Exhibit 10.9
DATED
STRICTLY PRIVATE AND CONFIDENTIAL
(1) NTL GROUP LIMITED
(2) IBM UNITED KINGDOM LIMITED
FRAMEWORK AGREEMENT FOR THE
PROVISION OF IT OUTSOURCING SERVICES
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Ref: IS/RJH/HEB
CONTENTS
CLAUSES PAGES
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1. DEFINITIONS AND INTERPRETATION................................................................. 2
2. OTHER PARTIES.................................................................................. 4
3. PRINCIPAL OBLIGATIONS.......................................................................... 7
4. COMMENCEMENT, TRANSITION, JOINT VERIFICATION etc............................................... 8
5. SERVICES AND SERVICE LEVELS.................................................................... 16
6. IBM's RESPONSIBILITIES......................................................................... 19
7. PERSONNEL...................................................................................... 32
8. REVIEW MEETINGS................................................................................ 39
9. SITES AND ACCOMMODATION........................................................................ 39
10. GROUP BUYING................................................................................... 40
11. REPRESENTATIONS AND WARRANTIES................................................................. 42
12. THIRD PARTIES.................................................................................. 44
13. THE EQUIPMENT.................................................................................. 45
14. SOFTWARE, DATA AND KNOW-HOW USED IN THE SUPPLY OF SERVICES..................................... 46
15. TECHNOLOGY REFRESH AND SOFTWARE CURRENCY....................................................... 51
16. CHARGES AND PAYMENT TERMS...................................................................... 53
17. CONFIDENTIALITY................................................................................ 58
18. SECURITY, RISK MANAGEMENT, CRISIS MANAGEMENT AND DISASTER RECOVERY............................. 61
19. MANAGEMENT AND CHANGE CONTROL.................................................................. 65
20. LEGISLATIVE AND QUASI-LEGISLATIVE REQUIREMENTS................................................. 65
21. INDEMNITY...................................................................................... 69
22. ESCROW DEPOSIT................................................................................. 74
23. LIABILITY...................................................................................... 74
24. FORCE MAJEURE.................................................................................. 76
25. ALTERATIONS TO THE ntl GROUP................................................................... 78
26. TERMINATION.................................................................................... 83
27. EXIT PLAN AND OBLIGATIONS UPON THE OCCURRENCE OF A TRIGGER EVENT............................... 88
28. NO PARTNERSHIP, ETC............................................................................ 88
29. WAIVER AND VARIATION........................................................................... 88
30. ASSIGNMENT..................................................................................... 89
31. REMEDIES CUMULATIVE: ENTIRE AGREEMENT.......................................................... 90
32. NOTICES........................................................................................ 91
33. FULL NEGOTIATION............................................................................... 93
34. COUNTERPARTS................................................................................... 94
35. INVALIDITY..................................................................................... 94
36. ANNOUNCEMENTS.................................................................................. 94
37. PROBLEM ESCALATION AND RESOLUTION.............................................................. 95
38. DISPUTE RESOLUTION, LAW AND JURISDICTION ...................................................... 96
Schedules
1. Definitions
2. Scope
3. Excluded Areas
4. Third Party Contracts and Software
5. Property
6. Charges
7. Service Levels
8. Work In Progress
9. Project Management
10. Benchmarking
11. Confidentiality Undertaking
12. Termination by Constituent Service
13. Governance
14. Disaster Recovery Services
15. Insurance
16. Transition
17. Quality
18. Security
19. IT Planning
20. Operational Environment Standards
21. Service Improvement
22. Supplier Information
23. Audit
24. Health and Safety
25. Desk-top Refresh/Assets
26. Exit Plan
27. Separation Issues
28. Unresolved Matters
29 e-Library, e-Procedures and Inventory
30 ICMS
31 Network Issues
32 Change Control
33 Regulatory Requirements
34 IBM Contracts
35 Strategic Partnership
THIS AGREEMENT is made the day of 2001
BETWEEN:
(1) NTL GROUP LIMITED (registered number 2591237) whose registered office
is at ntl House, ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
("ntl"); and
(2) IBM UNITED KINGDOM LIMITED (registered number 741598) whose registered
office is at ▇▇ ▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ("IBM").
BACKGROUND:
(A) IBM has provided IT services to ntl Comms under an agreement dated 28
August 1998 as amended, including by change control notice number 7
dated 16 May 2000 (the "1998 Agreement").
(B) ntl wishes to outsource the provision of certain of its IT functions to
IBM with the aim of (i) achieving a significant reduction in unit costs
comparable with the most efficient companies in ntl's industry sector,
and (ii) receiving improvements in service levels year on year in
accordance with the terms of this Agreement.
(C) As part of this additional provision of services the parties have
agreed to terminate the 1998 Agreement and roll up all services
provided to ntl Comms under that agreement into this Agreement.
(D) This Agreement shall apply to the provision of services within the
United Kingdom and the relevant terms shall be incorporated into the
Ireland Services Agreement by reference and may operate as the basis
for the provision of the Services in any other country to be agreed by
the parties.
(E) It has been agreed as part of the additional provision of services
certain contracts are first to be made available to and then
transferred to IBM or an IBM Group Company so as more readily to enable
it to fulfil its obligations under this Agreement.
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(F) ntl is entering into this Agreement on behalf of other members of the
ntl Group who are to have the benefit of this Agreement.
(G) The Agreement is initially for a period commencing on the Commencement
Date and shall expire at the end of the Term, subject to renewal or
extension pursuant to Clause 4.6 (Termination by Time; Renegotiation)
or the continued provision of Services as provided for in Schedule 26
(Exit Plan).
IT IS NOW AGREED AS FOLLOWS:
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINED TERMS
The defined terms are set out in Schedule 1.
1.2 CONTENTS AND HEADINGS
The contents pages and headings are included for convenience only and
shall not affect the interpretation or construction of this
Agreement.
1.3 REFERENCES
In this Agreement, unless the context requires otherwise, any
reference to:
1.3.1 a party or the parties is to a party or the parties (as the case
may be) to this Agreement;
1.3.2 any reference to a Clause or a Schedule is to a clause of or a
schedule to this Agreement (as the case may be) and references
made in a Schedule to Parts or Paragraphs are to parts or
paragraphs (as the case may be) of that Schedule;
1.3.3 "this Agreement" includes the Schedules (as amended from time to
time), which form part of this Agreement for all purposes;
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1.3.4 a Schedule includes an annex, exhibit or attachment to it (as
amended from time to time), which forms part of the Schedule for
all purposes;
1.3.5 a reference to "part" of the Services or Constituent Services
includes both a category of services (as opposed to all the
Services or Constituent Services) and the provision of services
to a company, business, or business unit or part thereof (as
opposed to the ntl Group in its entirety);
1.3.6 a statute or statutory provision includes any consolidation or
re-enactment, modification or replacement of the same, any
statute or statutory provision of which it is a consolidation,
re-enactment, modification or replacement and any subordinate
legislation in force under any of the same from time to time;
1.3.7 the masculine, feminine or neuter gender respectively includes
the other genders and any reference to the singular includes the
plural (and vice versa);
1.3.8 a person includes a firm, corporation and unincorporated
associations, government, state or agency of state, any
association or partnership or joint venture (whether or not
having a separate legal personality);
1.3.9 "holding company" and "subsidiary" shall have the meaning
ascribed to them by Section 736 of the Companies ▇▇▇ ▇▇▇▇ as
amended from time to time;
1.3.10 writing shall include any modes of reproducing words in a legible
or non-transitory form. Notice in writing may not be given by
e-mail;
1.3.11 continuation of the provision of Services by ntl or a Third Party
Service Provider does not require provision to be in the same
form or manner;
1.3.12 one person indemnifying another in respect of any matter, event
or circumstance (in whatever form of words) is, save where
otherwise provided in a particular clause, to the first person
indemnifying and keeping indemnified the second against all
demands, claims, actions, proceedings, damages,
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payments, losses, costs, expenses or other liabilities from time
to time made, suffered or incurred by the second as a result of
the matter, events or circumstance;
1.3.13 all references to books, records or accounts being made available
by IBM for inspection or similar wording shall include an
obligation (where such books, records or accounts are not in the
possession, custody or power of an IBM Group Company and are
necessary to enable the audit or inspection to verify a relevant
cost or matter) to use all reasonable endeavours to procure that
they are made available. For the avoidance of doubt, except where
expressly stated to the contrary in Schedule 23 (Audit), the
phrase "books, records or accounts" or any similar words or
phrases shall not require IBM to provide access to records or
information which relate to its actual cost in delivering
services (as opposed to any costs which are on-chargeable) or to
its internal accounts or costing or charging methodologies; and
1.3.14 all references to making the Assets available to IBM include,
where applicable, any IBM Group Company.
2. OTHER PARTIES
2.1 IBM GROUP AND NTL GROUP
2.1.1 The parties to this Agreement recognise that the terms of this
Agreement may be used as the basis for services to be supplied by
certain members of the IBM Group to certain members of the ntl
Group respectively in the future, whether as independent
transactions or as transactions related to or connected with this
Agreement in some respect. If agreed by the relevant parties,
such agreements would incorporate by reference all the terms of
this Agreement save to the extent that changes are required
either by local law or so as to achieve a similar allocation of
cost and risk and to achieve the same economic effect in that
territory as exists under this Agreement in relation to the UK
under the laws of England and Wales or to reflect changes in the
services to be provided
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and the charging for the same. This provision shall not be a
commitment to enter into (or procure the entering into of) any
such further agreements or to deliver services within the scope
of this Agreement in other jurisdictions nor a commitment on the
charges for such services.
2.1.2 The provisions of this Agreement are intended to be enforceable
by any person who is, or has been, at any time a member of the
ntl Group which receives, or has received, Services under this
Agreement as third party beneficiaries on the same basis as they
are enforceable by ntl. However, this is subject to the following
provisions and procedures:
(a) the parties to this Agreement may rescind, vary,
amend or terminate this Agreement without the
consent of any member of the ntl Group,
notwithstanding that a member of the ntl Group has
relied on, or indicated assent to, any term of
this Agreement; and
(b) proceedings may only be brought by a member of the
ntl Group with the consent of ntl (which, if
given, may be conditional upon or subject to such
procedural limitations or controls as ntl may
impose in any case). IBM shall have no obligation
to check whether such consent has been obtained.
2.2 NTL LIABILITY
2.2.1 Notwithstanding any other provision of this Agreement (but
subject to any valid assignment of this Agreement in accordance
with Clause 30 (Assignment)), ntl shall remain solely liable for
all of the obligations and liabilities of ntl and members of the
ntl Group under this Agreement. IBM hereby acknowledges and
agrees that it shall not bring any action or claim relating to
this Agreement against any member of the ntl Group other than
ntl.
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2.2.2 Save as provided for in Clause 2.2.1 above, no person who is not
a party (or their permitted successor or assign) to this
Agreement shall have any right to enforce any term of this
Agreement.
2.2.3 ntl will procure that each member of the ntl Group which receives
Services under this Agreement shall fulfil or perform its
applicable obligations under this Agreement and IBM shall be
relieved of liability to the extent that it is unable to perform
its obligations as a result of such member of the ntl Group
failing to fulfil or perform such obligations.
2.2.4 Notwithstanding any other provision of this Agreement ntl agrees
that this Clause 2 shall not allow multiple recovery by different
members of the ntl Group in respect of the same loss.
2.3 INTER-RELATIONSHIP BETWEEN THIS AGREEMENT AND THE IRELAND SERVICES
AGREEMENT
2.3.1 Termination of the Ireland Services Agreement may take place in
accordance with its terms without any effect on the operation of
this Agreement in relation to the United Kingdom.
2.3.2 Save as otherwise agreed by the parties, the Ireland Services
Agreement will terminate on the same basis if this Agreement
terminates for any reason.
2.3.3 Termination in relation to the United Kingdom of any Constituent
Service Combination where the delivery of such services in the
Republic of Ireland under the Ireland Services Agreement is
dependent upon delivery in the United Kingdom of the terminated
services shall result in either (at ntl's election):
(a) termination of the equivalent services in the Republic of
Ireland under the Ireland Services Agreement on the same
basis as the termination in relation to the United Kingdom;
or
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(b) the operation of Change Control under the Ireland Services
Agreement to establish the basis on which the delivery of
such services in relation to the Republic of Ireland under
the Ireland Services Agreement may continue, provided that
where the termination in relation to the United Kingdom was
not: (i) by ntl for convenience, or (ii) by IBM under Clause
26.2, or (iii) for Force Majeure, ntl shall not be required
to bear any increased costs or charges in relation to such
continued provision of services.
2.3.4 IBM shall provide such information as ntl requires in order for
ntl to make the election pursuant to Clause 2.3.3 above.
2.3.5 Assignment of the Ireland Services Agreement may take place in
accordance with its terms without any effect on the operation of
this Agreement in relation to the United Kingdom. Notwithstanding
any other provision of this Agreement or the Ireland Services
Agreement, in the event that either this Agreement or the Ireland
Services Agreement is assigned to any party or there is a change
of control of either party such than the corresponding parties to
this Agreement and the Ireland Services Agreement are no longer
in the same Group, the provisions of Clause 2.3.2 to 2.3.4 shall
no longer apply.
2.3.6 Provisions to reflect the position set out in this Clause 2.3
shall be included within the Ireland Services Agreement.
2.3.7 For the avoidance of doubt, members of the ntl Group operating in
the Republic of Ireland are entitled to receive services
corresponding with the entire scope of this Agreement. However,
they receive some of the services under this Agreement and some
of the services under the Ireland Services Agreement. Payment
obligations in relation to such services are in each case under,
and only under, the agreement under which such services are
supplied.
3. PRINCIPAL OBLIGATIONS
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3.1 IBM shall provide the Services on a non-exclusive basis (subject to
the provisions of Schedule 6 (Charges) related to minimum baselines
on resource commitments and to the ability of ntl to terminate this
Agreement in respect of a Constituent Service Combination in
accordance with the provisions of Clause 4.6 (Termination for
Convenience)) to ntl at the Service Locations commencing on the
Services Start Date for the Term and otherwise on the terms and
conditions set out in this Agreement. For the avoidance of doubt,
nothing in this Agreement shall be deemed or construed as implying
that IBM is an exclusive supplier of hardware, software or services
to ntl and ntl shall have the right to procure any non-IBM products
and services from alternative sources and, if IBM can not supply any
IBM products within ntl's required timescales or at competitive
prices, then ntl shall have right to procure IBM products through
alternative sources.
3.2 It is the intention of the parties that the Services shall be
provided in order to fulfil the Initial Objectives and in a manner
consistent at all times with the Overall Objective.
3.3 ntl and IBM shall enter into agreements in respect of the Additional
Underlet Premises in the terms set out in Schedule 5 (Property).
3.4 ntl and IBM shall each comply with their respective obligations set
out in the Schedules to this Agreement.
3.5 The parties hereby acknowledge and agree that it is ntl's current
intention, as at the Services Start Date, to add further services to
this Agreement in accordance with the evaluation options described in
Schedule 6 (Charges).
4. COMMENCEMENT, TRANSITION, JOINT VERIFICATION AND TERMINATION FOR
CONVENIENCE
4.1 COMMENCEMENT
4.1.1 This Agreement shall commence on the Commencement Date and shall
remain in force for the Term unless or until terminated in
accordance with the terms of this Agreement.
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4.1.2 The provision of the Services shall commence on the
Services Start Date and shall continue for the Term unless
or until terminated in accordance with the terms of this
Agreement.
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4.2 TRANSITION OF SERVICES
The parties shall commence and complete the Contract Start-up Plan and
the Transition Implementation Plan in accordance with the provisions of
Schedule 16 (Transition) during the Transition Period.
4.3 IBM CONTRACTS
With regard to any IBM Contracts, the parties hereby agree that all
such contracts shall terminate on the Services Start Date. On
termination of any IBM Contract:
4.3.1 its subject matter shall form part of the Services at no extra
charge to ntl; and
4.3.2 on termination or expiry of this Agreement ntl shall obtain (at
its sole option) the benefit of either: (i) the commercial terms
of the applicable IBM Contract or (ii) these Terms and
Conditions, taking account of changes in pricing over the period
since when the IBM Contract was terminated.
4.4 JOINT VERIFICATION OF INFORMATION
4.4.1 The provisions of this Clause 4.4 apply only in relation to
services, contracts and assets which have not been the subject
matter of the 1998 Agreement.
4.4.2 IBM and ntl shall jointly complete the exercise during the Joint
Verification Period of verifying the information used in
preparing this Agreement. There shall be no additional charge to
ntl in respect of any costs or expenses incurred by IBM in
connection with this exercise.
4.4.3 Subject always to the remainder of this Clause 4.4, if at the end
of the Joint Verification Period, as a result of the Joint
Verification, discrepancies are discovered between the
information reflected in this Agreement and the actual data, this
Agreement shall be amended by agreement of the parties in writing
and there shall be an equitable adjustment to the Charges. If
either party disputes any discrepancy itself, then the parties
shall escalate the matter in
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accordance with Clause 37 (Escalation Procedure) and, in default
of agreement, the matter shall be resolved in accordance with the
dispute resolution procedure set out in Clause 38 (Dispute
Resolution). Notwithstanding the foregoing, to the extent Joint
Verification reveals any discrepancies in the information used in
preparing this Agreement the parties shall use their reasonable
endeavours to mitigate the consequences of such discrepancies on
the Charges payable by, for example, terminating any additional
third party contracts revealed by Joint Verification (to the
extent the performance of the Services will be unaffected by
their termination).
