EXHIBIT 4.121
CONFIDENTIAL TREATMENT
REQUESTED BY MARCONI CORPORATION PLC
DATED: 23 MAY 2003
(1) CSC INTERNATIONAL SYSTEMS MANAGEMENT INC.
(2) MARCONI CORPORATION PLC
(3) MARCONI COMMUNICATIONS LIMITED
MASTER AGREEMENT FOR THE PROVISION OF IT AND PROJECT SERVICES
STRICTLY PRIVATE AND CONFIDENTIAL
MAYER, BROWN, ▇▇▇▇ & MAW LLP
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▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Tel: ▇▇▇▇-▇▇▇ ▇▇▇▇
Fax: ▇▇▇▇-▇▇▇ ▇▇▇▇
Ref: 764/965/30745.00009
IN THIS EXHIBIT, THE NOTATION "[***]" (OR OTHER SIMILAR NOTATION) INDICATES THAT
CONFIDENTIAL MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT. THE MATERIAL SO OMITTED HAS BEEN FILED SEPARATELY WITH THE SEC.
CONTENTS
CLAUSE SUBJECT MATTER PAGE
1. Definitions and Interpretation 1
2. Scope and Duration 13
3. Performance 22
4. Charges and Deferred Contract Premium Payments 34
5. Validation of Information 39
6. Technology Refreshment 44
7. Continuous Improvement 44
8. Benchmarking 44
9. Governance 45
10. Marconi Software and Assets 45
11. Grant of Licences 46
12. Property and Personnel 48
13. Termination 48
14. Consequences of Termination or Expiry 50
15. Representations and Warranties 56
16. Confidentiality 57
17. Data Protection 59
18. Intellectual Property 61
19. Liability And Insurance 65
20. Force Majeure 68
21. Alterations in the Marconi Group 69
22. No Commissions, etc 71
23. Third Party Beneficiaries 72
24. Indemnification Procedure 73
25. Assignment and Sub-Contracting 74
26. Dispute Resolution 77
27. Expert's Decision 78
28. Arbitration 79
29. Entire Agreement 80
30. Notices 81
31. No Partnership etc. 82
32. Amendments, Waivers & Rights Cumulative 82
33. Severability 83
34. Costs 83
35. Counterparts 83
36. Announcements 83
37. Governing Law and Jurisdiction 84
38. Further Assurance 84
39. Duty to Mitigate 84
40. Euro 84
SCHEDULES
Schedule 1 - Service Level Agreement
Schedule 2 - Not Used
Schedule 3 - List of Standards and Policies
Schedule 4 - Charges
Schedule 5 - Service Credits
Schedule 6 - Project Initiation Procedure
Schedule 7 - Project Terms
Schedule 8 - Not Used
Schedule 9 - Change Control
Schedule 10 - Personnel
Schedule 11 - Property
Schedule 12 - Audit
Schedule 13 - Termination Compensation
Schedule 14 - Exit Management
Schedule 15 - The Budget
Schedule 16 - Form of Country Agreement
Schedule 17 - Technology Refresh
Schedule 18 - Continuous Improvement
Schedule 19 - Benchmarking
Schedule 20 - Governance
Schedule 21 - Approved Sub-Contractors
Schedule 22 - Assumptions & Dependencies
Schedule 23 - Form of Guarantees
EXHIBITS
Exhibit 1 - Transition Project
Appendix A to Exhibit 1 - General Project Plan
Appendix B to Exhibit 1 - True Up Project Plan
Exhibit 2 - Existing Projects
MASTER SERVICES AGREEMENT
DATE: 23 May 2003
PARTIES:
(1) CSC INTERNATIONAL SYSTEMS MANAGEMENT INC., a company incorporated in
Nevada, USA, whose principal place of business is at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇ (the "SUPPLIER");
(2) MARCONI CORPORATION PLC, a company incorporated in England and Wales,
with company number 67307, whose registered office is New Century Park,
▇▇ ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("MARCONI"); and
(3) MARCONI COMMUNICATIONS LIMITED, a company incorporated in England and
Wales, with company number 703317, whose registered office is at New
Century Park, ▇▇ ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("MCL").
BACKGROUND:
▇. ▇▇▇▇▇▇▇ desires to outsource the provision of certain services, and to
that end issued invitations to tender to several potential suppliers
dated 17 January 2002.
B. On the basis of the Supplier's responses dated 19 January 2002 and 22
February 2002, Marconi selected the Supplier, subject to contract.
C. By agreements of the same date as this Agreement, Marconi has agreed to
sell or to procure the sale of certain assets, and to transfer or to
procure the transfer of certain contracts and staff, to members of the
Supplier Group and to members of the BT Group in return for cash
payments by members of the Supplier Group and members of the BT Group.
D. The Supplier has agreed to provide and Marconi has agreed to pay (or
procure payment) for the Services, subject to the terms of this
Agreement.
IT IS NOW AGREED THAT:
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement the following definitions apply unless the context
otherwise requires:
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"APPLICABLE LEGISLATION" means any Legislation at any time relating or
applicable to the Services or any lawful requirement or demand of any
Competent Authority in respect of which compliance is legally
obligatory;
"APPROVED SUB-CONTRACTOR" means any sub-contractor authorised under
Clause 25.2 (Subcontracting) (other than a Key Supplier or the
counter-party to an In-Scope Contract);
"ASSET" means any of the Assets as defined in a Transfer Agreement;
"ASSET TRANSFER AGREEMENT" means the agreement between the Parties of
the same date as the Commencement Date providing for the transfer of
certain assets and staff for the purposes of or in connection with the
Services (other than the Network Services) in accordance with a CSC
Transfer Agreement;
"BASELINE CHARGE" has the meaning given in Schedule 4 (Charges);
"BEST INDUSTRY PRACTICE" means in relation to any undertaking in any
circumstances, the degree of skill, diligence, prudence and foresight
which would reasonably and ordinarily be expected from a suitably
skilled and experienced person in the same or similar circumstances;
"BT" means British Telecommunications Plc, a company incorporated in
England and Wales with registered number 1800000, whose registered
office at the Commencement Date is at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇;
"BT ASSET TRANSFER AGREEMENT" means the agreement between Marconi, MCL,
the Supplier and BT of the same date as the Commencement Date providing
for the transfer of certain assets and staff for the purposes of or in
connection with the Network Services in accordance with a BT Transfer
Agreement;
"BT CONTRACT" means any contract defined as an In-Scope Contract in a
BT Transfer Agreement;
"BT TRANSFER AGREEMENT" means an agreement in writing in relation to a
Territory entered into as envisaged by the BT Asset Transfer Agreement
between a member of the Marconi Group, a member of the Supplier Group
and a member of the BT Group for (amongst other things) the sale of
assets and/or the transfer of contracts and staff for the purposes of
the provision of the Network Services;
"BUDGET" means the notional costs in respect of the Internal Services
set forth in Schedule 15 (The Budget);
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"BUSINESS DAY" means any day when clearing banks are open for business
in the City of London for the transaction of normal banking business,
other than a Saturday, Sunday, bank or public holiday recognised in
England;
"CHANGE" has the meaning given to it in Change Control;
"CHANGE CONTROL" means the provisions of Schedule 9 (Change Control);
"CHARGE" means an amount in respect of the provision of the Services,
in the case of the IT Services, determined in accordance with Schedule
4 (Charges), and in the case of the Project Services, calculated in
accordance with the Schedule of Work under which the Project Services
in question are to be performed, in any case subject to variation in
accordance with Change Control and (as applicable) Schedule 19
(Benchmarking);
"COMMENCEMENT DATE" means the date on which this Agreement has been
signed by the Supplier, Marconi and MCL;
"COMPETENT AUTHORITY" means any court, governmental body or regulatory
authority having authority over or in respect of the Marconi Group, the
Supplier Group or any Approved Sub-Contractor;
"CONTROL" means the beneficial ownership of more than fifty per cent
(50%) of the issued share capital with full voting rights of, or the
legal power to direct or cause the direction of, the general management
of the company, partnership or other entity in question or the holding
company of the company, partnership or other entity in question, and
"CONTROLLED" shall be construed accordingly;
"COUNTRY" means any country from time to time where Services are to be
delivered under this Agreement;
"COUNTRY AGREEMENT" means an agreement in writing on the terms
envisaged by Clause 2.10(4) (Country Agreements);
"COUNTRY CONDITIONS" means, in relation to a Country, the filing of any
notifications with, and the granting of any consents or approvals by,
any Governmental Authority which is required to authorise within (or
otherwise in respect of) that Country the provision of the IT Services
by the Supplier or any Approved Sub-Contractor;
"CSC TRANSFER AGREEMENT" means an agreement in writing in relation to a
Territory entered into as envisaged by the Asset Transfer Agreement
between a member of the Marconi Group and a member of the Supplier
Group for (amongst other things) the
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sale of assets and/or the transfer of contracts and staff for the
purposes of the provision of the Services (other than the Network
Services);
"CURRENT CONTRACT" means any contract defined as such in a Transfer
Agreement;
"CUTOVER" means the transfer of responsibility for any Services to the
Supplier in accordance with Clause 2.2 (Cutover);
"DEFAULT INTEREST" means an annual rate of interest at [***] per cent.
per annum above the base rate from time to time of the National
Westminster Bank plc (or, in case of amounts denominated in a currency
other than Sterling, a bank of equivalent standing to be agreed between
the Parties);
"DEPENDENCIES" means the actions, circumstances or events which need to
be performed by or on behalf of the Marconi Group or to occur or
otherwise to be satisfied in order for the Supplier to be able to
provide the Services, which in the case of the IT Services are
identified as "Dependencies" in Part 2 of Schedule 22 (Assumptions and
Dependencies), and in the case of Project Services are identified in
the Schedule of Work under which the Project Services in question are
to be performed;
"DISCLOSURE LETTER" means a letter defined as such in a Transfer
Agreement;
"EMPLOYEE" means any "Employee" as defined in a Transfer Agreement;
"EXIT ARRANGEMENTS" means the provisions contained in Schedule 14 (Exit
Management) and the Exit Plan;
"EXIT PLAN" has the meaning given to it in Clause 2.11 (Exit Plan);
"EXPERT'S DECISION" means the process described in Clause 27 (Expert's
Decision) and "EXPERT" shall be construed accordingly;
"FORCE MAJEURE EVENT" has the meaning given to it in Clause 20.7 (Force
Majeure);
"GOVERNMENTAL AUTHORITY" means any nation or government, any state,
regional, provincial, territorial, local or other political subdivision
thereof, or any supranational authority and any entity or official
exercising executive, legislative, judicial, quasi-judicial, regulatory
or administrative functions of or pertaining to government;
"GROUP" means, in relation to a person (other than Marconi or MCL), all
or any of the following from time to time: that person, its
subsidiaries and subsidiary
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[***] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
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undertakings and any parent undertaking of that person, and all other
subsidiaries and subsidiary undertakings of any parent undertaking of
that person, and in the case of Marconi, means the Marconi Group, and
"MEMBER OF THE GROUP OF" any person shall be construed accordingly;
"IN-SCOPE CONTRACT" means any BT Contract or Supplier Contract;
"INSOLVENCY EVENT" means any of the following occurring in relation to
either Party:
(a) the issue of a petition for winding-up, which petition is not
dismissed or stayed within forty-five (45) days of its issue
(except for the purpose of a solvent reconstruction or
amalgamation and where the resulting entity agrees in writing
to undertake all of the obligations of the relevant Party
under this Agreement);
(b) the making of an order or an effective resolution being passed
for winding up (except for the purpose of a solvent
reconstruction or amalgamation and where the resulting entity
agrees in writing to undertake all of the obligations of the
relevant Party under this Agreement);
(c) the making of an order for the appointment of an
administrative receiver, administrator, trustee, liquidator,
manager or similar officer (except for the purpose of a
solvent reconstruction or amalgamation and where the resulting
entity agrees in writing to undertake all of the obligations
of the relevant Party under this Agreement);
(d) an encumbrancer, receiver (including an administrative
receiver) or other similar officer taking possession of the
whole or any part (which is material in the context of the
performance of the affected Party's obligations under this
Agreement) of such Party's undertaking, property or assets;
(e) being unable to pay debts as they fall due as defined by
section 123 of the Insolvency ▇▇▇ ▇▇▇▇; or
(f) any event that is analogous to any of the events to which
paragraphs (a) to (e) refer occurring in any jurisdiction in
which a Party is incorporated.
"INTELLECTUAL PROPERTY" means any intellectual property rights,
including patents, utility models, copyrights, moral rights, topography
rights, database rights, trade secrets and rights of confidence, and
all embodiments thereof, whether tangible or intangible in all cases
whether or not registered or registrable in any country, for the
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full term of such rights including any extension to or renewal of the
terms of such rights and including registrations and applications for
registration of any of these and rights to apply for the same and all
rights and forms of protection of a similar nature or having equivalent
or similar effect to any of these anywhere in the world;
"INTERNAL SERVICES" means any or all of the services described in the
Service Level Agreement provided by the Marconi Group from its own
resources or procured by the Marconi Group from third parties and
delivered to or used by the Marconi Group as at the Commencement Date
at the sites identified in Appendices A, C and D of the Service Level
Agreement;
"INVOICE REGIONS" has the meaning given in Paragraph 1.2 of Schedule 4
(Charges);
"IT EQUIPMENT" means any assets defined as "IT Equipment" in a CSC
Transfer Agreement (the "SUPPLIER EQUIPMENT") or as "Network Equipment"
in a BT Transfer Agreement (the "BT EQUIPMENT");
"IT SERVICES" means the services (other than Project Services) and
other activities for which the Supplier is responsible as described in
the Service Level Agreement;
"KEY SUPPLIER" means any of Bellsouth, Worldcom, Sprint, Deutsche
Telekom AG, Telecom Italia SpA, Telecom Italia Mobile SpA, Omnitel SpA,
Wind-Infostrada SpA, Inet SpA, Albacom SpA or Edisontel SpA;
"LEASED EQUIPMENT" means the hardware and other information technology
and network assets and equipment that is subject to the Equipment
Contracts to be sold under a Transfer Agreement;
"LEGISLATION" means any Act of Parliament or subordinate legislation
within the meaning of section 21(1) of the Interpretation ▇▇▇ ▇▇▇▇, any
exercise of the Royal Prerogative and any enforceable Community right
within the meaning of section ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and any
other law or statute of any other country in which the Services are
provided and (insofar as compliance therewith is legally obligatory)
any licence, standard or principle of behaviour, rule, regulation or
code of practice or guidance laid down or required by any regulatory
authority or body or self-regulating or other organisation exercising
supervisory authority or control over or in respect of the Marconi
Group, the Supplier Group or any Approved Sub-Contractor pursuant to
legislation or otherwise and any other regulation, decision, licence or
authorisation having the force of law of any body having jurisdiction
in relation to the business of the Marconi Group, the Supplier Group or
any Approved Sub-Contractor and "LEGISLATIVE" shall be construed
accordingly;
6
"LICENSED SITE" means any area within a Site designated by Marconi
(acting reasonably) for use by the Supplier from time to time for the
purpose of providing the Services;
"LOSS" means any or all loss, damage, cost and expense;
"MARCONI ASSETS" means the hardware and other goods, including
software, and services to which the Marconi Controlled Group is
entitled pursuant to a contract with any third party (other than an
In-Scope Contract), and hardware and other goods, including Marconi
Software, owned by the Marconi Controlled Group;
"MARCONI CONTRACT MANAGER" means a suitably qualified and experienced
person appointed by Marconi from time to time to fulfil the tasks
required of the appointee under this Agreement;
"MARCONI CONTROLLED GROUP" means Marconi, and any other person which
from time to time Controls, is Controlled by, or is under common
Control with Marconi, and "MEMBER OF THE MARCONI CONTROLLED GROUP"
shall be construed accordingly;
"MARCONI DATA" means all or any information or data supplied to the
Supplier or any third party by or on behalf of a member of the Marconi
Group for the purposes of the Services or generated or collected by or
on behalf of the Supplier in the course of providing or in connection
with the Services, which relates to the business of the Marconi Group
(excluding the Supplier's business records and information used to
calculate the Charges);
"MARCONI GROUP" means all or any of the following from time to time:
(a) Marconi;
(b) Marconi's wholly-owned subsidiaries and wholly-owned
subsidiary undertakings;
(c) any parent undertaking of Marconi and all other wholly-owned
subsidiaries and wholly-owned subsidiary undertakings of any
parent undertaking of Marconi;
(d) Marconi Communications South Africa (pty) Ltd; and
(e) each company, partnership or other entity included within the
"Marconi Group" pursuant to Clause 2.1(4), but in each case
only until Marconi notifies the Supplier that the company,
partnership or other entity in question is no longer within
the Marconi Group,
7
and "MEMBER OF THE MARCONI GROUP" shall be construed accordingly;
"MARCONI SOFTWARE" means the software (whether in source, object, or
executable code) and associated documentation, the Intellectual
Property subsisting in or relating to which is owned by a member of the
Marconi Controlled Group;
"MARCONI WORKS" means Works specifically developed for the Marconi
Group pursuant to a Schedule of Work or otherwise pursuant to this
Agreement at Marconi's prior written request,[***] including any
enhancements, additions or changes to the Marconi Software or Marconi
Data;
"NETWORK SERVICES" means:
(a) those IT Services referred to in Part 5 (Network Services) of
the Service Level Agreement; and
(b) any of the IT Services referred to in Parts 2 (Helpdesk and
Call Centre Services), 3 (Desktop and Supply Services) and 9
(Security Services) of the Service Level Agreement and any
Project Services to the extent (in any such case) performed
(or to be performed) by or on behalf of BT in its capacity as
an Approved Sub-contractor;
"NON-LICENSED SITES" means those of the Sites which are not Licensed
Sites;
"PARTY" means the Supplier or Marconi (but not for the avoidance of
doubt MCL);
"PHASE 1 COMPLETION" means the last "Completion" under a Transfer
Agreement relating to a Phase 1 Territory to occur;
"PHASE 1 TERRITORY" means each of the United Kingdom, Ireland, the
United States of America and Canada;
"PHASE 2 COMPLETION" means, in relation to a Phase 2 Territory,
"Completion" under the Transfer Agreement(s) relating to that
Territory;
"PHASE 2 LONG STOP DATE" means the date that is twelve (12) weeks after
Phase 1 Completion;
"PHASE 2 TERRITORY" means a Territory other than a Phase 1 Territory;
"PROJECT" means the activities and events required to take place to
bring into effect a Change, any applications development to which Part
7 of the Service Level Agreement refers, or any other activities and
events intended to achieve a particular
8
result or perform a particular task for the benefit of the Marconi
Group, in each case as described in a Schedule of Work;
"PROJECT INITIATION PROCEDURE" means the provisions of Schedule 6
(Project Initiation Procedure);
"PROJECT SERVICES" means the services to be undertaken by the Supplier
under a Schedule of Work, or any of them;
"PROJECT TERMS" means the provisions of Schedule 7 (Project Terms);
"REGULATED ACTIVITIES" has the meaning given to it in Clause 3.7(1)
(Regulated Activities);
"SCHEDULE OF WORK" means a document agreed by the Parties or determined
in accordance with the Project Initiation Procedure;
"SERVICE CATEGORIES" means the service categories into which the IT
Services are classified in the Service Level Agreement, and "SERVICE
CATEGORY" means any one of them;
"SERVICE DELIVERY MANAGER" means a suitably qualified and experienced
person nominated by the Supplier from time to time to fulfil the tasks
required of the nominee under this Agreement;
"SERVICE LEVEL AGREEMENT" means the document forming Schedule 1
(Service Level Agreement);
"SERVICES" means the IT Services and the Project Services, or any of
them;
"SIDE DEED" means the side deed between Marconi Communications Limited,
Marconi Corporation Plc and British Telecommunications Plc dated the
same date as this Agreement;
"SITE" means premises occupied by the Marconi Group from time to time
and such additional or replacement premises as may be designated by
Marconi from time to time in accordance with Change Control;
"SUPPLIER CONTRACT" means any contract defined as an In-Scope Contract
in a CSC Transfer Agreement;
"SUPPLIER GROUP" means all or any of the following from time to time:
the Supplier, its subsidiaries and subsidiary undertakings and any
parent undertaking of the
9
Supplier, and all other subsidiaries and subsidiary undertakings of any
parent undertaking of the Supplier and "MEMBER OF THE SUPPLIER GROUP"
shall be construed accordingly;
"SUPPLIER PERSONNEL" means all persons employed or engaged by the
Supplier or its Approved Sub-contractors from time to time in
connection with the Services, including self-employed contractors
(whether or not employed or engaged directly as individuals or through
the medium of a company);
"SUPPLIER WORKS" means any Works (including proprietary tools), the
Intellectual Property in or to which is owned by a member of the
Supplier Group, excluding Works licensed to the Marconi Group under
Clause 11.1 (Works);
"TAXATION" means and includes all forms of taxation and statutory,
governmental, supra-governmental, state, local governmental or
municipal impositions, duties, contributions, deductions, withholdings
and levies whether of the United Kingdom or elsewhere whenever imposed;
"TERRITORY" means a country defined as such in either the Asset
Transfer Agreement or the BT Asset Transfer Agreement (whether or not a
Country);
"THIRD PARTY PROVIDER" means any supplier, other than the Supplier or
any member of the Supplier Group, of goods (including software) or
services to any member of the Marconi Group;
"TRANSFER AGREEMENT" means a CSC Transfer Agreement or a BT Transfer
Agreement;
"TRANSFERRING EMPLOYEE" means any person falling within the definition
of "Employees" in a Transfer Agreement;
"TRANSITION SERVICES" means the Project Services to be performed under
Exhibit 1 (Transition Project);
"TRANSACTION TAX" means any form of value added tax, stamp duty,
registration tax, sales tax, fees or surcharges or similar tax or duty
levied by a Governmental Authority upon the transfer of assets or
equipment, and shall include any interest or penalty incurred in
connection with a failure or the late payment thereof;
"TRUE-UP PROCESS" has the meaning given to it in Clause 5.2(1) (True-Up
Process);
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"VIRUS" means any thing, device or code incorporated in or attached to
any software or data which is intended to impair or otherwise adversely
affect the operation of any computer, prevent or hinder access to any
program or data (whether by rearranging the same within the computer or
any storage medium or device or by altering or erasing the program or
data in whole or part, or otherwise) including computer viruses and
other similar things; and
"WORKS" means any software (whether in source, object or executable
code), databases (but excluding the content of a database to the extent
it includes Confidential Information or financial information of the
Supplier or any Approved Sub-contractor), documentation, methodologies,
know-how, inventions or other works or materials.
1.2 INTERPRETATION
In this Agreement:
(a) unless the context otherwise requires, all references to:
(i) "CLAUSES", "SCHEDULES", "EXHIBITS" and "APPENDICES"
are to clauses of, schedules, exhibits and appendices
to this document as amended from time to time in
accordance with this Agreement;
(ii) the word "INCLUDES" or "INCLUDING" shall be construed
without limitation to the generality of the preceding
words;
(iii) this "AGREEMENT" includes its Schedules, Exhibits and
Appendices and references to this Agreement as
amended from time to time in accordance with its
terms (as amended accordingly);
(iv) the "RIGHTS" of any person (including of either
Party) shall mean the rights and remedies available
to that person under this Agreement or otherwise;
(v) "INDEMNIFY" means to indemnify and keep indemnified
in respect of the Loss in question and, where any tax
or other duty is chargeable on or in relation to the
Loss or its payment, then such indemnity shall be on
an after tax basis;
(vi) a "PERSON" include any individual, firm, corporation,
unincorporated association, government, state or
agency of state, association,
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partnership or joint venture (whether or not having a
separate legal personality);
(vii) a "COMPANY" include any company, corporation or other
body corporate wherever and however incorporated or
established;
(viii) a "DOCUMENT" are to that document as varied,
supplemented or replaced from time to time;
(ix) "WRITING" shall include any modes of reproducing
words in a legible and non-transitory form;
(x) "DOLLARS" or "$" is to the lawful currency of the
United States of America as of the Commencement Date;
(xi) "EUROS" or "E" is to the lawful currency of
participating member states of the European Monetary
Union as of the Commencement Date;
(xii) "STERLING" or "L" or "POUNDS" is to the lawful
currency of the United Kingdom as of the Commencement
Date;
(xiii) a TIME OF DAY is to London time and references to a
"DAY" are to a period of 24 hours running from
midnight to midnight;
(b) the headings shall be ignored in construing this Agreement;
(c) unless the context otherwise requires, words or phrases
importing the singular shall be interpreted to include the
plural and vice versa; and
(d) unless the context otherwise requires, a statute or statutory
provision is a reference to the statute or statutory provision
in force in England and Wales and includes any consolidation,
re-enactment, modification or replacement of it, any statute
or statutory provision of which it is a consolidation,
re-enactment, modification or replacement and any sub-ordinate
legislation in force under any of the same from time to time,
but without in any case increasing the liability of either
Party under or in connection with this Agreement, subject to
Clause 4.5 (Changes in Laws).
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1.3 COMPANIES ACT DEFINITIONS
In this Agreement, unless the context otherwise requires, words and
expressions defined in the Companies ▇▇▇ ▇▇▇▇ shall bear the meaning
ascribed to them in that Act to the exclusion of any definition of the
same words or expressions in any other Legislation.
1.4 OBLIGATIONS UPON GROUP MEMBERS
Where any provision of this Agreement requires any act or omission of
or by a member of the Marconi Group or the Supplier Group, Marconi
shall procure that the relevant member of the Marconi Group shall, and
the Supplier shall procure that the relevant member of the Supplier
Group shall, act or omit to act (as the case may be) in accordance with
such provision.
1.5 CONFLICT OR INCONSISTENCY
If there is any conflict or inconsistency between, on the one hand:
(a) the Schedules or Exhibits (including their Appendices) and, on
the other, Clauses 1 to 40, then Clauses 1 to 40 shall prevail
to the extent of the conflict or inconsistency; or
(b) the Schedules and, on the other, an Exhibit (including its
Appendices), the latter shall prevail to the extent of the
conflict or inconsistency.
2. SCOPE AND DURATION
2.1 SCOPE AND DURATION
(1) This Agreement shall begin on the Commencement Date and shall continue
for ten (10) years from Phase 1 Completion, after which it shall
expire, subject to earlier termination in accordance with its terms.
(2) Where either the Asset Transfer Agreement, the BT Asset Transfer
Agreement or any Transfer Agreement referable to a Phase 1 Territory
terminates in accordance with its terms before Phase 1 Completion, this
Agreement shall also terminate forthwith on the same date. Where either
the Asset Transfer Agreement, the BT Asset Transfer Agreement or any
Transfer Agreement terminates in accordance with its terms on or after
Phase 1 Completion, and consequently Phase 2 Completion does not (or
will not) occur in respect of any Phase 2 Territory, then this
Agreement shall also terminate
13
insofar as it applies to Services to be delivered in or from that Phase
2 Territory, but shall otherwise remain in full force and effect.
(3) MCL is a party to this Agreement solely for the purpose of and as
envisaged by Clause 4.6 (MCL), and shall cease to be a party to this
Agreement (and Clause 4.6 (MCL) shall cease to apply) immediately upon
MCL ceasing to be a member of the Marconi Controlled Group.
(4) Marconi warrants that, as at the Commencement Date, nothing in this
Agreement involves the provision of the Services to any person who is
not a member of the Marconi Group, and Marconi shall ensure that
(subject to Clause 21 (Alterations in the Marconi Group)) this
continues to be the case throughout the term of this Agreement,
provided that:
(a) Marconi may from time to time by notice to the Supplier
include within the "Marconi Group" for the purposes of this
Agreement, any company, partnership or other entity which is a
member of the Marconi Controlled Group;
(b) the companies, partnerships and other entities listed in
Appendix C to the Service Level Agreement (the "ASIA-PAC
ENTITIES") shall be deemed to be included within the "Marconi
Group" for the purposes of this Agreement, but only in so far
as relates to the provision of the services specified in
relation to those Asia-Pac Entities in that Appendix; and
(c) the companies, partnership and other entities listed in
Appendix D to the Service Level Agreement (the "TRANSITIONING
OUT ENTITIES") shall be deemed to be included within the
"Marconi Group" for the purposes of this Agreement during the
relevant periods specified in relation to those Transitioning
Out Entities in that Appendix, or such longer periods as may
be agreed between the Supplier and Marconi from time to time.
2.2 CUTOVER
(1) Subject to the following provisions of this Clause 2.2, responsibility
for the provision of any Services (other than the Transition Services)
shall occur Country by Country when (but not before) all of the
following have occurred in relation to the Country in question:
(a) where that Country is a Territory:
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(i) which is a ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇ Completion; or
(ii) which is a Phase 2 ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇ Completion for
that Country (but not, in any event, before Phase 1
Completion); or
(b) where that Country is not a Territory, when the Country
Conditions for that Country have been satisfied or waived by
the Parties, and by BT, and five (5) Business Days have
elapsed following such satisfaction or waiver, or such other
date as the Parties may agree in writing, but not, in any
event, before Phase 1 Completion.
(2) Where (if at all) the Marconi Group uses Internal Services in any
Country (the "RELEVANT COUNTRY") which are delivered in whole or part
from a Territory (the "EXTERNAL TERRITORY") which is not the Country in
question, responsibility for all or part of the Services replacing the
Internal Services delivered from the External Territory shall pass at
the same time as responsibility passes in respect of the Services
provided from the External Territory (but, in relation to the Relevant
Country, not before the requirements of Clause 2.2(1) applicable to the
Relevant Country have been satisfied), and the Parties will co-operate
in any reasonable arrangements intended to enable:
(a) the Internal Services provided from the External Territory to
continue; and
(b) the relevant Services (other than those replacing the Internal
Services provided from the External Territory) to be provided,
pending responsibility for the Services delivered from the
External Territory passing to the Supplier.
2.3 APPOINTMENT OF SUPPLIER
(1) Subject to the terms of this Agreement, the Supplier shall provide or
procure the provision of:
(a) the Services (other than the Transition Services) on and with
effect from Cutover in relation to those Services; and
(b) the Transition Services,
in each case for Marconi and for the benefit of other members of the
Marconi Group, and Marconi shall pay, or procure payment of, the
Charges.
15
(2) The appointment of the Supplier to provide the Services under this
Agreement is non-exclusive, so that Marconi is entitled to undertake tasks
the same as or similar to the Services or to retain the services of a
third party to provide services that are the same as or similar to the
Services, and the Supplier is entitled to provide services that are the
same as or similar to the Services to any third party, but in any case
without affecting Marconi's or (as the case may be) the Supplier's
obligations under this Agreement.
2.4 ADDITIONAL SERVICES
(1) Subject to Clause 2.4(6), where, during the term of this Agreement, a
member of the Marconi Group:
(a) wishes to obtain additional services that are the same as or similar
to the Services; or
(b) to expand the scope of the Services,
in either case other than through Change Control, Marconi shall notify the
Supplier of the Marconi Group's requirements no later than other potential
suppliers are so notified, and shall, or shall procure that the relevant
member of the Marconi Group shall, give the Supplier (or such appropriate
member of the Supplier Group as the Supplier may nominate and which is
reasonably acceptable to the Marconi Group member) the opportunity to
quote for the provision of those new or additional services.
(2) Where, in Marconi's reasonable opinion, the terms (including as to the
charges for the services) upon which the Supplier (or its nominee under
Clause 2.4(1)) proposes to provide such services are competitive
(including having regard to other bids) and otherwise meet the Marconi
Group's requirements for those services, then:
(a) Marconi shall or shall procure that the relevant member of the
Marconi Group shall appoint the Supplier or such member of the
Supplier Group to provide those services on those terms; and
(b) the Supplier shall or shall procure that such member of the Supplier
Group shall accept the appointment,
by (in each such case) the execution of an agreement in writing
subject to those terms.
(3) In all other cases, Marconi may retain the services of a third party to
provide those services, without affecting the Supplier's rights and
obligations under this Agreement.
16
(4) Where the Supplier Group is requested by Marconi to provide new or
additional services, and the Supplier Group is reasonably able to provide
those services to the Marconi Group, the Supplier shall not, or shall
procure that the relevant member of the Supplier Group shall not:
(a) refuse to do so; or
(b) agree to provide those services only on unreasonable terms.
(5) Where Clause 2.4(1) applies, the Marconi Group shall be entitled (but not
obliged) to disclose to all other persons expressing an interest in
providing the new or additional services Marconi's obligations under this
Clause 2.4.
(6) Marconi shall not be obliged to comply with this Clause 2.4 in relation to
requirements (as referred to in Clause 2.4(1)) of a member of the Marconi
Group which was not a member of the Marconi Group as at the Commencement
Date (a "NEW MARCONI AFFILIATE") where either:
(a) the New Marconi Affiliate is a party to a contract that was entered
into before the New Marconi Affiliate became a member of the Marconi
Group and compliance with this Clause 2.4 would either result in a
breach of that contract or would result in the procurement of
services that would be the same as or similar to services to which
the Marconi Group is receiving under that contract; or
(b) the New Marconi Affiliate is not a member of the Marconi Controlled
Group.
2.5 SITES AND SOFTWARE
(1) The:
(a) locations of the Sites at, or in respect of which, the IT Services
are intended to be performed as of the Commencement Date; and
(b) Marconi Assets being software in relation to which the IT Services
are intended to be provided as at the Commencement Date,
are identified in the Service Level Agreement.
(2) Where there is any change to such Site or software before Cutover has
occurred in respect of the Services relating to the Site or software, then
any adjustment to the
17
Charges shall be made in accordance with Schedule 4 (Charges) and, where
applicable, Change Control.
(3) Where there is any change to such Site or software on or after
Cutover has occurred in respect of the Services relating to the Site
or software, such change shall be subject to Change Control,
provided that where the change falls within the scope of the
relevant "ARC/RRC" mechanisms outlined in Schedule 4 (Charges), any
adjustment to the Charges shall be determined pursuant to those
"ARC/RRC" mechanisms.
2.6 PROJECT SERVICES
(1) No Project shall be undertaken unless:
(a) the Parties have completed the Project Initiation Procedure in
relation to the relevant Project; and
(b) the Parties have agreed the Charges (or the Charges have been
determined pursuant to this Agreement) for the provision of the
Project Services (to the extent that those Charges are not
contemplated under Schedule 4 (Charges)).
(2) Exhibit 1 (Transition Project) shall constitute a Schedule of Work in
relation to the preparation of the Parties for the provision by the
Supplier of the IT Services.
(3) The Parties acknowledge that Exhibit 2 (Existing Projects) lists current
and planned projects of the Marconi Group as of the Commencement Date and
that provision has been made in the Budget for the costs of these projects
(subject to verification via a True-up Process). As soon as reasonably
practicable after Cutover in relation to the Services to be provided in
the Phase 1 Territories, the Parties shall conclude Schedules of Work in
relation to these projects in accordance with the Project Initiation
Procedure.
2.7 CHANGE CONTROL AND VARIATIONS TO THE IT SERVICES
(1) Subject to Clause 2.7(2), Schedule 9 (Change Control) shall have
effect.
[***]
2.8 AUDIT
Schedule 12 (Audit) shall have effect.
18
2.9 NOTICE OF BREACHES
Without limiting the provisions of Clause 13 (Termination), Marconi and
the Supplier, promptly upon becoming aware of a breach of this Agreement
by the other, shall notify the other of the breach in question, and the
Party allegedly in default shall investigate the claim and, if well
founded, without affecting the rights of either Party, shall propose
reasonable measures to rectify the breach and to prevent a recurrence of
it.
2.10 COUNTRY AGREEMENTS
(1) Either Party is (subject to the provisions of Schedule 4) entitled by
reasonable prior notice to the other Party to nominate a member of its
Group (which may, for the avoidance of doubt, but subject to the following
requirements of this Clause 2.10, be itself) to provide (in the case of
nominations by the Supplier) or pay for (in the case of nominations by
Marconi) any of the Services pursuant to this Agreement; each such
nomination shall be of an entity which is resident (for tax purposes) as
follows:
(a) for Services to be provided in the Invoice Region "UK and
Ireland," in the UK; and
(b) for Services to be provided in the Invoice Region "Rest of World",
either (i) in the UK, or (ii) (subject to Clause 2.10(6)) in a
Country in the "Rest of World" Invoice Region to which the Services
are to be provided under this Agreement; and
(c) for Services to be provided in any other Invoice Region, in a
Country in that Invoice Region,
and the nominating Party shall procure that the entity nominated pursuant
to Clause 2.10(1)(a), (b) or (c) shall invoice all Services or (as the
case may be) make all payments due under this Agreement from the Country
referred to in 2.10(1)(a), (b) or (c).
(2) Marconi shall, where Marconi is receiving the relevant Services, or shall
procure that each member of the Marconi Group receiving the Services
shall, accept the performance of the Supplier's nominee in lieu of the
Supplier, and to the extent the Supplier's nominee performs the Services
in accordance with this Agreement, that performance shall to the same
extent (but not otherwise) discharge the Supplier under this Agreement;
for the avoidance of doubt, each Party shall be liable to the other for
the acts and omissions of its nominee(s) and (in the case of Marconi) the
relevant
19
member(s) of the Marconi Group arising under or in connection with this
Agreement, as if they were its own.
(3) Without prejudice to Clause 38 (Further Assurance):
(a) where the Supplier nominates a member of the Supplier Group to
perform any of the Services in accordance with Clause 2.10(1),
Marconi shall, or shall procure that the member of the Marconi Group
receiving the Services, or if more than one, any one of them (in
either case) reasonably acceptable to the Supplier, shall promptly
enter into a Country Agreement with the Supplier's nominee, and the
Supplier shall procure that its nominee also promptly enters into
that Country Agreement;
(b) where Marconi nominates a member of the Marconi Group to pay for any
of the Services in accordance with Clause 2.10(1), the Supplier
shall, or shall procure that a member of the Supplier Group
reasonably acceptable to Marconi shall, promptly enter into a
Country Agreement with Marconi's nominee in respect of the Services
for which payment is to be made by the member of the Marconi Group,
and Marconi shall procure that its nominee also promptly enters into
that Country Agreement; and
(c) each Party shall ensure that its Group member which enters into a
Country Agreement as envisaged by this Clause 2.10(3) is resident
(for tax purposes) as follows:
(i) for Services to be provided in the Invoice Region "UK and
Ireland," in the UK; and
(ii) for Services to be provided in the Invoice Region "Rest of
World", either (aa) in the UK, or (bb) (subject to Clause
2.10(6)) in a Country in the "Rest of World" Invoice Region to
which the Services are to be provided under this Agreement;
and
(iii) for Services to be provided in any other Invoice Region, in a
Country in that Invoice Region,
and the nominating Party shall procure that the entity which enters
into a Country Agreement pursuant to Clause 2.10(3)(c)(i), (ii) or
(iii) shall invoice all amounts due and/or make all payments due (as
the case may be) under this Agreement from the Country referred to
in 2.10(3)(c)(i), (ii) or (iii), and if any such Group member ceases
to be so resident, that Party will promptly notify
20
the other Party of this fact and, at the request of the other Party,
ensure that all rights and obligations of the relevant Group member
are promptly assigned and transferred to a member of its Group which
is so resident.
(4) Each Country Agreement shall be substantially in the form set forth in
Schedule 16 (Form of Country Agreement), with such amendments (if any):
(a) as are appropriate to reflect Applicable Legislation and any
Regulated Activities; and
(b) as may be necessary to give effect to any exercise of either Party's
rights under this Agreement,
in either case from time to time.
(5) Where a Country Agreement is entered into by a member of a Party's Group,
that Party shall procure compliance by that Group member with that Country
Agreement.
(6) If:
(a) a Party nominates a non-UK entity as envisaged by Clause
2.10(1)(b)(ii);
(b) a non-UK entity enters into a Country Agreement as envisaged by
Clause 2.10(3)(c)(ii)(bb); or
(c) Marconi nominates a non-UK entity as envisaged by Clause
25.1(1)(a)(iii)(bb)(ii),
then that non-UK entity shall bear and pay for all taxes, levies and
similar payments imposed outside the United Kingdom on all sums due
pursuant to this Agreement from that non-UK entity to the other Party to
the Country Agreement, in addition to the sums due to that other Party, to
the extent that such taxes, levies and similar payments would not have
been so imposed had that non-UK entity been resident (for tax purposes) in
the UK and made all payments due pursuant to this Agreement from the UK.
2.11 EXIT PLAN
As soon as reasonably practicable after Cutover in respect of any
Services, the Supplier shall establish and thereafter maintain a plan (the
"EXIT PLAN") for the orderly migration of the Services that have been
Cutover in accordance with Best Industry Practice from the Supplier to
Marconi or, at Marconi's discretion, to a Third
21
Party Provider within such period following expiry or earlier termination
of this Agreement as Marconi may reasonably require, and such plan shall
be consistent with the Exit Arrangements.
2.12 CO-OPERATION
The Parties undertake to consult and to co-operate with each other to
take, so far as is reasonable, such actions as may be required to optimise
their Taxation position and their position as regards compliance with
Applicable Legislation, arising from this Agreement.
2.13 GUARANTEES
(1) If at any time Marconi ceases to own directly or indirectly (whether
through shareholdings or otherwise) as least sixty five per cent (65%) by
value of the net assets of the Marconi Group (excluding any New Marconi
Affiliate (as defined in Clause 2.4(6)), Marconi shall (as soon as
reasonably practicable thereafter) procure that such member(s) of the
Marconi Group (other than Marconi's parent undertaking) that, together
with Marconi, do own such assets to that value, execute and deliver to
each of the Supplier (in favour of the Supplier) and to BT (in favour of
BT) a guarantee substantially in form set forth in Part 1 of Schedule 23
(Form of Guarantees).
(2) On the Commencement Date the Supplier shall deliver to Marconi a guarantee
in the form set out in Part 2 of Schedule 23 (Form of Guarantees) executed
by Computer Sciences Corporation.
3. PERFORMANCE
3.1 OPERATIONAL RESPONSIBILITY
(1) The Supplier accepts that operational responsibility for the Services
shall pass to the Supplier under this Agreement.
(2) Subject to Clauses 3.1(5) and 3.10 the only circumstances in which the
Supplier is discharged in whole or part from providing the Services or the
Exit Arrangements (but only to the extent and for so long as such
circumstances shall affect the performance of the Services or, as the case
may be, the Exit Arrangements) are:
(a) if the Dependencies are not met;
22
(b) if Marconi breaches this Agreement, the Asset Transfer Agreement or
the BT Asset Transfer Agreement or any member of the Marconi Group
breaches any Country Agreement or Transfer Agreement;
(c) if Marconi does not provide access to (for whatever reason) Marconi
Assets or personnel requested by the Supplier Group pursuant to
Clause 3.8(2) (Availability of the Marconi Assets and Personnel)
(whether or not such failure to make available amounts to a breach
of this Agreement);
(d) if the Supplier Group or the BT Group is not effectively able to
enjoy the benefit of any In-Scope Contract with effect from Phase 1
Completion or Phase 2 Completion (as appropriate);
(e) if the relevant member of the Supplier Group or the BT Group elects,
pursuant to a Transfer Agreement not to purchase any Current
Contract, except to the extent that access is provided to the
subject matter of such Current Contract under Clause 3.8(2)
(Availability of the Marconi Assets and Personnel);
(f) if the counter-party to a BT Contract or a Supplier Contract
breaches that In-Scope Contract;
(g) if any Key Supplier breaches its In-Scope Contract or other
agreement or arrangement to which clause 10.6 of a BT Transfer
Agreement refers;
(h) if Clause 20 (Force Majeure) applies; or
(i) where (and if at all) otherwise expressly so stated in this
Agreement.
No such discharge shall relieve the Marconi Group from its obligation to
pay any Charges (which shall be payable to the same extent as if the
Supplier had performed the obligations discharged as envisaged by this
Clause 3.1(2)).
(3) To the extent the Supplier is, pursuant to Clause 3.1(2), discharged from
performing the Services by any matter to which Clause 3.1(2) (other than
Clause 3.1(2)(h) (Force Majeure)) refers, the Supplier shall notify
Marconi as soon as reasonably practicable, describing the relevant matter
or matters in reasonable detail, and the Supplier shall:
(a) provide the Services which are unaffected in accordance with this
Agreement;
(b) use Best Industry Practice to perform the affected Services, and
Marconi shall reimburse the Supplier all reasonable incremental
costs incurred in doing so to the extent those costs are not already
included in the Charges; and
23
(c) resume provision of the Services in accordance with this Agreement
as soon as reasonably practicable thereafter.
(4) At Marconi's request, the Supplier shall procure such assets and personnel
as are reasonably necessary to replace any assets or personnel that
Marconi has failed to provide under Clauses 3.8(1) or (2), and Marconi
shall pay (or procure payment of) a reasonable adjustment to the Charges
as a result thereof.
(5) Where Marconi requests the procurement of assets or personnel under Clause
3.1(4), the Supplier shall have a reasonable period of time in which to
procure and implement those assets or personnel; at the expiration of that
period Clause 3.1(2) shall cease to have effect in relation to the
Services affected by Marconi's failure to provide access to the relevant
assets, and/or personnel.
(6) Schedule 5 (Service Credits) shall have effect in relation to the accrual
of service credits.
(7) [***] No service credits shall accrue to the extent the breach or breaches
of the Service Level Agreement (or failures to achieve any of the Key
Service Levels identified in Appendix 1 of Schedule 5) are caused by or
are attributable to any of the circumstances to which Clause 3.1(2)
refers.
(8) This Clause 3.1(8) applies in respect of a breach (a "RELEVANT SUBCONTRACT
BREACH") of an In-Scope Contract (or other agreement or arrangement) to
which Clause 3.1(2)(f) or (g) refers (a "RELEVANT SUBCONTRACT"). In this
Clause 3.1(8), the "AFFECTED SUBCONTRACT SERVICES" means the services
provided, or which ought to have been provided, under the Relevant
Subcontract to which the Relevant Subcontract Breach relates.
(a) If the Services corresponding to the Affected Subcontract Services
are fairly described in the Service Level Agreement, and:
(i) where the Services corresponding to the Affected Subcontract
Services have been provided in accordance with this Agreement
notwithstanding the Relevant Subcontract Breach, then all
service credits, damages and other amounts that may be
recovered from the counter-party to the Relevant Subcontract
in respect of the Relevant Subcontract Breach shall be for the
Supplier's account; or
(ii) where the Services corresponding to the Affected Subcontract
Services have not been provided in accordance with this
Agreement,
24
notwithstanding the exercise of Best Industry Practice in
accordance with Clause 3.1(3)(b), then all service credits,
damages and other amounts that may be recovered from the
counter-party to the Relevant Subcontract in respect of the
Relevant Subcontract Breach shall be fairly and reasonably
apportioned between the Parties, their respective Group
members and/or the relevant Approved Subcontractor, in
proportion to the Loss suffered by them as a result of the
Relevant Subcontract Breach (and for this purpose all amounts
for which Marconi is liable under Clause 3.1(3)(b) shall be
deemed to be damage suffered by Marconi).
(b) If:
(i) the Services corresponding to the Affected Subcontract
Services are not fairly described in the Service Level
Agreement, or
(ii) those Services are so described but the Supplier is in breach
of Clause 3.1(3)(b) (Best Industry Practice), or
(iii) the Supplier (or any member of its Group or the relevant
Approved Subcontractor) has not suffered damage as a result of
the Relevant Subcontract Breach and Clause 3.1(8)(a)(i) does
not apply,
then without affecting the other rights of the Marconi Group, but
subject to Clause 3.1(8)(e), all the service credits, damages and
other amounts that may be recovered from the counter-party to the
Relevant Subcontract in respect of the Relevant Subcontract Breach
shall be for Marconi's account.
(c) At Marconi's request, the Supplier shall or shall procure that the
relevant member of the Supplier's Group or the relevant Approved
Subcontractor shall, use reasonable endeavours to enforce its rights
under the Relevant Subcontract in respect of the Relevant
Subcontract Breach.
(d) Where Clause 3.1(8)(a)(ii) applies and Marconi has made a request
under Clause 3.1(8)(c):
(i) the Parties shall, and shall procure that the relevant members
of their Group shall and the Supplier shall procure that the
relevant Approved Subcontractor shall, reasonably co-operate
with each other in seeking to recover all service credits,
damages and other amounts in respect of the Relevant
Subcontract Breach; and
25
(ii) the costs and expenses incurred by the Supplier (and by
members of its Group and the relevant Approved Subcontractor)
under Clause 3.1(8)(c) or (d)(i) (as the case may be) shall be
set-off (on a proportionate basis where necessary) against the
amount so recovered before any allocation of that amount under
Clause 3.1(8)(a)(ii).
(e) Where Clause 3.1(8)(b) applies and Marconi has made a request under
Clause 3.1(8)(c):
(i) Marconi shall indemnify the Supplier Group (and the relevant
Approved Subcontractor) in respect of its or their reasonable
costs and expenses in seeking to enforce its or their rights
at Marconi's request under Clause 3.1(8)(c); and
(ii) Marconi shall control the conduct or settlement of the claim
and may require the appointment of lawyers of its choice. For
this purpose, the Supplier shall, or shall procure that the
relevant member(s) of its Group and any relevant Approved
Subcontractor shall, comply with all reasonable directions of
Marconi under this Clause 3.1(8)(e)(ii).
