Transition Services
Agreement
The Procter & Gamble
Company
and
The Folgers Coffee Company
Effective as of November 6,
2008
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1
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6
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3. SERVICES AND CONTROLS PROCESS
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6
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6
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3.2 Substantive Business Decisions
Prohibited
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6
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7
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4. SERVICE PROVIDER SUBCONTRACTORS AND THIRD
PARTY CONTRACTS
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8
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8
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4.2 Customer Compliance with Third Party
Contracts
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8
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5. RELATIONSHIP MANAGEMENT
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8
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5.1 Relationship Managers
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8
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8
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9
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5.4 Change Management Process
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9
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9
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5.6 Continued Performance
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9
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9
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6.1 Use of Customer Facilities
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9
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6.2 Service Provider Facilities and
Systems
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10
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7. TECHNOLOGY, SOFTWARE AND PROPRIETARY
RIGHTS
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10
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7.1 Customer Owned Technology
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10
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7.2 Service Provider Owned Technology
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10
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7.3 No Implied Licenses; Residuals
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11
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11
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8. CUSTOMER DATA AND PHYSICAL
SECURITY
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12
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12
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12
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i
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12
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8.4 Physical Security for Facilities
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12
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12
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9.1 Confidential Information
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12
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12
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9.3 Exceptions to Confidential
Treatment
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13
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9.4 Return or Destruction
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13
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13
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13
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13
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14
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14
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10.5 Invoicing and Payment
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14
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11. REPRESENTATIONS AND WARRANTIES
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14
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14
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11.2 Compliance with Laws
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15
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11.3 Standard of Performance; Standard of
Care
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15
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16
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16
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16
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16
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16
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13. INDEMNITIES, PROCEDURES AND
LIMITATIONS
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16
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13.1 Indemnification by Customer
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16
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13.2 Indemnification by Service
Provider
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17
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13.3 Reductions For Insurance Proceeds And Other
Recoveries
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18
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13.4 Indemnification Procedure
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19
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13.5 Limitations on Liability
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21
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13.6 Indemnification and Limitations on
Liability Relating to Negligence and Strict Liability
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21
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13.7 Waiver of Subrogation
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22
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22
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22
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ii
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14.2 Termination for Non-Payment
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22
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22
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14.4 Rights Upon Termination or
Expiration
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23
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23
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23
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15.2 Binding Effect; No Assignment
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23
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24
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24
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25
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15.8 Independent Contractors
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25
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26
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15.11 Amendments and Waivers
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26
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26
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27
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iii
Schedule A-1 – Supply Network
Solutions
Schedule A-2 – Purchasing
Schedule A-3 – Market Development Organization
Schedule A-4 – North America Product Supply
Operations
Schedule A-5 – Workplace & Infrastructure
Solutions
Schedule A-6 – Intentionally Omitted
Schedule A-7 – Decision Support Solutions
Schedule A-8 – Global Data Management
Schedule A-9 – Financial Services & Solutions
Schedule A-10 – Consumer Relations
Schedule A-11 – Customer & Consumer Solutions
Schedule A-12 – Intentionally Omitted
Schedule A-13 – Service Provider Professional Sales
Schedule A-14 – Intentionally Omitted
Schedule A-15 – Market Measurements
Schedule A-16 – Product Innovation Capability
Services
Schedule A-17 – Administration of Historical
Workers’ Compensation Claims
Schedule B
— Recipients
Schedule C — Pricing
Schedule D — Certain Service Provider
Agreements
iv
TRANSITION SERVICES
AGREEMENT
This
Transition Services Agreement (this “ Agreement
”) is entered into effective November 6, 2008 (the
“ Effective Date ”) by and between The Folgers
Coffee Company, a Delaware corporation (“ Customer
”) and The Procter & Gamble Company, an Ohio corporation
(“ Service Provider ”).
WHEREAS,
Customer desires to obtain from Service Provider the information
technology and business process services described in this
Agreement on the terms and conditions as set forth in this
Agreement.
NOW
THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valid consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Parties hereby agree as follows:
“
Action ” means any demand, charge, claim, action,
suit, counter suit, arbitration, hearing, inquiry, proceeding,
audit, review, complaint, litigation or investigation, or
proceeding of any nature whether administrative, civil, criminal,
regulatory or otherwise, by or before any federal, state, local,
foreign or international Governmental Authority or any arbitration
or mediation tribunal.