4.4.4 ntl shall have the right to require that any third party
contracts relating exclusively to the Business which are
identified in the course of Joint Verification, but which were
not transferred to IBM under the Transfer Agreement, are
transferred to IBM on the same terms and conditions as set out in
the Transfer Agreement provided that if any such transfer results
in the total annual sums payable by IBM to the opposite parties
to such contracts changing, there shall be an equitable
adjustment to the Charges in respect of the same in accordance
with Clause 4.4.3.
4.4.5 Without prejudice to the other provisions of this Clause 4.4
(Joint Verification of Information), the parties hereby agree
that the outcome of Joint Verification shall neither increase nor
decrease the aggregate Charges payable by ntl under this
Agreement and/or the Ireland Services Agreement in any one
calendar year during the Term by more than L4,000,000 either way.
4.4.6 For the avoidance of doubt, any change in the Charges arising
from Joint Verification shall be taken into account in the
calendar year in which the adjusted charge is payable or (but for
this Clause 4.4) would be payable.
4.5 INADEQUACIES IN INITIAL SCOPE
4.5.1 It is accepted by both parties that there may be some services
(the "Undocumented Services") which have not been fully or
adequately
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documented in this Agreement and the Schedules which are related
to the scope of this Agreement. If the Undocumented Services were
previously carried out by the Transferring Individuals during the
12 month period immediately preceding the Services Start Date
then such Undocumented Services are (subject to the final
paragraph of Clause 4.5.4) deemed included within the Scope and
are included within this Agreement as Services and Schedule 2
(Scope) and any other affected Schedules shall be amended
accordingly provided that such Undocumented Services are
identified by ntl within 12 months of the Services Start Date.
4.5.2 Pending resolution under Clauses 4.5.3 and 4.5.4 below, IBM shall
continue to perform the Undocumented Services, at least to the
standards which pertain at the Services Start Date if no Service
Levels are specified for that category of Undocumented Services.
4.5.3 In the event that the Joint Verification exercise referred to in
Clause 4.4 above reveals Undocumented Services not addressed
under Clause 4.5.1 which ntl wishes to continue to receive then
Schedule 2 (Scope) and any other affected Schedules shall be
amended to include such services pursuant to the Change Control
procedures.
4.5.4 If during the Joint Verification Period it is determined that:
(a) members of the team from IBM Group Companies working on the
engagement that led up to this Agreement or the 1998
Agreement were provided with information or had access to
such information as a result of time spent with ntl
Personnel related to additional services performed by the
Transferring Individuals; or
(b) ntl had advised IBM in writing that such additional services
were intended to be within Scope; and
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(c) IBM knew or ought reasonably to have known that such
additional services were required in the light of Clause
4.5.4 (a) and/or Clause 4.5.4 (b) above;
then (unless such services are expressly excluded from Scope or
included within or are services related to the Excluded Areas)
there shall be no increase in the Charges related to IBM
performing such services as part of the Scope.
4.5.5 Any dispute as to the appropriate Charges for any Services added
to Schedule 2 as a result of the Joint Verification exercise
shall be escalated by the parties as specified in Clause 37
(Problem Escalation and Resolution) of the Agreement and in
default of agreement the matter shall be resolved in accordance
with the dispute resolution procedure set out in Clause 38
(Dispute Resolution).
4.6 TERMINATION FOR CONVENIENCE
4.6.1 ntl may terminate this Agreement in whole or with respect to the
applicable Constituent Service Combinations set out in Schedule
12 (Termination by Constituent Service) upon no less than 6
months' prior notice in writing to take effect at any time
without being required to go through the process of obtaining
agreements under the Change Control procedures set out in
Schedule 32 (Change Control). Subject to all other rights of
termination contained in this Agreement, no such notice may be
given expiring before the 5th anniversary of the Services Start
Date. Termination pursuant to this Clause 4.6 shall be subject to
the applicable termination payment by ntl to IBM as specified in
Schedule 6 (Charges) of this Agreement. Any such termination
shall have the consequences set out in Clause 2.3
(Inter-relationship between National Agreements).
4.6.2 Termination pursuant to this Clause 4.6 (Termination for
Convenience) shall be subject to the applicable termination
payment by ntl to IBM as specified in
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Schedule 6 (Charges). Any such termination shall have the
consequences set out in Clause 2.3 (Inter-relationship between
National Agreements).
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4.7 TERMINATION BY TIME; RENEGOTIATION
4.7.1 This Agreement shall expire at the end of the Term subject to the
following provisions of this Clause 4.7.
4.7.2 ntl shall notify IBM whether it desires to renew this Agreement
not less than 18 months prior to the end of the Term (the "Expiry
Date"). If ntl notifies IBM that it desires to renew this
Agreement, IBM shall inform ntl in writing whether it desires to
renew this Agreement within 20 Business Days whereupon the
parties shall co-operate so that IBM shall present to ntl, not
less than 12 months prior to the Expiry Date, a proposal shall
include IBM's proposed prices, terms and conditions to govern
such renewal.
4.7.3 If IBM notified ntl that it desires to renew the Agreement
pursuant to Clause 4.7.2, but the parties are unable to agree
upon renewal prices, terms and conditions as of 6 months prior to
the Expiry Date or in accordance with paragraph 7.4 (ntl's rights
on and beyond Termination) of Schedule 26 (Exit Plan) then ntl
shall have the right upon giving to IBM at least 3 months written
notice prior to the Expiry Date to require that this Agreement be
extended for 1 year beyond the Expiry Date on the then current
terms and conditions including, but not limited to, the then
current Baselines. If (to the extent that the parties have
decided to continue negotiation) the parties are unable to reach
agreement upon renewal prices, terms and conditions during such
additional year (including, without limitation, because ntl has
entered into a similar contract with a third party or has decided
not to enter into any replacement or equivalent contract) this
Agreement shall expire at the end of that year.
4.7.4 If either party notifies the other under this Clause 4.7 that it
does not wish to renew this Agreement or the situation described
in the first sentence of Clause 4.7.3 occurs then the provisions
of this Agreement expressed to operate upon or after notice to
terminate being given shall apply.
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5. SERVICES AND SERVICE LEVELS
5.1 PROVISION OF SERVICES
IBM shall provide the Services to ntl with reasonable skill and care
and in accordance with:
5.1.1 all Applicable Legislation and so as to enable ntl to comply with
all Legislation subject to:
(a) ntl informing it of regulatory matters contained in its
operating licences or any lawful requirements or demands of
any relevant authority or regulator to which it is subject
and updating the list of regulatory matters in accordance
with Schedule 33 (Current Legislative Requirements); and
(b) the provisions of Clause 5.3 (Changes to Legislation or
Applicable Legislation).
5.1.2 Best Industry Standards as soon as reasonably practicable and in
any event within 12 months of the Services Start Date save that
all Services provided prior to the Services Start Date under the
1998 Agreement shall conform to Best Industry Standards from the
Services Start Date (other than as specifically set out in
Schedule 17 (Quality) in relation to SEI only);
5.1.3 the other terms of this Agreement; and
5.1.4 in accordance with the Service Levels set out in Schedule 7
(Service Levels).
5.2 IBM shall in providing the Services meet the Service Levels and comply
with the obligations contained in the Schedules. In default of any
specific or precise obligation in a Schedule:
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5.2.1 IBM shall deal promptly with queries or problems relating to the
use or performance of the Services and use all reasonable
endeavours to correct or procure the correction of defects in
Services promptly;
5.2.2 IBM shall identify the location of any fault on any System as
soon as reasonably practicable, and:
(a) where it appears in equipment or in software not within the
Scope then IBM shall use its reasonable endeavours to; or
(b) where it appears in equipment or in software which is within
the Scope but where IBM is not itself able to provide the
necessary services then IBM shall
liaise with the applicable equipment and software suppliers with
the object of ensuring the continuing satisfactory operation of
the System and take all appropriate actions to ensure that the
System maintains its full functionality;
5.2.3 subject to Clause 5.3 (Changes to Legislation or Applicable
Legislation), IBM shall provide or procure modifications or
enhancements to the Equipment and to the Software including but
not limited to updating data and formulae to ensure that any
changes brought about by any Legislation are incorporated into
the Software.
5.3 CHANGES TO LEGISLATION OR APPLICABLE LEGISLATION
5.3.1 The parties shall jointly consider the impact of any changes to
Legislation or Applicable Legislation (collectively referred to
hereunder as "the Legislative Changes") which do or will become
effective during the Term, and IBM shall take such steps as are
necessary to modify the Services or Software in accordance with
Schedule 32 (Change Control). The charging and other implications
shall be dealt with via Change Control save that in the event the
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Legislative Changes are applicable to providers of computer
services and information technology services as a whole, then IBM
shall bear all costs and expenses associated with implementing
consequent modifications to the Services or Software (save in the
event that ntl has served notice to terminate and appointed a
Third Party Service Provider to replace IBM and the period for
implementation of the Legislative Change extends a reasonable
period into such new contract and ntl decides that the
Legislative Change should be implemented by such Third Party
Service Provider).
5.3.2 Each party shall take all reasonable steps to minimise the
charges or costs and expenses connected with implementing any
modifications to the Services as a result of Legislative Changes
including without limitation sharing of any such costs incurred
by IBM with other customers of IBM if applicable.
5.3.3 Each party shall bear any additional costs imposed upon it as,
for example, an employer or owner or occupier of property as a
result of any Legislative Change (including changes to health,
safety and/or environmental Legislation). The provisions of this
Clause 5.3 are solely limited to changes required to the Services
or the Software.
5.4 IBM shall ensure that the Documentation in respect of the Software is
complete in all material respects and up-to-date (save, in respect of
Software used by ntl or any member of the ntl Group as at the
Services Start Date for any deficiencies in the Documentation
existing as at that date other than deficiencies arising from, or as
a result of any act or omission of IBM in relation to its obligations
under, the 1998 Agreement).
5.5 Notwithstanding any other provision of this Agreement, the Service
Levels shall be subject to review at any time by agreement between
the appropriate ntl Contract Executive and the IBM Project Executive.
18
5.6 EVALUATION OF SERVICE LEVELS
IBM shall provide all assistance that ntl may reasonably require in
accordance with this Agreement for the purposes of evaluating Service
Levels from time to time and resolving operational problems in
connection with the Services.
5.7 BENCHMARKING
The parties have agreed to conduct benchmarking in accordance with the
processes and procedures set out in Schedule 10 (Benchmarking) and with
the potential consequences stated therein.
6. IBM'S RESPONSIBILITIES
6.1 IBM shall be responsible (subject to provision in a timely manner by
ntl to IBM of the relevant information) for ensuring that whenever IBM
Personnel, its agents and sub-contractors are on the premises of any
member of the ntl Group for the performance of Services they shall
comply with all ntl's policies (including ntl's ethics policy), which
have been notified to IBM at the Services Start Date or, if notified to
IBM after the Services Start Date then within the period of time given
by ntl to its employees, the provisions of all leases and tenancy
agreements relating to such premises, security and health, safety and
environmental procedures and all other reasonable instructions and
directions of ntl (from time to time in respect of all of these). IBM
shall comply with the requirements of the Health and Safety at Work etc
▇▇▇ ▇▇▇▇ and any other relevant health, safety and environmental
regulations at its own cost in performing the Services, without
prejudice to Clause 5.1.1 (Compliance with Applicable Legislation) and
shall comply with the provisions contained in Schedule 24 (Health and
Safety).
6.2 IBM undertakes that at all times it shall own or be authorised to use
all Equipment and software necessary for the purposes of supplying the
Services, subject to the provision of any consents that it is the
responsibility of ntl to procure.
6.3 During the continuance of this Agreement IBM shall maintain insurance
cover to the levels specified in Schedule 15 (Insurance).
19
6.4 IBM shall review what provision (including by way of contract with
third parties) should be made for ntl in order to ensure continuity of
the Services with effect from the Services Start Date, as set forth in
Schedule 14 (Disaster Recovery Services) and shall put in place such
disaster contingency plans as are provided for in and in accordance
with that Schedule.
6.5 CONTRACTS ENTERED INTO BY IBM
6.5.1 For contracts (other than those contracts described in Clause
6.5.4) into which IBM enters after the Services Start Date in
connection with the Services IBM shall use reasonable endeavours
to negotiate provisions to address the right to assign or divide
such contracts without restriction or payment such that the
benefit continues to be enjoyed by:
(a) a company or business departing from ntl Group; and/or
(b) ntl or any Third Party Service Provider from time to time
appointed by it upon the termination of this Agreement in
whole or in respect of any Constituent Service.
6.5.2 ntl will provide reasonable assistance to IBM in connection with
Clause 6.5.1 above. In the event IBM is unsuccessful in
incorporating the provisions detailed in Clauses 6.5.1 (a) or
(b), ntl shall have the right to approve such contracts, such
approval not to be unreasonably withheld or delayed. IBM is
relieved of liability for failure to perform the Services or
achieve Service Levels to the extent attributable to ntl delay in
approving or refusing to approve such contracts under this Clause
6.5, provided that IBM uses reasonable endeavours to identify an
alternative supplier as soon as reasonably practicable.
20
6.5.3 ntl acknowledges that IBM's compliance with the obligations in
this Clause 6.5 may preclude IBM from obtaining the most cost
effective third party goods and services and/or may conflict
with:
(a) other obligations to provide competitive prices; and/or
(b) delivery of the Services;
in any such case, IBM shall inform ntl of this and of the
alternative bases on which the contract could be entered into.
ntl shall select one alternative and IBM shall be relieved of its
other obligation to the extent that the selection made precludes
that other obligation.
6.5.4 IBM may sub-contract any part of its obligations to perform the
Services to, or order goods or services to enable or facilitate
its supply of the Services from:
(a) any third party other than those third party companies
listed in or identified under Schedule 22 (Supplier
Information); and
(b) those third parties notified to IBM by ntl from time to time
acting reasonably on the basis of a commercial conflict of
interest with such company or its group,
provided that (i) IBM has satisfied itself that the third party
has the capability to meet the relevant obligations under this
Agreement; and (ii) if IBM intends to sub-contract any part of
the Services to any third party not then listed as a Competitive
Supplier in accordance with Schedule 22 (Supplier Information)
and IBM reasonably believes that such third party is a competitor
to ntl, then IBM shall seek ntl's approval to use of such third
party as a sub-contractor.
6.5.5 ntl agrees that in the event of further third parties being added
to those listed in Schedule 22 (Supplier Information) with whom
IBM has a pre-existing contractual relationship relating to the
provision of Services under this
21
Agreement, then, where this causes IBM any material difficulty in
providing the Services then IBM may propose a change request
under the Change Control provisions in respect of any
consequential impact on the Services, Service Levels or Charges;
ntl shall not unreasonably withhold or delay its agreement to
such change request.
6.5.6 Notwithstanding any sub-contracting IBM shall remain liable for
the performance of all Services delivered pursuant to under this
Agreement.
6.6 IBM may terminate any of the contracts assumed by it under this
Agreement or the 1998 Agreement, to the extent to which such contracts
relate to the Services, subject to such termination not having an
adverse effect on IBM's performance of its obligations under this
Agreement or ntl's rights whether during or after termination of this
Agreement.
6.7 Only any Charges expressly set forth within Schedule 6 (Charges) (in
its form from time to time, including as varied through Change Control)
as being chargeable shall be on-chargeable to ntl. Where such costs are
on-chargeable to ntl by IBM under this Agreement then IBM shall use
reasonable endeavours to secure the most competitive prices available
from third party suppliers of both goods and services (in accordance
with the provisions of Schedule 2 (Scope)) taking account of its
capabilities to bulk purchase supplies for all its customers.
Competitive prices in this context includes all forms of reduction in
or rebate of costs and, in particular, includes rebates or credits at
the end of a period based on total volume or the supply of free or
reduced charge supplies.
6.8 IBM shall explain to ntl at the earliest possible stage any significant
changes it proposes to make in the provision of the Services or in the
method or manner of provision of, or quality of, the same and shall not
make any commitment to change the same without the prior approval in
writing of ntl (such approval not to be unreasonably withheld).
22
6.9 IBM shall, in discharging the Services, use such goods, services and
materials as are of appropriate quality in order to fulfil its
obligations.
6.10 If IBM writes or procures the writing of software (whether bespoke
Applications Software, including modifications to existing software, or
bespoke Systems Software) for ntl or for use in the provision of the
Services it shall do so in accordance with the appropriate provisions
of Schedule 9 (Project Management).
6.11 Subject to the other provisions of this Clause 6.11 and to ntl
informing IBM of such contracts in a timely manner, IBM undertakes to
comply with all levels of performance required in order for ntl and/or
any member of the ntl Group to comply with any and all contracts to
supply services under any contract entered into by ntl or any member of
the ntl Group has with any third party. IBM further undertakes in
respect of such levels of performance to ensure that nothing they do or
fail to do may give rise to a breach of any obligation under those
contracts or might constitute a defence or a counterclaim to be raised
against ntl. Where ntl does not meet the contractual standard at the
Services Start Date, IBM shall maintain the standards currently
achieved by ntl and shall use reasonable endeavours to meet the
contractual standard within a reasonable period. Where this obligation
results in a higher standard than would otherwise be required of IBM
under any other provision of this Agreement then Change Control shall
be operated in the event of any material alteration being required to
the Services as a result of such obligations (whether contained in
contracts existing at the Services Start Date or entered into
subsequently). For the avoidance of doubt, there shall be no increase
in Charges in respect of any contract existing at the Services Start
Date where ntl was in compliance with such obligations at such date.