3.2 QUALITY OF THE SERVICES
(1) The Supplier shall provide the Services:
(a) in the case of the IT Services (and subject to Exhibit 1):
(i) until the end of the True-Up Process, to the same extent,
quality, manner and level of provision as the Internal
Services that are replaced by the Services in question were
received or procured internally in the period up to the
relevant Cutover; and
(ii) thereafter, in accordance with the Service Level Agreement;
(b) in the case of the Project Services, in accordance with the Project
Terms;
(c) otherwise in accordance with Best Industry Practice;
(d) in accordance with all Applicable Legislation binding on the
Supplier or its sub-contractors;
(e) in accordance with those of Marconi's internal standards and
procedures which are identified in Schedule 3 (List of Standards and
Policies), and any other
26
additional or substituted standards or procedures implemented by
Marconi from time to time, subject to Change Control, provided that:
(i) the Supplier shall not be required to comply with any such
standards or procedures where to do so would require it (or
any member of its Group or Approved Sub-contractors) to breach
any Applicable Legislation;
(ii) the Supplier shall only be required to comply with any such
standards or procedures to the extent complied with by the
Marconi Group in the period up to the relevant Cutover except
where any other standard or procedure is applied pursuant to
Change Control;
(iii) the Supplier shall be entitled to comply with its own
standards and procedures instead of such internal Marconi
standards and procedures if and to the extent that Marconi
agrees that the Supplier's own standards and procedures
provide protection which is not materially less than such
internal Marconi standards and procedures (such agreement not
unreasonably to be withheld or delayed); and
(iv) to the extent a Service comprises a Regulated Activity in
relation to which there exists a mandatory standard or
procedure which differs from Marconi's internal standards and
procedures, the Supplier shall only be required to provide
that Service in accordance with that imposed standard or
procedure (and the Supplier shall promptly notify Marconi of
the terms of the regulated standard or procedure),
and, for the avoidance of doubt, wherever any provision in this
Agreement imposes an obligation on the Supplier or any Approved
Sub-Contractor to comply with any such Marconi standards or
procedures, that provision shall be interpreted as being subject to
the above proviso (to the same extent as if the above paragraphs (i)
to (iv) were written out in full in that provision); and
(f) in accordance with all other terms of this Agreement.
(2) The Supplier shall:
(a) to the extent that the Supplier's responsibility in providing the
Services includes the provision (but, not, for the avoidance of
doubt, the mere carriage or hosting) of information, ensure that all
information so provided is, in all material respects, accurate,
complete and not misleading;
27
(b) as soon as possible and to the extent reasonably practicable, free
of charge, reconstitute, up to the point of the last back-up (or to
such back-up as ought to have been made by the Supplier in
accordance with this Agreement), any data spoilt, destroyed or lost
as a result of the breach of the Supplier of this Agreement,
provided that, where the Supplier is not expressly responsible as
part of the Services for the making of back-up copies in respect of
those data, Marconi makes available to the Supplier the latest
back-up copies that the Marconi Group has or ought reasonably to
have made in accordance with Best Industry Practice and the copies
(if any) of the information embodied in such spoilt, damaged or lost
data held by the Marconi Group;
(c) co-operate with the Marconi Group, its officers, employees, agents
contractors, and any Competent Authorities, in the performance of
acts which concern the Services, as Marconi may reasonably require;
and
(d) use Best Industry Practice in order to seek to ensure that no one
introduces any Virus onto or into any networks, computer hardware or
software used by the Marconi Group and in respect of which the
Supplier is providing the Services.
(3) The Supplier shall deal promptly with queries or problems relating to the
use or performance of the Services and (without affecting the Marconi
Group's other rights) use all reasonable endeavours promptly to correct or
procure the correction of any failure to perform the Services in
accordance with the terms of this Agreement (including any defective or
delayed provision of the Services).
(4) The Supplier undertakes at all times during the continuance of this
Agreement actively to monitor the nature and categories of (and the manner
and method of delivery of), and charges for services provided by the
industry relevant to each Service in general and the outsourcing industry
for that Service in particular and to keep Marconi informed of all
developments that the Supplier considers in accordance with Best Industry
Practice may be of benefit to Marconi.
(5) Marconi shall (and shall ensure that each other member of the Marconi
Group shall) use reasonable endeavours in order to seek to ensure that no
one introduces any Virus onto or into any networks, computer hardware or
software used by the Marconi Group and in respect of which the Supplier is
providing the Services.
3.3 CO-OPERATION WITH THIRD PARTY PROVIDERS
(1) Without affecting the Marconi Group's other rights, where the Marconi
Group appoints a Third Party Provider to provide any hardware or other
goods (including software) or services (including
28
any services similar to the Services), the Supplier shall reasonably
co-operate with the Third Party Provider and provide such access as may
reasonably be necessary to all relevant:
(a) documentation, information and data; and
(b) systems, premises and communications networks,
in the possession, custody or control of the Supplier as the Third Party
Provider reasonably requires to provide the goods (including software) or
services, subject to Clause 3.3(3) and subject to the provision to the
Supplier of a confidentiality undertaking by the Third Party Provider
direct to the Supplier on terms substantially the same as the provisions
of Clause 16 (Confidentiality).
(2) Subject to Clause 3.3(3), the Supplier shall liaise with all Third Party
Providers and provide all reasonable assistance to ensure that their goods
or services are integrated into and compatible with the provision of the
Services in order to achieve utility of the goods and services in question
for the Marconi Group.
(3) The Supplier shall not be required to provide the co-operation, access,
liaison or assistance referred to in Clauses 3.3(1) or 3.3(2) to the
extent and for so long as the Supplier, acting reasonably, considers that
this is inappropriate, taking into account:
(a) any disruption likely to occur to the operations of the Supplier
Group or its subcontractors;
(b) any adverse effect of such co-operation, access, liaison, assistance
or information upon the integrity of the systems, premises or
communications networks for which the Supplier or any other member
of its Group or subcontractors is responsible;
(c) the commercial sensitivity of the documentation, information and/or
data to be disclosed;
(d) any potential infringement of Intellectual Property or third party
rights;
(e) any material adverse affect upon the security, health or safety of
the Supplier or the Supplier's personnel or any other persons; or
(f) any potential breach of Applicable Legislation.
29
Notwithstanding the foregoing, the Supplier shall use reasonable
endeavours to implement a reasonable alternative solution to allow it
provide the co-operation, access, liaison or assistance referred to in
Clauses 3.3(1) and 3.3(2).
(4) The Supplier's performance of this Clause 3.3 shall be at no additional
charge to Marconi where such performance is part of or is reasonably
incidental to the provision of the Services; where this is not the case
and Marconi requests the Supplier to perform this Clause 3.3, the Supplier
may levy (and Marconi shall pay or procure payment of) an additional
charge for the performance of such obligations, provided that such
additional charge shall be reasonable and (as far as reasonably
practicable) determined prior to performance commencing.
3.4 AUTHORITY OF THE SUPPLIER
(1) Subject to this Clause 3.4 and Clause 16 (Confidentiality), in the
discharge of its duties in relation to the IT Services, each of the
Supplier, BT in its capacity as an Approved Sub-contractor, and such other
Approved Sub-contractors approved in writing by Marconi for the purposes
of this Clause 3.4, shall have full discretion, authority, right and power
to act for, and on behalf of, the appropriate member of the Marconi Group
in giving such instructions and notifications and to provide such
information to third parties as may be required in performing the IT
Services in accordance with this Agreement; the authority contained in
this Clause 3.4(1) is continuing and shall remain in full force and effect
until this Agreement or the Supplier's right and obligation to provide the
IT Services are terminated, provided that such termination shall not
affect any transactions prior to such termination. The Supplier shall, and
shall procure that its Approved Sub-contractors shall, give such
instructions and notifications and provide such information to third
parties as may be required in performing the Services on behalf of the
Marconi Group unless otherwise stated in this Agreement or agreed in
writing by the Parties.
(2) If the Supplier or any Approved Sub-contractor receives any information,
instruction, application or other communication from any third party
relevant to the performance of its duties in relation to the Services
under this Agreement (a "RELEVANT COMMUNICATION"), then to the extent the
Relevant Communication or part thereof is not manifestly erroneous and
subject to Clause 3.4(3), the Supplier or the relevant Approved
Sub-contractor is entitled:
(a) to rely on such Relevant Communication or the relevant part thereof
as accurate and complete; and
30
(a) to act upon such Relevant Communication,
without further enquiry of the Marconi Group.
(3) The provisions of Clause 3.4(2)(a) or (b) only apply in relation to a
Relevant Communication if the Supplier or the relevant Approved
Sub-contractor has used Best Industry Practice to satisfy itself that the
Relevant Communication in question is authentic and correctly received.
(4) The Supplier shall, and shall procure that the Approved Sub-contractors
shall, obtain written approval from the Marconi Group before:
(a) entering into any contract on behalf of the Marconi Group or making
representations on behalf of or pledging the credit of the
Marconi Group;
(b) contesting (on behalf of the Marconi Group) any action brought
against the Marconi Group or instituting any legal or other
proceedings on behalf of the Marconi Group; or
(c) otherwise purporting to conduct the affairs of the Marconi Group
except as authorised under Clause 3.4(1).
3.5 RECORD KEEPING
Subject to any conflicting obligation of the Supplier under any other
provision of this Agreement, the Supplier shall during the term of this
Agreement, and for a period of five (5) years after its termination or
expiry, keep or cause to be kept on behalf of the Marconi Group such
books, records, statements, documents of title, licence agreements and
certificates and other documents so as to give a complete and accurate
record of all transactions carried out by the Supplier on behalf of the
Marconi Group and shall cooperate fully with any requests by the Marconi
Group and any Competent Authority to inspect and take copies of such
records for the purpose of ensuring that the Supplier has complied with
its obligations under this Agreement.
3.6 CRIMINAL ACTS
Each Party shall indemnify the other and members of its Group in respect
of all criminal acts or wilful default committed by its employees, agents
or contractors in the performance of or purported performance of this
Agreement.
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3.7 REGULATED ACTIVITIES
(1) Marconi acknowledges that certain of the [***] Services, the other
obligations of the Supplier under this Agreement or any Country Agreement
and certain of the licences granted hereunder (and/or, in any such case,
the terms, including as to price, thereof) may:
(a) be regulated by Applicable Legislation (binding on the Supplier or
its Approved Sub-contractors);
(b) be subject to mandatory or published terms (including as to price);
or
(c) be subject to a non-discrimination obligation (or equivalent) such
that the grant of particular terms to the Marconi Group would result
in an obligation (imposed by Applicable Legislation on the Supplier
or its Approved Sub-contractors) to provide those terms to third
parties,
(these Services or obligations shall be known as "REGULATED
ACTIVITIES").
(2) Notwithstanding anything in this Agreement, nothing in this Agreement or
in any Country Agreement shall operate to require the Supplier Group to
provide Services or perform obligations (or operate as a grant of, or an
obligation to grant, any licence) which are or are subject to Regulated
Activities other than in accordance with Applicable Legislation or any
mandatory or published terms, or in any circumstances which would result
in an obligation of the type referred to in Clause 3.7(1)(c). In these
circumstances, the Supplier Group shall be entitled, taking account of the
matters listed in Clause 3.7(1)(a) to (c), to provide the Services or
perform those obligations (or grant a licence) consistent with the
Applicable Legislation or other mandatory or published terms.
(3) Where the provision of the Services or the performance of an obligation by
the Supplier Group is a Regulated Activity, the Supplier Group shall be
entitled to suspend the provision of that Service or the performance of
that obligation where, and to the extent that, the Supplier Group is
strictly required to do so in order to comply with Applicable Legislation
or other mandatory or published terms, provided that the Supplier Group
shall use all reasonable endeavours to reinstate the provision of the
Services or the performance of its suspended obligations as soon as
possible.
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3.8 AVAILABILITY OF THE MARCONI ASSETS AND PERSONNEL
(1) This Clause 3.8 applies in respect of Marconi Assets (other than IT
Equipment) and Marconi Controlled Group's personnel (other than
Transferring Employees) that were used by the Marconi Controlled Group
before the relevant Cutover for the purpose of providing the Internal
Services replaced by the Services and are necessary to be used by the
Supplier or any Approved Sub-Contractor in the provision of the Services
(the "RELEVANT ASSETS").
(2) If requested by the Supplier, and to the extent that Marconi (or any other
member of the Marconi Controlled Group) is reasonably able to do so
without infringing or breaching third party rights, Marconi shall (free of
charge) use its reasonable endeavours promptly to give access to the
Supplier Group to the Relevant Assets (other than any such personnel whose
services are no longer reasonably available to Marconi or any other member
of the Marconi Controlled Group) for use in connection with the Services.
Where the Relevant Assets are made available to the Supplier Group, the
Supplier shall (and shall ensure that other members of the Supplier Group
shall) use reasonable endeavours to comply with any terms disclosed to the
Supplier relating to the Relevant Assets.
3.9 ANCILLARY FACILITIES
(1) Catering services that are made available to Marconi employees at or in
the vicinity of the Sites shall be made available to the Supplier
Personnel but only to the same extent and for so long as those services
are made available to Marconi's employees (and thereafter Marconi shall
have no obligation to provide catering facilities under this Agreement).
(2) Marconi shall continue to make car parking facilities available at or in
the vicinity of the Sites for the use of Supplier Personnel, to the same
level as the car parking facilities which were made available to
Transferring Employees immediately before the relevant Cutover. Marconi's
obligation under this Clause 3.9(2) shall however only continue for so
long as such car parking facilities are made available to Marconi
employees (and thereafter Marconi shall have no obligation to provide any
car parking facilities under this Agreement).
3.10 UNWINDING OF ITALIAN TRANSFER AGREEMENT
If at any time during the term of this Agreement the transfer under the BT
Italian Transfer Agreement of all or any portion of the Assets located in
Italy (the "AFFECTED ASSETS") is declared by any competent authority to be
or have been ineffective for any
33
reason (or if it appears to be reasonably likely that such a declaration
may be made), then Marconi and the Supplier shall, and the Supplier shall
procure that BT shall, use all reasonable endeavours to agree in good
faith and as soon as is reasonably practicable an alternative basis on
which such of the Services as require the use by the Supplier or any
Approved Sub-Contractor of the Affected Assets (the "AFFECTED SERVICES")
may be provided. In reaching any such agreement the Supplier shall, and
shall procure that any Approved Subcontractor shall, use all reasonable
endeavours to minimise any disruption to the Services. If such an
alternative basis for the provision of the Affected Services has not been
agreed by the time any declaration that the transfer of the Affected
Assets is ineffective is made, then the Supplier's obligations to provide
the Affected Services and Marconi's obligations to pay the Charges in
respect of the Affected Services shall be suspended until such time as the
Parties and any Approved Sub-Contractor have agreed such an alternative
basis for the provision of the Affected Services.
4. CHARGES AND DEFERRED CONTRACT PREMIUM PAYMENTS
4.1 GENERAL
(1) In consideration for the provision of the Services in accordance with this
Agreement, Marconi shall, subject to Clause 4.3 (Disputes), pay (or, where
the Charges in question are provided for by a Country Agreement, procure
payment, in accordance with that Country Agreement) to the Supplier or its
nominee for the time being (being a member of the Supplier Group or, in
relation to the Network Services, BT or a member of BT's Group) (and, for
the avoidance of doubt, the Supplier may appoint such a nominee in respect
of part only of the Charges, with the remainder of the Charges being
payable to the Supplier and/or another such nominee or nominees, and it is
acknowledged that the proportion of the Charges which is payable to a
particular nominee will be likely to change on (at least) a month to month
basis) the Charges, in accordance with the following payment terms:
(a) in the case of the IT Services:
(i) during any period when the credit rating of Marconi according
to the Standard & Poor credit rating service (Long-Term Issuer
Credit Rating), as published on the Commencement Date (or, if
that service ceases, any replacement service), is lower than
[***] (or has been lower in the preceding thirty day period),
monthly in advance to the extent the relevant Charges are
reasonably ascertainable in advance; and
34
(ii) otherwise, monthly in arrears;
(b) in the case of the Transition Services, in accordance with the
payment terms set out in Paragraph 2 of Schedule 4 (Charges); and
(c) in the case of Project Services (other than the Transition
Services), in accordance with the payment terms for that Service set
out in the relevant Schedule of Work.
No other charges or amounts in respect of the performance of that Service
shall be payable by Marconi except in accordance with this Agreement.
Any such nomination made under this Clause 4.1(1) shall be revocable from
time to time by ten (10) Business Days notice to Marconi.
(2) Invoices shall show the elements agreed from time to time of the Charges
and other amounts due to be credited to members of the Marconi Group, in
accordance with any agreed form of invoice. Each invoice shall be
accompanied by the supporting information set out in Schedule 4 (Charges)
together with any additional information set out in the Service Level
Agreement or the Schedule of Work (as the case may be) for the relevant
Service. Invoices for payments in advance (including under Clause
4.1(a)(i)) shall be issued by the Supplier (or another member of its Group
under a Country Agreement) at least thirty (30) days before the due date.
(3) All invoices shall be paid as set out in Schedule 4 (Charges) or (if
Schedule 4 (Charges) does not specify when a particular invoice is
payable) then:
(a) in the case of invoices for payments in advance (including under
Clause 4.1(a)(i)), as set out in this Agreement or as otherwise
agreed; and
(b) in respect of amounts payable in arrears, within thirty (30) days
from the date of invoice provided that the invoice is correctly
rendered and, to the extent that the relevant Charges are reasonably
ascertainable in advance, sent by or on behalf of the Supplier at
least thirty (30) days before the date due; where this is not the
case the invoice shall be payable within thirty (30) days from
receipt of the invoice.
4.2 DEFAULT INTEREST
If any Party fails to pay any sum due and payable by it under this
Agreement on the due date, it shall pay Default Interest on that sum from
the due date until the date of actual payment.
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4.3 DISPUTES
(1) Subject to Marconi's election (or deemed election) to receive service
credits accrued under Schedule 5 (Service Credits), but otherwise
notwithstanding anything else in this Agreement or any Country Agreement,
Marconi shall pay (or procure the payment of) the Charges hereunder
without any deduction or set-off whatsoever, irrespective of any dispute
that may exist and that would or may otherwise entitle any sum to be
set-off or withheld from the Charges, except that where (and to the extent
that) any sum otherwise due from Marconi is, in the opinion of the
Supplier (acting reasonably), the subject of a bona fide dispute, that sum
may be withheld from the Charges pending resolution of the dispute, but
the undisputed portion shall be paid by Marconi in accordance with this
Agreement. After settlement of the dispute, any amount agreed or
determined to be payable or repayable shall be due forthwith together with
any Default Interest thereon in accordance with Clause 4.2 (Default
Interest).
(2) The payment of any amount pursuant to an invoice shall not prevent Marconi
raising a dispute in respect of that amount and shall not constitute
acceptance by Marconi as to the performance by the Supplier of its
obligations under this Agreement.
4.4 OVERSEAS CHARGES
(1) Payment of charges under a Country Agreement shall to that extent
discharge the obligation of Marconi to pay those Charges under this Clause
4 (Charges).
(2) At Marconi's request the Supplier shall notify Marconi of the total amount
of invoiced Charges in respect of any period.
4.5 CHANGES IN LAWS
(1) Subject to Clauses 4.5(2) and Clause 4.7 (Taxes), where a change in
Legislation occurs after the Commencement Date which:
(a) changes the cost to the Supplier Group of providing the Services in
accordance with this Agreement; and
(b) specifically affects the provision of the Services to the Marconi
Group as a result of the nature of the Marconi Group's business or
of any other matter specific to the Marconi Group,
the Parties shall negotiate and implement an equitable adjustment to the
Charges to reflect that change (in default of agreement, to be determined
by Expert's Decision).
36
In all other cases, the Supplier Group's cost of its complying with a
change in Legislation shall be for the Supplier Group's account.
(2) Clause 4.5(1) shall not apply in the case of changes to Legislation
affecting Services which are Regulated Activities to the extent that any
restraints or requirements imposed by Applicable Legislation or other
mandatory or published terms prevent or restrict an adjustment to the
Charges or otherwise impose alternative requirements or in any
circumstances which would result in an obligation of the type referred to
in Clause 3.7(1)(c). In such circumstances, the Charges shall be varied in
accordance with the relevant Applicable Legislation or other mandatory or
published terms.
4.6 MCL
It is acknowledged that, for so long as MCL is a party to this Agreement,
Services shall be provided to and for the benefit of MCL as well as other
members of the Marconi Group. Where the Supplier has nominated BT or
another member of the BT Group under Clause 4.1(1) (General) or the
Supplier has assigned rights to BT or another member of the BT Group under
Clause 25.1(1)(c) (Assignment and Transfer), then BT (and/or its Group
member) shall be entitled to enforce (and pursue its right to recover
payment) against MCL (for so long as MCL is a party to this Agreement):
(a) any failure by Marconi to pay the Charges in respect of the Network
Services hereunder (to the extent of such nomination); and
(b) the assigned rights (to the extent of such assignment),
to the same extent as if BT (and/or such BT Group member) were a party to
this Agreement in lieu of the Supplier in respect of the relevant
provisions, provided that the rights granted to the BT Group against MCL
under this Clause 4.6 are limited to a right of set-off up to the amounts
(if any) owing from time to time from any members of the BT Group to MCL
under the "Purchasing Contracts" to which the Side Deed refers, and
subject to Clause 19.1 (Liability). This Clause 4.6 is without prejudice
to any common law right of set-off which the BT Group may have against MCL
arising other than pursuant to or in relation to this Agreement.
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4.7 TAXES
(1) Except as provided in this Clause 4.7 (Taxes) and notwithstanding Clause
4.5 (Changes in Laws), the Charges are exclusive of value added tax or any
applicable sales or service tax or any similar tax which is referable to
the provision of the Services and any successor or supplemental taxes
("VAT") and, to the extent that such taxes are properly referable or
chargeable to Marconi or to a member of its Group which is signatory to a
Country Agreement, Marconi (or such Marconi Group member) shall pay them,
in addition to the Charges, against delivery of a valid VAT, sales or
service tax or comparable invoice.
(2) [***]
(a) [***]
(b) [***]
[***]
(3) [***]
(4) Where a Party is liable to another in respect of any taxes (or required to
bear such taxes for which another Party is liable to the relevant
Governmental Authority) pursuant to this Clause 4.7, it shall pay those
taxes not less than three (3) Business Days before the date on which the
relevant other Party is required to account to a Governmental Authority or
to another Party for the taxes in question or, if later, once it has
received a valid VAT, sales tax, use tax or comparable invoice for them
from the relevant other Party.
4.8 DEFERRED CONTRACT PREMIUM PAYMENTS
The Supplier shall pay Marconi the amounts set forth in section 13 of
Schedule 4 (Charges) on the dates stated; such amounts are exclusive of
value added tax or any applicable sales tax or any similar tax which may
be referable to such payments, and, to the extent that such taxes are
properly referable or chargeable, the Supplier shall pay them, in addition
to such amounts, against delivery of a valid VAT, sales tax or comparable
invoice.
4.9 PAYING AGENT
(1) Subject to Clause 4.9(2), where any member of the Supplier Group or the BT
Group elects not to purchase a Current Contract under a Transfer
Agreement, and the costs in
38
respect of the Current Contract in question are included in the Budget or
the Charges, then the Supplier shall (or shall procure that a member of
the Supplier Group shall), as agent for and on behalf of the relevant
member of the Marconi Group, pay such of the charges or other outgoings
under such Current Contract as reflect such costs, and shall indemnify
Marconi in respect of all Loss incurred or sustained by Marconi or the
relevant Marconi Group member as a result of a failure by the Supplier
Group to comply with this Clause 4.9 (Paying Agent).
(2) Clause 4.9(1) is subject to Marconi not being in breach of Clause 4.1
(General) and Marconi shall indemnify the Supplier in respect of its (and
other members of the Supplier's Group's) reasonable incremental costs of
complying with Clause 4.9(1) insofar as they are not reflected in the
Charges.
5. VALIDATION OF INFORMATION
5.1 SERVICE LEVEL AGREEMENT
(1) In relation to any Services in respect of which Cutover has occurred,
during the period from the date on which such Cutover occurs until the end
of the relevant True-up Process (as defined in Clause 5.2(1)), the Parties
will undertake a review of the Service Level Agreement in order to
validate that it fairly describes:
(a) the Internal Services in respect of which Cutover has occurred; and
(b) the quality, manner and level of provision of such Internal
Services, including the extent to which the Marconi Group complied
with the standards and policies identified in Schedule 3 (Standards
and Policies) in the period up to the relevant Cutover.
The validation to which this Clause 5.1(1) refers shall be by reference to
the records of the Marconi Group to the extent they exist or, where they
do not exist or are insufficient for the purpose, by reference to the
information gathered by the Supplier (in the absence of manifest error or
negligence) for the purpose of the True-up Process (including the results
of the measurements to be made by the Supplier over a period of not less
than three (3) months during the True-up Process).
(2) To the extent the Service Level Agreement does not fairly reflect the
matters to which Clause 5.1(1)(a) or (b) refers (either because of an
error or omission or otherwise), the Service Level Agreement shall be
amended to do so.
39
(3) This Clause 5.1(3) applies only insofar as the IT Services are to be
performed after any Cutover by a sub-contractor pursuant to an In-Scope
Contract, the costs of which are included in the Budget (as verified under
the True-up Process under Clause 5.2) or included in the Charges pursuant
to Clause 5.2(6). If the review in Clause 5.1(1) cannot reasonably
establish whether the Service Level Agreement does fairly describe the
relevant matters as actually so performed by the counter-party to the
relevant In-Scope Contract, then for the purpose of any amendment pursuant
to Clause 5.1(2), the sub-contractor shall be assumed to be performing the
relevant IT Services in accordance with the requirements of the relevant
In-Scope Contract.
(4) If by the end of the True-up Process the Parties have not agreed either
that the Service Level Agreement fairly describes the matters to which
Clause 5.1(1) refers or the amendments that are required to be made so
that it does so, the outstanding issues in dispute shall be determined by
Expert's Decision.
(5) Any determination of the Expert under Clause 5.1(4) shall specify the
amendments (if any) that shall be made to the Service Level Agreement so
that it fairly represents the matters to which Clause 5.1(1) refers.
5.2 TRUE-UP PROCESS
(1) Within the [***] months following Cutover in relation to any Services, the
Supplier shall complete the due diligence and information verification
process contemplated by this Clause 5.2 (each being a "TRUE-UP PROCESS").
The purpose shall be to verify:
(a) the Resource Baseline (as defined in Schedule 4 (Charges)) for each
Service Category Cutover against the actual volumes of Internal
Services provided as of the relevant Cutover ("ACTUAL VOLUMES");
(b) the accuracy of the information provided to the Supplier and to BT
by way of specific disclosures contained in Appendix B of the
Disclosure Letter, subject to Clause 5.2(2), and the accuracy and
completeness of the Budget as a statement of:
(i) the cost actually incurred by the Marconi Group; or
(ii) reasonably expected to be incurred by the Marconi Group had
the Marconi Group continued to provide the relevant Services,
40
in each case in relation to the Cutover IT Services and the Project
Services in the period to which the Budget relates or the relevant
part of that period (all the information referred to in this (b)
being "BASELINE INFORMATION");
(c) the assumptions as specified in Schedules 4 (Charges) and 22
(Assumptions and Dependencies); and
(d) whether the Service Level Agreement fairly describes any Internal
Services procured under a Current Contract:
(i) which does not relate to any hardware or other information
technology and network assets or equipment owned by the
Marconi Group and located outside the Territories or used
exclusively for a purpose other than the Internal Services;
and
(ii) the costs of which are not included in the Budget.
(2) In relation to staff costs, the purpose of the True-Up Process shall be to
verify that the Baseline Information includes the cost of all staff (as a
result of payment of salary, national insurance contributions, pensions
and other benefits) used by the Marconi Group to deliver the Internal
Services as of the relevant Cutover. This includes costs of all vacant
positions to the extent that the number of Transferring Employees is below
the number of staff required by Marconi to deliver the Internal Services
as of the relevant Cutover.
(3) Marconi shall grant the Supplier and/or its designees, including
sub-contractors, reasonable access to all information, Marconi Group
personnel and resources reasonably required for the True-up Process and
shall otherwise provide reasonable co-operation to the Supplier in
connection with the True-up Process.
(4) In verifying the accuracy and completeness of the Budget the Supplier
shall apply the generally applicable accounting principles that were
applied by Marconi in preparing the Budget.
(5) Subject to Paragraph 6.3(3) of Schedule 4 (Charges), to the extent that
the True-up Process identifies any variations in the Resource Baseline for
any Service Category as compared to the Actual Volumes for that Service
Category, then Paragraphs 1.3(3) to (5) of Schedule 4 shall apply.
41
(6) To the extent that by the end of a True-up Process:
(a) it is identified that the Baseline Information is inaccurate or
incomplete, or that the Budget is inaccurate or incomplete as a
statement of:
(i) the costs actually incurred by the Marconi Group; or
(ii) the costs reasonably expected to be incurred by the Marconi
Group had the Marconi Group continued to provide the relevant
Services,
in each case in relation to the Cutover IT Services and the Project
Services in the period to which the Budget relates (or the relevant
part of that period);
(b) information or costs are identified which render any assumption as
referred to in Clause 5.2(1)(c) invalid; or
(c) it is identified that the Service Level Agreement fairly describes
any Internal Services procured under a Current Contract satisfying
the parameters in Clause 5.2(1)(d)(i) and (ii),
(any thereof being a "RELEVANT MATTER") then a fair and reasonable
adjustment, calculated according to the formula set out in Clause 5.2(7),
shall be made to the Baseline Charges, save that the Baseline Charges will
not be reduced if the item which would otherwise give rise to the
adjustment will need replacement or substitution to allow the Supplier to
perform the Services in accordance with this Agreement as from the
relevant Cutover, provided that the item is so replaced or substituted or
the Supplier is otherwise performing the Services in accordance with this
Agreement by other means. For the avoidance of doubt, any adjustment to
the Charges which may arise in relation to any of the circumstances to
which Clause 21 (Alterations in the Marconi Group) applies shall be made
under Clause 21.7 and not under this Clause 5.2(6).
(7) The formula to be applied to adjust the Baseline Charges is as follows:
(a) where the Relevant Matter results in an increase in the cost of
providing the IT Services excluding the Network Services (when
compared to what the cost would have been, but for the Relevant
Matter), the Baseline Charges for such Services shall be increased
by that increase in cost multiplied by the Adjustment Percentage,
except that where (and to the extent that) such increase in cost
consists of third party obligations which cannot be replaced or
substituted (without, in either such case, breach of contract or
payment of a
42
charge or penalty), such Baseline Charge will be increased by the
actual increase in costs for so long as under the terms of such
third party obligation it cannot be replaced or substituted;
(b) where the Relevant Matter results in a decrease in the cost of
providing the IT Services excluding the Network Services, the
Baseline Charges for such Services shall be decreased by an amount
equal to the Adjustment Percentage of such decrease in cost;
(c) where the Relevant Matter results in an increase in the cost of
providing the Network Services (when compared to what the cost would
have been, but for the Relevant Matter), the Baseline Charges for
such Services shall be increased by that increase in cost multiplied
by the Network Adjustment Percentage except that where (and to the
extent that) such increase in cost consists of third party
obligations which cannot be replaced or substituted (without, in
either such case, breach of contract or payment of a charge or
penalty), such Baseline Charge will be increased by the actual
increase in cost for so long as under the terms of such third party
obligation it cannot be so replaced or substituted;
(d) where the Relevant Matter results in a decrease in the cost of
providing the Network Services, the Baseline Charges for the Network
Services only shall be decreased by an amount equal to the Network
Adjustment Percentage of such decrease in cost; and
(e) for the purposes of this Clause 5.2(7):
(i) "ADJUSTMENT PERCENTAGE" means [***]; and
(ii) "NETWORK ADJUSTMENT PERCENTAGE" means[***].
(8) Where the True-Up Process identifies matters to which Clause 5.2(5) and
(6) refer in relation to the same Services, the provisions of Clause
5.2(5) shall apply first followed by Clause 5.2(6) and (7).
(9) Where adjustments to the Charges arise as a result of this Clause 5.2, the
adjustments will be applied to the Charges for the relevant Services (e.g.
Helpdesk, Desktop, Network Services, Applications Development and
Maintenance, Data Centre Services) in the Invoice Region in question.
Where an adjustment cannot be linked to a specific Service and Invoice
Region or it relates to more than one Service or Invoice
43
Region the overall adjustment will be pro-rated in a fair and reasonable
manner across the Charges for the affected Services and Invoice Regions.
(10) Where any Network Services which would otherwise be delivered in a ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇ do not Cutover by the Phase 2 Long Stop Date, the Charges in
respect of the remaining Network Services which have Cutover by that date
shall be adjusted in accordance with Change Control.
(11) Where any IT Services (other than the Network Services) which would
otherwise be delivered in a Phase 2 Territory in an Invoice Region
comprising more than one Country do not Cutover by the Phase 2 Long-Stop
Date, the Charges in respect of the remaining IT Services (other than the
Network Services) to be provided in the same Invoice Region which have
Cutover by that date shall be adjusted in accordance with Change Control.
(12) Any variations in the Charges shall apply retrospectively from the
relevant Cutover to which the True-up Process in question relates and any
amount due to the Supplier as a result of underpayment of the Charges, and
any amount due to Marconi as a result of overpayment of the Charges shall
be reconciled and paid by the relevant Party within thirty (30) days of
the reconciliation.
(13) Subject to Clause 5.2(5), any dispute between the Parties arising in
relation to the application of this Clause 5.2 shall be determined by
Expert's Decision.
(14) References in this Agreement to the "END OF THE TRUE-UP PROCESS" mean the
end of the [***] month period referred to in Clause 5.2(1) (as such period
may be varied from time to time by agreement in writing of the Parties).
6. TECHNOLOGY REFRESHMENT
The provisions of Schedule 17 (Technology Refreshment) shall have effect.
7. CONTINUOUS IMPROVEMENT
The provisions of Schedule 18 (Continuous Improvement) shall have effect.
8. BENCHMARKING
8.1 The provisions of Schedule 19 (Benchmarking) shall have effect, subject to
the following (and all capitalised expressions in this Clause 8 have the
same meaning as in Schedule 19 (Benchmarking)):
44
(a) Marconi shall not be entitled to include any [***] within the scope
of an Assessment covering any other Services; and
(b) Paragraph 4.4 of Schedule 19 (Benchmarking) shall not apply to any
Value for Money Benchmarking of the Charges applicable to any [***].
8.2 Nothing in Clause 8.1 shall affect the interpretation of the expression
"reasonable endeavours" elsewhere in this Agreement, the Asset Transfer
Agreement, the BT Asset Transfer Agreement or any Transfer Agreements.
9. GOVERNANCE
The provisions of Schedule 20 (Governance) shall have effect.
10. MARCONI SOFTWARE AND ASSETS
10.1 RELEVANT ASSETS
(1) Marconi hereby grants to the Supplier, or shall procure the grant to the
Supplier of, a non-exclusive, non-transferable world-wide licence for the
duration of this Agreement to use the Marconi Software and, subject to the
prior written consent of Marconi (which shall not unreasonably be withheld
or delayed), to translate, adapt, arrange and otherwise alter the Marconi
Software only in connection with and to the extent necessary for the
purpose of providing the Services.
(2) The Supplier is not entitled to sub-license its rights under Clause
10.1(1) to any third party, including its agents, except that it may
sub-licence those rights to sub-contractors approved by Marconi or
permitted under Clause 25 (Assignment and Sub-Contracting). The terms of
any sub-licence granted by the Supplier to its subcontractors may permit
the sub-contractor to grant further sub-licences to the sub-contractor's
permitted sub-contractors, subject in each case to the prior written
consent of Marconi (not to be unreasonably withheld or delayed) and
provided that the Supplier shall remain responsible for the acts or
omissions of such sub-contractors in relation to the Marconi Software as
if they were acts or omissions of the Supplier.
10.2 MARCONI ASSETS
(1) Except as provided in the Service Level Agreement or a Schedule of Work,
the Marconi Assets shall not be used by the Supplier for any purpose other
than provision of the Services without the prior written consent of
Marconi.
45
(2) The Supplier undertakes the safe custody of and the return to Marconi of
all Marconi Assets in the possession or control of the Supplier Group or
any Approved Sub-Contractors, and shall be responsible for loss of or
damage to them occasioned whilst in such possession or control otherwise
than by the act or omission of the Marconi Controlled Group or their
respective officers, directors, employees, contractors or agents.
10.3 NO LIEN
Neither the Supplier, nor any sub-contractor nor any other person acting
on behalf of the Supplier, shall have a lien on any Marconi Assets or
Marconi Data for any sum due to the Supplier, the sub-contractor or other
person, and the Supplier shall take any reasonable steps to ensure that
the title of the Marconi Group, and the exclusion of any such lien, are
brought to the notice of all sub-contractors and other persons dealing
with any Marconi Assets or Marconi Data.
10.4 ASSETS ACQUIRED BY THE SUPPLIER
To the extent the Supplier acquires any assets for and on behalf of the
Marconi Group, the Supplier shall abide by all Marconi's reasonable
procedures for authorisation and audit trail documentation as may be
notified to the Supplier in writing and in advance.
11. GRANT OF LICENCES
11.1 WORKS
The Supplier hereby grants, or shall procure that the relevant member of
the Supplier Group shall grant, to the Marconi Group a non-exclusive,
royalty free, perpetual licence to use, reproduce, modify, adapt,
translate, arrange and otherwise alter for the purpose of receiving the
Services or, following termination or expiration of this Agreement, for
the purposes of the Marconi Group receiving services that are the same as
or similar to the Services or are otherwise a replacement for the
Services, whether provided using its own resources or provided by a Third
Party Provider, all Works created predominantly in the course of the
provision of the Services by or on behalf of the Supplier, other than
Marconi Works.
11.2 SUPPLIER WORKS
(1) Subject to Clause 3.7 (Regulated Activities), the Supplier hereby grants,
or shall procure that the relevant member of the Supplier Group shall
grant, to the Marconi Group for the duration of this Agreement, a
non-exclusive, royalty-free, non-
46
transferable and non-sub-licensable licence to use all Supplier Works as
are necessary to enable the Marconi Group to enjoy the benefit of the
Services.
(2) The Supplier shall not deploy Supplier Works in connection with the
provision of the Services in such a manner that they are required to be
used by the Marconi Group in order to receive the Services without the
prior written consent of Marconi (which consent shall not be unreasonably
withheld or delayed).
11.3 THIRD PARTY WORKS
Where in order to receive the Services in accordance with the terms of
this Agreement the Marconi Group requires licences of Works (whether
existing as at the Commencement Date or subsequently coming into
existence), the Intellectual Property subsisting in or relating to which
is owned by a third party (including, for the avoidance of doubt, any
Approved Sub-contractor), the Supplier shall use reasonable endeavours to
ensure that such Works are licensed on terms which permit use by the
Marconi Group and which entitle the Marconi Group to benefit from any
indemnities or warranties against infringement of Intellectual Property
arising from such use. Where the Supplier does not obtain such licence or
terms, the Supplier shall ensure that such Works are not deployed by
members of the Supplier Group (or Approved Sub-contractors) in such a
manner that they are required by the Marconi Group in order to receive the
Services without Marconi's prior written consent (which consent shall not
be unreasonably withheld or delayed).
11.4 OTHER AGREEMENTS WITH THIRD PARTIES
Where any agreement (other than a licence of Works, but for the avoidance
of doubt including an agreement for the maintenance or support of Works
whether or not forming part of an agreement for the licence of Works) is
entered into by any member of the Supplier Group exclusively or
predominantly for the purpose of providing the Services (whether or not
the subject matter thereof may be made available to the Marconi Group),
the Supplier shall or shall procure that the procuring member of the
Supplier Group shall, use all reasonable endeavours to procure that the
terms of the agreement:
(a) acknowledge that the subject matter of the agreement is to be used
for the benefit of relevant member(s) of the Marconi Group and
entitle relevant member(s) of the Marconi Group, after termination
or expiry of this Agreement, to enforce the provisions of that
agreement, to the extent
47
necessary to receive the Services or services that are the same as
or similar to the Services;
(b) contain a term that, at the request of Marconi, the agreement (or
the relevant part thereof which benefits Marconi) shall be
transferred by novation to Marconi or its nominee (being a member of
the Marconi Group), with effect from termination or expiry of this
Agreement, at no cost; and
(c) gives full credit (wherever relevant) to Marconi for the period or
periods during which the member of the Supplier Group shall have
procured such services.
12. PROPERTY AND PERSONNEL
The provisions of Schedules 10 (Personnel) and 11 (Property) shall have
effect.
13. TERMINATION
13.1 TERMINATION WITHOUT CAUSE
Marconi may by notice to the Supplier of at least [***] months, terminate
this Agreement in whole or in part with effect from the end of the notice
period, provided that such notice shall not expire and such termination
shall not take effect before the end of a period of [***] months from the
Phase 2 Long-Stop Date.
13.2 TERMINATION FOR CAUSE
(1) Subject to Clause 13.2(3) and to the next paragraph of this Clause
13.2(1), and to Clause 20 (Force Majeure), either Party (the
"NON-DEFAULTING PARTY") may by notice to the other Party (the "DEFAULTING
PARTY") terminate this Agreement in whole or in part as from the date of
service of the notice if the Defaulting Party commits a material breach of
this Agreement, which in the case of a breach capable of remedy, is not
remedied within [***] days after the Non-Defaulting Party has given notice
containing details of the breach and requiring such breach to be remedied;
provided that, in the case of a termination of this Agreement in part, the
Non-Defaulting Party may only terminate those parts of this Agreement
affected by the breach in question.
Where the Non-Defaulting Party is Marconi, Marconi is entitled to specify
a period of notice to terminate this Agreement under this Clause 13.2(1)
that ought reasonably to allow the Marconi Group to procure a replacement
service provider but in no event longer than [***] months from the date of
service of the notice.
48
(2) "MATERIAL BREACH" means, for the purpose of Clause 13.2(1) and Schedule 7
(Project Terms):
(a) a breach which has, or a series of persistent breaches which taken
together have, a material adverse effect on the business of the
Marconi Group (where Marconi is the terminating Party) or the
Supplier Group (where the Supplier is the terminating Party);
(b) in the case of the Supplier, a breach entitling Marconi to terminate
this Agreement (in whole or part) pursuant to Paragraph 5.2(3)(c) of
Schedule 5 (Service Credits); or
(c) the failure at any given time to make payment of outstanding amounts
due and payable under this Agreement (and not, in the opinion of the
terminating party (acting reasonably) the subject of a bona fide
dispute).
(3) Subject to the following provisions of this Clause 13.2, where Marconi
serves notice on the Supplier to terminate this Agreement in whole or part
under Clause 13.2(1), and the material breach in question was caused
solely or substantially by an Approved Sub-contractor, the Supplier shall
within ten (10) Business Days thereafter notify Marconi whether or not the
Supplier intends to seek to replace the responsible Approved
Sub-contractor; in default of such notice from the Supplier the right of
the Supplier to do so shall lapse and Marconi's notice shall take effect
from the date it was served for the purpose of Clause 13.2(1).
[***]
(4) Subject to Clause 13.2(5), where the Supplier elects to replace the
Approved Sub-contractor, the Supplier shall have a period of [***] days
from the date of Marconi's notice of termination under Clause 13.2(1) in
which to appoint a replacement sub-contractor in accordance with Clause
25.2 (Sub-Contracting) or itself to take over responsibility for the
provision of the relevant Services within that period and Marconi's notice
under Clause 13.2(1) shall be suspended during that period (except as
provided in this Clause 13.2), provided that:
(a) the Supplier shall be liable to provide the relevant Services in
accordance with this Agreement during that period;
(b) Marconi is entitled to procure a temporary replacement service; and
49
(c) all other rights of the Marconi Group under this Agreement or
otherwise in respect of the breach shall be unaffected.
(5) Where the Supplier appoints the replacement sub-contractor in accordance
with Clause 25.2 (Sub-Contracting) and the replacement takes over
responsibility for the provision of the relevant Services within the
requisite period, then Marconi shall not terminate this Agreement in
respect of the breach in question and Marconi's notice under Clause
13.2(1) shall not take effect.
(6) Where the Supplier does not appoint the replacement sub-contractor in
accordance with Clause 25.2 (Sub-Contracting) or the replacement does not
take over responsibility for the relevant Services within the requisite
period, then Marconi's notice shall take effect from the date it was
served for the purpose of Clause 13.2(1); where the breach in question is
a remediable breach and the period for the remedy of the breach has
expired without the breach being remedied, this Agreement or the relevant
part thereof shall terminate with immediate effect.
13.3 INSOLVENCY EVENTS
Either Party may at any time, by serving notice on the other, terminate
this Agreement in whole or in part with immediate effect as from the date
of service of the notice if an Insolvency Event occurs in relation to the
other Party.
13.4 CHANGE OF CONTROL
If there is a change of Control of Marconi, Marconi may at any time after
such change of Control by notice to the Supplier of at least [***] months,
terminate this Agreement in whole (but not in part only) with effect from
the end of the notice period.
14. CONSEQUENCES OF TERMINATION OR EXPIRY
14.1 PRESERVATION OF RIGHTS
Termination or expiry of this Agreement or any part thereof for whatever
reason shall not affect the rights of the Parties which have accrued in
accordance with this Clause 14 (Consequences of Termination or Expiry) or
otherwise have accrued due on or before termination or any obligation to
pay Charges in respect of Services provided before termination or expiry,
and Clauses 3.6 (Criminal Acts), 4.2 (Default Interest), 16
(Confidentiality), Clause 11.1 (Works), 18 (Intellectual Property), 19.1
(Liability),
50
23 (Third Party Beneficiaries), 24 (Indemnification Procedure), 25.1(c)
(Assignment to BT), and 38 (Further Assurance) shall survive termination
or expiry.
14.2 TERMINATION WITHOUT CAUSE
Where Marconi has terminated this Agreement or any part thereof pursuant
to Clause 13.1 (Termination without Cause), the relevant provisions of
Schedule 13 (Termination Compensation) shall have effect.
14.3 TERMINATION FOR CHANGE OF CONTROL
Where Marconi has terminated the Agreement or any part thereof pursuant to
Clause 13.4 (Termination for Change of Control) due to the change of
Control of Marconi, the relevant provisions of Schedule 13 (Termination
Compensation) shall have effect.
14.4 TERMINATION BY THE SUPPLIER FOR CAUSE
Where the Supplier has terminated the Agreement or any part thereof
pursuant to Clause 13.2 (Termination for Cause), Marconi shall pay Basic
Costs and Lost Profits (as those expressions are defined in Schedule 13
(Termination Compensation)), save that for the purpose of this Clause
14.4, the period in respect of which Lost Profits shall be calculated
shall be from the date of termination of this Agreement to the day before
the tenth anniversary of the Phase 1 Completion.
14.5 EXIT ARRANGEMENTS
(1) If either Party gives notice of termination of this Agreement or any part
thereof the Exit Arrangements shall apply to the whole or (as the case may
be) the part so terminated during the notice period and thereafter where
the duration of the assistance to be provided under the Exit Arrangements
extends beyond the notice period to terminate this Agreement. The Exit
Arrangements shall also apply prior to expiry of this Agreement and
thereafter where the duration of the assistance to be provided under the
Exit Arrangements extends beyond expiry.
(2) The Supplier's performance of the Exit Arrangements shall be:
(a) free of charge to Marconi where:
(i) Marconi has terminated this Agreement under Clause 13.2
(Termination for Cause); or
51
(ii) the Supplier has terminated this Agreement under Clause 13.3
(Insolvency Events); or
(b) subject to payment of a reasonable charge (payable in advance) by
Marconi, where:
(i) this Agreement expires under Clause 2.1 (Scope and Duration);
(ii) Marconi has terminated this Agreement under Clause 13.1
(Termination without Cause), Clause 13.3 (Insolvency Events)
Clause 13.4 (Change of Control), or Clause 20.3 (Force
Majeure); or
(iii) the Supplier has terminated this Agreement under Clause 13.2
(Termination for Cause).
(3) The Supplier shall be entitled to suspend (pending receipt of the relevant
amount(s)) its obligation to perform the Exit Arrangements if at any given
time the Marconi Group fails to make payment of the Charges or any amount
under Clauses 14.2, 14.3, 14.4 or 14.5(2)(b) that is or are due and
payable under this Agreement (and not, in the opinion of the Supplier
(acting reasonably)) the subject of a bona fide dispute.
