TERMS AND CONDITIONS
These Terms and Conditions for Business Process Outsourcing Services (this “Agreement”) is entered into between Managed Services Partners LLC, a Kansas limited liability company (“MSP”) and Customer as identified in the applicable STATEMENT OF WORK NO 1 (“Customer”). (MSP and Customer are sometimes hereinafter referred to collectively as the “Parties” and individually as a “Party”.) The obligations set forth in this Agreement will be performed by MSP itself and through direct and indirect wholly-owned affiliates. This Agreement will become effective as identified in the applicable Statement of Work NO 1 (the “Effective Date”). This Agreement is further entered into with reference to the following facts:
A. MSP is in the business of providing business process outsourcing and related services to its customers, including the services contemplated by this Agreement; and
B. Customer has chosen to engage MSP to provide certain business process outsourcing services to Customer, as such services may be agreed by Customer and MSP from time to time and documented in separate Statements of Work; and
C. Customer and MSP desire to establish a mechanism for the execution of such Statements of Work and agree upon
standard provisions that will govern each such Statements of Work.
Accordingly, the Parties agree as follows:
1. DEFINITIONS
In this Agreement, the following terms will have the indicated meanings:
“MSP Facilities” means any facility owned, operated, managed or under contract with MSP from where MSP provides Services.
“MSP Materials” means any materials, documentation, manuals, guidelines, business processes, methodologies, software, tools, patents, registered designs, trade marks and service marks (whether registered or not), copyright, database rights, inventions, designs, drawings, performances, computer programs, confidential information, business names, or other items licensed or owned by MSP and used by MSP to the Services, including MSP Software (excluding the Customer Materials).
“MSP Personnel” means employees of MSP and its subcontractors assigned to perform the Services. “MSP Solution” means all systems, software, designs, documentation, literary works or works of authorship, computer programs, program tools, drawings, user manuals, technical manuals, charts, graphs, machine readable text and files, computer code (in object code and source code form), applications, utilities, operating systems, procedures, methodologies, databases, ways of doing business, know-how, screen layouts, tools and programs, including all IPR subsisting therein, that MSP uses to provide the Services, implements pursuant to this Agreement or otherwise, or otherwise offers to Customer or other MSP customers as part of MSP service offerings, and any improvements, modifications, corrections, compilations, derivative works, derivations, or other revisions of same. For clarification, the MSP Solution includes the MSP Software, MSP Materials, and unless otherwise expressly stated, the MSP Solution excludes the Existing Customer Solution.
“MSP Software” means software that is owned or licensed by MSP and used by MSP or its subcontractors to provide the Services.
“Affiliate” of any specified person or entity, means any other person or entity that directly, or indirectly through one or more intermediaries, Controls or is Controlled by, or is under common Control with, the specified person or entity.
“Agreement” means this Agreement for Business Process Outsourcing Services and all Schedules and Attachments
hereto.
“Authorized User” means a user authorized to access and use one or more portions of the MSP Solution as set forth in
the applicable Statement of Work.
“Business Day” means any day other than a Saturday, Sunday or legal holiday in the locality in which the Services are provided.
“Commissioned Work” means any work, design, output, document, system, software or component thereof (including IPR subsisting therein), that is (a) defined as a Deliverable or project in a task order or similar change order document executed by authorized representatives of both parties; (b) to be provided by MSP or a subcontractor of MSP; (c) provided by MSP at a separately identifiable, discrete charge as stated in the task or change order; and (d) has terms governing Customer’s acceptance testing and acceptance criteria for the Deliverable or project.
“Control” and its derivatives means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person or entity, whether through the ownership of more than fifty percent (50%) of voting securities, by contract, or otherwise.
“Customer Data” means all Confidential Information of Customer as well as all data and information (including data relating to the transactions reflected in this Agreement and databases) (i) submitted to MSP by Customer, (ii) obtained, maintained, developed or produced by MSP or MSP Agents in connection with the Services and/or this Agreement or (iii) to which MSP or MSP Agents have access in connection with the provision of the Services, including, but not limited to, in (i), (ii) and (iii) above, information relating to Customer’s customers, employees, third party vendors, technology, operations, facilities, financials, consumer markets, products, capacities, systems, procedures, security practices, research development, business affairs and finances, and excluding in (i), (ii, and (iii) above any MSP Software, MSP Materials and MSP’ Confidential Information.
“Customer Materials” means any materials, documentation, manuals, guidelines, business processes, methodologies, software, tools, patents, registered designs, trade marks and service marks (whether registered or not), copyright, database rights, inventions, designs, drawings, performances, computer programs, confidential information, business names, or other items licensed or owned by Customer and required to be used by MSP to provide the Services (excluding the MSP Materials).
“Deliverable” means a specific item, writing, output or work that (i) is clearly defined and identified in the Statement of Work as a “Deliverable”; and (ii) is to be provided by MSP at a separate charge. Deliverables will not be construed to include any pre-existing works of authorship or other intellectual property rights owned or licensed MSP or a third party or any MSP Software.
“Equipment” means the computer and related equipment owned or leased by MSP and used by MSP to “Intellectual Property Rights” or “IPR” means all intellectual property rights or analogous rights, including without limitation patents, trade secret, registered designs, trademarks and service marks (whether registered or not), rights in the nature of unfair competition rights, copyright, database right, design right and all similar proprietary rights including those subsisting (in any part of the world) in inventions, designs, drawings, business methods, performances, computer programs, semi-conductor topographies, confidential information, business names, goodwill and the style and presentation of goods or services and applications for protection of any of the above rights anywhere in the world. “Interest” means interest at the monthly rate of one-half percent (1/2%) or six percent (6%) per annum.
