OPERATIONAL TRANSFORMATION SERVICES AGREEMENT

XL OT Programme  

Accenture  

Commercial-in-Confidence  

1  

OPERATIONAL TRANSFORMATION  

SERVICES AGREEMENT  

XL OT Programme  

Accenture  

CONTENTS

PART A – INTERPRETATION  

1

.  

Definitions  

2

.  

Interpretation  

PART B - SERVICES  

3

.  

Transformation Services  

4

.  

Statements of Work  

5

.  

Support Services  

6

.  

XL Affiliates  

7

.  

Additional Terms  

8

.  

Accenture Alliances  

9

.  

Outsourcing  

PART C - OPERATIONAL  

10

.  

Joint Responsibility  

11

.  

Dependencies and XL Responsibilities  

12

.  

Relief Events  

13

.  

Subcontractors  

14

.  

Timetable  

15

.  

Acceptance  

16

.  

Governance  

17

.  

Change Control Procedure  

18

.  

Electronic Communication  

19

.  

Regulatory Compliance  

20

.  

Regulatory Change  

21

.  

Policies  

PART D - FINANCIAL  

22

.  

Charges and Audit  

23

.  

Payment  

24

.  

Taxes  

PART E – INTELLECTUAL PROPERTY  

25

.  

Intellectual Property Rights  

26

.  

Licensed Proprietary Assets  

PART F – CONFIDENTIALITY AND DATA PROTECTION  

27

.  

Confidentiality  

28

.  

Data Protection  

PART G - LIABILITY  

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29.

Warranties and Covenants  

30.

Indemnities  

31.

Liability  

32.

Force Majeure  

33.

Insurance  

PART H – TERM AND TERMINATION  

34.

Term and Termination  

35.

Effect of Termination  

PART I – MISCELLANEOUS  

36.

Employees and Employment Claims  

37.

Publicity  

38.

Notices  

39.

Waiver  

40.

Entire Agreement  

41.

Conflict  

42.

Amendment  

43.

Relationship  

44.

Third Party Rights  

45.

Assignment  

46.

Dispute Resolution  

47.

Governing Law  

48.

Execution  

49.

Schedules  

SCHEDULES  

1

Transformation Services  

2

Statement of Work Template  

3

Charges  

4

Capacity Services  

5

Acceptance and Warranty  

6

Governance  

7

Change Control Procedure  

8

XL Affiliates  

9

XL Compliance Guidelines  

10

WPDR Process  

11

Key Personnel  

12

Data Transfer Agreement  

13

XL Policies  

Appendices  

1

Executed WPDRs  

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SERVICES AGREEMENT  

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OPERATIONAL TRANSFORMATION SERVICES AGREEMENT DATED  

2008  

PARTIES  

1      

Accenture LLP , having its registered office at 161 North Clark, Chicago, Illinois 60601 (" Accenture "); and

2      

XL Global Services, Inc, a Delaware Corporation, with offices located at 70 Seaview Avenue, Stamford, CT 06902 (" XL ).

(A)      

XL is a leading global provider of commercial property and casualty insurance;

(B)      

Accenture is a leading provider of consulting and technology services, including business consulting, system consulting, information technology consulting, training, computer programming and other consulting services;

(C)      

XL is carrying out the OT Programme (as defined below); and

(D)      

Accenture has agreed to assist XL with the OT Programme, in accordance with the terms and conditions of this Agreement.

1      

Definitions

1.1      

In this Agreement and the following definitions will apply unless inconsistent with the context or otherwise specified.

“Accenture Affiliate” means any other person that, directly or indirectly, through one or more intermediaries, is controlled by or under common control with Accenture. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such person, whether through the ownership of voting securities, by contract or otherwise;

“Accenture Group” means Accenture and the Accenture Affiliates;

“Accenture Knowledge Capital” means any reports, documents, templates, studies, software programs in both source code and object code, specifications, business methods, tools, methodologies, processes, techniques, analytical frameworks, algorithms, know-how, processes, products documentation, abstracts and summaries thereof, and other work product and materials (i) existing prior to commencement of the Services, (ii) developed outside the scope of the Services, or (iii) arising from the performance of the Services that are not part of the Deliverables (whether conceived or developed or lawfully acquired by Accenture Group individually or jointly with the XL

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Group and others), that are proprietary to the Accenture Group or to third parties, including all Intellectual Property Rights therein and together with any derivatives, enhancements and/or modifications thereto whether or not developed as part of the Services.