14.6 ASSET ARRANGEMENTS
(1) Subject to Clause 14.6(4), Marconi shall have the obligation upon the
expiry or termination of this Agreement (or part of this Agreement) to
acquire any equipment owned by the Supplier or any member of the Supplier
Group or Approved Sub-Contractors' Groups, and used exclusively or
predominately in the provision of the Services (or, in the case of partial
termination, the Services which have been terminated) at such net book
value as is determined by depreciating the cost of the equipment appearing
in the books of the Supplier or the relevant member of the Supplier Group
or the Approved Sub-Contractor's Group (as the case may be) on a straight
line basis in accordance with the generally applicable accounting
principles of the Supplier, the member of the Supplier Group or the
Approved Sub-Contractors' Group (being the owner of the relevant
equipment) for the equipment in question; the Supplier shall sell or
transfer or shall procure that its relevant member of the Supplier Group
or Approved Sub-Contractors' Group shall sell or transfer the relevant
equipment at that net book value and free of charge where that net book
value is nil. Title to, and risk in, the equipment purchased by Marconi
under Clause 14.6(1) shall pass by delivery to Marconi upon payment of the
relevant purchase price, and the Supplier, the member of the Supplier
Group or the member of the Approved Sub-Contractor Group (as appropriate)
shall deliver such equipment to Marconi (such
52
delivery to take place at the locations where that equipment is physically
located at that time). The Supplier warrants that as at the date of any
sale to Marconi under this Clause 14.6(1) the Supplier and/or the relevant
members of the Supplier Group and/or any relevant member of the Approved
Sub-Contractors' Group (as the case may be) have good title to such
equipment free from and clear of all liens, charges, mortgages, or similar
encumbrances but excluding liens or licences arising in the ordinary
course of business which are fairly disclosed to the Marconi Group.
(2) Without prejudice to Clause 14.6(1), as at the Commencement Date, it is
contemplated by the Parties that the Marconi Group shall (after
termination or expiry of this Agreement) continue to use (but without
undertaking any obligation to do so) the equipment referred to in Clause
14.6(1) for the purpose of the provision of services that are a
replacement for the Services.
(3) Upon the expiry or earlier termination of this Agreement (or part of this
Agreement), any agreement concluded pursuant to Clause 11.4 (Other
Agreements with Third Parties) (other than between members of the Supplier
Group) (or in the case of partial termination, any such agreement which
relates exclusively or predominantly to that part of the Services to which
the termination relates) will be transferred by novation to Marconi or its
nominee and the Supplier shall make all reasonable endeavours to obtain
the consent of the counter-party and to procure the execution of all such
deeds and other documents and to do such other things as Marconi may
reasonably require in order to give effect to the novation(s). Until the
relevant novation has been obtained, and subject to obtaining necessary
third party consents, Marconi or its nominee shall be entitled exclusively
to use the subject matter of the relevant agreement for the purpose of
continuing that part of the Services to which the termination relates. The
costs and expenses of the Supplier's (and other members of the Supplier
Group's) compliance with this Clause 14.6(3) shall be borne by the
Supplier in the event of expiration of the Agreement or earlier
termination of the Agreement (or part of it) due to the Supplier's breach
or for an Insolvency Event of the Supplier; in all other cases the cost
and expenses shall be borne by Marconi.
(4) Notwithstanding the terms of any novation pursuant to Clause 14.6(3):
(a) Marconi shall indemnify the Supplier against all Losses incurred by
the Supplier or members of its Group by reason of the failure of
Marconi or its nominee to observe and perform or procure to have
observed and performed all obligations under the agreement to the
extent they should have been performed on or after the date the
relevant novation is effective or, if earlier,
53
the date exclusive use is granted to Marconi or its nominee as
envisaged by Clause 14.6(3) ("NOVATION DATE"); and
(b) with effect from the Novation Date, the Supplier shall indemnify
Marconi in respect of all Losses incurred by Marconi or its nominee
(appointed under Clause 14.6(3) in respect of that agreement) by
reason of the failure by the Supplier or members of the Supplier
Group or its Approved Subcontractors to observe and perform the
obligations under the agreement before the Novation Date.
(5) If this Agreement is terminated by Marconi pursuant to Clause 13.2
(Termination for Cause), and as a consequence, Marconi purchases equipment
pursuant to Clause 14.6(1) at a price which exceeds a reasonable price
which Marconi's incoming service provider would have charged Marconi (in
the absence of this Clause 14.6(1)) for equivalent equipment (contracting
on arm's length terms), then the Supplier shall indemnify Marconi for the
amount of such excess.
(6) This Clause 14.6(6) applies in respect of assets purchased by Marconi
pursuant to Clause 14.6(1) and agreements transferred to Marconi (or its
nominee) pursuant to Clause 14.6(3) and which (in either such case) were,
immediately before expiry or termination of this Agreement, used (in part)
for purposes other than the provision of the Services (the "OTHER
PURPOSES"). In respect thereof:
(a) if requested by the Supplier, and to the extent that Marconi is (or
other members of the Marconi Group are) reasonably able to do so,
Marconi shall (or shall ensure that other members of the Marconi
Group shall) subject to such charge as is reasonable in all the
circumstances, taking into account in particular Marconi's costs
incurred in connection therewith use its reasonable endeavours to
promptly make those assets and the subject matter of those
agreements available to the Supplier Group for use in connection
with the Other Purposes for a reasonable period and the Supplier
shall use reasonable endeavours to make alternative arrangements
such that it ceases use of those assets and/or the subject matter of
those agreements as soon as is reasonable in all the circumstances;
(b) where such assets and/or the subject matter of those agreements are
so made available to the Supplier Group, the Supplier shall (and
shall ensure that other members of the Supplier Group shall) comply
with any terms disclosed to the Supplier relating to the relevant
assets and/or agreement.
54
(7) All Transaction Taxes (payable by any Party) on or in respect of the
transactions and payments referred to in Clause 14.6(1) shall be borne by
Marconi, except where Marconi has terminated this Agreement under Clause
13.2 (Termination for Cause), in which case any irrecoverable Transaction
Taxes shall be for the Supplier's account.
(8) Prior to lodging any tax filing that could reasonably be expected to give
rise to any Transaction Taxes payable by the Supplier under Clause 14.6(7)
("RELEVANT TAX FILING"), Marconi shall consult with the Supplier and,
where requested by the Supplier, with BT and consider any reasonable
position proposed by the Supplier or BT (as the case may be) with respect
to that part of the Relevant Tax Filing which relates to or could
reasonably be expected to affect the Supplier's liability under Clause
14.6(7), with a view to optimising the taxation position of CSC, BT and
Marconi.
(9) Marconi shall promptly notify the Supplier upon becoming aware that a tax
audit, examination, contest or other tax proceeding is or may be carried
out by any Governmental Authority which relates to or could reasonably be
expected to affect the Supplier's liability under Clause 14.6(7)
("RELEVANT TAX PROCEEDINGS"). The Supplier and, at the Supplier's request,
BT shall have the right to participate at its own expense in any Relevant
Tax Proceedings (including without limitation by participating in any
discussions or negotiations between Marconi and the Governmental
Authority) and Marconi agrees to consult with the Supplier and, at the
Supplier's request, BT and keep the Supplier and, at the Supplier's
request, BT fully informed of all material matters relating to the conduct
thereof and to promptly provide the Supplier and, at the Supplier's
request, BT with all material correspondence relating thereto. Marconi
shall not make any settlement of any Relevant Tax Proceedings which could
affect the Supplier's liability under Clause 14.6(7) without the consent
of CSC, such consent not to be unreasonably withheld or delayed.
14.7 SUPPLIER WORKS
If Marconi so requests, following the termination or expiry of the
Agreement, the Supplier shall not unreasonably withhold or delay its
agreement to grant to the Marconi Group (or its nominee) a licence to use
the Supplier Works for a period of up to one year after such termination
or expiry, and as is necessary to enable the Marconi Group to continue to
enjoy the benefit of services the same as or similar to the Services, in
accordance with reasonable commercial terms.
55
15. REPRESENTATIONS AND WARRANTIES
15.1 SUPPLIER REPRESENTATIONS AND WARRANTIES
The Supplier represents, warrants and undertakes to Marconi that:
(a) it has, and will continue to have, the necessary skill, experience
and resources to perform the Services in accordance with this
Agreement;
(b) it has, or shall obtain and maintain, all rights, licences,
permissions and approvals necessary for it to perform its
obligations under this Agreement excluding any rights, licences,
permission and approvals to be granted by Marconi or other members
of the Marconi Group under this Agreement, the Asset Transfer
Agreement, the BT Asset Transfer Agreement or any Country Agreement
or any Transfer Agreement;
(c) it has the right to grant or to assign to Marconi and all members of
the Marconi Group any rights granted or assigned under this
Agreement; and
(d) it shall provide Marconi with notice of any change of Control of the
Supplier within five (5) Business Days after the same.
15.2 MARCONI REPRESENTATIONS AND WARRANTIES
Marconi represents, warrants and undertakes to the Supplier that:
(a) it has, or shall obtain, all rights, licences, permissions and
approvals necessary for it to perform its obligations under this
Agreement; and
(b) it has the right to grant the Supplier and all members of the
Supplier Group any rights granted under this Agreement.
15.3 MUTUAL REPRESENTATIONS AND WARRANTIES
Each Party represents and warrants to the other Party that is has full
power and authority to execute, deliver and perform its obligations under
this Agreement and that there are no existing agreements or arrangements
with third parties, the terms of which prevent such Party from entering
into or performing its obligations under this Agreement.
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15.4 EXCLUSION OF IMPLIED TERMS
All warranties, conditions, or terms not set out in this Agreement and
which would otherwise be implied or incorporated into this Agreement by
reason of statute, common law or otherwise (other than as to the title to
goods) are hereby excluded, except to the extent they may not be excluded
or limited by law.
16. CONFIDENTIALITY
16.1 CONFIDENTIALITY OBLIGATIONS
(1) Each Party shall, and shall procure that each other member of its Group
and its sub-contractors shall, keep confidential this Agreement, its
provisions, and all information concerning the business, customers, trade
secrets, processes, or methods of or used by the other Party or any other
member of its Group or its sub-contractors in carrying on business
("CONFIDENTIAL INFORMATION"), obtained from the other pursuant to or in
connection with this Agreement or which may be disclosed to the other
during the provision or receipt of the Services or the performance of this
Agreement before, on or after the Commencement Date, and for this purpose:
(a) the Marconi Software, the Marconi Data and the Marconi Works shall
be included in the definition of Confidential Information as it
applies to the information of Marconi; and
(b) the Supplier Works and works licensed under Clause 11.1 (Works)
shall be included in the definition of Confidential Information as
it applies to the information of the Supplier.
(2) The Supplier may only disclose Confidential Information of the Marconi
Group to those of the Supplier Personnel who require such Confidential
Information:
(a) for the purpose of carrying out the Supplier's obligations under
this Agreement; or
(b) pursuant to a licence granted pursuant to this Agreement.
(3) Marconi may only disclose Confidential Information of the Supplier Group:
(a) to those of its personnel (including sub-contractors), the personnel
of other members of the Marconi Group or any Third Party Providers
or professional advisors who require such Confidential Information
in connection with the provision or receipt of the Services; or
57
(b) pursuant to a licence granted pursuant to this Agreement;
except that Marconi shall not disclose any Confidential Information of the
Supplier to any Third Party Provider in either of the following
circumstances:
(c) until such time as the Third Party Provider has undertaken in
writing to the Supplier (on terms reasonably acceptable to the
Supplier) to abide by terms substantially the same as the provisions
of this Clause 16 (Confidentiality); and
(d) Marconi shall not so disclose any such Confidential Information to
the extent such Confidential Information contains financial
information (including as to charges or costs) or any trade or
business secrets of the Supplier Group or of their subcontractors.
(4) 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 information of its own of similar significance but on no
account less than reasonable care.
(5) Each Party agrees that (except pursuant to a licence granted pursuant to
this Agreement) it shall not use any Confidential Information of the other
Party for any purpose other than the performance of its respective
obligations or enforcing its rights under this Agreement, nor copy or
disclose, in whole or part, any such Confidential Information to any third
party without the written consent of the other Party's authorised
representative. However, 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)
subject to appropriate written confidentiality obligations.
16.2 EXCEPTIONS
The provisions of this Clause 16 (Confidentiality) shall not apply to
Confidential Information which the recipient can show to the disclosing
Party's reasonable satisfaction:
(a) was lawfully 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;
58
(c) was at the time of disclosure or has become generally available to
the public otherwise than by reason of the recipient's neglect or
breach of the restrictions set out in this or any other agreement;
(d) has been independently ascertained or created by the recipient
without access to any or all of the Confidential Information as
demonstrated by its written records; or
(e) is required:
(i) by law of any relevant jurisdiction; or
(ii) by any securities exchange or regulator or Competent Authority
to which any Party is subject or submits, wherever situated,
including NASDAQ, the Securities and Exchange Commission of
the United States of America, the London Stock Exchange, the
UK Listing Authority or the Panel on Takeovers and Mergers,
whether or not the requirement for disclosure has the force of
law,
but only to the extent and for the purpose of such disclosure, and
provided that any information disclosed pursuant to this Clause
16.2(e) shall be disclosed only after notice to the other Parties
and the disclosing Party shall take reasonable steps to co-operate
with the other Parties regarding the manner of that disclosure.
17. DATA PROTECTION
17.1 COMPLIANCE WITH LEGISLATION
Each Party shall ensure that it shall comply with the provisions and
obligations imposed on it by Applicable Legislation relating to data
protection, including the Data Protection ▇▇▇ ▇▇▇▇ and any legislation
and/or regulations implementing or made under or pursuant to that Act or
Directives 95/46/EC and 97/66/EC of the European Parliament (all referred
to as "DATA PROTECTION LEGISLATION").
17.2 RETURN OF PERSONAL DATA
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 or under Applicable Legislation.
59
17.3 SUPPLIER RESPONSIBLE FOR THIRD PARTIES
The Supplier shall be responsible for the acts and omissions of any third
party with whom it contracts or who processes (within the meaning of the
Data Protection Legislation) data on its behalf as it is for its own acts
and omissions in relation to the matters provided for by this Clause 17
(Data Protection).
17.4 DATA CONTROLLER
(1) The Parties agree that the provisions of this Clause 17.4 (Data
Controller) shall apply if and to the extent that Marconi and/or any other
members of the Marconi Group provide personal data for the Supplier
(including where acting through an Approved Sub-Contractor) to process for
Marconi and/or other members of the Marconi Group.
(2) Marconi and/or other members of the Marconi Group shall (as between any of
them and members of the Supplier Group) determine the purposes for which
and the manner in which such personal data ("RELEVANT PERSONAL DATA") are
processed (the entity making such a determination being, for the purposes
of this Clause 17, the "DATA CONTROLLER").
(3) The Supplier shall only process Relevant Personal Data in accordance with
instructions from the Data Controller, and all such processing in
accordance with this Agreement shall be deemed to be on the instructions
of the appropriate Data Controller. Any changes to the Services arising as
a result of such instructions (and the costs implications of such changes)
shall be dealt with through Change Control.
(4) Those members of the Marconi Group which are Data Controllers may enforce
the provisions of this Clause 17.4 in their own right in accordance with
the provision of the Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇, except
that the Parties may rescind, terminate or vary this Clause 17 or any
other part of this Agreement without the consent of those Marconi Group
members.
17.5 ORGANISATIONAL AND TECHNICAL MEASURES
(1) The Supplier shall provide the Services in accordance with Marconi's
security policy identified in Schedule 3.
(2) The Supplier shall take reasonable steps to ensure the reliability of the
Supplier Personnel who have access to the Relevant Personal Data and shall
inform them of the importance of the need to avoid Data Protection Events.
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17.6 FURTHER DATA PROCESSOR OBLIGATIONS
(1) The Supplier shall promptly, and (to the extent reasonably practicable) in
any event not later than reasonably required in order to enable any Data
Controller to fulfil its duties under any Data Protection Legislation:
(a) pass on to the Data Controller any enquiries or communication
(including subject access requests) from end users relating to their
Relevant Personal Data or its processing;
(b) provide such information as may be required for the purpose of
responding to any such end users or otherwise to comply with duties
under Data Protection Legislation; and
(c) execute a contract in writing with the Data Controller (other than
Marconi) under which the Supplier agrees directly with the Data
Controller to process Relevant Person Data in accordance with the
terms of this Clause 17 (Data Protection).
(2) The Supplier's reasonable incremental costs of compliance with Clause
17.6(1) (other than Clause 17.6(1)(c)) shall be for the account of
Marconi.
18. INTELLECTUAL PROPERTY
18.1 OWNERSHIP
(1) Subject to Clause 18(2), all Intellectual Property (if any) subsisting in
or relating to Marconi Works shall be owned (as between the Parties) by
Marconi and the Supplier hereby assigns (or shall procure that any member
of the Supplier Group shall assign) (with full title guarantee) all right,
title and interest in and to such Intellectual Property to Marconi; at
Marconi's request and expense, the Supplier shall execute such deeds and
other documents, and shall do all things, as Marconi may reasonably
require in order to give Marconi the benefit of this assignment and to
defend and enforce its rights assigned under this Clause 18.1(1).
(2) Notwithstanding Clause 18.1(1), nothing in this Agreement shall affect the
ownership of any Intellectual Property, the ownership of which is already
regulated by an existing contract between members of the Marconi Group and
members of the BT Group.
(3) All Intellectual Property (if any) subsisting in or relating to Works
(other than Marconi Works) which are developed in the course of the
provision of the Services by
61
or on behalf of the Supplier shall be owned (as between the Parties) by
the Supplier or its designee and Marconi hereby assigns (or shall procure
that any member of the Marconi Group shall assign) (with full title
guarantee) all right, title and interest in and to such Intellectual
Property to the Supplier or its designee; at the Supplier's request and
expense, Marconi shall (and shall procure that each other member of the
Marconi Group shall) execute such deeds and other documents, and shall do
all things, as the Supplier may reasonably require in order to give the
Supplier or its designee the benefit of this assignment and to defend and
enforce the Supplier and/or its designee's rights assigned under this
Clause 18.1(3).
(4) Nothing in Clause 18.1 shall be deemed to confer on Marconi any rights in
respect of Works ("PRE-EXISTING WORKS") which are the property of the
Supplier or a third party, and which are incorporated into any Marconi
Works but which were created before (or independently of) those Marconi
Works, provided that:
(a) the Supplier shall notify and supply full details to Marconi of all
such Pre-existing Works before incorporating such Pre-existing Works
into any Marconi Works;
(b) before incorporating such Pre-existing Works into any Marconi Works,
the Supplier shall and shall procure from such third party the right
for such Pre-existing Works to be incorporated into the relevant
Marconi Works; and
(c) in relation to any Services relating to or involving the creation,
development, enhancement, customisation, addition or alteration (by
or on behalf of the Supplier) of any Marconi Works, the Supplier
shall provide or shall procure that Marconi has a licence to the
relevant Pre-existing Works in such Marconi Works on reasonable
commercial terms.
(5) If and to the extent that any Intellectual Property is deemed for any
reason not to vest in the Party in which it is intended (pursuant to
Clause 18.1(1) or (3)) to vest (the "OWNER"), then subject only to Clause
18.1(4), upon request by the Owner, the other Party shall forthwith assign
or otherwise transfer, or procure the assignment or transfer of, the same
to the Owner free of any encumbrance and without further or any
compensation to the Owner.
(6) Nothing in this Agreement shall prevent the Supplier from using skill,
know-how or methodologies gained or developed in the course of providing
the Services that is or are of general application and does not
specifically relate to the Marconi Group,
62
provided that its or their use by the Supplier does not infringe any
Intellectual Property of the Marconi Group.
18.2 INDEMNITY
(1) The Supplier shall indemnify the Marconi Group against any claim (other
than by a member of the Marconi Group) based upon any allegation of
infringement of the Intellectual Property of any third party as a result
of any use by any person of the Supplier IPR either for the purpose of
this Agreement or for the receipt of the Services which claim is made
against any member of the Marconi Group or their respective officers,
directors, employees, agents, successors and assigns, provided that the
Supplier shall have no obligation with respect to any Losses to the extent
they arise out of:
(a) modification or misuse of equipment, systems, programs or products
by the Marconi Group or any third party (not being a member of the
Supplier Group or an Approved Sub-contractor), other than
modifications or uses authorised by the Supplier;
(b) combination, operation or use thereof with devices, data, equipment,
systems, programs or products other than in accordance with the
instructions of the Supplier or its subcontractors;
(c) the Supplier or any of its Approved Sub-Contractors having complied
with a written design or instructions provided to it by or on behalf
of the Marconi Group (however if, within a reasonable period of
having been provided with the written design or instruction, the
Supplier becomes aware, or ought reasonably to have become aware,
that the allegation of infringement is likely to arise, then the
Supplier shall promptly notify Marconi in writing); or
(d) Marconi Group's breach of this Agreement, the Asset Transfer
Agreement or of the BT Asset Transfer Agreement or of any Country
Agreement or Transfer Agreement or any use of the Supplier IPR
outside the scope of the licences granted in this Agreement.
(2) Marconi shall indemnify the Supplier Group against any claim (other than
by a member of the Supplier Group) based upon any allegation of
infringement of the Intellectual Property of any third party as a result
of any use by any person of the Marconi IPR for the purpose of this
Agreement made against any member of the Supplier Group or their
respective officers, directors, employees, agents, successors
63
and assigns provided that Marconi shall have no obligation with respect to
any Losses, to the extent they arise out of:
(a) modification or misuse of such equipment, software or other
materials by the Supplier Group or any third party (not being a
member of the Marconi Group or any Third Party Provider), other than
modifications or uses authorised by Marconi or any other member of
the Marconi Group;
(b) the Supplier's (or any member of the Supplier Group's) combination,
operation or use thereof with devices, data, equipment, systems,
programs or products in an arrangement which is not that of Marconi
(or any other member of the Marconi Group) prior to the relevant
Cutover;
(c) Marconi having complied with a written design or instruction
provided to it by the Supplier Group, to the extent that the
infringement does not arise from the method selected or used by
Marconi to implement that design or instruction; or
(d) the Supplier's breach of this Agreement, the Asset Transfer
Agreement or the BT Asset Transfer Agreement or any use of the
Marconi IPR outside the scope of the licences granted in this
Agreement.
(3) If any of the circumstances described in Clause 18.2(1) and 18.2(2) arise,
the Party liable under the indemnity (the "INDEMNIFYING PARTY") to the
other Party (the "INDEMNIFIED PARTY") may at its own expense promptly:
(a) procure the right for the Indemnified Party and (where the Supplier
is the Indemnified Party, the Approved Sub-Contractors) to continue
using the Supplier IPR in the case of Marconi or the Marconi IPR in
the case of the Supplier as envisaged by this Agreement;
(b) make or procure such alterations, modifications, adjustments or
substitutions to all or any part or parts of the Supplier IPR in the
case of Marconi or the Marconi IPR in the case of the Supplier so
that it becomes non-infringing without materially affecting the
relevant part of the Services or the Project or the costs to the
Supplier of performing this Agreement; or
(c) substitute a non-infringing version of the infringing item of
equivalent functionality and performance.
(4) In this Clause 18.2 the following definitions apply:
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(a) "MARCONI IPR" means all Marconi Software, Marconi Data and Works
owned or purported to be owned by the Marconi Group which are made
available or supplied to the Supplier Group or an Approved
Sub-contractor pursuant to this Agreement; and
(b) "SUPPLIER IPR" means all Works owned or purported to be owned by the
Supplier Group which are made available or supplied to the Marconi
Group pursuant to this Agreement, other than Marconi IPR.
19. LIABILITY AND INSURANCE
19.1 LIABILITY
(1) Neither Party excludes or limits its liability to the other Party:
(a) for death or personal injury caused by its negligence; or
(b) any other liability to the extent the liability may not be excluded
or limited by law.
(2) Any limitation on liability shall not apply to the extent such Loss is
caused by fraudulent misrepresentation or deceit.
(3) Subject to Clause 19.1(1), each Party's Group's entire liability for all
claims under or in connection with this Agreement and all contracts and
documents entered into pursuant to this Agreement (including the Country
Agreements and also liability to assignees permitted under Clause 25.1(1)
(Assignment or Transfer)) regardless of the form of action and whether in
contract, tort (including negligence), warranty or any other legal or
equitable grounds, shall in no event exceed the following limits:
(a) the total liability (in aggregate) under or in connection with this
Agreement in respect of all claims (other than pursuant to the
indemnities in Clause 18.2 (Intellectual Property Indemnity))
arising during the period from the Commencement Date to the day
immediately before Phase 1 Completion: an amount equal to the total
Transition Charges;
(b) for (in aggregate) each claim arising during each Year occasioned by
any single event or series of related events (other than pursuant to
the indemnities in Clause 18.2 (Intellectual Property Indemnity)):
[***]; and
(c) the total such liability (in aggregate) under or in connection with
this Agreement in respect of all such claims arising during each
Year: [***]
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"YEAR" means each period of twelve (12) months or part thereof during the
term of this Agreement commencing on the date of Phase 1 Completion and
each anniversary thereof.
For the avoidance of doubt, nothing in this Clause 19.1(3) shall operate
to restrict any liability of any member of the Marconi Group to pay the
Charges or any termination compensation under Schedule 13 (Termination
Compensation).
(4) Subject to Clause 19.1(5), in no event will either Party have any
liability whether based on contract, tort (including negligence), warranty
or any other legal or equitable grounds, for any indirect or consequential
loss, or loss of profits, goodwill, revenue, business or anticipated
savings or (but without prejudice to Clause 3.2(2)(b)(Quality of the
Services)) for any loss or destruction of data (even when advised of their
possibility) arising from or related to this Agreement howsoever caused.
(5) It is in the contemplation of both parties that if the Supplier breaches
this Agreement, (each such breach being an "EVENT OF DEFAULT"), Marconi
may suffer Loss as a direct result thereof, as follows:
[***]
Without affecting Marconi's other rights, but subject always to Clause
19.1(4), the Parties agree that such direct Losses if proven by Marconi
shall not be excluded by the operation of Clause 19.1(4).
(6) No claim shall be brought by either Party under this Agreement unless it
shall have given notice in writing of that claim specifying (in reasonably
sufficient detail) the matter giving rise to the claim, the nature of the
claim and, so far as practicable, the amount claimed, not later than the
expiry of a period of [***] years from the date that the claim first
accrued.
(7) Marconi agrees with the Supplier to waive any rights or claims which it
may have against any of the Transferring Employees in respect of any
misrepresentation, inaccuracy or omission in, or from, any information or
advice supplied or given by any of the Transferring Employees on which
Marconi may have relied in connection with agreeing the Assumptions listed
in Schedule 4 (Charges) and Part 1 of Schedule 22 (Assumptions and
Dependencies).
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19.2 INSURANCE
(1) The Supplier shall have in force the following insurances with a reputable
insurer or (if greater) such levels as are not less than limits of
liability under Applicable Legislation:
[***]
(2) Marconi acknowledges that the insurances referred to in Clause 19.2(1) may
be subject to excess or deductible provisions such that the insurer may
not be liable for the entire amount of any particular claim.
(3) The Supplier shall ensure that Marconi's interest has been recorded [***]
referred to in Clause 19.2(1)(b).
(4) The provisions of this Clause 19.2(4) shall apply where the Services are
to be provided in any State forming part of the USA.
(a) The Supplier shall take out and maintain workers compensation
insurance in all such States, providing in each case a level and
scope of cover no less than the requirements therefor under the laws
of the State in question.
(b) [***].
(5) Upon request the Supplier shall provide satisfactory evidence to Marconi
that the insurances required under this Agreement have been effected,
including certification from the insurer that such insurances are in
place; provided that where the Services are to be provided in a State
forming part of the USA which is a monopolistic State, the requirements of
this Clause 19.2(5) shall be satisfied by the Supplier providing evidence
to the reasonable satisfaction of Marconi that the requisite premium has
been paid to the State insurer.
(6) [***]
(7) Marconi shall have in force insurances which cover theft or damage to the
Supplier's tangible property whilst on Sites or otherwise in the custody
or control of Marconi or other members of the Marconi Group. The
provisions of Clause 19.2(3), (4) and (5) shall apply mutatis mutandis.
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20. FORCE MAJEURE
20.1 Subject to Clause 20.6, if either Party is prevented, hindered or delayed
from or in performing any of its obligations under this Agreement by a
Force Majeure Event (as defined below) then:
(a) 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;
(b) as soon as 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;
(c) 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
(d) 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.
20.2 If any Force Majeure Event prevents, hinders, or delays performance of all
or any part of the Services then the Supplier shall immediately notify
Marconi of such event and of its anticipated duration. If the anticipated
period or the period during which the Force Majeure Event in fact subsists
is of a length such that in Marconi's reasonable opinion it has or may
reasonably be expected to have a material adverse effect on the Marconi
Group or part thereof and the Supplier has had a reasonable opportunity to
make alternate arrangements for the delivery of the Services and is unable
to do so, then Marconi may procure such part of the Services from an
alternate source to the extent that such alternate source can provide
those Services, subject to Marconi continuing to pay any monies due to the
Supplier under this Agreement for the remaining Services not affected by
the Force Majeure Event.
20.3 If the period of the Force Majeure Event in fact subsists to a length such
that the non-performance delayed or defective performance of the Services
in accordance with this Agreement would but for Clause 20.5 be a material
breach of this Agreement, and if the Supplier has been unable to make
alternate arrangements (having been given a
68
reasonable opportunity to do so) then Marconi may terminate this Agreement
in respect of the affected Services as of a date specified by Marconi in a
notice of termination to the Supplier. Where Marconi terminates this
Agreement in respect of the affected Services, the Parties shall negotiate
and implement an equitable adjustment to the Charges to reflect the change
(in default of agreement, to be determined by Expert's Decision).
20.4 For the avoidance of doubt, the Supplier shall be entitled to the Charges
duly incurred in respect of those Services provided before the relevant
Force Majeure Event.
20.5 Subject to Clause 20.6, neither Party shall 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 (as soon as reasonably practicable)
notified the other Party and the time for performance of that obligation
shall be extended accordingly.
20.6 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.
20.7 In this Clause 20 "FORCE MAJEURE EVENT" means the occurrence of any event
or circumstance which is outside the reasonable control of the Party whose
performance of this Agreement is affected by the event or circumstance,
such occurrence or circumstance, including any outbreak or threatened
outbreak of war, acts of terrorism or sabotage, flood, fire, lightening,
explosion, accident, riot, weather conditions or any other act of God and
any acts or omissions of any third party (other than of a sub-contractor
of the Party whose performances affected a third party or whose act or
omission is to be procured by that Party, except where such an act or
omission is caused by an event or circumstance which itself would
constitute a Force Majeure Event in relation to that sub-contractor).
20.8 This Clause 20 (Force Majeure) shall not relieve the Supplier of any
obligations which it may have under this Agreement in relation to the
provision of disaster recovery or similar services to the Marconi Group,
unless those obligations themselves are affected by a Force Majeure Event.
21. ALTERATIONS IN THE MARCONI GROUP
21.1 This Clause 21 applies if any entity (the "DEPARTING ENTITY") ceases to be
a member of the Marconi Group or any member of the Marconi Group sells or
outsources one or
69
more of its businesses or functions (the "DEPARTING BUSINESS") to a person
who is not a member of the Marconi Group (such cessation, sale or
outsourcing being referred to, in this Clause 21, as a "DEPARTURE"), and
such Departing Entity or Departing Business was, before the Departure,
receiving Services from the Supplier.
21.2 Subject to resolution of costs and technical issues (if any) through
Change Control, if (at Marconi's entire option) Marconi informs the
Supplier that there is to be a Departure then, if the Supplier is
requested to do so in writing by Marconi but subject to Clause 3.7
(Regulated Activities), the Supplier shall provide the Services under this
Agreement to that Departing Entity or Departing Business for a period of
at least six (6) months after the Departure as if that Departing Entity or
Departing Business were a member of the Marconi Group. Marconi shall be
responsible for the payment to the Supplier of any reasonable additional
costs incurred by the Supplier in the provision of the Services to a
Departing Entity or Departing Business pursuant to this Clause.
21.3 If Marconi does not have sufficient information for the purposes of the
proposed acquirers of the Departing Entity or the Departing Business in
respect of the Charges attributable to the supply of Services to the
Departing Entity or the Departing Business then the Supplier shall (at
Marconi's cost and provided the Supplier has the information freely
available) assist Marconi in providing the information as expeditiously as
possible, taking account of the commercial objectives and need for speed
on the part of the Marconi Group.
21.4 Marconi may at its discretion use its reasonable endeavours to procure
that a Departing Entity or the successor in title to a Departing Business
that is not a member of the Marconi Group shall enter into an agreement
with the Supplier for the provision of the Services that such Departing
Entity or Departing Business was receiving from the Supplier under this
Agreement before Departure.
21.5 Subject to Clause 21.6, where and to the extent that a Departing Entity or
successor in title to a Departing Business that is not a member of the
Marconi Group:
(a) does not enter into an agreement with the Supplier for the provision
of the Services that such Departing Entity or Departing Business was
receiving from the Supplier under this Agreement before the
Departure, whether or not Marconi used reasonable endeavours under
Clause 21.4, there shall (notwithstanding that the 24 month period
referred to in Clause 13.1 may not yet have expired) be deemed to
be, as of the date of the Departure, a termination of this Agreement
by Marconi in part under Clause 13.1 (Termination without Cause) to
the extent of the Services being received by
70
the Departing Entity or (as the case may be) the Departing Business
immediately before the Departure and (without limitation) Clause
14.2 (Termination without Cause) shall apply accordingly;
(b) does enter into an agreement with the Supplier for the provision of
the Services that such Departing Entity or Departing Business was
receiving from the Supplier under this Agreement before the
Departure, whether or not Marconi used its reasonable endeavours
under Clause 21.4, such Departure shall not be treated for any
purpose as a termination in part by Marconi under Clause 13.1
(Termination without Cause) and, for the avoidance of doubt, the
provisions of Clause 14.2 (Consequences of Termination) and Schedule
13 (Termination Compensation) shall not apply.
21.6 Notwithstanding Clause 21.5(a), to the extent that the changes in the
requirements of the Marconi Group as a result of the Departure are (as
regards each affected Service Category) within the RRC Resource Band (as
defined in Schedule 4 (Charges)) for that Service Category, then the
provisions of Schedule 13 (Termination Compensation) shall not apply.
21.7 Any changes to the Charges or the IT Services provided to the Marconi
Group arising as a result of a Departure shall be subject to Change
Control, provided that where the change falls within the scope of the
relevant "ARC/RRC" mechanism outlined in Schedule 4 (Charges), any
adjustment to the Charges shall be determined pursuant to those "ARC/RRC"
mechanisms.
21.8 In addressing matters under Change Control as envisaged by Clause 21.2,
the Parties shall negotiate in good faith to seek to ensure that the costs
(including the Charges) that would be incurred by the Departing Entity or
successor in title to the Departing Business under such an agreement with
the Supplier Group will not be materially greater than the costs
(including the Charges) or a reasonable proportion thereof allocable to
the Services received by the Departing Entity or Departing Business
immediately before the Departure.
22. NO COMMISSIONS, ETC
The Supplier shall not solicit nor accept commissions, rebates, or other
financial inducements from any suppliers or subcontractors in relation to
the Services otherwise than in accordance with Best Industry Practice.
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23. THIRD PARTY BENEFICIARIES
23.1 Marconi has concluded this Agreement on its own behalf and for the benefit
of the other members of the Marconi Group. The Supplier has concluded this
Agreement on its own behalf and for the benefit of the other members of
the Supplier Group.
23.2 Subject to the limits of the Supplier's liability in this Agreement, the
Supplier shall from time to time indemnify Marconi in respect of an amount
equal to any and all agreed or proven Loss incurred or sustained by any
other member of the Marconi Group (other than any Loss arising as a result
of a breach of Clause 17.4) which:
(a) arises or is in connection with a misrepresentation or breach of
this Agreement by the Supplier (or any member of the Supplier Group)
or any tortious act or omission of the Supplier (or any member of
the Supplier Group) or an Approved Sub-Contractor in connection with
this Agreement, provided that the Loss would have been recoverable
by the member of the Marconi Group if it had been a party to this
Agreement assuming that all obligations and warranties owed by the
Supplier to Marconi were also owed to such member of the Marconi
Group; or
(b) is expressed to be recoverable under an indemnity in this Agreement
in favour of the member of the Marconi Group.
23.3 Subject to the limits of Marconi's liability in this Agreement, Marconi
shall from time to time indemnify the Supplier in respect of an amount
equal to any and all agreed or proven Loss incurred or sustained by any
other member of the Supplier Group which:
(a) arises or is in connection with a misrepresentation or breach of
this Agreement by Marconi (or any other member of the Marconi Group)
or any tortious act or omission of Marconi (or any other member of
the Marconi Group) in connection with this Agreement, provided that
the Loss would have been recoverable by the member of the Supplier
Group if it had been a party to this Agreement assuming that all
obligations and warranties owed by Marconi (the relevant other
member of the Marconi Group) to the Supplier were also owed to such
member of the Supplier Group; or
(b) is expressed to be recoverable under an indemnity in this Agreement
in favour of the member of the Supplier Group.
23.4 Marconi shall procure that no other member of the Marconi Group shall, and
the Supplier shall procure that no other member of its Group shall, save
as provided for in
72
Clause 17.4(4) (Data Controller) bring a claim against the other Party or
member of its Group under or relating to this Agreement.
23.5 In no circumstances shall either Party be liable both to the other and to
another member of the Marconi Group (in the case of the Supplier) or the
Supplier Group (in the case of Marconi) for Loss incurred or sustained by
that member of the Marconi Group or that Group member, and the amount of
such Loss for which a claim may be made shall not exceed the amount which
the indemnified Party would have been entitled to claim under this
Agreement assuming that the Loss in question had in fact been incurred by
that Party.
23.6 Subject to Clauses 17.4(4) and 23.7, no person who is not a Party to this
Agreement (including any employee, officer, agent, representative or
sub-contractor of either Party) shall have the right (whether under the
Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇ or otherwise) to enforce any
term of this Agreement which expressly or by implication confers a benefit
on that person without the prior agreement in writing of the Parties.
23.7 It is intended that BT and other members of BT's Group may enforce the
benefits conferred on them under Clauses 2.13(1) (Guarantees), 4.6 (MCL)
and 25.2(4) (Claims against Approved Sub-Contractors), of this Agreement
in accordance with the terms of the Contracts (Rights of Third Parties)
▇▇▇ ▇▇▇▇, except that the Parties may rescind or vary this Agreement
without the consent of BT or any member of BT's Group.
24. INDEMNIFICATION PROCEDURE
24.1 A Party entitled to indemnification under this Agreement (the "INDEMNIFIED
PARTY") shall give written notice as soon as reasonably practicable upon
becoming aware of circumstances giving rise to a right of indemnity under
this Agreement to the Party that is obligated to provide indemnification
(the "INDEMNIFYING PARTY"). Within ten Business Days after such notice,
the Indemnifying Party may notify, in writing, the Indemnified Party of
its decision to take control of the defence of any claim made by any third
party and which is the subject of the indemnity 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
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which involves a remedy other than the payment of money by the
Indemnifying Party shall:
(a) be made without the consent of the Indemnified Party, which consent
shall not be unreasonably withheld or delayed; or
(b) not include as an unconditional term thereof the giving by the
claimant 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.
24.2 The Indemnified Party under this Clause 24 (Indemnification Procedure)
shall use its reasonable endeavours to mitigate the Loss.
25. ASSIGNMENT AND SUB-CONTRACTING
25.1 ASSIGNMENT OR TRANSFER
(1) Neither Party may assign or transfer any of its rights or obligations
under this Agreement without the prior written consent of the other, not
to be unreasonably withheld or delayed except that:
(a) Marconi shall be entitled by notice to the Supplier to assign or
transfer any or all of its rights or obligations under this
Agreement to another member of the Marconi Group, provided that
(i) Marconi shall at all times be liable for any breach of this
Agreement by the assignee or transferee;
(ii) if any such assignee or transferee ceases at any time to be a
member of the Marconi Group it shall, at the request of the
Supplier, immediately reassign and re-transfer all such
rights, obligations and liabilities to a remaining member of
the Marconi Group, and
(iii) Marconi may only so transfer payment obligations to a Marconi
Group member which is resident (for tax purposes) as follows:
(aa) for Services to be provided in the Invoice Region "UK
and Ireland", in the UK;
74
(bb) for Services to be provided in the Invoice Region "Rest
of World", either (i) in the UK; or (ii) (subject to
Clause 2.10(6)) in a Country in the "Rest of World"
Invoice Region to which the Services are to be provided
under this Agreement; and
(cc) for Services to be provided in any other Invoice Region,
in a Country in that Invoice Region,
and Marconi shall procure that the entity nominated pursuant
to Clause 25.1(1)(a)(iii)(aa), (bb) or (cc) above shall make
all payments due under this Agreement from the Country
referred to in Clause 25.1(1)(a)(iii)(aa), (bb) or (cc) above.
If any such Marconi Group member ceases to be so resident,
Marconi will promptly notify the Supplier of this fact and, at
the request of the Supplier, ensure that all rights and
obligations of the relevant Marconi Group member are promptly
assigned and transferred to a member of the Marconi Group
which is so resident;
(b) the Supplier shall be entitled by notice to Marconi to assign or
transfer any or all of its rights or obligations under this
Agreement to another member of its Group provided that (i) at all
times the Supplier shall be liable for any breach of this Agreement
by the assignee or transferee, (ii) if any such assignee or
transferee ceases at any time to be a member of the Supplier Group
it shall, at the request of Marconi, immediately reassign and
re-transfer all such rights, obligations and liabilities to a
remaining member of the Supplier Group; and
(c) the Supplier shall be entitled by notice to Marconi to assign to BT
and/or other members of the BT Group (in whole or in part) the
benefit of the obligations and warranties imposed on Marconi under
this Agreement and any claims or rights in damages which the
Supplier may have in respect of those obligations; for the avoidance
of doubt, any such liability of Marconi to BT or any other member of
the BT Group shall be taken into account in determining whether the
limitation of the Marconi Group's liability under Clause 19.1(3) has
been reached.
(2) Following any permitted assignment or transfer under Clause 25.1(1), any
reference in this Agreement to Marconi or the Supplier shall, where the
context allows (and in respect only of the rights and obligations so
transferred or assigned), be a reference to that Party's assignee or
transferee (as the case may be). Any permitted assignee or transferee
shall be treated for all purposes as if it had been an original Party to
(and
75
been granted the relevant rights under) this Agreement, but not so as to
take into account any other services provided to the assignee/transferee
prior to the assignment or transfer for the purpose of seeking
retrospective volume discounts.
(3) Either Party may disclose to any assignee or transferee or proposed
assignee or transferee such information about this Agreement (including
copies of all of it or extracts from it) as is reasonably necessary in
connection with such an assignment or transfer or to give consideration to
such a proposed assignment or transfer. This is subject to the assigning
or transferring Party (i) procuring that such third party executes, in
favour of the other Party, a confidentiality undertaking comparable in all
material respects with Clause 16 (Confidentiality) and (ii) having first
obtained the prior written consent of the other Party, such consent not to
be unreasonably withheld or delayed. No such disclosure shall be a breach
of the confidentiality provisions contained in this Agreement.
(4) The provisions of this Clause 25.1 shall apply to any and all successive
assignees or transferees from time to time holding the benefit of this
Agreement.
25.2 SUB-CONTRACTING
(1) Subject to Clause 25.2(2), the Supplier shall not sub-contract (or
authorise any of its sub-contractors to sub-contract) the whole or any
part of the provision of the Services without the prior written consent of
Marconi (such consent not to be unreasonably withheld or delayed).
(2) Notwithstanding Clause 25.2(1), the Supplier may sub-contract (and may
authorise its Approved Sub-contractors to sub-contract) the provision of
part of the Services to:
(a) a member of the Supplier Group or, in the case of an Approved
Sub-contractor, a member of the Approved Sub-contractor's Group;
(b) the other parties to the In-Scope Contracts, in relation to those
parts of the Services provided for in those In-Scope Contracts; and
(c) the sub-contractors identified in Schedule 21 (Approved
Sub-Contractors), in relation to those parts of the Services
specified in Schedule 21 (Approved Sub-Contractors) as approved for
sub-contracting to those parties.
(3) If the Supplier sub-contracts any of its obligations (other than pursuant
to In-Scope Contracts), the Supplier shall notify Marconi of the identity
of the sub-contractor and of the sub-contracted Services and, subject to
Clause 3.1, procure that its sub-
76
contractor complies with and is bound by the requirements of this
Agreement as it applies to the Supplier. The Supplier shall (subject to
Clause 3.1) remain fully liable for the performance of any obligations of
its sub-contractors and shall be solely responsible for payments due to
its sub-contractors.
(4) Marconi shall not (and shall procure that no other member of the Marconi
Group shall) bring a claim against any Approved Sub-Contractor (whether
based on contract, tort (including, without limitation, negligence),
warranty or any other legal or equitable grounds) under or relating to
this Agreement or the Services.
26. DISPUTE RESOLUTION
26.1 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 Marconi Contract Manager and the Service Delivery Manager.
26.2 If the matter is not resolved within 10 Business Days of its being
referred to the managers referred to in Clause 26.1 the matter shall be
referred to the next level of Marconi's and the Supplier's management in
accordance with the hierarchy set forth in Clause 26.3 who must meet
within ten (10) Business 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 one more levels of management. If the unresolved 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.
26.3 The levels of escalation are:
THE SUPPLIER MARCONI
FIRST LEVEL Service Delivery Manager Marconi Contract Manager
SECOND LEVEL Account Executive Senior Vice President - IT
THIRD LEVEL President UK Division Chief Operating Officer
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 and
is authorised to settle the unresolved matter.
77
26.4 If the matter is not resolved at or before the Third Level then the matter
shall be submitted to mediation by the Centre for Effective Dispute
Resolution ("CEDR") within 14 days of either Party giving written notice
to the other of that Party's wish to refer the matter to mediation by CEDR
provided that such notice shall only be given while the matter remains
unresolved by the escalation process and shall be given no later than the
date 14 days after the date of the meeting of the Third Level of
management. The representative of the Party giving such notice, at the
escalation level at which such notice is given, shall (except where such
notice is given at the Third Level) promptly notify that Party's
representative at the next level, in order of ascent, that such notice has
been given. The costs of the mediator shall be shared equally between the
Parties (each Party bearing its own other costs). Where a matter is
submitted to mediation as envisaged by this Clause 26.4, the provisions or
requirements of this Clause 26 (Dispute Resolution) shall not be
considered to have been applied or met until 6 (six) months after such
submission.
26.5 Neither party shall seek to terminate this Agreement in reliance on, or
initiate any proceedings in respect of, any unresolved matter until either
escalation to and including the Third Level has been completed, unless (a)
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; or (b) the
termination is by the Supplier on the grounds of an Insolvency Event in
relation to Marconi, or a breach by Marconi of its payment obligations
under this Agreement.
26.6 Where any matter or issue is to be referred to Expert's Decision in
accordance with this Agreement, the Parties shall apply the provisions of
this Clause 26 (Dispute Resolution) beforehand, and no such reference
shall take place until the requirements of this Clause 26 (Dispute
Resolution) have been met.
26.7 The Supplier shall continue to provide the Services and perform its
obligations under this Agreement notwithstanding that a matter (or
matters) has or have been referred for attempted Dispute Resolution
pursuant to this Clause 26 (Dispute Resolution).
26.8 Notwithstanding anything in Clauses 26 (Dispute Resolution), 27 (Expert's
Decision) or 28 (Arbitration), nothing in those Clauses shall operate to
restrict either Party's rights to apply for or obtain emergency or
interlocutory relief.
27. EXPERT'S DECISION
27.1 Subject to Clause 27.2, any matter or dispute to be determined by Expert's
Decision shall be referred for determination to a suitably qualified
person (the "EXPERT")
78
nominated either jointly by the Parties, or failing agreement between them
within the time stated in this Agreement or, where no time is stated,
within ten (10) Business Days from the date on which the matter or dispute
first arose, on the application by either Party by the President of the
Institute of Chartered Accountants in England and Wales. The Expert shall
not have a conflict of interest in his dealings with either Party.
27.2 In all cases the terms of appointment of the Expert shall include:
(a) a commitment by the Parties to supply the Expert with the
assistance, documents and information he required for the purpose of
his determination; and
(b) a requirement on the Expert to give his determination within twenty
eight (28) Business Days or such other reasonable period, and to
hold professional indemnity insurance both then and for three (3)
years following the date of his determination.
27.3 The Expert's Decision is final and binding on the Parties in the absence
of negligence, manifest error or bad faith. The Expert acts as an expert
and not an arbitrator; Expert's Decision is not a quasi-judicial
procedure. Save as provided elsewhere in this Agreement, each Party shall
bear its own costs and the reasonable costs of the Expert shall be borne
equally between the Parties.
28. ARBITRATION
28.1 Subject to Clause 26.8, any dispute arising out of or in connection with
this Agreement shall be resolved in accordance with the provisions of this
Clause 28.
28.2 Before referring a dispute to arbitration in accordance with Clause 28.4,
the dispute shall in the first instance be dealt with in accordance with
Clause 26.
28.3 Where pursuant to this Clause 28 any dispute is to be referred to
arbitration, compliance with Clause 28.2 shall be a condition precedent to
the making of an award, unless the Party referring the dispute to
arbitration has reasonable cause to do so to protect or preserve any right
of action it may have.
