyright, trademark, trade secret or other proprietary rights of a third party; provided, however, that Supplier shall not have any obligation or liability under this clause (f) if and to the extent any such infringement or misappropriation is caused by: (i) modifications made by Customer, Buyer or IBM Third Party Contractors not specified or authorized (in each case, in writing) by Supplier or Supplier Agents; (ii) IBM/CIGNA’s combination of otherwise non-infringing Supplier’s work product or services with items not furnished or specified by Supplier or Supplier Agents in writing that by sole virtue of such combination, makes the work product, service or item infringing; (iii) a breach of this Subcontract by Buyer; (iv) failure of IBM/CIGNA to use Supplier-provided corrections or modifications that would remedy the non-infringement and that offer equivalent features and functionality; (v) third party Software not provided by Supplier, except to the extent that such infringement or misappropriation arises from the failure of Supplier to obtain the necessary third party Software licenses or Required Consents or to abide by the limitations of the applicable third party Software licenses; (vi) Equipment or Software or other resources provided to Supplier by IBM/CIGNA; or (vii) the distribution, operation or use of Software of Materials for the benefit of a third party outside of the other party’s enterprise.

 

g It has not violated applicable Laws or regulations or Buyer policies (of which Supplier has been given notice) regarding the offering of inducements in connection with this Subcontract. If Supplier does not comply with the foregoing, Buyer shall have the right to terminate this Subcontract for cause without affording Supplier an opportunity to cure.

 

h If any Equipment provided by Subcontractor, including those provided by any Affiliate or third party subcontractor to Subcontractor, directly or indirectly causes any damage or loss to any IBM system or results in the loss of any IBM Data, Subcontractor shall, at no additional charge to IBM, repair or replace affected IBM Equipment.

 

i It shall cooperate with Buyer and shall take commercially reasonable actions and precautions to prevent the introduction and proliferation of Malicious Code into the systems used to provide the Supplier Services or the IBM environment. If Malicious Code is found to have been introduced into the systems used by Supplier to provide the Supplier Services, Supplier shall at no additional charge eliminate the Malicious Code from such systems used by Supplier to provide the Supplier Services and, if the Malicious Code causes a loss of operational efficiency or loss of data, to assist Buyer to the same extent to mitigate and restore those losses with generally accepted data restoration techniques. Without the prior written consent of Buyer, Supplier represents, warrants and covenants that it shall not insert into any Software code that would have the effect of disabling or otherwise shutting down all or a portion of the Supplier Services, and with respect to disabling code that may be part of any Software, that it shall not invoke the disabling code at any time.

 

k It is duly authorized to enter into this Subcontract and to make the commitments set forth in this Subcontract.

 

l Its execution, delivery and performance of this Subcontract does not constitute a violation of any judgment, order, or decree; a material default under any material contract by which it or any of its material assets are bound; or an event that would, with notice or lapse of time, or both, constitute such a default.

 

m Supplier warrants that it will perform the Services using reasonable care and skill, and according to the agreed upon specifications. Buyer agrees that it must report any deficiencies of the Services to Supplier in writing within ninety (90) days of performance of the Services in order to receive the warranty remedy. In such case Supplier will re-perform the Services at no additional charge.

 

n All current and future employees and agents of and consultants to Supplier with access to or involved in the performance of Supplier Services have executed and delivered or shall execute and deliver to Supplier a proprietary rights agreement with Supplier substantially consistent with the form attached as Exhibit 10 hereto pursuant to which such employee or consultant agrees to confidentiality and intellectual property assignment terms sufficient to enable Supplier to meet its obligations to Buyer and Customer under the Subcontract and sufficient to enable Buyer to meet its obligations to Customer under the Prime Contract.

