Exhibit
10.14


 


Hawaiian Telcom  Confidential
Information




 





 


AMENDED AND RESTATED


 


MASTER APPLICATION SERVICES AGREEMENT


 


BETWEEN


 


HAWAIIAN TELCOM COMMUNICATIONS, INC.


 


AND


 


ACCENTURE LLP


 


EXECUTED


 


March 13, 2009




 





 


Execution
Copy


 

















 


INDEX
OF DOCUMENTS


 


Master
Application Services Agreement


Exhibit A:  Definitions


Exhibit B:  Services


Exhibit C:  Fees


Exhibit D:  Service Levels


Exhibit E:  Governance


Exhibit F:  Benchmarking


Exhibit G:  Audits; Record Retention


Exhibit H:  Insurance


Exhibit I:  Minimum Data Safeguards


Exhibit J:  Customer Policies


Exhibit K:  Supplier Background Investigations and
Examinations Policies and Standards


 

















 


MASTER
APPLICATION SERVICES AGREEMENT


 


This Amended and Restated Master Application
Services Agreement (this “Master Agreement”),
executed as of March 13, 2009 and effective as of the effective date
determined in accordance with Section 16.3 (the “Effective Date”), is by and between
Hawaiian Telcom Communications, Inc., a Delaware corporation (“Customer”), and Accenture, LLP, an Illinois
limited liability partnership (“Supplier”).  Each of Customer and Supplier is referred to
herein as a “Party” and
collectively as the “Parties”.


 


RECITALS


 


WHEREAS, Supplier and Customer have
previously entered into that certain Application Services Agreement dated February 5,
2007, pursuant to which Supplier provided Customer with certain software
development and management services, which agreement is scheduled to expire on April 30,
2009 (as amended, the “Prior Agreement”);


 


WHEREAS, Supplier and Customer wish to amend
and restate the Prior Agreement in its entirety and extend its term, and
facilitate the means by which Supplier and Customer can enter into new
agreements for new services;


 


WHEREAS, in connection with the foregoing,
Supplier and Customer are entering into this Master Agreement and Schedule
A-Application Management Services (“Schedule A”)
which amend and restate in its entirety the Prior Agreement, and which will
facilitate the process by which Customer and Supplier may agree to procure and
provide additional services, and the terms and conditions upon which such
services will be provided.


 


NOW, THEREFORE, for and in consideration of
the agreements set forth below, Customer and Supplier agree as follows:


 


1.                                      Agreement
Structure.


 


1.1                               Master Agreement.  This
Master Agreement sets forth the terms and conditions which will apply to any
Services which Customer agrees to procure from Supplier and which Supplier
agrees to provide to Customer.  This
Master Agreement does not, by itself, obligate Customer to procure any services
or Supplier to provide any services.


 


1.2                               Schedules.  If and when
Customer wishes to procure services, Customer shall so notify Supplier, and
subject to reaching agreeable terms, the Parties shall negotiate and enter into
a schedule (each a “Schedule”)
which will identify:  (a) the
Services, including any responsibilities allocated to each Party; (b) the
Schedule Term; (c) the Fees to be paid; (d) any known Commissioned
Materials; (e) any milestones (“Milestones”);
(f) any Equipment, Software, materials or other resources which Customer
is obligated to provide to Supplier for use in connection with the Services or
which Customer needs to procure for itself in order to be able to use the
Services; and (g) any other information relevant to the applicable
Services.


 


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1.3                               Approved Service Changes.  Approved
Service Changes are entered into in accordance with Section 8.1 (Service
Changes) of Exhibit B (Services) and address changes to Services or new
services to be provided under an existing Schedule, as further set forth
therein.


 


1.4                               Non-Exclusive Services.  Subject to any commitments expressly provided
for in a Schedule, if any, nothing herein shall prevent Customer from performing
itself, or from procuring from third parties, the Services or services similar
to the Services.


 


1.5                               Recipients and Authorized Users.  Supplier
acknowledges that although the Services are being provided to Customer,
Customer may procure Services hereunder on behalf of the following:  (a) Customer; (b) Customer’s
Affiliates; (c) business partners of Customer (e.g., CLEC customers who
rely on Customer services that rely on the Services); and (d) Contractors,
customers and suppliers of Customer and/or its Affiliates, provided in the case
of Contractors, customers and suppliers, such entities use the Services solely
for the benefit of Customer and/or its Affiliates or solely in connection with
business transactions between such entities and Customer and/or its Affiliates
(the entities in subsections (a), (b), (c) and (d) collectively, “Permitted Recipients”).  Supplier acknowledges that, if requested by
Customer in writing, specified employees or Contractors of the Permitted
Recipients shall have the right to access the Services (including any Customer
Systems and Supplier Systems) to the same extent as Customer Personnel, and to
the extent requested by Customer in writing, to interface with Supplier in
connection with Supplier’s performance of the Services (“Authorized Users”).  Notwithstanding the foregoing, and other than
receiving the Services as set forth herein, no Permitted Recipients (other than
Customer) or Authorized Users shall obtain any rights (except as expressly set
forth herein), benefits or remedies under this Agreement, nor shall any such
parties have the right to enforce this Agreement.  To the extent any Schedule contains any
minimum volumes, spending, or other commitments, all use of the Services by
Permitted Recipients and Authorized Users shall count towards such minimums.


 


1.6                               Definitions.  Capitalized
terms used in this Agreement have the meanings set forth on Exhibit A
(Definitions).


 


1.7                               Terminology.  Unless
expressly stated otherwise:  (a) references
to Master Agreement mean this Master Agreement together with any Exhibits or
other attachments hereto, but excluding Schedules; (b) references to a
Schedule means a Schedule and any Exhibits or attachments thereto and Approved
Service Changes entered into thereunder, and the Master Agreement as it relates
to the Services under that Schedule; and (c) references to “Agreement” shall mean the Master Agreement
and all Schedules.


 


1.8                               Order of Precedence.  In the event of a conflict, ambiguity or
inconsistency between (a) the provisions of this Master Agreement and any
Schedule (excluding this Master Agreement), the terms of this Master Agreement
shall govern except to the extent a provision of the Schedule expressly states
that it is intended to supersede a provision of the Master Agreement; and (b) a
Schedule (excluding Approved Service Changes) and any Approved Service Changes
thereunder, the terms of the Schedule shall govern except to the extent a
provision of the Approved Service Change expressly states that it is intended
to supersede a provision of the Schedule. 



 


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Notwithstanding the foregoing or anything herein to the contrary,
except with respect to incremental rights granted to Customer or liabilities
assumed by Supplier, a Schedule may only alter or supplement the following
terms if the alteration or supplement is expressly identified in the Schedule
under a heading titled “Deviations from Master”:  3, 5, 6, 10, 11, 12, 13, 14, 15, 16 of this
Master Agreement or Exhibit G (Audits; Record Retention) to this Master
Agreement.