28.4 All disputes arising out of or in connection with this Agreement which
cannot be resolved in accordance with Clauses 26 (Dispute Resolution) and
are not to be determined pursuant to Expert's Decision shall be finally
settled under the Rules of
79
the London Court of International Arbitration by three arbitrator(s)
appointed in accordance with the said Rules. Furthermore:
(a) the place and the seat of the arbitration shall be London, England;
the tribunal shall have the power to conduct hearings elsewhere if
appropriate;
(b) the language of the arbitration, including all documents, shall be
English;
(c) the law governing this agreement to arbitrate shall be the law of
England and Wales.
28.5 The Supplier irrevocably appoints the person named against it in this
Clause 28.5 to be its agent for the receipt of service of process in
England. The Supplier agrees that any service document in relation to the
subject matter of this Agreement may be effectively served on it in
connection with proceedings in England and Wales by service on its agent.
The Supplier's respective appointee is:
CSC Computer Sciences Limited
Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
For the attention of: The Company Secretary (or his successor
from time to time)
Facsimile no: ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇
with a copy to: CSC International Systems Management Inc
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, ▇▇▇
Facsimile no: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Marked for the
Attention of: Vice President and General Counsel
29. ENTIRE AGREEMENT
This Agreement, the Asset Transfer Agreement, the BT Asset Transfer
Agreement, the Country Agreements, the Transfer Agreements and all
contracts and documents entered into pursuant to those agreements together
represent the entire agreement between the Parties in relation to the
subject matter of this Agreement (and those agreements, contracts and
documents) and all previous agreements or representations, whether written
or oral, between the Parties in relation to that subject matter shall be
ineffective upon execution and delivery of this Agreement, the BT Asset
Transfer
80
Agreement and the Asset Transfer Agreement save in the event of fraudulent
misrepresentation by a Party.
30. NOTICES
30.1 All notices and other communications relating to this Agreement:
(a) shall be in English and in writing;
(b) shall be delivered by hand or sent by post or facsimile;
(c) (subject to Clause 30.1(d)) shall be delivered or sent to the Party
concerned at the relevant address or number, as appropriate, and
marked all as shown in Clause 30.2 (subject to such amendments as
may be notified from time to time in accordance with this Clause by
the relevant Party to the other Party);
(d) may in the case of any claim form, judgement or other notice of
process on either Party be delivered or sent to their respective
registered offices from time to time; and
(e) shall take effect:
(i) if delivered, upon delivery;
(ii) if posted, at the earlier of the time of delivery and (if
posted in the United Kingdom by first class registered post)
10 am on the second Business Day after posting; or
(iii) if sent by facsimile when a complete and legible copy of the
communication, whether that sent by facsimile or a hard copy
sent by post or delivered by hand, has been received at the
appropriate address,
provided that if any communication would otherwise become effective
on a non-Business Day or after 5 pm on a Business Day, it shall
instead become effective at 10 am on the next Business Day.
30.2 The initial details for the purposes of Clause 30.1 are:
Address: Marconi Corporation Plc
New Century Park,
▇▇ ▇▇▇ ▇▇,
▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇,
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile No: ▇▇▇ (▇)▇▇ ▇▇▇▇ ▇▇▇▇
Marked for
the Attention of: The Company Secretary
With a copy to:
Party: Marconi Corporation plc
Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Facsimile no: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
For the attention of: Senior Vice President - Information Technology
PARTY: CSC
Address: CSC International Systems Management Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇
Facsimile No: + 1 310 322 9767
Marked for
the Attention of: Vice President and General Counsel
31. NO PARTNERSHIP ETC.
Nothing in this Agreement or any document referred to in it or any
arrangement contemplated by it shall be construed as creating a
partnership between the Parties for any purpose whatsoever and neither
Party shall have the power or authority to bind the other Party or impose
any obligations on it to the benefit of any third party.
32. AMENDMENTS, WAIVERS & RIGHTS CUMULATIVE
32.1 No amendment or variation of the terms of this Agreement shall be
effective unless it is made or confirmed in a written document signed by
both Parties.
32.2 No delay in exercising or non-exercise by either Party of any of its
rights under or in connection with this Agreement shall operate as a
waiver or release of that right. Rather, any such waiver or release must
be specifically granted in writing signed by the Party granting it.
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32.3 Except as expressly provided in this Agreement, the rights and remedies
contained in this Agreement are cumulative and are not exclusive of any
rights or remedies provided by law or otherwise.
33. SEVERABILITY
If any part of any provision of this Agreement shall be illegal, invalid
or unenforceable in any respect, then the remainder of such provision and
all other provisions of this Agreement shall remain legal, valid and
enforceable, and the remaining rights, obligations and liabilities of the
parties under this Agreement shall not be affected or impaired.
34. COSTS
Except where this Agreement provides otherwise, each Party shall be
responsible for all the costs charges and expenses incurred by it in
connection with and incidental to the preparation and completion of this
Agreement and the other documents referred to in this Agreement.
35. COUNTERPARTS
This Agreement may be executed in any number of counterparts, and by the
parties on separate counterparts, but shall not be effective until all
parties has executed at least one counterpart. Each counterpart shall
constitute an original of this Agreement, but all the counterparts
together shall constitute but one and the same instrument.
36. ANNOUNCEMENTS
36.1 NO ANNOUNCEMENTS WITHOUT PRIOR APPROVAL
The Parties mutually agree (subject to Clause 36.2) that no press or other
public announcements (whether to shareholders, employees, customers,
suppliers or otherwise) shall be made or sent out by them in respect of
the subject matter of this Agreement or an ancillary matter without the
text of the announcement receiving the prior written approval of the other
Party (which approval shall not be unreasonably withheld or delayed).
83
36.2 ANNOUNCEMENT EXCEPTIONS
Either Party may make or send out any press or public announcement to the
extent the announcement is:
(a) required by the law of any relevant jurisdiction;
(b) required by any securities exchange or regulatory or governmental
body to which either Party is subject or submits, wherever situated,
including the London Stock Exchange, the UK Listing Authority or the
Panel on Takeovers and Mergers, whether or not the requirement for
information has the force of law,
in which case, the announcement shall only be made or sent out after
consultation with (and after taking into account the reasonable
requirements of) the other Party as to the content of the announcement.
37. GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by and interpreted in accordance with
English law. Subject to Clauses 26 (Dispute Resolution) and 28
(Arbitration) hereof, 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.
38. FURTHER ASSURANCE
Each Party shall, whether before, on or after termination of this
Agreement, do, execute and perform and shall procure to be done, executed
and performed, all such further acts, deeds, documents and things as the
other Party may reasonably require from time to time effectively to give
effect to this Agreement.
39. DUTY TO MITIGATE
Each Party shall and shall procure that each other member of its Group
shall in relation to any loss or liability which might give rise to a
claim under this Agreement against the other Party take all available
steps to avoid or mitigate that loss or liability.
40. EURO
If the United Kingdom becomes a participating member state for the
purposes of European Monetary Union and so the euro becomes a or the
lawful currency of the United Kingdom, then:
84
(a) that shall not affect the validity of this Agreement or the rights
or obligations of the Parties under it, nor shall it give any Party
the right to alter or terminate this Agreement in whole or part; and
(b) with effect from the date on which it occurs any amount referred to
in this Agreement in Sterling shall at either Party's request be
re-denominated in euros at the rate and in the manner determined by
the relevant legislation.
EXECUTION
The Parties have shown their acceptance of the terms of this Agreement by
executing it at the end of the Exhibits.
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EXECUTION
The Parties have shown their acceptance of the terms of this Agreement by
executing it on the date first written above.
SIGNED by ▇▇▇ ▇▇▇▇▇ )
)
duly authorised for and on behalf of ) /s/ ▇▇▇ ▇▇▇▇▇
CSC INTERNATIONAL SYSTEMS )
MANAGEMENT INC )
Witness's signature: /s/ A M ▇▇▇▇▇▇▇▇
Name (in capitals): ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Address: Flat 4 ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Occupation: TRAINEE SOLICITOR
SIGNED by ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ )
)
duly authorised for and on behalf of ) /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
MARCONI CORPORATION PLC )
Witness's signature: /s/ ▇ ▇ ▇▇▇▇▇▇▇▇
Name (in capitals): ▇ ▇ ▇▇▇▇▇▇▇▇
Address: ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Occupation: LAWYER
SIGNED by ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ )
MARCONI COMMUNICATIONS LIMITED ) /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
acting by its attorney )
)
in the presence of: )
Witness's signature: /s/ ▇ ▇ ▇▇▇▇▇▇▇▇
Name (in capitals): ▇ ▇ ▇▇▇▇▇▇▇▇
Address: ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Occupation: LAWYER
86
SCHEDULE 1 - SERVICE LEVEL AGREEMENT
CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
SCHEDULE 1
SERVICE LEVEL AGREEMENT
1
SCHEDULE 1 - SERVICE LEVEL AGREEMENT
CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
1. OVERVIEW AND DEFINITIONS
1.1 OVERVIEW
This Schedule 1 (Service Level Agreement) describes the IT services and
service levels which the Marconi Group requires from the Supplier.
The Services and service levels described in this Schedule are based on
the Services and service levels which the Marconi Group believes it
currently provides internally, and will be verified and (where applicable)
amended in accordance with the True-Up Process specified in Clause 5.1
(True-Up) of the Agreement.
The description for each service area listed in this Schedule 1 (Service
Level Agreement) includes a general overview of the business objective to
be obtained from the service area, as well as detailed service
specifications and requirements. These service requirements are organized
into activities, service parameters, service specifications, and
responsibilities.
Each service category description is explained in detail, together with
the level of service to be provided by the Supplier in relation to that
service category (the "SERVICE LEVEL"). Except where otherwise expressly
stated, each Service Level will be measured over a calendar month.
A process definition introducing each service line provides a brief
description of how the Marconi Group provides the service today. This
description is not intended to restrict the manner in which the service
should be delivered in the future.
1.2 DEFINITIONS
In this Schedule 1 (Service Level Agreement) the following definitions
apply:
(1) SUPPORT LEVELS
The following definitions apply:
FIRST-LEVEL SUPPORT: ( SIMPLE FAULT RECTIFICATION ).
- Provided by the Supplier's in-house personnel (except where
expressly highlighted in the service function description);
- Configuration assistance and troubleshooting;
- Collect information (traces and dumps);
- Perform first diagnosis of problem;
- Deliver known solutions;
- Answer general product and technical questions;
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SCHEDULE 1 - SERVICE LEVEL AGREEMENT
CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
SECOND-LEVEL SUPPORT: ( COMPLEX FAULT RECTIFICATION)
- Provided by the Supplier's in-house personnel (except where
highlighted in service function descriptions);
- Analyse problems in depth;
- Problem duplication capabilities;
- Fault workaround generation;
- Answer high-level product and technical questions;
- Provide troubleshooting guidance to first-level support;
- Hardware/software diagnosis and verification;
THIRD-LEVEL SUPPORT: (DESIGN FAULT RECTIFICATION)
- Provided by the software licensor/distributor;
- Provided by manufacturer to manufacturer support partner;
- Provided by manufacturer senior technical support engineering;
- Diagnose and report bugs;
- Correlate problems with source code;
- Work with development engineering to fix bugs;
- Release updates/upgrades/software patches.
(2) PRIORITY LEVELS
The following table defines the fault priority levels:
PRIORITY DEFINITION EXAMPLE
-------- ---------- -------
1 Critical business impact - entire service eg WAN backbone failure
outage
2 Significant business impact - impacting eg LAN failure
multiple Users
3 Single user impact
4 'How do I?' or request rather than a
problem requiring resolution
Fault priority levels are determined by support staff (on reasonable
grounds) taking into account the following factors:
- Number of customers affected;
- Effect on Marconi Group's business;
- Context of Problem;
- Deadlines;
- Application involved and its importance
- Frequency of occurrence of problem;
- Customer's sense of priority;
- Customer's commitment level;
- Availability of a workaround; and
- Threat to data integrity or computer security.
(3) DESKTOPS, PC'S
- "PC" means a desktop PC, laptop PC or Unix workstation; and
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SCHEDULE 1 - SERVICE LEVEL AGREEMENT
CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
- "DESKTOP" means a desktop Windows PC or Unix Workstation.
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SCHEDULE 1 - SERVICE LEVEL AGREEMENT
CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
(4) USER CATEGORIES
The following definitions apply:
"STANDARD USER" - These are standard users of the Services where each
standard Service Level (as specified in this document) applies;
"HOMEWORKER" - These are users who are formally registered with the
Marconi Group as "homeworkers". These users will receive a degree of
remote support, however for some Services (including Desktop support and
procurement services) the user will be required to visit a Marconi Group
site Accordingly, some of the Service Levels for this category of user
will need to be amended to reflect this service differential. This will be
undertaken as part of the True Up Process.
"FIELDWORKER" - These are users who operate in the field. Some Services
(including Desktop support and procurement services) will be available to
the user in the field. Accordingly, some of the Service Levels for this
category of user will need to be amended to reflect this service
differential. This will be undertaken as part of the True Up Process.
"EXECUTIVE" - These are users who receive an uplift to the standard
Services. Accordingly, some Service Levels for this category of user will
need to be amended to reflect this service differential. This category of
user will be a controlled formalised list of named users, updated from
time to time.
(5) IT GROUPS
The following definitions apply:
"IT GROUP" means the Supplier's personnel, including personnel which have
been transferred from the Marconi Group; and
"MARCONI IT" means the Marconi Group's in house IT personnel who have been
retained within the Marconi Group and not transferred to the Supplier.
(6) HOURS OF SUPPORT
"24X7" means, in respect of a Service, the availability of that Service
twenty four (24) hours per day, seven (7) days per week.
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SCHEDULE 1 - SERVICE LEVEL AGREEMENT
CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
2. HELPDESK & CALL CENTRE SERVICES
2.1 SERVICE DESCRIPTION
(1) OVERVIEW
The purpose of the Services listed in this Section 2 (Helpdesk & Call
Centre Services) is to provide the first point of contact between the
Marconi Group and the Supplier and to provide first line support for
Marconi Group employees including the services listed in paragraph 2.1(2)
below.
These Services include call taking relating to fault resolution for
general PC and application problems; user queries of the `How do I?' type;
account creation & terminations; PC software installations, upgrades,
replacements and provision of PCs for new hire; video conference booking;
requests for support and management of the IT services within business
stream projects including facilities and people moves.
(2) MAIN FUNCTIONS AND ACTIVITIES
To provide a central point of contact between the Marconi Group and the
Supplier for tracking and resolution of problems at 1st level including:
- Call taking for general PC application and network problems (this
may include phone or web based logging);
- User queries of the `How do I?' type;
- Account creation & terminations;
- PC software installations, upgrades, replacements and provision of
PCs for new personnel hire (Installation Moves and Changes - IMACs);
and
- Service requests for IT generated by business stream projects.
- Security:
- SecurID token resets, re-syncronisations, disables, issuance
of one-time passwords;
- Laptop encryption troubleshooting, account resets;
- End user VPN initial support; and
- Initial security incident contact.
2.2 SERVICE PARAMETERS (SCOPE)
(1) CURRENT LOCATIONS OF IT CALL CENTRES:
As at the Commencement Date, the Marconi Group's Call Centre locations are
located in the following cities, towns or countries:
N. America: - Pittsburgh
- Chicago
- Dallas
- Montreal
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SCHEDULE 1 - SERVICE LEVEL AGREEMENT
CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
- Cleveland
- Bellevue
EMEA: - UK - Liverpool & Coventry
- Italy
- Germany - Backnang
- South Africa - Midrand
- Ireland - Dunlaoire
Latin America: - Mexico
- Brazil
(2) LANGUAGES SUPPORTED
N. America: - Pittsburgh - English
- Chicago - English
- Dallas - English
- Montreal - English, French
- Cleveland - English
- Bellevue - English
EMEA: - UK - English
- Italy - English, Italian
- Germany - English, German
- South Africa - English
- Ireland - English
Latin America: - Mexico - Spanish
- Brazil - Portugese
(3) SERVICE HOURS OF OPERATION
REGION IN - HOURS SUPPORT OUT-OF-HOURS SUPPORT
------ ------------------ --------------------
N. America
Pittsburgh Mon - Fri 07:00 - 20:00 EST Pager Call-out
Chicago Mon - Fri 07:00 - 18:00 Central Pager Call-out
Dallas Mon - Fri 07:00- 18:00 Central Pager Call-out
Montreal Mon - Fri 08:30- 17:30 EST Pager Call-out
Cleveland Mon - Fri 07:00 - 18:00 Central Pager Call-out
Seattle Mon - Fri 07:00- 18:00 Pacific Pager Call-out
EMEA
UK - Liverpool/Coventry Mon- Fri 08:00 - 18:00 BST Pager Call-out
Sat: 08:00 - 12:00 BST
Italy Mon- Fri 06:30 - 20:30 CET Pager Call-out
Sat: 08:00 - 13:00 CET
Germany - Backnang Mon - Fri 06:30- 20:30 CET Pager Call-out
South Africa - Midrand
Ireland - Dunlaoire Mon - Fri 09:00- 17:30 BST Pager Call-out
Latin America
Mexico Mon - Fri 07:00- 18:00 Central Pager Call-out
Brazil Mon - Fri 07:00- 17:00 EST Pager Call-out
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SCHEDULE 1 - SERVICE LEVEL AGREEMENT
CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
(4) MANAGEMENT SYSTEMS USED
REGION TICKET TRACKING SYSTEM
------ ----------------------
N. America
Pittsburgh Remedy ARS
Chicago Remedy ARS
Dallas GWI (with Lotus Notes Interface)
Montreal Remedy ARS
Cleveland Remedy ARS
Seattle Clarify
EMEA
UK - Liverpool/Coventry Peregrine Service Centre
Italy Remedy ARS
Germany - Backnang Remedy ARS
South Africa - Midrand
Ireland - Dunlaoire Remedy ARS
Latin America
Mexico Remedy ARS
Brazil Remedy ARS
(5) MARCONI GROUP USERS
Call Centre and Helpdesk services shall be available to and used by users
within Marconi Group globally as specified in Appendix A.
Each regional Helpdesk site shall provide these services to users within
their local geographic region, and also to users of other services hosted
at that site.
2.3 SERVICE LEVELS DEFINITION & TARGETS:
(1) KEY PERFORMANCE INDICATORS
- Number of calls taken/month;
- Call abandon rate;
- First call resolution rate; and
- Number of tickets closed/month.
(2) SERVICE LEVEL TARGETS AND OBJECTIVES
Performance shall be tracked on a regional basis, within the following key
areas:
- ability to respond and resolve user problems; and
- the availability of key infrastructure components, hardware and
applications.
The Service Levels for these Services are set out below.
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SCHEDULE 1 - SERVICE LEVEL AGREEMENT
CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
CALL CENTRE TARGETS:
REF MEASURE PERFORMANCE
--- ------- -----------
Cc1 Phone Calls Answer rate [***]
Cc3 Phone Call Abandonment Rate (post automated [***]
announcements)
Cc4 First call closure (logged via phone or web). [***]
2.4 PROCESSES & PROCEDURES
Helpdesk calls and critical incidents shall be managed through a clearly
defined process. Escalation will be through IT line management as shown
below.
FIRST SUBSEQUENT
PRIORITY LEVEL TARGET CLEAR TIME ESCALATION/COMMUNICATION ESCALATIONS/COMMUNICATION
-------------- ----------------- ------------------------ -------------------------
1 4 hours 30 minutes 30 minutes
2 8 hours 1 hour Every 2 hours
3 2 working days 2 working days Every working day
4 5 working days N/A N/A
Priority 1 and Priority 2 problems will follow a formal incident
management process. The periods listed for such problems in the table
above specify the timings for proactive communication and escalation into
the business.
Priority 3 problems will not follow a formal incident management process.
The periods listed for Priority Level 3 problems in the table above
specify the time after which an end user can invoke an escalation and for
subsequent escalations.
SENIOR
MANAGEMENT
ESCALATION CHAIN ESCALATION
---------------- ----------
First Contact Local Helpdesk
Escalates to Regional IT Helpdesk
Escalates to Regional IT Helpdesk Manager
Escalates to Area Manager
Escalates to Regional IT Director
Escalates to VP, Regional IT
Escalates to EVP Marconi IT
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SCHEDULE 1 - SERVICE LEVEL AGREEMENT
CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
SCHEDULE 1 - SERVICE LEVEL AGREEMENT
CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
10
SCHEDULE 1 - SERVICE LEVEL AGREEMENT
CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
3. DESKTOP AND SUPPLY SERVICES (EXCLUDING IMACDS)
3.1 SERVICE DESCRIPTION
(1) OVERVIEW
The Services listed in this Section 3 (Desktop and Supply Services)
include:
- the provision of support and maintenance of desktop, laptop and UNIX
workstation hardware and softWARE;
- fault diagnosis, ongoing hardware and software maintenance and
'break/fix' activities for desktop, laptop and UNIX workstation
hardware;
- support of peripherals including fax machines, printers, folding and
posting machines, scanners, PDA's, web-cams, plotters, barcode
equipment, acquisition boards and CD-RW and DVD-RW;
- provision of network login accounts, system accounts, remote access
accounts, voicemail and mobile and desk phones;
- provision of audio-conferencing facilities and phone booking of
video-conferencing facilities.
The Services listed in this Section 3 (Desktop and Supply Services)
exclude PC installations, moves, adds, changes and disposals (IMACDs)
other than as part of technology refresh, which are charged separately on
a "per-event" (or Project) basis, and which are set out in further detail
in Section 4 (Installations, Moves, Adds, Changes and Disposals) of this
Schedule.
(2) MAIN FUNCTIONS AND ACTIVITIES (EXCLUDING IMACDS)
- Desktop Supply and Administration
- The provision of new PC Desktop and laptop hardware and operating
system software as part of technology refresh.
- Global account administration for network access and applications
systems.
- Desktop equipment inventory management, storage, collection and
redeployment.
- The provision of network login accounts, system accounts, remote
access accounts and voicemail.
- The provision of audio-conferencing facilities and booking of
video-conferencing facilities.
- Desktop Maintenance & Support
Fault diagnosis, repair, hardware and software maintenance of all Desktop
equipment and associated peripherals (as listed in the overview above).
Desktop Security - Maintain approved Anti Virus signatures on all Desktop
systems with anti-virus installed, as required by the Marconi
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SCHEDULE 1 - SERVICE LEVEL AGREEMENT
CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
Group's Security Policies (Schedule 3). Maintain agreed patch levels on
Desktop systems.
3.2 SERVICE PARAMETERS (SCOPE)
(1) SERVICE HOURS OF OPERATION
REGION IN - HOURS SUPPORT
------ ------------------
N. America
Pittsburgh Mon - Fri 08:30 - 17:30 EST
Chicago Mon - Fri 08:30 - 17:30 Central
Dallas Mon - Fri 08:30 - 17:30 Central
Montreal Mon - Fri 08:30 - 17:30 EST
Cleveland Mon - Fri 08:30 - 17:30 Central
Seattle Mon - Fri 08:30 - 17:30 Pacific
EMEA
UK - Liverpool/Coventry Mon - Fri 08:30 - 16:30 GMT (Cov)
Mon - Fri 08:15 - 16.30 GMT (Liv)
Italy Mon - Fri 08:30 - 17:30 CET
Germany - Backnang Mon - Fri 08:30 - 17:30 CET
South Africa - Midrand
Ireland - Dunlaoire Mon - Fri 08:30 - 17:30 GMT
Latin America
Mexico Mon - Fri 08:30 - 17:30 Central
Brazil Mon - Fri 08:30 - 17:30 Brazilian time
(2) SERVICE AVAILABILITY
The Service described in this Section 3 (Desktop and Supply Services)
shall be available during hours defined in paragraph 3.2(1) above.
Requests for these Services shall be taken via the helpdesks (except UK,
which is web only), or via a web interface.
(3) LOCATIONS & BUSINESS USERS
Desktop and Supply Services shall be available to and used by all Marconi
Group users at the Sites listed in Appendix A.
Desktop and Supply Services shall be provided from Sites where there are
currently resident IT personnel. Sales offices and sites where there are
no resident IT personnel shall receive these Services remotely from
regional operational hubs, which may include site visits by traveling
support staff. Reasonable expenses relating to such remote operations
(such as travel and freight expenses) shall be borne by Marconi.
3.3 SERVICE LEVELS DEFINITION & TARGETS:
(1) KEY PERFORMANCE INDICATORS
- Number of tickets opened this month;
- Number of open tickets at month end; and
- Number of tickets closed/month; mean time to close.
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SCHEDULE 1 - SERVICE LEVEL AGREEMENT
CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
(2) SERVICE LEVEL TARGETS AND OBJECTIVES
Performance shall be tracked on a regional basis within the following key
areas:
- ability to respond and resolve user problems.
- ability to provide user account maintenance and requested equipment.
- availability of key infrastructure components, hardware and
applications.
The Service Levels for these Services (other than Project Services) are
set out below.
References to time periods below commence from receipt of a validly
completed and duly authorised request for the relevant Service.
DESKTOP SERVICES SLA'S
SERVICE
REF LINE MEASURE PERFORMANCE
--- ---- ------- -----------
DESKTOP MAINTENANCE & SUPPORT SERVICES (INCLUDING HARDWARE AND SOFTWARE)
Dt5 Time to 'break/fix' under warranty (PC) [***]
Dt6 [***]
Dt7 Time to 'break/fix' out of warranty (PC) [***]
Dt8 [***]
Dt7s Time to 'break/fix' shop floor PC or find [***]
work around.
Dt8s [***]
Dt9 Time to 'break/fix' user damage (PC) [***]
Dt10 [***]
Dt11 Time for theft replacement (Mobile phone) [***]
Dt12 [***]
Dt13 Time to 'break/fix' under warranty (mobile [***]
phone)
Dt14 [***]
Dt15 Time to break/fix out of warranty (mobile [***]
phone)
Dt16 [***]
Dt17 Time to break/fix user damage (mobile phone) [***]
Dt18 [***]
SUPPLY SERVICES
Ss9 Provision of network login account [***]
Ss10 [***]
Ss11 Provision of system accounts [***]
Ss12 [***]
Ss13 Provision of remote access accounts [***]
Ss14 [***]
Ss15 Provision of access to existing shared areas [***]
Ss16 [***]
Ss17 Provision of a new shared area completed as per agreed Project targets
Ss18 Provision of generic accounts, distribution [***]
Ss19 lists, majordomo lists [***]
Ss23 Provision of standard desktop & laptop [***]
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SCHEDULE 1 - SERVICE LEVEL AGREEMENT
CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
SERVICE
REF LINE MEASURE PERFORMANCE
--- ---- ------- -----------
Ss24 software (for software installed over the [***]
network or where a user brings their laptop
to IT)
Provision of non-standard desktop & laptop
software (for software installed over the
Ss25 network or where a user brings their laptop
to IT) completed as per agreed Project targets
Provision of software for Unix workstations
Ss26 (for software installed over the network or
completed as per agreed Project targets where a
user brings their laptop to IT)
Ss27 Customer enquiries completed as per agreed Project targets
Ss28 Provision of new standard desk phone [***]
Ss29 [***]
Ss30 Provision of new feature phone [***]
Ss31 [***]
Ss32 Provision of new mobile phone [***]
Ss33 [***]
Ss34 Provision of new data port [***]
Ss35 [***]
Ss36 Provision of voicemail [***]
Ss37 [***]
Ss38 Booking of videoconferencing facility [***]
Ss39 Provision of audio-conferencing MeetMe [***]
Ss40 account [***]
Ss41 Provision of audio-conferencing Event calls [***]
Ss42 [***]
14
SCHEDULE 1 - SERVICE LEVEL AGREEMENT
CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
8. DATA CENTRE SERVICES
8.1 SERVICE DESCRIPTION
(1) OVERVIEW
The purpose of the Services described in this Section 8 (Data Centre
Services) is to provide and manage the computer systems that support
the services provided by the IT department, as further detailed in
paragraph 8.1(2), below.
(2) MAIN FUNCTIONS AND ACTIVITIES
SERVICE CATEGORIES SUPPORTED:
- Messaging Services - Email, electronic paging and faxing, including
but not limited to Lotus Notes and Microsoft Exchange.
- Business Application Services - Services relating to applications
required to support specifically business related systems, including
but not limited to CEIS, ERP, MRP, CRM, Peoplesoft, Workflow (See
Appendix B).
- Engineering Application Services - Services relating to applications
required to support specifically engineering related systems,
including but not limited to EMDS, Windchill (See Appendix B).
- Synchronous Collaboration Services - Services relating to
applications required to provide real-time communications delivery,
such as Sametime
- Content Services - Services required to provide access to
information and data, such as File Servers, Shared Areas, Content
specific databases.
- Infrastructure Services - Services required to provide the
electronic "backbone" services upon which all other services are
reliant, such as naming and addressing services, domain management
services, routing services. Includes directory services.
- Web and Portal Services - Systems required for the delivery of
intranet, internet and extranet services.
DATA CENTRE SERVICES PROVIDED:
- Securing all data through a defined set of defined backup schedules
(note, schedules will vary from platform to platform and country to
country);
- Monitoring services for outages;
- Managing incidents;
- Managing capacity;
- Managing system performance;
- Providing system and database administration services;
- Installing and upgrading hardware and software;
- Providing Third Level Support for customer's problems;
- Providing disaster recovery cover for key services (as reasonably
defined by Marconi);
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SCHEDULE 1 - SERVICE LEVEL AGREEMENT
CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
- Using the Change Control and configuration management processes for
the approval and implementation of any Changes; and
- Process and Service improvements.
SECURITY SERVICES PROVIDED:
- Providing back-end anti-virus infrastructure for clients, servers,
and gateways;
- Maintaining anti-virus signatures on all systems with anti-virus
installed;
- Monitoring all systems with anti-virus installed for any virus
activity;
- Providing anti-virus incident reporting per incident.- Providing
monthly virus outbreak reports;
- Providing day-to-day management of Internet content filtering
devices (proxies); and
- Providing back-end infrastructure support of laptop encryption
products.
Where applicable and available, Project related Data Centre Services
may be obtained from the pool of pre-paid resources identified as being
available for such purposes in Schedule 4 (Charges).
8.2 SERVICE PARAMETERS (SCOPE)
(1) SERVICE HOURS OF OPERATION
Most systems shall be available 24 x 7 (those which are not shall be
identified during the True-Up Process). Data Centre staff shall
general work the standard working day. Out of hours cover shall be via
an on-call rota.
(2) LOCATIONS & USERS
Data Centre Services shall be provided for the benefit of all users of
IT within the Marconi Group globally as specified in Appendix A and
Appendix C.
8.3 SERVICE LEVELS DEFINITION & TARGETS:
(1) SERVICE LEVEL TARGETS AND OBJECTIVES
The Service Levels for these Services are set out below.
References to "SERVICE AVAILABILITY" are to the period of time during
each calendar month in which the relevant Service is available for
productive use by the Marconi Group, excluding:
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SCHEDULE 1 - SERVICE LEVEL AGREEMENT
CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
- circumstances in which the Supplier is discharged from providing the
Services pursuant to Clause 3.1(2) of the Agreement; and
- planned outages (such as scheduled maintenance and scheduled
upgrades),
expressed as a percentage of the overall time potentially available
during that calendar month.
References to time periods below commence from receipt of a validly
completed and duly authorised request for the relevant Service.
REF MEASURE TARGET
--- ------- ------
Sa1 PC Network Login Time [***]
(average time)
Sa2 Mail System [***]
Sa3 ERP System [***]
Sa4 File Server [***]
SERVICE
REF LINES MEASURE TARGET
----------- ------- ------
MESSAGING SERVICES, BUSINESS SYSTEMS
OPERATIONS, ENGINEERING SYSTEMS
OPERATIONS, SYNCHRONOUS
COLLABORATION SERVICES, CONTENT
SERVICES, INFRASTRUCTURE SERVICES,
WEB & PORTAL SERVICES
Dc1 Priority 1 - First [***]
Response
Dc2 Priority 1 - [***]
Dc3 Fix/Workaround [***]
Dc4 Priority 2 - First [***]
Response
Dc5 Priority 2 - [***]
Dc6 Fix/Workaround [***]
Dc7 Priority 3 - First [***]
Response
Dc8 Priority 3 - [***]
Dc9 Fix/Workaround [***]
Dc10 Priority 4 - First [***]
Response
Dc11 Priority 4 - [***]
Dc12 Fix/Workaround [***]
D13 Progress updates [***]
Priority 1
Dc14 Progress updates [***]
Priority 2
System or file
restoration can be
Dc15 accomplished up to the [***]
point of the last
working day
Dc16 Critical File Restore [***]
Dc17 Non-critical file [***]
restore
Hardware or software
Dc18 Upgrades (Tactical) - Completed as per agreed
Estimate Project targets
Hardware or software
Dc19 Upgrades (Tactical) - Completed as per agreed
Completion Project targets
Hardware or software
Dc20 Upgrades (Strategic) - Completed as per agreed
Estimate Project targets
Hardware or software
Dc21 Upgrades (Strategic) - Completed as per agreed
Completion Project targets
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SCHEDULE 1 - SERVICE LEVEL AGREEMENT
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REQUESTED BY
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Completed as per agreed
Dc22 individual system
Performance definition.
Proactive capacity
Dc23 monitoring - disk [***]
utilisation
Proactive capacity
monitoring - cpu
utilisation. Define
Dc24 threshold on a [***]
server-by-server bases
within 6 month true-up.
Dc25 Proactive capacity [***]
monitoring
Dc26 Availability [***]
Dc27 Allowable downtime [***]
Notice period for
Dc28 planned allowable [***]
downtime
MESSAGING SERVICES
Ms1 Mail quota [***]
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SCHEDULE 1 - SERVICE LEVEL AGREEMENT
CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
9. SECURITY SERVICES
9.1 SERVICE DESCRIPTION
(1) OVERVIEW
The purpose of the Services listed in this Section 9 (Security
Services) is to:
- provide the Marconi Group with an "Information Security Program"
baSED upon information security best practices, encompassing
policies, procedures and standards;
- deploy, configure and monitor security tools to best secure the
Marconi environment;
- manages a risk process to define information security risks and risk
mitigation; and
- manage information security incident response teams and coordinate
and external incidents with the local authorities if necessary;
- provide a cost effective security infrastructure;
- provide operational security support for the security tools
deployed; and
- monitor security logs for relevant security incidents against agreed
framework.
(2) MAIN FUNCTIONS AND ACTIVITIES
To protect the Marconi Group's information assets by:
- Assisting the Marconi Group in developing security strategy and
direction by assessing the Marconi Group's business needs and
requirements;
- Maintaining approved ISS monitoring & scanning checks for host-based
IDS, network-based IDS and network scanning tools;
- Deploying and managing global firewalls;
- Keeping key relationships with Marconi legal and HR for the
development and support of corporate policies;
- Providing VPN services for B2B connections, intra-company (Marconi
to Marconi), and user home-based VPN's;
- Providing encryption services via laptop encryption, email and file
encryption;
- Providing CacheFlow proxies for Internet connectivity;
- Coordinating Global Cert team; and
- Providing security consultancy in support of IT and business
projects.
9.2 SERVICE PARAMETERS (SCOPE)
(1) SERVICE HOURS OF OPERATION
For the management of day-to-day security operations, such as firewall
support, an on call rotation shall exist on a 24x7 basis. At the
Commencement Date this is provided through teams based in the Americas,
UK, and Italy.
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CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
(2) LOCATIONS & MARCONI GROUP USERS
Security services shall be provided for the benefit of all users of IT
within the Marconi Group, as specified in Appendix A and Appendix C.
At the Commencement Date, Security Services are provided from:
N.America
- Pittsburgh
EMEA
- UK
- Italy
9.3 SERVICE LEVELS DEFINITION & TARGETS:
The Service Levels for these Services (excluding Project Services) are
set out below. Service Levels relating to Project Services are set
out in Section 11 of this Schedule (Project Services).
References to "SERVICE AVAILABILITY" are to the period of time during
each calendar month in which the relevant services are available for
productive use by the Marconi Group, excluding:
- circumstances in which the Supplier is discharged from providing the
Services pursuant to Clause 3.1(2) of the Agreement; and
- planned outages (such as scheduled maintenance and scheduled
upgrades),
expressed as a percentage of the overall time potentially available
during that calendar month.
SERVICE LINES MEASURE PERFORMANCE
------------- ------- -----------
OPERATIONAL SECURITY SERVICES
Os1 Firewall up-time [***]
Os2 Host-based assessment [***]
tools
Os3 Network - based IDS [***]
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SCHEDULE 1 - SERVICE LEVEL AGREEMENT
CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
10. STRATEGY AND MANAGEMENT SERVICES
10.1 SERVICE DESCRIPTION
(1) OVERVIEW
The purpose of the Services listed in this Section 10 (Strategy and
Management Services) is to provide the Marconi Group with IT strategy
and architecture-related services associated with the provision of the
other IT Services. These Services include the development and
maintenance of IT strategy and architecture documentation in accordance
with Marconi strategy, and the monitoring and reporting to the Marconi
Group regarding emerging technologies.
(2) MAIN FUNCTIONS AND ACTIVITIES
- IT Strategy and IT Architecture Documentation
The development and maintenance (in conjunction with the Marconi
Group, and aligned to the Marconi Group business strategy) of
documentation detailing an IT architecture principles set plus
broader documentation defining IT Strategy. The Global Strategy will
be produced within six (6) months of Phase 1 Completion and updated
quarterly (where required). Regional Strategy variations will be
produced within six (6) months of completion of each region and
updated quarterly (where required).
- Review of Emerging Technologies
The review of emerging technologies which could be developed as part
of the Services delivered to Marconi and the provision of best
practice service roadmaps and technology updates as required, but as
a minimum quarterly. These services will provide recommendations on
the way forward for use and deployment of emerging technologies
aligned to the agreed Marconi IT strategy, or "value adding"
propositions for the Marconi Group business.
Marconi will in all instances retain overall control of IT strategy and
architecture. Marconi will provide the overall governance of these
activities through the IT Solutions Boards (as detailed in Schedule 20
(Governance)) and will create business cases and set priorities and
overall time frames to be met and accepting recommendations produced by
these activities.
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10.2 SERVICE LEVELS DEFINITION AND TARGETS
SERVICE LINES MEASURE PERFORMANCE
--------------------- -----------
STRATEGY AND MANAGEMENT SERVICES
---------------------------------------------------------
Sm1 Production of IT [***]
Architecture
Principles document
Sm2 Production and [***]
maintenance of IT
Strategy document
Sm3 Technology [***]
Investigation Report
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SCHEDULE 1 - SERVICE LEVEL AGREEMENT
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REQUESTED BY
MARCONI CORPORATION PLC
11. PROJECT SERVICES
11.1 SERVICE DESCRIPTION
This Section 11 (Project Services) will address Service Levels for
services which are provided as Projects (whether initiated through
Change Control or otherwise) This includes Project Services provided
as part of the Desktop and Supply Services, Data Centre Services,
Network Services and Application Services.
11.2 PROJECT CLASSIFICATIONS
IT Projects shall be classified according to the following:
- "STRATEGIC PROJECT", being a long-term/high profile Project to
creaTE a unique product or service, where either:
- the estimated cost to complete it is [***]
- the estimated effort required to complete it is[***]; or
- the complexity, risk and impact are "Critical/High".
- "TACTICAL PROJECT", being an Project undertaken to create a
unique product or service, where
- the estimated cost to complete it is [***]
- the estimated effort required to complete it is [***]man
hours; or
- the complexity, risk and impact are "Medium".
- "MAJOR ENHANCEMENTS", being a Project where the effort
required to complete it is more [***] man hours, but less
that[***] man hours.
- "SMALL ENHANCEMENTS", being a Project where the effort
required to complete it is estimated to be less than [***] man
hours. Such Projects shall form part of (but not be limited
to) the Application Support Services.
11.3 SERVICE LEVELS DEFINITION & TARGETS
The Service Levels for the Project Services are set out below.
References to time periods below commence from receipt of a validly
completed and duly authorised request for the relevant Project.
These Service Levels shall be measured on an annual basis.
SERVICE
LINES MEASURE PERFORMANCE
-----------------------------------------------------------------
PROJECT SLA
-----------------------------------------------------------------
Pm1 Project Evaluation [***]
Report (Small
Enhancements)
Pm2 Project Evaluation [***]
Report (Other
Enhancements)
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REQUESTED BY
MARCONI CORPORATION PLC
SERVICE
LINES MEASURE PERFORMANCE
-----------------------------------------------------------------
Pm3 Project Evaluation [***]
Report (Tactical
Projects)
Pm4 Project Evaluation [***]
Report (Strategic
Projects)
Pm5 Tactical Projects [***]
completed within agreed
timeframe (as specified
in Schedule of Work).
Pm6 Strategic Projects [***]
completed within agreed
timeframe (as specified
in Schedule of Work)
Pm7 Small enhancements [***]
completed within agreed
timeframe (as specified
in Schedule of Work).
Pm8 Major enhancements [***]
completed within agreed
timeframe (as specified
in Schedule of Work).
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REQUESTED BY
MARCONI CORPORATION PLC
12. DISASTER RECOVERY SERVICES
12.1 SERVICE DESCRIPTION
(1) OVERVIEW
The purpose of the Services listed in this Section 12 (Disaster
Recovery Services) is to provide the Marconi Group with business
continuity and disaster recovery services.
In the UK, the disaster recovery services are provided as at the
Commencement Date through the following disaster recovery contracts:
o NDR;
o Comdisco; and
o BT.
These contracts and the disaster recovery services provided pursuant to
them, are set out below.
(2) NDR CONTRACT
In the event of a disaster, hardware will be provided on which the
following services can be restored:
- MFG/PRO, IPS and Workflow
- USML
- Liverpool Engineering Cluster
- PC Servers
- Comms Kit
- EMDS
- Internet Gateway
- Firewall and Mimesweeper
- Lotus Notes
- Windchill
This equipment can be delivered to Coventry NCP, Liverpool Edge Lane,
Beeston or London Docklands. In addition, the PC servers can be
delivered to any one of six sites that can be specified at point of
callout.
The specifications of equipment that will be delivered will be
sufficient to offer a cut-down service to key Marconi Group users.
The equipment can be delivered into a Marconi Group data centre or
delivered in a trailer that will be sited at the specified disaster
recovery location. In a full-scale disaster, the equipment can
initially be housed in the trailer and subsequently moved to the
temporary data centre provided by Comdisco.
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(3) COMDISCO CONTRACT
In the event of a disaster, an "Enhanced Emergency Rescue Service" will
be provided that consists of the following equipment:
EQUIPMENT CAPACITY
--------- --------
Temporary office cabins (24ft x 8ft) 6
Mobile diesel generator Up to 1,000 kVA
Frequency converter (400Hz) 75kVA
Chilled water Up to 2 x 35kW
UPS 400 kVA
Power distribution units Up to 2 x 180 kVA
Air-conditioning units Up to 176 kW
Mobile air-conditioning units 2 x 10 kW
CableEase RJ45 cabling system 375 x RJ45
(4) BT CONTRACT
Disaster recovery support for PBX's with BT for the UK Sites specified
below. Within [***]hrs of being invoked a caravan will turn up on site
and provide a telephone infrastructure. It includes handsets if
required. As part of the disaster recovery support, a new exchange is
automatically ordered. This will take around 6/8 weeks typically to
arrive.
SITE SERVICE LEVEL
---- -------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Sheriffs Court, Coventry ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
New Horizon Park, Coventry ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
Discovery Court, Poole ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Technology Drive, Beeston ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
PBX100 is an exchange with 100 phones.
11.3 SERVICE LEVELS DEFINITION & TARGETS
The Service Levels for the Disaster Recovery Services are set out
below.
(1) NDR
Delivery of the replacement equipment commenced within [***]of
notification.
(2) COMDISCO
The equipment will be provided within [***] hours and can be kept for
[***] month at no charge. The equipment can then be purchased at list
price.
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SCHEDULE 1 - SERVICE LEVEL AGREEMENT
CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
(3) BT
Within [***]of being invoked a caravan will turn up on site and provide
a telephone infrastructure. It includes handsets if required. As part
of the disaster recovery support, a new exchange is automatically
ordered. This will take around 6/8 weeks typically to arrive.
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SCHEDULE 1 - SERVICE LEVEL AGREEMENT
CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
[***][***][***][***][***][***][***][***][***][***][***][***][***][***][***][***]
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MARCONI CORPORATION PLC
APPENDIX A
TO SERVICE LEVEL AGREEMENT
LIST OF "IN-SCOPE" MARCONI GROUP SITES
[***]
49
SCHEDULE ▇ - ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇
TO SERVICE LEVEL AGREEMENT
LIST OF APPLICATIONS
[***]
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SCHEDULE 1 - SERVICE LEVEL AGREEMENT
APPENDIX C
SHARED SERVICES PROVIDED BY MARCONI GLOCAL IT TO ASIA PAC
The following details the support provide to Asia Pac by Marconi Global IT:
PART A: SERVICES: [***]
51
SCHEDULE 1 - SERVICE LEVEL AGREEMENT
APPENDIX D
RECENTLY DISPOSED MARCONI ENTITIES
[***]
52
SCHEDULE 1 - SERVICE LEVEL AGREEMENT
APPENDIX E
[***]
(Refer attached document)
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CONFIDENTIAL TREATMENT
REQUESTED BY
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SCHEDULE 2
BLANK
This Schedule has been intentionally deleted.
SCHEDULE 3 - STANDARDS AND POLICIES CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
SCHEDULE 3
STANDARDS AND POLICIES
1. PURPOSE
This Schedule 3 (Standards & Policies) defines the internal Marconi
Group standards and policies that apply at the Commencement Date.
2. REVIEW OF AND CHANGES TO STANDARDS AND POLICIES
2.1 In relation to any Country in respect of which Cutover has occurred,
the Supplier shall commence reviewing the standards and policies listed
in this Schedule as soon as reasonably practicable after the relevant
Cutover and shall notify Marconi of any concerns or potential issues
regarding its ability to adhere to those standards and policies which
it has reviewed.
2.2 Without prejudice to Paragraph 2.1, Marconi and the Supplier shall,
within a three (3) month period following the relevant Cutover, jointly
review the listed standards and policies with a view to verifying the
level to which the Marconi Group currently adheres to those policies.
Changes that are required to enable adherence to the listed standards
and policies shall be subject to Change Control.
2.3 During the term of this Agreement, the listed standards and policies
may need to be supplemented or changed. Such changes shall be subject
to Change Control.