“Losses” means all losses, liabilities, damages and claims, and all related costs and expenses (including any and all reasonable legal fees and reasonable costs of investigation, litigation, settlement, judgment, appeal, interest and penalties) incurred by an indemnified party in connection with an indemnified claim.
“Pass-Through Expenses” will mean the actual invoiced amounts (excluding any MSP profit, administrative fee or internal overhead charges) charged to MSP by third parties as more particularly described the applicable Statement of Work.
“Schedules” means any schedule, exhibit, agreement or other document either (i) attached to this Agreement, (ii) executed by the Parties concurrently with this Agreement or on the Commencement Date, or (iii) executed by the Parties at any time after the Effective Date, if such document states that it is a Schedule to this Agreement.
“Software” will mean the source code and object code versions of any applications programs, operating system software, computer software languages, utilities and other computer programs (i.e., any set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result), and documentation and supporting materials relating thereto, in whatever form or media, used or developed in connection with the provision of the Services, including the tangible media upon which such applications programs, operating system software, computer software languages, utilities and other computer programs, and documentation and supporting materials relating thereto are recorded or printed, together with all corrections, improvements, updates and releases thereof.
“Statement of Work” means the document entered into from time to time by Customer, which sets forth the description of Services and related obligations to be performed by MSP under this Agreement, and any support required from Customer.
“Virus” will mean harmful surreptitious code or other contaminants, including commands, instructions, devices, techniques, bugs, web bugs or design flaws that may be used to access, alter, delete, threaten, infect, assault, vandalize, disrupt, damage, disable, or shut down Customer or MSP’, as the case may be, systems, databases, Software, or hardware.
2. TERM
2.1 Term.
The initial term of this Agreement shall be set forth in Statement of Work NO 1 (“Effective Date”). Thereafter, this Agreementshall be deemed automatically renewed for successive periods equal to the initial term as stated in the Statement of Work NO. 1 until terminated by either party by written notice given to the other party at least (30 days if month-to-month or 60 days if year-to-year) before the end of any term year.
3. SERVICES
3.1 Services.
During the Term of this Agreement, MSP will provide to Customer the Services in accordance with the terms of this Agreement and a Statement of Work Number 1 that describes all services, resources and deliverables to be provided by MSP to Customer. Any additional services mutually agreed to by the Parties shall be set forth in a Statement of Work in the form of Schedule A for the compensation set forth therein. Each Statement of Work shall be governed by the terms and conditions of this Agreement by reference No Statement of Work will become effective until it has been executed by an authorized representative of each Party. Such Services may be amended and supplemented from time to time pursuant to the Change Control Procedures. Statement of Work Number 1 attached under this Agreement as Schedule A describes the initial services to be provided by MSP to Customer.
3.2 Reliance on Instructions.
In performing its obligations under this Agreement, MSP will be entitled to rely upon any routine instructions, authorizations, approvals or other information provided to MSP by Customer. Unless MSP knew or in the course of its provision of the Services or should have known, of any error, incorrectness or inaccuracy in such instructions, authorizations, approvals or other information, MSP will incur no liability or responsibility of any kind in relying on or complying with any such instructions, authorizations, approvals or other information received from Customer.
3.3 Viruses; Disabling Code.
Customer will use commercially reasonable efforts, including the use of commercially available virus detection software, to ensure that any Software or hardware provided by Customer is delivered free of any Virus and shall not knowingly, intentionally or negligently introduce into such Software or hardware, any Virus. In the event any such Virus is introduced as a result of a breach by Customer or Customer Agents of this covenant, Customer will exercise commercially reasonable efforts to eradicate the Virus and reduce the effects of the Virus as existed prior to the introduction of such Virus at Customer’s sole cost and expense.
MSP will use commercially reasonable efforts, including the use of commercially available virus detection software, to ensure that any Software, or hardware provided by MSP is delivered free of any Virus and MSP shall not knowingly, intentionally or negligently introduce into the Software or hardware, any Virus. In the event such a Virus is introduced without a breach by MSP or MSP Agents of this covenant, MSP shall, (i) at no additional charge to Customer, using the MSP resources fully-dedicated to Customer (to the extent feasible) or (ii) if additional skills or time are required, on a time and materials basis, and with reasonable assistance from Customer, exercise commercially reasonable efforts to eradicate the Virus, reduce the effects of the Virus, and restore the Software and/or hardware to the same level of service or operation as existed prior to the introduction of such Virus. Notwithstanding the foregoing, in the event any such Virus is introduced as a result of a breach by MSP of this covenant, MSP will exercise commercially reasonable efforts to eradicate the Virus, reduce the effects of the Virus, and restore the Software and/or hardware to the same level of service or operation as existed prior to the introduction of such Virus at no charge to Customer.
3.4 Compliance with Laws.
Each Party will comply, and will cause each of its employees, agents and subcontractors to comply, with the laws of all governmental authorities to the extent such laws are applicable: (i) in the case of MSP, to MSP’ provision of the Services, and (ii) in the case of Customer, Customer’s receipt and use of the Services.
MSP shall use commercially reasonable efforts to identify and notify Customer of any changes in applicable laws and regulations that may relate to its delivery of the Services. Customer shall use commercially reasonable efforts to identify and notify MSP of any changes in applicable laws and regulations that may relate to its receipt and/or use of the Services. In the event changes in laws or regulations prevent or impair MSP from delivering the Services under the Agreement, MSP shall use commercially reasonable efforts to develop and, upon Customer’s written approval (such approval not to be unreasonably withheld), implement a suitable work-around until such time as MSP can perform the Services under the Agreement without such work-around.