“Accenture QA” means Accenture’s internal quality assurance processes and measures referred to in clause 27.4 which are confidential to Accenture;

“Acceptance Criteria” means material conformity with the specifications of the applicable WPDR or SOW and any specific acceptance criteria documented and agreed in the relevant WPDR or SOW (as updated by mutual agreement between the Parties);

“Acceptance Test” means the relevant acceptance tests referred to in Schedule 5;

“ ADM ” means the various and applicable Accenture Delivery Methodologies followed by Accenture in the performance of the Services. ADM is part of Accenture Knowledge Capital;

“Agreement” means this document and any schedules, appendices and attachments hereto as amended and supplemented from time to time (including any WPDRs, Statements of Work and Change Control Notices executed by the Parties);

“ Arrangement Letters ” means the arrangement letters relating to certain services provided by members of the Accenture Group to members of the XL Group prior to the date of this Agreement and including the arrangement letter between (1) Accenture AG and (2) XL Services Switzerland in relation to the Operational Transformation Program Phase 2 –stages 1 and 2 (countersigned by XL Services Switzerland on 22 September 2007), Operational Transformation Program Phase 3 (Initial Mobilisation) dated 21 January 2008.

“Assumptions” means the assumptions relating to the Project and the Services stipulated or referred to in this Agreement including its Schedules, any WPDRs and Statements of Work upon which the agreed terms pertaining to the Services or Project are based;

“Business Day” means a day when clearing banks are ordinarily open for business in the City of New York, NY (other than a Saturday or Sunday);

“Capacity Services” means the capacity services to be provided by Accenture to XL described in Clause 5.2 and Schedule 4;

“Change Control Procedure” means the procedure detailed in Schedule 7 pertaining to the variation of this Agreement or any WPDR or Statement of Work;

“Change Notice” means the notice given in accordance with Schedule 7 which specifies the change(s) agreed between the Parties;

"Charges" means the fees and expenses payable to Accenture under this Agreement;

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"Confidential Information" means (a) any and all information (whether commercial, financial, technical or otherwise) relating to the disclosing party and XL Affiliates and Accenture Affiliates as the case may be, their respective employees, sub-contractors, customers and suppliers, including as to their respective products, services, methods, plans or business affairs, disclosed to or otherwise obtained by the recipient party under or in connection with any Services, Project and/or this Agreement and which is designated as being confidential or which is by its nature clearly confidential and (b) any and all information which has been derived or obtained from information described in (a) above. Confidential Information also includes Accenture Knowledge Capital and Custom Components;

“Custom Components” means reports, documents, templates, studies, software programs in both source code and object code, specifications, business methods, tools, methodologies, processes, techniques, analytical frameworks, algorithms, knowhow, processes, products, documentation, abstracts and summaries thereof, and other work product and materials which are developed by Accenture or the Parties jointly during the course of the Services and supplied as, or as part of, a Deliverable which are business specific to the XL Group, but excluding, any Accenture Knowledge Capital;

“Data Privacy Laws” has the meaning given to it in Clause 28.1;

“Defect” means a defect (i) of Severity Level 1-3, as described in Annex 1 of Schedule 5, in a Warranty Item (ii) that materialises after a Warranty Item is put into live operation (iii) which prevents that Warranty Item from functioning in conformity with the test model based on the functional specifications stated in the applicable WPDR or SOW and (iv) which was tested for during the UAT for the relevant Warranty Item;

"Deliverables" means reports, documents, templates, studies, software programs in both source code and object code, specifications, business methods, tools, processes, analytical frameworks, algorithms, products, and other work product and materials which are originated and prepared for XL by Accenture (either independently or in concert with XL or third parties), specified as Deliverables in Schedule 1, a WPDR or a Statement of work and delivered to XL during the course of the Services. Deliverables may comprise Custom Components and/or Accenture Knowledge Capital;

“Dependencies” means the dependencies on and responsibilities of XL, XL Affiliates and XL Personnel specified in this Agreement, including any particular tasks and responsibilities specified in Schedule 1, a WPDR or Statement of Work as Dependencies;

"Effective Date" means the date of this Agreement;

"Equipment" means any computers, software, computing facilities, communications links and other equipment and items which XL is responsible for providing in connection with the Services;

“Force Majeure Event” means acts, events, omissions, happenings or non-happenings beyond the reasonable control of a party including acts of God, severe weather, fire, explosion, flood, drought, earthquake, disease, epidemic, quarantine,

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strikes, labour shortages, work stoppages, slow downs or other industrial disputes, riots or civil disturbances, war, acts of terrorism, sabotage, acts of government, local government or regulatory bodies or any accident causing damage to or destruction, in whole or in part, of the equipment or property necessary to perform the Services;

“Initial Term” has the meaning given to it in Clause 34.1;

“Intellectual Property Rights” means all copyright, trade marks, patents, design rights, database rights, business or domain names, inventions and all other intellectual property rights of a similar nature recognised in any jurisdiction whether registered or not and any applications or rights for registration associated therewith;

“Key Personnel” means the individuals named in Schedule 11 (or their agreed replacements or substitutes from time to time);

“License Agreement” means the agreement between the Parties in relation to Licensed Proprietary Asset described in the Schedule thereto executed on or around the Effective Date;

“Licensed Proprietary Assets” means Accenture Claim Components Solution V. 7.1 as described in the Schedule to the License Agreement, and any other assets which are owned or licensed by Accenture or Accenture Affiliates which Accenture may license to XL pursuant to the terms of mutually acceptable license agreements;