“
Affiliate ” means, with respect to any specified
Person, those other Persons who Control, are Controlled by, or
under common Control with such specified Person.
“
Agreement ” has the meaning given in the
preamble.
“ Base
Services ” has the meaning set forth in
Section 3.1(a) .
“
Change Management Process ” has the meaning set forth
in Section 5.4 .
“
Charges ” means the amounts payable by Customer to
P&G pursuant to Article 10 .
“
Claim ” has the meaning set forth in
Section 13.1 .
“
Claim Notice ” has the meaning set forth in
Section 13.3(a) .
“
Confidential Information ” has the meaning set forth
in Section 9.1 .
“
Contract ” means any contract, agreement, lease,
license, sales order, purchase order, instrument or other
commitment, whether written or oral, that is binding on any Person
or any part of its property under applicable Law.
“
Control ” and its derivatives mean, with respect to
any Person (other than an individual): (a) the legal,
beneficial, or equitable ownership, directly or indirectly, of
(i) at least 50% of the aggregate of all voting equity
interests in such Person or (ii) equity interests having the
right to at least 50% of the profits of an entity or, in the event
of dissolution, to at least 50% of the assets of such Person; or
(b) the right to appoint, directly or indirectly, a majority
of the board of directors or equivalent governing body of such
Person; or (c) the right to control, directly or indirectly,
the
1
management or
direction of such Person by contract or corporate governance
document; or (d) in the case of a partnership, the holding of
the position of sole general partner.
“
Controls Processes and Procedures ” has the meaning
set forth in Section 3.3(a) .
“
Customer ” has the meaning set forth in the Preamble.
References herein to “Customer” shall include the
“Recipients” to the extent the context
requires.
“
Customer Group ” has the meaning set forth in
Section 5.5 .
“
Customer Data ” has the meaning set forth in
Section 8.1 .
“
Customer Equipment ” means all Equipment owned or
leased (other than from Service Provider) by Customer that is used
in connection with the Services.
“
Customer Facilities ” has the meaning set forth in
Section 6.1(a) .
“
Customer Owned Technology ” has the meaning set forth
in Section 7.1 .
“
Customer Parties ” has the meaning set forth in
Section 13.2 .
“
Customer Software ” means all Software owned by, or
provided under license (other than from Service Provider) to,
Customer that is used in connection with the Services (and all
modifications, replacements, upgrades, enhancements, documentation,
materials and media relating to the foregoing).
“
Customer System ” means an interconnected grouping of
Customer Equipment and/or Customer Software that is used in
connection with the Services, and all additions, modifications,
substitutions, upgrades or enhancements thereto.
“
Customer Technology ” means Customer Owned Technology
and Customer Third Party Technology.
“
Customer Third Party Technology ” means all Technology
licensed (other than by Service Provider) to Customer that is
provided to Service Provider for use in connection with the
Services.
“
Direct Claim ” has the meaning set forth in
Section 5.5 .
“
Effective Date ” has the meaning set forth in the
Preamble.
“
Equipment ” means computer and telecommunications
equipment (without regard to the entity owning or leasing such
equipment) including: (i) servers, personal computers, and
associated attachments, accessories, peripheral devices and other
equipment; and (ii) private branch exchanges, multiplexors,
modems, CSUs/DSUs, hubs, bridges, routers, switches and other
telecommunications equipment.
“
Final Determination ” means the final resolution of
any Tax liability for any Tax period by or as a result of
(i) a final and unappealable decision, judgment, decree or
other order by any court of competent jurisdiction, (ii) a
final settlement with the Internal Revenue Service, a
closing
2
agreement or
accepted offer in compromise under Code Sections 7121 or 7122,
or a comparable arrangement under the laws of another jurisdiction,
(iii) any allowance of a Refund in respect of an overpayment
of Tax, but only after the expiration of all periods during which
such amount may be recovered by the jurisdiction imposing such Tax,
or (iv) any other final disposition, including by reason of
the expiration of the applicable statute of limitations.
“
Financial Transactions ” has the meaning set forth in
Section 3.3(a) .
“
Force Majeure Event ” has the meaning set forth in
Section 15.5(a) .