 


1.9                               Interpretation; Rules of Construction.  The following
interpretations and rules of construction shall apply:  (a) headings preceding the text of Sections,
and headings to Exhibits, the table of contents and the table of Exhibits
included in or attached to this Agreement are used for convenience only and are
not to be considered in construing or interpreting this Agreement; (b) any
reference to a Section will be to the document in which it is included
(e.g., the Master Agreement, an Exhibit, or a Schedule) unless such reference
specifically references another document; (c) references to any Law refer
to such Law in changed or supplemented form, or to a newly adopted Law
replacing a previous Law; (d) the use of the term “including” and
inflections thereof, or of the abbreviation “e.g.” mean “including without
limitation,” “include without limitation” or “includes without limitation;” and
(e) words importing the singular include the plural and vice versa where
the context so requires.  The Parties
acknowledge and agree that they have mutually negotiated the terms and
conditions of this Agreement and have engaged such legal counsel as they deemed
necessary to enter into this Agreement, and as such hereby agree that any
provision contained herein with respect to which an issue of interpretation or
construction arises shall not be construed to the detriment of the drafter on
the basis that such Party or its professional advisor was the drafter.  References in this Agreement to “$” shall be
deemed a reference to United States dollars unless otherwise specified.


 


2.                                      Term.


 


2.1                               Master Agreement Term.  The term of
this Master Agreement will commence on the Effective Date and will expire five (5) years
thereafter, provided that the Master Agreement will survive thereafter for the
duration of any Schedule which is still in effect (the “Term”).


 


2.2                               Schedule Term.  The term of
each Schedule shall commence on the effective date thereof (each a “Schedule Effective Date”) and shall survive
for the period set forth in such Schedule (as each may be extended pursuant to Section 2.3,
a “Schedule Term”).


 


2.3                               Renewal.  In no event
will either Party be obligated to renew the Master Agreement or a Schedule
unless and until the Parties have reached agreement and executed a new Master
Agreement or Schedule.  Supplier agrees
that if Customer does provide notice of its desire at least six (6) months
prior to the expiration of the Term or a Schedule Term to renew the Master
Agreement or a Schedule and includes any new or different requirements,
Supplier shall provide Customer, within thirty (30) days after Supplier
receives such requirements, proposed changes to the Master Agreement or a
proposed new Schedule which meets such requirements and which includes pricing
and other terms and conditions upon which Supplier is willing to renew the
Master Agreement or Schedule.


 


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3.                                      Services.


 


3.1                               Services.  Supplier shall
provide the services provided for in Exhibit B (Services), each Schedule
and as provided for in this Master Agreement (the “Services”).  For the
avoidance of doubt, the Services identified in Exhibit B (Services) apply
to all Schedules.


 


3.2                               Service Locations; Location of Customer Personal Data.  Each Schedule shall identify
the applicable Service Locations. 
Supplier shall obtain Customer’s approval prior to:  (a) performing the Services from a
location other than the Service Locations expressly provided for in each
Schedule; or (b) storing Customer Personal Data in, or physically
transporting Customer Personal Data through, or accessing Customer Personal
Data from, a country other than the country in which the Service Locations
expressly provided for in each Schedule are located.  Notwithstanding the foregoing, Supplier may
provide the Services from a Service Location that is not expressly identified
in the applicable Schedule without Customer’s approval, provided (A) the
new Service Location is in the same metropolitan area as another Service
Location and is of equal to or better quality than the Service Location from
which the Services were previously provided, and (B) Customer is able to
obtain, at no cost to Customer, any applicable consents with respect to third
party assets (e.g., Equipment, Software, etc.). 
If either Party requests a change in the Service Locations, such change
will be addressed pursuant to Section 8.1 (Service Changes) to Exhibit B
(Services),  provided that, where
Supplier is the Party requesting the change, there will be no incremental Fees
to Customer and Supplier shall reimburse Customer for any incremental costs
incurred by Customer as a result of such relocation of a Service Location.


 


3.3                               Subcontracting.  Supplier shall
perform all Services using Employees of Supplier or its Affiliates or
Contractors that are approved by Customer in writing, including without
limitation those Contractors that have been pre-approved by Customer and
identified in a Schedule (“Approved
Contractors”), provided that approval will not be required for
Contractors who provide contract labor (as opposed to performing and being
responsible for material aspects of the Services), provided that (i) Supplier
maintains daily supervision and control over such Contractors; (ii) the
use of such Contractors does not exceed ten percent (10%) of the total number
of Supplier Personnel that are dedicated to Customer; and (iii) Supplier
notifies Customer at least thirty (30) days (or such shorter period as may be
reasonable under the circumstances) advance written notice before first
engaging any such Contractor.


 


3.4                               Non-Commercially Available Materials. 
Supplier shall obtain Customer’s approval prior to using any Software
to provide the Services that is not commercially available to Customer
(including any Software which is used to process transactions for Customer or
to automate any of the Services provided to Customer).  Supplier shall not, without Customer’s prior
approval, install in any Customer System any Software that is not provided by
Customer, other than Software which is a Supplier Embedded Material (subject to
Section 5.2), Commissioned Material, or any Supplier Materials that are
expressly identified in the applicable Schedule or an Approved Service Change
thereunder.  Supplier shall ensure that
any agreement for subcontracted Services, Materials (including license and
maintenance agreements therefore) or leased Equipment (including maintenance
agreements), in each case which are exclusively dedicated to Customer and
executed after the Effective Date, is assignable to Customer, using Reasonable 


 


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Efforts to obtain the right to assign any such agreement without fees
payable to the applicable third party for the right to assign; provided, however,
that if Supplier cannot obtain such assignment right without such fees despite
using Reasonable Efforts, Supplier shall obtain Customer’s written approval
before proceeding with any such agreement.


 


3.5                               Responsibility for Subcontractors and Affiliates.  Supplier shall remain
responsible for obligations under this Agreement performed by any Supplier
Affiliate or Contractor to the same extent as if such obligations were
performed by Supplier’s Employees. 
Supplier shall ensure that any subcontract or license contains such
provisions as are necessary to ensure Supplier’s ability to comply with the
terms of this Agreement, including Section 5 (Property Rights), Section 6
(Confidentiality) and Section 12.5 (Exit Rights).  Supplier shall be responsible for the work
and activities, and acts and omissions, of each of its Personnel, including
compliance with the terms of this Agreement. 
Supplier shall be responsible for all payments to its Contractors, and
for any incremental Taxes for which Customer is responsible pursuant to Exhibit C
(Fees) to the extent such Taxes are payable as a result of the engagement of
such Contractor.  To the extent Customer
approves of Supplier’s use of any Contractors, such approval will not relieve
Supplier of any of its obligations hereunder and Supplier shall not permit any
such Contractors to access any Customer Confidential Information or Customer
Personal Data unless and until such Contractors have agreed in writing to be
bound by the terms of this Agreement, including the terms of Section 6.


 


3.6                               Cooperation with Customer Contractors. 
Customer may from time to time engage Contractors to perform services
for, or provide products to, Customer, including managing Supplier’s
obligations under this Agreement. 
Supplier shall cooperate with and work in good faith with any Customer
Contractors as requested by Customer. 
Such cooperation shall include making available Supplier Service
Locations, access to Supplier Personnel for information and knowledge transfer,
access to Equipment, access to Software (to the extent permitted by applicable
Software license agreements), and information regarding Services (including any
Software used in connection with the Services and the configurations
thereof).  Supplier’s cooperation shall
be provided in a way that does not adversely affect Supplier’s performance of
the Services or increase Supplier’s cost to perform the Services.  In the event there is an increase in Supplier’s
costs due to such cooperation, Supplier will so notify Customer in advance and
if Customer approves such cooperation in writing, the Fees will be equitably
adjusted if and to the extent provided for in Section 8.3 of Exhibit B.


 


3.7                               Adverse Impact on Services.  Each Party will
promptly notify the other Party if an event of which that Party has notice
arises that, applying reasonable professional judgment, is likely to have a
material adverse effect on the Supplier’s ability to perform the Services.