“Losses” means losses, liabilities, damages, actions, claims, costs and expenses (including reasonable legal fees and disbursements);

“Mandatory Change” means a proposed or actual change to this Agreement which either Party reasonably maintains, after thorough evaluation, is required in order to comply with applicable law or regulation;

“Minimum Effort Level” means the minimum number of man-days for Accenture’s performance of Transformation Services upon which the discount on Accenture’s fees are conditional, as specified in Clause 15 of Schedule 3 (Charges);

“New Services” means services which are not part of the Transformation Services and which XL may wish to procure and Accenture may wish to provide pursuant to an agreed SOW as referred to in clause 4;

“OT Programme ” means the operational transformation program XL is carrying out in its insurance business which comprises organisational restructuring, process re-engineering and the modification and installation of XL’s applications suite in respect of which Accenture Affiliates have provided certain services to XL Affiliates pursuant to separate contractual arrangements detailed in the Arrangement Letters;

“Parties” means the parties to this Agreement; Accenture LLP and XL Global Services, Inc. (each a “Party” ) and any permitted successor or assignee of such Parties;

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“Programme Plan” means the plan annexed to Schedule 1 depicting the timeline for the Transformation Services;

"Project" means the project described in the relevant WPDR or SOW;

“Project Plan” means any project plan or timetable specified in Schedule 1 or the relevant WPDR or SOW;

“Relief Event” has the meaning ascribed to it in Clause 12.4 and any other event expressly specified to be a Relief Event including in Clause 25.3, Schedule 5 and Schedule 10;

“Service Location” means the location(s) from which the Services will be delivered specified in Schedule 1 or the applicable WPDR or SOW;

"Services" means all work and services to be provided to XL by Accenture pursuant to this Agreement and any WPDR or Statements of Work;

“Services QA” means the periodic quality assurance reviews the Parties agree to perform in respect of the Services as specified in Clause 22.12;

"Statement of Work" means a document substantially similar in form to that set forth at Schedule 2 which is completed and signed by XL and Accenture in relation to a Project which sets out the details of the Project, including the services, timescales, fees and the charging basis and other matters specific to that Project (and “ SOW ” shall be construed accordingly);

“ Software” means source code and object code, operating system software or other computer programs, in whatever form or media;

“Software Deliverables” means Deliverables solely consisting of Software;

“System Release” means a release of major Software to deliver all or a substantial part of a Capability Release as specified in Schedule 1 or the relevant WPDR;

“Taxes” has the meaning ascribed to it in Clause 24;

“Term” means the term of this Agreement, including the Initial Term and any agreed extension thereto;

“Termination Compensation” means the charges payable by XL to Accenture upon termination of this Agreement specified in Schedule 3 or any specified in an SOW;

“Transformation Services” means the transformation services to be provided by Accenture to XL as specified in Schedule 1 and the WPDRs;

“UAT” means the user acceptance test that XL shall perform in accordance with Schedule 5;

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“Virus” means any software virus, spyware, trojan horse, logic bomb, malware or other analogous code whose purpose is to prevent all or part of an IT system or any Software from being used in the manner in which it was intended;

“Warranty” means the warranty provided by Accenture in respect of Warranty Items specified in Schedule 5;

“Warranty Item” means a Software Deliverable that is a System Release developed by Accenture or jointly by Accenture and XL Personnel in circumstances where Accenture provides at least 50% of the man-day effort and management control of the work set out in the relevant WPDR;

“Warranty Period” means the period of 30 days from the date on which a Warranty Item is put into a live production environment provided this is within three weeks (or such other reasonable period specified in the applicable WPDR as amended by the Change Control Procedure as necessary) of UAT completion of such Warranty Item;

“Working Day” means a day (other than a Saturday or Sunday or public holiday) in any jurisdiction in which the Services (or any part of them) or any activities under or in connection with this Agreement are to be performed or are being performed;

“WPDR” means the Work Packet Definition Report agreed between the Parties in accordance with Clause 3.3;

“WPDR Process” means the process for the Parties to agree WPDRs set out in Schedule 10;

“XL Affiliate” means any other person that, directly or indirectly, through one or more intermediaries, is controlled by or under common control with XL that is listed in Schedule 8 (as amended by mutual agreement of the Parties from time to time). For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such person, whether through the ownership of voting securities, by contract or otherwise;

“XL Group” means XL and the XL Affiliates;

“XL Information” means all information, documentation and participation, including decisions and approvals, provided by XL, XL Affiliates, or parties acting on their behalf, to Accenture or Accenture Affiliates in connection with the Services;

“XL Insurance” or “XLI” means the global insurance business segment of the XL Group;

“XL Personnel” means the directors, employees, agents, contractors, sub-contractors or suppliers of the members of the XL Group and any other parties acting on behalf of any other member of the XL Group;

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“XL Pre-Existing Rights” means the ownership rights, including Intellectual Property Rights of the XL Group, in any proprietary data, information, tools, templates, intellectual capital, know-how, methodologies, or other materials or items developed or acquired by the XL Group prior to the execution of this Agreement or developed outside the scope of this Agreement, and any enhancements, modifications and/or improvements thereto;

“XL Supplied Materials” means any and all materials which are proprietary to the XL Group or any third party supplier (other than Accenture) together with any enhancements or modifications thereto, the use of which is required by Accenture in connection with the Services; and

“ Year ” means the period of 12 months immediately following the Effective Date, and each subsequent period of 12 months thereafter during the Term (and references to numbered Years shall be construed accordingly).