 

37.0 INDEMNIFICATION 

 

37.1 By Supplier . Supplier shall indemnify, defend and hold harmless Buyer and CIGNA and their respective officers, directors, employees, agents, successors and assigns from any and all Losses and threatened Losses arising from or in connection with any of the following:

 

a.    Claims by Governmental Authorities for fines, penalties, financial sanctions or late charges arising from or in connection with Subcontractor’s (or Subcontractor Personnel’s) failure to comply with any laws solely to the extent Subcontractor’s failure to comply with laws constitutes a breach of Subcontractor’s services obligations under the Subcontract or a Statement of Work which services obligation was communicated to Subcontractor by IBM as a written requirement in order to enable IBM to comply with such laws;

 

b.    Supplier’s use or disclosure of information in breach of its confidentiality obligations set forth in this Subcontract;

 

c.    Supplier’s failure to obtain the Required Consents or comply with the terms of any third party consent or underlying agreement;

 

d.    any claim or action initiated by an Affiliate of Supplier or potential or actual agent of Supplier (including Supplier Personnel) asserting rights in connection with this Subcontract;

 

e.    any actual or alleged infringement or misappropriation of the trade secret, copyright or other proprietary rights, alleged to have occurred because of systems or other resources provided by or on behalf of Supplier or Supplier Personnel or based upon performance of the Service; provided, however, that Supplier shall not have any obligation or liability under this clause (h) if and to the extent any such infringement or misappropriation is caused by: (i) modifications made by Buyer, CIGNA, IBM Third Party Contractors or CIGNA Third Party Contractors not specified or authorized (in each case, in writing) by Supplier or Supplier Agents; (ii) Buyer’s or CIGNA’s combination of otherwise non-infringing Supplier’s work product or services with items not furnished or specified by Supplier or Supplier Agents in writing that by sole virtue of such combination, makes the work product, service or item infringing; (iii) a breach of this Subcontract by Buyer; (iv) failure of Buyer or CIGNA to use Supplier-provided corrections or modifications that would remedy the non-infringement and that offer equivalent features and functionality; (v) third party Software not provided by Supplier, except to the extent that such infringement or misappropriation arises from the failure of Supplier to obtain the necessary third party Software licenses or Required Consents or to abide by the limitations of the applicable third party Software licenses; or (vi) Equipment, or Software provided to Supplier by Buyer or CIGNA, neither of which has been authorized or approved by Buyer.

 

f.    any amounts assessed against any IBM Entity, including taxes, penalties and interest, assessed against any IBM Entity, that are the obligation of Supplier under this Subcontract;

 

g.    any claim relating to any violation by Supplier or Supplier Agents or their respective officers, directors, employees, representatives or agents, of any Law or any common law protecting persons or members of protected classes or categories, including laws or regulations prohibiting discrimination or harassment on the basis of a protected characteristic;

 

h.    any claim or action by, on behalf of, or related to, any prospective, then-current or former employees of Supplier or Supplier Agents arising out of hiring practices of Supplier or employment or termination of employment with Supplier, including any claim arising under occupational health and safety, worker’s compensation, ERISA or other applicable Law, except for claims arising out of misrepresentations made by Buyer to Hired Employees, if any, prior to their respective Hire Dates;

 

i.    any claim or action by, on behalf of, or related to, any prospective, then-current or former employees of Supplier or Supplier Agents based on a theory that Buyer is an employer or joint employer of any Supplier or Supplier Agent personnel;

 

j.    any claim or action by, on behalf of, or related to, any third party providing services to Buyer prior to the SOW Effective Date relating to actions of Supplier or Supplier Personnel, including the hiring by Supplier of the third party’s employees;

 

k.    damages for the death or bodily injury of an agent, employee, customer, business invitee or business visitor or other person caused by the tortious conduct of Supplier or Supplier Agents;

 

l.    damages for the damage, loss or destruction of real or tangible personal property caused by the tortious conduct of Supplier or Supplier Agents;

 

m.    any claim or action or other proceeding asserted against Buyer but resulting from an act or omission of Supplier or any Supplier Agent in its capacity as an employer of a person; and

 

n.    any claim in connection with the handling and processing of any and all immigration and employment-related issues and requirements arising in connection with the Supplier Personnel (whether located in the United States or elsewhere ).