6.12 IBM shall comply with such ntl Group policies relevant to the Services
(which have been notified to IBM at the Services Start Date or, if
notified to IBM after the Services Start Date then as soon as
reasonably practicable after such notification) as may exist from time
to time or be required of its suppliers by the ntl Group or which are
required of ntl by a third party (and consequently requiring consequent
compliance by its suppliers). Where this obligation results in a higher
standard than would otherwise be required of IBM then Change Control
shall be operated in the event of any material
23
alteration being required to the Services as a result of such standards
(whether contained in policies existing at the Services Start Date or
created or varied subsequently). For the avoidance of doubt, there
shall be no increase in Charges in respect of any policy existing at
the Services Start Date where ntl was in compliance with such standards
at such date.
6.13 IBM shall at all times during the continuance of the Agreement remain
committed to use quality management methods to provide quality
services.
6.14 EURO COMPLIANCE
6.14.1 Prior to introducing any new Systems and Software as part of the
Services, IBM shall test existing Systems and Software which will
interface with any new Systems and Software against their euro
compliance specifications to ensure that all such existing
Systems and Software which are Euro Compliant as at the Services
Start Date are not caused to cease being Euro Compliant as a
result of such introduction. Except to the extent that such
existing Systems or Software are shown not to be Euro Compliant
by such testing by IBM and IBM notifies ntl of that fact, IBM
shall ensure that all such existing Systems and Software which
have been tested by IBM and which are Euro Compliant remain Euro
Compliant.
6.14.2 If such existing Systems or Software tested pursuant to Clause
6.14.1 are notified by IBM to ntl to be not Euro Compliant, IBM
shall with such notification provide details of non-compliancy
and the impact of the introduction of new Systems and Software
with such non-compliant existing Systems or Software. ntl shall
advise IBM whether it wishes IBM to undertake the work necessary
to make such existing Systems or Software Euro Compliant (in
accordance with Change Control). If ntl advise IBM that it does
not wish any work to be done to achieve compliance IBM shall not
be responsible to the extent such new Systems or Software cease
to be Euro Compliant or for interoperability of such new Systems
and Software with such
24
non-compliant Systems and Software provided that IBM have advised
ntl of such impact.
6.14.3 Subject to any detailed specification agreed between the parties,
IBM shall ensure that all new Systems and Software which process
monetary data or use any currency formatting (including currency
symbols) developed and supplied by IBM or any IBM Group company
as part of the Services are Euro Compliant and remain Euro
Complaint.
6.14.4 Subject to any detailed specification agreed between the parties,
IBM shall use its reasonable endeavours to ensure that all new
third party Systems and Software which process monetary data or
use any currency formatting (including currency symbols) and
supplied as part of the Services are Euro Compliant and remain
Euro Complaint and, in any event, IBM shall use no less efforts
than it would, if it were procuring for itself, to obtain a
warranty for the benefit of ntl from the supplier in accordance
with the position on Euro Compliance provided for under this
Agreement. In the event the supplier does not provide such a
warranty or one which is reasonably comparable, IBM having used
all reasonable endeavours to persuade such supplier to do so, IBM
will notify ntl prior to any proposed acquisition of such Systems
or Software and provide reasonable assistance to ntl in reaching
a solution satisfactory to ntl. ntl shall respond to such
notification as soon as reasonably practicable. ntl shall have
the right to require IBM to source an alternative supplier of
such new Systems or Software who is prepared to provide ntl with
appropriate warranty protection (to the extent a suitable
alternative exists) provided that ntl agrees to pay any
additional costs incurred by IBM relating to acquiring such new
Systems or Software from an alternative supplier.
6.14.5 Unless agreed as part of a Project listed under Schedule 8 (Work
in Progress), IBM shall not be obliged to make any System or
Software existing as at the Services Start Date Euro Compliant
save on terms agreed pursuant to Schedule 32 (Change Control).
25
6.14.6 For the avoidance of doubt, IBM is not responsible under this
Clause 6.14 for, and IBM does not make any representations
regarding, the Euro Compliance of:
(a) any System or Software existing as at the Services Start
Date which has not been tested by IBM in accordance with
this Agreement provided that IBM has complied with its
obligations under Clause 6.14.1;
(b) any System or Software existing as at the Services Start
Date that IBM has found to be not Euro Compliant following
testing in accordance with Clause 6.14.1 unless IBM has
agreed to make such System or Software Euro Compliant; or
(c) third party's products or services provided that IBM has
complied with its obligations under Clause 6.14.4.
6.15 DATE COMPLIANCE
6.15.1 Prior to introducing any new Systems and Software as part of the
Services, IBM shall test existing Systems and Software which will
interface with any new Systems and Software against their date
compliance specifications to ensure that all such existing
Systems and Software which are Date Compliant as at the Services
Start Date are not caused to cease being Date Compliant as a
result of such introduction. Except to the extent that such
existing Systems or Software are shown not to be Date Compliant
by such testing by IBM and IBM notifies ntl of that fact, IBM
shall ensure that all such existing Systems and Software which
have been tested by IBM and which are Date Compliant remain Date
Compliant.
6.15.2 If such existing Systems or Software tested pursuant to Clause
6.15.1 are notified by IBM to ntl to be not Date Compliant, IBM
shall with such notification provide details of non-compliancy
and the impact of the introduction of new Systems and Software
with such non-compliant existing
26
Systems or Software. ntl shall advise IBM whether it wishes IBM
to undertake the work necessary to make such existing Systems or
Software Date Compliant (in accordance with Change Control). If
ntl advise IBM that it does not wish any work to be done to
achieve compliance IBM shall not be responsible to the extent
such new Systems or Software cease to be Date Compliant or for
interoperability of such new Systems and Software with such
non-compliant Systems and Software provided that IBM have advised
ntl of such impact.
6.15.3 Subject to any detailed specification agreed between the parties,
IBM shall ensure that all new Systems and Software which process
date data developed and supplied by IBM or any IBM Group company
as part of the Services are Date Compliant and remain Date
Complaint.
6.15.4 Subject to any detailed specification agreed between the parties,
IBM shall use its reasonable endeavours to ensure that all new
third party Systems and Software which process date data and
supplied as part of the Services are Date Compliant and remain
Date Complaint and, in any event, IBM shall use no less efforts
than it would, if it were procuring for itself, to obtain a
warranty for the benefit of ntl from the supplier in accordance
with the position on Date Compliance provided for under this
Agreement. In the event the supplier does not provide such a
warranty or one which is reasonably comparable, IBM having used
all reasonable endeavours to persuade such supplier to do so, IBM
will notify ntl prior to any proposed acquisition of such Systems
or Software and provide reasonable assistance to ntl in reaching
a solution satisfactory to ntl. ntl shall respond to such
notification as soon as reasonably practicable. ntl shall have
the right to require IBM to source an alternative supplier of
such new Systems or Software who is prepared to provide ntl with
appropriate warranty protection (to the extent a suitable
alternative exists) provided that ntl agrees to pay any
additional costs incurred by IBM relating to acquiring such new
Systems or Software from an alternative supplier.
27
6.15.5 For the avoidance of doubt, IBM is not responsible under this
Clause 6.15 for, and IBM does not make any representations
regarding, any of the following being Date Compliant:
(a) any System or Software existing as at the Services Start
Date which has not been tested by IBM in accordance with
this Agreement provided that IBM has complied with its
obligations under Clause 6.15.1;
(b) any System or Software existing as at the Services Start
Date that IBM has found to be not Date Compliant following
testing in accordance with Clause 6.15.1 unless IBM has
agreed to make such System or Software Date Compliant; or
(c) third party's products or services provided that IBM has
complied with its obligations under Clause 6.15.4.
6.16 IBM undertakes at all times during the continuance of this Agreement:
6.16.1 actively to monitor the nature and categories of (and the manner
and method of delivery of) services provided by the IT and
computer services industry in general and the IT outsourcing
industry in particular and to keep ntl informed of all relevant
developments;
6.16.2 to be innovative in seeking to improve the quality, productivity
and performance of the Services in accordance with the provisions
of Schedule 21 (Service Improvement);
6.16.3 to provide charges to the ntl Group for the Services consistent
with any improvement in quality implemented by IBM including
applying any year on year reductions in the Charges detailed in
Schedule 6 (Charges) and more generally provide New Services and
related charges in such a manner as to take into consideration
improved technology processes and procedures all according to
Best Industry Standards;
28
6.16.4 actively to seek to apply the knowledge gathered as a result of
Clause 6.16.1 in the delivery to ntl of the Services, consistent
with maintenance or increase in quality or reduction or
maintenance of cost. This applies also to mechanisms or
procedures used within IBM in delivering the Services to ntl;
6.16.5 to maintain its investment in technology, equipment and
associated skills so as to ensure it remains a supplier of high
quality services and retains the knowledge base to fulfil its
obligations under this Agreement;
6.16.6 to seek to identify opportunities for further automation of ntl
Group's business and further amalgamation of its Systems;
6.16.7 to demonstrate objectivity and professionalism in determining
whether to provide any part of the Services themselves or to
secure them from third parties;
6.16.8 to strive for the best solution for the ntl Group; and
6.16.9 to operate in a timely, open and honest manner with regard to the
aspirations, needs, commitments or difficulties of the business
of the ntl Group.
6.17 IBM shall neither do nor omit to do any act or thing nor permit a
situation to arise, whereby IBM knowingly or negligently permits a
conflict with relation to the Services to be created between the
interest of ntl or any member of the ntl Group on the one part and IBM
or an IBM Group Company from time to time or any of its or their
subcontractors on the other part.
6.18 IBM shall not offer or give or agree to give any person employed by or
connected with ntl Group or who otherwise provides services to the IBM
Group or ntl Group in connection with this Agreement any gift or
consideration of any kind as an inducement or reward for doing or
forbearing to do or for having done or forborne to
29
do any act in relation to this Agreement, or for showing or forbearing
to show favour or disfavour to any person in relation to this
Agreement.
6.19 IBM shall procure that all contractors used by IBM in the provision of
the Services from time to time other than those who are Transferring
Individuals unless and until their contracts are renewed execute a
Confidentiality Undertaking in the form substantially similar to that
attached as Schedule 11 (Confidentiality Undertaking) in ntl's favour.
IBM shall immediately notify ntl of any notification it receives from a
party to such an undertaking that it believes there to have been a
disclosure of such information or of any reasonable suspicion it has
that there has been breach of such an undertaking.
6.20 IBM shall:
6.20.1 in conjunction with ntl, undertake the respective obligations set
out under and in accordance with Schedule 19 (IT Planning); and
6.20.2 ensure that the necessary resources are committed to meet the
Baseline and Baseline Bands as agreed from time to time in
accordance with the provisions of Schedule 6 (Charges) so as to
achieve the implementation of the ITOP set out in Schedule 19 (IT
Planning) following any amendments as agreed between the parties
in accordance with this Agreement.
6.21 IBM shall at all times after the time period stated in Schedule 29
(e-Library, e-Procedures and Inventory) create and maintain the
Inventory within the e-Library in accordance with Schedule 29
(e-Library, e-Procedures and Inventory).
6.22 Without prejudice to Clauses 5.1 (Provision of Services) and 6.17
(avoidance of conflict) and except in the cases of use of IBM network
facilities, pre-existing contractual arrangements, technical
unfeasibility or material increased cost to ntl, IBM shall not use the
telecommunications networks of any person other than ntl in connection
with the Services. In addition, where ntl provides suitable services
and/or products, IBM shall select and utilise such ntl services and
products when
30
delivering or developing the Services irrespective of the availability
or suitability of IBM's usual or preferred supplier of equivalent
services and/or products. For the avoidance of doubt, where an ntl
telecommunications network connects with other networks this shall not
breach of this Clause 6.22. This Clause 6.22 shall not preclude IBM
Personnel from utilising the mobile phone carrier or (other than at ntl
locations) a fixed line network as designated by their local purchasing
policy. IBM agrees that if it uses any bandwidth pursuant to this
Clause 6.22 not provided by ntl in accordance with Schedule 31 (Network
Issues), this will be at no additional charge to ntl. IBM also agrees
that it may not use ntl's internal telecommunications network or
bandwidth other than for the purpose of providing the Services to ntl
save as provided for in Schedule 5 (Property).
6.23 IBM shall perform the Services in a manner intended to cause no harm to
the reputation of ntl or any member of the ntl Group.
6.24 IBM shall not without first informing ntl and obtaining its written
approval enter into a contract in relation to any Equipment or
Software, which:
6.24.1 by its nature (including its duration or the basis of charging);
or
6.24.2 contains any provision which,
would or is likely to cause any material difficulty or inconvenience
for ntl in the continuation of the Services whether by it or by a Third
Party Service Provider appointed by it upon the termination of this
Agreement in whole or in respect of the applicable Constituent Service
Combinations set out in Schedule 12 (Termination by Constituent
Service) or which would or is likely to cause any material difficulty
or inconvenience in the operation of or the performance of IBM's
obligations under Clauses 26 (Termination) or 27 (Exit Plan). After
notice of termination has been given by either party, IBM shall not
enter into any contracts in relation to any Equipment or Software
without first informing ntl and obtaining its written approval. This
restriction shall not apply to any contract of employment or for the
provision of personal services.
31
6.25 IBM shall comply at all times with all and any instructions of ntl
which are made at any time to ensure compliance with any existing or
future obligation of any member of the ntl Group to any department,
agency or body of Her Majesty's Government provided that the
implications of such instructions are managed in accordance with Clause
5.3 (Changes to Legislation or Applicable Legislation).
7. PERSONNEL
7.1 THE IBM PROJECT EXECUTIVE
The IBM Project Executive shall act as the representative of IBM under
and pursuant to this Agreement. The IBM Project Executive may by notice
to ntl appoint a temporary alternate in the event of his absence from
the office for any reason (such temporary appointment not to exceed 4
weeks). The IBM Project Executive shall devote his full time and effort
to the provision of the Services.
7.2 THE IBM CORE TEAM
The IBM Core Team shall devote their full time and effort to the
provision of the Services.
7.3 REPLACEMENT OF THE IBM PROJECT EXECUTIVE AND IBM CORE TEAM
IBM shall give ntl at least 90 days notice prior to replacing the IBM
Project Executive or any member of the IBM Core Team, unless such
individual:
7.3.1 Resigns or retires from IBM;
7.3.2 is dismissed by IBM for misconduct (e.g., fraud, drug abuse,
theft);
7.3.3 fails to perform his or her duties and responsibilities pursuant
to this Agreement; or
32
7.3.4 dies or is unable to work due to his or her disability.
IBM shall discuss with ntl any reasonable and lawful objections ntl may
have to such replacement and shall provide ntl with all reasonable
information to allow it to consider whether to approve the proposed
replacement. The identity of the replacement ultimately remains subject
to ntl's written approval. IBM shall notify ntl promptly of the
resignation of the IBM Project Executive or any member of the IBM Core
Team and, at ntl's request, shall use reasonable endeavours to ensure
such employee works his full period of contractual notice.
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7.4 THE NTL CONTRACT EXECUTIVE
The ntl Contract Executive, notified to IBM in writing from time to
time, shall act as the representative of ntl under and pursuant to
this Agreement. ntl may from time to time replace the ntl Contract
Executive and shall forthwith notify IBM of the identity of any such
replacement.
7.5 THE ntl CORE TEAM
The ntl Core Team, notified to IBM in writing from time to time,
shall be allocated by ntl to manage this Agreement and act as points
of contact for IBM. ntl may from time to time replace any one or more
of the ntl Core Team and shall forthwith notify IBM of the identity
of any such replacement(s).
7.6 AUTHORITY
The IBM Project Executive and ntl Contract Executive shall each have
full authority (subject in the case of the ntl Contract Executive to
all matters contained in the Governance Schedule) to act on behalf of
his principal for the purpose of fulfilling such party's obligations
under this Agreement and (unless otherwise agreed or set out in the
Governance Schedule) may represent the principal (accompanied by such
other personnel as may be necessary) at any meeting in relation to
the Services.
7.7 UNSUITABLE PERSONS
If in the reasonable opinion of ntl any IBM Personnel:
7.7.1 fail to meet the required standards of performance; or
7.7.2 engage in conduct which is unacceptable to ntl
then IBM shall, at ntl's request, make all reasonable efforts to
address the concerns of ntl in a manner reasonably acceptable to ntl.
If IBM fails to address those concerns in
34
a manner reasonably acceptable to ntl within 5 Business Days (or such
other period as the parties may agree in writing) of ntl's request, IBM
shall procure the removal of that member of IBM Personnel from any
involvement with the performance of IBM's obligations under this
Agreement as soon as reasonably practical and in any event within 3
Business Days after the end of that 5th Business Day (or other) period.
If ntl asserts in its reasonable judgment that such individual presents
a threat to the security, health, safety or well-being of ntl
employees, contractors or property or has materially breached any ntl
Group policy and/or procedure (such policy and/or procedure having been
previously notified to IBM) that has been previously notified to IBM
then IBM shall procure their removal forthwith. Any individual who has
previously been dismissed by ntl for misconduct shall fall into this
category automatically. IBM shall use reasonable efforts to avoid
employing any such individual in the provision of the Services.