2      

Interpretation

2.1      

In this Agreement:

The headings and contents page of this Agreement are included for convenience only and are not to be used in construing any provision of the Agreement;

Words importing a gender include every gender, references to the singular include the plural and vice versa and words denoting persons include individuals and bodies corporate, partnerships, unincorporated associations and other bodies (in each case, wherever resident and for whatever purpose) and vice versa;

References to this Agreement or any other document are to this Agreement or that document as in force for the time being and as amended from time to time in accordance with this Agreement or that document (as the case may be);

References to recitals, clauses, schedules and appendices are to recitals and clauses of, schedules to and appendices to schedules of this Agreement and references in a schedule or an appendix to a part or paragraph are to parts or paragraphs of that schedule or appendix;

Unless the context requires otherwise, a reference to a statute, statutory provision or subordinate legislation (as so defined) shall be construed as including a reference to that statute, provision or subordinate legislation as in force at the date of this Agreement and as from time to time modified or consolidated, superseded, re-enacted or replaced after the date of this Agreement; and

The words "other", "includes", "including" and "in particular" do not limit the generality of any preceding words and any words which follow them shall not be construed as being limited in scope to the same class as the preceding words where a wider construction is possible.

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PART B - SERVICES

3      

Transformation Services

3.1      

XL is responsible for and shall control the OT Programme.

3.2      

Accenture will provide and XL will procure the Transformation Services during the Term in accordance with this Agreement in order to support XL in the delivery of the OT Programme.

3.3      

The Parties acknowledge that the OT Programme is an iterative process the requirements of which will be more fully understood during the course of the Term. The Transformation Services described in Schedule 1 reflect the intentions of the Parties at the Effective Date. The Parties acknowledge that the Transformation Services require further definition and development in the form of drawing up WPDRs in accordance with the WPDR Process which will include relevant details as to scope, deliverables and respective responsibilities.

3.4      

Throughout the Term, the Parties will co-operate in good faith and use all commercially reasonable efforts to ensure that the WPDR Process is complete in respect of each work packet at least one (1) month prior to the scheduled commencement of that work packet save in relation to those work packets in respect of which WPDRs are appended to this Agreement at Appendix 3. The parties shall ensure that any dispute between them is escalated promptly through the governance and dispute resolution procedures to achieve rapid resolution.

3.5      

In the event, that Accenture provides any services to, or on behalf of XL, without executing a WPDR in accordance with this Agreement, such services shall be subject to the terms and conditions of this Agreement.

3.6      

Accenture shall be a preferred supplier across XLI and GBS and business partner of the XL Group for the OT Programme. Prior to procuring any services from third parties for the benefit of XLI which Accenture or Accenture Affiliates may be able to provide, including application maintenance services, members of the XL Group shall keep members of the Accenture Group informed about major opportunities / projects and provide Accenture with the opportunity to bid on such opportunities and projects.

3.7      

Accenture shall be the exclusive provider of the Transformation Services. XL shall not engage (and shall procure that XL Affiliates shall not engage) other services provider(s) to perform all or any part of the Transformation Services without the prior written agreement of Accenture, which shall not be unreasonably withheld.

3.8      

XL (and/or XL Affiliates), may perform itself or acting reasonably, and in consultation with Accenture, contract with a third party to perform any service for the OT Programme that is outside the scope of the Transformation Services, including systems development, operations and related services to augment or supplement the Transformation Services. In the event XL (and/or XL Affiliates) performs itself or contracts with a third party to perform any such service, Accenture shall cooperate in good faith with XL (and/or XL Affiliates) and any such agreed third party providers to the extent reasonably required.

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3.9      

For the avoidance of doubt, nothing in this Agreement shall prevent any member of the Accenture Group from providing services the same or similar to the Services to any other party at any time, provided that Accenture, Accenture does not breach its obligations under this Agreement in respect of any XL Confidential Information or XL owned Intellectual Property Rights.