 

38.0 CONFIDENTIALITY 

 

38.1 IBM or CIGNA Confidential Information . Supplier shall: (a) use the same care and discretion to avoid disclosure, publication or dissemination of IBM or CIGNA Confidential Information as it uses with respect to its own similar information that it does not wish to disclose, publish or disseminate; and (b) use IBM or CIGNA Confidential Information solely to the extent required to fulfill its obligations or exercise its rights under this Subcontract. Supplier shall not disclose, publish, release, transfer or otherwise make available IBM or CIGNA Confidential Information in any form to, or for the use or benefit of, any person or entity without Buyer’s consent. Subject to Section 16.4, Supplier shall, however, be permitted to disclose relevant aspects of the IBM or CIGNA Confidential Information to its officers, directors, agents, professional advisors, Supplier Agents and employees, to the extent that such disclosure is not restricted under this Subcontract or any Governmental Approvals and only to the extent that such disclosure is reasonably necessary for the performance of its duties and obligations, or exercise of its rights, under this Subcontract; provided, however, that all such persons or entities have entered into an agreement containing terms consistent with the terms set forth in this Article and Supplier shall take all reasonable measures to ensure that IBM or CIGNA Confidential Information is not disclosed, published or disseminated in contravention of the provisions of this Subcontract by such officers, directors, agents, professional advisors, Supplier Agents and employees. The obligations in this Section shall not restrict any disclosure pursuant to any law (provided that Supplier shall give prompt notice to Buyer and the disclosing IBM Entity of such order). 

 

38.2 Restricted Materials . Subcontractor hereby acknowledges and agrees that the following items, whether in paper or electronic form, are IBM or CIGNA Confidential Information: all IBM or CIGNA financial, pricing, and costs of or relating to IBM or CIGNA or suppliers or customers of IBM, CIGNA and their Affiliates, all marketing and business plans and forecasts of IBM or CIGNA, any information related to consumer goods in development or discovery, IBM protocols, case report forms, data management plans, data listings, statistical analyses results, minutes, notes, or recollections of contents of meetings or strategy discussions relating to IBM’s or CIGNA’s business operations, personally identifiable information and policy and procedure manuals (excluding any pre-existing Subcontractor Confidential Information) (collectively, “Restricted Materials”). Subcontractor shall treat all Restricted Materials as strictly confidential and: (a) shall use the Restricted Materials only to the extent necessary to perform its obligations or exercise its rights under this Subcontract; (b) shall provide access to such Restricted Materials only to those Subcontractor Personnel who have a need to know in connection with Subcontractor’s performance of its obligations or exercise of its rights under this Subcontract; and (c) shall use the same care and discretion to avoid disclosure, publication or dissemination of Restricted Materials as it uses with respect to its own similar information that it does not wish to disclose, publish or disseminate. Other IBM or CIGNA Confidential Information not expressly listed in this Section may be considered Restricted Materials of IBM or CIGNA and should be treated as such by Subcontractor upon written notice from IBM.

 

38.3 Supplier Confidential Information . Buyer shall: (a) use the same care and discretion to avoid disclosure, publication or dissemination of Supplier Confidential Information as it uses with respect to its own similar information that it does not wish to disclose, publish or disseminate; and (b) use Supplier Confidential Information solely to the extent required to fulfill its obligations or exercise its rights under this Subcontract. Buyer shall not disclose, publish, release, transfer or otherwise make available Supplier Confidential Information in any form to, or for the use or benefit of, any person or entity without Supplier’s consent. Buyer shall, however, be permitted to disclose relevant aspects of the Supplier Confidential Information to its officers, directors, agents, professional advisors, contractors, subcontractors and employees and to the officers, directors, agents, professional advisors, contractors, subcontractors and employees of the IBM Entities, to the extent that such disclosure is not restricted under this Subcontract or any Governmental Approvals and only to the extent that such disclosure is reasonably necessary for the performance of its duties and obligations, or exercise of its rights, under this Subcontract; provided, however, that Buyer shall take all reasonable measures to ensure that Supplier Confidential Information of Supplier is not disclosed, published or disseminated in contravention of the provisions of this Subcontract by such officers, directors, agents, professional advisors, contractors, subcontractors and employees. The obligations in this Section shall not restrict any disclosure pursuant to any Law (provided that the recipient shall give prompt notice to Supplier of such order).