 


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4.                                      Governance;
Dispute Resolution.  The Parties
agree to comply with the governance procedures set forth in Exhibit E
(Governance).  In addition, if a Party
has a dispute under this Agreement (each a “Dispute”),
such Party may seek to resolve such Dispute through the process set forth in
this Section 4.  Nothing in this section
is intended to limit either Party’s termination rights under this Agreement.


 


4.1                               Account Executives.  Within five (5) business
days after either Party furnishes to the other notice of a Dispute, the
Customer Account Executive and Supplier Account Executive shall consider the
Dispute in person or by telephone and shall attempt in good faith to resolve
the Dispute for a period of ten (10) business days after their first
meeting.


 


4.2                               Steering Committee Members.  If a Dispute is
not resolved in accordance with Section 4.1 above, each Party’s most
senior member of the Executive Steering Committee shall consider the Dispute in
person or by telephone within ten (10) business days after the expiration
of the period set forth in Section 4.1 and shall attempt in good faith to
resolve the Dispute for a period of twenty (20) business days after the
expiration of the period provided for in Section 4.1 above.  Unless such executives otherwise agree in
writing, either Party may pursue its rights and remedies under this Agreement
after the expiration of such period.


 


4.3                               Documentation and Request for Assistance. 
During the course of Dispute resolution, all reasonable document
requests made by one Party to the other Party for non-privileged information
reasonably related to the resolution of the Dispute is to be honored so that
each of the Parties may be fully advised of the other Party’s position.  Following resolution of a Dispute, such
resolution shall be documented and delivered to both Parties.


 


4.4                               Continuity of Services.  Supplier acknowledges that the timely and
complete performance of its obligations pursuant to this Agreement is critical
to the business and operations of Customer. 
Accordingly, in the event of a Dispute, Supplier shall continue to so
perform all of its obligations under this Agreement in good faith during the
resolution of such Dispute provided Customer continues to make payments for
Fees that are not subject to the Dispute unless and until (a) authority to
stop doing so is granted by Customer or conferred by a court of competent
jurisdiction, (b) this Agreement or a Schedule is terminated in accordance
with the provisions hereof, or (c) Supplier has the right to suspend
services pursuant to this Agreement.


 


4.5                               Claims.  Each Party
agrees that all actions under this Agreement will be brought by the Parties
hereto, and not by any Affiliates or other Permitted Recipients or Authorized
Users.


 


5.                                      Property
Rights.


 


5.1                               General Principle.  Intellectual
property which is created, conceived, reduced to practice or otherwise
developed by either Party or its Related Parties in connection with the
performance of such Party’s obligations under this Agreement, including any
Software and other Materials, shall be referred to as “Developed IP”.  Except as otherwise provided for in this Section 5,
ownership of any Developed IP will be determined in accordance with applicable
intellectual property laws.  All other
intellectual property (other than Developed IP), including intellectual 


 


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property which either Party or its Related Parties (a) develops,
acquires or licenses independently of this Agreement or during any Schedule
Term, (b) has already developed, acquired or licensed prior to the
Effective Date, (c) develops, acquires or licenses during the Term but
which is of general applicability and not unique to the performance of such
Party’s obligations under this Agreement, and, in the case of Supplier, not
developed by Supplier Personnel in connection with performing the Services for
Customer, (d) licenses from a third party (collectively, “Background IP”), shall be owned by such
Party.  For the avoidance of doubt, in
the case of Supplier, any modifications, enhancements and improvements to, or
derivatives of Supplier Background IP made by Supplier or a Supplier Contractor
independently or pursuant to this Agreement (excluding any Commissioned
Materials or Materials that are otherwise developed by Supplier Personnel in
connection with performing the Services for Customer under this Agreement)
shall be deemed included in Supplier Background IP, and in the case of
Customer, any modifications, enhancements and improvements to, or derivatives
of Customer Background IP made by Customer or a Customer Contractor
independently or pursuant to this Agreement shall be deemed included in
Customer Background IP.  Under no
circumstances does Customer assign to Supplier any intellectual property rights
under this Agreement.


 


5.2                               Customer Materials. 
Notwithstanding Section 5.1, Customer will own all intellectual
property rights in and to any Materials which are developed by Supplier or
Supplier’s Related Parties under a Schedule and which are either expressly
identified in such Schedule as Commissioned Materials, or which are developed
in connection with the Services or which are initially, specifically or
primarily developed for Customer or Customer’s Related Parties (including any
modifications made by Supplier to Customer Background IP that are Materials,
collectively, “Commissioned Materials”)
subject to Section 5.12 (Timing). 
Except as set forth below, Supplier shall ensure that development work
performed by or on behalf of Supplier in connection with the creation of
Commissioned Materials shall be original, and that no Supplier owned or
licensed Material (including any freeware software and Supplier Background IP)
is incorporated into such Commissioned Materials.  Notwithstanding the foregoing, Supplier may
embed into Commissioned Materials any Software or other Materials owned or
licensed by Supplier (including any freeware software and Supplier Background
IP) (“Supplier Embedded Materials”)
if and only if the Supplier Embedded Material is expressly identified in a
Schedule or Approved Service Change in a conspicuous manner under a heading
titled “Supplier Embedded Materials” which also expressly identifies which
Commissioned Material the applicable Supplier Embedded Material will be
embedded in and any deviations from or other limitations on the license grant
provided for below.  Except to the extent
a Schedule or Approved Service Change expressly identifies deviations from or
limitations on the following license, if Supplier embeds any Supplier Embedded
Materials into any Commissioned Material, Supplier hereby grants to Customer,
under all of Supplier’s intellectual property rights, a perpetual, global,
fully paid, royalty free, irrevocable, non-exclusive, sub-licensable,
transferable license (in the case of Software, in object code and, unless
otherwise provided for in the applicable Schedule or Approved Service Change,
source code), to load, install, execute, store, distribute, perform, display,
copy, modify, maintain, create derivative works of and otherwise use or exploit
in any manner any such Supplier Embedded Materials solely in connection with
and as embedded in such Commissioned Material.


 


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5.3                               Patents.  As between
the Parties and subject to Section 5.2, ownership of patents for inventions
conceived or reduced to practice in connection with this Agreement shall be
determined in accordance with the laws of inventorship of the applicable
jurisdiction where patent rights are, or may be, filed for, except that
Customer shall own any patents in inventions (other than Supplier’s Background
IP):  (a) which are conceived or
reduced to practice in connection with the development of Commissioned
Materials; or (b) which are embodied in any specifications or processes
specified by or defined by Customer.  In
addition, to the extent Supplier has a patent on, or intends to seek patent
protection on, a process that Supplier requires Customer to follow (including
pursuant to this Agreement) in order to receive the Services, Supplier shall
notify Customer of such patent protection, and Customer shall be granted a
perpetual, global, fully paid, royalty free, irrevocable, non-exclusive,
sub-licensable, transferable license to continue to follow such process for
internal purposes only after expiration or termination of this Agreement.  For the avoidance of doubt, the foregoing
license does not include processes used by Supplier, but shall only apply to
processes followed by Customer as required by Supplier.


 


5.4                               License Rights During the Term.  Each Party grants to the other, during the
Term only, a global, fully paid, royalty-free, non-exclusive, license to load,
install, execute, store, distribute (within its enterprise only), perform,
display and copy any Materials which it provides to the other Party for use in
connection with the Services, solely as necessary to provide, use, access or
receive, as applicable, the Services, provided that each Party’s use of any
Software provided by the other Party shall be subject to the terms of license
agreements applicable to that Software and any other conditions imposed by the
Party providing the Software, in each case as disclosed in writing to the Party
receiving the Software.