If the changes are to laws or regulations primarily applicable to MSP and not to Customer, MSP shall develop and implement a work-around at its own expense. If the changes are due to laws or regulations primarily applicable to Customer, MSP shall develop and implement a work-around at Customer’s expense as mutually agreed in writing; provided, however, if the costs associated with implementing such change(s) are also applicable to MSP’ other customers, any proposed increase by MSP will include only Customer’s proportionate share of the costs to implement such change. If the changes are due to laws or regulations applicable to both Customer and MSP, then MSP shall develop and implement a work-around, the expense of which shall be shared by Customer and MSP as mutually agreed in writing.
4. INTELLECTUAL PROPERTY RIGHTS AND OBLIGATIONS
4.1 Existing Customer Solution.
(a) Customer retains all right, title and interest in the Existing Customer Solution and any other Customer property utilized in the provision of the Services, including but not limited to the Customer Data. MSP is hereby granted a limited license to use the Existing Customer Solution only as expressly described in this Section 4.1.
(b) Except as set forth below, Customer hereby grants MSP a limited, worldwide and non-exclusive license to use, access, practice, embody, implement, load, execute, store, transmit, display, copy, maintain, modify, enhance, create derivative works, make and have made the Existing Customer Solution and all components thereof, in accordance with the following:
1. MSP agrees to comply with such terms and conditions of the third party contracts for the Customer Third Party Resources (as defined below) as Customer provides to MSP.
2. The license granted MSP pursuant to this Section 4.1 will be limited to MSP and its subcontractors, employees and authorized agents of MSP. MSP may use the Existing Customer Solution for the purpose of providing Services to Customer and for no other purpose.
3. MSP’ license to use the Existing Customer Solution will expire automatically on the later of the expiration of the Term, termination of this Agreement by either party or completion of the Termination/Expiration Assistance.
(c) The Parties acknowledge that the Existing Customer Solution includes equipment, materials, software or other items licensed or procured by Customer from a third party (“Customer Third Party Resources”). Customer will obtain the relevant required consent from each third party provider of the Customer Third Party Resources (each, a “Required Consent”). For clarification, such Required Consents will be obtained so as to enable MSP to provide the Services (i) upon the Service Commencement Date, and (ii) following the Service Commencement Date to the extent the parties agree that MSP will continue to use a Customer Third Party Resource to provide the Services.
(d) The Parties’ respective financial responsibilities for Required Consents associated with MSP’ use of those Customer Third Party Resources that consist of third party software are set forth in Schedule A. Unless expressly stated otherwise in this Agreement, financial responsibility for Required Consents will be that of Customer.
(e) Subject to any agreements governing the Customer Third Party Resources, all right, title and interest in improvements, modifications, corrections, compilations, derivative works, derivations, or other revisions of the Existing Customer Solution, or components thereof, will be retained by Customer. Customer hereby grants to MSP by way of present assignment a limited, non-exclusive, worldwide right to use such improvements, which license will be further governed by Section 4.1(b) above.
4.2 MSP Solution.
Except as expressly set forth herein, MSP retains all right, title and interest in the MSP Solution. Customer is hereby granted a limited license to use portions of the MSP Solution as described in Sections 4.3.
4.3 MSP Software.
(a) MSP hereby grants to Customer a limited, non-exclusive, non-transferable royalty-free license to use the MSP Software and any end user documentation associated with such Software solely for Customer’s internal business purposes to the extent necessary to receive the Services from MSP during the Term of the applicable Statement of Work. The foregoing license grant is hereby made subject to any access or other restrictions on use specified in any third-party license agreements governing MSP Software.
(b) The license granted to Customer pursuant to Section 4.3(a) will be an object-code license only. Customer may not in any way adapt, vary, modify, transfer, reverse assemble, reverse compile or otherwise reverse engineer or derive the source code of the MSP Software, in whole or in part. Upon the request of Customer, MSP will provide such information as is necessary to allow Customer to develop software that is interoperable with such MSP Software.
(c) Customer’s access to the MSP Software will be limited to Authorized Users. In each case, Authorized Users of a given MSP Software product will consist of Customer employees or agents who have a need to access or support access of such MSP Software for the performance of Customer’s internal business functions to receive the Services from MSP. In no event will Customer knowingly enable an employee, contractor or agent of an MSP Competitor to be an Authorized User.
(d) The license granted pursuant to this Section 4.3 will expire immediately upon termination or expiration of the applicable Statement of Work.
4.4 Customer Data.
Nothing in Sections 4.1 through 4.3 above will be construed to convey any right, title or interest in the Customer Data to MSP. To the extent necessary and contemplated in this Agreement, Customer hereby grants MSP a limited, non-exclusive, license to use such Customer Data to the extent required to deliver the Services. MSP’ license to use the Customer Data will expire automatically on the later of the expiration of the Term, termination of this Agreement by either party or completion of the Termination/Expiration Assistance. Following such expiration or termination of the Agreement or completion of the Termination/Expiration Assistance, MSP agrees to return or destroy, at Customer’s option, all Customer Data and any copies thereof in MSP’ possession or control. Customer will relieve MSP from its obligation to perform the Services to the extent that MSP is required to return, erase, or destroy the Customer Data in its possession and such return, erasure, or destruction prevents MSP from performing the Services.