3. LIST OF STANDARDS AND POLICIES:
3.1 INFORMATION SECURITY CORPORATE POLICIES
- Executive Information Security Policy version 1.0
- Information Security Management Policy version 1.0
- Access Control Policy version 2.0
- Information Classification and Control Policy version 1.1
- Communication and Network Security Policy version 2.0
- Systems Development, Operations, and Maintenance Policy
version 1.0
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SCHEDULE 3 - STANDARDS AND POLICIES CONFIDENTIAL TREATMENT
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- Business Continuity Management Policy version 1.0
- Personnel Security Policy version 1.0
- Physical and Environmental Security Policy version 1.0
- Compliance Policy version 1.0
- IT Acceptable Usage Policy 1.0
3.2 INFORMATION SECURITY CORPORATE STANDARDS
- Corporate Standards Getting Started Guide version 2.0
- Critical Business Applications Standards version 2.0
- Communications Networks Standards version 2.0
- Information Processing Standards version 2.0
- Systems Development Standards version 2.0
- Security Management Standards version 2.0
3.3 INFORMATION SECURITY OPERATIONAL POLICIES
- Oracle 11i Application Security version 1.0
- Home Office Security version 2.0
- Account ID and Password Policy version 1.1
- Internet Secure Operation Policy version 1.0
- E-mail Secure Operation Policy version 1.1
- Third Party Dial-In Remote Access version 1.0
3.4 INFORMATION SECURITY OPERATION STANDARDS AND PROCEDURES
- Oracle Database Security - version 1.2
- Content (HTTP) Filtering with Websense - version 1.0
- Business-to-Business Connectivity version 1.0
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SCHEDULE 3 - STANDARDS AND POLICIES CONFIDENTIAL TREATMENT
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- Business VPN (Virtual Private Network) version 1
- CacheFlow LAN Browser Configuration version 1
- CacheFlow Remote Access Browser Configuration version 1.1
3.5 INFORMATION SECURITY GUIDELINES
- Oracle Application Audit - version 1.0
- Laptop Security Guidelines version 1.1
- Securing Internet Information Services 5.0 on Windows 2000
version 1.0
- Securing Solaris version 1.0
- Password Guidelines version 1.2
- CacheFlow FAQ version 1.0
- CacheFlow Support FAQ version 1.0
- PointSec FAQ version 1.07
- SecuRemote FAQ version 1.0
3.6 HARDWARE STANDARDS
- Marconi PC Client standards version 1.0
- Technology refresh policy version 1.0
3.7 COMMUNICATIONS INFRASTRUCTURE STANDARDS
- Routing Standards version 1.0
- Network Architecture version 1.0
- Operational Standards version 1.0
- IP Addressing Standards version 1.0
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SCHEDULE 3 - STANDARDS AND POLICIES CONFIDENTIAL TREATMENT
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3.8 INFRASTRUCTURE APPLICATIONS STANDARDS
- DNS Strategy version 1.0
- E-mail standards rev 1.0
- Collaborative Tools standards version 1.0
3.9 NAMING STANDARDS
- Countries - Country names and 2 letter codes version 1
- Sites - Addresses and 5 letter codes version 1
- Hosts - computer and networked device names version 1
- User names - computer account names version 1
- Character Sets version 1
3.10 PROJECT MANAGEMENT
- IT Project Lifecycle Management prog03v1
- IT Project Reporting Process prog01v1
4
SCHEDULE 4 - CHARGES CONFIDENTIAL TREATMENT
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SCHEDULE 4
CHARGES
SCHEDULE 4 - CHARGES CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
SCHEDULE 4
CHARGES
1. DEFINITIONS AND OVERVIEW
1.1 DEFINITIONS
In this Schedule, the following additional definitions apply, unless
the context otherwise requires:
"ADDITIONAL RESOURCE CHARGE" OR "ARC" means an additional charge
payable in relation to a Service Category in an Invoice Region, where
the number of Resource Units in relation to that Service Category in
that Invoice Region exceeds the Resource Baseline for that Service
Category in that Invoice Region, calculated by multiplying the number
of additional Resource Units by the applicable ARC rate;
"BASELINE CHARGE" means the monthly charge payable in relation to a
Service Category in an Invoice Region, where the number of Resource
Units in relation to that Service Category in that Invoice Region
equals the Resource Baseline for that Invoice Region, as specified in
this Schedule in relation to that Service Category for that Invoice
Region;
"CONTRACT YEAR", in relation to an Invoice Region, means each period of
twelve (12) months during the term of this Agreement, commencing on
Cutover of the relevant Services in the last Country within that
Invoice Region;
"INVOICE REGIONS" has the meaning given to it in Paragraph 1.2(1);
"REDUCED RESOURCE CREDIT" OR "RRC" means a reduction in the charges
payable in relation to a Service Category in an Invoice Region, where
the number of Resource Units in relation to that Service Category in
that Invoice Region is less than the Resource Baseline for that Service
Category in that Invoice Region, calculated by multiplying the number
of shortfall Resource Units by the applicable RRC rate;
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"RESOURCE BANDS" means the agreed range of Resource Units either side
of the Resource Baseline, as specified in relation to that Service
Category in an Invoice Region in this Schedule;
"RESOURCE BASELINE" means the baseline number of Resource Units in
relation to a Service Category in an Invoice Region, as specified in
this Schedule in relation to that Service Category and that Invoice
Region;
"RESOURCE UNIT" in relation to a Service Category, means the unit of
measurement in relation to which the Resource Baseline, ARC's and RRC's
shall be calculated, as specified in relation to that Service Category
in this Schedule; and
"SERVICE CATEGORIES" means the service categories into which the IT
Services are classified in the Service Level Agreement, and "SERVICE
CATEGORY" means any one of them.
1.2 INVOICES AND INVOICE REGIONS
(1) The Charges detailed in this Schedule 4 (Charges/Rate Card) shall be
invoiced separately for each of the following regions (the "INVOICE
REGIONS"):
- North America;
- UK & Ireland;
- Germany;
- Italy; and
- "Rest of World" (being all regions within scope and not listed
above).
(2) The Marconi Group entities to be invoiced by the Supplier Group for
each of the Invoice Regions are initially as follows:
INVOICE REGION INVOICING ENTITY INVOICING CURRENCY
-------------- ---------------- ------------------
North America Marconi Communications, Inc. US Dollars
UK & Ireland Marconi Communications Limited Pounds Sterling
Germany Marconi Communications GmbH Euros
Italy Marconi Communications SpA Euros
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Rest of World Marconi Communications Limited Pounds Sterling
(3) Marconi may nominate alternative or additional entities to pay for the
Services in accordance with Clause 2.10 of this Agreement.
(4) Each invoice shall contain the following information:
(a) a break-up of the Charges for each Service Category;
(b) in the case of Charges calculated by reference to the number
of Resource Units, the number of Resource Units upon which the
Charges are based;
(c) details of any pre-paid resources (FTE or AVI based) which
have been consumed during that invoice period; and
(d) details of service credits (if any) set off against the
Charges;
(e) in respect of North America, the relevant Marconi business
unit to which the invoice relates (being the following: BBRS,
NC and Wireless); and
(f) such other information as may be specified in the Service
Level Agreement and/or applicable Schedule of Work.
1.3 BASELINE CHARGES, RESOURCE BASELINES, ARCS AND RRCS
(1) The Charges for the following Service Categories shall be calculated by
reference to the mechanism outlined in this Paragraph 1.3:
- Help Desk & Call Centre Services (Paragraph 3);
- Desktop and Supply Services (Paragraph 4);
- Network Services (Paragraph 6);
- Application Support Services (Paragraph 7)
- Application Development Services (Paragraph 8); and
- Data Centre Services (Paragraph 9).
(2) Where the number of Resource Units for the Service Category equals the
number of Resource Units in that Service Category's Resource Baseline,
the charge for that Service Category shall be that Service Category's
Baseline Charge.
(3) Where the number of Resource Units for the Service Category:
(a) exceeds the number of Resource Units in that Service
Category's Resource Baseline; and
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SCHEDULE 4 - CHARGES CONFIDENTIAL TREATMENT
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(b) is within that Service Category's ARC Resource Band, the
Charge for that Service Category shall be the Baseline Charge
for that Service Category plus an ARC calculated by reference
to the additional Resource Units.
(4) Where the number of Resource Units for the Service Category:
(a) is less than the number of Resource Units in that Service
Category's Resource Baseline; and
(b) is within the RRC Resource Band for that Service Category, the
Charge for that Service Category shall be that Service
Category's Baseline Charge less a RRC calculated by reference
to the shortfall of Resource Units.
(5) Where the number of Resource Units for a Service Category exceeds or is
less than the Resource Band for that Service Category, the Parties
shall negotiate in good faith a reasonable adjustment to the Charges in
accordance with Change Control. Pending agreement of such an
adjustment, the Supplier will charge Marconi the amounts that would
have applied had the number of Resource Units stayed at the minimum or
maximum level within the Resource Band (as applicable), provided that
if the Parties cannot agree a reasonable adjustment within twenty (20)
days of the number of Resource Units first falling outside the Resource
Band, the Supplier may make a reasonable additional charge or reduction
in charge to reflect the increase or shortfall in Resource Units. All
amounts paid or credited pending agreement of an adjustment will be
adjusted retrospectively once the final adjustment has been agreed (or
as otherwise determined via[***]).
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2. CHARGES FOR TRANSITION PROJECT
2.1 OVERVIEW
These Charges relate to the services to be provided by the Supplier as
set out in Exhibit 1 (Transition Project) (the "TRANSITION SERVICES").
2.2 CHARGES
(1) The Charges for the Transition Services consist of two components:
(a) Charges for Transition Services relating to Call Centre,
Desktop, Data Centre and Application Services; and
(b) Charges for Transition Services relating to Network Services.
(2) The Charges for Transition Services relating to Call Centre, Desktop,
Data Centre and Application Services (broken up by Invoice Region) are
as follows:
UK & IR. (L'000) NA ($'000) GERMANY (E'000) ITALY (E'000) ROW (L'000)
---------------- ---------- --------------- ------------- -----------
CALL CENTRE [***] [***] [***] [***] [***]
DESKTOP [***] [***] [***] [***] [***]
DATA CENTRE [***] [***] [***] [***] [***]
APPLICATIONS [***] [***] [***] [***] [***]
TOTAL [***] [***] [***] [***] [***]
(3) The Charges for Transition Services relating to Network Services
(broken up by Invoice Region) are as follows:
UK & IR. (L'000) NA ($'000) GERMANY (E'000) ITALY (E'000) ROW (L'000)
---------------- ---------- --------------- ------------- -----------
NETWORK [***] [***] [***] [***] [***]
SERVICES
TOTAL [***] [***] [***] [***] [***]
(4) The Parties acknowledge that the Charges for Transition Services
specified in Paragraphs 2.2(2) and 2.2(3) are calculated based upon
Transition Services being provided across all of those Invoice Regions,
and that the removal of an Invoice Region from the scope of the
Transition Services will not necessarily result in a reduction of the
Charges, or a reduction of the Charges by the exact amount specified
for that Invoice Region in those Paragraphs. The adjustment (if any) to
the Charges for Transition Services in such instance shall be dealt
with pursuant to Change Control.
2.3 INVOICING AND PAYMENT
(1) Subject to Paragraph 2.3(3), the Charges for Transition Services
relating to Call Centre, Desktop, Data Centre and Application Services
shall be invoiced in
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SCHEDULE 4 - CHARGES CONFIDENTIAL TREATMENT
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twelve (12) equal instalments, on the first day of each month during
the year following the Phase 1 Completion Date (in which case, those
Charges will be invoiced by the Supplier Group at least thirty (30)
days before the due date).
(2) Subject to Paragraph 2.3(3), the Charges for Transition Services
relating to Network Services shall be payable by the Marconi Group on
the second anniversary of the Commencement Date (in which case, those
Charges will be invoiced by the Supplier Group at least thirty (30)
days before the due date).
(3) Subject to Clauses 3.3 (Consequences of Termination) of the Asset
Transfer Agreement and Clause 3.3 (Consequences of Termination) of the
BT Asset Transfer Agreement, where this Agreement is terminated prior
to payment in full of the Charges for the Transition Services, those
Charges shall become payable on the date of termination, provided that
if at the date of termination not all of the Transition Services have
been performed, the Supplier Group shall only be entitled to invoice
the Marconi Group (and the Marconi Group shall only be required to pay
to the Supplier Group) a proportion of the total Charges for Transition
Services, such proportion to be reasonably calculated by the Supplier
Group having regard to the proportion of the Transition Services
actually performed.
(4) The Charges for Transition Services shall be payable by the Marconi
Group within thirty (30) days of receipt of a correctly rendered
invoice from the Supplier Group. Where the Charges for Transition
Services become payable early as envisaged by Paragraph 2.3(3), those
Charges will be invoiced at least thirty (30) days before the due date
or, where this is not reasonably practicable, at such later date as is
reasonably practicable for the Supplier Group.
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3. CHARGES FOR HELP DESK AND CALL CENTRE SERVICES
3.1 OVERVIEW AND DEFINITIONS
(1) These Charges relate to the "Help Desk and Call Centre" Services as set
out in Section 1 of the Service Level Agreement (Schedule 1).
(2) In this Section, the following additional definitions apply: "DESKTOP
UNITS" means both desktop and laptop devices; "HELPDESK CALL" means any
incoming interaction with the help-desk from an end-user (by phone,
e-mail or the web), excluding automatic event update calls (eg.
pre-recorded messages accessed via a voice response unit);
"MARCONI GENERATED CALL" means a Helpdesk Call which is:
(a) attributable to the introduction by Marconi of new
applications or changes to existing applications, new
technology or changes to existing technology or new Marconi
policies or changes to existing Marconi policies; and
(b) not caused by or related to the Supplier's breach of the
Service Level Agreement and/or a Schedule of Work;
"MARCONI GENERATED CALL BASELINE" means, in relation to each Invoice
Region, the baseline number of Marconi Generated Calls per Desktop Unit
per annum in that Invoice Region, determined and agreed by the Parties
during the period corresponding to the True-Up Process or, in the
absence of agreement between the Parties during that period, as
determined pursuant to Expert's Decision; and "MARCONI GENERATED CALL
RATIO" means the actual number of Marconi Generated Calls per Desktop
Unit per annum (calculated separately for each Invoice Region).
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3.2 BASELINE CHARGES (MONTHLY)
YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10
---- ---- ---- ---- ---- ---- ---- ---- ---- -----
UK & Ire (L'000) [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
NA ($'000) [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
Italy (E'000) [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
ROW (L'000) [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
Germany (E'000) [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
3.3 RESOURCE UNITS, RESOURCE BASELINE, ARCS AND RRCS
(1) RESOURCE UNITS
Resource Units for the Help Desk and Call Centre Services are as follows:
(a) the number of Desktop Units deployed; and
(b) the number of Marconi Generated Calls.
(2) RESOURCE BASELINE
The Baseline Charges are based upon the following Resource Baselines:
(a) Desktop Units deployed, broken up as follows:
UK & Ire Desktop [***]
Laptop [***]
US Desktop [***]
Laptop [***]
Germany Desktop [***]
Laptop [***]
Italy Desktop [***]
Laptop [***]
ROW Desktop [***]
Laptop [***]
(b) The Marconi Generated Call Baseline.
(3) ARC/RRC RATES (EXPRESSED AS MONTHLY AMOUNTS)
ARC's and RRC's shall be determined as follows:
(a) for a variations in the number of Desktop Units of up to +/-[***]%
([***]per cent) from the Resource Baseline for Desktop Units, the
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Charges shall be adjusted by a percentage amount equal to the
percentage variation in the number of Desktop Units from the
Resource Baseline[***]; and
(b) for variations in the Marconi Generated Call Ratio of up to
+/-[***]% ([***]per cent) from the Marconi Generated Call Baseline,
an ARC/RRC will apply for each Marconi Generated Call over or below
those which would have been generated had the Marconi Generated Call
Ratio remained at the Marconi Generated Call Baseline, at the rate
specified in the following table:
RATE (PER CALL) YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10
--------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- -----
UK& IRE (L) [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
N. AMERICA ($) [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
ITALY (E) [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
ROW (L) [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
GERMANY (E) [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
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4. CHARGES FOR DESKTOP AND SUPPLY SERVICES
4.1 OVERVIEW
These Charges relate to the "Desktop and Supply" Services (excluding
IMACD's) as set out in Section 3A of the Service Level Agreement.
BASELINE CHARGES (ANNUAL)
YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10 TOTAL
---- ---- ---- ---- ---- ---- ---- ---- ---- ----- -----
UK & Ire (L'000) [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
NA ($'000) [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
Italy (E'000) [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
ROW (L'000) [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
Germany (E'000) [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***]
4.2 RESOURCE UNITS, RESOURCE BASELINE, ARCS AND RRCS
(1) RESOURCE UNITS
Numbers of Desktops / Laptops units supported by the Supplier.
BASELINE VOLUMES
----------------------------------
UK & Ire Desktop [***]
Laptop [***]
US Desktop [***]
Laptop [***]
Germany Desktop [***]
Laptop [***]
Italy Desktop [***]
Laptop [***]
ROW Desktop [***]
Laptop [***]
Global Desktop [***]
Laptop [***]
Total [***]
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(2) ARC/RRC RATES (MONTHLY)
The following monthly ARC / RRC rates are applicable to a variation to the
Resource Baseline of up to +/- [***]% ([***]per cent).
YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10
---- ---- ---- ---- ---- ---- ---- ---- ---- -----
UK & IRELAND (L)
Desktop ARC [***]
Laptop ARC
Desktop RRC
Laptop RRC
GERMANY (E)
Desktop ARC [***]
Laptop ARC
Desktop RRC
Laptop RRC
ITALY (E)
Desktop ARC [***]
Laptop ARC
Desktop RRC
Laptop RRC
NORTH AMERICA ($)
Desktop ARC [***]
Laptop ARC
Desktop RRC
Laptop RRC
REST OF THE WORLD (L)
Desktop ARC [***]
Laptop ARC
Desktop RRC
Laptop RRC
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YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10
---- ---- ---- ---- ---- ---- ---- ---- ---- -----
Desktop RRC
Laptop RRC
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5. CHARGES FOR INSTALLATIONS, MOVES, ADDS, CHANGES AND DISPOSAL (IMACD)
SERVICES
5.1 OVERVIEW
These Charges relate to the "Installations, Moves, Adds, Changes and
Disposal" Services as set out in Section 3B of the Service Level Agreement
(Schedule 1).
5.2 CHARGES
(1) CHARGES FOR INSTALLATIONS, MOVES, ADDS AND CHANGES
The Supplier shall charge for Installations, Moves, Adds and Changes (as
defined in the Service Level Agreement) on a "per event" basis, according
to the following:
UK& IRE (L) NORTH AMERICA ($) ITALY (E) GERMANY (E) ROW (L)
----------- ----------------- --------- ----------- -------
INSTALLATION [***]
MOVES
ADDITION
CHANGES
(2) CHARGES FOR DISPOSALS
During the True-Up Process the Supplier will examine the Marconi Group's
processes for Disposals (as defined in the Service Level Agreement) in
each Invoice Region with a view to establishing:
(a) whether those processes for Disposals are compliant with Applicable
Legislation; and
(b) whether the costs associated with those Disposals were included
within the Budget (Schedule 15).
Charges for Disposals shall be dealt with as follows:
(c) in those Invoice Regions where the Marconi Group's processes for
Disposals are compliant with Applicable Legislation and the costs
associated with those processes are included within the Budget for
Desktop and Supply Services, the Supplier shall provide Disposals in
accordance with the Marconi Group's existing processes and at no
additional charge to Marconi (such charge already being incorporated
as part of the Charge for Desktop and Supply Services);
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(d) in those Invoice Regions where the Marconi Group's processes for
Disposals are compliant with Applicable Legislation but the cost for
such processes has not been included in the Budget for Desktop and
Supply Services, the Supplier shall provide Disposals in accordance
with the Marconi Group's existing processes at a Charge reasonably
reflective of the Marconi Group's (or its relevant member's) costs
relating to such Disposals (established pursuant to the True Up
Process), or in the event that such costs are not reasonably
ascertainable by the Parties, for the following Charges:
UK & IRE (L) NORTH AMERICA ($) ITALY (E) GERMANY(E) ROW (L)
------------ ----------------- --------- ---------- -------
DISPOSALS (PER [***]
UNIT)
(e) in those Invoice Regions where Marconi's processes for Disposals are
not compliant with Applicable Legislation, the Supplier shall
provide Disposals in accordance with Applicable Legislation and for
the following Charges:
UK & IRE (L) NORTH AMERICA ($) ITALY (E) GERMANY(E) ROW (L)
------------ ----------------- --------- ---------- -------
DISPOSALS (PER [***]
UNIT)
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6. CHARGES FOR NETWORK SERVICES
6.1 OVERVIEW
These Charges relate to the "Network" Services as set out in Section 4 of
the Service Level Agreement.
6.2 USAGE BASED (COMMODITY) CHARGES
[***]
6.3 NON-USAGE BASED CHARGES
The Charges for Network Services other than those specified in Paragraph
6.2 (Usage Based Charges) are as follows:
(1) CHARGES BASELINE (ANNUAL)
YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10 TOTAL
---- ---- ---- ---- ---- ---- ---- ---- ---- ----- -----
UK & Ire (L'000) [***]
NA ($'000)
Italy (E'000)
ROW (L'000)
Germany (E'000)
Appendix 1 to this Schedule sets out the breakdown of the charges in NA by
Marconi SBU. This breakdown will be verified during True-up.
(2) RESOURCE UNITS
Resource Units for the Network Services are as follows:
(a) the number of active LAN ports;
(b) the number of active voice ports;
(c) the number of active RAS ports; and
(d) the number of active voicemail ports.
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(3) RESOURCE BASELINE
The Baseline Charges are based upon the following Resource Baseline:
UK & IRE NA GER ITALY ROW TOTAL
-------- -- --- ----- --- -----
LAN Ports [***]
Voice Ports
RAS Ports
Voicemail Ports
Appendix 1 to this Schedule sets out the breakdown of the resource
baseline in NA by Marconi SBU. This breakdown will be verified during
True-up.
Where a True-up Process identifies any variations in the above Resource
Baseline as compared to actual volumes of Internal Services as of the
relevant Cutover, there shall be no amendment to the Baseline Charges as a
result of that variation. For the avoidance of doubt, this previous
sentence does not apply to the extent that the above Resource Baseline
changes as a result of any of the matters identified in Clauses 5.2(1)(b)
to (e) of this Agreement.
(4) ARCS & RRCS (MONTHLY)
Subject to Paragraph 6.3(5), the following monthly ARC / RRC rates are
applicable to a variation in the Resource Baseline of up to +/- [***]%
[***]per cent).
UK & IR. NA GERMANY ITALY ROW
ACTIVE PORTS (L) ($) (E) (E) (L)
------------ -------- -- ------- ----- ---
ARC
LAN [***]
Voice
RAS
Voicemail
RRC
LAN
VOICE
RAS
VOICEMAIL
The Parties acknowledge that the Resource Baseline as stated in Paragraph
6.3(3) is based on the number of "active" ports as opposed to the number
of "available"
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ports. As part of the True Up Process the Parties shall establish the
number of "available" ports, and the following additional ARC/RRC
mechanism shall apply until the end of the Transformation Stage (as
defined in Exhibit 1 (Transition Project)):
SCENARIO ADJUSTMENT MECHANISM
-------- --------------------
Actual "active" ports greater than "available" Adjust Baseline Charge by adding the ARC rate.
port baseline.
Actual "active" ports greater than "active" port Adjust Baseline Charge by adding the RRC rate.
baseline.
Actual "active" ports less than "active" port Adjust Baseline Charge by subtracting the RRC rate.
baseline.
(5) CHANGE CONTROL
Notwithstanding Paragraph 6.2(4), ARC's and RRC's shall not apply in the
following circumstances, which shall be dealt with pursuant to Change
Control and shall, accordingly (to the extent referable to Change Control
envisaged by this Paragraph 3.3(5)) not be considered to be within the
Resource Bands):
- Site size increase/decrease (as set out in (a), below);
- bandwidth utilisation increase/decrease (as set out in (b), below);
- Site closure/addition;
- mergers & acquisitions / de-mergers; and
- territory entry/exit (i.e., a change which leads to the Network
Services no longer being required in a territory in which they were
previously provided).
Change Control shall apply in relation to Site size increases/decreases
and/or bandwidth utilisation increases/decreases in the manner set out
below:
(A) SITE SIZE INCREASE/DECREASE
The manner in which Site size increases or decreases shall be
managed (ARC/RRC adjustments or Change Control) shall be determined
according to the change in size of a site as follows:
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NO SITE VERY SMALL SMALL MEDIUM LARGE
------- ---------- ----- ------ -----
NO SITE - Change Change Change Change
Control Control Control Control
VERY SMALL Change - ARCs/RRCs Change Change
Control Control Control
SMALL Change ARCs/RRCs - ARCs/RRCs Change
Control Control
MEDIUM Change Change ARCs/RRCs - Change
Control Control Control
LARGE Change Change Change Change
Control Control Control Control -
where:
- "VERY SMALL" means [***]
- "SMALL" means [***]
- "MEDIUM" means [***] and
- "LARGE" means[***].
(B) BANDWIDTH UTILISATION INCREASE/DECREASE
Average bandwidth utilisation figures for the combined network
traffic to and from each Site during normal working hours shall be
measured and baselined during the period corresponding to the
True-Up Process.
These baselined utilisation figures shall be applied for the
combined network traffic to and from individual Sites during the
normal working hours for the Site being measured (averaged over a
period of three consecutive months).
The following variations in average bandwidth use shall result in an
amendment to the Charges being made pursuant to Change Control:
- Site utilisation <[***]% below average bandwidth baseline; and
- Site utilisation >[***]% above average bandwidth baseline.
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7. CHARGES FOR APPLICATION SUPPORT SERVICES
7.1 OVERVIEW
These Charges relate to the "Applications Support and Maintenance"
Services as set out in Section 5 of the Service Level Agreement (Schedule
1).
7.2 BASELINE CHARGES (ANNUAL)
YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10 TOTAL
---- ---- ---- ---- ---- ---- ---- ---- ---- ----- -----
UK & Ire (L'000) [***]
NA ($'000)
Italy (E'000)
ROW (L'000)
Germany (E'000)
7.3 RESOURCE UNITS, RESOURCE BASELINES, ARCS & RRCS
(1) RESOURCE UNITS
Resource Units for the Applications Support are the legacy applications
requiring support as listed in Appendix B to the Service Level Agreement
(Schedule 1).
(2) RESOURCE BASELINE
The Baseline Charges for the Application Support Services are based upon
the legacy applications listed in Appendix B to the Service Level
Agreement (Schedule 1).
(3) ARCS AND RRCS
During the period corresponding to the True-Up Process, the Supplier
shall:
(a) break down the Baseline Charges for the Application Support Services
to obtain a separate charge for each legacy application (or group of
legacy applications) being supported (which breakdown shall be
reasonably commensurate with the cost of supporting each such
application); and
(b) develop an ARC/RRC table identifying a mechanism for varying the
Baseline Charges to reflect variations to the number of applications
(or groups of applications) being supported.
Where the Parties agree the results of such exercise, the Charges for the
support of each application (or group of applications), and any ARCs/RRCs
arising from variations in the number of key applications (or groups of
applications) shall be dealt with in accordance with the agreed mechanism
(as from the date of such agreement). Prior to such agreement (or where
the Parties cannot agree such a mechanism by the end of the True-Up
Process), all variations in the number of applications shall be dealt with
through Change Control.
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8. CHARGES FOR APPLICATION DEVELOPMENT SERVICES
8.1 OVERVIEW AND DEFINITIONS
(1) These Charges relate to the "Applications Development" Services as set out
in Section 6 of the Service Level Agreement. The purpose of these Services
is to make available to the Marconi Group a pool of pre-paid labour for
use by the Marconi Group for application development and enhancement
purposes as it sees fit.
(2) In this Section 8, the following additional definitions shall apply:
"ESTABLISHMENT PERIOD" in relation to a Country, means the period of
[***]calendar months commencing on Cutover of the Application and
Development Services for that Country; "POST ESTABLISHMENT PERIOD" in
relation to an Invoice Region, means the period from the end of the
Establishment Period for that Invoice Region, until the termination or
expiry of this Agreement.
8.2 BASELINE CHARGES (ANNUAL)
YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10 TOTAL
---- ---- ---- ---- ---- ---- ---- ---- ---- ----- -----
UK & Ire (L'000) [***]
NA ($'000)
Italy (E'000)
ROW (L'000)
Germany (E'000)
8.3 RESOURCE UNITS, RESOURCE BASELINES, ARCS & RRCS
(1) RESOURCE UNITS
Resource Units for the Application Development Services are as follows:
(A) ESTABLISHMENT PERIOD
Resource Units for the Application Development Services during the
Establishment Period shall be the number of full time equivalent ("FTE")
personnel engaged in providing application development services.
(B) POST ESTABLISHMENT PERIOD
Resource Units for the Application Development Services during the
Post Establishment Period shall be the number of Applications Value
Index ("AVI") units (as determined pursuant to Paragraph 8.3(2)(b)).
(2) RESOURCE BASELINES
(A) ESTABLISHMENT PERIOD
The Baseline Charges specified in Paragraph 8.2 are based upon a
Resource Baseline of[***] full time equivalent ("FTE") personnel
engaged in providing Application Development Services. If, as a
result of the True Up Process, the actual Resource Baseline is found
to be less than
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this, the Baseline Charges shall be reduced by a percentage equal to
the percentage difference between [***]FTE and the actual Resource
Baseline.
(B) POST ESTABLISHMENT PERIOD
During the final (12) twelve months of the Establishment Period, the
Supplier shall use the Supplier's "Domains of Change Index" (DCI) to
obtain a measure in "Applications Value Index" (AVI) units of the
applications development and enhancement work being undertaken by
the Transferring Employees (or their subsequent replacements) during
that twelve (12) month period. This measure (the "AVI RESOURCE
BASELINE") shall form the Resource Baseline for the Application
Development Services during the Post Establishment Period
(3) ARCS AND RRCS
(A) ESTABLISHMENT PERIOD
During the Establishment Period, no ARCs/RRCs will apply. Additional
personnel will be made available to Marconi at the rates and subject
to the conditions specified in Paragraph 11.3 (Resource Rate Card).
(B) POST ESTABLISHMENT PERIOD
During the Post Establishment Period, Marconi may increase or
decrease the AVI Resource Baseline by providing the Supplier with
sixty (60) days notice of its required variation in AVI Units.
Variations in the AVI Resource Baseline shall be subject to a
minimum varied number of AVI Units, which shall be agreed between
the Parties during the Establishment Period based upon the Supplier
reasonable minimal resourcing requirements (or in the absence of
agreement shall be referred to Expert's Decision).
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9. CHARGES FOR DATA CENTRE SERVICES
9.1 OVERVIEW
These Charges relate to the "Data Centre" Services as set out in Section 9
of the Service Level Agreement.
9.2 CHARGES
The following sets out the Charging regime that shall apply at the time of
Cutover of the Data Centre Services. As soon as possible following such
Cutover, the Parties shall work together to attempt to agree an
alternative "consumption based" charging mechanism as set out in Paragraph
9.3, below. This Charging regime shall continue to apply until the
consumption based mechanism set out in Paragraph 9.3 has been agreed (or
otherwise determined via Expert's Decision).
(1) BASELINE CHARGES (ANNUAL)
YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10 TOTAL
---- ---- ---- ---- ---- ---- ---- ---- ---- ----- -----
UK & Ire (L'000) [***]
NA ($'000)
Italy (E'000)
ROW (L'000)
Germany (E'000)
(2) RESOURCE UNITS & RESOURCE BASELINE
The Baseline Charges specified in Paragraph 9.2(1) are based upon a
Resource Baseline of servers as follows:
Region Servers
------ -------
UK & Ireland [***]
Germany
Italy
North America
Rest of the World
Total
(3) ARCS/RRCS (MONTHLY)
Until the "consumption based" charging mechanism outlined in Paragraph 9.3
is agreed, any changes to the Charges for the Data Centre Services
resulting from a variation in the number of Servers shall be dealt with
through Change Control.
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9.3 [***]
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10. CHARGES FOR STRATEGY & MANAGEMENT SERVICES
10.1 OVERVIEW
These Charges relate to the "Strategy and Management" Services as set out
in Section 10 of the Service Level Agreement.
10.2 BASELINE CHARGES (ANNUAL)
YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10 TOTAL
---- ---- ---- ---- ---- ---- ---- ---- ---- ----- -----
UK & Ire (L'000) [***]
NA ($'000)
Italy (E'000)
ROW (L'000)
Germany (E'000)
10.3 RESOURCE BASELINE
The Baseline Charges are based upon [***]FTE people providing Strategy and
Management Services . If, as a result of the True Up Process, the actual
number of people providing Strategy and Management Services is found to be
more or less than this number, the Baseline Charges shall be increased or
reduced by a percentage equal to the percentage difference between [***]
FTE people and the actual number of people providing the services.
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11. CHARGES FOR IKON (UK) CONTRACT SERVICES
11.1 OVERVIEW
These Charges relate to the services described in the IKON (UK) Contract,
as that contract is defined in Section 13 of the Service Level Agreement
(Schedule 1).
11.2 CHARGES (EXPRESSED AS ANNUAL AMOUNTS) [***]
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12. CHARGES FOR PROJECT SERVICES
12.1 OVERVIEW
These Charges relate to the "Project" Services as set out in Section 11 of
the Service Level Agreement.
12.2 PRE-PAID POOL OF LABOUR
(1) A pre-paid pool of labour shall be available to the Marconi Group to
allocate towards Project Services as follows:
(a) application development resources (as detailed in Paragraph 8);
(b) non-application development resources (as detailed in Paragraph
12.2(2)).
(2) The Parties acknowledge that the Marconi Group's Budget for a number of
Services (including Network Services and Data Centre Services) includes a
cost for personnel who are working on Projects other than application
development Projects. As at the Commencement Date, Marconi estimates the
number of personnel working on such Projects to be approximately fifteen
(15) full time equivalent ("FTE") personnel.
(3) During the True Up Process the Parties will work together in good faith to
identify the actual number of FTE's working on Projects other than
application development Projects, and the number of FTE's so determined
shall be made available to the Marconi Group to allocate towards
non-application Project Services. If the number of FTE's cannot be agreed
by the end of the True Up Process, the matter shall be referred to
Expert's Decision.
12.3 RESOURCE RATE CARD:
These Charges relate to Projects where it is agreed in the relevant
Project Schedule of Work that the Project Services will be provided on a
time and materials basis. A minimum notice period of[***] calendar days is
required for each resource required (or such lesser period as is agreed
between the Parties).
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(1) PROJECTS RELATED TO SERVICES OTHER THAN NETWORK SERVICES:
SKILL SET CATEGORY
(RATE PER HOUR) UK & IRE (L) GERMANY (E) ITALY (E) NORTH AMERICA ($) REST OF THE WORLD (L)
--------------- ------------ ----------- --------- ----------------- ----------- ---------
PROGRAM MANAGER [***]
PROJECT MANAGER
PROJECT CO-ORDINATOR
SR. ARCHITECT
ARCHITECT
SR. ENGINEER
ENGINEER
SR. TECHNICIAN
TECHNICIAN
SR. DBA
DBA
SR. S/W DEVELOPER
SOFTWARE DEVELOPER
(2) PROJECTS RELATED TO NETWORK SERVICES
SKILL SET CATEGORY
(RATE PER HOUR) UK & IRE (L) GERMANY (E) ITALY (E) NORTH AMERICA ($)
--------------- ------------ ----------- --------- -----------------
PROJECT MANAGER [***]
SENIOR PROJECT MANAGER
PROGRAMME MANAGER
TECHNICAL DESIGN
SENIOR TECHNICAL DESIGN
DESIGN CONSULTANT
PROGRAMME OFFICE MANAGER
TECHNICIAN/FIELD ENGINEER
SENIOR TECHNICIAN /
SUPPORT MANAGER
ADMINISTRATION SUPPORT
JUNIOR ADMINISTRATION SUPPORT
27
SCHEDULE 4 - CHARGES CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
These rates apply for "in country" resources. Some bespoke Marconi systems
in territories outside the UK may require short term resource to be
provided from the UK; With respect to Network Services, the Supplier will
only resource from the UK by exception and with prior agreement from
Marconi. Rates for the Rest of the World will be provided as and when
required.
12.4 RATE CARD DISCOUNTS
(1) The following discounts will be applied to the rates stated in the Rate
Cards where:
(a) Marconi provides a period of notice of at least [***]days of its
required resources; and
(b) the resources (measured individually) are applied by the Marconi
Group for a continuous period as specified in accordance with the
following table:
DISCOUNT % DISCOUNT %
DURATION IN MONTHS (30 TO 60 DAYS NOTICE) (>60 DAYS NOTICE)
------------------ ---------------------- -----------------
0 TO 3 MONTHS [***]% [***]%
OVER 3 MONTHS UP TO 6 MONTHS [***]% [***]%
OVER 6 MONTHS UP TO 12 MONTHS [***]% [***]%
OVER 12 MONTHS [***]% [***]%
(2) Where, after the commencement of a resource, the period for which that
resource is required is subsequently changed by Marconi to a shorter
period the rate of discount applicable to that resource shall be adjusted
accordingly (and restrospectively).
12.5 EXPENSES
The Rates specified in the Rate Card above, exclude reasonable travel and
related expenses, which will be charged separately by the Supplier. The
Supplier shall comply with the terms of Marconi's travel and expenses
policies (as set out in Schedule 3 (List of Standards and Policies)), and
in any event shall ensure that such expenses are reasonable having regard
to the nature of the work in question.
28
SCHEDULE 4 - CHARGES CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
13. DEFERRED CONTRACT PREMIUM PAYMENTS
For each of the first four (4) Contract Years for each Invoice Region, the
Supplier shall pay Marconi (or the relevant members of the Marconi Group,
as nominated by Marconi from time to time) on the Deferred Contract
Premium Payment Date, an amount for that Invoice Region representing a
deferred contract premium payment, calculated by applying the following
formula: [***]
29
SCHEDULE 4 - CHARGES CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
BASE DEFERRED CONTRACT PREMIUM PAYMENTS:
CONTRACT YEAR 1
INVOICE REGION PAYMENT AMOUNT
-------------- --------------
UK & IRE (L'000S) [***]
GERMANY (E'000S)
ITALY (E'000S)
NORTH AMERICA ($'000S)
REST OF WORLD (L'000)
TOTAL
CONTRACT YEAR 2
INVOICE REGION PAYMENT AMOUNT
-------------- --------------
UK & IRE (L'000S) [***]
GERMANY (E'000S)
ITALY (E'000S)
NORTH AMERICA ($'000S)
REST OF WORLD (L'000)
TOTAL
CONTRACT YEAR 3
INVOICE REGION PAYMENT AMOUNT
-------------- --------------
UK & IRE (L'000S) [***]
GERMANY (E'000S)
ITALY (E'000S)
NORTH AMERICA ($'000S)
REST OF WORLD (L'000)
TOTAL
CONTRACT YEAR 4
INVOICE REGION PAYMENT AMOUNT
-------------- --------------
UK & IRE (L'000S) [***]
GERMANY (E'000S)
ITALY (E'000S)
NORTH AMERICA ($'000S)
REST OF WORLD (L'000)
TOTAL
30
SCHEDULE 4 - CHARGES CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
14. INDEXATION OF CHARGES
14.1 INDEXATION MECHANISM
At the beginning of each new Contract Year, the Baseline Charges, ARCs,
RRCs, Rate Cards and all other Charges specified in this Agreement and
this Schedule 4 (other than the Charges specified in Paragraph 6.2) for
each Invoice Region shall be subject to indexation in accordance with the
following formulas:
[***]
14.2 INDICES
(1) The price indexation mechanism described in Paragraph 14.1 shall be
applied to the Charges using the territory specific indices listed below
REGION LO/L WO/W
------ ---- ----
US Employment Cost Index (ECI), Not Seasonally Consumer Price Index (CPI), Not Seasonally
Adjusted, Wages and Salaries, Professional, Adjusted, US City Average, All Items as published
Specialty, and Technical Occupations, Private by the Department of Labor, Bureau of Labor
Industry. Statistics.
UK Average Earnings Index : Service Industries Retail Prices Index excluding mortgage interest
(National Statistics Office) payments (National Statistics Office)
GERMANY Index of collectively agreed wages of wage Consumer price index for all private households
earners, Federal Statistical Office Germany (non-adjusted value), Federal Statistical Office Germany
ITALY Gross average earnings per employee in services, Indici dei prezzi al consumo (Instituto Nazionale
growth rate (Istituto Nazionale di Statistica) di Statistica)
REST OF THE Determined pursuant to Paragraph 14.2(2). Determined pursuant to Paragraph 14.2(2).
WORLD
(2) For those countries within the "Rest of the World" Invoice Region, the
Supplier will work with Marconi in good faith to attempt to agree within
180 days from the Phase 2 Longstop Date:
(a) the appropriate RPI and Average Earnings Index for the largest three
countries within this Invoice Region; and
(b) a weighted average RPI and Average Earnings Index algorithm to
determine the value of the indexed Charges within the Invoice
Regions (the relative weighting assigned to each country will be
subject to an annual review).
31
SCHEDULE 4 - CHARGES CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
(3) In the event that the Parties cannot agree the appropriate indices
and/or weightings pursuant to Paragraph 14.2 (3) the matter shall be
referred to Expert's Decision.
32
SCHEDULE 4 - CHARGES CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
15. FOREIGN EXCHANGE ADJUSTMENTS
(1) Baseline Charges for the "Rest of World" Invoice Region (stated in Pounds
Sterling) are based upon the following conversion rates:
CONVERSION TO GBP CURRENCY COUNTRY
----------------- -------- -------
0.27 BRL ▇▇▇▇▇▇
▇.▇▇▇▇ ▇▇▇ Mexico
▇.▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
0.62 EUR Spain
(2) Where, with regard to any country within the "Rest of the World" Invoice
Region, the conversion rates for the currency applicable to such country
as at the date of invoicing (as that conversion rate is specified in
London Financial Times on the date of invoicing, and in the absence of any
edition on that date, any quality broadsheet newspaper published in London
and reasonably nominated by the Supplier) have changed from those
specified above as at the date of invoicing, the Charge attributable to
such country shall be adjusted by an amount equal to the variation in
conversion rate.
33
SCHEDULE 4 - CHARGES CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
16. RETAINED COSTS AND EXPENSES
Marconi will retain and be responsible for the following costs and
expenses, which have been excluded from the Charges set out in this
Schedule: [***]
34
SCHEDULE 4 - CHARGES CONFIDENTIAL TREATMENT
REQUESTED BY
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇ -
▇▇▇▇▇ ▇▇▇▇▇▇▇ CHARGES BY BUSINESS UNIT
CHARGES FOR HELP DESK AND CALL CENTRE SERVICES
BASELINE CHARGES (MONTHLY)
YR1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10
--- ---- ---- ---- ---- ---- ---- ---- ---- -----
BBRS ($ '000) [***]
NC ($ '000)
Wireless ($ '000)
Total
CHARGES FOR DESKTOP AND SUPPLY SERVICES
BASELINE CHARGES (ANNUAL)
YR1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10 TOTAL
--- ---- ---- ---- ---- ---- ---- ---- ---- ----- -----
BBRS ($ '000) [***]
NC ($ '000)
Wireless ($ '000)
Total
RESOURCE BASELINE
NUMBER OF RESOURCE UNITS
Desktop [***]
BBRS Laptop
Desktop
NC Laptop
Desktop
Wireless Laptop
CHARGES FOR NETWORK SERVICES
NON-USAGE BASED CHARGES
BASELINE CHARGES (ANNUAL)
YR1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10 TOTAL
--- ---- ---- ---- ---- ---- ---- ---- ---- ----- -----
BBRS ($ '000) [***]
NC ($ '000)
Wireless ($ '000)
Total
RESOURCE BASELINE
35
SCHEDULE 4 - CHARGES CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
NUMBER OF RESOURCE UNITS
BBRS NC Wireless Total
---- -- -------- -----
LAN Ports
Voice Ports
RAS Ports
Voicemail Ports
CHARGES FOR APPLICATION SUPPORT SERVICES
BASELINE CHARGES (ANNUAL)
YR1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10 TOTAL
--- ---- ---- ---- ---- ---- ---- ---- ---- ----- -----
BBRS ($ '000) [***]
NC ($ '000)
Wireless ($ '000)
Total
36
SCHEDULE 4 - CHARGES CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
CHARGES FOR APPLICATION DEVELOPMENT SERVICES
BASELINE CHARGES (ANNUAL)
YR1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10 TOTAL
--- ---- ---- ---- ---- ---- ---- ---- ---- ----- -----
BBRS ($ '000) [***]
NC ($ '000)
Wireless ($ '000)
Total
CHARGES FOR DATA CENTRE SERVICES
BASELINE CHARGES (ANNUAL)
YR1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10 TOTAL
--- ---- ---- ---- ---- ---- ---- ---- ---- ----- -----
BBRS ($ '000) [***]
NC ($ '000)
Wireless ($ '000)
Total
RESOURCE BASELINE
NUMBER OF RESOURCE UNITS
BUSINESS UNIT NUMBER OF SERVERS
------------- -----------------
BBRS [***]
NC
Wireless
TOTAL
37
SCHEDULE 4 - CHARGES CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
CHARGES FOR STRATEGY & MANAGEMENT SERVICES
BASELINE CHARGES (ANNUAL)
YR1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR 10 TOTAL
--- ---- ---- ---- ---- ---- ---- ---- ---- ----- -----
BBRS ($ '000) [***]
NC ($ '000)
Wireless ($ '000)
Total
38
SCHEDULE 5 - SERVICE CREDITS CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
SCHEDULE 5
SERVICE CREDITS
1. DEFINITIONS
In this Schedule, the following additional definitions apply, unless
the context otherwise requires:
"GLOBAL POINTS TOTAL" has the meaning given to it in Paragraph 5.2(1)
of this Schedule 5 (Service Credits);
"INVOICE REGIONS" means each of the separate invoice regions specified
in Schedule 4 (Charges), and "INVOICE REGION" means any one of them;
"MONTH OF ACCOUNT" means each calendar month during the term of this
Agreement, commencing on the first day of the first full calendar month
following the end of the True-Up Process;
"REGIONAL POINTS TOTAL" has the meaning given to it in Paragraph 5.2(1)
of this Schedule 5 (Service Credits); and
"SERVICE CATEGORIES" means the service categories into which the IT
Services are classified in the Service Level Agreement, and "SERVICE
CATEGORY" means any one of them.
2. OVERVIEW
2.1 The service credits payable by the Supplier in respect of any and all
breaches of the service levels specified in the Service Level
Agreement, whether incurred during any notice period to terminate this
Agreement or otherwise, shall be calculated in accordance with this
Schedule 5 (Service Credits).
2.2 The service credits and service credit points accrued by the Supplier
for breach of the service levels specified in the Service Level
Agreement shall be calculated separately for each Service Category in
each Invoice Region.
2.3 The total service credits and service credit points accrued by the
Supplier in each Service Category and for each Invoice Region shall be
calculated by the Supplier
1
SCHEDULE 5 - SERVICE CREDITS CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
and reported to Marconi within [***] Business Days after the end of,
and as at, the last day of each Month of Account.
3. CALCULATION OF SERVICE CREDITS
3.1 KEY SERVICE LEVELS
The service levels measured in each Service Category and in each
Invoice Region for the purpose of calculating service credits are
listed in Appendix 1 (the "KEY SERVICE LEVELS").
3.2 WEIGHTING OF KEY SERVICE LEVELS
Each of the Key Service Levels is weighted to reflect the criticality
of those Key Service Levels to the Marconi Group's business.
3.3 CALCULATION OF BASE SERVICE CREDITS
The base service credits payable for each Service Category in each
Month of Account in each Invoice Region shall be calculated as follows:
(a) each of the Key Service Levels shall be measured over the
Month of Account, and actual performance against each of those
Key Service Levels recorded by the Supplier and reported to
Marconi;
(b) a service credit shall be payable in relation to a Key Service
Level where the level of performance achieved by the Supplier
against that Key Service Level falls within one of the service
credit bands "Band1 ([***]%)", "Band2 ([***]%)" or "Band3
([***]%)" (where the level of performance falls into more than
one service credit band, it shall be deemed to fall within the
band yielding the highest percentage credit);
(c) for each Key Service Level, the amount of the service credit
(if any) arising from the Supplier's failure to meet that Key
Service Level ("SERVICE CREDIT (KSL)") shall be calculated as
follows:
[***]
2
SCHEDULE 5 - SERVICE CREDITS CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
(d) the aggregate base service credit (if any) payable in relation
to that Service Category in that Month of Account for that
Invoice Region shall be the sum of the individual amounts
calculated pursuant to Paragraph 3.3(c) for each of the Key
Service Levels within that Service Category for that Invoice
Region.
3.4 CALCULATION OF ADJUSTED SERVICE CREDITS
(1) For each Service Category in each Invoice Region, the aggregate base
service credit (if any) calculated pursuant to Paragraph 3.3(d), shall
be further adjusted as follows:
(a) where service credits have been payable for that Service
Category and for that Invoice Region for each of the preceding
[***]Months of Account, the aggregate base service credit for
the current Month of Account shall be adjusted upwards by
[***](multiplied by [***]);
(b) subject to Paragraph 3.4(2), where no service credits have
been payable for that Service category and for that Invoice
Region for each of the preceding [***]Months of Account, the
aggregate base service credit for the current Month of Account
shall be adjusted downwards by [***](multiplied by [***]).
(2) Where the aggregate base service credit for a Service Category for the
previous Month of Account has been adjusted downwards pursuant to
Paragraph 3.4(1)(b), and service credits are then payable for that
Service Category for that Invoice Region in the current Month of
Account, the downwards adjustment for the previous Month of Account
shall be reversed by adding an amount equal to the amount by which the
previous month's aggregate service credit was reduced to the current
month's aggregate service credit.
3.5 SERVICE CREDIT CAP
The maximum service credit payable by the Supplier across all Service
Categories in an Invoice Region in any Month of Account shall be capped
at [***]percent
3
SCHEDULE 5 - SERVICE CREDITS CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
([***]%) of the total Charges payable for all of those Service
Categories in that Invoice Region in that Month of Account.
3.6 DOUBLE JEOPARDY
Where a single event causes service credits to accrue in relation to
more than one Service Category in an Invoice Region in a single Month
of Account, Marconi shall only be entitled to the largest of the
service credits accrued as a result of that event.
4. PAYMENT OF SERVICE CREDITS
All service credits (the "CREDIT AMOUNT") shall accrue and shall be
paid, at Marconi's discretion, by way of a credit against payment of
Charges otherwise payable after the Month of Account (or in such other
manner as the Parties may agree). If there are any service credits
outstanding on the date of termination of this Agreement, those service
credits shall be paid in cash (together with any applicable VAT) to
Marconi by the Supplier within thirty (30) days after the date of
termination. The parties expressly agree that these payments will not
be tax-affected in the United States.