“
Governmental Authority ” means any federal, state,
local, foreign or international court, government, department,
commission, board, bureau, agency, official or other regulatory,
administrative or governmental authority.
“
Indemnitee ” has the meaning set forth in
Section 13.3 .
“
Indemnifying Party ” has the meaning set forth in
Section 13.3 .
“
Information ” means information, whether or not
patentable or copyrightable, in written, oral, electronic or other
tangible or intangible forms, stored in any medium, including
studies, reports, records, books, Contracts, instruments, surveys,
discoveries, ideas, concepts, know-how, techniques, designs,
specifications, drawings, blueprints, diagrams, models, prototypes,
samples, flow charts, data, computer data, disks, diskettes, tapes,
computer programs or other software, marketing plans, customer
names, communications by or to attorneys (including attorney-client
privileged communications), memos and other materials prepared by
attorneys or under their direction (including attorney work
product), and other technical, financial, employee or business
information or data, but in any case excluding back-up
tapes.
“
Insurance Proceeds ” means those monies:
(i) received by an insured from an insurance carrier; or
(ii) paid by an insurance carrier on behalf of the
insured.
“
Intellectual Property Rights ” means any and all
common law, statutory and other intellectual property rights,
including copyrights, trademarks, trade secrets, patents and other
proprietary rights issued, honored and/or enforceable under any
applicable Laws anywhere in the world.
“
Laws ” means any statute, law, ordinance, regulation,
rule, code or other requirement of, or Order issued by, a
Governmental Authority.
“
Losses ” has the meaning set forth in
Section 13.1 .
“
Orders ” means any orders, judgments, injunctions,
awards, decrees, writs or other legally enforceable requirement
handed down, adopted or imposed by, including any consent decree,
settlement Contract or similar written Contract with, any
Governmental Authority.
“
Parties ” shall mean Customer and Service
Provider.
“
Person ” shall mean any individual, partnership, firm,
corporation, association, joint venture, limited liability company,
trust or other entity, or any Governmental Authority.
“
Pricing Schedule ” means Schedule C to
this Agreement.
3
“
Recipient ” has the meaning set forth in
Section 3.1(c) .
“
Recipient Personnel ” means any employees of any
Recipient, and employees of any third party contractors providing
Services to Customer.
“
Refund ” means any cash refund of Taxes or reduction
of Taxes by means of credit, offset or otherwise, together with any
interest received thereon.
“
Relationship Manager ” has the meaning set forth in
Section 5.1 .
“
Required Consents ” means (i) all consents
required at any time to grant Service Provider the right to use
and/or access Customer Third Party Technology, Customer Software,
Customer Equipment, the Customer System and Recipient software and
equipment in connection with providing the Services; (ii) all
consents required at any time to grant Customer and the Recipients,
to the extent necessary to exercise their rights or perform their
obligations under this Agreement, the right to use and/or access
Service Provider Technology, Service Provider Software, Service
Provider Equipment and the Service Provider System; and
(iii) all other consents, including consents to modification
of third party licenses or other Contracts, required from third
parties at any time in connection with Service Provider’s
provision of the Services.
“
Separation Agreement ” means that certain Separation
Agreement, dated as of June 4, 2008, herewith, by and between
Customer and Service Provider, relating to the separation of
Customer’s business from Service Provider.
“
Service Provider Equipment ” means all Equipment owned
or leased by Service Provider or a Service Provider Affiliate or
Subcontractor and used in connection with the Services.
“
Service Provider Facilities ” has the meaning given in
Section 6.2(a) .
“
Service Provider Group ” has the meaning set forth in
Section 5.5 .
“
Service Provider Owned Technology ” has the meaning
set forth in Section 7.2 .
“
Service Provider Parties ” has the meaning set forth
in Section 13.1(a) .
“
Service Provider Personnel ” means those employees,
representatives, contractors, subcontractors and agents of Service
Provider, Subcontractors and Service Provider Affiliates who
perform any Services under this Agreement.
“
Service Provider Software ” means all software
programs and programming owned by, or provided under license to,
Service Provider and used to provide the Services (and all
modifications, replacements, upgrades, enhancements, documentation,
materials and media relating to the foregoing).
“
Service Provider System ” means an interconnected
grouping of Service Provider Equipment and/or Service Provider
Software used in connection with the Services, and all additions,
modifications, substitutions, upgrades or enhancements
thereto.