4.5 Privacy Laws.
The Parties acknowledge and agree that Customer will be and remain the controller of the Customer Data for purposes of all applicable laws relating to data privacy, transborder data flow and data protection (collectively, the “Privacy Laws”), and nothing in this Agreement or any Statement of Work will restrict or limit in any way Customer’s rights or obligations as owner and/or controller of the Customer Data for such purposes. The Parties also acknowledge and agree that MSP may have certain responsibilities prescribed by applicable Privacy Laws as a processor of the Customer Data and any other services provided hereunder, and MSP hereby acknowledges such responsibilities to the extent required thereby for processors of data and any other services provided hereunder, and agrees that such responsibilities will be considered as a part of the Services to be provided by MSP under this Agreement and each Statement of Work. Notwithstanding the above, in the event that Privacy Laws to which the activities contemplated by this Agreement and each Statement of Work are subject are materially modified, MSP will work with Customer to continue to comply with such Privacy Laws.
5. CONFIDENTIALITY
5.1 Defined.
Certain information which the Parties may exchange from time to time may be considered by the Party disclosing such information to be confidential and proprietary in nature, including but not limited to: (i) Customer Data, (ii) the Existing Customer Solution, (iii) any MSP proprietary software licensed or otherwise made available to Customer, including, but not limited to, the MSP Software, (iv) business plans or records of each Party made available to the other, (v) any and all such other information that the disclosing Party specifies as confidential and provides to the receiving Party (vi) the terms of this Agreement; (vii) and any other information that a reasonable business person would deem confidential (collectively, “Confidential Information”). The Parties agree to treat any and all Confidential Information that may be exchanged confidential.
5.2 Exclusions.
The obligations of confidentiality will not apply to any Confidential Information that is (i) publicly available or becomes so in the future without restriction, (ii) rightfully received by either Party from a third party and not accompanied by confidentiality obligations, (iii) already in the receiving Party’s possession and lawfully received from sources other than the disclosing Party, (iv) independently developed by the receiving Party, or (v) approved in writing for release or disclosure without restriction by the disclosing Party.
5.3 Limited Waivers.
The terms of this Article 5 will not preclude the disclosure of Confidential Information by either Party if such disclosure is (i) in response to a valid order of a court or other governmental body of the United States or any political subdivision thereof, or (ii) otherwise required by law; provided, however, that the Party from whom disclosure is sought will provide written notice to the disclosing Party of such request and will limit the disclosure to the extent required for such purposes.
6. MANAGEMENT AND CONTROL
6.1 Subcontracting.
MSP may, in the ordinary course of business subcontract any portion of the Services. No subcontracting will release MSP from its responsibility for its obligations under this Agreement. In no event will MSP will disclose Customer Confidential Information to a subcontractor unless and until such subcontractor has agreed in writing to protect such information in a manner substantially equivalent to that required of MSP under this Agreement, and then only as necessary for the subcontractor to perform its obligations under the Agreement.
7. INSURANCE; RISK OF LOSS
7.1 Required Insurance Coverages.
During the Term, each Party will maintain at its own expense, in addition to all legally required insurance, policies of insurance in such amounts and on such other terms and conditions as it reasonably determines are necessary with regard to its business, provided that the amounts and other terms and conditions of such policies must be at least equivalent to policies appropriate for and typically maintained by other companies of comparable size engaged in similar business activities. Notwithstanding the foregoing, MSP agrees to maintain commercial general liability insurance with a minimum limit of $1,000,000 per claim and an aggregate limit of no less than $2,000,000. Each such MSP policy shall name Customer as an additional insured. MSP’ insurance shall be primary and not be entitled to contribution from any insurance maintained by Customer. Each Party will provide, upon written request, proof of its insurance coverage (such as a certificate of insurance executed by an authorized representative of the Party). Such certificates shall require that the policies shall not be canceled or reduced in coverage until thirty (30) days written notice of such cancellation or reduction has been received by the other Party. All coverages for subcontractors shall be subject to all of the requirements stated herein. In addition, the insurance requirements set forth in this Section will not limit or expand MSP’ liability under or related to the Services or this Agreement.
8. CHARGES
8.1 Charges for Services.
In consideration for the performance of the Services, Customer will pay to MSP the Charges (defined as the Base Charges and any Variable Charges) set forth in Schedule A, plus any taxes and duties further described in Section 8.9 below. MSP reserves the right to increase Base and Variable Charges at any time by providing 90 days advance written notice in the event of a year-to-year contract or 30 days advance written notice in the event of a month-to-month contract. When MSP notifies Customer of a change in prices, MSP will provide Customer with a new Statement of Work containing the new pricing. Customer’s failure to execute and return the new Statement of Work within the applicable 90 or 30 day notice period will be grounds for termination of the contract at the end of the notice period.
8.2 Invoicing.
Unless otherwise specified in an applicable Statement of Work, MSP will invoice Customer, on a monthly basis as follows: (i) Base Charges will be invoiced 15 days in advance of each month for which the Services are to be provided, such Base Charges will be payable to MSP within fifteen (15) days from the date of invoice and (ii) all Variable Charges will be invoiced to Customer within ten (10) days following the end of the month in which such Charges are incurred and the undisputed portion of all such Variable Charges will be payable to MSP within fifteen (15) days from date of invoice.
8.3 Prorated Charges.
All periodic Charges under this Agreement (excluding Charges based upon actual usage or consumption of Services) will be computed on a calendar month basis, and will be prorated for any partial month.
8.4 Disputed Amounts.
If Customer in good faith disputes all or any portion of an invoice for Charges, then Customer will pay the undisputed portion of the invoice by the due date and Customer will notify MSP as soon as possible of the specific amount disputed and will provide reasonable detail as to the basis for the dispute. Except as provided in this Agreement, Customer will not withhold timely payment of any undisputed amount pending resolution of the disputed amount and MSP will continue to provide the Services pending resolution of the dispute. Promptly after Customer notifies MSP of the dispute, the Parties will then attempt to resolve the disputed portion of such invoice in accordance with the informal dispute resolution procedures set forth in Section 13. If Customer and MSP are unable to resolve the disputed amount in 10 days and the disputed amount exceeds five (5%) percent of the Base Charges, Customer will deposit the disputed amount in an escrow account established by agreement of Customer and MSP pending a resolution of the dispute. Only Customer’s Variable Charges may be subject to the withholding mechanism described in this Section 8.4.