5. SERVICE CREDIT POINTS
5.1 CALCULATION OF SERVICE CREDIT POINTS
(1) For each Month of Account in each Invoice Region, the value of the
service credit points accrued by the Supplier in that Month of Account
in that Invoice Region, shall be calculated as follows:
(a) for each Service Category in that Invoice Region, the service
credit payable (calculated in accordance with Paragraphs 3.3
and 3.4, but ignoring any cap imposed pursuant to Paragraph
3.5), expressed as a percentage of the monthly Charge for that
Service Category (being a figure between [***] to[***]) shall
be multiplied by the percentage points weighting specified in
the following table:
SERVICE CATEGORY POINTS WEIGHTING (%)
---------------- --------------------
4
SCHEDULE 5 - SERVICE CREDITS CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
Help Desk & Call Centre Services [***]
Desktop & Supply Services [***]
Network Services & Security [***]
Application Services [***]
Data Centre Services [***]
Project Services (apps dev) [***]
TOTAL 100 %
(b) the results of the calculation for each Service Category in
the Invoice Region shall be added together to obtain a single
interim points score across all Service Categories in that
Invoice Region, being a figure in the range [***]to [***];
(c) the interim points score shall be multiplied by ([***]) to
determine the service credit points accrued across all Service
Categories in that Invoice Region in that Month of Account,
being a figure in the range [***] to [***].
5.2 OPERATION OF SERVICE CREDIT POINTS
(1) Service credit points shall accrue both within Invoice Regions
("REGIONAL POINTS TOTAL") and across Invoice Regions ("GLOBAL POINTS
TOTAL"). The value of the Regional Points Total and/or the Global
Points Total accrued by the Supplier from time to time shall be
relevant for determining whether Marconi has the right to terminate
this Agreement or part of it pursuant to Paragraph 5.2(3)(c).
(2) In calculating the Regional Points Total and the Global Points Total
from time to time, account shall only be taken of points accrued in the
immediately preceding [***]Months of Account[***]).
(3) Where at any time within the period to which Paragraph 5.2(2) refers,
the Regional Points Total equals or exceeds [***]points or the Global
Points Total equals or exceeds [***]points, the following shall apply:
(a) Marconi may, by written notice to the Supplier, require the
Supplier within the [***]month period following receipt of
Marconi's notice (the
5
SCHEDULE 5 - SERVICE CREDITS CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
"CURE PERIOD") to diagnose and correct the causes of all
relevant Service Level Agreement breaches;
(b) during the [***]calendar months following the expiry of the
Cure Period ("THE ASSESSMENT PERIOD"), the Parties shall
jointly assess whether the corrective measures taken by the
Supplier during the Cure Period have been effective; and
(c) where the Regional Points Total for any calendar month during
the Assessment Period exceeds [***]points or the Global Points
Total for [***]during the Assessment Period exceeds[***],
Marconi shall be entitled, by notice to the Supplier within
[***]days after the end of the Assessment Period, to
terminate:
(i) this Agreement; or
(ii) that part (or those parts) of this Agreement
corresponding to the Invoice Regions and/or Service
Categories in relation to which the relevant service
credit points giving rise to the right of termination
have been accrued,
with effect from the date stated in the notice.
(4) In the event that Marconi has provided notice to the Supplier of a
"Cure Period" pursuant to Paragraph 5.2(3), but has not terminated this
Agreement pursuant to Paragraph 5.2(3)(c) by the end of the [***] day
period referred to in that Paragraph, the accrued Regional Points Total
and (as applicable) Global Points Total shall be reduced by
[***]percent ([***]%) as at the last day of that [***] day period.
6. GENERAL
6.1 Nothing in this Schedule affects Marconi's other rights to terminate
this Agreement by reason of a material breach or series of persistent
breaches of this Agreement.
6
SCHEDULE 5 - SERVICE CREDITS CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
6.2 The Parties acknowledge that they have spent a considerable amount of
time negotiating the provisions of this Schedule and the service
credits agreed are genuine pre-estimate of damages intended to
compensate Marconi for the damage caused by breaches of the Relevant
SLA without penalising the Supplier, actual damages being difficult to
assess.
7
SCHEDULE 5 - SERVICE CREDITS CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
APPENDIX 1:
KEY SERVICE LEVELS
OVERVIEW
This Schedule outlines the Key Service Levels which will be measure for the
purpose of calculating service credits payable by the Supplier and service
credit points accumulated.
REVIEW OF KEY SERVICE LEVELS DURING TRUE UP
These Key Service Levels have been extracted from the Service Level Agreement
attached as Schedule 1. Accordingly, these Key Service Levels (including the
trigger levels for the Bands at which service credits shall accrue) are subject
to review and validation during the period of the True Up Process and will be
amended/updated by the Parties to reflect changes made to the Service Level
Agreement as a result of that process (in accordance with the process set out in
Clause 5 of this Agreement). In undertaking the review and validation of the Key
Service Levels relating to availability, the Parties will take account of the
degree of architectural resilience required to support those Key Service Levels,
including by reference (where relevant) to industry based standards and
manufacturers stated "meantime between failures" for hardware components.
MEANING OF "AVAILABILITY/DOWNTIME"
References to periods of "availability"/"downtime" in relation to these Key
Service Levels have the corresponding meanings given to them in the Service
Level Agreement.
CALCULATING PERFORMANCE FOR SERVICE COMPRISING MULTIPLE PARTS
Where a Key Service Level refers to a service comprising more than one part, the
actual performance achieved in relation to that Service Level shall be
calculated by taking the arithmetic mean performance of all parts comprising
that service.
8
SCHEDULE 5 - SERVICE CREDITS CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
DEEMED SERVICE CREDITS
If in each of [***]consecutive Months of Account in any Invoice Region and in
relation to any of the Key Service Levels:
(a) the Performance Target for that Key Service Level is not achieved; and
(b) the level of performance achieved does not fall (and is not deemed to
have fallen) within any of the service bands (i.e. Band 1 ([***]%),
Band 2 ([***]%) or Band 3 ([***]%)),
then the level of performance for the [***]of those Months of Account shall be
deemed to be within Band 1 ([***]%) and the provisions of this Schedule 5
(Service Credits) shall apply accordingly.
BASE (UNITED KINGDOM)
HELP DESK SERVICES Band1 Band2 Band3
REF MEASURE PERFORMANCE TARGET [***] [***] [***] WEIGHTING WEIGHTING%
--- ------- ------------------ ----- ----- ----- --------- ----------
[***]
DESKTOP AND SUPPLY SERVICES Band1 Band2 Band3
REF MEASURE PERFORMANCE TARGET [***] [***] [***] WEIGHTING WEIGHTING%
--- ------- ------------------ ----- ----- ----- --------- ----------
[***]
[***] [***]
NETWORK SERVICES & SECURITY Band1 Band2 Band3
REF MEASURE PERFORMANCE TARGET [***] [***] [***] WEIGHTING WEIGHTING%
--- ------- ------------------ ----- ----- ----- --------- ----------
[***]
9
SCHEDULE 5 - SERVICE CREDITS CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
[***] [***]
APPLICATION SERVICES Band1 Band2 Band3
REF MEASURE PERFORMANCE TARGET [***] [***] [***] WEIGHTING WEIGHTING%
--- ------- ------------------ ----- ----- ----- --------- ----------
[***]
DATA CENTRE SERVICES Band1 Band2 Band3
REF MEASURE PERFORMANCE TARGET [***] [***] [***] WEIGHTING WEIGHTING%
--- ------- ------------------ ----- ----- ----- --------- ----------
[***]
10
SCHEDULE 5 - SERVICE CREDITS CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
Sa3 ERP System Availability
(Downtime in minutes) [***] [***] [***] [***]
[***]
Sa4 Application Server Availability
(Downtime in minutes) [***] [***] [***] [***]
[***]
Dc2 Priority 1 - Fix/Workaround [***]
Dc5 Priority 2 - Fix/Workaround
PROJECT SERVICES (APPS DEV) Band1 Band2 Band3
REF MEASURE PERFORMANCE TARGET [***] [***] [***] WEIGHTING WEIGHTING %
--- ------- ------------------ ----- ----- ----- --------- -----------
Pm3 Project Evaluation Report [***] [***]
(Tactical Projects)
11
SCHEDULE 5 - SERVICE CREDITS CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
ITALY
The Key Service Levels for Italy are the same as those listed above in relation
to the United Kingdom, except that in Italy the Key Service Levels for Data
Centre Services shall be replaced with the following:
DATA CENTRE SERVICES
Band1 Band2 Band3
REF MEASURE PERFORMANCE TARGET [***] [***] [***] WEIGHTING WEIGHTING %
--- ------- ------------------ ----- ----- ----- --------- -----------
Mail System Availability
(Downtime in minutes)
[***]
[***]
[***]
[***]
Application Server Availability
(Downtime in minutes)
[***]
12
SCHEDULE 5 - SERVICE CREDITS CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
GERMANY
The Key Service Levels for Germany are the same as those listed above in
relation to the United Kingdom, except that in Germany the Key Service Levels
for Data Centre Services shall be replaced with the following:
DATA CENTRE SERVICES
Band1 Band2 Band3
REF MEASURE PERFORMANCE TARGET [***] [***] [***] WEIGHTING WEIGHTING %
--- ------- ------------------ ----- ----- ----- --------- -----------
Mail System Availability
(Downtime in minutes)
[***]
[***]
[***] [***] [***] [***]
Application Server Availability
(Downtime in minutes) [***] [***] [***] [***]
[***]
[***]
13
SCHEDULE 5 - SERVICE CREDITS CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
UNITED STATES
The Key Service Levels for the United States are the same as those listed above
in relation to the United Kingdom, except that in the United States the Key
Service Levels for Data Centre Services shall be replaced with the following:
DATA CENTRE SERVICES
Band1 Band2 Band3
REF MEASURE PERFORMANCE TARGET [***] [***] [***] WEIGHTING WEIGHTING %
--- ------- ------------------ ----- ----- ----- --------- -----------
Mail System Availability
(Downtime in minutes)
[***]
14
SCHEDULE 5 - SERVICE CREDITS CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
ERP System Availability
(Downtime in minutes) [***] [***] [***] [***]
[***]
Application Server Availability
(Downtime in minutes) [***] [***] [***]
[***]
[***]
15
SCHEDULE 5 - SERVICE CREDITS CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
REST OF WORLD
The Key Service Levels for the "Rest of World" are the same as those listed
above in relation to the United Kingdom, except that in the "Rest of World" the
Key Service Levels for Data Centre Services shall be replaced with the
following:
Band1 Band2 Band3
REF MEASURE PERFORMANCE TARGET [***] [***] [***] WEIGHTING WEIGHTING %
--- ------- ------------------ ----- ----- ----- --------- -----------
Mail System Availability
(Downtime in minutes) [***]
[***]
ERP System Availability
(Downtime in minutes) [***]
[***]
Application Server
Availability
(Downtime in minutes) [***] [***] [***] [***]
[***]
[***]
16
SCHEDULE 5 - SERVICE CREDITS CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
APPENDIX 2
WORKED EXAMPLE
The attached is a worked example of the process of calculating Service Credits
in accordance with the provisions of this Schedule 5 (Service Credits).
The Parties acknowledge that the attached worked example is provide as an
example only and, in the event of any conflict between the worked example and
the other provisions of this Schedule 5 (Service Credits), such other provisions
of this Schedule 5 (Service Credits) shall prevail to the extent necessary to
resolve the conflict.
1. EXAMPLE KEY SERVICE LEVELS & WEIGHTINGS
The table set out below (TABLE 1) is an extract of the Key Service Levels
to be achieved for the Data Centre Services in the United Kingdom.
TABLE 1
DATA CENTRE SERVICES Band1 Band2 Band3
REF MEASURE PERFORMANCE TARGET
--- ------- ------------------
Sa2 Mail System Availability
(Downtime in minutes)
[***]
17
SCHEDULE 5 - SERVICE CREDITS CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
DATA CENTRE SERVICES Band1 Band2 Band3
REF MEASURE PERFORMANCE TARGET
--- ------- ------------------
Sa3 ERP System Availability
(Downtime in minutes) [***] [***] [***] [***]
Sa4 Application Server
Availability
(Downtime in minutes)
Dc2 Priority 1 -
Fix/Workaround
Dc5 Priority 2 -
Fix/Workaround
2. DETERMINATION OF SERVICE CREDIT BANDS
The table set out below (TABLE 2) is a sample record of Service Levels
achieved for the Data Centre Services in the United Kingdom during a
hypothetical Month of Account. The Service Levels achieved are listed in
the first column.
By comparing the Service Levels achieved against the extract of Key
Service Levels in Table 1, we can determine that each of the achieved
service levels falls within the credit band "Band 1", meaning that a
[***]% service credit is payable for those Service Levels.
TABLE 2
REF MEASURE SERVICE LEVELS CREDIT B1 CREDIT B2 CREDIT B3 CREDIT%
ACTUALLY ACHIEVED
--- ------- ----------------- --------- --------- --------- -------
Sa2 Mail System Availability
[***]
18
SCHEDULE 5 - SERVICE CREDITS CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
REF MEASURE SERVICE LEVELS CREDIT B1 CREDIT B2 CREDIT B3 CREDIT%
ACTUALLY ACHIEVED
--- ------- ----------------- --------- --------- --------- -------
Sa3 ERP System Availability
Sa4 Application Server Availability
Dc2 Priority 1 -
Fix/Workaround
Dc5 Priority 2 -
Fix/Workaround
3. CALCULATION OF BASE SERVICES CREDITS
The table set out below (TABLE 3) shows the calculation of the Base
Service Credits for the Data Centre Services in the UK, assuming a monthly
Service Charge of[***].
This is calculated for each Service Level by multiplying the Monthly
Charge by the (Credit Band % )and (Weighting %). The total Service Credit
for the UK
19
SCHEDULE 5 - SERVICE CREDITS CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
Data Centre Services are then calculated by adding up the Service Credits
for each Service Level to arrive at an aggregate Base Service Credit
of[***].
TABLE 3
Monthly Service
Ref Measure Credit Band% Weighting% Charge LK Credit LK
--- ------- ------------ ---------- --------- ---------
Sa2 Mail System Availability
[***]
Sa3 ERP System Availability
Sa4 Application Server Availability
Dc2 Priority 1 -
20
SCHEDULE 5 - SERVICE CREDITS CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
MONTHLY SERVICE
REF MEASURE CREDIT BAND% WEIGHTING% CHARGE LK CREDIT LK
--- ------- ------------ ---------- --------- ---------
Fix/Workaround
Dc5 Priority 2 -
Fix/Workaround
TOTAL L
21
SCHEDULE 5 - SERVICE CREDITS CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
4. CALCULATION OF ADJUSTED SERVICE CREDITS
Finally, the adjusted service credits are calculated by looking at the
previous [***]months.
Where service credits have been payable for that Service Category and for
that Invoice Region for each of the preceding three months, the adjusted
service credit is calculated by multiplying the aggregate base service
level by[***].
Where no service credits have been payable for that Service Category and
for that Invoice Region for each of the preceding [***]months, the
adjusted service credit is calculated by multiplying the aggregate base
service level by [***](provided that if there are service credits payable
in the next month, this will be reversed).
As can be seen in the following table (TABLE 4), although service credits
have been payable in the last [***]months, they have not been payable in
the previous [***]months, therefore no adjustment up is made. Similarly,
as credits have been payable in the previous [***]months, no adjustment
down is made either. Hence, the base service credit remains unadjusted.
TABLE 4
THIS
PREVIOUS MONTHLY MONTHS
ADJUSTED MONTH MONTH MONTH THREE BLIP MONTHS BASE COST OF BASE THIS ADJUSTED
CREDITS -▇ -▇ -▇ STRIKES BLIP ADJUSTER CREDIT LK SERVICE CREDIT MONTH CREDIT LK
------- -- -- -- ------- ---- -------- --------- ------- ------ ----- ---------
Data
Centre
Services [***]
END OF WORKED EXAMPLE
22
SCHEDULE 6 - PROJECT INITIATION PROCEDURE CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
SCHEDULE 6
PROJECT INITIATION PROCEDURE
1. IDENTIFICATION OF PROJECTS BY SUPPLIER
The Supplier will proactively identify and communicate with Marconi any
circumstances that would require a Project under this Agreement.
2. PROJECTS REQUESTS AND EVALUATION REPORTS
2.1 PROJECT REQUESTS BY MARCONI
(1) Marconi may request a new Project at any time, by giving details of the
proposed Project to the Supplier in the form reasonably agreed between the
Parties (or in the absence of agreement, in a reasonable form) (the
"PROJECT REQUEST FORM").
(2) Without limiting Paragraph 2.1(1), each Project Request Form:
(a) shall classify the proposed Project (based upon Marconi's reasonable
estimates and understanding of the proposed Project as the time of
submitting the request) as either:
(i) "SMALL ENHANCEMENT" being a Project where the effort required
to complete it is less than [***] man hours;
(ii) a "MAJOR ENHANCEMENT" being a Project where the estimated
effort required to complete it is [***] or more but less than
[***] man hours;
(iii) a "TACTICAL PROJECT" being a Project undertaken to create a
unique product or service, where either (a) the estimated cost
to complete it is between L[***] and [***] (inclusive); (b)
the estimated effort required to complete it is between [***]
and [***] man hours (inclusive); or (c) the complexity, risk
and impact are "medium" (as reasonably determined by Marconi);
or
1
SCHEDULE 6 - PROJECT INITIATION PROCEDURE CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
(iv) a "STRATEGIC PROJECT", being a long-term/high profile Project
to create a unique product or service, where either: (a) the
estimated cost to complete it is greater than L[***]; (b) the
estimated effort required to complete it is greater than [***]
man hours; or (c) the complexity, risk and impact are
"critical/high" (as reasonably determined by Marconi);
(b) shall indicate the preferred basis on which Marconi wishes the
proposed Project to be priced by the Supplier (for example, pricing
on a time and material basis, pricing on a fixed charge basis or
pricing drawing upon the pool of agreed pre-paid human resources);
and
(c) shall be signed by both a duly authorised representative of Marconi
IT and a duly authorised delegated authority within the relevant
Marconi Group business unit.
2.2 PROJECT EVALUATION REPORT
(1) Where Marconi provides the Supplier with a Project Request Form, the
Supplier shall provide Marconi with an evaluation report (the "PROJECT
EVALUATION REPORT"), free of charge, on the proposed Project promptly, and
in any event, within the following times from receipt of the Project
Request Form, according to the following classification:
(a) for "Small Enhancements", within [***]Business Days;
(b) for "Major Enhancements", within [***]Business Days;
(c) for "Tactical Projects", within [***]Business Days;
(d) for "Strategic Projects", within [***]Business Days,
or according to such other time frames as may be agreed between the
Parties from time to time.
(2) The Project Evaluation Report shall be a high-level report of
approximately one page in length, the purpose of which is to provide
Marconi with a preliminary indication of the feasibility of the proposed
Project and the charges and other
2
SCHEDULE 6 - PROJECT INITIATION PROCEDURE CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
costs relating to its implementation. The Project Evaluation Report shall
address the following (as reasonably applicable):
(a) the feasibility of the proposed Project;
(b) impact on the Services and the Service Levels;
(c) an assessment of any cost implications/benefits;
(d) resource requirements (of both Marconi and the Supplier);
(e) dates of key milestones and likely final implementation date;
(f) an estimate of the charges or charging principle for implementation
of the proposed Project, addressing to the extent reasonably
practicable, the preferred pricing methods proposed by Marconi in
its Project Request; and
(g) the estimated time, costs and/or resources (in man days) for
preparing a fully scoped Schedule of Work in relation to the
proposed Project.
3. CONSIDERATION OF PROJECT EVALUATION REPORT
3.1 CONSIDERATION OF PROJECT EVALUATION REPORT
Marconi shall consider the Project Evaluation Report and shall, within a
reasonable time, notify the Supplier in writing whether or not Marconi
wishes to proceed with the proposed Project in accordance with the Project
Evaluation Report, or whether Marconi requires further information or
changes to the Project Evaluation Report.
3.2 AMENDMENTS TO PROJECT EVALUATION REPORT
The Supplier shall supply such further information to Marconi and/or
reasonably amend the Project Evaluation Report in accordance with
Marconi's reasonable requirements.
3
SCHEDULE 6 - PROJECT INITIATION PROCEDURE CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
4. PROJECT SCHEDULES OF WORK
4.1 REQUEST FOR SCHEDULE OF WORK
Following receipt of a Project Evaluation Report from the Supplier (or, in
the case of a Change to be implemented as a Project, a Change Evaluation
Report), Marconi may request the Supplier in writing to prepare a Schedule
of Work in relation to the proposed Project detailed in that Report, and
the Supplier shall prepare such Schedule of Work within the timeframe
specified in the Project Evaluation Report (or Change Evaluation Report,
as applicable), or in the absence of such specification within a
reasonable time.
4.2 CONTENTS OF SCHEDULE OF WORK
(1) Subject to Paragraph 4.2(2), a Schedule of Work shall address the
following issues (as applicable):
(a) a summary description of the rationale and purpose of the proposed
Project, including an assessment of the impact on the Services and
the Service Levels;
(b) the major steps required to complete the proposed Project, including
whether a business case is to be prepared;
(c) the deliverables to be provided under the proposed Project and,
where practicable, the specifications for each deliverable;
(d) the estimated timeframe for the completion of the Project, including
the date of achievement of each major step and provision of each
deliverable;
(e) a responsibility matrix indicating the activities to be performed by
Marconi, the Supplier or any other party necessary to complete the
proposed Project;
(f) any key staff transfers, additions or reassignments (if any)
associated with the proposed Project;
4
SCHEDULE 6 - PROJECT INITIATION PROCEDURE CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
(g) reasonable estimates of the amount of risk involved with the
proposed Project, the steps to be taken to mitigate such risk, the
key assumptions underlying the Project and any key dependencies;
(h) the proposed reporting mechanisms relating to the Project, including
report structure and frequency;
(i) the charges or charging principle for implementation of the proposed
Project, addressing to the extent reasonably practicable, the
preferred pricing methods proposed by Marconi in its Project
Request;
(j) any agreed liquidated damages payable by the Supplier and the method
in which those liquidated damages will be triggered and/or
calculated;
(k) any agreed warranty period relating to the deliverables to be
provided under the Project;
(l) for Strategic Projects, the notice period for Marconi to terminate
the Schedule of Work without cause, and the compensation payable for
such termination (if any); and
(m) the time period during which the Schedule of Work will remain open
for acceptance.
(2) The Parties acknowledge that for Tactical and Strategic Projects that the
Schedule of Work to be prepared by the Supplier pursuant to Paragraph
4.2(1) shall only be required to address the issues to a level of detail
reasonably required to initiate a Project definition phase in accordance
with Best Industry Practice.
4.3 COST OF DEVELOPING SCHEDULE OF WORK
The first [***]man-days of work associated with the preparation of a
Project Schedule of Work shall be provided by the Supplier free of charge
for each Project, subject to a maximum cap of [***]Project Schedules of
Work per twelve (12) month period. Any agreed work performed by the
Supplier over and above this such first [***]man-days of work (or in
excess of [***]Project Schedules of Work per twelve (12) month period)
shall be chargeable by the Supplier in the
5
SCHEDULE 6 - PROJECT INITIATION PROCEDURE CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
manner agreed between the Parties as part of the Project Evaluation Report
(including by drawing upon the pool of agreed pre-paid human resources,
where available), or in the absence of such agreements, in a reasonable
manner.
4.4 AMENDMENTS TO SCHEDULE OF WORK
The Supplier shall reasonably amend its draft Schedule of Work in
accordance with Marconi's reasonable requirements. The Supplier may make
reasonable changes to the Schedule of Work (including the pricing or
charging aspects) consequent on the amendments requested by Marconi
pursuant to this Paragraph.
5. PROJECT IMPLEMENTATION
5.1 EXECUTION OF SCHEDULE OF WORK
(1) Neither Party shall be required to implement a Schedule of Work until it
has been agreed in writing and signed by each of the authorised
signatories of each of the Parties. In addition, in the case of a Project
which has been initiated through Change Control, the Change Evaluation
Report relating to that Project must also have been agreed in writing and
signed by the Parties prior to implementation of the Schedule of Work
relating to the Change in question.
(2) Where a Schedule of Work relating to a Project which has been initiated
through Change Control cannot be resolved by agreement between the
Parties, after escalation in accordance with the procedures specified in
Clause 26 (Dispute Resolution), and where Marconi cannot reasonably engage
a third party to implement that Project (taking into account the
incremental cost of the Marconi Group going to a third party and any
material adverse impact of doing so on the business of the Marconi Group),
the unresolved matters relating to that Schedule of Work shall be referred
for determination by Expert's Decision. The terms of reference for the
Expert's Decision in such instances shall be as set out in Paragraph 7(2)
of Schedule 9 (Change Control).
5.2 IMPLEMENTATION OF PROJECT
Once a Schedule of Work has been agreed in writing between the Parties,
the Parties shall implement each agreed Schedule of Work:
6
SCHEDULE 6 - PROJECT INITIATION PROCEDURE CONFIDENTIAL TREATMENT
REQUESTED BY
MARCONI CORPORATION PLC
(a) in accordance with the Project Terms;
(b) with reasonable skill and care in a manner consistent with Best
Industry Practice; and
(c) otherwise promptly and diligently.
5.3 NON-IMPLEMENTATION OF PROJECT
If Marconi does not agree to the proposed Project (as specified in the
Schedule of Work), the Services shall continue to be provided in
accordance with this Agreement as if the Project had not been requested.
7
SCHEDULE 7 - PROJECT TERMS
SCHEDULE 7
PROJECT TERMS
1. DEFINITIONS AND INTERPRETATION
The following additional definitions apply in this Schedule 7 (Project
Terms):
"ACCEPTANCE CERTIFICATE" means a written notice that the
Deliverables meet the Acceptance
Criteria;
"ACCEPTANCE CRITERIA" means the acceptance criteria that
are agreed between the parties and
either set forth in the Schedule of
Work or thereafter agreed in writing
between the parties in accordance
with these Project Terms;
"DELIVERABLES" means the deliverables for a Project
set forth in the Schedule of Work;
"DOCUMENT DELIVERABLES" means any Deliverable in documentary
form, other than computer software;
"PROJECT PLAN" means the timetable of activities and
events in connection with the
achievement of a Project, as set
forth in a Schedule of Work or
thereafter agreed in writing between
the Parties; and
"REQUIREMENTS" means the requirements and specifications
for the Deliverables, as set forth in the
Schedule of Work or otherwise agreed
between the Parties in writing.
SCHEDULE 7 - PROJECT TERMS
2. PERFORMANCE OF SCHEDULE OF WORK
2.1 The Supplier will implement the Schedule of Work. Marconi shall provide
such co-operation and assistance as is specified in the Schedule of Work.
2.2 The Supplier shall establish, operate and maintain such administration and
communications procedures and resources as specified in the Schedule of
Work.
2.3 The Supplier will provide such reports as Marconi shall reasonably request
regarding progress. The Supplier shall promptly advise Marconi of anything
in connection with the Project which ought reasonably to be so notified in
accordance with Best Industry Practice, including:
(a) technical problems, obstacles, or possible delays;
(b) circumstances which may, or may reasonably be expected, to entitle
either Party to invoke Change Control; and
(c) any risk of infringement of any Intellectual Property by the
provision of the Project Services in accordance with this Agreement,
and, where applicable, such notice shall be given in advance to enable
Marconi to take any reasonable course of action.
2.4 The Schedule of Work shall not be revised or modified except as agreed by
the Parties in writing. Either party may propose a Change to the Schedule
of Work, which will be dealt with in accordance with Change Control.
3. QUALITY OF THE PROJECT SERVICES AND DELIVERABLES
3.1 Wherever any Project Services consist in designing or specifying any
Deliverable, the Supplier shall in accordance with Best Industry Practice:
(a) make all reasonably relevant enquiries of those Marconi Group
personnel identified by Marconi who have any information relevant to
the Deliverable in question; and
(b) provide all appropriate information to the Marconi Group's personnel
in order to facilitate their responses to those enquiries,
2
SCHEDULE 7 - PROJECT TERMS
and Marconi shall procure that its relevant personnel reasonably
co-operate with the Supplier's relevant enquiries.
3.2 Except to the extent that the failure of the Deliverables to meet the
relevant Requirements has arisen as a direct result of any of the
circumstances listed in Clause 3.1(2) of this Agreement, the Supplier
warrants, represents and undertakes that all Deliverables will
substantially meet their relevant Requirements as set forth in the
Schedule of Work (or as may have been amended through Change Control).
4. TIME FOR PERFORMANCE
4.1 PROJECT PLAN
(1) The Parties shall implement each Project in accordance with the Project
Plan and shall otherwise provide such co-operation and assistance as the
other may reasonably require in connection with each Schedule of Work.
(2) Each Party shall proceed diligently with carrying out its responsibilities
under this Agreement in accordance with each Project Plan and shall use
all reasonable endeavours to complete the work by the dates set out in the
Project Plan, subject to any extensions of time as may be granted in
accordance with the terms of this Agreement.
4.2 DELAY
As soon as it becomes reasonably apparent that the progress of a Project
or any part thereof is being or is likely to be delayed, the Supplier
shall promptly notify Marconi of all the material circumstances, including
the cause or causes of the delay, the actual and/or expected period of
delay and the steps which the Supplier proposes to take and or has taken
to overcome, prevent or minimise such delay.
4.3 LIQUIDATED DAMAGES
Liquidated damages (if any) arising from a delay in the progress of a
Project shall be payable by the Supplier as specified in the Schedule of
Work.
3
SCHEDULE 7 - PROJECT TERMS
5. DOCUMENT DELIVERABLES
5.1 The Supplier shall submit all Document Deliverables to Marconi for
approval (acting reasonably) as against the relevant Requirements.
5.2 Marconi shall promptly notify the Supplier if the Document Deliverables do
not meet the relevant Requirements. If Marconi does not (acting
reasonably) consider that the Document Deliverables meet the Requirements,
it shall reasonably specify the amendments to be made to the Document
Deliverables as against the relevant Requirements, and the Supplier shall
be given a reasonable opportunity to amend the Document Deliverables
accordingly. Marconi shall be deemed to have accepted the Document
Deliverables if it does not respond to the Supplier within [***] Business
Days of having received the Document Deliverables from the Supplier.
5.3 If the Document Deliverables do not materially meet the Requirements (as
reasonably determined by Marconi) by the relevant date stated in the
Project Plan and/or Schedule of Work, or by the end of the reasonable
period given to the Supplier to amend the Document Deliverables pursuant
to Paragraph 5.2, or in the absence thereof, within a reasonable time (and
where such failure has arisen other than as a result of any of the
circumstances specified in Clause 3.1(2)) then Marconi may (without
affecting its other rights) by notice in writing to the Supplier:
(a) extend the period for completion to a reasonable date specified in
the notice, in which case the Supplier shall free of charge seek to
cure the outstanding defects and the Document Deliverables shall be
resubmitted by the Supplier for approval by Marconi in accordance
with this Paragraph 5. At the end of such period, this Paragraph 5.3
shall reapply, so that Marconi may exercise its rights under this
Paragraph 5.3 on successive occasions in its discretion; or
(b) terminate the relevant Project in whole or in part.
4
SCHEDULE 7 - PROJECT TERMS
6. ACCEPTANCE CRITERIA AND TESTING
6.1 DETERMINATION OF ACCEPTANCE CRITERIA
(1) In respect of each Deliverable (other than a Document Deliverable), the
Supplier shall prepare draft acceptance criteria as a Document Deliverable
reflecting the requirements of Paragraph 6.1(2) by the time they are
required in accordance with the Schedule of Work and shall notify Marconi
when they are complete and ready for consideration by Marconi.
(2) The acceptance criteria shall include the testing procedures and criteria
for testing whether or not the Deliverable in question meets the relevant
Requirements, including:
(a) details of the tests to be run and the results which must be
produced if the Deliverable is to be considered to have passed the
tests;
(b) details of the data and data volumes to be used when running the
tests;
(c) the identity of the party who shall undertake the tests; and
(d) any other production criteria which reflect Best Industry Practice.
(3) The acceptance criteria may define different problem categories and
different rules in respect of acceptance for each problem category (e.g.
the acceptance criteria may specify that the existence of "minor problems"
will not prevent the Deliverables from being accepted). Notwithstanding
the foregoing, the Supplier shall, at its cost, correct all failures of
the Deliverables to meet the Acceptance Criteria within a reasonable
period of time.
(4) Once Marconi has approved the draft acceptance criteria in writing, they
shall become the Acceptance Criteria.
6.2 ACCEPTANCE TESTING
(1) Each Deliverable (other than a Document Deliverable) shall be tested in
accordance with the relevant Acceptance Criteria. As soon as reasonably
practicable after completion of the applicable testing, Marconi shall
issue an Acceptance Certificate in respect of the particular Deliverable
if in the reasonable
5
SCHEDULE 7 - PROJECT TERMS
opinion of Marconi the Acceptance Criteria are satisfied in respect of the
Deliverable. Issue of the Acceptance Certificate shall not affect
Marconi's rights under this Agreement or otherwise, except that Marconi
shall not be entitled to reject a Deliverable to the extent that the
Acceptance Criteria have been passed, or an Acceptance Certificate issued,
in respect of that Deliverable.
(2) If the Acceptance Criteria are not so satisfied, Marconi shall notify the
Supplier, specifying any perceived deficiencies; provided that, if
(a) Marconi does not notify the Supplier within a reasonable time and in
any event within [***]Business Days (or such other period that is
agreed in writing between the Parties) after completion of the
acceptance testing that they are not satisfied; or
(b) Marconi puts the relevant Deliverable into productive use other than
for testing or diagnostic purposes;
the Acceptance Criteria applicable to that Deliverable shall be deemed to
have been met (provided that where Marconi only puts part of a relevant
Deliverable into productive use, only that part of the Deliverable shall
be deemed to have been accepted pursuant to this provision).
(3) The Supplier shall be given a reasonable opportunity following receipt of
a notice given under Paragraph 6.2(2) to cure the defects and the
Deliverable shall be re-tested in accordance with the Acceptance Criteria.
(4) If by the date set forth in the relevant Schedule of Work for the
completion of acceptance testing or after re-testing pursuant to Paragraph
6.2(3) (or such other date as has been agreed in writing between the
Parties), the Acceptance Criteria in respect of the Deliverable have not
materially been met (other than as a result of any of the circumstances
specified in Clause 3.1(2) of this Agreement), then Marconi may (without
affecting its other rights) by notice in writing to the Supplier:
(a) extend the period for completion to a reasonable date specified in
the notice, in which case the Supplier shall seek to cure the
outstanding defects and the Deliverable shall be re-tested in
accordance with this Paragraph 6. At the end of such period, this
Paragraph 6.2(4) shall
6
SCHEDULE 7 - PROJECT TERMS
reapply, so that Marconi may exercise its rights under this Paragraph
6.2(4) on successive occasions in its discretion; or
(b) terminate the relevant Project in whole or in part.
7. PROJECT MANAGEMENT
7.1 APPOINTMENT OF SUPPLIER PROJECT MANAGER
The Supplier shall appoint and make available a suitably skilled,
qualified and experienced person to manage the Project (the "SUPPLIER
PROJECT MANAGER").
7.2 APPOINTMENT OF MARCONI PROJECT MANAGER
Marconi shall appoint and make available a suitably skilled, qualified and
experienced person to co-ordinate with the Supplier Project Manager (the
"MARCONI PROJECT MANAGER").
7.3 SUPPLIER PROJECT MANAGER ROLES AND RESPONSIBILITIES
(1) The Supplier Project Manager shall be responsible for:
(a) the day-to-day management of each Project (including ensuring the
progress of the Project in accordance with the agreed Schedule of
Work and Project Plan);
(b) reporting to the Marconi Project Manager on the progress of the
Project;
(c) attending meetings when reasonably required by the Marconi Project
Manager to review the progress of the Project; and
(d) providing all information and documentation reasonably required by
Marconi for proper development of the Project.
7.4 MARCONI PROJECT MANAGER ROLES AND RESPONSIBILITIES
(1) The Marconi Project Manager shall be responsible for:
(a) providing all information and documentation reasonably required
by the Supplier for proper development and implementation of the
Project;
7
SCHEDULE 7 - PROJECT TERMS
(b) attending meetings when reasonably required to review the
progress of the Project; and
(c) making him or herself reasonably available to the Supplier Project
Manager as reasonably required to discuss the progress of the
Project and any problems in relation thereto.
8. REPORTS AND REVIEWS
8.1 REPORTS
(1) The Supplier shall report to Marconi in relation to the status of the
Project in accordance with:
(a) the applicable standards and procedures for such reporting specified
in Schedule 3 (List of Standards and Policies); and
(b) any specific reporting requirements specified in a Schedule of Work.
(2) In addition to any specific reporting requirements required pursuant to
Paragraph 8.1(1), Marconi may from time to time by notice to the Supplier,
require the Supplier to provide a report giving details of the status of
the Project as compared to the Schedule of Work, including the implication
and cost consequences, if any, of the current situation. If the report is
to be reviewed at a meeting between the Supplier and Marconi, the Supplier
shall provide the report at least [***]Business Days before the meeting.
8.2 REVIEWS
(1) The Supplier shall co-operate in the undertaking of reviews with Marconi
in relation to the status of the Project in accordance with:
(a) the applicable standards and procedures for such reviews specified
in Schedule 3 (List of Standards and Policies);
(b) any specific review requirements or mechanisms specified in a
Schedule of Work.
(2) In addition to any specific review mechanisms or requirements required
pursuant to Paragraph 8.2(1), Marconi may from time to time review the
Project
8
SCHEDULE 7 - PROJECT TERMS
("REVIEW") including the progress of the Project as compared to the
Schedule of Work.
(3) Without affecting Marconi's other rights, the Supplier shall implement any
actions agreed between the Parties or reasonably required by Marconi as a
result of the Review.
9. PROJECT TERMINATION
9.1 TERMINATION WITHOUT CAUSE
(1) Marconi may, by written notice to the Supplier, terminate a Schedule of
Work without cause from the expiry of the relevant notice period, which
shall be:
(a) for a Strategic Project (as defined in Schedule 6):
(i) where an agreed notice period is specified in the Project
Schedule of Work, that period of notice (in which case Marconi
shall pay to the Supplier the relevant termination charges (if
any) specified in that Schedule of Work); or
(ii) where a period of notice for termination for convenience is
not specified in the Project Schedule of Work, the period
expiring on the completion of the then next Key Milestone for
the Project; and
(b) for any Project other than a Strategic Project (as defined in
Schedule 6), reasonable notice to the Supplier (in which case no
termination charges shall be payable by Marconi, unless otherwise
expressly specified in the Schedule of Work).
9.2 TERMINATION FOR CAUSE
Either Party may by notice to the other terminate a Schedule of Work as
from the date of service of the notice if the other party commits a
material breach of the Schedule of Work that is not remedied within
[***]calendar days after the non-breaching party has given written notice
requiring such breach to be remedied.
9
SCHEDULE 8 - BLANK
SCHEDULE 8
This Schedule has been intentionally deleted.
1
SCHEDULE 9 - CHANGE CONTROL
SCHEDULE 9
CHANGE CONTROL
1. IDENTIFICATION OF CHANGES BY SUPPLIER
The Supplier will proactively identify and communicate with Marconi any
circumstances that would require a Change under this Agreement.
2. CHANGES REQUESTS AND EVALUATION REPORTS
2.1 CHANGE REQUESTS BY MARCONI
(1) Marconi may request a change to the Services at any time, by giving
details of the proposed change or the additional services as the case may
be (the "CHANGE") to the Supplier in the form reasonably agreed between
the Parties (or, in the absence of agreement, in a reasonable form) (the
"CHANGE REQUEST FORM").
(2) Without limiting Paragraph 2.1(1), each Change Request Form:
(a) shall classify the proposed Change as either:
(i) an URGENT CHANGE, being a Change which would need to be
implemented within one (1) calendar month (or earlier) in
order to limit or avoid a materially adverse impact upon the
Marconi Group's business or the provision of the Services, or
to enable either Party to comply with a legal obligation;
(ii) a NECESSARY CHANGE, being a Change which would be an Urgent
Change, but in respect of which the time required in order to
comply with the obligation is longer than one (1) calendar
month; and
(iii) a DESIRABLE CHANGE, being a Change which is not an Urgent or a
Necessary Change;
(b) shall indicate the preferred basis on which Marconi wishes the
proposed Change to be priced by the Supplier (for example, pricing
on a time and
1
SCHEDULE 9 - CHANGE CONTROL
material basis, pricing on a fixed charge basis or pricing drawing
upon the pool of agreed pre-paid human resource capacity); and
(c) shall be signed by both a duly authorised representative of Marconi
IT and a duly authorised delegated authority within the relevant
Marconi Group business unit.
2.2 CHANGE EVALUATION REPORT
(1) Where Marconi requests a Change the Supplier shall promptly provide
Marconi with an evaluation report (the "CHANGE EVALUATION REPORT"), free
of charge, on the proposed Change, and in any event, according to the
following classification:
(i) for an URGENT CHANGE, within [***]Business Days;
(ii) for a NECESSARY CHANGE, within [***]Business Days; and
(iii) for a DESIRABLE CHANGE, within [***]Business Days,
or according to such other time frames as may be agreed between the
Parties from time to time.
(2) The Change Evaluation Report shall be a high-level report of approximately
one page in length, the purpose of which is to provide Marconi with a
preliminary indication of the feasibility of the proposed Change and the
charges and other costs relating to its implementation. The Change
Evaluation Report shall address the following:
(a) the feasibility of the proposed Change;
(b) impact on the Services and the Service Levels;
(c) an assessment of any cost implications/benefits;
(d) resource requirements (of both Marconi and the Supplier);
(e) dates of key milestones and likely final implementation date;
(f) an estimate of the charges or charging principle for implementation
of the proposed Change and the continued provision of the Services
(as revised in accordance with the Change), addressing to the extent
reasonably
2
SCHEDULE 9 - CHANGE CONTROL
practicable, the preferred pricing methods proposed by Marconi in
its Change Request;
(g) whether the proposed Change should be implemented as a new Project,
and if so, an estimate of any further steps required to prepare a
Project Schedule of Work and the estimated costs/resources for doing
so.
2.3 CHANGE REQUESTS BY SUPPLIER
The Supplier may also propose a Change by preparing (at its cost) a Change
Evaluation Report (addressing, to the extent applicable, the issues set
out in Paragraph 2.2), and providing the same to Marconi for its
consideration.
3. CONSIDERATION OF CHANGE EVALUATION REPORT
3.1 CONSIDERATION OF CHANGE EVALUATION REPORT
Marconi shall consider the Change Evaluation Report and shall, within a
reasonable time, notify the Supplier in writing whether or not Marconi
wishes to proceed with the proposed Change in accordance with the Change
Evaluation Report, or whether Marconi requires further information or
changes to the Change Evaluation Report.
3.2 AMENDMENTS TO CHANGE EVALUATION REPORT
The Supplier shall supply such further information to Marconi and/or
reasonably amend the Change Evaluation Report in accordance with Marconi's
reasonable requirements.
4. CHANGES TO BE IMPLEMENTED AS PROJECTS
4.1 CHANGES TO BE IMPLEMENTED AS PROJECTS
Where the Supplier has identified that a Change should be implemented as a
Project, and Marconi has notified the Supplier that it wishes to proceed
with the proposed Change, the Supplier shall prepare a Schedule of Work
for the proposed Project (and Marconi shall pay the Supplier for the
preparation of that Schedule of Work) in accordance with the provisions of
Schedule 6 (Project Initiation Procedure).
3
SCHEDULE 9 - CHANGE CONTROL
4.2 CHANGE NOT TO PROCEED UNTIL SCHEDULE OF WORK AGREED
Where the Supplier has identified that a Change should be implemented as a
Project, the proposed Change shall not proceed unless and until a Schedule
of Work has been prepared and agreed between the Parties in relation to
the proposed Change in accordance with the provisions of Schedule 6
(Project Initiation Procedure).
5. IMPLEMENTATION OF CHANGES
5.1 EXECUTION OF CHANGE EVALUATION REPORT
If Marconi requests the Supplier to proceed with the proposed Change, then
the duly authorised representatives of both Parties shall execute the
Change Evaluation Report.
5.2 IMPLEMENTATION OF CHANGES
Where a Change Evaluation Report has been executed by the Parties, the
Change shall be implemented in accordance with the Change Evaluation
Report (and where the Change is being implemented as a Project, the
relevant Project Schedule of Work) and the Services, the Project Schedule
of Work and/or the Service Level Agreement shall be amended to reflect the
implementation of the Change.
5.3 NON-IMPLEMENTATION OF CHANGES
If Marconi does not require the Change to be implemented, the Services
shall continue to be provided in accordance with this Agreement as if the
Change had not been requested.
6. PAYMENT OF CHARGES FOR CHANGES
Charges for Changes agreed in a Change Evaluation Report and/or Project
Schedule of Work (as applicable) shall be payable as specified in the
relevant Change Evaluation Report and/or Project Schedule of Work (as
applicable) or, in default of such specification, in accordance with
Clause 4 (the Charges) of this Agreement.
4
SCHEDULE 9 - CHANGE CONTROL
7. RESOLUTION BY EXPERT'S DECISION
(1) Where, following escalation in accordance with the procedures specified in
Clause 26 (Dispute Resolution) of this Agreement, any relevant matters
relating to a proposed Change still cannot be resolved by agreement
between the Parties, and where Marconi cannot reasonably engage a third
party to implement that Change (taking into account the incremental cost
of the Marconi Group going to a third party and any material adverse
impact of doing so on the business of the Marconi Group) the unresolved
matters will be referred for determination by Expert's Decision.
(2) The terms of reference for Expert's Decision shall include a requirement
that his determination shall take into account and accommodate the
following:
(a) the existing commitments of the Supplier;
(b) the lead-time which would be required in order for the Supplier to
implement the proposed Change;
(c) the reasonableness (or otherwise) of the Supplier's proposed
Charges, having regard to any specific factors (including cost
factors) which are applicable to the Supplier;
(d) the financial impact of not implementing the proposed Change upon
the Marconi Group's business;
(e) the criticality of the proposed Change to the Marconi Group's
business;
(f) the cost of investments of the Supplier (or its Approved
Subcontractors) reasonably made for the sole or primary purpose of
providing the Services to the Marconi Group; and
(g) any obligation of the Supplier to make payments under Paragraph 13
of Schedule 4 (Charges).
(3) Marconi will promptly notify the Supplier in writing after completion of
that procedure, whether Marconi agrees to proceed with the proposed
Change.
5
SCHEDULE 10 - PERSONNEL
SCHEDULE 10
PERSONNEL
1. DEFINITIONS
In this Schedule:
"KEY EMPLOYEE" means in the case of Marconi, any Employee who is in a
senior executive, managerial or technical capacity and primarily engaged
in providing the Services and is so described and listed in Schedule 3 of
any Transfer Agreement and in the case of the Supplier or BT, any employee
of the Supplier Group or BT Group who is in a senior executive, managerial
or technical capacity and primarily engaged in providing the Services and
is so described and listed in Schedule 3B of any Transfer Agreement;
"RELEVANT THIRD PARTY" means any third party who takes over the provision
of the Services (in whole or in part) for or on behalf of or in any way in
association with the Supplier or any third party who takes over the
provision of the Services, and in any case, provides services which are
similar, analogous or comparable to the Services; and
"RESERVED EMPLOYEE" means each of (i) in the case of the Supplier, its
Account Executive, Service Delivery Manager, Applications Development
Manager, Chief Architect, Finance Manager, and Commercial Manager, (ii) in
the case of BT, its Business Management Director, Business/Contract
Manager and Chief Architect (Technical/Service Delivery), or (iii) any
other employee of the Supplier Group or BT Group who is a senior
consultant or project manager and who at the time that notice of
termination is given was primarily engaged in providing the Services on an
assignment with a duration of less than three months. The Supplier shall
provide Marconi before Cutover with the names of those persons who will
occupy the positions identified above, and the names of their replacements
thereafter. In the case of (i) and (ii) above a person shall only be a
Reserved Employee if he was employed by the Supplier Group or BT Group on
the Commencement Date of this Agreement.
1
SCHEDULE 10 - PERSONNEL
2. CONTRACT COMMENCEMENT
2.1 The parties acknowledge that the mechanism by which the Employees transfer
to the Supplier Group or BT Group is dealt with by the provisions of
Schedule 2 (Employment Provisions) of the CSC Transfer Agreements or the
BT Transfer Agreements, as the case may be.
3. OBLIGATIONS RELATING TO PROVISION OF SERVICES DURING THE TERM OF THE
AGREEMENT
3.1 Throughout the term of this Agreement, the Supplier shall indemnify
Marconi for and on behalf of the Marconi Group against all Loss incurred
by the Marconi Group arising out of or relating to the engagement,
employment or the termination of the employment or any contractual
arrangement in respect of any employee, worker, agent or contractor who is
or has been engaged or employed to any extent by the Supplier Group or an
Approved Sub-Contractor Group in connection with any part of the Services,
other than Loss caused by or on behalf of the Marconi Group or their
employees or agents.