3.10      

The Parties may jointly designate from time to time certain key personnel, as set out in Schedule 11 (“ Key Personnel ”). Accenture and XL will cause each of the Key Personnel to devote sufficient time necessary to perform their responsibilities specified in this Agreement. With respect to the appointment of the initial and any replacement Key Personnel, the Parties will cooperate with each other to fill the Key Personnel positions with individuals who are reasonably acceptable to the other Party. Before assigning an individual to a Key Personnel position, whether as an initial assignment or a replacement, the employing Party will (i) notify the other Party of the proposed assignment; (ii) introduce the individual to appropriate representatives of the other Party; and (iii) subject to applicable law, obligations of confidentiality and the employing Party’s standard personnel practices, provide the other Party with a curriculum vitae, and any other information about the individual reasonably requested by the other Party. If the other Party has a good faith objection to any such assignment within 5 Business Days, the employing Party will not assign the proposed individual, and will propose to the other Party the assignment of another individual of suitable ability and qualifications, within a mutually agreed upon timeframe.

3.11      

Except in the event of cessation of employment, death, illness, injury, or disability, either Party will notify the other Party in writing at least 30 days prior to replacing any personnel serving in a Key Personnel position. In the event of any replacement of personnel serving in a Key Personnel position, the employing Party will provide for an appropriate transition (overlap) period for the new individual and use reasonable efforts to minimise any disruption such replacement may cause in the performance of that Party’s obligations under this Agreement.

4      

Statements of Work for New Services

4.1      

From time to time the Parties may execute SOW’s under this Agreement in respect of New Services. Notwithstanding the foregoing, nothing in this Agreement shall obligate XL to procure or Accenture to provide any New Services unless the Parties execute a SOW. Each SOW shall be executed by an authorized representative of XL and Accenture. Each properly executed SOW shall be deemed, upon its full execution, to be incorporated into this Agreement and the terms and conditions set forth in this Agreement shall govern the New Services, except for provisions in this Agreement which are specifically excluded or modified in such SOW.

4.2      

Each SOW shall, to the extent applicable, generally conform to the format as set forth in Schedule 2 to this Agreement.

4.3      

Each such SOW shall constitute a separate agreement between XL and Accenture for the Project described therein.

4.4      

No member of the Accenture Group is obliged to provide any services not expressly specified in Schedule 1 unless and until the Parties execute a SOW or WPDR and the terms and conditions of this Agreement shall apply to all such Services unless modified by that SOW or WPDR.

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4.5      

XL shall not be obligated to pay for any services not expressly specified in Schedule 1 unless and until the Parties execute a WPDR or any SOW and the terms and conditions of this Agreement shall apply to all such Services.

5      

Support Services

5.1      

Any application maintenance or support services which may be required by XL from Accenture from time to time in connection with the Transformation Services shall be the subject of a separate agreement which will specify applicable terms pertaining to such services.

5.2      

Accenture will provide Capacity Services during the Term in accordance with and subject to the terms of this Agreement. Capacity Services means the provision of non- consulting technical resources to work on a full-time basis for a minimum period of 3 months, or as otherwise agreed between the parties, per resource, within the XL Global Business Services under the direction and supervision of XL and/or XL Affiliates and/or XL Personnel. XL shall be responsible for its operation and use of the Capacity Services. XL hereby commits to a minimum volume of use and duration of Capacity Services of 15 Accenture resources per year with an average of 25 Accenture full-time resources per year over the period of three years commencing a maximum of three months following the Effective Date. The Charges in respect of Capacity Services shall be determined in accordance with Schedule 4. Such Charges shall be excluded from the calculation of Eligible Fees for the purposes of the Risk/Reward Mechanism. The Parties acknowledge that XL’s specific Capacity Services requirements (in relation to skills, timing and location) will be further defined as set out in Schedule 4.

6      

XL Affiliates

6.1      

XL may extend the benefit of the Services to other XL Affiliates subject to Clause 31.5.

7      

Additional Terms

7.1      

If the Services include the provision of Software and/or other proprietary materials (including Licensed Proprietary Assets), XL (and/or XL Affiliates and/or contractors or sub-contractors of the XL Group) may from time to time be required to agree to additional appropriate terms pertaining to the license and use of such Software and/or other proprietary materials which may be included as “Special Conditions” in a SOW or WPDR or may be in the form of a separate agreement with Accenture or a third party.

8      

Accenture Alliances

8.1      

Accenture agrees to extend its network of technology provider relationships on behalf of XL. For agreed upon technologies, where Proquire LLC (a wholly owned subsidiary of Accenture) (“Proquire”) can offer equal to, or more favourable, pricing and/or terms than XL can obtain from other sources, XL, at its sole option, may acquire such hardware and software technologies directly from Proquire.

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8.2      

Accenture has alliance relationships with third party product and services vendors. As part of many such relationships, Accenture is able to resell certain products and services and/or may receive compensation from vendors in the form of fees or other benefits in connection with the marketing, technical and other assistance provided by Accenture. XL acknowledges that such relationships may be beneficial to Accenture and assist in its performance of the Services. In the event Accenture recommends a vendor to XL that is an Alliance partner of Accenture, Accenture agrees to so advise XL in writing of the existence of such an alliance relationship.

9      

Outsourcing

9.1      

Any business process outsourcing services provided by any member of the Accenture Group are excluded from the scope of this Agreement and shall be the subject of a separate written agreement.