“
Service Provider Technology ” means Service Provider
Owned Technology and Service Provider Third Party
Technology.
4
“
Service Provider Third Party Technology ” means any
third party Technology (other than Customer Third Party Technology)
used by Service Provider, a Service Provider Affiliate or
Subcontractor in connection with the Services.
“
Services ” means the Base Services and any Termination
Assistance Services.
“
Software ” means programs and programming (including
the supporting documentation, media, on-line help facilities and
tutorials).
“
Statements of Work ” or “ SOWs ”
means the descriptions of services in Schedules A-1 through
A-17 .
“
Subcontractors ” means Service Provider’s
contractors or other service providers that perform a portion of
the Services.
“
Subsidiary ” of any Person, means a corporation or
other organization whether, incorporated or unincorporated, of
which at least a majority of the securities, or interests having by
the terms thereof ordinary voting power to elect at least a
majority of the Board of Directors or others performing similar
functions with respect to such corporation or other organization,
is directly or indirectly owned or controlled by such Person or by
any one or more of its Subsidiaries; provided ,
however , that a Person that is not directly or indirectly
wholly-owned by any other Person will not be a Subsidiary of such
other Person unless such other Person Controls, or has the right,
power or ability to Control, that other Person.
“
Tax ” or “ Taxes ” shall mean all
forms of taxation, whenever created or imposed, and whether of the
United States or elsewhere, and whether imposed by a federal,
state, municipal, governmental, territorial, local, foreign or
other body, and without limiting the generality of the foregoing,
shall include net income, gross income, gross receipts, sales, use,
value added, ad valorem , transfer, recording, franchise,
profits, license, lease, service, service use, payroll, wage,
withholding, employment, unemployment insurance, workers
compensation, social security, excise, severance, stamp, business
license, business organization, occupation, premium, property,
environmental, windfall profits, customs, duties, alternative
minimum, estimated or other taxes, fees, premiums, assessments or
charges of any kind whatever imposed or collected by any
governmental entity or political subdivision thereof, together with
any related interest and any penalties, additions to such tax or
additional amounts imposed with respect thereto by such
governmental entity or political subdivision.
“
Technology ” means all formulae; algorithms;
processes; procedures; designs; ideas; concepts; research;
inventions and invention disclosures (whether or not patentable or
reduced to practice); know-how, proprietary information and
methodologies; trade secrets; technology; computer software (in
both object and source code form); databases; specifications; and
all records thereof, including documentation, design documents and
analyses, studies, programming tools, plans, models, flow charts,
reports and drawings, and all Intellectual Property Rights
subsisting in each of the foregoing.
“
Term ” has the meaning set forth in
Section 2.1 .
“
Termination Assistance Services ” has the meaning set
forth in Section 14.4 .
5
“
Third-Party Claims ” has the meaning set forth in
Section 13.1 .
“
Transaction Agreement ” means that certain Transaction
Agreement, dated as of June 4, 2008, among Customer, Service
Provider and certain Affiliates of Customer and Service
Provider.
The term of
this Agreement will begin on the Effective Date and will end at
midnight on May 6, 2009 (the “ Term
”), unless earlier terminated in accordance with the terms of
this Agreement. Customer may extend the Term as to all or any
individual Service(s) (to the extent such individual Service(s) can
be segregated from the other Services which are not being extended)
for one month periods up to an aggregate of six (6) additional
months by providing to Service Provider sixty (60) days advance
written notice.
3. SERVICES
AND CONTROLS PROCESS
(a)
Performance . Service Provider will provide the Services
described in Schedule A (the “ Base Services
”). Services provided by Service Provider under this
Agreement may be provided by Service Provider directly or through
any of its Subsidiaries at Service Provider’s
discretion.
(b)
Commencement of Services . Unless otherwise specified in the
applicable Statements of Work, Service Provider will begin to
provide the Base Services on the Effective Date.
(c)
Recipients . Service Provider will provide the Base Services
to Customer and to Customer’s Subsidiaries, to the extent
specified in Schedule B (which may be updated by
Customer from time to time upon notice to Service Provider) (each,
a “ Recipient ”).