7.8 IBM PERSONNEL - HEALTH AND SAFETY; COMPETENCE AND CAPABILITY
IBM shall only use individuals in the provision of Services if they are
suitable, competent and capable (within the meaning of Legislation
relating to health and safety matters from time to time) for the tasks
which they are to undertake.
7.9 TERMINATION BENEFITS
IBM shall not (and shall use its reasonable endeavours to procure that
any relevant agent or contractor shall not), without the prior consent
of ntl, vary or purport or promise to vary the terms or conditions (as
amended from time to time) of employment or engagement or service of
any IBM Personnel involved to any significant extent in the provision
of Services to ntl (including promises to make any additional payment
or provide any additional benefit other than in respect of salary
increases or benefit awards or promotions customarily awarded or made
in the ordinary course of business) where:
7.9.1 such variation or addition takes effect or is to take effect
during the 12 months prior to expiry of the Agreement; or
35
7.9.2 all or part of such variation or addition first takes effect
after the expiry of the Agreement; or
7.9.3 such variation or addition results in any such services not being
terminable by the employer or recipient of services (as the case
may be) within six months of the expiry of the Agreement; or
7.9.4 such variation or addition relates to a provision of a benefit
triggered by termination of employment or the provision of
services; or
7.9.5 such variation or addition relates to the provision of a benefit
other than salary which such individual will or may have a
contractual right to receive after the expiry of the Agreement
other than benefits attaching automatically to a promotion
awarded in the ordinary course of business; or
7.9.6 such variation or addition prevents restricts or hinders any such
individual from working for ntl or a Third Party Service Provider
nominated by ntl; or
7.9.7 such variation or addition creates or grants or promises to
create or grant terms or conditions of employment or service for
an individual to commence on or after the start of this Agreement
if and to the extent that such terms and conditions are
materially different to the terms and conditions of the nearest
equivalent IBM Personnel prior to the date of offer and where, if
such terms and conditions had been granted to such equivalent IBM
Personnel, it would have been a breach of this Clause 7.9.
This Clause 7.9 is qualified so that it only applies where such
variation would or is likely to materially adversely affect ntl's
ability to terminate this Agreement in whole or in respect of the
applicable Constituent Service Combinations set out in Schedule 12
(Termination by Constituent Service) or its position if it were to do
so, or where such variation would or is likely to cause any material
difficulty or inconvenience for
36
ntl in the continuation of the Services whether by it or by a Third
Party Service Provider appointed by it upon such termination.
7.10 IBM shall provide all personnel necessary to ensure that the Services
are performed in accordance with the terms of this Agreement. IBM shall
be solely responsible for the supervision, daily direction and control
of IBM Personnel. In addition IBM shall be responsible for payment of
all compensation, benefits and employer taxes relating to such persons
arising as a result of or in connection with the period for which they
were employed by IBM and/or the cessation of such employment
(including, without limitation, workers' compensation and disability)
and shall indemnify ntl in respect thereof. The parties agree that
nothing in this Clause 7.10 shall make any IBM Personnel an employee of
or directly engaged by ntl or any member of the ntl Group and IBM shall
indemnify ntl against any claim by any member of IBM Personnel that
such a direct relationship exists with any member of the ntl Group.
7.11 Without prejudice to Clause 7.8 (IBM Personnel - health and safety;
competence and capability), before allowing any of their staff (other
than any of the Transferring Individuals) on to any Service Location or
Shared Premises IBM shall take up and verify appropriate references in
accordance with IBM's usual policy. These should be made available to
ntl on request. IBM shall use reasonable endeavours to procure that all
its sub-contractors shall do likewise.
7.12 At each Review Meeting IBM shall report on all planned and completed
personnel movements materially affecting the Services.
7.13 Neither party during the Term of this Agreement shall solicit the other
party's staff who have been employed or engaged in or in relation to
the provision or utilisation of the Services or the performance of this
Agreement at any stage within the previous 12 months in respect of
employees and 6 months in respect of contractors. The obligations of a
party under this Clause 7.13 shall be without prejudice to the
provisions of Schedule 26 (Exit Plan) which allow transfer or movement
of IBM Personnel to ntl or any Third Party Service Provider on
termination of the Agreement in whole or in respect of a Constituent
Service. For the purposes of this Clause 7.13
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"solicit" means the soliciting of such person with a view to engaging
such person as an employee, director, subcontractor or independent
contractor (including through the medium of a company which contracts
to provide their services). For the avoidance of doubt, however,
"solicit" does not include employing an individual in response to their
reply to a bona fide advert made generally to the public.
7.14 CHANGES TO TRANSFERRING INDIVIDUALS
7.14.1 Notwithstanding the foregoing provisions of this Clause 7
(Personnel) and unless agreed otherwise by the parties through
the governance procedure set out in Schedule 13 (Governance), IBM
undertakes that, during the 90 day period immediately following
the Services Start Date, 90% of the total number of Relevant
Transferring Individuals shall continue to provide the Services
and IBM shall actively seek to ensure there is no change in such
personnel below this percentage level. In the event of any
unavoidable changes to the Relevant Transferring Individuals, IBM
having used all reasonable endeavours to avoid any changes, if
the total percentage of remaining Relevant Transferring
Individuals falls below 90% of the original number of Relevant
Transferring Individuals, IBM will supply suitable comparably
experienced and capable replacements should these personnel still
be required to provide the Services.
7.14.2 IBM further undertakes that unless agreed otherwise by the
parties through the governance procedure set out in Schedule 13
(Governance), during the second 90 day period immediately
following the Services Start Date, 80% of the original total
number of Relevant Transferring Individuals shall continue to
provide the Services and IBM shall actively seek to ensure there
is no change to such personnel below this percentage level. In
the event of any unavoidable changes to the remaining Relevant
Transferring Individuals, IBM having used all reasonable
endeavours to avoid any changes, if the total percentage of
remaining Relevant Transferring Individuals falls below 80% of
the original number of Relevant Transferring Individuals, IBM
will supply suitable comparably experienced and capable
replacements should these personnel still be required to provide
the Services.
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8. REVIEW MEETINGS
Review meetings and governance meetings shall take place in accordance
with the provisions of Schedule 13 (Governance) (as amended from time
to time).
9. SITES AND ACCOMMODATION
9.1 IBM agrees to provide the Services to the Service Locations, in
relation to which the following provisions shall apply:
9.1.1 ntl shall permit IBM to occupy the Operational Properties under
the terms set out in Schedule 5 (Property);
9.1.2 any damage to a Service Location or Operational Property, or
office furniture or computer equipment at such a Service Location
or Operational Property caused by negligence or wilful misconduct
of IBM Personnel or its (as opposed to ntl's) visitors shall be
the responsibility of IBM;
9.1.3 to the extent that these are not transferred under the Transfer
Agreement nor under the 1998 Agreement to IBM, ntl shall permit
IBM to use the fixtures, fittings and furnishings at the Underlet
Premises at no charge; and
9.1.4 ntl shall use its reasonable endeavours to procure the continued
availability to the Employees of the ntl employee facilities more
particularly defined in Schedule 5 (Property) for so long as such
facilities continue to be available to all ntl employees.
9.2 CHANGE TO LOCATIONS FROM WHICH SERVICES ARE SUPPLIED
9.2.1 IBM may change or add to the locations from which IBM provides
services without the prior written consent of ntl provided that
such relocation shall not in any way impair IBM's ability to
perform the Services in accordance with the terms of this
Agreement and shall not be intended to frustrate or impair
39
performance of the Exit Plan or would impair ntl's or any Third
Party Service Provider's ability to perform the Services after
termination of this Agreement. IBM shall provide ntl with written
information and a plan setting out the implications for the
provision of the Services prior to any such relocation -
including, in particular, response times, security of Data and
Know-How, continuity of service provision and dependency on
telecommunications networks. If there will be such an impairment
then IBM shall obtain ntl's consent before implementing such
plan. Subject to the provisions of Schedule 5 (Property), the
costs and savings of any permitted move shall, in both cases, be
IBM's. The provisions of this Clause 9.2.1 shall not affect the
obligations in respect of the Operational Properties set out in
Schedule 5 (Property).
9.2.2 If ntl wishes to change any of the properties comprised within
the Shared Premises or the Underlet Premises or if any of those
properties can no longer be used by IBM as a result of action
taken or threatened by the relevant landlord including without
limitation the exercise of any breaks or right to determine or
wishes to add further premises to the Operational Properties (for
example, as a result of a transaction described in Clause 25
(Alterations to the ntl Group)) then:
(a) those new premises shall be used by IBM under the terms
relevant either to Underlet Premises or Shared Premises as
agreed to by the parties and the relevant provisions of
Schedule 5 (Property) shall apply accordingly; and
(b) the technical and charging implications of this shall be
addressed via Change Control;
subject at all times to the provisions of Schedule 5 (Property).
10. GROUP BUYING
In accordance with the order management procedure in Schedule 2
(Scope):
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10.1 in the event that, in the course of providing the Services under this
Agreement, IBM needs to place orders for any hardware or software and
ntl has a requirement for the same or similar hardware and/or software,
then if such requirement is related to this Agreement or otherwise, IBM
shall upon reasonable notice and request of ntl (subject to any terms
and conditions in the contract with the third party supplier which may
prohibit this) add such ntl requirements to IBM's order with
instructions to the relevant supplier to separately sell and deliver
the relevant hardware and software directly to ntl and invoice ntl
directly. In the event that the supplier is unwilling to agree to this,
then IBM shall relieved of its responsibilities under this Clause 10.1.
10.2 Where IBM is procuring software licences from any third party pursuant
to this Agreement, it shall, at the request of ntl, use its reasonable
endeavours to procure for ntl and/or the ntl Group a right to use the
applicable software under the terms of such licences to the extent such
terms are acceptable to ntl and provided that IBM do not incur any
additional liability as a result of procuring such right to use for ntl
and/or the ntl Group.
10.3 ntl's rights under this Clause 10 extend to ordering hardware or
software on behalf of other members of the ntl Group. For the avoidance
of doubt IBM shall only respond to requests made by ntl and the
obligation to pay for such hardware or software shall be that of ntl.
10.4 IBM shall not be required to take or transfer title to any software or
hardware and IBM shall not give any warranty of any kind whatsoever
(whether express or implied, by statute, in law or equity or otherwise
arising) in relation to any hardware or software so supplied but shall
use reasonable efforts to procure that the supplier enters into a
warranty with ntl or the relevant ntl Group company.
10.5 Nothing in this Clause 10 (Group Buying) shall restrict IBM from
purchasing hardware or software from a supplier which refuses to sell
the same on the same terms to ntl (or any ntl Group Company). Subject
to IBM complying with its obligations under this Clause 10 (Group
Buying), IBM shall have no liability whatsoever: (i) if a
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supplier refuses to sell hardware or software to ntl (or any ntl Group
Company); or (ii) in respect of any such sale from a supplier to ntl
(or any ntl Group Company).
11. REPRESENTATIONS AND WARRANTIES
11.1 IBM represents, warrants and undertakes to ntl that:
11.1.1 it has the necessary skill and experience to perform the Services
at the specified Service Levels in accordance with Schedule 7
(Service Levels);
11.1.2 (subject to Clauses 14.1 and 14.2 (Consents and licences for
Software Contracts)) it has, or shall obtain, all rights, titles,
licences, permissions and approvals necessary to perform its
obligations under this Agreement and shall renew the same as
necessary during the Term;
11.1.3 it has the right to grant ntl and all members of the ntl Group
any rights granted under this Agreement (both for those companies
and/or for any Third Party Service Providers during the Term);
and
11.1.4 it shall provide ntl with written notice of any change of control
of IBM in accordance with Clause 26.1.3 (Change of control of
IBM) within 10 Business Days of the same.
11.2 IBM does not warrant the accuracy of any advice, report, data or other
product delivered to ntl to the extent it is produced with or from data
provided by ntl if and to the extent that any error is due to
inaccuracy in such data.
11.3 ntl represents, warrants and undertakes to IBM that:
11.3.1 subject to any necessary landlord's consent in respect of the
Underlet Premises (for so long as they are Underlet Premises) ntl
is authorised to permit IBM access to and use of the Service
Locations and Operational Properties used in
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connection with performing the Services subject to compliance by
IBM with the terms of Schedule 5 (Property) and its other
obligations under this Agreement;
11.3.2 the Service Locations and Shared Premises comply with the
requirements of the Health and Safety at Work etc. ▇▇▇ ▇▇▇▇ and
any other relevant health and safety regulations. For the
avoidance of doubt, this does not extend to the Underlet
Premises;
11.3.3 (subject to Clauses 14.1 and 14.2 (Consents and licences for
Software Contracts)) it has, or shall obtain, all rights, titles,
licenses, permissions and approvals necessary to perform its
obligations under this Agreement; and
11.3.4 it shall provide IBM with written notice of any change of control
of ntl in accordance with Clause 26.2 (IBM's right of
termination) within 10 Business Days of the same.
11.4 With respect to any work undertaken by or on behalf of IBM with respect
to Projects, IBM represents and warrants to ntl that:
11.4.1 any Deliverables will be of satisfactory quality and shall be in
accordance with any Specification or Statement of Work agreed
between the parties;
11.4.2 the Deliverables will be free from defects in design, material,
workmanship and performance and will conform to their agreed
Specification or Statement of Work;
11.4.3 the Deliverables will not contain any computer viruses, trojan
horses or similar destructive, disruptive or nuisance programs
which should have been identified by IBM using current accepted
industry practice;
11.4.4 the Deliverables will comply with all applicable laws;
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11.4.5 the Deliverables will comply with all specific regulations and/or
standards which relate to the Deliverables and which have been
previously advised to IBM (whether specifically or as being
applicable to all Deliverables);
11.4.6 without prejudice to the generality of Clause 11.4.1 (Warranty
regarding Deliverables), any and all Projects will be performed
by appropriately qualified and experienced personnel, with due
care and skill as it is reasonable for ntl to expect; and
11.4.7 there will be no mortgages, charges, liens, security interests or
other encumbrances and/or obligations over or affecting the
Deliverables except as otherwise agreed between the parties.
12. THIRD PARTIES
12.1 Without prejudice to ntl's rights to terminate under Clause 4.6
(Termination for Convenience) (or to act as it wishes outside of the
Scope ntl reserves the right to provide for itself or alternatively to
seek tenders from third parties (which may or may not include IBM) in
respect of software development services other than in respect of those
projects listed in Schedule 8 (Development Projects) provided that
nothing in this Clause 12.1 shall relieve ntl of any obligations
identified within Schedules 6 (Charges).
12.2 If IBM is included in any list of tenderers ntl reserves the right to
appoint a tenderer other than IBM if it considers it to be more
suitable for its purposes. If any Third Party Service Provider is
appointed to provide services (the "Third Party Services") then, to the
extent this is in addition to the provision of services by IBM, IBM
shall provide such Documentation and assistance as is reasonably
necessary for the integrating of such Third Party Services into or with
the Services. IBM shall use reasonable endeavours to ensure that such
assistance is provided by the IBM Personnel, but to the extent that
such resource is unavailable (because of IBM's other obligations under
this Agreement) or insufficient, then IBM shall be entitled to charge
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ntl for any additional resource reasonably required, the charges for
this to be determined through Change Control.
12.3 IBM shall permit any Third Party Service Provider or ntl to use any
System to the extent it is the subject of this Agreement for system
test purposes, remedial or diagnostic purposes or for the purposes of
the Exit Plan at times to be agreed between such Third Party Service
Provider or ntl and IBM, such agreement not to be unreasonably withheld
or delayed. IBM shall not be obliged to allow such Third Party Service
Provider access to any System or to any IBM Premises unless such Third
Party Service Provider has signed an appropriate confidentiality
agreement with IBM and undertaken to comply with IBM's security
arrangements.
12.4 Nothing in this Agreement shall prevent ntl from allowing third parties
to make use of the Systems and/or Services provided to it by IBM under
this Agreement where such third parties provide ntl with other services
and their usage is equivalent to that of an end user.
12.5 IBM shall not be liable to ntl hereunder to the extent that any failure
by IBM to provide the Services in accordance with the terms of this
Agreement is as a result of the use of any System by, or any act or
omission of, any Third Party Service Provider or ntl. In such
circumstances, IBM shall notify ntl of such effect and shall co-operate
with ntl and/or the Third Party Service Provider in resolving any such
problem, the charging implications of which shall be addressed via
Change Control.
13. THE EQUIPMENT
13.1 Except as provided for in Schedule 4 (Third Party Contracts and
Software), IBM shall have the responsibility during the Term for
arranging and paying for maintenance of the Equipment, both remedial
and preventative.
13.2 IBM shall keep the Equipment in good and substantial repair and
condition and, unless required to fulfil its obligations under this
Agreement, may not make any alteration (other than routine upgrades) to
any Equipment which remains or is ntl's
45
property except with the prior written agreement of ntl (such consent
not to be unreasonably withheld or delayed).
13.3 IBM shall not (and shall not purport to) create any security interest
over or share possession or use of the Equipment without the prior
written agreement of ntl (such consent not to be unreasonably withheld
or delayed) if, in either case, this would hinder ntl's ability to have
Equipment transferred to it or a Third Party Service Provider free of
any such security interest or sharing of possession or use upon
termination of this Agreement in whole or in part.