8.5 Late Payment.
Any Charges due to MSP under this Agreement that are not paid on the date otherwise due will thereafter bear Interest until paid.
8.6 Pass-Through Expenses.
Subject to the provisions of this Section 8.6, Customer will pay all Pass-Through Expenses. MSP will review for accuracy the third party invoice for any Pass-Through Expenses and will pay when due to such third party all valid amounts set forth on such invoice. MSP will include the amount of such payment on its next invoice to Customer and will include with such invoice a copy of the third party invoice. Pass-through expenses will be amended as needed within each Statement of Work.
8.7 MSP Personnel.
MSP bears sole responsibility for payment of all compensation, fringe benefits, payroll taxes, contributions and other, similar costs for MSP’ employees.
8.8 Record Keeping.
MSP will maintain complete and accurate records of, and supporting documentation for, the amounts billed to and payments made by Customer under this Agreement or the Statement of Work. MSP will retain such records throughout the Term and for six (6) years thereafter. MSP will provide Customer, at Customer’s request, with paper and electronic copies of documents and information reasonably necessary to verify MSP’ compliance with this Agreement. Customer and its authorized agents and representatives will have access to such records for audit purposes during normal business hours during the Term and thereafter for the period during which MSP is required to maintain such records.
8.9 Taxes.
Each Party will pay any personal property taxes on property it either owns, leases or subleases.
(a) MSP will pay any sales, use, excise, value-added, services, consumption, and other taxes and duties imposed on any goods acquired, used or consumed by MSP in connection with the Services (excluding any taxes applicable to Pass-Through Expenses).
(b) In addition to invoicing Customer for the Charges associated with the Services, when applicable MSP will invoice amounts equal to the taxes, assessments, duties, permits, fees and other charges of any kind, however designated, assessed, charged or levied, based on, with respect to or measured by (i) such Charges, (ii) this Agreement or (iii) the Services, Software, Equipment, Materials or other property (intangible or intangible) or, the use thereof or the resources used therefore, provided under this Agreement. MSP will either remit these taxes on Customer’s behalf, in which case Customer will reimburse MSP for such amounts, or Customer will pay such amounts directly to the applicable taxing authority.
(c) The Parties will cooperate with each other to enable the Parties to determine accurately their respective tax liabilities and to reduce such liabilities to the extent permitted by law. MSP invoices to Customer will separately state the amount of any taxes MSP is collecting from Customer.
9. POLICIES AND PROCEDURES; CUSTOMER DATA
9.1 Compliance with Procedures.
MSP will perform the Services in compliance with the policies and procedures set forth in the applicable Statement of Work.
9.2 Accuracy of Customer Data and Processing.
Customer will be responsible for the accuracy and completeness of any information, materials or data that Customer or its Affiliates provide to MSP, and for the accuracy and completeness of Customer’s transmission to MSP of such information, materials or data. MSP will be responsible for the accuracy and completeness of MSP’ systems electronic receipt of any such information, materials or data, and for the accuracy and completeness of information, materials or data that MSP provides or transmits. MSP will promptly correct any errors or inaccuracies attributable to MSP in Customer Data or reports discovered by Customer and identified to MSP, or discovered by MSP or any errors or inaccuracies that MSP should have reasonably discovered. Such corrections will be provided at no charge to Customer. Corrections and reruns will be reported in reports defined jointly by Customer and MSP and produced by MSP. Customer acknowledges and agrees that the foregoing is not intended to obligate MSP to correct any errors in Customer systems or software outside of MSP’ reasonable control which cause such errors or inaccuracies. MSP will not be responsible for errors in or the delay or nonperformance of its responsibilities or obligations under this Agreement to the extent caused by the inaccuracy and/or incompleteness of information, materials, or data provided to MSP by Customer, its Affiliates or the third party providers or by the failure of Customer, its Affiliates or the third party providers to furnish information, materials or data. Notwithstanding the foregoing, MSP will promptly notify Customer in writing of all inaccuracies, insufficiencies or errors discovered by MSP in such Customer information, materials or data or if there is any information, materials or data that MSP requires Customer to furnish. MSP will promptly correct all such inaccuracies and errors in such Customer information, materials or data, and in any errors in the Services caused by the inaccuracies or errors in such Customer information, materials or data. Customer will indemnify, defend and hold harmless MSP, its Affiliates and MSP’ directors, officers and employees and their respective successors and assigns from and against all Losses arising from third-party claims resulting from any inaccuracies in or incompleteness of any information or materials, including, but not limited to, the Customer Data, provided by Customer, its Affiliates or third parties to MSP under this Agreement. MSP will indemnify, defend and hold Customer, its Affiliates and Customer’s directors, officers and employees and their respective successors and assigns from and against all Losses resulting from (i) any inaccuracies in or incompleteness of any information or
materials, including, but not limited to, the Customer Data caused by the acts or omissions of MSP, or (ii) MSP’ failure to correctly perform the Services and/or accurately process Customer transactions as required by the policies and procedures set forth in the applicable Statement of Work.
9.3 Review of MSP Materials.
Customer will endeavor to promptly notify MSP in writing of all inaccuracies, insufficiencies or errors found in the MSP Materials or any other information, materials and data provided to Customer by MSP.