3.2 The Supplier shall undertake or procure that the Supplier Group shall
undertake:
(a) the recruitment, training and provision of suitably qualified and
skilled individuals to perform the Services and that such
individuals (including the Employees) receive proper training and
instructions in their functions and duties as may be necessary from
time to time;
(b) the observance by the Supplier Group of all relevant health and
safety precautions including those in respect of the Supplier
Personnel and sub-contractors that are required by any applicable
law, rules and regulations of the relevant Country that its workers,
employees, agents or contractors work in and any applicable
collective bargaining agreements, for the protection of itself, its
employees or contractors and visitors to premises under its control;
and
(c) the maintenance of sufficient individuals to carry out the Services,
including the provision of cover for annual or sick leave or other
absences and emergencies.
2
SCHEDULE 10 - PERSONNEL
3.3 (a) The Supplier will ensure that all individuals providing the Services
have contracts if:
(i) he or she was in the employment of the Marconi Group
immediately before Cutover and while so employed had a
contract of employment; or
(ii) this is required to satisfy the requirements of any applicable
law, rules, regulations, and applicable collective bargaining
agreements of the relevant country that its workers,
employees, agents or contractors work in.
(b) The Supplier will use all reasonable endeavours to ensure that all
individuals providing the Services are under an obligation of
confidentiality to both the Supplier and the Marconi Group not to
disclose or use any trade secrets or confidential information
acquired during the course of their employment or engagement, except
in the proper performance of their duties or as required by law.
3.4 The Supplier shall (subject to Applicable Legislation) provide the Marconi
Group with such information about the Key Employees who provide the
Services under this Agreement as may be reasonably required. If, in the
reasonable opinion of the Marconi Group, any such individual should not be
employed to provide the Services, the Supplier Group shall (subject to
Applicable Legislation) at its cost not use such person in connection with
the Services, once informed by the Marconi Group of its decision.
3.5 Subject to the provisions of Paragraph 4, the Supplier agrees that it
shall indemnify Marconi against all Loss incurred or sustained by the
Marconi Group in connection with or as a result of any claim by any
employee, worker, agent or contractor (for the purposes of Paragraph 3.5,
a "RELEVANT PERSON") on the grounds that the contract of employment of any
Relevant Person is alleged to be with the Marconi Group as a result of the
actions or omissions of the Supplier Group or any Approved Sub-Contractors
Group in respect of such Relevant Person, rather than with the Supplier
Group or any
3
SCHEDULE 10 - PERSONNEL
Approved Sub-Contractors Group. If the contract of a Relevant Person is
found to be with the Marconi Group as a result of the actions or omissions
of the Supplier Group or any Approved Sub-Contractors Group in respect of
such Relevant Person, rather than with the Supplier Group or any Approved
Sub-Contractors Group, the Supplier agrees that:
(a) in consultation with Marconi, it will within [***]Business Days of
being requested by Marconi make to that Relevant Person an offer in
writing to employ him or her under a new contract of employment to
take effect upon the termination referred to below; and
(b) such offer of employment will be on terms and conditions which are
overall not less favourable than the terms and conditions of
employment applicable to the Relevant Person as a matter of law;
(c) as soon as possible after the offer made by the Supplier has been
accepted or rejected by that person, and in any event no later than
the expiry of [***]Business Days after an offer has been made in
accordance with Paragraph 3.5(b), the Supplier shall advise Marconi
which of those offers have been accepted or rejected. Marconi shall
or shall procure that the relevant employer of the Relevant Person
shall waive applicable notice periods for any such person who wishes
to accept the Supplier's offer of employment. If the Supplier's
offer of employment is rejected by that person, Marconi shall or
shall procure that the relevant employer of the Relevant Person
shall make that person available to the Supplier for the performance
of the Services for so long as the Supplier may request, and shall
not terminate, other than for cause or where the Supplier no longer
requires the service of such employee, the employment of the person
concerned. The Supplier shall be responsible for and shall indemnify
Marconi for and on behalf of itself and as agent for the member of
the Marconi Group who is the employer of the Relevant Person against
all Loss arising directly or indirectly from (i) the employment of
that Relevant Person from the date the contract of the Relevant
Person is found to be with the Marconi Group (for the purposes of
Paragraph 3.5, the "RELEVANT DATE) until the termination of that
employment unless such Loss was caused by or on behalf of the
Marconi Group; and (ii) the termination of the employment of that
person (including any redundancy pay which shall consist of a
redundancy package equivalent to that which would have been made
available to him or her immediately prior to the
4
SCHEDULE 10 - PERSONNEL
Relevant Date) but not compensation for unfair or wrongful dismissal
or breach of contract. The Supplier shall notify Marconi if the
Supplier no longer requires the service of such employee (a
"CESSATION NOTICE") and Marconi shall or shall procure that the
relevant employer of the Relevant Person commence the legal
termination process of the employment of the Relevant Person. In
such a case the Supplier's indemnity in Paragraph 3.5(c)(i) shall
only continue for a maximum [***]month period (or, where there is a
longer period prescribed by law or by contract or a longer period
necessary to comply with relevant law for the commencement and
completion of the termination process, such longer period) from the
date of its Cessation Notice and shall not include any period when
such employee is providing services for the benefit of the Marconi
Group (other than the Services).
3.6 (a) Save as provided in paragraph 4.1(e) of this Schedule 10 (Personnel)
the Supplier agrees that for six (6) months after the termination of
this Agreement the Supplier Group will not (except with the prior
written consent of the Board of Directors of Marconi) directly or
indirectly do or attempt to entice, induce or encourage those Key
Employees who are not Reserved Employees (who become employees of
any member of the Marconi Group or a Relevant Third Party) to leave
or seek to leave his or her position for the purpose of taking up
employment with the Supplier Group or BT Group provided that any
recruitment advertising (other than advertising which is
specifically targeted at the relevant employees) will not be deemed
to be direct or indirect enticement, inducement or encouragement for
the purposes of this paragraph.
(b) Marconi agrees that for six (6) months after the termination of this
Agreement the Marconi Group will not (except with the prior written
consent of the Board of Directors of the Supplier) directly or
indirectly do or attempt to entice, induce or encourage those Key
Employees of the Supplier Group or its Approved Sub-Contractors
Groups who do not become employees of any member of the Marconi
Group or the Reserved Employees to leave or seek to leave his or her
position for the purpose of taking up employment with the Marconi
Group provided that any recruitment advertising (other than
advertising which is specifically
5
SCHEDULE 10 - PERSONNEL
targeted at the relevant employees) will not be deemed to be direct
or indirect enticement, inducement or encouragement for the purposes
of this paragraph.
3.7 During the term of this Agreement, and save as contemplated in any
Transfer Agreement:
(a) the Supplier Group shall not, and shall procure that the Approved
Sub-Contractors Groups shall not, actively solicit employees who
remain in the employment of the Marconi Group after the relevant
Cutover provided that any recruitment advertising (other than
advertising which is specifically targeted at the relevant
employees) will not be deemed to be direct or indirect enticement,
inducement or encouragement for the purposes of this paragraph; and
(b) the Marconi Group shall not actively solicit employees who remain in
the employment of the Supplier Group or its Approved Sub-Contractors
Groups after the relevant Cutover provided that any recruitment
advertising (other than advertising which is specifically targeted
at the relevant employees) will not be deemed to be direct or
indirect enticement, inducement or encouragement for the purposes of
this paragraph.
4. OBLIGATIONS ON ENDING OF SERVICES
4.1 On the expiry or termination (in whole or in part) by Marconi pursuant to
Clause 13.1 (Termination without Cause), Clause 13.4 (Change of Control)
or Clause 20 (Force Majeure) or, by the Supplier, pursuant to Clause 13.2
(Termination for Cause) or by either party pursuant to Clause 13.3
(Insolvency Events) of this Agreement, the following provisions shall
apply:
(a) if the Regulations, European Regulations or South African Law (as
defined in the Transfer Agreements) apply to the Employees and/or
those employees of the Supplier Group or BT Group who are primarily
engaged in providing the Services (or, in the case of a partial
termination, those Employees and/or those employees who are
primarily engaged in providing that part of the Services to which
such partial termination relates) (other than the Reserved
Employees) (together "SERVICE PROVIDING EMPLOYEES") upon such
termination or expiry, those Service
6
SCHEDULE 10 - PERSONNEL
Providing Employees will become employees of Marconi or a member of
the Marconi Group or a Relevant Third Party in accordance with the
Regulations, European Regulations or South African Law. (For the
purposes of the definition of Service Providing Employees, an
employee is regarded as "primarily engaged" in providing the
Services if the employee spends [***]or more of his or her time
engaged in providing the Services);
(b) if the Regulations, European Regulations or South African Law (as
defined in a Transfer Agreement) do not apply, Marconi shall (for
itself or for any member of the Marconi Group) or shall procure that
a Relevant Third Party make an offer to each Service Providing
Employee (as defined in paragraph 4.1(a) above) [***]("TOTAL
EMPLOYEES") at the date of this Agreement) (other than those
employees under notice of termination of employment for reasons not
connected with the circumstances anticipated in this paragraph 4.1)
to employ him or her under a new employment relationship to commence
immediately on the date of the expiry or termination of this
Agreement in accordance with the circumstances anticipated in this
paragraph 4.1 (the "END DATE");
(c) the offer to be made will be such that the provisions of the new
employment relationship offered by Marconi (whether on its own
behalf or on behalf of any member of the Marconi Group or a Relevant
Third Party) will:
(i) in the case of the Total Employees, be overall, not less
favourable to the corresponding provisions of his or her
employment relationship as existing immediately prior to the
relevant Cutover, subject to such changes as are made in
respect of the Total Employees and other Supplier Group and BT
Group employees in the ordinary course of business; and
(ii) in the case of other Service Providing Employees, be overall,
not less favourable than the corresponding provisions of such
employee's contracts of employment prior to the Protected
Period (as defined in Paragraph 4.4, below) provided that such
contracts of employment shall be on terms which are
commensurate with those of other employees of the Supplier
Group or BT Group;
7
SCHEDULE 10 - PERSONNEL
(d) if an employee to whom an offer is made pursuant to paragraph
4.1(b) wishes to accept such offer of employment then the
Supplier shall or shall procure that the relevant member of
the Supplier Group or BT Group shall waive the requirement on
the employee concerned to give any period of notice of
termination of his or her employment under the terms of his or
her employment so as to allow the employee to commence
employment with Marconi or any member of the Marconi Group or
a Relevant Third Party on the End Date;
(e) (i) if an employee to whom an offer is made pursuant to
paragraph 4.1(b) refuses such an offer of employment,
the Supplier shall, if requested to do so by the Marconi
Group (whether on its own behalf or on behalf of a
Relevant Third Party) endeavour to redeploy such
employee provided that such endeavours shall not cause
the Supplier to incur costs in excess of those which
would reasonably be incurred in any redeployment
process. Any such redeployment shall be deemed to take
effect from the End Date;
(ii) if, despite the Supplier's endeavours to redeploy such
employee, the employee cannot be redeployed by the
Supplier, the Supplier or the relevant member of the
Supplier Group or BT Group may, after the Supplier has
notified Marconi in writing of the intention to do so,
commence the legal termination process of the employment
of the employee concerned; and
(iii) Marconi's [***]shall [***]indemnify the Supplier for and
on behalf of the Supplier Group and BT Group as regards:
(aa) the redundancy payments made by the Supplier or
the relevant member of the Supplier Group or BT
Group in respect of such employees[***] ; and
(bb) the cost of employment of such employee from the
End Date until the termination of that employment
for a maximum [***]month period (or where there is
a longer period prescribed by law or by contract
for commencement and completion of the termination
process, such longer
8
SCHEDULE 10 - PERSONNEL
period) but shall not include any period when such
employee is providing services for the benefit of
a member of the Supplier Group or BT Group.
4.2 (a) On termination by Marconi pursuant to Clause 13.2 (Termination for
Cause) of this Agreement, if the Regulations, European Regulations
or South African Law do not apply upon such termination, the
Supplier will co-operate and will procure the co-operation of any
relevant member of the Supplier Group or BT Group in allowing
Marconi or a member of the Marconi Group (whether on its own behalf
or on behalf of a Relevant Third Party) to make offers to those
Service Providing Employees in providing the Services whom Marconi
in its sole discretion requires to provide any member of the Marconi
Group (whether on its own behalf or on behalf of a Relevant Third
Party) with the Service on an on-going basis. On termination by
Marconi pursuant to Clause 13.2 (Termination for Cause) of this
Agreement, the provisions of paragraph 4.1(a) shall apply to the
extent the Regulations, European Regulations or South African Law do
apply upon such termination.
(b) If this Agreement is terminated by Marconi pursuant to Clause 13.2
(Termination for Cause) and Marconi, any member of the Marconi Group
or a Relevant Third Party is obliged by operation of law to employ
any of the Service Providing Employees and, as a consequence the
costs to the Marconi Group of procuring the Services on an on-going
basis exceeds the costs which the Marconi Group would have incurred
in the absence of such obligation then the Supplier shall indemnify
Marconi for and on behalf of the Marconi Group for the amount of
such excess. Marconi shall and shall procure that the Marconi Group
use reasonable endeavours to mitigate the amount of such excess. For
the avoidance of doubt the amount of any indemnity paid by the
Supplier to Marconi under this paragraph 4.2(b) shall be subject to
the limits of the Supplier's liability as set out in Clause 19.1
(Liability) of this Agreement.
4.3 (a) The Supplier will indemnify Marconi for and on behalf of the Marconi
Group (whether on its own behalf or on behalf of a Relevant Third
Party) against any Loss incurred or sustained by the Marconi Group
or a Relevant Third Party arising out of or attributed to any act or
omission by
9
SCHEDULE 10 - PERSONNEL
the Supplier or a sub-contractor prior to the End Date in relation
to the employment or the termination of employment of any employee,
worker, agent or contractor who is or has been employed to any
extent in providing the Services or any part of the Services at any
time.
(b) The Supplier will indemnify Marconi for and on behalf of the Marconi
Group against any Loss of the Marconi Group or a Relevant Third
Party arising out of or relating to the employment of any of the
Reserved Employees on or after the End Date unless such Loss arises
from the actions or omissions of Marconi save that Marconi's
agreement that the Reserved Employees shall not transfer to Marconi
or any member of the Marconi Group or a Relevant Third Party shall
not constitute an act or omission of Marconi.
(c) Marconi shall indemnify the Supplier for and on behalf of the
Supplier Group and BT Group in respect of:
(i) any act or omission or obligation or liability of the Marconi
Group or Relevant Third Party before or after the date on
which the Service Providing Employees become employed by the
Marconi Group or Relevant Third Party (as the case may be)
pursuant to paragraph 4.1, relating to the employment or
termination of employment of such Service Providing Employees
who become so employed, unless such act or omission or
obligation or liability was caused by or on behalf of the
Supplier Group or BT Group (as the case may be);
(ii) any substantial changes to the terms of the employment of any
of those Service Providing Employees who become employed by
the Marconi Group or Relevant Third Party pursuant to
paragraph 4.1, to their detriment which are made, proposed or
anticipated to take effect after the date on which such
Service Providing Employees become so employed and any change
in the identity of their employer which is a significant
change and to their detriment; or
(iii) any breach by the Marconi Group or a Relevant Third Party of
Regulation 10(3) of the Regulations or equivalent provisions
under
10
SCHEDULE 10 - PERSONNEL
Applicable Legislation.
4.4 The Supplier shall not and shall procure that the Supplier Group and all
Approved Sub-Contractors Groups shall not, without the prior written
consent of Marconi (not to be unreasonably withheld):
(a) if a notice of termination of this Agreement is served for any
reason then, with effect from the date on which such notice is
given, until the date of termination of this Agreement; or
(b) from a date six months before the expiry of this Agreement by
effluxion of time then from that date until the date of expiry or
termination of this Agreement
(the "PROTECTED PERIOD") carry out a Prohibited Act (as defined below) in
relation to an individual who is or would be employed by the Supplier
Group or any Approved Sub-Contractor Group (other than a Reserved
Employee) and such employee is or would be primarily engaged in providing
the Services at the time that such notice of termination is given or (for
the purposes of sub-Paragraph (ii)) such date is reached (a "RELEVANT
EMPLOYEE").
The Prohibited Acts are:
(i) the termination of the employment of any Relevant Employee for any
reason whatsoever other than for cause, where such employee has
engaged in unlawful conduct or such employee's voluntary
resignation;
(ii) the material alteration or change in any way of any terms and
conditions of employment of any Relevant Employee (whether with or
without the consent of such Relevant Employee) other than giving
effect to any pre-existing contractual obligations to any such
individual or the pay review or other changes which apply to the
employees of the Supplier Group or Approved Sub-Contractor Group
generally;
(iii) the recruitment (except as a replacement for an employee whose
employment is terminated and where the replacement is being
recruited on terms which are not materially better than the terms of
the employee being replaced) of any employee to provide any part of
the Services except
11
SCHEDULE 10 - PERSONNEL
where Marconi's prior consent has been given, in which case such an
employee will be deemed to be a Relevant Employee; and
(iv) the relocation or assignment to new duties of any Relevant Employee.
4.5 The Supplier shall, during the Protected Period deliver to Marconi
promptly on request and in any event within four weeks of such request
details of terms and conditions of the Relevant Employees and their
benefits (including bonuses), whether contractual or discretionary,
working arrangements relating to shift patterns and hours worked and a
skills database for each employee detailing the task or skill for which
the employee has been trained during this Agreement. It is expressly
acknowledged that Marconi can pass such information on to any prospective
Relevant Third Party. This paragraph shall be subject to compliance with
any applicable law or regulation. If the provisions of that law or
regulation prohibit full compliance with this paragraph then the Supplier
shall take all such steps as it can lawfully undertake to ensure as full
compliance as possible with this Paragraph. Marconi shall obtain
appropriate confidentiality undertakings from such Relevant Third Party in
relation to the handling of information relating to the employee.
4.6 Following the date of expiry or termination of this Agreement, however it
arises, the Supplier shall deliver promptly or procure the delivery to
Marconi or the Relevant Third Party which Marconi notifies the Supplier is
taking over the Service(s) copies of all available personnel and
employment records (including national insurance and PAYE records),
including full particulars of:
(a) each Service Providing Employee who becomes employed by a member of
the Marconi Group or a Relevant Third Party (a "TRANSITIONING
EMPLOYEE"), including name, sex, and the date on which continuity of
employment began for each Transitioning Employee for statutory
purposes;
(b) standard terms and conditions of employment of each Transitioning
Employee;
(c) all payments, benefits or changes to terms and conditions of
employment promised to any Transitioning Employee;
12
SCHEDULE 10 - PERSONNEL
(d) dismissals (other than voluntary redundancies) of Transitioning
Employees or termination of employment effected within the twelve
(12) months prior to the date of expiry or termination of this
Agreement and disciplinary records relating to Transitioning
Employees;
(e) all agreements or arrangements entered into in relation to the
Transitioning Employees between the Supplier or any relevant
sub-contractor or relevant employer and any trade union or
association of trade unions or organisation or body of employees
including elected representatives; and
(f) all strikes or other industrial action (other than insignificant
industrial action) taken by any Transitioning Employee within the
twelve (12) months prior to the date of expiry or termination of
this Agreement.
This paragraph shall be subject to compliance with any applicable law or
regulation. If the provisions of that law or regulation prohibit full
compliance with this paragraph then the Supplier shall take all such steps
as it can lawfully undertake to ensure as full compliance as possible with
this paragraph.
4.7 The Supplier shall indemnify Marconi for and on behalf of the Marconi
Group, on demand against all Loss arising out of any claim by any trade
union, works council, staff association, worker representative (whether or
not recognised by the Supplier Group or Approved Sub-Contractor Group) or
employee in respect of all or any of the employees working in the
provision of the Services, arising out of a failure or alleged failure by
the Supplier Group or Approved Sub-Contractor Group to comply with its
legal obligations to consult under any applicable law or regulation.
4.8 This paragraph 4 shall survive termination (in whole or in part) or expiry
of this Agreement however it arises and whether or not either Party is in
default of this Agreement.
4.9 The determination for purposes of this paragraph 4 as to whether the
Regulations, European Regulations or South African Law would or would not
apply upon expiry or termination (in whole or in part) of this Agreement,
shall be made as soon as possible after the commencement of the Protected
Period. If the Parties have not jointly made this determination within two
weeks of the commencement of the Protected Period the dispute shall be
referred for resolution to a senior
13
SCHEDULE 10 - PERSONNEL
employment lawyer of at least ten (10) years' qualification in the
appropriate jurisdiction and in the event that such a lawyer cannot be
agreed between the parties to a replacement lawyer appointed by the
President of the Law Society. The costs of such referral shall be
apportioned equally between the parties.
5. BT TRANSFERRING EMPLOYEES
5.1 The Supplier undertakes to enter into an agreement with BT which protects
Marconi and each member of the Marconi Group to the extent provided for in
this Schedule 10 of this Agreement (Personnel) and, to the extent that the
Supplier fails to do so, the Supplier will indemnify Marconi for and on
behalf of the members of the Marconi Group who are the employers of the
Employees (as defined in Schedule 3 of a BT Transfer Agreement) in respect
of any act or omission or obligation or liability before or after the
relevant Cutover relating to the employment or remuneration of the
employment of any of such Employees on the same terms as provided in this
Schedule 10 (Personnel).
5.2 The Supplier may assign to BT the benefit of the provisions of this
Schedule 10 (Personnel) which apply to the BT Group including those which
extend to losses suffered by the BT Group.
14
SCHEDULE 11 - PROPERTY
SCHEDULE 11
PROPERTY
1. SITES
1.1 The provisions of this Paragraph 1 shall apply to the Supplier and
Approved Sub-Contractors and references to Supplier Personnel shall be
construed as including references to the personnel of any Approved
Sub-Contractor.
1.2 Marconi shall grant the Supplier at all reasonable times and in a
timely manner access to the Non-Licensed Sites as invitees as may be
necessary for the provision of the Services.
1.3 The following provisions shall apply in relation to all the Sites:
(a) Marconi may, acting reasonably and properly, refuse to admit,
or order the removal of any Supplier Personnel whose behaviour
or conduct at the time he or she is seeking admittance to, or
is present on, the Site renders that person unfit to be on the
Site and action taken under this Paragraph 1.2 shall be
confirmed in writing to the Supplier and shall not relieve the
Supplier of its obligations under this Agreement;
(b) the Supplier shall take reasonable care to ensure that, in the
performance of the Services at any Site, it does not interfere
to any material degree with the operations of the Marconi
Group, its employees, agents or any other contractors;
(c) the Supplier shall comply with all reasonable and proper
directions issued by Marconi relating to the Supplier's access
to the Sites and in particular (but without prejudice to the
foregoing) any such directions issued by Marconi relating to
security at the Sites provided that the Supplier shall not be
required to comply with any such directions where to do so
would require it (or any members of the Supplier Group or
Approved Subcontractors) to breach any Applicable Legislation;
1
SCHEDULE 11 - PROPERTY
(d) except as may otherwise be agreed between the Parties, the
Supplier shall use all reasonable endeavours to procure that
none of the Supplier Personnel do any act or omit to act at
the Sites other than in connection with the provision of the
Services;
(e) the fixtures and fittings provided by Marconi shall at all
times remain the property of Marconi;
(f) the Supplier shall not provide or carry out any work involved
in the provision of services to any company other than the
Marconi Group from the Sites;
(g) the Supplier shall take every care to ensure that it does not
on or in the vicinity of the Sites do any act or thing which
shall cause any damage or inconvenience to the Marconi Group,
their employees, agents or any other contractors and where any
such damage is caused, the Supplier shall forthwith make good
that damage at its own expense and will indemnify and keep
indemnified Marconi in respect of the direct costs of such
making good; and
(h) Marconi shall procure that the Sites are a safe working
environment for Supplier Personnel who access the Sites as
permitted pursuant to this Schedule 11 (Property).
2. OCCUPATION OF LICENSED SITES
2.1 Marconi shall at its own expense provide to the Supplier sufficient
accommodation and facilities (including utilities, air-conditioning and
UPS etc) of a sufficient standard as may be reasonably required by the
Supplier in order to provide the Services.
2.2 The Supplier shall:
(a) not use the Licensed Sites other than for the provision of the
Services;
(b) immediately report all incidents relating to the safety,
security or operation of the Licensed Sites to Marconi;
2
SCHEDULE 11 - PROPERTY
(c) keep and maintain the Licensed Sites and each and every part
of them used by the Supplier in a neat and tidy condition and
free from any offensive or noisome matter or thing whatsoever
and not to commit any waste or make any addition or alteration
to the Licensed Sites;
(d) not to cause or permit to be done any act or thing which might
cause damage to any fixtures, fittings and furniture belonging
to the Marconi Group and which the Supplier is permitted to
use in the Licensed Sites;
(e) not do or cause or permit to be done any act or thing at the
Licensed Sites which might be or become a nuisance or
inconvenience or cause damage or annoyance to the Marconi
Group or other persons or which may infringe any statutory
rule order or regulation for the time being in force;
(f) not knowingly do or bring or cause or permit to be done or
brought any matter or thing upon the Licensed Sites or any
part of them by reason or in consequence of which the rights
of the Marconi Group under any policy of insurance in respect
of the Licensed Sites or either of them would or might be
prejudicially affected;
(g) permit the agents or servants of Marconi or any other person
authorised by Marconi from time to time and upon reasonable
notice to inspect any area of the Licensed Sites which is
occupied by the Supplier for the purpose of ascertaining
whether the provisions of this Paragraph 2 are being
faithfully kept, observed and performed;
(h) not make any alterations or additions of any nature whatsoever
at the Licensed Sites;
(i) if for whatever reason Marconi requires the Supplier to vacate
any of the Licensed Sites Marconi shall give a reasonable
period of written notice to the Supplier, and, subject to
Paragraph 2.5 of this Schedule 11, vacate the relevant
Licensed Site prior to the expiry of that notice period and in
vacating the relevant Licensed Site the Supplier shall comply
with the provisions of Paragraph 2.2 (m) of this Schedule
11(Property);
(j) without prejudice to the provisions of Paragraph 2.2(i) above
and subject to Paragraph 2.5 of this Schedule 11, vacate any
of the Licensed Sites as
3
SCHEDULE 11 - PROPERTY
soon as reasonably practicable upon written demand by Marconi
if Marconi reasonably and properly considers that the
continued occupation of the relevant Licensed Sites may result
in Marconi's landlord at the relevant Licensed Site taking
proceedings for forfeiture of the lease under which Marconi
holds (inter alia) the relevant Licensed Site for breach of
the alienation provisions of the lease or otherwise in respect
of any breach of covenant or obligation under such lease;
(k) not exclude or impede Marconi or any other occupier from
lawful access to the Licensed Sites nor exclude, impede or
interfere with Marconi's continuing rights of possession,
occupation and control of the whole of the premises of which
the Licensed Sites form part;
(l) not do or permit to be done any act or thing which would
(other than the entering into of this Agreement) constitute a
breach of the covenants on the part of the tenant and the
conditions contained in the leases under which Marconi holds
the various premises of which the Licensed Sites form part;
(m) in the event of termination of this Agreement for whatever
reason be responsible for removing from the Licensed Sites or
part thereof any items belonging to the Supplier such removal
to be under the supervision of Marconi's personnel and in the
event of failure to remove all such items within [***]weeks
after termination of this Agreement Marconi shall have the
right to remove and dispose of any such items in any manner
which it thinks fit and to leave the Licensed Sites clean and
tidy;
(n) not assign sublet part with or share possession of the
Licensed Sites nor in any way deal with the benefit of any
entitlement of which the Supplier may have under the
provisions of this Paragraph 2 all of which are a personal
arrangement between Marconi and the Supplier save as permitted
by Clause 12 (Property and Personnel) of this Agreement;
(o) not at any time without Marconi's prior written consent fix to
or exhibit on the Licensed Sites or display anywhere in the
Licensed Sites any placard, sign, notice, fascia board or
advertisement;
4
SCHEDULE 11 - PROPERTY
(p) not provide or carry out any work involved in the provision of
services to any company other than the Marconi Group from the
Licensed Sites;
(q) whenever required to leave any of the Licensed Sites ensure
that all the Supplier's equipment and belongings are removed
from the relevant Licensed Site and that the relevant Licensed
Site is left clean and tidy and where the removal of any items
belonging to the Supplier has caused any damage to the
relevant Licensed Site, make good forthwith any such damage
and indemnify and keep indemnified Marconi for and on behalf
of members of the Marconi Group in respect of any costs,
expenses or liabilities of whatsoever nature incurred by it or
them arising out of such damage; and
(r) acknowledge that this is an occupational licence and the
relationship of landlord and tenant shall not arise between
the Parties.
2.3 If the Supplier shall fail materially to observe and perform any of the
agreements and undertakings on its part contained in this Schedule 11
in relation to any of the Licensed Sites then Marconi may by notice in
writing served upon the Supplier require the Supplier to remedy any
such failure within fourteen (14) days and if the Supplier shall not
within that period of fourteen (14) days remedy such failure, Marconi
may determine the licence in relation to the relevant Licensed Site and
the Supplier shall thereupon forthwith vacate the relevant Licensed
Site and remove therefrom all things belonging to the Supplier and the
provisions of Paragraph 2.2 (m) of Schedule 11 shall apply. Any Changes
to the Services required as a result of the operation of this Paragraph
2.3 shall be dealt with through Change Control (provided that they
shall not result in any increase to the Charges).
2.4 If at any time Marconi, in its reasonable discretion, requires the
Supplier to enter into leases or sub-leases (as the case may be) of any
of the Licensed Sites, then Marconi and the Supplier shall each use all
reasonable endeavours to agree the terms of any such leases or
sub-leases on terms that are commensurate with the respective
responsibilities and liabilities of the parties under this Schedule 11
and both Parties shall act reasonably and expeditiously in so doing.
5
SCHEDULE 11 - PROPERTY
2.5 In the event that the Supplier is required to vacate any of the
Licensed Sites pursuant to Paragraphs 2.2(i), 2.2(j) or 2.2(k) of this
Schedule 11 or otherwise, Marconi shall at its own expense provide the
Supplier with sufficient alternative accommodation and facilities
(including utilities, air-conditioning and UPS etc) of a sufficient
standard to enable the Supplier to be able to provide the Services and
the Supplier shall not be liable or responsible for any interruption in
the provision of the Services to the extent to which such interruption
is caused directly or indirectly by such vacation or by the re-location
of the Supplier to the alternative accommodation Provided That the
Supplier shall use all reasonable endeavours to ensure that there is no
interruption in the provision of the Services during such vacation or
re-location and that where there is any such interruption it shall be
remedied as quickly as is reasonably practicable. Associated relocation
costs shall be for Marconi's account and shall be agreed in accordance
with Schedule 9 (Change Control).
2.6 In the event that the Supplier is required to vacate any of the
Licensed Sites pursuant to Paragraph 2.3 of this Schedule 11, Marconi
shall at the expense of the Supplier provide the Supplier with
sufficient alternative accommodation and facilities (including
utilities, air-conditioning and UPS etc) of a sufficient standard to
enable the Supplier to be able to provide the Services and the Supplier
shall ensure that there is no interruption in the provision of the
Services during such vacation or re-location of the Supplier to the
alternative accommodation Provided That where any such interruption
occurs the Supplier shall use all reasonable endeavours at its own cost
to ensure that any such interruption is remedied as quickly as is
reasonably practicable.
6
SCHEDULE 12 - AUDIT
SCHEDULE 12
AUDIT
1. ACCESS TO PREMISES, DATA AND STAFF
1.1 Subject always to Paragraphs 1.3 and 1.5 and for the purposes shown in
Paragraph 2, the Supplier shall permit, or shall procure that the
relevant member of the Supplier Group shall permit:
(a) the Marconi Group's personnel and authorised agents and
representatives;
(b) the Marconi Group's auditors (internal and external, and
whether financial, qualitative or otherwise) or consultants,
subject to the prior approval of the Supplier (such approval
not to be unreasonably withheld or delayed); and
(c) any other person to whom the Marconi Group is required legally
to provide the same,
with access to its property, personnel, documents, records, systems,
processes and procedures as is reasonably necessary or required by law
for the purposes of carrying out the audit functions described in this
Schedule, including for the purpose of providing reasonable assistance
in understanding or interpreting information to which the Marconi Group
has access under this Schedule. Except in relation to audits for the
purposes shown in Paragraphs 2.1(b) and 2.1(c), the Supplier will not
be required to provide such access more than once in any consecutive
twelve (12) month period, in any single site or location.
1.2 The Supplier shall nominate a contact person for any audit who shall be
the central communication point and organiser for the performance of
the Supplier's responsibilities under this Schedule.
1.3 Marconi shall, or shall procure that, the relevant member of the
Marconi Group shall provide no less than ten (10) Business Days (unless
the access is required in response to a breach of the Supplier's
obligations) notice to the Supplier stating the audit dates, scope of
the audit and auditors.
1
SCHEDULE 12 - AUDIT
1.4 Marconi shall, or shall procure that, the relevant member of the
Marconi Group shall use reasonable endeavours to:
(a) ensure that the numbers of individuals are kept to a
reasonable level, such that they will not deflect the Supplier
from meeting its obligations under this Agreement and to the
extent that the failure to meet the Service Levels is solely
attributable to the performance of the audit, the Supplier
shall have no liability in relation thereto unless the audit
is being carried out in response to a breach of the Supplier's
obligations; and
(b) ensure that the individuals performing the audit comply with
security or other site regulations pertaining to any relevant
Supplier (or Authorised Sub-contractor) premises.
1.5 No agent, representative, auditor or other person may be appointed
under Paragraph 1.1 unless that appointee is subject to duties of
confidentiality no less stringent than the provisions of Clause 16
(Confidentiality) except where and to the extent that such duties would
impede any legal or regulatory duty to which the appointee is subject
in connection with or which relates to the audit.
1.6 Marconi shall, and shall procure that its agents, representatives,
auditors and other persons appointed under Paragraph 1.1 shall, use the
access granted and the information obtained pursuant to this Schedule
12 (Audit) only for the purposes specified in Paragraph 2.1.
2. PURPOSES
2.1 The purposes to which Paragraph 1 refers for which the access referred
to in that Paragraph is to be provided are to allow the Marconi Group
to:
(a) carry out disaster recovery reviews of the Supplier's
controls, facilities and equipment relating to the Supplier's
obligations under this Agreement;
(b) carry out all applicable regulatory reviews and audits which
the Marconi Group is required to undertake or to which the
Marconi Group is subject (including to the extent that they
relate to the Services);
(c) comply with Applicable Legislation, including audits legally
required in relation to any member of the Marconi Group;
2
SCHEDULE 12 - AUDIT
(d) carry out risk reviews of the Marconi Group (or any member of
the same entitled to receive the Services) for internal risk
purposes;
(e) verify the confidentiality and security of Marconi Data;
(f) review the security procedures of the Supplier;
(g) verify the Supplier's adherence to the Service Levels;
(h) review compliance with agreed protocols and standards (as
initially listed in Schedule 3 and thereafter amended in
accordance with Change Control);
(i) verify the Supplier's calculation of the Charges by examining
the Supplier's records relating to "Resource Units" (as
defined in Schedule 4 (Charges/Rate Card)) (where applicable),
subject to the provisos in Paragraph 3.1(a); and
(j) verify any amounts claimed by the Supplier pursuant to
Schedule 13 (Termination Compensation), subject to the
provisos in Paragraph 3.1(a). The Supplier shall provide
statements of relevant information from the Supplier's (or its
Approved Sub-Contractor's) auditors for the purpose of such
verification,
2.2 The period to which any such audit relates shall be limited to the
twelve (12) month period immediately prior to the audit, or such longer
period as may reasonably be required in order to reasonably satisfy the
purpose of the audit.
3. PROVISION OF MATERIAL AND ASSISTANCE
3.1 The Supplier shall maintain in accordance with Best Industry Practice
records of and supporting documentation for:
(a) all financial transactions directly relating to the Charges
and for performance of or failure to meet the Service Levels
(provided that this obligation does not require the Supplier
to make available underlying or "open book" financial
information relating to its or its Authorised Subcontractors'
cost of providing the Services or its profit margins); and
3
SCHEDULE 12 - AUDIT
(b) records of relevant and reasonable non-financial matters or
activities in accordance with generally accepted industry
methods and procedures including details of the Supplier's
policies and procedures relating to the management of the IT
environment for the supply of the Services and all other
records detailed elsewhere in this Agreement.
3.2 To the extent that the information referred to in Paragraph 3.1 relates
to Services provided or substantially provided by the Supplier's
Approved Subcontractors, the Supplier shall ensure that it has been
granted, in relation to such Approved Subcontractors, audit rights
substantially the same as those given to Marconi pursuant to this
Schedule 12 (Audit), and if requested by Marconi, the Supplier shall
exercise those rights in order to obtain and make available to Marconi
for the purposes of this Schedule 12 (Audit) the information referred
to in Paragraph 3.1. The Supplier's reasonable costs relating to the
exercise of its audit rights against such subcontractors (including the
reasonable costs of any agents, representatives, auditors or
consultants engaged for such purposes) shall be borne by Marconi.
3.3 The Supplier shall give all reasonable assistance to all appointees
under Paragraph 1 of this Schedule 12 (Audit) to understand or
interpret the records and supporting documentation to which Paragraphs
3.1 and 3.2 refer, and shall co-operate with all reasonable requests of
such appointees.
4. COST OF EXAMINATION
Marconi shall bear the costs of itself and of any agents,
representatives, auditors or consultants (including any software, tools
or other items relating thereto) of any examination undertaken pursuant
to these audit provisions. Save as provided for in Paragraph 3.2, the
Supplier shall not make any charge for compliance with this Schedule 12
(Audit), including the provision of all such reasonable assistance or
information.
5. RECOVERY OF COSTS AND EXCESS PAYMENTS - MONETARY AUDITS
5.1 Where the examination reveals that the Supplier has incorrectly
invoiced Marconi then the Supplier shall, at Marconi's sole option,
re-pay the overpayments or shall give full credit for any such excess
to Marconi in its subsequent invoices until such excess is repaid in
full.
4
SCHEDULE 12 - AUDIT
5.2 Where (and to the extent that) the sum of any overpayment determined
pursuant to Paragraph 5(1) is, in the opinion of the Supplier (acting
reasonably), the subject of a bona fide dispute, that sum may be
withheld from the repayment or credit pending resolution of the
dispute, but the undisputed portion shall be paid or credited by the
Supplier in accordance with Paragraph 5(1). After settlement of the
dispute, any amount agreed or determined to be payable or repayable
shall be due forthwith, together with Default Interest thereon.
6. RETENTION OF RECORDS
The Supplier shall retain all records relevant to these audit functions
during the term of this Agreement. Thereafter all such records shall be
delivered to Marconi as part of Exit Management.
5
SCHEDULE 13 - TERMINATION COMPENSATION
SCHEDULE 13
TERMINATION COMPENSATION
1. DEFINITIONS
In this Schedule 13 (Termination Compensation), the following
definitions shall apply:
"BASIC COSTS" means:
(i) the net value of un-amortised investments (excluding
equipment) reasonably made by the Supplier Group for the sole
or primary purpose of providing the terminated Services to the
Marconi Group; and
(ii) any other costs or expenses that are reasonably incurred by
the Supplier Group as a direct consequence of termination of
this Agreement (including costs or expenses payable by the
Supplier Group under any sub-contracts between the Supplier
Group and its Approved Subcontractors) (or in the case of
partial termination of the Agreement, the relevant part of the
Agreement).
"LOST PROFITS" means a sum equal to the Supplier's anticipated gross
profit margin for the terminated Services which it would have achieved
under this Agreement, had those Services not been terminated, [***]as
such sum is verified by the Supplier's independent auditors[***].
2. TERMINATION WITHOUT CAUSE
2.1 TERMINATION [***]
Where Marconi has terminated this Agreement (or part of it) pursuant to
Clause 13.1 (Termination without Cause) or Clause 13.4 (Change of
Control) [***]Marconi shall pay (in accordance with Clause 4.1 of this
Agreement):
(a) the Supplier's Lost Profits; and
(b) the Supplier's Basic Costs.
2.2 [***][***]
1
SCHEDULE 13 - TERMINATION COMPENSATION
3. ASSETS
Assets will be dealt with in accordance with Clause 14.7 (Asset
Arrangements) of this Agreement.
4. PERSONNEL
Redundancy costs (if any) payable by the Marconi Group in the event of
termination shall be dealt with in accordance with Schedule 10
(Employment).
5. MITIGATION OF LOSS
The Supplier shall take all reasonable steps to mitigate its Losses
arising from Marconi's termination of this Agreement.
6. [***][***]
2
SCHEDULE 14 - EXIT MANAGEMENT
SCHEDULE 14
EXIT MANAGEMENT
1. DEFINITIONS
In this Schedule 14 (Exit Management) the following additional
definition applies:
"EXIT PERIOD" means the period during which the Parties shall perform
their obligations under the Exit Arrangements, for such period as is
specified in the Exit Plan or otherwise as agreed between the Parties.
2. EXIT MANAGEMENT OBLIGATIONS
2.1 The obligations set out in this Schedule 14 (Exit Management) do not
represent an exhaustive list of the actions to be taken by either Party
and the Supplier shall provide such co-operation, information and
assistance as Marconi (or its replacement supplier) reasonably requires
to effect a complete migration of the Services being provided at the
date of termination or expiry, during the Exit Period.
2.2 The Parties shall use all reasonable endeavours to minimise the
disruption to the other's business.
2.3 The Supplier shall deliver to Marconi (at the times specified in the
Exit Plan), details of all Services being provided by the Supplier and
its Approved Subcontractors at the date of termination or expiry and,
to the extent that they are used in order to provide the Services, of
the following:
(a) all the Supplier owned assets and Approved Subcontractor owned
assets used to deliver the Services at the date of termination
or expiry;
(b) all commercially available Supplier owned Intellectual
Property used by the Supplier in the provision of the Services
at the date of termination or expiry;
1
SCHEDULE 14 - EXIT MANAGEMENT
(c) all third party Intellectual Property used by the Supplier in
provision of the Services at the date of termination or
expiry;
(d) an up to date schedule of all Third Party Providers and third
party contracts used by the Supplier in the provision of the
Services at the date of termination or expiry; and
(e) a copy of existing service manuals and other relevant
documents detailing all processes and procedures specifically
used in the provision of the Services at the date of
termination or expiry.
2.4 At Marconi's request, the Supplier shall co-operate with Marconi in
good faith and provide reasonable assistance to facilitate Marconi to
obtain suitable licences and/or permissions from the Supplier's
strategic suppliers and partners to enable Marconi to have continued
access to, and use of, Intellectual Property required by Marconi for
the continued provision of the Services by Marconi or a Third Party
Provider.
2.5 The Supplier shall deploy the appropriately knowledgeable and skilled
staff to perform its obligations under this Schedule 14 (Exit
Management).
2.6 During the Exit Period the Supplier shall not without the prior written
consent of Marconi (which consent shall not be unreasonably withheld or
delayed):
(a) take any steps which would increase the costs payable by
Marconi at termination or expiry; or
(b) make any changes to the Service otherwise than in accordance
with Change Control.
2.7 The Supplier shall provide (and shall use reasonable endeavours to
procure that its Approved Subcontractors shall provide) such access as
Marconi and/or its appointed agents and Third Party Providers may
reasonably require to achieve the aims and objectives of the Exit Plan.
In exercising such access, Marconi shall use reasonable endeavours to
minimise the disruption to the Supplier Group's and the relevant
Approved Subcontractors' businesses.
2
SCHEDULE 14 - EXIT MANAGEMENT
2.8 On or within [***] days after the date of effective termination or
expiry or as otherwise specified in the Exit Plan (and to the extent
not already done) the Supplier shall (and shall procure that its
subcontractors shall):
(a) hand back all security passes and authorisations which are
outstanding in relation to the Supplier's Personnel, agents,
or sub-contractors in respect of attendance on site at any of
the Marconi Group's Sites;
(b) return all of the following to the extent that it is in the
possession or control of the Supplier or its Authorised
Subcontractors:
(i) all Confidential Information of the Marconi Group
including all copies thereof; and
(ii) all documentation, files, records and other materials
relating to the Services (whether created by the
Supplier Group or its Authorised Subcontractors) and
the media upon which the same are stored (other than
items in which the Supplier retains ownership of the
Intellectual Property and which are not to be
licensed to the Marconi Group beyond termination or
expiry),
provided that the Supplier and its Authorised Subcontractors
(to the extent that such materials are relevant to them) may
retain a single copy of such materials for archival purposes
(and further provided that the materials shall remain subject
to the confidentiality obligations of Clause 16
(Confidentiality)).
(c) return all Marconi Assets in the possession or control of the
Supplier;
(c) deliver a copy of all Marconi Software and Marconi Data in the
possession or control of the Supplier (in the format most
appropriate for the Marconi Software and/or Marconi Data) and
shall destroy, or procure the destruction of, any remaining
electronic copies of such Marconi Software or Marconi Data;
(e) provide Marconi with a detailed description and status report
of all breaches of this Agreement of which the Supplier is
aware, which have not been corrected or resolved as at the
date of termination or expiry
3
SCHEDULE 14 - EXIT MANAGEMENT
insofar as they have affected, affect or might affect the
termination of the Service; and
(f) provide all of the normal periodical reports which the
Supplier has been obliged to provide (or has agreed to
provide) to Marconi throughout this Agreement made up to the
effective termination or expiry date or the closest date
possible thereto.
2.9 Forthwith upon the performance by the Supplier of all of its
obligations under the Exit Arrangements to the reasonable satisfaction
of Marconi, Marconi will sign a copy of the Exit Plan to confirm its
acceptance of such performance whereupon the Supplier's obligations
under this Schedule shall be discharged.
2.10 Payment (if any) for the Supplier's performance of the obligations set
out in this Schedule shall be as specified in Clause 14.5(2) of this
Agreement.
2.11 The Supplier shall not be obliged to provide any information or access
to any replacement supplier as envisaged by this Schedule 14 (Exit
Management) unless that replacement supplier is subject to duties of
confidentiality no less stringent than the provisions of Clause 16
(Confidentiality).
4
SCHEDULE 15 - BUDGET
SCHEDULE 15
BUDGET
1
SCHEDULE 16 - FORM OF COUNTRY AGREEMENT
SCHEDULE 16
FORM OF COUNTRY AGREEMENT
DATE:
PARTIES:
(1) [CSC AFFILIATE], a company incorporated under the laws of [*] [, with
company number *], whose [registered office][principal place of business]
is at * (the "SUPPLIER"); and
(2) [MARCONI AFFILIATE] a company incorporated under the laws of [*][, with
company number *], whose principal place of business is at * ("MARCONI
(TERRITORY)").
BACKGROUND:
(A) CSC International Systems Management Inc. ("CSC"), Marconi Corporation plc
and Marconi Communications Limited are parties to a Master Services
Agreement dated * (the "MASTER SERVICES AGREEMENT") for the provision by
CSC of the Services.
(B) Under the Master Services Agreement, the provision of the Country Services
may be delivered by the Supplier.
(C) Accordingly, the Supplier has agreed to deliver and Marconi (Territory)
has agreed to pay for the Country Services, subject to the terms of this
Agreement.
IT IS AGREED as follows:
1. DEFINITIONS
In this Agreement, except as provided in this Agreement the defined terms
in the Master Services Agreement have the same meaning, and the following
definitions apply, unless the context otherwise requires:
"COUNTRY CHARGES" means the Charges payable in accordance with the Master
Agreement in respect of the provision of the Country Services;
2
SCHEDULE 16 - FORM OF COUNTRY AGREEMENT
"COUNTRY SERVICES" means all those Services required to be performed in
the Countries in the Invoice Region under the Master Agreement, whether or
not from locations in the Invoice Region; and
"INVOICE REGION" means [Germany][Italy][UK & Ireland][North America (as
defined in Schedule 4 (Charges) to the Master Services Agreement)][Rest of
World (as defined in Schedule 4 (Charges) to the Master Services
Agreement);]
2. SUPPLY OF SERVICES
The Supplier shall provide the Country Services in the Invoice Region and
Marconi (Territory) shall pay for them, subject to the terms of this
Agreement.
3. CHARGES
The Supplier shall be entitled at the times and in the manner provided in
the Master Services Agreement in relation to invoices for the Charges, to
invoice Marconi (Territory) for the Country Charges, and Marconi
(Territory) shall pay the invoiced amount in accordance with the
provisions of the Master Agreement applicable to the payment of the
Charges.
4. CLAIMS
(1) The parties acknowledge that any default in the provision of the Country
Services is subject to the terms of the Master Services Agreement;
accordingly, except in respect of the non-payment of the Country Charges
in accordance with Clause 3, neither party shall have any claim against
the other under this Agreement, except to the extent such liability cannot
be excluded or limited by mandatorily applicable law in the whole or any
part of the Invoice Region.
(2) Any claim for non-payment of the Country Charges shall be dealt with in
accordance with the Master Services Agreement.
5. TERM AND TERMINATION
This Agreement shall come into effect on the date it has been signed by
both the Supplier and Marconi (Territory), and shall automatically
terminate with immediate effect:
3
SCHEDULE 16 - FORM OF COUNTRY AGREEMENT
(a) upon termination or expiry of the Master Services Agreement; or
(a) if either party ceases to be a member, in the case of the Supplier,
of the Supplier Group or, in the case of Marconi (Territory), the
Marconi Group.