(d)
Subsequent Adjustments . The Parties acknowledge that
certain items of Equipment or Software or certain Contracts,
existing as of the Effective Date, may have been inadvertently
omitted from, included in or mischaracterized under, the applicable
schedules. Accordingly, the Parties agree that to the extent any
such omitted, included or mischaracterized item is discovered, the
discovering Party shall promptly notify the other Party and the
Parties shall promptly amend the relevant schedule. If such
discovered information results in a material increase in cost that
is not covered by Service Provider’s cost allocation that is
used to determine its Charges to Customer, using Service
Provider’s normal cost allocation methodology, then the
Parties will make an equitable adjustment to the Charges and
impacted schedules, all of which adjustments will be reviewed and
considered through the Change Management Process. In no event shall
any adjustment to the Service provide Service Provider with a
greater degree of discretion than it has with respect to the
existing Services.
3.2
Substantive Business Decisions Prohibited . Notwithstanding
anything to the contrary contained in this Agreement or the
accompanying schedules, none of Service Provider Parties,
Subcontractors or Service Provider Personnel shall make any
substantive business decisions with respect to Customer in
performing Services (including, without limitation, by performing
any sales or marketing activities for customer). Each provision of
this Agreement and the accompanying schedules shall be interpreted
in a manner consistent with this Section 3.2
.
6
(a) For
purposes of this Section 3.3:
(i) the
term “ Controls Processes and Procedures ” means
the control self-assessments, internal audits and controls
objectives and other regular reviews conducted by Service Provider
in the ordinary course of business; and
(ii) the
term “ Financial Transactions ” means those
finance and accounting transactions resulting from the performance
of the following Statements of Work: Supply Network Solutions,
Purchasing, Marketing Development Organization, North America
Product Supply Operations, Workplace & Infrastructure
Solutions, Global Data Management, and Financial Services &
Solutions.
(b) During
the Term, Service Provider will conduct, in the ordinary course of
business, the Controls Processes and Procedures on Service
Provider’s services environment. The Controls Processes and
Procedures may or may not include Customer specific transactions
resulting from the performance by Service Provider of the Financial
Transactions.
(c) At
a time mutually agreed upon by Service Provider and Customer, once
during each calendar quarter of the Term, a Service Provider
designated representative will be available to designated Customer
representative to do the following:
(i) Review
any material modifications to Service Provider’s systems that
may adversely impact the processing of the Financial
Transactions;
(ii) Review
any errors specific to a Financial Transaction and legal entity
owned by Customer detected during Service Provider’s Controls
Processes and Procedures and review Service Provider’s action
plan to address any specific errors noted during Service
Provider’s Controls Processes and Procedures, including
timing to implement the action plan; and
(iii) Review
any errors specific to a Financial Transaction and legal entity
owned by Customer detected during any external audit of Service
Provider’s processes or systems utilized to process the
Financial Transactions and discuss Service Provider’s action
plan to address any detected errors or issues, including timing to
implement the action plan.
(d) At
a time mutually agreed upon by Customer and Service Provider but at
least once during each calendar quarter of the Term, a designated
representative of Service Provider’s Global Internal Audit
organization will be available to a designated Customer
representatives to do the following:
(i) Review
any deficiencies or weaknesses in the Financial Transactions
detected by Service Provider in Service Provider’s services
environment that meet Service Provider’s threshold of a
significant deficiency or material weakness; and
(ii) Review
any instances of fraud that are actually known by Service Provider
and proven by Service Provider and adversely affects
Customer’s business operations.
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(e) During
the Term and upon at least 30 days written notice, Service
Provider will make available to Customer access to Service
Provider’s and Customer’s books and records that
Service Provider maintains to execute the Financial Transactions,
solely and only to the extent necessary for the purpose of
supporting the external and internal audits of Customer’s
accounting. Customer or its authorized representative will have the
right to audit the books and records during normal business hours
and will be responsible for any costs incurred by Service Provider
related to Customer’s audit that exceed the ordinary course
of business.
4. SERVICE
PROVIDER SUBCONTRACTORS AND THIRD PARTY CONTRACTS
(a)
Use of Subcontractors . Service Provider reserves the right
to use Subcontractors to assist Service Provider in the provision
of the Services as Service Provider deems appropriate.
(b)
Service Provider Responsibility for Subcontractors . Unless
otherwise agreed, Service Provider will be responsible for the
Services performed by the Subcontractor and Service Provider will
be Customer’s sole point of contact regarding the Services,
including with respect to payment.