10. INDEMNIFICATION
10.1 Intellectual Property Indemnification.
Customer and MSP each agree to defend and hold harmless the other against any third party action to the extent that such action is based on a claim that the Customer Materials and/or the Existing Customer Solution, in the case of Customer, and the MSP Materials and/or the MSP Solution, in the case of MSP, or the Confidential Information provided by the indemnitor, or any party thereof or any other intellectual property right of a Party (i) infringes a copyright under United States law, (ii) infringes a patent granted or pending under United States law or (iii) constitutes an unlawful disclosure, use or misappropriation of another party’s trade secret. The indemnitor will bear the expense of such defense and pay any damages and reasonable attorneys’ fees that are attributable to such claim finally awarded by a court of competent jurisdiction or any costs associated with settlement of said claim.
If the Customer Materials, Existing Customer Solution, MSP Materials, MSP Solution, any Confidential Information or any other intellectual property right of a Party becomes the subject of a claim under this Section, or in the indemnitor’s opinion is likely to become the subject of such a claim, then the indemnitor may, at its option, (a) modify the Customer Materials or Existing Customer Solution (if the indemnitor is Customer) or the MSP Materials or MSP Solution (if the indemnitor is MSP) or Confidential Information or other intellectual property right of a Party to make it noninfringing or cure any claimed misuse of another’s trade secret, provided such modification does not adversely affect the functionality of the Customer Materials, Existing Customer Solution, MSP Materials, or MSP Solution, as applicable or (b) procure for the indemnitee the right to continue using the Customer Materials, Existing Customer Solution, MSP Materials, or MSP Solution, as applicable or Confidential Information or other intellectual property right of a Party pursuant to this Agreement, or (c) replace the Customer Materials, Existing Customer Solution, MSP Materials, or MSP Solution or other intellectual property right of a Party, as applicable with substantially equivalent Software that is noninfringing or that is free of claimed misuse of another’s trade secret. Any costs associated with implementing any of the above alternatives will be borne by the indemnitor.
With respect to any Software provided or developed by a Party pursuant to this Agreement, such Party will have no liability to the other Party under this Agreement (a) to the extent that any claim of infringement is based upon the use of the Software in connection or in combination with equipment, devices or Software not supplied by that Party or used in a manner for which the Software was not designed, (b) for infringements that arise solely as a result of the implementation by that Party of functionality requirements presented by the other Party where there is no noninfringing alternative to such implementation, and the other Party has been so advised by that Party prior to implementation, and (c) for maintenance, modifications, updates, enhancements and improvements to the Software made by any Party other than that Party.
10.2 Indemnification Procedures.
(a) Promptly after receipt by an indemnitee of any written claim or notice of any third party action giving rise to a claim for indemnification by the indemnitee, the indemnitee will so notify the indemnitor and will provide, as soon as reasonably possible, copies of such claim or any documents relating to the action. Failure to so notify an indemnitor will not relieve the indemnitor of its obligations under this Agreement except to the extent that such failure or delay is prejudicial to indemnitor. Within thirty (30) days following receipt of such written notice, but in any event no later than ten (10) days before the deadline for any responsive pleading, the indemnitor will notify the indemnitee in writing (a “Notice of Assumption of Defense”) if the indemnitor elects to assume control of the defense and settlement of such claim or action.
(b) If the indemnitor delivers a Notice of Assumption of Defense with respect to a claim within the required period, the indemnitor will have sole control over the defense and settlement of such claim; provided, however, that (i) the indemnitee will be entitled to participate in the defense of such claim and to employ counsel at its own expense to assist in the handling of such claim and (ii) the indemnitor will obtain the prior written approval of the indemnitee before entering into any settlement of such claim or ceasing to defend against such claim. After the indemnitor has delivered a timely Notice of Assumption of Defense relating to any claim, the indemnitor will not be liable to the indemnitee for any legal expenses incurred by such indemnitee in connection with the defense of such claim; provided, that the indemnitor will pay for separate counsel for the indemnitee to the extent that conflicts or potential conflicts of interest between the Parties so require. In addition, the indemnitor will not be required to indemnify the indemnitee for any amount paid by such indemnitee in the settlement of any claim for which the indemnitor has delivered a timely Notice of Assumption of Defense ifsuch amount was agreed to without prior written consent of the indemnitor, which will not be unreasonably withheld or delayed in the case of monetary claims. An indemnitor may withhold consent to settlement of claims of infringement affecting its proprietary rights in its sole discretion.
(c) If the indemnitor does not deliver a Notice of Assumption of Defense relating to a claim within the required notice period, the indemnitee will have the right to defend the claim in such a manner as it may deem appropriate, at the cost and expense of the indemnitor. The indemnitor will promptly reimburse the indemnitee for all such costs and expenses upon written request therefor.
11. LIMITATIONS ON LIABILITY
11.1 Limit on Types of Damages Recoverable.
(a) EXCEPT AS SET FORTH IN CLAUSE (b) BELOW AND TO THE MAXIMUM EXTENT PERMISSIBLE
BY LAW, EACH PARTY DISCLAIMS LIABILITY FOR AND IN NO EVENT WILL EITHER PARTY BE
LIABLE FOR, INDIRECT, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES, REGARDLESS OF
THE FORM OF ACTION, WHETHER IN CONTRACT, TORT OR OTHERWISE, AND EVEN IF SUCH PARTY
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
(b) The exclusion set forth in clause (a) above will not apply to Losses arising from a third-party claim otherwise
recoverable by an indemnitee pursuant to Article 10 (Indemnification), statutory penalties arising as a result of a
material breach of Section 4.5 (Privacy Laws), Article 5 (Confidentiality) and statutory penalties arising as a result of
a material breach of Section 9.2 (Accuracy of Customer Data and Processing).