 


5.5                               Supplier Background IP and Other Developed IP.


 


(a)                               Supplier hereby
grants to Customer, under all of Supplier’s intellectual property rights,
global, fully paid, royalty free, irrevocable, non-exclusive, sub-licensable,
transferable license (in object code in the case of Software), perpetual
license to use, load, install, execute, store, perform, display, copy, maintain
and otherwise use or exploit:


 


(i)                                    any
Supplier-owned Software (excluding Developed IP and Supplier Embedded
Materials) used by Supplier to provide the Services to the extent needed for
Customer or Customer’s service provider to continue to operate any Supplier
Managed Customer System, Commissioned Materials or the Developed IP, for
Customer’s own internal business purposes, without adversely affecting
performance, functionality or interoperability of the foregoing systems in production;


 


(ii)                                Developed IP
that Customer does not otherwise have a license to (which will include source
code in the case of Software to the extent Supplier is permitted to provide
Customer with such source code);


 


(iii)                            any Materials
other than Software (excluding Developed IP) that are in Customer’s possession
at any time during the Term or any Termination Assistance Period, for Customer’s
own internal business purposes;


 


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(iv)                               any Supplier-owned Software
(excluding Developed IP) used by Supplier to provide the Services and which is
commercially licensed by Supplier and which the Schedule expressly states is
subject to this Section 5.5(a)(iv), provided that (i) this license
will include source code and the right to create derivative works if such right
is provided by Supplier to any other licensee, (ii) Customer’s right to
use such Software shall be subject to Supplier’s then current commercial
license terms and conditions, to the extent not inconsistent with this Section 5.5,
(iii) the scope of Customer’s rights will be limited to the scope which
Customer enjoys during the Term (e.g., if this Agreement limits Customer’s
right to install such Software to a specified number of servers, such
limitation will survive, or if this Agreement limits access to such Software to
a specified number of users, such limitation will survive); (iv) where
such software is generally licensed by Supplier for an upfront fee for a
perpetual license and an ongoing annual maintenance fee, there shall be no up
front license fee, and if Customer requests such maintenance, Supplier shall
provide to Customer support and maintenance services for any such Software on
terms and conditions generally available to other licensees, and at Fees which
are consistent with those enjoyed by Customer during the applicable Schedule
Term; and (v) where such software is generally licensed by Supplier on a
term based basis, such license shall be subject to Customer continuing to pay
for such license on a term based basis, provided that the fees will be
consistent with those enjoyed by Customer during the applicable Schedule Term.


 


(v)                                   For the avoidance of doubt,
Supplier’s Accenture Delivery Methods (ADM) manuals are not subject to the
license grants set forth in this Section 5.5(a), unless or except as
otherwise explicitly agreed to in a separate license arrangement. Any ADM
manual that is to be excluded from the license grants in this Section 5.5(a) must
be clearly marked as “Accenture Delivery Methods,” or “ADM.”


 


(b)                                  Except as otherwise provided
in Section 5.5(a), all Supplier Background IP and Supplier-owned Software
in Customer’s possession which Customer does not otherwise have a license to
shall be promptly returned to Supplier upon termination or expiration of the
applicable Schedule Term (and any applicable Termination Assistance Period).


 


5.6                               Equipment.  As between the Parties, each Party shall
retain ownership of any Equipment provided by such Party to the other for use
in connection with the Services; provided that, except for general office
equipment (e.g., chairs, desks, telephones, personal computers and the like),
Supplier shall not use any of its own Equipment to provide the Services unless
expressly identified in the applicable Schedule or unless Customer otherwise
consents in writing, which consent shall not be unreasonably withheld.  Each Party shall properly identify Equipment
of the other Party as the other Party’s property.


 


5.7                               Liens.  Neither Party shall purport
to pledge, or in any way charge by way of security, permit any lien to be
placed on, or otherwise encumber or permit the encumbrance in any way, on any
property of the other Party.


 


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5.8                               Assignments.  Supplier hereby irrevocably
and unconditionally assigns to Customer such intellectual property rights as
are necessary to reflect the allocation of rights provided for in this Section 5
(Property Rights) together with any and all claims, past, present or future, of
any nature whatsoever that the assigning Party may have for infringement,
misappropriation, or violation of any such intellectual property rights.  If any intellectual property rights,
including artists’ rights and moral rights, cannot (as a matter of law) be
assigned as provided above, then Supplier hereby unconditionally and
irrevocably grants to Customer an exclusive (without reservation), perpetual,
irrevocable, worldwide, fully paid, royalty-free, transferable, assignable
license, with the right to sublicense through multiple levels of sublicensees,
to use and exploit in any manner whatsoever such intellectual property rights
which cannot be assigned.  Supplier shall
be responsible for securing on behalf of Customer any intellectual property
rights of its Personnel and Contractors which are necessary to reflect the
allocation of rights provided for in this Section 5 (Property Rights).


 


5.9                               No Implied
Rights.  All rights not expressly
granted in this Agreement are reserved. 
Without limiting the generality of the foregoing, neither Party shall
have any right to use any trademarks or similar rights of the other Party.


 


5.10                        Further
Assurances.  Each Party
shall, and shall cause its Personnel and Contractors to:  (a) cooperate with and assist the other
Party and its designees, both during and after the Term, in perfecting,
maintaining, and enforcing such Party’s or its designees’ rights under this Section 5
(Property Rights); and (b) execute and deliver to the requesting Party any
documents or take any other actions as may reasonably be necessary, or as such
Party may reasonably request, to perfect, maintain, protect, or enforce its or
its designees’ rights in such materials or otherwise carry out the purpose of
this Section 5 (Property Rights).


 


5.11                        Authorized
Users.  All licenses granted to
Customer under this Agreement (including in this Section 5 (Property
Rights) and in Section 12.5 (Exit Rights)) shall extend to all Authorized
Users and Permitted Recipients, and shall also extend to all Authorized Users
to the extent such persons exercise such license rights solely for the benefit
of Customer and Permitted Recipients and subject to the terms and conditions of
this Agreement.  Customer shall be fully
responsible for the use of Supplier Embedded Materials, Supplier Software and
other Supplier Materials, and Supplier information by Customer Affiliates and
Contractors of Customer and its Affiliates.


 


5.12                        Timing.  For each license granted by Supplier to
Customer in this Section 5 and for any rights that Supplier is obligated
to assign to Customer hereunder, such license or assignment shall be deemed
consummated upon, Customer’s payment to Supplier of all fees for the month in
which the item subject to the applicable license or assignment is first used in
a production capacity.  To the extent any
Fees for such month are disputed, then the license grant or assignment shall be
deemed consummated as follows: (a) if such dispute pertains to material or
work that is not the licensed or assigned item, the license grant and
assignment shall be deemed consummated upon payment of undisputed Fees for the
applicable month, and (b) if such dispute pertains to material or work
that is the licensed or assigned item, the license grant and assignment shall
be deemed consummated in accordance with the resolution of such disputed Fees
pursuant to Exhibit C, 


 


10

















 


Section 6.  Until such assignment or license is
consummated, the license rights provided for in Section 5.4 shall apply.