10      

Joint Responsibility

10.1      

The Parties acknowledge that the Transformation Services is a joint effort of activity in delivering the OT Programme which is intended to be achieved using a contribution of the knowledge, resources and skills of both Parties, and third party support contracted by each Party.

10.2      

XL and Accenture acknowledge that the nature of the Services requires timely, active and positive good faith co-operation between the Parties to resolve any issues not foreseen at the time of commencement of the Services and each party will co-operate in good faith with the other to resolve such issues in a timely and reasonable manner.

11      

Dependencies and Responsibilities

11.1      

XL acknowledges and agrees that in order to perform the Services in accordance with the terms and conditions of this Agreement Accenture is dependent upon XL’s and XL Affiliates’ compliance with its (and their) obligations and dependencies under this Agreement.

11.2      

XL shall:

11.2.1

Pay all Charges which are not in good faith dispute that are due in respect of the Services pursuant to this Agreement;

11.2.2

Be solely responsible for its use and operation of the Services and any Deliverables, including the implementation of any recommendations and advice, and any consequences therefrom;

11.2.3

Be solely responsible for determining whether the Services and Deliverables meet the XL Group’s requirements, including business, compliance and policy requirements;

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11.2.4      

Be solely responsible for its compliance with all applicable laws and regulations;

11.2.5      

Perform (and procure performance by XL Affiliates and XL Personnel where applicable) responsibilities and Dependencies set out in this Agreement or otherwise reasonably required in connection with the Services;

11.2.6      

Obtain, in advance of Accenture’s use, any consent necessary for Accenture (and any Accenture Affiliate) to use each item of XL Supplied Materials;

11.2.7      

Ensure XL and XL Affiliates have adequate XL Personnel to fulfil their obligations in respect of the Services; and

11.2.8      

Procure that XL Personnel cooperate with Accenture in connection with Services and are bound by appropriate confidentiality undertakings in respect of Deliverables and other Accenture Group Confidential Information.

11.3      

Accenture shall be responsible for:

11.3.1      

Compliance with all laws and regulations applicable to its business;

11.3.2      

Performing (and procuring performance by Accenture Affiliates and Accenture Personnel where applicable) its obligations set out in this Agreement;

11.3.3      

Providing adequate numbers of personnel in accordance with Clause 29.4; and

11.3.4      

Procuring that its personnel and subcontractors cooperate with XL during the performance of the Services and are bound by appropriate confidentiality undertakings in respect of XL Group Confidential Information.

11.4      

XL will provide (or will procure), free of charge, to Accenture (or Accenture Affiliates if requested) the following throughout the continuance of the Services:

11.4.1      

Reasonable and sufficient access to XL Personnel and XL Affiliates (consistent with the OT Programme requirements) who are involved with or whose involvement is required in connection with the Services;

11.4.2      

To the extent Accenture's (or Accenture Affiliates’) personnel need to work at the premises of XL and/or XL Affiliates a suitable and safe working environment and normal office services as XL generally makes available to its employees located at the premises in which Accenture or Accenture Affiliates will be rendering services , including desks, storage, furniture and other normal office equipment support, adequate computer resources, photocopying facilities, telephone and facsimile equipment and services (including voice mail services), stationery (excluding Accenture specific items), postal and courier services, archiving facilities, general office supplies, security and janitorial support, parking) and such other items, services and resources as the Parties may agree are reasonably necessary for Accenture to perform its obligations under this Agreement. By mutual agreement the Parties may determine alternative office locations which may not necessarily be collocated at an XL office location

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depending on space availability, provided that such separate office location (1) generally conforms to the requirements set forth in this Clause, (2) enables the relevant Accenture and XL teams to be co-located, (3) is within a reasonably convenient distance to XL offices to which such teams require access;

11.4.3

Any Equipment. XL will ensure that any Equipment it is responsible for providing to enable Accenture to provide the Services is properly installed and is reasonably sufficient and suitable (consistent with the OT Programme requirements) for its purpose and that any adjustments which may be required are carried out expeditiously. XL is responsible, at its own expense, for the reasonably prompt and continuing availability to Accenture (or Accenture Affiliates) of the Equipment in good working order throughout the duration of the Services consistent with such standards as XL generally makes available to its own employees; and

11.4.4

Prompt access to XL Information reasonably required by Accenture to perform the Services. XL will ensure that all XL Information is complete, accurate, and reliable in all material respects and is provided on a timely basis. Accenture shall be entitled to rely on XL Information and will not be responsible for the verification, correction or amendment of the same.

12      

Relief Events

12.1      

Upon the occurrence of a Relief Event, the Party who first becomes aware of the Relief Event shall notify the other Party as soon as reasonably practicable. The Parties shall then co-operate in good faith and use commercially reasonable efforts to propose and agree workarounds to address and minimise the impact to the Services resulting from a Relief Event. Any changes to the scope of the Services as a result of a Relief Event shall be agreed through the Change Control Procedure.