11.2 Limit on Amount of Direct Damages Recoverable.
(a) MSP’ cumulative liability for any and all damages arising out of or relating to its performance of the Services performed pursuant to a Statement of Work under this Agreement will not exceed the lesser of (i) Customer’s actual proven direct damages for the event(s) giving rise to the cause(s) of action or (ii) the total Charges payable to MSP for the Services provided under the applicable Statement of Work for the six (6) calendar months immediately preceding the month in which the event giving rise to the liability occurred (or, if the event giving rise to the liability occurs during the first six (6) months after the Service Commencement Date, the total Charges payable to MSP pursuant to the applicable Statement of Work under this Agreement for such six (6) months). This limitation will not apply to losses or damages attributable to claims by an indemnitee pursuant to Article 10 (Indemnification) statutory penalties arising as a result of a material breach of Section 4.5 (Privacy Laws), Article 5 (Confidentiality), statutory penalties arising as a result of a material breach of Section 9.2 (Accuracy of Customer Data and Processing), claims relating to any amounts or credits due Customer from MSP under this Agreement as set forth in this Agreement, claims relating to MSP’ willful or intentional misconduct or gross negligence or claims submitted for coverage under MSP’ commercial general liability policies set forth in Section 7.1 as such policies are required to be maintained by MSP up to the amount of the proceeds received under such policies for the subject claim.
(b) Customer’s cumulative liability for any and all damages arising out of or related to this Agreement will not exceed an amount equal to the total Charges payable to MSP under the applicable Statement of Work for the six (6) calendar months immediately preceding the month in which the event giving rise to the liability occurred (or, if the event giving rise to the liability occurs during the first six (6) months after the Commencement Date, the total Charges payable to MSP pursuant to the applicable Statement of Work under this Agreement for such first six (6) months). This limitation will not apply to losses or damages attributable to (i) claims by an indemnitee pursuant to Article 10 (Indemnification), statutory penalties arising as a result of a material breach of Section 4.5 (Privacy Laws), Article 5 (Confidentiality), statutory penalties arising as a result of a material breach of Section 9.2 (Accuracy of Customer Data and Processing), claims relating to Customer’s willful or intentional misconduct or gross negligence, or claims relating to the failure by Customer to pay undisputed amounts under this Agreement or any Termination Fees as set forth in this Agreement.
(c) Each Party will have a duty to mitigate damages as provided by applicable law.
12. TERMINATION
12.1 Termination.
(a) Either Party will have the option, but not the obligation, to terminate an applicable Statement of Work upon (30 days if month-to-month or 60 days if year-to-year) prior written notice.
12.2 Effect of Termination.
Termination of this Agreement or any categories of Services for any reason under this Article 12 will not affect (i) any liabilities or obligations of either Party arising before such termination or out of the events causing such termination or (ii) any damages or other remedies to which a Party may be entitled under this Agreement, at law or in equity arising from any breaches of such liabilities or obligations.
13. DISPUTE RESOLUTION
13.1 General.
Any dispute or controversy between the Parties with respect to the interpretation or application of any provision of this Agreement or the performance by MSP or Customer of their respective obligations hereunder will be resolved as provided in this Article.
13.2 Informal Dispute Resolution.
The Parties may, by mutual agreement, attempt to resolve their dispute informally in the following manner:
(a) Representatives from each Party will negotiate in good faith in an effort to resolve the dispute.
(b) During the course of negotiations, all reasonable requests made by one Party to the other for non-privileged information, reasonably related to the dispute, will be honored in order that each of the Parties may be fully advised of the other’s position.
(c) The specific format for the discussions will be determined at the discretion of the Parties, but may include the preparation of agreed upon statements of fact or written statements of position.
(d) Proposals and information exchanged during the informal proceedings described in this Article between the Parties will be privileged, confidential and without prejudice to a Party’s legal position in any formal proceedings. All such proposals and information, as well as any conduct during such proceedings, will be considered settlement discussions and proposals, and will be inadmissible in any subsequent proceedings.
(e) In the event of a dispute that cannot be resolved by business negotiations set forth above, each Party hereby agrees that before initiating any litigation, the Parties shall first attempt to resolve their dispute through the means of mediation using a qualified and experienced third-party mediator in a location to be mutually determined by the Parties, or if the Parties cannot agree, then in Johnson County, Kansas. The costs of such mediation shall be equally divided between the Parties. Such mediation shall be conducted by each Party designating a duly authorized officer or other representative to represent the Party, with authority to bind the Party, and that the Parties then meet with the mediator in good faith. In the course of mediation, the Parties agree to exchange informally such information as is reasonably necessary and relevant to the issues being mediated. If such mediation is unsuccessful, then either Party shall have the right to initiate litigation in the appropriate court as provided herein. In such event, no part of the mediation, including the statements made by the Parties or the mediator shall be admissible against either party in the litigation.
In the event a Party seeks injunctive relief, specific performance or in the event of an approaching deadline prescribed by any applicable statute of limitation, then there shall be no requirement that such Party utilize the mediation process referred to herein.
13.3 Applicable Law, Waiver of Jury Trial.
All questions concerning the validity, interpretation and performance of this Agreement will be governed by and decided in accordance with the laws of the State of Kansas without giving effect to any choice-of-law provision or rule (whether of the State of Kansas or any other jurisdiction) that would cause the application of the laws of any other jurisdiction.
IN ANY ACTION BROUGHT BY EITHER PARTY AGAINST THE OTHER, EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES THE RIGHT TO REQUEST A JURY TRIAL, TO THE FULLEST EXTENT PERMITTED BY LAW, AND ANY SUCH LITIGATION SHALL BE TRIED TO THE JUDGE SITTING AS THE FINDER OF FACT AS WELL AS THE JUDGE OF THE APPLICABLE LAW.