 


6.                                      Confidentiality.


 


6.1                               Definition.  For purposes of this Agreement, “Confidential Information” shall mean any
and all information of a Party (the “Disclosing
Party”) which is provided to the other Party (the “Receiving Party”) or to which the other
Party has access as a result of this Agreement, whether in graphic, electronic,
written or oral form, that (a) relates to the Disclosing Party’s business
operations, financial condition, customers, products, services or technical
knowledge, (b) is communicated to the Receiving Party by the Disclosing
Party and identified as confidential or proprietary, (c) is identified as
confidential or proprietary to which a Party has access in connection with this
Agreement, (d) is communicated to a Party or to which it has access that
reasonably should be understood by the Receiving Party, because of
confidentiality or similar legends, the circumstances of disclosure or the
nature of the information itself, to be proprietary and confidential to the
Disclosing Party.  The Parties agree that
this Agreement shall be deemed the Confidential Information of both Parties,
provided that Supplier agrees that Customer’s requirements provided by Customer
with respect to the Services, including any Service descriptions and the
Service Levels and any other information contained in this Agreement, but
specifically excluding pricing, shall be deemed the Confidential Information of
Customer.  For the avoidance of doubt,
Customer may not disclose the fact that any terms provided for herein were
agreed to by Supplier.  In addition,
Customer Confidential Information shall be deemed to include all data (A) obtained
by Supplier or Supplier Contractors from Customer in connection with this
Agreement, (B) hosted by Supplier on behalf of Customer, including data
hosted on a Supplier Managed Customer System, and all derivatives of any of the
foregoing, and (C) developed or produced by Supplier or Supplier
Contractors in connection with this Agreement. 
All such Confidential Information shall be and shall be deemed to have
been received in confidence and shall be used only for purposes of this
Agreement.  Notwithstanding the
foregoing, Confidential Information will not include information which: (a) is
or becomes publicly available through no fault of the Receiving Party; (b) is
or was independently developed by the Receiving Party; or (c) is or was
received by the Receiving Party without obligation of confidentiality.  For the avoidance of doubt, each Party’s
Background IP and Developed IP, and the Commissioned Materials shall be deemed
Confidential Information of the Party which owns such items, and may only be
used by the other Party for the purposes set forth herein.


 


6.2                               General
Obligations.  Neither
Customer nor Supplier shall disclose, publish, release, permit the disclosure
of, transfer or otherwise make available Confidential Information of the other
in any form to, or for the use or benefit of, any person or entity without the
Disclosing Party’s written consent.  In
addition, each Party shall, however, be permitted to disclose relevant aspects
of the other Party’s Confidential Information to its Personnel and Contractors
to the extent such disclosure is not restricted under any Consents or any Laws
or Governmental Approvals and only to the extent that such disclosure is
reasonably necessary for, and use by Personnel and Contractors is limited to,
the performance of such Party’s duties and obligations or the determination,
preservation or exercise of its rights and remedies under this Agreement;
provided that such Personnel and Contractors have previously executed a written
confidentiality agreement 


 


11

















 


consistent with the terms of this
Agreement.  This Section imposes no
obligation with regard to that portion of Confidential Information that the
receiving Party is required to disclose pursuant to Law or any order by any
Governmental Authority and such Receiving Party provides, to the extent it may
legally do so, the Disclosing Party with prompt notice prior to any such
required disclosure, and limits such disclosure only to that information which
is required to be disclosed. All Confidential Information shall be returned to
Customer upon termination of this Agreement, unless otherwise directed by
Customer in writing.


 


6.3                               Precautions.  Without limiting each Party’s obligations as
provided for in Section 6.2 and Section 6.6(g), each Party shall take
reasonable steps to protect the Confidential Information of the other Party
from wrongful use or disclosure, which steps are at least as protective as the
other Party takes with respect to protecting its own Confidential Information.


 


6.4                               Wrongful
Disclosures.  Without
limiting either Party’s rights with respect to a breach of this Section 6
(Confidentiality), each Party shall:  (a) promptly
notify the other Party of any unauthorized access, possession, disclosure, use
or knowledge, or attempt thereof, of the other Party’s Confidential Information
by any person or entity that may become known to such Party; (b) include
with such notice full details of the unauthorized access, possession,
disclosure, use or knowledge, or attempt thereof (including the nature of the
non-permitted use or disclosure, the Confidential Information used or
disclosed, the identity of the person or persons who made the non-permitted or
violating use or disclosure (or attempt thereof) (if known), the recipient of
the non-permitted disclosure (if known), and what corrective action the Party
took or will take to prevent further non-permitted uses or disclosures), (c) investigate
or assist the other Party in investigating or preventing the recurrence of any
unauthorized possession, disclosure, use or knowledge, or attempt thereof, of
Confidential Information; (d) reasonably cooperate with the other Party in
any litigation and investigation against third parties deemed necessary by the
other Party to protect its proprietary rights; and (e) promptly use its
Reasonable Efforts to prevent a recurrence of any such unauthorized possession,
disclosure, use or knowledge, or attempt thereof, of Confidential Information.


 


6.5                               Residual
Knowledge.  Nothing in this
Agreement shall restrict a Party from using the generic ideas, concepts, or
know-how developed by or disclosed to a Party in connection with this Agreement
and inadvertently retained in the unaided memory of the receiving Party’s
Personnel (and not intentionally memorized for the purpose of later recording
or use) who have rightful access to such information under the terms of this Agreement,
provided that such use does not infringe or misappropriate the intellectual
property rights of a Party or breach its confidentiality or other obligations
under this Agreement.


 


6.6                               Customer
Personal Data.


 


(a)                                  Definition.  “Customer
Personal Data” means all Customer data which can identify an
individual (including, without limitation, “personal information” as defined in
Haw. Rev. Stat. § 487N or any similar law, “personal data” as defined by the
European Directive of the European Parliament and of Council 95/46/EC, “nonpublic
personal information” as defined by GLB, “protected health information” as
defined by the HIPAA, and “customer proprietary 


 


12

















 


network information” as defined by Section 222
of the Communications Act, as amended (47 U.S.C. § 222), regardless of whether
such laws apply to a Party, and any information about an individual, which if
disclosed, would require a Party to notify the individual of such disclosure
under any Laws applicable to such Party). 
Without limiting the terms of this Section 6.6, Customer Personal
Data shall always be deemed to be a subset of Customer Confidential Information
(even if it qualifies for one of the exceptions in Section 6.1), however,
to the extent there is any conflict between this Section 6.6 and Sections
6.1 through 6.4, the provisions of this Section 6.6 shall control.  In addition, any breach of a Party’s
obligation set forth in this Section 6.6 shall be subject to Section 14.3(e).


 


(b)                                  Ownership and
Use of Customer Personal Data.  As between the Parties, Customer shall be the
sole and exclusive owner of all Customer Personal Data and subject to the
remainder of this Section 6.6(b),  Supplier
is hereby authorized to have access to and utilize the Customer Personal Data
to the extent necessary or appropriate for the performance of its obligations
hereunder and for no other purpose. 
Supplier will not, directly or indirectly: (i) possess or assert
any lien or other right or interest against or to any Customer Personal Data: (ii) sell,
assign, license, lease or
otherwise  use or commercially
exploit the Customer Personal Data;
or (iii) except as provided for in this Section 6.6(b), disclose  Customer Personal Data to  any third party.  For the avoidance of doubt, Supplier may
disclose Customer Personal Data to its Employees, Affiliates, and subject to Section 3.3,
Contractors and only to the extent such disclosure is reasonably necessary for
the performance of Supplier’s obligations under this Agreement.