13.4 Without prejudice to all the other provisions of this Agreement, risk
of loss or damage to the Equipment itself shall lie with the party who
has the custody and control of such Equipment save to the extent such
loss or damage is caused by the other party, its agents or contractors.
Upon receipt of reasonable request from ntl, IBM shall promptly notify
ntl of the replacement value of the Equipment.
13.5 For the avoidance of doubt, this Clause 13 (the Equipment) shall apply
irrespective of whether the Equipment is owned by ntl or by IBM.
14. SOFTWARE, DATA AND KNOW-HOW USED IN THE SUPPLY OF SERVICES
14.1 IBM hereby acknowledges and agrees that all consents and licences in
respect of the Software Contracts transferred to IBM pursuant to the
1998 Agreement and any Software Contracts entered into pursuant to the
1998 Agreement prior to the Services Start Date that are, in both
cases, still relevant to the provision of the Services as at the
Services Start Date are in place and sufficient to allow IBM to provide
such Services under this Agreement as were provided under the 1998
Agreement.
14.2 ntl shall use its reasonable endeavours to ensure that all consents and
licences in respect of transferring rights to, or permitting IBM to,
use software the subject of the Current Contracts (as updated by the
parties as a consequence of Joint Verification) and Retained Third
Party Contracts (as updated from time to time in accordance with
Schedule 4 (Third Party Contracts and Software) necessary for the
performance of the
46
Services, are obtained (though if there is any obligation to maintain
such consent or licence then IBM shall be responsible for this). In the
event that any such consent is not obtained, IBM shall be relieved of
any obligation to provide the Services and/or meet Service Levels to
the extent that such Services and/or Service Levels are affected by the
failure to obtain the required consent. However, in such circumstances
IBM shall provide such assistance to ntl as ntl may reasonably require
and the parties shall co-operate with each other in achieving a
reasonable alternative arrangement for ntl to continue to process its
work with minimum interference to its business operations.
14.3 All Intellectual Property in any Materials created by ntl or for ntl by
third parties and which is transferred to IBM or which IBM is permitted
to use under or pursuant to the 1998 Agreement, this Agreement or the
Transfer Agreement shall remain with ntl and IBM shall have a
non-exclusive right to use such Intellectual Property during the Term
for the sole purpose of providing the Services.
14.4 All Intellectual Property in any Materials created by IBM or its
sub-contractors for ntl under this Agreement and which are not
Derivative Works of existing Materials of IBM shall be vested in ntl
and IBM shall deliver to ntl a copy of such Materials including the
source code for any such Materials which are programs as soon as
reasonably practicable upon completion of development of such
Materials, or earlier termination of this Agreement and in either case
subject to payment due for the work done to produce such Materials
prior to the date of termination provided always that IBM will not
unreasonably withhold delivery of such Materials where a bona fide
dispute as to the payment due exists. IBM shall have a non-exclusive
right to use such Materials during the Term for the sole purpose of
providing the Services. For the avoidance of doubt the Intellectual
Property in ICMS or any Derivative Work thereof shall (unless the
parties have agreed otherwise) vest in IBM.
14.5 In the event that IBM identifies opportunities to exploit any Materials
in which Intellectual Property is owned by ntl pursuant to Clause 14.4
outside the ntl Group then IBM may approach ntl for the grant of a
licence to IBM to exploit such Materials. ntl shall consider any
commercial arrangements proposed by IBM in respect of such licence and
not unreasonably withhold or delay its consent to such a request where
the
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opportunity does not conflict with the interests of any member of the
ntl Group. Where ntl consents to such a request it represents to IBM
that ntl is the party entitled to give consent to the request. In the
event that ntl identifies any opportunity for exploitation of any
Materials in which Intellectual Property is owned by ntl pursuant to
Clause 14.4 outside the ntl Group, it shall give IBM reasonable
opportunity to participate in such exploitation provided that if the
parties are unable to agree commercial arrangements in a reasonable
timescale, ntl shall be free to exploit such Materials itself or via a
third party. Both parties shall at all times act in good faith and
without delay and where opportunities are so identified, seek to agree
mutually beneficial arrangements. Any licence granted by ntl shall not
excuse IBM from its obligations to comply with Clause 17
(Confidentiality) in respect of any ntl Confidential Information
contained or comprised within any such licensed Materials.
14.6 Where as part of the Services any Material which is not a Derivative
Work is supplied by IBM to ntl which is software used to integrate IBM
Software Product(s) or to integrate Third Party Software Products or to
integrate IBM Software Products with Third Party Software Products all
Intellectual Property in such Material shall be vested in ntl and IBM
shall have an irrevocable non-exclusive royalty free worldwide licence
to use, copy and modify such Material (and to sublicence others to use,
copy and modify such Materials).
14.7 Where as part of the Services any Material is supplied to ntl which is
a Derivative Work of any existing Material of IBM:
14.7.1 where existing Material is either ICMS or IBM System Software,
the Intellectual Property in the Derivative Work shall vest in
IBM (unless the parties have agreed otherwise) and ntl shall have
a licence to use such Derivative Work on IBM's normal commercial
terms for customers of similar standing to ntl. Such licence will
be royalty free for the Term and irrevocable to the extent ntl
complies with the terms thereof. Such licence will include the
right to permit Third Party Service Providers to use such
Derivative Work for the purposes of providing ntl with like
services to those provided by IBM hereunder following termination
of the provision of any of the Services by
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IBM provided that for so long as ntl remains the licensee of
such Derivative Work, ntl shall be responsible for
compliance with the licence terms by such third parties and
shall pay or procure the payment of the prevailing licence
fees in accordance with this Clause 14;
14.7.2 where the existing Material is not ICMS or IBM System Software,
the Intellectual Property in the Derivative Work (other than the
Intellectual Property in the existing Material) shall vest in ntl
and ntl shall have an irrevocable, non-exclusive royalty free
licence under the Intellectual Property in the existing Material,
to the extent the same is contained in the Derivative Work, to
use, copy, modify and make Derivative Works of such existing
Material for its and ntl Group companies' internal business
purposes and (subject to Clause 14.8) IBM shall have an
irrevocable, non-exclusive, royalty free, worldwide licence to
use, copy and modify such Material (and to sub-license others to
use, copy and modify such Material).
14.8 Subject always to IBM's client confidentiality IBM shall use all
reasonable endeavours to notify ntl in advance of all proposals to use,
copy or modify any of the Materials referred to in Clause 14.6 or
14.7.2 by or on behalf of a third party or create Derivative Works of
such Materials by or on behalf of third parties if such third parties
are in the television (including without limitation digital and
interactive services), telecommunications (including, without
limitation, internet and internet protocol service providers) and cable
industries from time to time and such other industries which may be
agreed between the parties. IBM will not unreasonably withhold
agreement to adding industries which are directly related to the
foregoing. If ntl reasonably believes that it would be materially
prejudiced by the use by or on behalf of a third party of any Materials
referred to in Clause 14.6 or 14.7.2 or any Derivative Work thereof,
then IBM shall not use, copy modify or create Derivative Works of those
Materials for use by or on behalf of such third party for a period of
eighteen months, or such other period as the parties may agree in
writing. ntl shall not unreasonably withhold its consent for the using,
copying or modifying of such Materials or creation of any Derivative
Works of such Materials.
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14.9 As between ntl and IBM, ntl shall own the Intellectual Property in all
Know-How and in all Data supplied by ntl to IBM under this Agreement
and in all Data generated by IBM on behalf of ntl (other than IBM's
Data) or by ntl during the provision of the Services under this
Agreement and IBM shall have a non-exclusive right to use the same
during the Term for the sole purpose of providing the Services.
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14.10 INVENTIONS
Inventions made in the course of the Agreement and embodied in
Materials supplied to ntl or used or planned to be used in the
provision of Services shall be treated as follows:
14.10.1 In the case of any invention made by IBM, the right to apply
for patent protection therefor and any patent granted thereon
shall belong to IBM, subject to a worldwide, non-exclusive
royalty-free irrevocable licence (with right to sublicence)
hereby granted to ntl and the other members of the ntl Group
under any such patent granted. Such licence will include
(without limitation) the right to make, have made, use, have
used, lease, sell and/or otherwise transfer any apparatus
and/or practice and have practised any method, and shall
include the right to grant, directly or indirectly
sub-licences to Third Party Service Providers; and
14.10.2 in the case of any invention made jointly by ntl and IBM, the
right to apply for patent protection therefor and ownership of
any patent granted thereon shall be joint and ntl and IBM
shall each have the right to exploit any such patent in any
manner and to grant licences thereunder to third parties and
to assign its rights therein, in each case without accounting
to or requiring the consent of the other. All expenses
incurred in obtaining and maintaining any such jointly owned
patent shall be equally shared, but if either party shall
elect not to file a patent application in any country, the
other shall have the right to obtain and maintain a patent in
that country at its own expense and shall have full control of
the prosecution and maintenance thereof, even though title
thereto shall remain joint as aforesaid.
15. TECHNOLOGY REFRESH AND SOFTWARE CURRENCY
15.1 Without prejudice to any further obligations contained in the Schedules
to this Agreement and subject to ntl's responsibilities set out in
Schedule 25 (Asset Refresh), IBM shall ensure that the Equipment and
Software is technologically sufficient so as to allow IBM to meet the
Service Levels and as necessary, to meet its business
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requirements notified to IBM from time to time and, in particular, so
that IBM can comply with Clause 15.3. ntl or such third parties as ntl
shall consider reasonably necessary may conduct quality audits in
accordance with the audit provisions referred to in Schedule 23
(Audit). IBM shall co-operate in the conduct of such quality audits in
accordance with Schedule 23 (Audit).
15.2 In the event that any quality audit in respect of the above discloses
that the Equipment is below the specified standard, IBM shall propose a
plan for updating the Equipment to that standard within a reasonable
period. Unless ntl agrees otherwise, IBM shall implement the plan for
updating the Equipment as soon as reasonably practicable subject always
to ntl performing its responsibilities in accordance with Schedule 25
(Asset Refresh).
15.3 Subject to any other provisions of this Agreement with regard to
payment of licence or upgrade fees, IBM agrees to maintain reasonable
currency for releases and versions of Software, unless otherwise
mutually agreed as part of a Project and/or as specified in the ITOP.
For these purposes, reasonable currency shall mean that support is
available from the licensor for the release or version installed.
15.4 In the event that one party requests the other party to delay upgrading
specific Software as set out in Clause 15.3 then the other party shall
comply (except if the requesting party is IBM and the delay will affect
Service Levels adversely) provided that the requesting party reimburses
the other party for any reasonable costs incurred as a result of either
of the following:
15.4.1 being prevented from taking economic or performance advantage
of appropriate technology; or
15.4.2 incurring additional costs (which shall include but not be
limited to Software-support costs due to withdrawal of
maintenance by the licensor or multiple-version charges).
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15.5 In the event that one party requests the other party to operate and
maintain multiple versions of System Software, the other party shall
comply provided that the requesting party reimburses the other party
for any reasonable costs incurred as a result thereof. Where the
requesting party is:
15.5.1 IBM, this is subject to this not adversely affecting the
Service Levels; or
15.5.2 ntl, then IBM shall be relieved from related Service Levels to
the extent that such Service Levels are adversely affected due
to the operation and maintenance of multiple versions.
15.6 Software shall not be introduced which does not comply with the
Supported Products Register implemented other than in accordance with
Schedule 20 (Operating Environment Standard).
16. CHARGES AND PAYMENT TERMS
16.1 DETERMINATION OF CHARGES
In consideration of the provision of the Services ntl shall pay with
respect to the period commencing on the Services Start Date to IBM an
amount determined in accordance with Schedule 6 (Charges). In respect
of any time and materials element, the number and skills classification
of IBM Personnel for which payment is made by ntl shall be as provided
for in Schedule 9 (Projects) and Schedule 6 (Charges).
16.2 ABSENTEES
For the avoidance of doubt, no payment shall be due (for any time and
materials element) from ntl in respect of any IBM Personnel who do not
provide the Services.
16.3 NO OTHER CHARGES
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Save as expressly agreed between the parties in writing pursuant to
Change Control or as otherwise stated in this Agreement, there shall be
no other charges in addition to those set forth in this Clause 16
payable by ntl pursuant to this Agreement.
16.4 CURRENCY
All payments to IBM shall be made in the official currency of the
Territory and if there is more than one then that which ntl selects on
a prospective basis on not more than one occasion with the agreement of
IBM, such agreement not to be unreasonably withheld. If, during any
period of multiple official currencies, ntl selects the right to pay in
euros then it shall be entitled to change that basis of payment to the
other official currency without additional charge on one occasion.
16.5 EXCLUSIVE OF VAT
All prices are exclusive of Value Added Tax and, to the extent that
such tax is properly referable or chargeable to ntl, ntl shall pay the
same in addition to the Charges against delivery of a valid VAT
invoice.
16.6 INVOICES
The monthly portion of the Annual Services Charges shall be invoiced to
ntl monthly in advance. Variable Charges shall be applied to the
equivalent invoice issued following the month in which the relevant
Services were rendered. Any other charges and other sums due pursuant
to this Agreement shall be invoiced no earlier than the end of the
month in which they arise.
16.7 CREDIT PERIOD
All amounts due under this Agreement shall be paid on the last Business
Day of each month provided that the invoice was hand-delivered on the
first Business Day of such month and, otherwise, within 30 days of
receipt of such invoice.
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16.8 DISPUTED AMOUNTS
Where any sum is the subject of a bona fide dispute, the undisputed
portion shall be paid in accordance with this Agreement and, after
settlement of the dispute, any amount agreed or determined to be
payable shall be included within the next monthly invoice and be paid
accordingly, together with interest calculated under Clause 16.13
(Interest).
16.9 INVOICE DETAILS
Invoices shall show all elements of the Charges and other amounts due
thereunder and any amounts to be credited to ntl in accordance with the
agreed form of invoice. The initial form of the invoice is as included
within Schedule 6 (Charges) and changes to it by ntl under this clause
are to be as agreed by the parties. If ntl wishes to attribute the
Charges to the different companies, businesses and business units
within the ntl Group then the parties shall seek to agree, in good
faith, a method of doing this and if there is a material cost
associated therewith to IBM then this shall be dealt with via Change
Control.
16.10 OTHER AMOUNTS DUE
ntl may set off against the Charges and other amounts due hereunder any
amounts due and payable by IBM to ntl under this Agreement.
16.11 FURTHER DISPUTES
The payment of any amount pursuant to an invoice shall not prevent ntl
raising a dispute in respect of that amount and shall not constitute
acceptance by ntl as to the performance by IBM of its obligations under
this Agreement.
16.12 CREDITS DUE TO NTL
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Where ntl is entitled to receive a credit from IBM, this Agreement
shall treat the amount of the credit as a sum due to be paid to ntl by
IBM (and, if the combined account shall be in ntl's credit then, at its
option, ntl may raise an invoice and require payments of the same on
the same basis (both as to payment date and interest) as sums payable
by ntl to IBM).
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16.13 INTEREST
If any party fails to pay any sums due under this Agreement by the due
date for the payment of the same then interest on such sum shall be
calculated from the last date on which it could have been paid without
incurring interest to the date of actual payment (after as well as
before judgment) at the rate of 2% per annum above the base rate of
HSBC plc from time to time.
16.14 DAY RATES AND EXPENSES
Except as otherwise set forth in Schedule 6 (Charges), all day rates
shown in the Schedules as a basis for calculations of Charges are
inclusive of expenses incurred by such individuals in the performance
of their duties.
16.15 IBM CHARGING RATES - TIME AND MATERIALS
Where any rate per period of time has been specified by IBM as the
basis for charging for any Project or piece of work then that rate
shall be fixed and not be subject to increase, unless the possibility
of an increase in the rate was agreed by ntl at the time of agreeing to
the project or piece of work or is pursuant to an Index adjustment
(unless otherwise agreed through Schedule 32 (Change Control)).
16.16 OTHER PAYMENT PROVISIONS
16.16.1 On the Services Start Date, ntl shall pay to IBM a pro-rated
proportion of the monthly portion of the Annual Services
Charge for May 2001.
16.16.2 The Annual Services Charges for the final calendar month of
the Term shall be pro-rated to the number of days remaining in
the Term.
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17. CONFIDENTIALITY
17.1 CONFIDENTIAL INFORMATION
Each party shall keep confidential all information (including the terms
of this Agreement) and documentation including (without limitation) the
Data and other information concerning the business or trade secrets,
manufacturing processes, Know-How or methods used by the other party in
carrying on business ("Confidential Information"), obtained from the
other pursuant to or in connection with the 1998 Agreement (to the
extent that it relates to the Services provided pursuant to this
Agreement), this Agreement and/or the Transfer Agreement both before
and after the Services Start Date. IBM may only disclose Confidential
Information regarding ntl to those IBM Personnel who require such
Confidential Information for the purpose of carrying out IBM's
obligations under this Agreement. IBM may only disclose Confidential
Information regarding ntl to Contractors for the purpose of carrying
out IBM's obligations under this Agreement and who have entered into
equivalent confidentiality obligations to those contained in Schedule
11 (Confidentiality Undertaking) or this Clause 17 provided that this
obligation shall not apply to any contracts originally with members of
the ntl Group which have been or are assigned, transferred or novated
to IBM. ntl may only disclose Confidential Information regarding IBM to
those of its personnel who require such Confidential Information for
the purpose of ensuring this Agreement and the Services operate
efficiently, and in order to protect ntl's rights and interests
hereunder. Each party shall take the same care to avoid disclosing
Confidential Information of the other party to any third party as the
receiving party takes with similar information of its own which it does
not wish so to disclose.