 

38.4 Exceptions . The obligations mentioned under Section 38.1, Section 38.2 and Section 38.3 do not apply if, and to the extent that the receiving party is able to prove that: (a) it previously had such knowledge and information without obligation of confidentiality; (b) such knowledge and information was or becomes part of the public domain, publicly available or public knowledge through no fault of the receiving party; (c) it has received such knowledge and information from a third party, the disclosure to such third party without constituting a breach of the confidentiality undertaking hereunder; or (d) it independently developed such knowledge or information without use of or access to the disclosing party’s confidential information, as demonstrated by reasonable supporting evidence.

 

38.5 No Copies . The receiving party (nor any person or entity to whom the receiving party has a right to disclose the Confidential Information of the disclosing Party under this Article 29) shall not make copies of Confidential Information, in whole or in part, obtained from the disclosing party, except as necessary to perform its obligations under this Subcontract.

 

38.6 Ownership of Confidential Information. For the avoidance of doubt, all IBM or CIGNA Confidential Information (including Restricted Materials) is the property of Buyer or CIGNA, respectively. For the avoidance of doubt, all Supplier Confidential Information is the property of Supplier.

 

38.7 Confidential Agreement . This Subcontract is a confidential agreement between Supplier and Buyer. In no event may this Subcontract be reproduced or copies shown to any third parties by either Buyer or Supplier without the prior written consent of the other Party, except as may be necessary by reason of legal, accounting or regulatory requirements of Supplier or Buyer, as the case may be, or to obtain legal, accounting or other advice in connection with this Subcontract, in which event Supplier and Buyer agree to exercise reasonable diligence in limiting such disclosure to the minimum necessary under the particular circumstances and cause anyone to whom such Party provides this Subcontract to keep it confidential in accordance with the provisions of this Subcontract. Neither Party is permitted to issue any press release, distribute any advertising, or make any public announcement concerning this Subcontract or its business relationship with the other Party without the other Party’s prior written consent. The obligations in this Section 38.7 shall not restrict any disclosure of required pursuant to any Law; provided that: (a) each Party shall give reasonable and prompt advance notice of such disclosure requirement to the other and give the other reasonable opportunity to object to and contest such disclosure; and (b) each Party shall use reasonable efforts to secure confidential treatment of any such information that is required to be disclosed.

 

38.8 Disclosure . Notwithstanding the confidentiality, non-disclosure and proprietary rights provisions of this Subcontract, Supplier acknowledges and agrees that Buyer and Supplier has the right to file a copy of, and/or disclose, all or part of this Subcontract and related documents and information, including performance reports and fees and invoicing, as may be required or requested by its regulators and auditors.

 