 


(c)                                  Compliance.  Supplier will:  (i) segregate all Customer Personal Data
from that of any other client: (ii) establish and maintain procedures,
systems, processes and controls intended to prevent the unauthorized access,
use, disclosure, destruction, loss or alteration of any Customer Personal Data
in the possession or control of Supplier or any of its Contractors, Affiliates
or Personnel, or while transmitted by Supplier (or any of its Contractors,
Affiliates or Personnel) to Customer, that are no less rigorous than those
maintained by Supplier for its own similar data; (iii) at Customer’s
request, promptly assist Customer with any subject access requests which may be
received from individuals to whom the Customer Personal Data relates; (iv) promptly
carry out a request from Customer to amend, transfer or delete any of the
Customer Personal Data necessary to allow Customer to comply with Laws
applicable to Customer in relation to Customer Personal Data; and (v) not
transfer any Customer Personal Data across national borders unless authorized
in writing to do so by Customer and, if authorized, ensure that the transfer is
made in accordance with any reasonable instructions from Customer and any
further steps necessary to ensure that the transfer is in accordance with the
applicable Laws.  Without limiting the
generality of the foregoing, Supplier shall comply with Customer Policies
regarding procedures and safeguards against the unauthorized access, use,
disclosure, destruction, loss or alteration of Customer Personal Data in
Supplier’s possession, as such Customer Policies are attached as Exhibit J
(Customer Policies), as such procedures may be upgraded or enhanced by Customer
from time to time, provided that any such changes will be subject to the fee
adjustments provided for in Section 8.3 (Equitable Adjustments) of Exhibit B
(Services).


 


(d)                                  Archived
Customer Personal Data. Unless otherwise directed by Customer,
Supplier may retain archival copies of Customer Personal Data as reasonably
necessary 


 


13

















 


to verify Supplier’s compliance with this
Agreement, subject to its confidentiality obligations as set forth in this Section 6.  Supplier shall identify such data to Customer
at the time such archival copies are withheld.


 


(e)                                  Provision
of Data; Destruction of Data.  Upon Customer’s reasonable request, for any
reason and at any time during the Term and Termination Assistance Period,
Supplier shall (i) promptly provide to Customer, in the format and on the
media requested by Customer, all or any part of Customer Personal Data; and (ii) erase
or destroy all or any part of Customer Personal Data in Supplier’s
possession.  Supplier shall not withhold
any Customer Personal Data as a means of resolving any dispute.


 


(f)                                    Data Privacy.  The Parties
shall comply with their respective obligations under all privacy and data
protection Laws and regulations applicable to any Customer Personal Data
(collectively, the “Data Protection Laws”),
provided that, for the avoidance of doubt, Supplier shall comply with all
Supplier Laws and Customer shall comply with all Customer Laws.  The Parties acknowledge that, with respect to
all Customer Personal Data controlled and owned by Customer and processed (as
defined in the Data Protection Laws) by Supplier for the purpose of the
provision of Services under this Agreement: (i) Customer alone shall
determine the purposes for which and the manner in which such Customer Personal
Data will be processed by Supplier; (ii) Customer shall be the data controller
(as defined in the Data Protection Laws); (iii) Supplier shall be the data
processor (as defined in the Data Protection Laws).  Where, in connection with this Agreement,
Supplier processes Customer Personal Data on behalf of Customer as a data processor,
Supplier shall (i) process the Customer Personal Data only on written
instructions of Customer and to the extent reasonably necessary or appropriate
for the performance of this Agreement; (ii) not disclose Customer Personal
Data to any person except as required or permitted by this Agreement or with
Customer’s prior written consent; and (iii) implement appropriate
technical, administrative, physical and organizational measures and safeguards,
as specified in Section 6.6(g).


 


(g)                                 Data
Security.  Supplier
shall provide to Customer in writing, and upon Customer’s written approval,
implement commercially reasonable technical, administrative, physical and
organizational safeguards and security measures which are consistent with
current practices in the telecommunications and information technology
industries, to (i) protect Customer Personal Data against unauthorized
destruction, loss, alteration, access, misuse or disclosure, and (ii) ensure
the availability, integrity and confidentiality of Customer Personal Data in
the possession of Supplier and its Affiliates, Contractors and Personnel (or to
which any of the foregoing has access), and during the shipping, electronic
transmission and storage thereof (the “Data
Safeguards”).  The Data
Safeguards must comply with all security Laws applicable to any Customer
Personal Data (including any Laws applicable to use, storage, possession and/or
handling of Customer Personal Data), the Customer Policies (as defined in Section 6.6(i),
the requirements of Exhibit I (Minimum Data Safeguards), and must be at
least equal to the highest of the following: 
(i) industry standards for locations similar to the applicable
Service Location, (ii) industry standards applicable to the Customer
Personal Data, (iii) those data security policies in effect as of the
Effective Date at each Service Location; and (iv) the standards used by
Supplier to protect its data which is similar to Customer Personal Data.  Supplier shall, at its sole expense, 


 


14

















 


revise and maintain the Data Safeguards at
Customer’s request.  In the event
Supplier intends to implement a change to the Data Safeguards (including
pursuant to Customer’s request), Supplier shall notify Customer and, upon
Customer’s approval, implement such change.


 


(h)                                 Access;
Breaches.  Supplier
will not attempt to access or allow access to Customer Personal Data that is
not required for the performance of the Services or otherwise authorized
hereby.  If any unauthorized access to
Customer Personal Data that requires Customer, under applicable Law or in its
business judgment, to make a notification to any third party, Customer shall be
solely responsible for making such notification, including determining the
content, methods, and means of such notification.  Supplier shall reasonably cooperate with
Customer in formulating such notification, but Supplier shall not make any such
notification at its own initiative without Customer’s prior consent.  Subject to Section 14.2 (Limitation on
Damages), Supplier will pay the reasonable costs and expenses of investigation,
remediation and notification to the extent the security breach is caused by or
related to a breach of this Agreement by Supplier or Supplier’s Related Parties
(including credit monitoring for each person whose Personal Data was or may
have been compromised).  For the
avoidance of doubt, the requirements of this Section 6.6(h) are in
addition to the requirements of Section 6.4.


 


(i)                                    Customer Policies. 
Without limiting the generality of this Section 6.6 (Customer
Personal Data), Supplier will comply with the Customer policies attached hereto
as Exhibit J (Customer Policies), as they may be changed by Customer from
time to time (the “Customer Policies”),
subject to Section 8.3 (Equitable Adjustments) of Exhibit B
(Services), and ensure that all Customer Personal Data residing on a Supplier
System or in a Supplier Service Location is physically segregated from the data
of any other Supplier Customer.


 


(j)                                    Confidentiality and Training.  Supplier shall maintain a written policy,
consistent with the obligations imposed by this Agreement, with respect to the
proper management of Customer Personal Data by Supplier Personnel.  Supplier shall institute an express
disciplinary process to take punitive measures, up to and including dismissal,
against any Supplier Personnel that violate this policy.  Supplier shall specifically train all
Supplier Personnel that will handle Customer Personal Data with respect to the
proper handling of Customer Personal Data and the data privacy, data security,
and confidentiality obligations imposed by this Agreement.


 


6.7                               Duration of
Obligations.  The receiving
party’s obligations under this Section 6 (Confidentiality) will continue
during the Term and Termination Assistance Period and survive the expiration or
termination of the Agreement for a period of seven (7) years after the End
Date, provided that obligations with respect to Customer Personal Data shall
survive indefinitely.