17.2 PERMITTED USE
17.2.1 Each party agrees that it shall not use any Confidential
Information regarding the other party for any purpose other
than the performance of its respective obligations or
enforcing its rights under this Agreement or as otherwise
permitted hereunder, nor copy or disclose any such
Confidential Information to
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any third party without the written consent of the other party's
authorised representative.
17.2.2 Both parties shall be permitted to disclose this Agreement to
their professional advisers, agents or representatives
(including those who are assisting it in connection with this
Agreement) and in respect of ntl to any other entity within
the ntl Group subject to appropriate confidentiality
obligations.
17.3 EXCEPTIONS
17.3.1 The provisions of this Clause 17 shall not apply to
Confidential Information which the recipient can show to the
disclosing party's reasonable satisfaction:
(a) was known to the recipient (without obligation to keep the
same confidential) at the date of its disclosure;
(b) is after the date of disclosure lawfully acquired by the
recipient in good faith from an independent third party who is
not subject to any obligation of confidentiality in respect of
such Confidential Information;
(c) in its entirety was at the time of disclosure or has become
public knowledge otherwise than by reason of the recipient's
neglect or breach of the restrictions set out in this or any
other agreement; or
(d) is independently developed by the recipient without access to
any or all of the Confidential Information.
17.3.2 Nothing in this Clause 17 shall prevent either party from
disclosing confidential information to the extent such
disclosure is required by law, judicial action, recognised
stock exchange, governmental department or agency or other
regulatory authority to be disclosed in which event the
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recipient shall take all reasonable steps to consult and take into
account the reasonable requirements of the other party in relation to
such disclosure.
17.4 COMMENCEMENT AND SURVIVAL
The obligations in this Clause 17 shall be effective from the
Commencement Date and survive the expiration or termination of this
Agreement.
17.5 RESIDUAL KNOWLEDGE: GENERAL AND UNIQUE
This Clause 17 (Confidentiality) shall not apply to information
relating to information technology general data processing or general
information handling which is validly disclosed to the other party for
the purposes of this Agreement, which is retained mentally in the
ordinary course of performing the Services and which forms part of the
general skill and knowledge of those employees or agents of the
recipient to whom Confidential Information is disclosed pursuant to
this Agreement provided that this shall not apply to such information
which is either party's:
17.5.1 Customer, supplier and other trade relationships;
17.5.2 Employee and management relationships;
17.5.3 Finances, including revenues, costs, profitability and its
relationships with investors, bankers or providers of finance;
17.5.4 Government and regulatory relationships;
17.5.5 Partnerships, joint ventures and investment relationships;
17.5.6 Business plans, development plans and business strategies;
17.5.7 Business conduct and compliance;
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17.5.8 Patents, utility models, trade and service marks, trade and
business names, domain names, rights in designs, copyrights,
moral rights, topography rights, and rights in databases, in
all cases whether or not registered or registrable; or
17.5.9 Position or relationship with the community, health & safety,
and the environment,
Nothing in this Clause 17.5 shall permit a party to disclose to any
person the source of such information to any person.
18. SECURITY, RISK MANAGEMENT, CRISIS MANAGEMENT AND DISASTER RECOVERY.
18.1 PHYSICAL SECURITY
IBM shall ensure at all times that any area occupied by it within the
Shared Premises is kept for use solely in respect of provision of
Services to ntl under this Agreement and accessed only by authorised
IBM Personnel and ntl Personnel (or any authorised representative of
ntl), and any other persons authorised by the same in order to
facilitate the performance of the Services. Access by such authorised
persons shall be limited further by such security measures as are in
place from time to time at the Building or the ntl Property (whichever
is applicable). If such security measures involve:
18.1.1 any physical items (such as an electronic identity or swipe
card) then IBM shall ensure that they are returned to IBM upon
the termination of the employment of any individual or the
completion of any services for which they were required to be
issued to a contractor then, upon any non-return of such
physical item, IBM shall inform ntl's representative at the
Building of this forthwith (and IBM shall itself bear all
attendant reasonable costs following from the non-return and
any necessary security measures consequent upon the same); or
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18.1.2 a security code provided to individuals then IBM shall not
provide it to anyone other than IBM Personnel (without ntl's
prior written consent) and upon any termination of employment
of such an employee or of use of such IBM Personnel to provide
the Services (or other person consented to by ntl) shall
inform the ntl's representative of the termination of their
employment or other involvement with IBM.
18.2 INFORMATION SECURITY
IBM shall ensure that all Confidential Information relating to ntl and
its customers, all ntl Software (including any developed under this
Agreement) and all of ntl's Data are kept under secure conditions and
in accordance with Schedules 17 (Quality) and 18 (Security) (including
in compliance with BS7799 to the extent that ntl comply with BS7799 as
at the Services Start Date) so as to protect them effectively from
unauthorised access and shall promptly inform ntl if IBM has any reason
to suspect that there has been unauthorised access or any dissemination
outside of IBM.
18.3 STANDARDS AND POLICIES
In addition to the obligations in Clauses 18.1 (Physical Security) and
18.2 (Information Security), IBM shall comply with all ntl policies
communicated in writing to IBM from time to time. In respect of a
change of policy this obligation is to be complied with as soon as
reasonably practicable after a consultation period appropriate both to
the importance of the change and the scale of the consequent changes in
procedure required. If any such change results in alteration with a
material financial impact on IBM then the provisions of Change Control
shall apply.
18.4 LOSS OR DESTRUCTION OF NTL'S DATA
If ntl's Data is for any reason damaged, lost or destroyed (hereinafter
the "Lost Data"), IBM shall:
18.4.1 retrieve the Lost Data from the last back-up;
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18.4.2 reconstruct the Lost Data (to the extent practicable) to the
date of the last back-up required in accordance with the
back-up arrangements specified in this Agreement if the Lost
Data is irretrievable due to IBM's failure to perform its
back-up obligations; and
18.4.3 reconstruct the Lost Data (to the extent practicable) from the
date of the last back-up required in accordance with the
back-up arrangements specified in this Agreement.
Services performed under Clause 18.4.3 shall be chargeable to ntl and
shall be agreed in accordance with Change Control (save if and to the
extent such reconstruction is required by reason of breach of this
Agreement by IBM or any negligent act or omission of IBM then such work
shall be carried out by IBM at no additional charge).
18.5 BACK-UPS OF DATA
IBM shall back-up all Data reliably in accordance with ntl policy
documented and implemented by ntl as at the Services Start Date and as
communicated in writing to IBM (or in accordance with this Agreement to
the extent that it is recorded herein) and, subsequently, in accordance
with the e-Procedures.
18.6 CRISIS MANAGEMENT
Without prejudice to the provisions of Schedule 18 (Security), IBM
shall comply with the ntl Crisis Management Plan as attached as Exhibit
1 to Schedule 14 (Disaster Recovery Services). ntl may from time to
time propose changes to such Crisis Management arrangements, which
shall be managed through Change Control. IBM shall be responsible for
implementing the IT Disaster Recovery Plan agreed in accordance with
Schedule 14 (Disaster Recovery Services).
18.7 CRISIS MANAGEMENT SIMULATION
ntl shall be entitled to inspect IBM's arrangements to implement its
part of the Crisis Management Plan and to observe their execution. IBM
shall provide a representative
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to participate at no additional charge in a reasonable number of ntl's
own rehearsals of the Crisis Management Plan. For the avoidance of
doubt, rehearsals shall not include the invocation of the Disaster
Recovery Plan agreed in accordance with Schedule 14 (Disaster Recovery
Services). IBM shall co-operate with ntl in a reasonable number of
ntl's simulations of Crisis Management scenarios without additional
charge. Such simulations may be at any level, from a system, or a
Service Level to the entirety of the Services and shall be subject to
reasonable notice being provided by ntl. In the event that a simulation
shows that IBM's arrangements do not meet the requirements of the
Crisis Management Plan then IBM shall rectify them promptly and
participate in a further simulation.
18.8 CRISIS SITUATION
Either party may reasonably designate as a crisis situation an event or
anticipated event which would materially affect ntl from carrying on
its business in the ordinary course. In such a situation ntl may
require rapid implementation of changes to the Services and IBM and ntl
shall convene a crisis management team to implement ntl's requirements.
ntl shall work with IBM in order to specify how the crisis is to be
handled. ntl shall be entitled to require the IBM Project Executive to
attend meetings of the ntl crisis team. The parties agree that in such
a crisis situation implementation of changes to the Services required
by ntl pursuant to this Clause 18.8 shall not be delayed in any way due
to a failure of the parties to agree costs in this respect. The parties
agree that the required changes shall be implemented immediately and
the parties shall reconvene as soon as reasonably practicable to agree
charges in good faith. If the parties are unable to reach agreement
then they shall escalate the matter as specified in Clause 37 (Problem
Escalation and Resolution) of this Agreement and in default of
agreement the matter shall be resolved in accordance with the dispute
resolution procedure set out in Clause 38 (Dispute Resolution).
18.9 RISK MANAGEMENT METHODOLOGIES
IBM shall participate in ntl's risk management process and in
particular shall, as and when reasonably required, undertake risk
assessments using tools and methodologies
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prescribed by ntl and report the outcome to ntl. Such assessments shall
be subject to the provisions of Change Control, without prejudice to
Clause 18.6 (Business Continuity and Crisis Management). All
deficiencies in the performance of IBM's obligations under this
Agreement identified during such review or process shall be rectified
by IBM unless the parties agree otherwise. IBM shall, if requested,
attend and participate in any risk management forum.
18.10 PROVISION OF INFORMATION
IBM shall provide ntl with such information as it reasonably requires
for insurance underwriting purposes from time to time.
19. MANAGEMENT AND CHANGE CONTROL
19.1 The parties shall comply with the processes and procedures for managing
and controlling all aspects of change to any part of the Scope or terms
of this Agreement in accordance with Schedule 29 (e-Library,
e-Procedures and Inventory) and Schedule 32 (Change Control).
20. LEGISLATIVE AND QUASI-LEGISLATIVE REQUIREMENTS
20.1 DATA PROTECTION AND OTHER LEGISLATION
20.1.1 The provisions of this Clause 20 shall be subject to the
provisions of Schedule 27 (Separation Issues) for the period
referred to in such schedule and otherwise in accordance with
its terms. To the extent that there is any conflict between
the terms of this Clause 20 and the provisions of Schedule 27
(Separation Issues) in relation to the matters set out in
Schedule 27 (Separation Issues), the terms of Schedule 27
(Separation Issues) shall prevail.
20.1.2 In the context of providing the Services to ntl IBM may
process personal data of which ntl is the data controller. ntl
will be the data controller of such personal data processed by
IBM for ntl in providing the Services. IBM will
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merely act in relation to such personal data of which ntl is
the data controller as a data processor on behalf of ntl.
20.1.3 Each party shall ensure that it shall at all times during the
Term comply with the provisions and obligations imposed on it
in its role as data controller or data processor (as the case
may be) by Data Protection Legislation (including making
and/or amending all registrations necessary to allow it to
fulfil its obligations under this Agreement), the data
protection principles and any other similar applicable
Legislation, and all personal data acquired by either party
from the other shall be returned or deleted (at the option of
the requesting party) on request save to the extent required
by that party to discharge its obligations hereunder. The
remaining sub-clauses in this Clause 20 are without prejudice
to the general obligation contained in this Clause 20.1.
20.2 DISCLOSURE OF PERSONAL DATA, INCLUDING TO ITS SUBJECTS
Each party shall indemnify the other in respect of any unauthorised
disclosure of personal data by such party. The parties hereby
acknowledge that performance of a duty imposed by the Data Protection
Legislation shall not constitute a breach of any obligation in respect
of confidentiality which may be owed to the other party. However,
wherever reasonably practicable, the party acting under such duty shall
first inform the other party of the request and consider in good faith
any objections to the proposed disclosure. In any event, the party
acting under such duty shall provide a copy of all personal data which
it does so disclose to the other party
20.3 IBM - DATA PROCESSOR
IBM hereby warrants to ntl that IBM shall not process any data other
than in accordance with ntl's instructions. If these instructions are
such as to have a material affect on the performance of its obligations
or the cost of such performance then the implications of this shall be
dealt with via Change Control.
20.4 NTL - DATA CONTROLLER
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ntl hereby warrants to IBM that ntl is registered as a 'data
controller' in accordance with and pursuant to the Data Protection ▇▇▇
▇▇▇▇ and that it shall maintain all necessary registrations and/or
notifications, during the Term in respect of the data which it obtains,
possesses or processes or which IBM is required to obtain, possess or
process on its behalf pursuant to this Agreement.
20.5 PERSONAL DATA SECURITY
20.5.1 ntl shall provide to IBM sufficient information about all
processing of personal data, including information about the
risks to individuals presented by such processing, that IBM is
obliged to perform during the Term, to enable IBM to make an
assessment of the level of personal data security that is
required. Subject to Clause 20.5.2 below but otherwise without
prejudice to IBM's other obligations in respect of information
security (and except as provided to the contrary in Schedule
27 (Separation Issues)), IBM shall:
(a) having regard to the state of technological
development and to the cost of implementing any
measures provide a level of security (including
appropriate technical and organisational measures)
appropriate to:
(i) the harm that might result from:
(aa) unauthorised or unlawful processing
of such personal data; or
(bb) accidental loss, destruction or
damage of such personal data; and
(ii) the nature of the data;
(b) take reasonable steps to ensure the reliability of
IBM's staff who have access to the personal data;
(c) provide ntl with such information as ntl may
reasonably require from time to time to establish
IBM's compliance with the obligations relating
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to security contained in the Data Protection
Legislation and as set out in Schedule 18 (Security);
and
(d) inform ntl as soon as reasonably practicable of any
particular risk to the security of ntl's computer
networks of which it becomes aware and of the
categories of personal data and individuals which may
be affected.
20.5.2 Without prejudice to the provisions in Schedule 27 (Separation
Issues), the parties acknowledge that Schedule 18 (Security)
meets the level of security required under Clause 20.5.1(a) as
at the Services Start Date. If as a consequence of IBM
providing the Services to ntl under this Agreement there is a
change in the level of security required under Clause
20.5.1(a) above as a result of:
(a) a change in the nature of the data; or
(b) the level of security specified in Schedule 18 (Security)
being lower than that which is appropriate;
and the change is such as to have a material effect on the performance
of IBM's obligations or the cost of such performance then the
implications of this shall be dealt with via Change Control provided
that there shall be no increase in the Charges except to the extent
that the change in the level of security required is attributable to a
change in the nature of the data or to the level of security set out in
Schedule 18 (Security) being lower than that which was appropriate as
at the Services Start Date. IBM shall be relieved of its obligations
under Clause 20.5.1(a) in respect of personal data of which ntl is the
data controller to the extent that ntl does not agree to changes
proposed (via Change Control or otherwise) by IBM to comply with Clause
20.5.1 (a) or otherwise refuses to agree reasonable security measures
proposed by IBM and ntl shall inform IBM of the extent to which (if at
all) any security measures proposed by IBM would not, if implemented,
comply with the requirements of Clause 20.5.1 (a).
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20.6 DATA PROTECTION LEGISLATION (TELECOMMUNICATIONS INDUSTRY SPECIFIC)
IBM shall ensure that each System is able to produce itemised and
non-itemised bills for ntl's subscribers if required to do so by ntl.
20.7 OVERSEAS TRANSFERS OF PERSONAL DATA
20.7.1 ntl shall not require or purport to require IBM to transfer
personal data to another territory where such a transfer is
prohibited by Data Protection Legislation.
20.7.2 IBM shall only process personal data outside of the European
Economic Area with ntl's prior written consent, such consent
to be in ntl absolute discretion provided that where such
consent is withheld IBM shall be relieved of its obligations
to process data to the extent affected by such withholding of
consent.
20.8 OTHER GUIDELINES
IBM shall at all times act in a manner consistent with the requirements
of any and all codes relating to personal data processing which are
generally accepted within the IT or telecoms industry and/or are
recommended, endorsed or approved by the Information Commissioner in so
far as they are relevant to the Services.
21. INDEMNITY
21.1 IBM'S INDEMNITY
21.1.1 IBM agrees to indemnify ntl, and each member of the ntl Group
and their respective officers, directors, employees, agents,
successors and assigns, in accordance with the procedures
described in Clause 21.3 (Indemnification Procedures), against
any claim based upon or in connection with any allegation of
infringement made against ntl of any Intellectual Property,
alleged to have occurred because of the use of any Equipment,
IBM Software, software or
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other materials of any nature in the provision of the Services
to ntl by IBM pursuant to this Agreement (including for the
avoidance of doubt any equipment, IBM software, software or
other materials made available under the 1998 Agreement that
continue to be relevant to the provision of the Services under
this Agreement) provided, however, that IBM shall have no
obligation with respect to any losses to the extent the same
arise out of:
(a) ntl's modification or misuse of equipment, systems,
programs or products; or
(b) ntl's combination, operation or use with devices,
data, equipment, systems, programs or products not
used by IBM or its subcontractors in the provision of
the Services.