4.2
Customer Compliance with Third Party Contracts . Customer
agrees to be bound by and comply with the terms and conditions of
Services Provider’s agreements with the third parties listed
in Schedule D (as such schedule may be amended from
time to time upon mutual written agreement of the Parties), other
than Service Provider’s payment obligations under such
agreements, in each case to the extent services are directly or
indirectly provided to Customer under such agreements. In addition,
Customer will comply with any obligations (e.g., use restrictions,
confidentiality) to be performed under any Contracts (other than
Service Provider’s payment obligations under such agreements)
applicable to Customer’s receipt and use of the Services and
to the extent Customer is informed of such obligations.
5.
RELATIONSHIP MANAGEMENT
5.1
Relationship Managers . Each Party will appoint an
individual (each, a “ Relationship Manager ”)
who, from the Effective Date until replaced by the appointing
Party, will serve as that Party’s representative under this
Agreement during the Term. Each Relationship Manager will
(a) have overall responsibility for managing and coordinating
the performance of the appointing Party’s obligations under
this Agreement, and (b) be authorized to act for and on behalf
of the appointing Party concerning all matters relating to this
Agreement. Neither Party will reassign a Relationship Manager,
unless it provides at least ten (10) days prior written notice
to the other Party. If a Party terminates the employment of or
reassigns its Relationship Manager or its Relationship Manager
resigns, dies or becomes disabled, such Party will appoint a new
Relationship Manager within thirty (30) days after the
reassignment, resignation, death or disability.
5.2
Regulatory Review . Each Party will notify the other
promptly of any formal
8
request or
Order by a Government Authority to examine records regarding
Customer that are maintained by Service Provider or to examine
Service Provider’s performance of the Services. Service
Provider will cooperate with any such examination. Customer will
reimburse Service Provider for the reasonable costs Service
Provider incurs in connection with such examination.
5.3
Books and Records . During the Term, Service Provider shall
be provided with access, at no cost to Service Provider, to
Customer’s books and records to the extent necessary for
Service Provider to fulfill its obligations under this
Agreement.
5.4
Change Management Process . Service Provider will use the
same change management process for changes to the Services that
Service Provider uses to manage changes for Service
Provider’s own businesses that use the same or similar
services (“ Change Management Process
”).
5.5
Dispute Resolution . Any dispute, controversy or claim by
Service Provider or any of its Subsidiaries (collectively, “
Service Provider Group ”) against Customer or any of
its Subsidiaries (collectively, “ Customer Group
”) in connection with this Agreement (collectively “
Direct Claims ”) shall be resolved by the Parties in
accordance with Article 6 of the Separation Agreement,
except that any executive level discussions to be held pursuant to
Article 6 of the Separation Agreement with regard to
such dispute, controversy or claim shall be held by
Customer’s Chief Executive Officer (or his designee) and
Service Provider’s President of Global Business Services (or
his designee).
5.6
Continued Performance . Each Party agrees that it will,
unless otherwise directed by the other Party, continue performing
its obligations under this Agreement while any dispute is being
resolved until this Agreement expires or is terminated in
accordance with its terms, except in the case of a dispute with
regards to Customer’s alleged failure to pay amounts in
excess of $500,000; provided , however , that if
Customer pays such disputed amounts, (a) Service Provider shall
continue to perform its obligations under this Agreement and
(b) such payment shall not constitute a waiver of any claims
by Customer may have with respect to such disputed
amounts.
6.1
Use of Customer Facilities .
(a)
General . Customer will provide Service Provider, at no
charge, the space, office furnishings, janitorial service,
telephone service, utilities (including air conditioning) and
office-related equipment, supplies, and duplicating services at
Customer’s premises that Service Provider may reasonably need
to provide the Services (collectively, the “ Customer
Facilities ”). In addition, Customer will provide
necessary storage space for backup data files and will provide
additional storage space that may be required by any change in
retention schedules required by Customer. Service Provider’s
employees will have reasonable access to the Customer Facilities
twenty-four (24) hours a day, seven (7) days a
week.
(b)
Service Provider’s Obligations . To the extent Service
Provider is using any part of a Customer Facility to perform the
Services, Service Provider will comply with Customer’s
standard policies and procedures, as made available to Service
Provider, regarding access to and use of the Customer
Facilities.