 


6.8                               Reserved.


 


6.9                               Use of
Customer Systems.  To the extent a
Schedule obligates Customer to provide Supplier with any access to a Customer
System, such access shall be solely for purposes of performing the Services,
and Supplier’s access shall be limited to those specific Customer Systems identified
in a Schedule and the time periods and personnel designated by Supplier and
agreed to by Customer and Supplier.


 


15

















 


7.                                      Fees; Payments; Taxes.  The Parties
will comply with the terms of Exhibit C (Fees).


 


8.                                      Audits.  The Parties
will comply with terms of Exhibit G (Audits; Record Retention).


 


9.                                      Reserved.


 


10.                               Representations;
Warranties and Covenants.


 


10.1                        Representations.


 


(a)                                  General.  Each Party represents and warrants to the
other, as of the Effective Date and each Schedule Effective Date, that:  (i) it is an entity which has been duly
formed and is validly existing and in good standing under the Laws of the
jurisdiction where it is formed; (ii) it has all requisite power and
authority to execute, deliver and perform its obligations under this Agreement
and each Schedule; (iii) the execution, delivery and performance of this
Agreement and each Schedule: (A) has been duly authorized by its requisite
officials, and (B) shall not conflict with, result in a breach of, or
constitute a default under any other agreement to which it is a party or by
which it is bound; (iv) it is duly licensed, authorized or qualified to do
business and is in good standing in every jurisdiction in which a license,
authorization or qualification is required for the ownership or leasing of its
assets or the transaction of business of the character transacted by it, except
where the failure to be so licensed, authorized or qualified would not have a
material adverse effect on its ability to fulfill its obligations under this
Agreement or any Schedule; and (v) there is no outstanding (or, to the
best of its knowledge, pending or threatened) litigation, arbitrated matter or
other dispute to which it is a party that, if decided unfavorably to it, would
reasonably be expected to have a material adverse effect on its ability to
fulfill its obligations under this Agreement or any Schedule.


 


(b)                                  Infringement.  Each Party represents and warrants that as of
the execution of each Schedule, except to the extent expressly noted otherwise
in such Schedule, to its knowledge, any Equipment or Materials (excluding
Commissioned Materials) provided by such Party thereunder will not infringe
upon or misappropriate the intellectual property rights of a third party.  Supplier represents and warrants that as of
the execution of each Schedule, except to the extent expressly noted otherwise
in such Schedule, Deliverables will not infringe upon any copyrights or trade secrets
of a third party, and, to the knowledge of Supplier, will not infringe upon any
third party patents validly issued as of the Schedule Effective Date of the
applicable Schedule, or in the case of Commissioned Materials, the date
Supplier commences such development (but in all cases only with respect to
patent rights in the countries from which the Service is being provided or to
which the Service is provided).  Each
party’s exclusive remedy with respect to infringement is set forth in Section 13.4
with respect to Supplier indemnity and Section 13.5 with respect to
Customer indemnity.


 


(c)                                  Verizon
Software.  Customer
represents, warrants and covenants that the “Software,” “Verizon Deliverable”
and “Verizon Proprietary Software” (each as defined in the license agreement
between Customer and Supplier attached hereto as Exhibit L (Verizon
Sublicense), the “Verizon Sublicense
Agreement”) delivered or made available to Supplier is in 


 


16

















 


the form and content as it was provided to
Customer pursuant to the SDLA or the SLA (as defined in the Verizon Sublicense
Agreement), as modified by or for the benefit of Customer, including by
Supplier pursuant to the Prior Agreement.


 


10.2                        Warranties.


 


(a)                                  Supplier warrants that
during the applicable Warranty Period, its modifications to and development of
Deliverables (a) shall comply with their applicable specifications (and
functional requirements in the case of Software) and the requirements of this
Agreement in all material respects, and (b) in the case of Software, shall
not adversely affect the stability, performance, functionality or compatibility
of any other Software in a material respect. 
Supplier will promptly correct any failures to comply with the foregoing
warranty (each a “Warranty Defect”)
within a reasonable time under the circumstances, not to exceed sixty (60)  calendar days from receipt of a
non-conformity notice (provided that Customer notifies Supplier of such
non-compliance within the Warranty Period). 
Notwithstanding the foregoing, Supplier will be excused from its
obligations in this Section 10.2(a) to the extent a Warranty Defect
caused by: (a) any Person (other than Supplier Personnel) making any
revisions or modifications to the Deliverable after its provision to Customer; (b) Customer’s
misuse or operation of the Deliverable other than in accordance with the
applicable documentation or design identified in the applicable Schedule; or (c) use
of the applicable Deliverable on hardware that does not meet any minimum
hardware requirements identified in the Schedule, if any (unless such hardware
is otherwise recommended, supplied or approved by Supplier).


 


(b)                                  For purposes of this
Agreement, the “Warranty Period”
means the specified number of months set forth below after the Acceptance of a
particular Deliverable by Customer.  The
Warranty Period shall be two (2) months after Acceptance for the
functionality of those components of Deliverables that execute on an ongoing or
on a daily or weekly cycle, six (6) months after Acceptance for the functionality
of those components of Deliverables that execute on a monthly or quarterly
cycle, and two (2) years after Acceptance for the functionality of those
components of Deliverables that execute no more frequently than on an annual
cycle.  Acceptance shall occur as of the
date provided for in Section 13 (Acceptance Testing) of Exhibit B
(Services).


 


10.3                        Covenants.


 


(a)                                  Each Party covenants that it
has and will have the full power and authority to grant the other Party the
rights granted herein.


 


(b)                                  Supplier covenants that it
shall (i) comply with all Laws that (a) pertain to Supplier’s
operation of its business, and/or (b) pertain to Supplier’s obligations in
connection with the provision of the Services (i.e., information technology,
business process outsourcing, or other such services defined in the applicable
Schedule, but not telecommunication services provided by Customer to its
customers) (including those applicable to Supplier as a processor of Customer
Personal Data) (“Supplier Laws”); (ii) perform
the Services in accordance with the information Customer provides to Supplier
pursuant to Section 10.3(c); (iii) obtain and maintain all
Governmental Approvals applicable to it, and provide any notice to any
Governmental Authority 


 


17

















 


that it is required to make, in each case
under any Supplier Law (collectively, “Supplier
Governmental Approvals”); (iv) provide the Services with
promptness, diligence and in a professional manner, in accordance with the practices
and professional standards used in well-managed operations performing services
similar to the Services, and shall use adequate numbers of qualified
individuals with suitable training, education, experience and skill to perform
the Services; and (v) to the extent that resources or services are charged
on a person hour or other non-fixed basis (including charges billed on a time
and materials basis and pass-through basis), Supplier shall use Reasonable
Efforts to efficiently use the resources or services necessary to provide the
Services, and to perform the Services in a reasonably cost efficient manner
consistent with the required level of quality and performance.


 


(c)                                  Customer covenants that it
shall comply with all Laws that (a) pertain to Customer’s operation of its
business, and/or (b) regulate Customer in its capacity as a provider of
products and services in the telecommunications industry (including those
applicable to Customer as a data owner and controller of Customer Personal
Data) (“Customer Laws”).  Customer acknowledges that Supplier is not
obligated or expected to determine whether its Services, Deliverables,
suggestions, analyses or recommendations, if implemented, would result in
Customer being in compliance with Customer Laws, and to the extent Customer
requires a change to the Services to enable Customer to comply with Customer
Laws, Customer shall be responsible for determining such change is required and
for requesting such change in accordance with Section 8.1 (Service
Changes) to Exhibit B (Services).