13.4 Jurisdiction and Venue.
Any litigation initiated by either party involving this Agreement shall be pursued in the United States courts sitting in Kansas City, Kansas, which is the exclusive jurisdiction and venue of any action brought hereunder, unless the amount in controversy does not exceed the jurisdictional limit for federal court, in which case the action may be brought in the courts of the State of Kansas in Johnson County.
13.5 Charges and Costs.
In any legal action, the prevailing Party will be entitled to recover, in addition to its damages (subject to limitations stated elsewhere in this Agreement), its reasonable attorneys’ fees, expert witness fees, and other ordinary and necessary costs of litigation, as determined by the court. Such costs include, without limitation, costs of any legal proceedings brought to enforce a judgment or decree.
13.6 Equitable Remedies.
The Parties agree that in the event of any breach or threatened breach of any provision of this Agreement concerning
(i) Confidential Information, (ii) intellectual property rights or (iii) other matters for which equitable rights are expressly provided in this Agreement, money damages may be an inadequate remedy. Accordingly, either Party may seek a preliminary or permanent, mandatory or prohibitory, injunction or such other order of a court of competent jurisdiction.
14. MISCELLANEOUS
14.1 Interpretation.
(a) All Schedules are hereby incorporated in this Agreement by reference. In the event of any conflict or inconsistency between this Agreement and the Schedules, such conflict or inconsistency will be resolved by giving precedence first to this Agreement and second to the Schedules.
(b) The division of this Agreement into Articles, Sections, subsections, Attachments and Schedules, the division of Schedules or Attachments of this Agreement into Sections and subsections, and the insertion of headings in this Agreement are for convenience of reference only and will not affect its constructions or interpretation.
14.2 Binding Nature and Assignment.
This Agreement will be binding on the Parties and their respective successors and permitted assigns. Notwithstanding the above, neither Party may assign this Agreement, the Services, any rights or obligations hereunder, without the other Party’s prior written consent; provided, however, that either Party may make such an assignment, to an Affiliate or another entity or business unit of such Party or pursuant to an internal reorganization of such Party (including an Affiliate, business unit or entity that was receiving or entitled to receive the Services under this Agreement) upon written notice to the other Party, provided, however, that with respect to any assignment by MSP, any proposed assignee must be financially secure and an entity with the necessary resources to provide the Services. Any assignment in contravention of this subsection will be void. Any consent by a Party to any assignment of this Agreement will not constitute its consent to further assignments.
14.3 Further Assurances; Consents and Approvals.
Each Party will provide such further documents or instruments required by the other Party as may be reasonably necessary or desirable to give effect to this Agreement and to carry out its provisions. Whenever this Agreement requires or contemplates any action, consent or approval, such Party will act reasonably and in good faith and (unless the Agreement expressly allows exercise of a Party’s sole discretion) will not unreasonably withhold or delay such action, consent or approval.
14.4 Publicity.
MSP may not include Customer’s name on a list of MSP clients that MSP discloses to third parties without Customer’s prior written consent. In addition, unless the other Party gives prior written consent, neither Party will issue any public statement or announcement relating to this Agreement, nor display or use, in advertising or otherwise, any of the other Party’s trade names, logos, trademarks, service marks or other indicia of origin. For purposes of this Section 16.4, prior written consent must be given by an officer of the relevant Party.
14.5 Severability.
If any provision of this Agreement will be determined by any court of competent jurisdiction to be invalid or unenforceable, as to such jurisdiction, such invalidity or unenforceability will not affect the remainder of this Agreement, which will be construed as if such invalid or unenforceable provision had never been a part of this Agreement but in a manner so as to carry out as nearly as possible the Parties’ original intent.
14.6 Entire Agreement.
This Agreement, including the Schedules, constitutes the entire agreement between the Parties pertaining to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written, of the Parties pertaining to the subject matter hereof. There are no warranties, representations or other agreements between the Parties in connection with the subject matter hereof except as specifically set forth in this Agreement.
14.7 Notices.
Any notice, demand or other communication required or permitted to be given under this Agreement will be in writing and will be deemed delivered to a Party (i) when delivered by email, hand or courier, (ii) one business day after being sent by reputable overnight courier , or (iii) six (6) days after the date of mailing if mailed by United States certified mail, return receipt requested, postage prepaid, or (iv) one business day after being sent by email, in each case to the address or email of such Party set forth in the agreed upon Statement of Work NO. 1(or at such other address as the Party may from time to specify by notice delivered in the foregoing manner):
14.8 Survival.
Any provision of this Agreement which contemplates performance or observance subsequent to any termination
or expiration of this Agreement, will survive termination of this Agreement.
14.9 Independent Contractors.
MSP will perform its obligations under this Agreement as an independent contractor of Customer. Nothing herein will be deemed to constitute MSP and Customer as partners, joint venturers, or principal and agent. Neither Party has the authority to represent the other Party as to any matters, except as expressly authorized in this
Agreement.
14.10 Third Party Beneficiaries.
Nothing in this Agreement, express or implied, is intended to confer on rights, benefits, remedies, obligations or liabilities on any person (including, without limitation, any employees or Affiliates of the Parties) other than the Parties or their respective successors or permitted assigns.
14.11 Counterparts.
This Agreement may be executed in one or more counterparts, each of which will be deemed an original but all of which taken together will constitute one and the same instrument.
The Parties have executed this Agreement by the signatures of their respective authorized representatives on the date set forth in the Statement of Work NO. 1