12.2      

If and to the extent that any delay or failure by Accenture to perform its obligations under this Agreement is directly caused by a Relief Event, Accenture’s liability for such delay or failure will be excused and/or there will be an equitable adjustment of the Charges and in any time permitted for performance of the Services. For the avoidance of doubt, the foregoing shall not apply if and to the extent that a Relief Event is solely and directly caused by Accenture’s breach of its obligations under this Agreement.

12.3      

“Relief Event” means any of the following:

12.3.1

Breach by XL (or XL Affiliates) of its (or their) obligations under this Agreement or a SOW, including non-performance of any Dependencies, or any act or omission by XL, XL Affiliates or XL Personnel which has a detrimental effect on the Services;

12.3.2

Act or omission of or by Accenture resulting from Accenture's reasonable reliance on an act, instruction or direction of XL, XL Affiliates or any XL Personnel, in relation to the performance of all or any part of the Services or any other obligations; B

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12.3.3      

Material error or omission in XL Information or other data, information or materials provided to the Accenture Group by or on behalf of XL which contributes to Accenture’s failure to perform its obligations;

12.3.4      

Infringements of third party Intellectual Property Rights by XL, XL Affiliates or XL Personnel;

12.3.5      

Violations of law or regulation by XL, XL Affiliates or XL Personnel;

12.3.6      

Service or resource reductions or specific tasks, testing procedures or other services which are given priority as requested or approved by XL;

12.3.7      

Significant change in the manner in which XL conducts its business;

12.3.8      

Force Majeure Event;

12.3.9      

Material act or omission of a third party (excluding Accenture's subcontractors);

12.3.10      

Consequence of acting in accordance with a change to the Services made through the Change Control Procedure which was required by XL but reasonably advised against by Accenture in writing to XL; or

12.3.11      

Assumption(s) proving to be incorrect which have a material, individual or cumulative, impact on all or any part of the Services to which the relevant Assumption relates.

12.4      

If Accenture incurs additional direct costs in performing the Services as a direct result of any Relief Event, then (without prejudice to its other rights and remedies) it shall be entitled to recover such reasonable additional direct costs from XL provided that it has agreed such additional direct costs with XL prior to incurring them.

13      

Subcontractors

13.1      

Accenture shall not employ or engage sub-contractors for carrying out all or any part of the Services without XL’s prior written consent save that Accenture may employ as subcontractor or otherwise draw on the resources of (i) Accenture Affiliates, (ii) individual contractors (whether acting as individuals or via service companies) and (iii) third party subcontractors provided that the actual or reasonably anticipated value of the subcontractor fees does not exceed the greater of $100,000 in total in any Year or 4% of the fees due to Accenture for the applicable WPDR or SOW. Any such sub- contracting will not relieve Accenture from its obligations under this Agreement.

13.2      

Except as provided in Clause 13.1, prior to subcontracting any of the Services to a third party, Accenture shall notify XL of the proposed subcontractor, provide XL with any information XL may request with respect to such subcontractor, and obtain XL’s written approval of such subcontractor. No subcontracting shall release Accenture from its responsibility for its obligations under this Agreement or the SOWs. Accenture shall be responsible for the work and activities of any subcontractors, including compliance with the terms and conditions of this Agreement and the SOWs.

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Accenture shall be responsible for all payments to any subcontractors. Accenture shall promptly pay for all services, materials, equipment and labour used by subcontractor in providing the Services and keep XL’s premises and equipment free of all liens. In the event that Accenture has not paid any amount owed to a subcontractor in connection with Services provided by such subcontractor pursuant to this Agreement, XL may, in its sole discretion, withhold an amount from the Charges that is equal to such unpaid amount until it is paid by Accenture to the subcontractor. XL shall have the right to revoke its approval of any subcontractor and to direct Accenture to remove or replace such subcontractor if, in XL’s reasonable opinion, (i) the subcontractor’s performance is deficient, (ii) XL has concerns as to subcontractor’s ability to perform the applicable Services or (iii) the subcontractor has made a misrepresentation in connection with any information provided to XL or Accenture pursuant to this Clause. In such circumstances, Accenture shall be provided with a reasonable period of time to replace the sub-contractor and the parties shall agree any necessary alteration to the Services in accordance with the Change Control Procedure.

14      

Timetable

14.2      

Any timetable or Project Plan will be an estimate only unless such timetable or Project Plan is expressly agreed to be a binding commitment as part of a fixed price WPDR or SOW.

14.2      

The Parties shall work together in good faith to manage the Project Plan. Accenture shall use reasonable endeavors to perform the Services in accordance with any timetable or Project Plan.

15      

Acceptance and Warranty

15.2      

The provisions relating to acceptance and Warranty are specified in Schedule 5.

16      

Governance

16.2      

The governance arrangements and procedures relating to this Agreement are detailed in Schedule 6.

16.2      

Schedule 6 also documents the arrangements agreed between the Parties relating to the Governance of the OT Programme. Accenture’s role in relation to such Governance Procedures is part of the Programme Management Workstream described in Schedule 1.