21.1.2 In the circumstances described in Clause 21.1.1 in which IBM
indemnifies ntl against any claims of infringement of any
Intellectual Property, IBM shall at its own expense promptly:
(a) procure the unrestricted right for ntl and where
appropriate for any Third Party Service Provider to
continue using the same; or
(b) make or procure on ntl's behalf such alterations,
modifications, adjustments or substitutions to all or
any part or parts of the same so that it becomes
non-infringing without affecting the relevant part of
the Services; or
(c) substitute a non-infringing version of the infringing
item of at least functional equivalence.
21.1.3 If IBM is unable to provide any of the foregoing alternatives,
ntl may, at its sole option, terminate forthwith the Agreement
or affected Services (in each case in whole or in part) in
which the infringing item or matter is used without limiting
IBM's other liabilities to ntl. Provisions of this Agreement
applicable
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upon termination in respect of all of the Agreement or the
Services shall apply in respect of the terminated part of
Agreement or affected Services under this Clause 21.1 (IBM's
Indemnity).
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21.2 NTL'S INDEMNITY
ntl agrees to indemnify IBM, the IBM Group Companies and their
permitted subcontractors and their respective officers, directors,
employees, agents, successors and assigns (the "IBM Indemnitees"), in
accordance with the procedures described in Clause 21.3
(Indemnification Procedures), against any claim incurred by IBM based
upon or in connection with any allegation of infringement made against
the IBM Indemnitees of any Intellectual Property, alleged to have
occurred because of the use by IBM for the provision of the Services to
ntl of any Assets made available to the IBM Indemnitees by ntl under
the Transfer Agreement or in respect of assets made available or
transferred pursuant to the 1998 Agreement and which are relevant to
the provision of the Services under this Agreement.
21.3 INDEMNIFICATION PROCEDURES
A party entitled to indemnification under any of Clauses 21.1 (IBM's
Indemnity), 21.2 (ntl's Indemnity), or 21.5 (Survival) (an "Indemnified
party") shall give written notice as soon as reasonably practicable
upon becoming aware of a third party claim giving rise to a right of
indemnity under this Clause 21.3 to the party that is obligated to
provide indemnification under such clauses (the "Indemnifying party").
Within 10 Business Days after such notice, the Indemnifying party may
notify, in writing, the Indemnified party of its decision to take
control of the defence and, in such circumstances, the Indemnifying
party shall be entitled to take control of the defence and
investigation of such claim and to employ and engage lawyers of its
sole choice to handle and defend the same, at the Indemnifying party's
sole cost and expense. The Indemnified party shall co-operate in all
respects with the Indemnifying party in the investigation and defence
of such claim and shall not prejudice any defence to any such claim or
attempt to settle or compromise such claim. No settlement of a claim
that involves a remedy other than the payment of money by the
Indemnifying party shall be made without:
21.3.1 the consent of the Indemnified party, which consent shall not
be unreasonably withheld; or
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21.3.2 the inclusion of an unconditional term by which the claimant
grants to the Indemnified party of a release from all
liability in respect of such claim.
If the Indemnifying party does not assume full control over the defence
of a claim the Indemnified party shall have the right to defend the
claim in such manner as it may deem appropriate, at the cost and
expense of the Indemnifying party.
21.4 MITIGATION
The indemnified party under this Clause 21.4 shall use its reasonable
endeavours to mitigate any loss, damage, liability, expenses and costs
(excluding claiming under its own insurance policies) and the amount
claimable pursuant to any indemnity hereunder shall be reduced by any
amount recovered from any third party.
21.5 SURVIVAL
This Clause 21 (Indemnity) shall survive the termination of the
Agreement. Also, IBM shall indemnify ntl against any liabilities
arising from any claim made against ntl or any Third Party Service
Provider incurred or based upon or in connection with an allegation of
infringement of any Intellectual Property alleged to have occurred
because of the use after termination by ntl or any Third Party Service
Provider of any Equipment, IBM Software, software or other materials of
any nature which was originally used in connection with the provision
of the Services to ntl and subsequently was transferred to ntl or a
Third Party Service Provider upon termination of this Agreement (in
whole or in respect of any part), subject always to the provisos set
out in Clause 21.4 (Mitigation) and provided, however, that IBM shall
have no obligation with respect to any losses to the extent the same
arise out of:
21.5.1 ntl's or the Third Party Service Provider's modification or
misuse of the same; or
21.5.2 ntl's or the Third Party Service Provider's combination,
operation or use of the same with devices, data, equipment,
systems, programs or products not used by IBM or its
sub-contractors in the provision of the Services.
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22. ESCROW DEPOSIT
22.1 IBM shall maintain all escrow agreements in force at the Services Start
Date and shall not terminate any of these without ntl's consent.
22.2 IBM shall use its reasonable endeavours to procure that, if ntl wish
this in any particular case, third parties enter into escrow agreements
in respect of Third Party Software procured for use in the provision of
the Services to ntl on a basis which includes ntl as a beneficiary of
such arrangement.
23. LIABILITY
23.1 NON-EXCLUDED AND NON-LIMITED LIABILITIES
Neither party excludes or limits its liability to the other party for:
23.1.1 death or personal injury caused by its negligence;
23.1.2 physical damage to real or personal property resulting from
negligence of the other party, its agents, employees or
sub-contractors;
23.1.3 under Clause 21 (Indemnity); or
23.1.4 any liquidated sum due (or past due) and owing to the other
pursuant to this Agreement.
23.2 FRAUD OR DECEIT
Any limitation on liability, whether for direct loss or for any
indirect or consequential loss shall not apply to the extent such loss
is caused by fraudulent misrepresentation or deceit.
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23.3 CAP ON LIABILITY
Save in respect of a claim under Clause 21 (Indemnity) or Clause 23.1
(Non-excluded and non-limited liabilities) which shall be uncapped, the
entire liability of each party to this Agreement and its corresponding
group company under the Ireland Services Agreement, collectively, for
damages resulting from such parties' performance or non-performance
under this Agreement and the Ireland Services Agreement, regardless of
the form of action, and whether in contract, tort (including, without
limitation, negligence), warranty or any other legal or equitable
grounds, will be limited in the aggregate to a sum equivalent to the
Charges payable under this Agreement and the Ireland Services Agreement
in the first 12 months from the Services Start Date (the "Liability
Cap") provided always that during the first 12 months from the Services
Start Date, the Liability Cap shall be the greater of the Charges under
this Agreement and the Ireland Services Agreement to date or
L200,000,000 (two hundred million pounds sterling).
23.4 CRITICAL BILLING SYSTEMS
In the event that any breach of this Agreement by IBM results in a
temporary or permanent and complete loss of ntl's billing data, and
such lost data is necessary for any Business Critical Application to
enable ntl to invoice its customers for any particular day
(collectively "Lost Billing Data") then on the basis set out in
Schedule 6 (Charges) ntl shall be entitled, in accordance with Schedule
6 (Charges), to claim a service credit for such Lost Billing Data equal
to the amounts set out in Schedule 6 (Charges).
23.5 EXCLUSIONS FROM RECOVERY
Except where specific provision is made for such liability (including,
without limitation, the indemnity in paragraph 4.1.12 (ii)(b) of
Schedule 30) and subject at all times to Clause 23.4 (Critical Billing
Systems), in no event will either party have any liability whether
based on contract, tort (including, without limitation, negligence),
warranty or any other legal or equitable grounds, for any loss of
profit or revenue or
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anticipated savings by the other party or for consequential, indirect
or special damages, arising from or related to this Agreement, even if
foreseeable by such party or such party has been advised of the
possibility of such losses or damages; provided, however, that this
Clause 23.5 will not prevent either party from recovering liquidated
amounts payable under this Agreement.
23.6 NOTICE
Either party shall notify the other as soon as reasonably practicable
of any matter that could give rise to a claim under this Agreement.
23.7 MITIGATION
Both parties shall use their reasonable endeavours to mitigate any
loss, damage, liability, expenses and costs.
23.8 INSURANCES
IBM shall maintain in force the insurance described in Schedule 15
(Insurance).
24. FORCE MAJEURE
24.1 FORCE MAJEURE PROCEDURE (GENERAL)
If either party is prevented, hindered or delayed from or in performing
any of its obligations under this Agreement by a Force Majeure Event
then:
24.1.1 that party's obligations under this Agreement shall be
suspended for so long as the Force Majeure Event continues and
to the extent that party is so prevented, hindered or delayed.
This Clause 24.1 does not limit or otherwise affect IBM's
obligation to provide disaster recovery services if and to the
extent such services are provided under this Agreement for so
long as the Force Majeure
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Event continues, except to the extent that IBM is prevented
from providing the Services from the recovery centre(s) as a
result of such Force Majeure Event.
24.1.2 as soon as reasonably possible after commencement of the Force
Majeure Event the party prevented from fulfilling its
obligations shall notify the other party in writing of the
occurrence of the Force Majeure Event, the date of
commencement of the Force Majeure Event and the effects of the
Force Majeure Event on its ability to perform its obligations
under this Agreement;
24.1.3 the party prevented from fulfilling its obligations by a Force
Majeure Event shall use all reasonable efforts to mitigate the
effects of the Force Majeure Event upon the performance of its
obligations under this Agreement; and
24.1.4 as soon as reasonably possible after the cessation of the
Force Majeure Event the party prevented from fulfilling its
obligations by a Force Majeure Event shall notify the other
party in writing of the cessation of the Force Majeure Event
and shall resume performance of its obligations under this
Agreement.
24.2 FORCE MAJEURE (IBM SPECIFIC)
If any Force Majeure Event prevents, hinders, or delays performance of part of
the Services for more than 10 consecutive Business Days or for a period
exceeding 15 Business Days in aggregate in any given 3 month period (or such
shorter period as is shown in a Schedule in respect of the services in
question), then ntl at its option:
24.2.1 may procure such part of the Services from an alternate
source, and IBM shall be liable for payment for all direct
expenses for such Services for up to the lesser of 180 days or
the remainder of the Term subject to ntl continuing to pay any
monies due to IBM under this Agreement; and/or
24.2.2 may terminate this Agreement in respect of the affected
Services including for the avoidance of doubt the whole or any
part of a Constituent Service Combination (whereupon the
provisions of Clauses 19 (Management and
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Change Control), 26 (Termination) and 27 (Exit Plan etc) shall
apply) as of a date specified by ntl in a written notice of
termination to IBM, subject to paying IBM's reasonable
out-of-pocket expenses relating to the transition of such
Services to ntl or a Third Party Service Provider (as opposed
to those relating to such termination). Provisions of this
Agreement applicable upon termination of this Agreement or a
Constituent Service Combination shall apply to termination in
respect of part of a Constituent Service Combination under
this Clause 24.2.
24.3 NO BREACH
Neither party shall be deemed to be in breach of this Agreement, or
otherwise be liable to the other by reason of any delay in performance
or non-performance of any of its obligations under this Agreement to
the extent that such delay or non-performance is due to a Force Majeure
Event of which it has notified the other party and the time for
performance of that obligation shall be extended accordingly.
24.4 CONTINUING EVENT
Upon any Force Majeure Event the parties shall enter into bona fide
discussions as soon as reasonably practicable with a view to
alleviating its effects, or to agreeing upon such alternative
arrangements as may be fair and reasonable.
25. ALTERATIONS TO THE NTL GROUP
25.1 ADDITIONS TO THE NTL GROUP
If (at ntl's entire option) ntl informs IBM that a member of the ntl
Group is considering establishing or forming a new company or business
or a member of the ntl Group is considering acquiring an interest in
another company or business which would bring such company or business
within the definition of the ntl Group (in each case a "Target") then
IBM shall operate the applicable procedures in Schedule 32 (Change
Control) to the extent any New Services are required as expeditiously
as
78
possible, taking account of the commercial objectives and need for
speed of the ntl Group.
25.2 ADDITIONS OUTSIDE THE NTL GROUP
25.2.1 If ntl informs IBM that it wishes IBM to provide the Services
to persons which are not within the ntl Group but are related
to ntl other than as a customer then IBM shall consider such
request promptly and, in the event that it does not reasonably
object to the provision of the Services to such person, such
person shall be deemed to be a member of the ntl Group for the
purposes of this Agreement. IBM shall not be obliged to
provide any services to such a company except as formally
agreed under Change Control.
25.2.2 If ntl informs IBM that it may wish IBM to provide Services to
a company in which the ntl Group is considering acquiring less
than 50% of the issued share capital then IBM shall indicate
whether it would object under Clause 25.2.1 above to such a
request based on the information available to it. IBM shall,
if it does indicate its consent, act in accordance with Clause
25.3.
25.3 IBM RESPONSE
IBM shall provide information for such scenarios as ntl shall request
but shall provide the specified information in respect of the following
scenarios (unless given express instructions to exclude any of them):
25.3.1 the transfer of the systems of the Target (if any) to IBM and
the provision of services identical to those previously
enjoyed by the Target (if any) by IBM to the Target (as part
of the ntl Group, whether or not a separate legal person) on
the basis of this Agreement;
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25.3.2 the scenario in Clause 25.3.1, followed by a migration of the
Target to the same Systems as the remainder of the ntl Group
(and/or, if specifically requested by ntl, a migration in the
other direction); and
25.3.3 in the case of the acquisition of a business only, the
provision of services under this Agreement to the Target,
equivalent to those enjoyed by the ntl Group, without any
member of the ntl Group first acquiring some or all of the
Target's systems.
IBM accepts that it is likely that it would need to provide this
information under Schedule 32 (Change Control) to ntl without first
being supplied with all of the information that it would usually
require (including the identity of the Target). IBM shall endeavour to
ensure that the response which it produces is reasonable in all the
circumstances and any assumptions that IBM has made shall be clearly
stated in IBM's response. ntl accepts that IBM is not liable for any
inaccuracy in the information supplied to ntl by IBM under this Clause
25.3 due to the stated assumption being incorrect. For the avoidance of
doubt, IBM shall not be bound by any estimate provided pursuant to this
Clause and IBM shall not be obliged to provide any services to the
Target except as formally agreed under Change Control.
25.4 DISPOSALS FROM THE NTL GROUP
25.4.1 If (at ntl's entire option) ntl informs IBM that any company
("the Departing Company") is to cease to be a member of the
ntl Group or that any member of the ntl Group is to sell one
or more of its businesses ("the Departing Business") to a
person, natural or legal, who is not a member of the ntl Group
then:
(a) IBM shall, if requested to do so in writing by ntl,
provide the Services to that company or business for
a period of at least twelve months from the date of
such cessation. The costs and technical implications
of this shall be addressed via Change Control; or
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(b) IBM shall, subject always to IBM, acting reasonably,
being satisfied as to the financial status of the
company or business, if requested to do so in writing
by ntl provide that company or business with the
opportunity of receiving services equivalent to the
services received by such company or business under
this Agreement on equivalent terms; or
(c) IBM, ntl and the Departing Company (or, as the case
may be, the new owner of the Departing Business)
shall co-operate in operating the provisions of
Schedule 26 (Exit Plan) in respect of that part of
the Services enjoyed by the Departing Company or the
Departing Business; and, in any case,
(d) from the date of such cessation ntl shall cease to be
liable for the acts or omissions of the Departing
Company or Departing Business and for the portion of
the Charges which relate to, or to have any
continuing liability to IBM in respect of or related
to, the provision of the Services to the Departing
Company or the Departing Business, subject only to
the Departing Company or the new owner of the
Departing Business having entered into an agreement
or a deed in favour of IBM by which it becomes bound
in respect of the same and the Departing Company or
Departing Business having provided such security for
charges as IBM may reasonably require. The provisions
of Clause 30.3 (Disclosure of information to
assignees) shall apply mutatis mutandis in respect of
the Departing Company or Departing Business, their
owners or prospective owners and their advisers.
25.4.2 If ntl does not have sufficient information for the purposes
of the proposed acquirers of the Departing Company or the
Departing Business in respect of the Charges attributable to
the supply of Services to the Departing Company or the
Departing Business then IBM shall assist ntl in providing the
same as expeditiously as possible, taking account of the
commercial objectives and need for speed of the ntl Group.
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25.5 The parties acknowledge that where any additional company or business
is brought within the ntl Group or within the scope of this Agreement
or any company or business is removed from the ntl Group or the scope
of this Agreement, then as part of the Change Control process the
parties shall consider revising the liability cap set out in Clause
23.3 (Cap on Liability).
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25.6 MAJOR CHANGE TO NTL BUSINESS
Without prejudice to any other provision of this Clause 25 (Alterations
to the ntl Group), IBM shall acting reasonably and in good faith, at
the request of ntl and upon an officer of ntl certifying that there has
been a Major Change in the business activities of the ntl Group or ntl
has entered in to an agreement for a Major Change in the business
activities of the ntl Group, propose revisions to the technical
solution used to deliver the Services and propose new pricing
arrangements appropriate to the changed circumstances. The parties
shall enter into negotiations in good faith to seek to agree any
amendment to this Agreement which is required to reflect the same. For
the purposes of this Clause 25.6, a "Major Change" shall include,
without limitation, any corporate or business acquisition or disposal
involving ntl which results in the total number of employees in the ntl
Group increasing or decreasing, whether in one event or in a series of
associated events, by more than 15%.