38.9 Unauthorized Acts . Without limiting the rights of the IBM Entities in respect of a breach of this Section 38, Supplier shall: (a) promptly notify Buyer of any unauthorized possession, use or knowledge, or attempt thereof, of the Buyer or CIGNA Confidential Information by any person or entity that may become known to Supplier; (b) promptly furnish to Buyer full details of the unauthorized possession, use or knowledge, or attempt thereof, and assist Buyer in investigating or preventing the recurrence of any unauthorized possession, use or knowledge, or attempt thereof, of IBM or CIGNA Confidential Information; (c) cooperate with Buyer in any litigation and investigation against third parties deemed necessary by Buyer to protect the proprietary rights of Buyer; and (d) promptly use its diligent and reasonable efforts to prevent a recurrence of any such unauthorized possession, use or knowledge, or attempt thereof, of IBM or CIGNA Confidential Information. Without limiting the rights of the Supplier in respect of a breach of this Section 38, Buyer shall: (a) promptly notify Supplier of any unauthorized possession, use or knowledge, or attempt thereof, of the Supplier Confidential Information by any person or entity that may become known to Buyer or CIGNA; (b) promptly furnish to Supplier full details of the unauthorized possession, use or knowledge, or attempt thereof, and assist Supplier in investigating or preventing the recurrence of any unauthorized possession, use or knowledge, or attempt thereof, of Supplier Confidential Information; (c) cooperate with Supplier in any litigation and investigation against third parties deemed necessary by Supplier to protect the proprietary rights of Supplier; and (d) promptly use its diligent and reasonable efforts to prevent a recurrence of any such unauthorized possession, use or knowledge, or attempt thereof, of Supplier Confidential Information.

 

38.10 Injunctive Relief . Supplier acknowledges that, in the event of any breach of the provisions of this Section 38, Buyer may suffer damages that are not easily determinable, and shall be entitled to seek equitable relief, including an injunction or an order for specific performance, in addition to all other remedies available to Buyer at law or in equity. Buyer acknowledges that, in the event of any breach of the provisions of this Section 38, Supplier may suffer damages that are not easily determinable, and shall be entitled to seek equitable relief, including an injunction or an order for specific performance, in addition to all other remedies available to Supplier at law or in equity. 

 

38.11 Shared Service Location . If: (a) Supplier provides the Supplier Services to Buyer from a Shared Environment; and (b) any part of the business of Supplier or any such third party is now or is in the future competitive with Buyer’s or CIGNA’s business as specified through IBM’s or CIGNA’s Competitors, then Supplier shall develop a process, subject to Buyer’s approval, to restrict access in any such Shared Environment to IBM or CIGNA Confidential Information so that Supplier’s employees or Supplier Agents providing services to such IBM or CIGNA Competitors do not have access to IBM or CIGNA Confidential Information.

 

38.12 Attorney Client Privileged Documents . Supplier recognizes that it may obtain access to client documents, data and databases created by and for Buyer or CIGNA and associated communications related thereto which are confidential attorney work product or subject to the attorney-client privilege. Supplier shall not reveal to any third parties any such data or information: (a) marked with the words “attorney-client privilege” or “attorney work product” or words of similar import; or (b) designated by Buyer to Supplier as being subject to the attorney-client privilege or confidential attorney work product (such marked and designated data or information, collectively, “Privileged Work Product”). Supplier shall safeguard to prevent the unintentional disclosure of Privileged Work Product to third parties. The only Supplier Personnel who may have access to Privileged Work Product shall be those for whom such access is necessary for the purpose of providing Supplier Services to Buyer as provided in this Subcontract. Supplier recognizes that Privileged Work Product has been prepared in anticipation of litigation and that Supplier is performing the Supplier Services in respect of the Privileged Work Product as an agent of Buyer, and that all matters related thereto and protected from disclosure by Rule 26 of the United States Federal Rules of Civil Procedure (or any similar law in other local jurisdictions). Should Supplier ever be notified of any judicial or other proceeding seeking to obtain access to Privileged Work Product, Supplier shall: (i) immediately notify Buyer; (ii) take such reasonable actions at Buyer’s expense as may be specified by Buyer to resist providing such access; and (iii) if such access cannot be resisted, then only permit access to the extent required by law. 

 

38.13 Review . Buyer reserves the right to review Supplier’s policies and procedures used to maintain the security and confidentiality of Personal Information, including auditing Supplier concerning such policies and procedures. The provisions of this Section, are in addition to, and shall not be construed to limit any other confidentiality obligations under this Subcontract. Any exclusion from the definition of IBM or CIGNA Confidential Information contained in this Subcontract shall not apply to Personal Information.


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