17      

Change Control Procedure

17.2      

The Parties will agree changes to this Agreement as required in accordance with the Change Control Procedure detailed in Schedule 7.

17.2      

A Change Notice will not be valid unless and until executed by the Parties in accordance with Schedule 7.

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18      

Electronic Communication

18.2      

Subject to Clause 38, the Parties may correspond, communicate and convey information to each other by email or other electronic means for normal operational communications. Each party is responsible for its own security measures in relation to such communications and neither party shall be liable to the other for any loss, damage, expense or inconvenience caused by the loss, delay, interception or corruption of any electronic communication due to any reason beyond a party’s reasonable control.

19      

Regulatory compliance

19.1      

Notwithstanding anything in this Agreement, XL agrees and acknowledges that nothing in this Agreement is intended to constitute an offer to provide services or will result in services and/or activities which will or may require Accenture and/or any Accenture Affiliates and/or their personnel to be otherwise regulated, licensed or registered with or by an insurance and/or other authority or regulator, including without limitation, licensure and registration as an insurance producer, insurance agent, insurance intermediary, insurance adjuster, third party administrator, registered representative and/or broker dealer. Accenture and Accenture Affiliates and their personnel do not intend and will not be required to provide professional advice with respect to accounting, legal and regulatory compliance or similar areas. Any activities in these areas which are included within the Services are limited to clerical tasks and do not include any activities which may be subject to licensure, certification and/or registration in any jurisdiction. XL acknowledges that it will be ultimately responsible for determining whether any of XL’s and/or XL Affiliate’s business practices or processes in connection with the Services comply with applicable insurance, financial services, accounting and/or tax laws and regulations (and any changes thereto). XL’s current guidelines with respect to compliance with such laws and regulations are set forth in Schedule 9. Any changes to the scope of the Services due to changes in such laws and regulations or Schedule 9 shall be handled through the Change Control Procedure and at XL’s cost and expense.

19.2      

Each Party is responsible for compliance with all law and regulation applicable to its business and operations and for monitoring changes to the same.

19.3      

XL shall be responsible for directing Accenture’s performance of the Services in accordance and compliance with law and regulation applicable to XL Group’s business. XL and Accenture understand that there are numerous statutes, regulations and other provisions applicable to the XL Group’s business. If and to the extent that XL becomes aware, at any time, of existing or new law or regulation applicable to the XL Group’s business which affects the Services or Accenture’s performance of the Services, XL shall notify Accenture immediately and Clause 20 shall apply.

19.4      

Without prejudice to Clause 19.2, each party will retain responsibility for its compliance with all applicable export control laws and economic sanctions programs relating to its respective business, facilities, and the provision of services or products to third parties. Accenture will not be required by the terms of this Agreement to be directly or indirectly involved in the provision of goods, software, services and/or technical data that may be

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prohibited by applicable export control or economic sanctions programs if performed by Accenture.

19.5      

Applicable export control or economic sanctions programs may include U.S. export control laws such as the Export Administration Regulations and the International Traffic in Arms Regulations, and U.S. economic sanctions programs that are or may be maintained by the U.S. Government, including sanctions currently imposed by the US Department of Treasury Office of Foreign Asset Control against designated sanctioned countries , as well as Specially Designated Nationals and Blocked Persons programs. The Parties will comply with U.S. export control and U.S. economic sanctions laws with respect to the export or re-export of U.S. origin goods, software, services and/or technical data, or the direct product thereof.

19.6      

Prior to providing a party any goods, software, services and/or technical data subject to export controls controlled at a level other than EAR 99/AT the providing party will provide written notice to the receiving party specifying the nature of the controls and any relevant export control classification numbers.

19.7      

Prior to XL contracting with any entity with respect to which Accenture will provide any goods, software, services and/or technical data under this Agreement, XL will take reasonable steps to ensure that any such provision of goods, software, services and/or technical data to such entity is not subject to restrictions or prohibitions under applicable export control or economic sanctions programs.

19.8      

XL is responsible for complying with any applicable import compliance requirements which may apply to the XL Group’s receipt of Services or Deliverables.

20      

Regulatory Change

20.1      

In the event that a Party considers a Mandatory Change is required, it shall notify the other Party as soon as reasonably practicable. The Parties shall then co-operate in good faith and use commercially reasonable efforts to discuss and agree whether a Mandatory Change is required, the nature and extent of the Mandatory Change and shall seek to minimise the impact to the Services resulting from a Mandatory Change.

20.2      

If the Parties fail to agree a Change Notice in respect of a Mandatory Change either party may terminate upon 90 days notice, having first consulted with the other Party in accordance with Clause 20.1 above:

20.2.1      

This Agreement if the Mandatory Change affects the Services as a whole; or

20.2.2      

Any affected WPDR or SOW if the Mandatory Change affects only part of the Services.

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21

Policies

21.1

Accenture shall use reasonable endeavors to procure that its personnel working on XL’s premises comply with the reasonable requirements of X