26. TERMINATION
26.1 NTL'S RIGHT OF TERMINATION
ntl may terminate this Agreement in whole or in respect of the
applicable Constituent Service Combinations set out in Schedule 12
(Termination by Constituent Service) (immediately or following a period
of notice specified by it at the time of notice) by notice in writing
to IBM if:
26.1.1 IBM commits a material breach and fails to remedy such breach
or breaches (if capable of remedy) for a period of one month
or such other period as is agreed following receipt of written
notice from ntl specifying the breach or breaches. Without
limitation, ntl is entitled to presume a material breach if,
other than in the first 90 days from the Services Start Date,
the events identified in Schedule 6 (Charges) as triggers for
the purposes of this Clause 26.1.1 occur. For the avoidance of
doubt, the fact that these triggers have not occurred shall
not prevent ntl seeking to argue that a material breach has
occurred or that the condition set out in Clause 26.1.2 below
is satisfied and the parties agree that
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the existence of such triggers shall not be taken into account
in considering whether or not there has been a material
breach);
26.1.2 IBM commits persistent breaches, including persistent minor
breaches, of its obligations under this Agreement which in all
the circumstances do collectively result in a material breach
of IBM's obligations to ntl;
26.1.3 control of IBM should change. In this Clause 26.1.3, this
means that IBM should cease to be a subsidiary of
International Business Machines Corporation. For the avoidance
of doubt, this Clause 26.1.3 shall not give ntl any right to
terminate this Agreement if the change of control of IBM does
not adversely affect the provision of the Services; or
26.1.4 an Insolvency Event occurs in relation to IBM or it ceases to
carry on its business or substantially the whole of its
business.
If at any time the damages recovered or recoverable under this
Agreement (but for Clause 23.3 (Cap on liability)) equal or exceed the
Liability Cap then ntl (although not obliged to terminate this
Agreement in whole or in respect of any Constituent Service
Combination) shall be entitled at any time thereafter (notwithstanding
any subsequent adjustment to the Liability Cap in accordance with
Clause 23.3 (Cap on liability)) to terminate this Agreement in whole or
in respect of any Constituent Service Combination under this Clause
26.1 (and for the avoidance of doubt no termination by ntl after such
time shall be treated as being under Clause 4.6 (Termination for
Convenience) or Clause 4.7 (Termination by Time)).
26.2 IBM'S RIGHT OF TERMINATION
IBM may terminate this Agreement in whole (immediately or following a
period of notice specified by it at the time of notice) by notice in
writing to ntl if:
26.2.1 ntl commits a material breach (which excludes non-payment of a
disputed invoice) and fails to remedy such breach or breaches
(if capable of remedy) for
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a period of 1 month following receipt of written notice from
IBM specifying the breach or breaches;
26.2.2 ntl commits persistent breaches, including persistent minor
breaches, of its obligations under this Agreement which in all
the circumstances result in a material breach of ntl's
obligations to IBM;
26.2.3 an Insolvency Event occurs in relation to ntl or it ceases to
carry on its business or substantially the whole of its
business; or
26.2.4 control of ntl should change. For the purposes of this Clause
26.2.4 a change of control of ntl means that ntl ceases to be
a subsidiary of ntl Incorporated. For the avoidance of doubt,
this Clause 26.2.4 shall not give IBM any right to terminate
this Agreement if the change of control of ntl does not
adversely affect the financial status of ntl.
26.3 OTHER RIGHTS OR REMEDIES
Termination of this Agreement under this Clause 26 shall be without
prejudice to any other rights or remedies that either party may have
under this Agreement and shall not affect any accrued rights or
liabilities of either party at the date of termination.
26.4 RETURN OF NTL ASSETS
On termination of this Agreement for any reason IBM shall cease to use
for any purposes:
26.4.1 all copies of the ntl Software and related Documentation;
26.4.2 all Data belonging to ntl and related Documentation, including
tapes and other magnetic media;
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26.4.3 any Equipment which belongs to ntl and/or any Equipment which
ntl elects to purchase under Schedule 26 (Exit Plan);
26.4.4 any Assets which have not been transferred to IBM; and
26.4.5 all copies of Confidential Information belonging to ntl.
26.5 VACATION OF PREMISES BY IBM
IBM shall vacate within a reasonable period (taking account of the
notice period it has had to make necessary preparations) the Shared
Premises which it shall occupy at the date of termination pursuant to
and in accordance with Schedule 5 (Property).
26.6 MATERIALS USED IN THE PROVISION OF SERVICES
On notice of termination of this Agreement for any reason IBM shall
provide ntl with full details of all Equipment and Third Party Software
used in the provision of the Services.
26.7 EFFECT OF TERMINATION
Notwithstanding termination of this Agreement in whole or in part for
any reason, this Agreement shall continue in force to the extent
necessary to give effect those of its provisions which expressly or
impliedly have effect after termination and in relation to those
Services in respect of which there has been no termination. Termination
shall not affect the rights of either party accruing or accrued prior
to the termination of this Agreement.
26.8 TERMINATION BY NTL
If ntl terminates this Agreement in accordance with its terms, it shall
incur no liability to IBM as a result of such termination other than
any express obligation to pay a
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termination charge or any other amounts due under this Agreement up to
the point of termination.
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26.9 TERMINATION RIGHTS EXHAUSTIVE
The rights of termination set out expressly in this Agreement in
Clauses 4.6 (Termination for convenience), 4.7 (Termination by Time),
21 (Indemnity), 24 (Force Majeure) and 26 (Termination) (together with
the provisions of Schedule 10 (Benchmarking)) are the sole grounds for
termination available to the parties and represent the full extent of
the parties' respective rights and remedies arising on termination,
save for those rights, remedies and liabilities which shall have arisen
prior to termination or as otherwise expressly provided herein.
27. EXIT PLAN AND OBLIGATIONS UPON THE OCCURRENCE OF A TRIGGER EVENT
27.1 IBM shall produce and maintain an Exit Plan and Exit Plan Supporting
Data and discharge all other obligations relating thereto in accordance
with Schedule 26 (Exit Plan).
27.2 On the occurrence of a Trigger Event, IBM and ntl shall discharge their
respective obligations as detailed in Schedule 26 (Exit Plan).
28. NO PARTNERSHIP, ETC
Nothing in this Agreement, and no action taken by the parties pursuant
to this Agreement shall constitute, or be deemed to constitute, the
parties a partnership, within the meaning of the Partnership ▇▇▇ ▇▇▇▇
or denote the relationship of agent/principal between the parties.
29. WAIVER AND VARIATION
29.1 NO WAIVER
No omission to exercise or delay in exercising on the part of any party
to this Agreement any right, power or remedy provided by law or under
this Agreement shall
88
constitute a waiver of such right, power or remedy of any other right,
power or remedy or impair such right, power or remedy. No single or
partial exercise of any such right, power or remedy shall preclude or
impair any other or further exercise thereof or the exercise of any
other right, power or remedy provided by law or under this Agreement.
29.2 WAIVER IN WRITING
Any waiver of any right, power or remedy under this Agreement must be
in writing, must be expressly stated to be a waiver and must be
communicated in accordance with Clause 32 (Notices) and may be given
subject to any conditions thought fit by the grantor. Unless otherwise
expressly stated any waiver shall be effective only in the instance and
only for the purpose for which it is given and therefore shall not be
construed as a waiver of a party's rights or remedies with respect to
any succeeding breach of the same or other provisions.
29.3 VARIATION IN WRITING
No variation to this Agreement shall be of any effect unless it is
agreed in writing and signed by or on behalf of each party.
30. ASSIGNMENT
30.1 ntl and IBM may assign all or any of its rights and transfer all or any
of its obligations under this Agreement to any company which is a
member of the ntl Group or an IBM Group Company respectively (subject
in each case to that company having financial status acceptable to the
other party acting reasonably in the circumstances), provided that such
company enters into a deed in favour of the other party by which it
becomes bound by the provisions of this Agreement which bind the
assigning company in its place and provided that the assigning company
provides information reasonably sufficient to satisfy the other party
of the ability of the proposed assignee to meet its proposed
obligations. Apart from that, ntl may not assign any of its rights
under this Agreement without the prior written consent of IBM, such
consent not to be
89
unreasonably withheld or delayed save that it may assign upon and with
the transfer of the whole or a substantial part of its business on
notice to IBM without IBM consent. IBM may not assign any of its rights
under this Agreement without the prior written consent of ntl.
30.2 Following any permitted assignment and/or transfer under Clause 30.1,
any reference in this Agreement to that party shall, where the context
allows, include the assignee and/or transferee. Any permitted assignee
shall be treated for all purposes as if it had been an original party
to (and been granted the relevant rights under) this Agreement and the
assignor shall be released from all liability under this Agreement to
the extent such liability is assumed by the assignee.
30.3 Notwithstanding any provision of this Agreement and any confidentiality
obligation imposed on ntl by law, ntl may disclose to any assignee or
proposed assignee and its advisers such information about IBM as is
reasonably necessary to effect a transfer, subject to ntl entering into
a confidentiality undertaking with such third parties (expressed to be
for the benefit of IBM), and accordingly such disclosure shall not be
deemed to be a breach of this Agreement.
31. REMEDIES CUMULATIVE: ENTIRE AGREEMENT
31.1 RIGHTS CUMULATIVE AND ENTIRE
The rights, powers and remedies provided in this Agreement or expressly
referred to herein are cumulative and exhaustive and exclude any
rights, powers or remedies relating to its subject matter provided by
law or by any other document other than this Agreement or a document
referred to in it.
31.2 WHOLE AND ONLY AGREEMENT
Subject to the provisions of Clause 31.3 below, this Agreement together
with the Transfer Agreement and any documents referred to herein or in
that agreement constitutes the whole and only agreement between the
Parties relating to, and
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supersedes and extinguishes any prior drafts, previous agreements,
undertakings, representations, warranties and arrangements of any
nature whatsoever, whether or not in writing between the Parties, in
connection with the subject matter hereof including in particular a
confidentiality undertaking between the parties signed on 16 June 2000
(only to the extent it relates to the subject matter of this Agreement)
and the memorandum of understanding signed on 21 December 2000.
31.3 FRAUD OR DECEIT
Nothing in this Agreement or in any other document referred to herein
shall be read or construed as excluding any liability or remedy as a
result of fraud, fraudulent misrepresentation or deceit.
32. NOTICES
32.1 COMMUNICATIONS IN WRITING AND METHOD OF DESPATCH
Any communication to be given in connection with the matter
contemplated by this Agreement shall be in writing and shall either be
delivered by hand or sent by first class pre-paid post or facsimile
transmission. Delivery by courier shall be regarded as delivery by
hand.
32.2 ADDRESS FOR COMMUNICATIONS
Such communication shall be sent to the address of the relevant party
referred to in this Agreement or the facsimile number set out below or
to such other address or facsimile number as may previously have been
communicated to the other party in accordance with this Clause 32. Each
communication shall be marked for the attention of the relevant person.
Party: ntl Group Limited
Address: ntl House, ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
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Facsimile number: 01256 752420
For the attention of: The ntl Contract Executive (by name and title)
Party: IBM United Kingdom Limited
Address: ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Facsimile number: 01256 343 212
For the attention of: The Contract Manager, ntl Project Office
32.3 DEEMED SERVICE
A communication shall be deemed to have been served:
32.3.1 if delivered by hand at the address referred to in Clause 32.2, at the
time of delivery;
32.3.2 (unless returned as being undelivered) if sent by first class
pre-paid post to the address referred to in Clause 32.2, on
the 3rd Business Day following the time of posting; and
32.3.3 if sent by facsimile to the number referred to in Clause 32.2
at the time of completion of transmission by the sender
provided that a confirming copy is sent by first class
pre-paid post to the address referred to in Clause 32.2 within
24 hours after transmission.
If a communication would otherwise be deemed to have been delivered
outside of normal business hours (being 9.30 am to 5.30 pm on a
Business Day) under this Clause 32.3, it shall be deemed to have been
delivered at the opening of business on the next Business Day.
32.4 PROOF OF SERVICE
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In proving service of the communication, it shall be sufficient to show
that delivery by hand was made or that the envelope containing the
communication was properly addressed and posted as a first class
pre-paid letter, or if in the form of facsimile that it was despatched
and a confirmatory transmission report received.
32.5 CHANGE OF DETAILS
A party may notify the other party to this Agreement of a change to its
name, relevant person, address or facsimile number for the purposes of
Clause 32.2 (Address for communication) PROVIDED THAT such notification
shall only be effective on:
32.5.1 the date specified in the notification as the date on which
the change is to take place or
32.5.2 if no date is specified or the date specified is less than 5
clear Business Days after the date on which notice is deemed
to have been served, the date falling 5 clear Business Days
after notice of any such change is deemed to have been given.
32.6 SERVICE DOCUMENTS
For the avoidance of doubt, the parties agree that the provisions of
this Clause shall not apply in relation to the service of Service
Documents which shall be served marked for the attention of The Company
Secretary, The Legal Affairs Department, ntl House, ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ in the case of ntl and The
Company Secretary, IBM United Kingdom Limited, the Legal Department at
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ in the case of IBM or such other
address as has been communicated in accordance with Clause 32.5 in
either case.
33. FULL NEGOTIATION
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Each party acknowledges and agrees that the provisions of this
Agreement have been the subject of discussion and negotiation and, with
particular reference to any exclusion Clauses set out herein, are fair
and reasonable having regard to the circumstances as at the date of
this Agreement.
34. COUNTERPARTS
34.1 NUMBER OF COUNTERPARTS
This Agreement may be executed in any number of counterparts and by the
parties on different counterparts but shall not be effective until each
party has executed at least one counterpart.
34.2 ONE AND THE SAME
Each counterpart shall constitute an original of this Agreement but all
the counterparts shall together constitute one and the same agreement.
35. INVALIDITY
Each of the provisions of this Agreement is severable. If any such
provision or any part of such provision is or becomes illegal, invalid
or unenforceable in any respect under the law of any jurisdiction, the
legality, validity or enforceability in that jurisdiction of the
remaining provisions of this Agreement or the remaining parts of that
provision shall not in any way be affected or impaired thereby. The
parties shall seek in good faith to agree amendments to this Agreement
to reflect the original commercial intent as closely as legally
permissible.
36. ANNOUNCEMENTS
36.1 NO ANNOUNCEMENTS
No press conference, announcement or other communication concerning
this Agreement, its terms, the transactions referred to in this
Agreement or the 1998
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Agreement, or in connection with ntl shall be made or despatched by
either party to any third party without the prior written consent of
the other save as may be required by:
36.1.1 any law;
36.1.2 the New York Stock Exchange or any other regulatory or
governmental body to which either party is subject, whether or
not the requirement has the force of law; or
36.1.3 existing contractual arrangements provided that the other
party has first been informed of this and any confidentiality
undertaking reasonably required by it has been entered into by
the third party;
provided such communication shall be made only after consultation as to
form of notice with the other party.
36.2 CONTINUATION
The restrictions contained in this Clause 36 shall continue to apply
after the Term without limit in time.
37. PROBLEM ESCALATION AND RESOLUTION
37.1 Any question or difference which may arise concerning the construction,
meaning, effect or operation of this Agreement or any matter arising
out of or in connection with this Agreement shall in the first instance
be referred to the ntl Contract Executive and the IBM Project Executive
for discussion and resolution at or by the next Review Meeting. If the
matter is not resolved at such meeting, the matter shall be referred to
the next level of ntl's and IBM's management who must meet within three
working days or such other period as the parties may agree to attempt
to resolve the matter. If the matter is not resolved at that meeting,
the escalation shall continue with the same maximum time interval
through two more levels of management. If the unresolved
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matter is having a serious effect on the Services, the parties shall
use every reasonable endeavour to reduce the elapsed time in completing
the process. Neither party may initiate any legal action until the
process has been completed, unless such party has reasonable cause to
do so to avoid damage to its business or to protect or preserve any
right of action it may have.
37.2 The levels of escalation referred to in Clause 37.1 above are:
IBM NTL
First Level - Director of Services, First Level - Director, IT.
EMEA Region North
Second Level - General Manager, Second Level - Director, Finance.
Professional Services, EMEA
Third Level - Director of Services, Third Level - Chief Operating
EMEA Officer/Managing Director.
If any of the above are unable to attend a meeting, a substitute may
attend provided that such substitute has at least the same seniority or
reasonably comparable managerial or directorial responsibility and is
authorised to settle the unresolved matter.
37.3 If the dispute is not resolved by escalation in accordance with Clause
37.1 the parties shall seek to resolve disputes between them pursuant
to Clause 38.2 (Alternative dispute resolution).
38. DISPUTE RESOLUTION, LAW AND JURISDICTION
38.1 The parties shall attempt in good faith to resolve any dispute or claim
arising out of or relating to this Agreement promptly through
negotiations between the respective senior executives of the Parties
who have authority to settle the same pursuant to Clause 37 (Problem
Escalation and Resolution).
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38.2 If the matter is not resolved through negotiation, the Parties shall
attempt in good faith to resolve the dispute or claim through an
Alternative Dispute Resolution (ADR) procedure as recommended to the
parties by the Centre for Dispute Resolution. However, an ADR procedure
which is being followed shall not prevent either party from issuing
proceedings.
38.3 This Agreement shall be governed by and interpreted in accordance with
English law. The parties irrevocably submit to the non-exclusive
jurisdiction of the English courts to settle any disputes which may
arise in connection with this Agreement.
The parties have shown their acceptance to the terms of this Agreement by
signing at the end of this Agreement and by initialling the Schedules by way of
identification.
SIGNED for and on behalf of )
NTL GROUP LIMITED )
/s/ ▇▇▇▇▇▇ ▇▇▇▇
SIGNED for and on behalf of )
IBM UNITED KINGDOM LIMITED )
/s/ Authorized Signatory
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