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6.2
Service Provider Facilities and Systems .
(a)
Service Provider Facilities . Service Provider may perform
the Services in such facilities maintained by Service Provider or
its Subcontractors or Affiliates (collectively, “ Service
Provider Facilities ”) as Service Provider reasonably
deems appropriate.
(b)
Access to Service Provider Systems . Customer will, and will
require that all Recipient Personnel who have access to Service
Provider Systems in accordance with the provisions of
Section 11.3 , including computer or electronic data
storage systems, limit their access to those portions of such
systems for which they are authorized in connection with their
receipt and use of the Services. Customer will (i) limit such
access to those Recipient Personnel who are authorized to use the
Services in accordance with the provisions of
Section 11.3 , (ii) maintain and make available to
Service Provider a written list of the names of each individual who
will be granted such access, and (iii) adhere to Service
Provider’s security rules and procedures for use of Service
Provider Systems. All user identification numbers and passwords
disclosed to Recipients to permit any Recipient Personnel to access
the Service Provider Systems will be deemed to be, and will be
treated as, Service Provider’s Confidential Information.
Customer will cooperate with Service Provider in the investigation
of any apparent unauthorized access by Recipient Personnel to
Service Provider Systems. Service Provider shall, in its sole
discretion, be entitled to approve or restrict access to Service
Provider Systems by any Customer contractor.
7.
TECHNOLOGY, SOFTWARE AND PROPRIETARY RIGHTS
7.1
Customer Owned Technology .
(a)
Definition . The term “ Customer Owned
Technology ” means: (i) Technology owned by Customer
on the Effective Date; (ii) Technology developed or acquired
by Customer or its third-party service providers (other than
Service Provider) after the Effective Date; (iii) derivative works,
modifications and enhancements to any of the foregoing; and
(iv) all Intellectual Property Rights subsisting in any of the
foregoing.
(b)
Ownership by Customer; License to Service Provider .
Customer Owned Technology will be owned exclusively by Customer. As
of the Effective Date, Customer hereby grants to Service Provider
(and solely to the extent necessary for Service Provider to provide
the Services, to the Subcontractors) a non-exclusive, worldwide,
non-transferable (except as provided in Section 15.2 ),
revocable, fully paid-up, royalty-free right and license, solely
during the Term, to access, use, execute, reproduce, display,
perform, modify, enhance, distribute and create derivative works of
the Customer Owned Technology made available by Customer to Service
Provider pursuant to this Agreement for the express and sole
purpose of providing the Services. Except as otherwise requested or
approved by Customer, Service Provider will, and will cause the
Service Provider Personnel to, cease all use of Customer Owned
Technology upon the later of the end of the Term and the completion
of any Termination Assistance Services.
7.2
Service Provider Owned Technology .
(a)
Definition . The term “ Service Provider Owned
Technology ” means Technology owned by Service Provider
or a Service Provider Affiliate or Subcontractor and used in
connection with the Services, including any modifications,
enhancements or derivative works
10
of such
Technology or any new Technology developed by Service
Provider.
(b)
Ownership by Service Provider; License to Customer . Service
Provider Owned Technology will be owned exclusively by Service
Provider. In addition to any other license rights granted
hereunder, Service Provider hereby grants to each Recipient a
non-exclusive, worldwide, non-transferable (except as provided in
Section 15.2 ), fully paid-up, royalty-free right and
license during the Term, to the extent required to fully and
completely use the Services, to use all Intellectual Property
Rights in Service Provider Technology. The Parties acknowledge that
such right and license may be subject to additional terms and
conditions, and, except as otherwise provided herein, will
terminate upon the termination of the Services. As between the
Parties, all Internet addresses, network identification, access
codes and telephone numbers provided or issued to Customer or its
users by Service Provider or Service Provider Personnel, and not
transferred to Customer pursuant to the Separation Agreement, shall
be and remain the sole property of Service Provider.
7.3
No Implied Licenses; Residuals . Except as expressly
specified in this Agreement, nothing in this Agreement will be
deemed to grant to one Party, by implication, estoppel or
otherwise, license rights, ownership rights or any other
Intellectual Property Rights in any Technology owned by the other
Party or any Affiliate of the other Party. Service Provider shall
be free to use its general knowledge, skills and experience, and
any ideas, concepts, know how, an
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