6. GOVERNING LAW
The construction, interpretation and performance of this Agreement and all
transactions under this Agreement shall be governed by the laws of England
and Wales without reference to the UNCITRAL Conventions on Contracts for
the International Sale of Goods and without giving effect to any provision
of such law relating to conflict of laws; provided that, if any provision
of this Agreement is required by the mandatorily applicable laws of the
Invoice Region or any Country within the Invoice Region to be subject to
the laws of the Invoice Region or that Country, the construction,
interpretation and performance of such provision insofar as it applies to
the Invoice Region or that Country shall be governed by the internal laws
of the Invoice Region or (as the case may be) that Country without
reference to the UNCITRAL Conventions on Contracts for the International
Sale of Goods. To the extent permitted by such applicable law, the Parties
hereby waive any provision of law that renders any provision of this
Agreement unenforceable in any respect.
7. LANGUAGE
The Parties have requested that this Agreement and all documents
contemplated by this Agreement or relating to it be drawn up in the
English language.
EXECUTION
The Parties have shown their acceptance of the terms of this Agreement by
executing on the date first written above.
SIGNED by )
[ ] )
duly authorised for and on behalf of )
CSC (AFFILIATE) )
4
SCHEDULE 16 - FORM OF COUNTRY AGREEMENT
SIGNED by )
[ ] )
duly authorised for and on behalf of )
MARCONI (TERRITORY) )
5
SCHEDULE 17 - TECHNOLOGY REFRESH
SCHEDULE 17
TECHNOLOGY REFRESH
1. SCOPE OF REFRESH
(1) The Supplier shall (at its cost) replace with new equipment and software,
all equipment and software of the following description that is deployed
or used by the Marconi Group on the last day of each of the rolling
periods stated below in relation to the description of equipment in
question:
Equipment Period of Refresh
--------- -----------------
Desktop and laptop PC hardware and Over the first [***]years commencing
operating system. from Cutover of the relevant
Services in respect of which the
assets in question are used, on a
rolling basis of at least [***]per
year, and thereafter every [***]
years on a rolling basis of at least
[***]per year (but in either event,
refresh of 100% by the end of the
relevant period).
Software for use on the desktop With rollout of refreshed desktop
and laptops to provide office and laptop PC hardware, subject to
automation, network access and Marconi having first acquired
access to applications (at its own cost) the relevant
software licences.
("STANDARD OPERATING ENVIRONMENT")
(2) The level of specification of the new equipment and software to be
supplied by the Supplier shall be no less than a level which is equivalent
or (where no equivalent specification exists) comparable to the level of
the specification of the equipment or software to be replaced, as that
latter specification stood in the market when the equipment or software to
be replaced was acquired by the Marconi Group or (in the case of any
supply under this Schedule 17 (Technology Refresh), the Supplier).
(3) The policy and approach to be used for Technology Refresh is detailed in
Schedule 3 (List of Standards and Policies).
1
SCHEDULE 18 - CONTINUOUS IMPROVEMENT
SCHEDULE 18
CONTINUOUS IMPROVEMENT
1. PURPOSE OF THE SCHEDULE
The purpose of this Schedule 18 (Continuous Improvement) is to define the
process for the identification and promotion of ongoing improvement to the
Services, focused on the delivery of benefits (including financial
benefits) to the Marconi Group (the "CONTINUOUS IMPROVEMENT PROGRAM" or
"CIP").
2. CIP PROCESS
2.1 The Supplier shall proactively identify and communicate to Marconi
potential improvements to the Services ("CIP INITIATIVES").
2.2 Where the Supplier identifies a potential CIP Initiative, the Supplier
shall notify Marconi in writing by providing Marconi with a summary
description of the proposed improvement, together with details of the
anticipated benefits of the proposed improvement (and/or financial
improvement) to Marconi.
2.3 Where Marconi wishes to pursue a CIP Initiative, it shall identify the CIP
Initiative to the Supplier, and the review, approval and implementation of
the CIP Initiative shall be dealt with in accordance with Change Control
or as a Project.
3. CIP REGISTER
The Supplier shall maintain a register (in a format reasonably agreed
between the Parties) to record, monitor the progress of, and provide an
audit trail of all identified CIP Initiatives.
2
SCHEDULE 19 - BENCHMARKING
SCHEDULE 19
BENCHMARKING
1. DEFINITIONS
1.1 In this Schedule, the following additional definitions apply, unless the
context otherwise requires:
"ASSESSMENT" means any of the exercises to which Paragraph 2.1 refers in
relation to any or all of the Services;
"BENCHMARKER" means the third party appointed to undertake an Assessment
in accordance with Paragraph 3.1;
"BENCHMARK CHARGE" means the charge within the Normalised Data Sample that
is either equal to the Notional Benchmark Amount or (in the absence of
such a charge) the next higher charge that is closest to the Notional
Benchmark Amount (in either case regardless of whether or not there is
more than one charge satisfying that description);
"FIRST UNIT CHARGES" means the charges which the Supplier proposes shall
take, or (as the case may be) have taken, effect from the beginning of the
third Service Year;
"NORMALISED DATA SAMPLE" means a sample of data relating to contracts in
accordance with Paragraph 4.2;
"NOTIONAL BENCHMARK AMOUNT" means[***];
"RELEVANT SERVICES" means the Services within the scope of an Assessment;
"SERVICE YEAR" in relation to a Relevant Service, means each period of
twelve (12) months or part thereof during the term of this Agreement
commencing on the Cutover of those Relevant Services, and each anniversary
thereof.
1.2 All references in this Schedule 19 (Benchmarking) to the Charges shall for
the avoidance of doubt include the First Unit Charges.
2. TYPES OF ASSESSMENT
1
SCHEDULE 19 - BENCHMARKING
2.1 Subject to the terms of this Schedule 19 (Benchmarking), Marconi shall be
entitled from time to time by notice to the Supplier to undertake one or
more of the following exercises in relation to the Services described in
the notice:
(a) Value for Money Benchmarking in accordance with Paragraph 4;
(b) Service Management Performance Assessment in accordance with
Paragraph 5; and
(c) Stakeholder Satisfaction Survey in accordance with Paragraph 6.
2.2 Marconi shall not be entitled:
(a) to undertake the same Assessment in relation to the same Relevant
Services more than once during any period of twelve months, and for
this purpose time shall start to run from the date on which the
Assessment commences; or
(b) to conduct Value for Money Benchmarking in relation to any Services
at any time before the beginning of the third Service Year, but
without prejudice to Marconi's right to prepare for undertaking any
such Assessment with effect from the beginning of the third Service
Year.
3. APPOINTMENT OF BENCHMARKER
3.1 APPOINTMENT
(1) Any third party appointed to undertake an Assessment shall be appointed
jointly by the Parties, or failing agreement between them within ten (10)
Business Days from the date of a notice served on the Supplier by Marconi
for the purpose of this Paragraph 3, by Marconi acting in accordance with
Paragraph 3.1(2).
(2) Subject to Paragraph 3.1(3), Marconi shall appoint:
(a) one of Gartner Group, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, TPI or any successor to any
of their benchmarking businesses; or
(b) any other suitably qualified and experienced person,
2
SCHEDULE 19 - BENCHMARKING
provided that in any case the appointee is able and willing to act and
that, at the time of the appointment, the appointee has no manifest
conflict of interest in his dealings with the Supplier or any of its
Approved Sub-contractors, whether as a result of being a direct competitor
of the Supplier or any of its Approved Sub-contractors, or otherwise.
(3) In relation to Value for Money Benchmarking, Marconi shall not appoint any
third party who is unable for the purposes of the Assessment to compile a
Normalised Data Sample.
3.2 TERMS OF APPOINTMENT
In all cases the terms of appointment of the Benchmarker shall include:
(a) a commitment by the Parties to supply the Benchmarker with the
assistance, documents and information it requires for the purpose of
the Assessment and, in the case of the Supplier, a commitment to use
all reasonable endeavours to procure that its sub-contractors do the
same;
(b) a requirement on the Benchmarker:
(i) to use a Normalised Data Sample for the purpose of Value for
Money Benchmarking; and
(ii) give its determination within twenty eight (28) Business Days
or (if longer) such other reasonable period, and to hold
professional indemnity insurance both then and for three (3)
years following the date of its report; and
(c) a requirement that the Benchmarker be subject to duties of
confidentiality no less stringent than the provisions of Clause 16
(Confidentiality) of this Agreement.
3.3 CONFIDENTIALITY OF RESULTS
The results of the Assessment shall be deemed to be the Confidential
Information of each Party for the purposes of Clause 16 (Confidentiality).
3.4 CHARGES OF THE BENCHMARKER
3
SCHEDULE 19 - BENCHMARKING
(1) Subject to Paragraph 2.4(2), the reasonable charges of the Benchmarker for
the Assessment shall be for Marconi's account, provided that if the
charges of a Benchmarker, which could have been appointed except for being
a direct competitor of the Supplier, are lower than those of the
appointee, the difference shall be for the Supplier's account.
(2) Where the Supplier requests that the Benchmarker's report includes any of
the additional information to which Paragraph 4.1(2)(a) to (c) refers, and
Marconi does not require that information, then the costs of the
Benchmarker in providing that additional information shall be for the
Supplier's account.
4. VALUE FOR MONEY BENCHMARKING
4.1 PURPOSE
(1) The Parties acknowledge that the purpose of Value for Money Benchmarking
shall in all cases include a determination of where the Charges for the
Relevant Services in question stand in relation to the Benchmark Charge,
but shall include other purposes which the Parties agree and are accepted
by the Benchmarker.
(2) The report of the Benchmarker may include at the request of either Party
(and if accepted by the Benchmarker) the following information, in
addition to the determination to which Paragraph 4.1(1) refers:
(a) the identity of market competitors to the Supplier;
(b) trends in pricing of services in the field of the Relevant Services;
and
(c) comparisons to services in the field of the Relevant Services
provided to undertakings engaged in the same industry sector as the
Marconi Group.
4.2 NORMALISED DATA SAMPLE
(1) The data sample to be used for the purposes of a Value for Money
Benchmarking shall be a normalised sample, including service charges, of
not less that [***]contracts for the provision of services (whether alone
or together with other services) within the field of the Relevant Services
and prepared in accordance with Paragraph 4.2(2); the Benchmarker may take
into account any greater number of such contracts as he may reasonably
determine.
4
SCHEDULE 19 - BENCHMARKING
(2) The Benchmarker may (acting reasonably) determine the contracts to be
taken into account for the purposes of the sample, but he shall adjust the
information taken into account from those contracts to reflect the
following factors:
(a) the nature and volumes of the Relevant Services;
(b) the performance of the Relevant Services against the Service Level
Agreement in the period up the date on which the Value for Money
Benchmarking commences;
(c) the provisions of the Service Level Agreement applicable to the
Relevant Services;
(d) differences in relation to taxes, levies, exchange controls, laws
and regulations, and prevailing trade conditions between the
territories in which the Relevant Services are provided;
(e) the degree of satisfaction of the service levels or metrics required
under the relevant contract to be met by the services within the
field of the Relevant Services;
(f) liabilities accepted by the Supplier and Approved Subcontractors
when entering into this Agreement and the Asset Transfer Agreement;
and
(g) [***].
4.3 THE BENCHMARKER'S REPORT
(1) [***].
(2) The Benchmarker acts as an expert and not an arbitrator and the provisions
of this Paragraph 4 are not a quasi-judicial procedure.
4.4 IMPLICATIONS OF THE BENCHMARKER'S REPORT
(1) Subject to Paragraph 4.4(2), where the Benchmarker concludes that the
Charges for the Relevant Services are greater than the Benchmark Charge
(the difference being the "Delta"), the Supplier shall consider his report
and within twenty eight (28) days of the date of receipt of the report by
the Supplier, make reasonable proposals in writing to Marconi
5
SCHEDULE 19 - BENCHMARKING
[***]
[***]
[***]
[***]
[***] .
(2) The Supplier's proposals under Paragraph 4.4(1) may comprise all or any
combination of the matters to which Paragraph 4.4(1)(a) and (b) refers,
except that the Supplier shall in any event submit a proposal in
compliance with Paragraph 4.4(1)(a)(i).
(3) Marconi shall within twenty eight (28) days from receipt of the Supplier's
proposal(s) under Paragraph 4.4(1) inform the Supplier which of the
proposal(s) it requires to be implemented, and in default of doing so,
Marconi shall be deemed to have selected[***].
(4) Subject to Paragraphs 4.4(5) and (6), the Parties shall implement
whichever of the Supplier's proposal(s) Marconi selects[***].
(5) [***]
[***]
[***]
(6) [***].
4.5 REGULATED ACTIVITIES
Where any Relevant Services constitute or are subject to Regulated
Activities, any changes to the Charges which would otherwise be required
as a result of Paragraph 4.4 shall only take effect in accordance with
Clause 3.7(2) (Regulated Activities).
5. SERVICE MANAGEMENT REVIEW
5.1 PURPOSE
6
SCHEDULE 19 - BENCHMARKING
The Purpose of the service management review is to assess whether or not
the Supplier is meeting its Services obligations effectively and whether
improvements should be made.
5.2 SCOPE AND TERMS OF ENGAGEMENT
(1) The Benchmarker shall be required to conduct a Service Management
assessment covering the following key areas:
(a) key Service Management processes of:
(i) problem management;
(ii) Change management; and
(iii) Help Desk;
(b) performance and management reporting;
(c) meeting effectiveness;
(d) contract and relationship management; and
(e) billing.
(2) The Services Management benchmark will examine the effectiveness and
efficiency in performing the areas identified above, specifically
covering:
(a) interfaces between the Supplier and Marconi's operational employees
and Marconi's other third party service providers (if relevant);
(b) pro-active analysis and recommendations in the performance reports;
(c) the accuracy of the billing report information; and
(d) the knowledge, ability, helpfulness and efficiency of the helpdesk;
and
(e) the efficiency of performing Changes.
(3) The Services Management Review will consider the prevailing operational
processes and whether the processes are being adhered to.
7
SCHEDULE 19 - BENCHMARKING
5.3 AUDIT
The foregoing provisions of this Paragraph 5 do not affect Schedule 12
(Audit).
6. STAKEHOLDER SATISFACTION REVIEW
6.1 PURPOSE
A survey of key Marconi business stakeholders identified by Marconi to
determine the level of satisfaction of those stakeholders in relation to
the Services actually received.
6.2 SCOPE AND TERMS OF ENGAGEMENT
The Benchmarker shall be required to develop a questionnaire in
conjunction with Marconi and the Supplier, obtaining business stakeholder
views on the Supplier's:
- level of pro-active support;
- change support and responsiveness;
- problem identification and resolution effectiveness;
- helping the business to plan for the future through technology
leadership;
- basic service delivery effectiveness;
- project delivery success and consistency;
- value add for exploitation of technology and other CIP Initiatives;
- quality of communications; and
- overall achievement of Marconi's stated business aims and
objectives.
7. ACTIONS ARISING FROM A BENCHMARKING EXERCISE
Subject to Paragraph 4.4, the Parties shall (acting through the IT
Governance Team) consider any other recommendations of the Benchmarker,
with any Changes arising as a result thereof being subject to Change
Control.
8
SCHEDULE 20 - GOVERNANCE
SCHEDULE 20
GOVERNANCE
1. PURPOSE
1.1 The purpose of this Schedule 20 (Governance) is to detail the framework
that needs to be established to plan, direct and monitor the delivery of
the Services.
1.2 Specifically this Schedule covers:
- management roles & responsibilities including:
--> account & relationship management;
--> contract management;
--> service performance; and
--> associated governance activities.
- controlling bodies;
- meetings (purpose, constitution, frequency, location);
- reporting; and
- performance monitoring.
1.3 This Schedule 20 (Governance) is not intended to replace the Supplier's
operational management structures necessary to deliver the Services nor
any Project specific governance structures that may be agreed from time to
time.
1.4 Marconi and the Supplier acknowledge that the governance structures
outlined in this Schedule may evolve over time as the relationship
matures.
2. GUIDING PRINCIPLES
2.1 All governance activity shall comply with the following guiding
principles:
- Marconi will be responsible for strategy and the Supplier will be
responsible for operational matters;
- the focus of the governance structures shall be to ensure that all
activities remain aligned to Marconi's business strategies and
objectives;
1
SCHEDULE 20 - GOVERNANCE
- Marconi will chair meetings and have the casting vote (for the
avoidance of doubt, where decisions relate to proposed Changes,
those Changes will be implemented through Change Control);
- the governance organisational structures will, to the extent
applicable, be mirrored by both Marconi and the Supplier;
- all members of governing bodies, and all attendees of governance
meetings, will be of appropriate seniority and with appropriate
levels of empowerment to take necessary decisions and actions; and
- minutes of all meetings will be produced and circulated within two
(2) weeks of the meeting date.
3. GOVERNANCE STRUCTURE
The governance structure shall be as detailed in the following diagram:
OUTSOURCED SERVICE GOVERNANCE STRUCTURE
CORPORATE IT GOVERNANCE BOARD
--------------------------------------------------------------------------------
- Service Credit Recommendations
- Service Change Requests for
- IT Strategic Plan Commercial Approval
- Approvals - Business Demand Plans
- Technology Change Recommendations
- Unresolved Issues
REGIONAL GOVERNANCE BOARDS
--------------------------------------------------------------------------------
UK & Italy Germany CALA US Network US Wireless US BBRS
ROW Components Software and
Services
2
SCHEDULE 20 - GOVERNANCE
4. GOVERNANCE BOARDS
4.1 CORPORATE IT GOVERNANCE BOARD
(1) The Corporate IT Governance Board is the main governing body for this
Agreement.
(2) The Corporate IT Governance Board is primarily responsible for managing
the relationships between the Parties and performance of the Services by
the Supplier.
(3) More specifically, the Corporate IT Governance Board will be generally
responsible for:
- implementing and maintaining the strategic direction for this
Agreement;
- seeking to ensure that the governance principles outlined in this
Schedule 20 (Governance) are adhered to;
- seeking to ensure that the Parties' respective organisational
support models are aligned so as to effectively and efficiently
deliver the Services to the Marconi Group's business community;
- defining, implementing and maintaining the communications framework
between the Parties;
- reviewing recommendations from the Regional Governance Boards;
- monitoring and reviewing the performance of the Services against
agreed service levels and making recommendations regarding service
credits; and
- reviewing proposed Changes to this Agreement (the implementation of
which will be subject to Change Control).
4.2 REGIONAL GOVERNANCE BOARDS
(1) There shall be seven (7) Regional Governance Boards:
- UK & "Rest of World";
- Italy;
- Germany;
- CALA;
- US (Broadband Routing and Switching);
3
SCHEDULE 20 - GOVERNANCE
- US (Network Components); and
- US (Wireless Software and Services).
(2) There are two main roles for each of the Regional Governance Boards:
(a) Service Review; and
(b) Solutions Provision.
(3) The "SERVICE REVIEW" role of each of the Regional Governance Boards is to
monitor the provision of the Services in their respective regions, with a
view to seeking to ensure that the Services being delivered in accordance
with the Service Level Agreement, and that internal customer satisfaction
is being achieved. More specifically, each of the Regional Governance
Boards shall be responsible for:
- monitoring internal Marconi Group customer satisfaction;
- monitoring the Supplier's performance against the Service Level
Agreement (including the accrual of service credits) and reporting
on the same to the Corporate IT Governance Board;
- considering and making recommendations regarding potential Changes
and/or Projects;
- reviewing CIP Initiatives and making recommendations as appropriate;
and
- reporting issues to the Corporate IT Governance Board for
consideration as appropriate.
(4) The "SOLUTIONS PROVISION" role of each of the Regional Governance Boards
is to ensure that the proposed Changes and Projects are designed and
delivered in accordance with agreed Marconi business requirements and IT
architecture principles and standards. More specifically, the Regional
Governance Boards shall be responsible for:
- reviewing and providing feedback regarding business and IT
requirements;
- monitoring implementation of approved Changes and Projects;
4
SCHEDULE 20 - GOVERNANCE
- building and prioritising plans for proposed Changes and Projects in
accordance with Marconi's IT strategic plan;
- assisting to ensure that proposed Changes and Projects are
consistent with Marconi's IT and business strategy;
- identifying relevant industry, business and technology trends and
proposing ways in which they can be harnessed to the benefit of
Marconi;
- monitoring and review Project performance against the agreed
Schedule of Work for that Project; and
- reporting issues to the Corporate IT Governance Board as
appropriate.
5. MEMBERSHIP & FREQUENCY OF MEETINGS
5.1 MEETINGS OF GOVERNANCE BOARDS
The following table is an outline of the proposed membership and meeting
frequency for each of the governance boards listed above.
The Parties acknowledge that the details currently set out below are
incomplete, and shall work together in good faith to attempt to agree and
document the membership and meeting frequency for such governance boards
as soon as reasonably practicable following the Commencement Date.
Marconi members of the relevant Boards shall be as reasonably nominated by
Marconi.
MEMBERS
--------------
BOARD MARCONI THE SUPPLIER FREQUENCY
---------------------- -------------- ------------------------- ----------------------
Corporate IT Global Account Director Initially as required,
moving to Quarterly
Global Service Delivery
Director
Global Chief Architect
Regional Governance Service Delivery Manager Initially as required,
Board - UK moving to Monthly
Line of Service Leads -
(as appropriate)
Application Delivery
Manager
5
MEMBERS
--------------
BOARD MARCONI THE SUPPLIER FREQUENCY
---------------------- -------------- ------------------------- ----------------------
Regional Governance Service Delivery Manager Initially as required,
Board - CALA moving to Monthly
Line of Service Leads -
(as appropriate)
Application Delivery
Manager
Regional Governance Service Delivery Manager Initially as required,
Board - Italy moving to Monthly
Line of Service Leads -
(as appropriate)
Application Delivery
Manager
Regional Governance Service Delivery Manager Initially as required,
Board - Germany moving to Monthly
Line of Service Leads -
(as appropriate)
Application Delivery
Manager
Regional Governance Service Delivery Manager Initially as required,
Board - US (Broadband moving to Monthly
Routing and Switching) Line of Service Leads -
(as appropriate)
Application Delivery
Manager
Regional Governance Service Delivery Manager Initially as required,
Board - US (Network moving to Monthly
Components) Line of Service Leads (as
appropriate)
Application Delivery
Manager
Regional Governance Service Delivery Manager Initially as required,
Board - US (Network moving to Monthly
Components) Line of Service Leads (as
appropriate)
Application Delivery
Manager
Note that all boards shall reserve the right to invite other attendees as
appropriate and to meet on an ad-hoc basis as appropriate
6
SCHEDULE 20 - GOVERNANCE
5.2 ADDITIONAL MEETINGS
In addition to the meetings of the Governance Boards outlined in Paragraph
5.1, the following persons and/or committees shall meet for the purpose
and at the frequency set out below:
INTERFACES AND MEETINGS
--------------------------------------------------------------------------------
MARCONI THE SUPPLIER MEETINGS
--------- ------------ -------------------------------------------------
CORPORATE
Finance Finance Regular meetings at no less than monthly for
Manager Manager agreement, authorization, monitoring and
reconciliation of Charges.
IT
Project Application Regular meetings at no less than monthly to
Office Delivery ensure resources are available to deliver
Manager Projects, and to monitor Project progress against
agreed deliverables.
5.3 ATTENDANCE BY THIRD PARTIES AT MEETINGS.
The Parties acknowledge that it may be appropriate to invite third parties
to attend and participate as a guest in meetings (or a relevant part of
them) from time to time. Any such attendance shall be by invitation only,
and shall be subject to the prior consent of both Parties.
For example, it is anticipated that BT will generally be invited to attend
meetings of the Regional Governance Boards where operational matters
regarding the Network Services are to be discussed (although this is
subject to the prior consent of both Parties).
7
SCHEDULE 20 - GOVERNANCE
6. REPORTING REQUIREMENTS
The Supplier shall each report to the other as set out below. The format
of these reports shall be agreed between the Parties as soon as possible
following the Commencement Date, taking into account Marconi's reasonable
requirements.
REPORT TYPE: DESCRIPTION CORPORATE REGIONAL FREQUENCY ORIGINATOR
------------------ ------------------------- GOVERNANCE GOVERNANCE
BOARD BOARDS
---------- ---------- --------- ----------
SERVICE REPORTS
Service Level Report detailing actual Global Regional Monthly CSC
reports service levels achieved
by the Supplier against
target service levels.
Balanced Scorecard Measures of relationship Global Regional Monthly CSC
/performance; form and
content to be reasonably
agreed between the
Parties during True-Up
Customer Summary of results Regional Monthly CSC
Satisfaction regular customer
reports satisfaction surveys
carried out by supplier
(of a representative
sample of no less than 5%
of the relevant user
base).
Change Reports Changes summary for Global Regional Monthly CSC
previous month, including
details of both proposed
and agreed Changes.
Demand Reports Report detailing level of Regional Monthly CSC
demand during the
previous month,
including in relation to
the following:
Projects; Tasks; Help
Desk Calls; New PCs;
and Resource Utilisation.
Dispute/Issue Summary list of disputes Global Regional Monthly CSC
Reports / issues during previous
month, including status,
proposed solutions,
timeframes, etc.
8
SCHEDULE 20 - GOVERNANCE
REPORT TYPE: DESCRIPTION CORPORATE REGIONAL FREQUENCY ORIGINATOR
------------------ ------------------------- GOVERNANCE GOVERNANCE
BOARD BOARDS
---------- ---------- --------- ----------
COMMERCIAL /FINANCIAL REPORTS
Budget Reports Details of actual charges Global Regional Monthly CSC
against budgeted charges.
Invoice Reports Details of actual Regional Monthly CSC
invoices against forecast
invoices.
Service Credit Details of services Regional Monthly CSC
Reports credits and service
credit points accrued, as
required pursuant to
Schedule 5 (Service
Credits).
Continuous Details of Continuous Global Regional Monthly CSC
Improvement improvement initiatives
Initiative identified by Marconi or
Proposals CSC to save money or
improve service.
PROJECT REPORTS
Project Review Summary of progress Regional Monthly CSC
Reports against plan (time &
cost) for key projects
9
SCHEDULE 21 - APPROVED SUB-CONTRACTORS
SCHEDULE 21
APPROVED SUB-CONTRACTORS
1. LIST OF APPROVED SUBCONTRACTORS
The Supplier shall maintain a current list of all approved sub-contractors
detailing who they are, a listing of services the sub-contractors perform
for Marconi, and in which locations these sub-contractors deliver these
services.
2. CHANGES TO LIST OF APPROVED SUBCONTRACTORS
All proposed changes to this list of approved subcontractors must be
approved by Marconi prior to the Supplier contracting with such
sub-contractors.
3. APPROVED SUBCONTRACTORS AT COMMENCEMENT DATE
The list of approved sub-contractors as at the Commencement Date is as
follows:
[***]
[***]
[***]
1
SCHEDULE 22 - ASSUMPTIONS AND DEPENDENCIES
SCHEDULE 22
ASSUMPTIONS AND DEPENDENCIES
1. ASSUMPTIONS
The Charges specified in Schedule 4 (Charges) are based on the assumptions
listed in this Paragraph 1. To the extent that such assumptions prove to
be incorrect, the Charges may be adjusted as part of the True Up Process.
1.1 TRANSFERRING EMPLOYEES
[***]
[***]
[***]
[***]
1.2 INFRASTRUCTURE AND APPLICATIONS
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
2
SCHEDULE 22 - ASSUMPTIONS AND DEPENDENCIES
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
1.3 TRANSITION
[***]
1.4 MISCELLANEOUS
[***]
[***]
[***]
[***]
[***]
2. DEPENDENCIES
The following are the Dependencies for the IT and Network Services.
Marconi's failure to observe the Dependencies shall not constitute a
breach of contract but shall have the effect of discharging the Supplier
in whole or part from providing the Services or the Exit Arrangements as
specified in Clause 3.1 (Operational Responsibility).
3
SCHEDULE 22 - ASSUMPTIONS AND DEPENDENCIES
2.1 TRANSFERRING EMPLOYEES
Marconi will provide or make available sufficient information regarding
the skills and roles of potential Transferring Employees to reasonably
enable Marconi, the Supplier and BT to seek to determine and agree between
themselves, before the applicable Cutover, which of those Transferring
Employees will transfer to the Supplier and which Employees will transfer
to BT.
2.3 TRANSITION
Marconi will perform the customer tasks, participate in the review status
meetings and provide any relevant information in a timely manner, as
required pursuant to Exhibit 1 (Transition Project).
2.4 MANNER OF PROVIDING OF THE SERVICES
Subject to the provisions of the Master Services Agreement, the Asset
Transfer Agreement and the BT Asset Transfer Agreement, the Supplier (and
to the extent applicable, BT) will be permitted to change the manner of
provision of the Services (for example, by consolidating data centres) in
reasonable consultation with Marconi, provided that such change does not:
(a) have a material negative impact upon the business of the Marconi
Group (including taking into account any additional training
required);
(b) have a material negative impact on the Supplier's or BT's delivery
of the Services and/or the service levels to which they are
provided; or
increase any of the Charges or increase, to a material extent, any of the
Marconi Group's retained costs or expenses.
2.5 ACCESS TO ASSETS
Marconi shall make available to the Supplier and its Approved
Subcontractors, during the term of this Agreement and free of charge,
access to the Sites and Marconi Assets as reasonably required for the
provision of the Services in accordance with this Agreement.
4
SCHEDULE 23 - FORM OF GUARANTEES
SCHEDULE 23
FORM OF GUARANTEES
PART 1: MARCONI FORM OF GUARANTEE (CLAUSE 2.13(1))
FROM: [Insert details of relevant member of Marconi Group] (the
"GUARANTOR")
TO: (1) [CSC INTERNATIONAL SYSTEMS MANAGEMENT INC., a company
incorporated in Nevada, USA, whose principal place of business is at
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇ ("CSC")]
(2) [BRITISH TELECOMMUNICATIONS PLC, a company incorporated under
the laws of England and Wales with registered number 1800000 and
whose registered office is at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
("BT")]
DATED: 2002
RECITALS
(A) (3) [Marconi Corporation plc ("MARCONI") (1), Marconi Communications
Limited (2) and CSC (3) have entered into agreements known as the Master
Services Agreement and the Asset Transfer Agreement in connection with the
provision of certain information technology services by CSC, both dated
- 2002 ("THE AGREEMENTS").]
(4) [Marconi Corporation plc ("MARCONI") (1), CSC International System
Management Inc ("CSC") (2) and Marconi Communications Limited ("MCL") (3)
have entered into an agreement known as the Master Services Agreement in
connection with the provision of certain information technology and
network
----------
(1) Include where the Guarantee is to be given in favour of CSC.
(2) Include where the Guarantee is to be given in favour of BT.
(3) Include where the Guarantee is to be given in favour of CSC.
(4) Include where the Guarantee is to be given in favour of BT.
1
SCHEDULE 23 - FORM OF GUARANTEES
services by CSC, dated - 2002. BT is an Approved Subcontractor under the
Master Services Agreement and is entitled to enforce the benefits
conferred on it under Clauses 2.13(1) (Guarantees) and 25.2(4)(Claims
against Approved Sub-Contractors) of that agreement. In addition, Clause
25.1(c) (Assignment or Transfer) of the Master Services Agreement entitles
CSC to assign certain benefits, claims and rights to BT. In addition,
Marconi, MCL, CSC and BT have entered into an agreement known as the BT
Asset Transfer Agreement dated - 2002 providing for the transfer of
certain assets and staff to the BT Group for the purpose of or in
connection with the provision of "Network Services" (as defined in the
Master Services Agreement) under the Master Services Agreement. For the
purposes of this deed, the provisions of the Master Services Agreement
which BT is entitled to enforce (either directly or pursuant to an
assignment by CSC as aforesaid) and the BT Asset Transfer Agreement are
collectively known as "THE AGREEMENTS". ]
(B) Terms used in this deed which are defined in the Agreements have the same
meaning as is ascribed to them in the Agreements unless the context
otherwise requires. All references in this deed to clauses and schedules
are to clauses and schedules in the Agreements.
(C) The Guarantor agrees and undertakes to guarantee all of the obligations of
Marconi as stated in this deed.
NOW THIS DEED WITNESSETH as follows:
1. GUARANTEE
If Marconi fails to comply with any of its representations, warranties or
undertakings in any of the Agreements (each such representation, warranty
or undertaking being an "OBLIGATION") by the due date, then the Guarantor
guarantees as primary obligor that it shall on demand by [CSC][BT](5)
immediately perform and discharge the representations, warranties and
undertakings of Marconi.
----------
(5) Delete as applicable.
2
SCHEDULE 23 - FORM OF GUARANTEES
2. CONTINUING GUARANTEE
The guarantee set out in Clause 1 (Guarantee) (a) is a continuing
guarantee and shall remain in force and effect until Marconi has performed
and discharged all of its Obligations, and (b) is additional to (and not
in substitution for) any other security or guarantee which is or may be
held by any member of the [CSC][BT](6) Group from time to time in respect
of the obligations of Marconi under the Agreements.
3. NO RELEASE
The Guarantor's liability under Clause 1 (Guarantee) shall not be affected
by any concession, time, indulgence or release granted by [CSC][BT](7) or
any member of the [CSC][BT](8) Group to Marconi or by any payment or other
dealing or anything else (whether by or relating to Marconi, any other
member of the Marconi Group, any co-guarantor or any other person) which
would, but for this Clause 3 (No release), operate to discharge or reduce
that liability.
4. INVALIDITY OR UNENFORCEABILITY OF GUARANTEE
If anything (including any legal limitation, disability, liquidation or
other incapacity on the part of Marconi or any disclaimer by a liquidator
causes any of the Obligations and/or the guarantee set out in Clause 1
(Guarantee) to be or become invalid or unenforceable, then the Guarantor
shall perform and discharge all of Marconi's obligations under the
Agreements as if they were the primary obligations of the Guarantor.
5. NO DEDUCTION
The Guarantor shall make any payments due from it under Clause 1
(Guarantee) in full, without any deduction or withholding, in respect of
any claim (whether by way of set-off, counterclaim or otherwise) asserted
from time to time by Marconi
----------
(6) Delete as applicable.
(7) Delete as applicable.
(8) Delete as applicable.
3
SCHEDULE 23 - FORM OF GUARANTEES
or any member of the Marconi Group against [CSC][BT](9) or any member of
the [CSC][BT](10) Group under the Agreements or in respect of any other
matter or thing.
6. NO EXERCISE OF SET OFF-RIGHTS
The Guarantor shall not exercise any rights which it may have against
Marconi or any other member of the Marconi Group arising from or otherwise
relating to its guarantee under Clause 1 (Guarantee) or its other
obligations under this deed unless and until all of the Obligations of
Marconi have been performed and discharged.
7. ENFORCEMENT
[CSC][BT](11) may claim under the guarantee set out in Clause 1
(Guarantee) without first making demand of Marconi or taking any action to
claim under or enforce any other right, security or other guarantee which
it may hold from time to time in respect of the Obligations provided that
[CSC/BT](12) shall have given no less than 21 days notice to Marconi of
such demand and Marconi has failed to remedy its failure.
8. UNCONDITIONAL AND IRREVOCABLE GUARANTEE
The Guarantor's obligations under this deed, including its guarantee under
Clause 1 (Guarantee), are unconditional and irrevocable.
9. GOVERNING LAW AND JURISDICTION
The provisions of Clauses [18](13) [20](14) and 37 (Governing Law and
Jurisdiction) of the [Asset Transfer Agreement](15) [BT Asset Transfer
Agreement](16) and
----------
(9) Delete as applicable.
(10) Delete as applicable.
(11) Delete as applicable.
(12) Delete as applicable.
(13) Include where the Guarantee is in favour of CSC.
(14) Include where Guarantee is in favour of BT
(15) Include where the Guarantee is in favour of CSC.
(16) Include where Guarantee is in favour of BT
4
SCHEDULE 23 - FORM OF GUARANTEES
Master Services Agreement for the provision of IT and Project Services
respectively shall apply to this deed, mutatis mutandis.
This Deed has been duly executed as a deed on the date stated above.
EXECUTED and DELIVERED )
as a DEED by [RELEVANT MARCONI )
GROUP MEMBER] acting by the )
two directors or a director and the )
company secretary )
Director
Director/Secretary
EXECUTED and DELIVERED )
as a DEED by )
CSC INTERNATIONAL SYSTEMS )
MANAGEMENT INC. (17) )
two directors or a director and the )
company secretary )
Director
Director/Secretary
----------
(17) Include where the Guarantee is in favour of CSC.
5
SCHEDULE 23 - FORM OF GUARANTEES
EXECUTED and DELIVERED )
as a DEED by )
BRITISH TELECOMMUNICATIONS )
PLC(18) )
two directors or a director and the )
company secretary )
Director
Director/Secretary
----------
(18) Include where the Guarantee is in favour of BT.
6
SCHEDULE 23 - FORM OF GUARANTEES
PART 2: CSC FORM OF GUARANTEE (CLAUSE 2.13(2))
FROM: Computer Sciences Corporation of ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇, ▇▇▇ (the "GUARANTOR")
TO: Marconi Corporation Plc of New Century Park, ▇▇ ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("MARCONI")
DATED: 2002
RECITALS
(A) CSC International Systems Management Inc ("CSC") (1) Marconi (2) and MCL
(3) have entered into agreements known as the Asset Transfer Agreement and
the Master Agreement in connection with the provision of certain
information technology services by CSC, both dated - 2002 ("THE
AGREEMENTS").
(B) Terms used in this deed which are defined in the Agreements have the same
meaning as is ascribed to them in the Agreements unless the context
otherwise requires. All references in this deed to clauses and schedules
are to clauses and schedules in the Agreements.
(C) The Guarantor agrees and undertakes to guarantee all of the obligations of
CSC as stated in this deed.
NOW THIS DEED WITNESSETH as follows:
1. GUARANTEE
If CSC fails to comply with any of its representations, warranties or
undertakings in any of the Agreements (each such representation, warranty
or undertaking being an "Obligation") by the due date, then the Guarantor
guarantees as primary obligor that it shall on demand by Marconi
immediately perform and discharge the representations, warranties and
undertakings of CSC.
2. CONTINUING GUARANTEE
The guarantee set out in Clause 1 (Guarantee) (a) is a continuing
guarantee and shall remain in force and effect until CSC has performed and
discharged all of its Obligations, and (b) is additional to (and not in
substitution for) any other security
7
SCHEDULE 23 - FORM OF GUARANTEES
or guarantee which is or may be held by any member of the Marconi Group
from time to time in respect of the obligations of CSC under the
Agreements.
3. NO RELEASE
The Guarantor's liability under Clause 1 (Guarantee) shall not be affected
by any concession, time, indulgence or release granted by Marconi or any
member of the Marconi Group to CSC or by any payment or other dealing or
anything else (whether by or relating to CSC, any other member of the CSC
Group, any co-guarantor or any other person) which would, but for this
Clause 3 (No release), operate to discharge or reduce that liability.
4. INVALIDITY OR UNENFORCEABILITY OF GUARANTEE
If anything (including any legal limitation, disability, liquidation or
other incapacity on the part of CSC or any disclaimer by a liquidator
causes any of the Obligations and/or the guarantee set out in Clause 1
(Guarantee) to be or become invalid or unenforceable, then the Guarantor
shall perform and discharge all of CSC's obligations under the Agreements
as if they were the primary obligations of the Guarantor.
5. NO DEDUCTION
The Guarantor shall make any payments due from it under Clause 1
(Guarantee) in full, without any deduction or withholding, in respect of
any claim (whether by way of set-off, counterclaim or otherwise) asserted
from time to time by CSC or any member of the CSC Group against Marconi or
any member of the Marconi Group under the Agreements or in respect of any
other matter or thing.
6. NO EXERCISE OF SET OFF-RIGHTS
The Guarantor shall not exercise any rights which it may have against CSC
or any other member of the CSC Group arising from or otherwise relating to
its guarantee under Clause 1 (Guarantee) or its other obligations under
this deed unless and until all of the Obligations of CSC have been
performed and discharged.
8
SCHEDULE 23 - FORM OF GUARANTEES
7. ENFORCEMENT
Marconi may claim under the guarantee set out in Clause 1 (Guarantee)
without first making demand of CSC or taking any action to claim under or
enforce any other right, security or other guarantee which it may hold
from time to time in respect of the Obligations provided that Marconi
shall have given no less than 21 days notice to CSC of such demand and CSC
has failed to remedy its failure.
8. UNCONDITIONAL AND IRREVOCABLE GUARANTEE
The Guarantor's obligations under this deed, including its guarantee under
Clause 1 (Guarantee), are unconditional and irrevocable.
9. GOVERNING LAW AND JURISDICTION
The provisions of Clauses 18 and 37 (Governing Law and Jurisdiction) of
the Asset Transfer Agreement and Master Agreement for the provision of IT
and Project Services respectively shall apply to this deed, mutatis
mutandis.
This Deed has been duly executed as a deed on the date stated above.
EXECUTED and DELIVERED )
as a DEED by COMPUTER SCIENCES )
CORPORATION acting by the )
two directors or a director and the )
company secretary )
Director
Director/Secretary
9
SCHEDULE 23 - FORM OF GUARANTEES
EXECUTED and DELIVERED )
as a DEED by )
MARCONI CORPORATION PLC )
two directors or a director and the )
company secretary )
Director
Director/Secretary
10
EXHIBIT 1 - TRANSITION PROJECT
EXHIBIT 1
TRANSITION PROJECT
1. OVERVIEW
The purpose of this Exhibit 1 (Transition Project) is to outline the key
transition activities constituting the Transition Project, the key
milestones relating to those activities and the responsibilities of each
of the Parties in relation to those key activities and milestones.
The Parties acknowledge and agree that some of the activities and
obligations listed in this Exhibit 1 (Transition Project) may have been
completed or fulfilled by the Supplier pursuant to the terms of an
agreement between the Supplier and Marconi dated 8 April 2003 (the
"TRANSITION SERVICES AGREEMENT"), and that to the extent that such
activities and or obligations have been so completed or fulfilled under
the Transition Services Agreement, those activities shall be deemed to
have been completed or fulfilled pursuant to this Agreement.
2. PROJECT PLAN
2.1 OVERVIEW
The Transition Project consists of two Phases:
- PHASE 1 - United Kingdom, Ireland, US ,Canada,
- PHASE 2 - Italy, Germany and Rest of the World
High level plans outlining the key milestones and deliverables for each
Phase are set out in Paragraphs 2.2 and 2.3 (together, the "PROJECT PLAN")
.
Marconi and the Supplier will work together to further develop and
finalise the Project Plan in accordance with the key milestones set out
below.
2.2 GENERAL PROJECT PLAN
For the General Project Plan, refer to the diagram attached as Appendix A
to this Exhibit 1(Transition Project). This will be further developed
during the initial Transition phase. Dates in the General Project Plan
referable to the period prior
1
EXHIBIT 1 - TRANSITION PROJECT
to Completion are indicative only and are not intended to be binding on
the Parties.
2.3 TRUE UP PROJECT PLAN
For the True-Up Project Plan, refer to the diagram attached as Appendix B
to this Exhibit 1 (Transition Project). Dates in the True-Up Plan
referable to the period prior to Completion are indicative only and are
not intended to be binding on the Parties.
3. TRANSITION STAGES
Each Phase of the Transition Project shall be divided into the following
key stages:
(a) START UP STAGE - Transfer of Marconi Group employees to the Supplier
and the establishment of a foundation for the long-term retention
program;
(b) STABILISATION STAGE - Implementation of the initial processes and
infrastructure required for delivery of Services to the Marconi
Group;
(c) RELATIONSHIP STAGE - Establishment and alignment of governance and
management structures between the Parties;
(d) TRUE UP STAGE - Undertaking required analysis of existing services
and service levels in accordance with Clause 5.1 and 5.2;
(e) TRANSFORMATION STAGE - Implementation by the Supplier of operational
change and consolidation to the IT environment to realise
operational and efficiency improvements; and
4. KEY MILESTONES AND DELIVERABLES
The major milestones and deliverables identified in the Project Plan for
each Phase of the Transition Project are set out in further detail below.
For the purposes of paragraphs 4.1 to 4.5 of this Exhibit:
2
EXHIBIT 1 - TRANSITION PROJECT
- references to the Completion below shall be deemed to be to "Phase 1
Completion" in relation to Phase 1 Territories and to the relevant
"Phase 2 Completion " in relation to Phase 2 Territories;
- where a deliverable is stated to be due or to be completed on a date
prior to Completion, the date referable to that deliverable is
indicative only, and is not intended to be binding on the Parties
(save that those deliverables must have been provided by the
relevant Party by Completion); and
- where a deliverable is stated to be due on or following the
Completion, the actual day of Phase 1 Completion or Phase 2
Completion (as applicable) achieved shall be used.
4.1 START UP STAGE
MILESTONE DESCRIPTION DELIVERABLE DELIVERABLE TIMELINE RESPONSIBILITY
[***] [***] [***] [***] [***]
[***] [***] [***] [***] [***]
[***] [***] [***] [***] [***]
[***] [***] [***] [***] [***]
3
EXHIBIT 1 - TRANSITION PROJECT
MILESTONE DESCRIPTION DELIVERABLE DELIVERABLE TIMELINE RESPONSIBILITY
[***] [***] [***] [***] [***]
[***] [***] [***] [***] [***]
[***] [***] [***] [***] [***]
[***] [***] [***] [***] [***]
[***] [***] [***] [***] [***]
[***] [***] [***] [***] [***]
4.2 STABILISATION STAGE
4
EXHIBIT 1 - TRANSITION PROJECT
MILESTONE DESCRIPTION DELIVERABLE DELIVERABLE DUE DATE RESPONSIBLE
[***] [***] [***] [***] [***]
[***] [***] [***] [***] [***]
[***] [***] [***] [***] [***]
[***] [***] [***] [***] [***]
[***] [***] [***] [***] [***]
[***] [***] [***] [***] [***]
[***] [***] [***] [***] [***]
[***] [***] [***] [***] [***]
4.3 RELATIONSHIP STAGE
5
EXHIBIT 1 - TRANSITION PROJECT
MILESTONE DESCRIPTION DELIVERABLE DELIVERABLE DUE DATE RESPONSIBLE
[***] [***] [***] [***] [***]
[***] [***] [***] [***] [***]
[***] [***] [***] [***] [***]
[***] [***] [***] [***] [***]
[***] [***] [***] [***] [***]
4.4 TRUE UP STAGE
MILESTONE EVENTS DELIVERABLE DELIVERABLE TIMELINE RESPONSIBILITY
[***] [***] [***] [***] [***]
[***] [***] [***] [***] [***]
[***] [***] [***] [***] [***]
4.5 TRANSFORMATION STAGE
MILESTONE EVENTS DELIVERABLE DELIVERABLE TIMELINE RESPONSIBILITY
[***] [***] [***] [***] [***]
5. ROLES AND RESPONSIBILITIES
5.1 OVERVIEW
The Supplier and Marconi shall each put in place a global transition team
with a view to ensuring an efficient and successful transition phase. Key
responsibilities for each of the parties are highlighted below.
5.2 SUPPLIER RESPONSIBILITIES
- Responsible for leading the development of the transition Project
Plan.
6
EXHIBIT 1 - TRANSITION PROJECT
- Responsible and accountable for all transition activities and
deliverables.
5.3 MARCONI RESPONSIBILITIES
- Provide resources to fulfil agreed Marconi tasks, as identified in
the Transition Project Plan.
- Making available at least - one (1) part time Global Programme
Manager and one (1) part time Representative in each country for
issue resolution
- Making available at least one (1) HR representative in each country
to work alongside Supplier HR team (potentially full time to
Completion).
- Making reasonably available representatives (on a part time basis)
to liaise with and assist the Supplier during the Transition Project
in the following areas - True-Up, third party contracts, finance,
governance, communications, logistics, application services,
infrastructure services, and procurement.
- Participation in review status meetings (planned on being weekly).
- Provide responses to the Supplier's reasonable requests for any
relevant information required in a reasonable and timely manner.
6. CHARGES
The Charges for the Transition Project (and the manner in which they are
payable) are specified in Paragraph 2 of Schedule 4 (Charges/Rate Card).
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EXHIBIT 1 - TRANSITION PROJECT
APPENDIX A
GENERAL PROJECT PLAN
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EXHIBIT 1 - TRANSITION PROJECT
APPENDIX B
TRUE-UP PROJECT PLAN
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EXHIBIT 2 - EXISTING PROJECTS
EXHIBIT 2
EXISTING PROJECTS
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EXHIBIT 2 - EXISTING PROJECTS
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EXHIBIT 2 - EXISTING PROJECTS
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EXHIBIT 2 - EXISTING PROJECTS
PROJECT # PROJECT NAME DESCRIPTION REGION CURRENT STATUS CONTACT
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EXHIBIT 2 - EXISTING PROJECTS
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EXHIBIT 2 - EXISTING PROJECTS
PROJECT # PROJECT NAME DESCRIPTION REGION CURRENT STATUS CONTACT
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