 


(d)                                  Customer shall be
responsible for all of its costs of complying with Customer Laws (including
changes thereto) and Supplier shall be responsible for all of its costs of
complying with Supplier Laws (including changes thereto).


 


10.4                        Consents.  Each Party will be responsible for obtaining
any Required Consents which it is obligated to procure as provided for herein
or which it otherwise needs to comply with its obligations hereunder, provided
that, where a Schedule states that Supplier is obligated to secure a Required
Consent which Customer would otherwise be obligated to secure, Supplier shall
secure such Required Consent on the terms set forth in the applicable Schedule.


 


10.5                        Disclaimer.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
IN  SECTION 10.1, 10.2 OR IN A
SCHEDULE, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED, REGARDING ANY MATTER, INCLUDING FITNESS FOR A PARTICULAR PURPOSE AND
MERCHANTABILITY. SUPPLIER DOES NOT REPRESENT OR WARRANT THAT THE OPERATION OF
ANY SOFTWARE SHALL BE UNINTERRUPTED OR ERROR FREE.


 


11.                               Termination;
Termination Fees.


 


11.1                        Termination
for Convenience.  Customer may
terminate any Schedule(s) or portion(s) thereof for convenience and
without cause by giving Supplier notice of the termination at least ninety (90)
calendar days prior to the effective date of termination specified in the
notice.  In such case, Customer shall pay
Supplier the Termination Fees and Wind Down Expenses, if any,


 


18














 


for the applicable Schedule(s).  If a purported termination by Customer
pursuant to any subsection of this Section 11 other than this Section 11.1
is determined not to be a proper termination for cause, such termination shall
be deemed a termination for convenience subject to this Section 11.1.


 


11.2        Reserved.


 


11.3        Termination
for Change in Control of Supplier or Supplier’s Parent.  In the event of a Change in
Control of Supplier or Supplier’s parent, Customer shall have twelve (12)
months following the closing of such Change in Control to terminate any
Schedule(s) or portions(s) thereof by giving Supplier ninety (90)
days prior written notice of the termination, effective as of the date
specified in such notice, and by paying to Supplier Wind Down Expenses, if any,
for the applicable Schedule(s). 
Additionally, if during such twelve (12) month period, Service Credits
payable in any three consecutive months exceed 20% of the Amount at Risk for
each such month, all Service Credits and Service Credit caps shall be
multiplied by 1.5 for the remainder of such twelve (12) month period.  Supplier shall provide Customer with written
notification upon closing of any Change in Control which would be subject to
this Section.


 


11.4        Termination
for Financial Degradation.  Customer may terminate any Schedule(s) or
portion(s) thereof by giving Supplier notice of the termination, effective
as of the date specified in said notice, if there is a substantial doubt as to
Supplier’s ability to continue as a going concern, as determined in accordance
with generally accepted accounting principles. 
In the event the Parties do not agree that Supplier is in such a
condition, the Parties shall engage a mutually agreed upon, appropriately
qualified independent auditor to make a final determination.


 


11.5        Termination
for Cause by Customer.  Customer may
terminate any Schedule(s) or portion(s) thereof by giving written
notice thereof to Supplier and effective as of the termination date set forth
in such notice, and without limiting Customer’s other rights or remedies under
this Agreement, at law or in equity if:  (a) Supplier
fails to perform any obligation under a Schedule in a material respect and does
not cure such breach within thirty (30) calendar days after receipt of a notice
of breach from Customer (or such longer period as the Parties may agree to in
writing on a case by case basis), provided, that if Supplier works diligently
and in good faith to cure such breach and such breach is not capable of being
cured within thirty (30) days, Supplier may request a reasonable amount of
additional time to cure such breach if it demonstrates that it is capable of
curing such breach within the additional period, which request may be granted
or denied in Customer’s sole discretion.


 


11.6        Termination
for Insolvency/Financial Degradation.  Customer may terminate this Agreement in
whole, but not in part, in the event that Supplier (i) files for
bankruptcy, (ii) becomes or is declared insolvent, or is the subject of
any bona fide proceedings related to its liquidation, administration,
provisional liquidation, insolvency or the appointment of a receiver or similar
officer for it, (iii) passes a resolution for its voluntary liquidation, (iv) has
a receiver or manager appointed over all or substantially all of its assets, (v) makes
an assignment for the benefit of all or substantially all of its creditors, (vi) enters
into an agreement or arrangement for the composition, extension or readjustment
of substantially all of its obligations or any class of such obligations, (vii) has
any of its publicly traded equities delisted from any stock exchange, or (viii) 


 


19

















 


experiences an event analogous to any of the
foregoing in any jurisdiction in which any material portion of its assets are
situated.


 


11.7        Termination
for Cause by Supplier. 
Supplier may terminate a Schedule if:


 


(a)           Customer fails to pay
undisputed charges under such Schedule that in total are equal to or greater
than the Fees due for two (2) months under such Schedule based on the
average monthly billing for the prior twelve (12) months or portion thereof
(the “Minimum Amounts”).  If Supplier desires to terminate such
Schedule pursuant to this Section 11.7(a), Supplier shall first provide
written notice of the amounts claimed to be past due and an express statement
that Supplier intends to terminate such Schedule, citing this section of the
Agreement if the payment failure is not cured within the time frame set forth
below.  If Customer does not cure the
payment failure within thirty (30) days after receipt of such notice and
Supplier wishes to proceed toward exercising its right to terminate such
Schedule under this Section 11.7(a), Supplier shall send a second notice
containing the same information as the first notice.  Supplier may terminate such Schedule if
amounts in excess of the Minimum Amounts remain unpaid after thirty (30) days
following Customer’s receipt of the second notice.  For the avoidance of doubt, the failure to
pay amounts that are in dispute will not be grounds for termination under this Section 11.7(a);


 


(b)           Customer breaches, in a
material respect, its obligations to maintain the confidentiality of Supplier
Confidential Information, with the intent to breach such obligations, and fails
to correct the underlying systemic cause of the breach within thirty (30) days
after written notice from Supplier of its intent to terminate for cause;


 


(c)           Customer breaches, in a
material respect, restrictions associated with its license to Supplier Embedded
Materials, Supplier Software or other Supplier Materials, or Supplier
information, with the intent to breach such obligations, and fails to correct
such breach within thirty (30) days after written notice from Supplier of its
intent to terminate for cause, provided that, for the avoidance of doubt, any
wrongful disclosure of any such items or materials shall be subject to
subsection (b) above; or


 


(d)           Customer rejects the
Schedule pursuant to section 365 of Title 11 of the United States Code (the “Bankruptcy Code”) while a debtor under the Bankruptcy Code.


 


11.8        Termination
for Change in Laws.  If a Law
arises or there is a change in any Laws, which in either case, results in a
material (a) increase in Customer’s costs for the Services, (b) adverse
change in the Services, or (c) degradation of the Services, Customer may
terminate the applicable Schedule(s), or portion(s) thereof, effective as
of a date specified in such notice, subject to the payment of the Wind Down
Expenses, if any, for the applicable Schedule(s).


 


11.9        Impact of
Termination on Obligations.  The termination
of this Agreement or any Schedule(s), or portion(s) thereof, in accordance
with Sections 11.1-11.8, shall not relieve either Party of any of its
obligations which have accrued prior to such termination (including 


 


20

















 


Customer’s obligation to pay Fees and costs
due and payable for Services performed by Supplier in accordance with this
Agreement).


 


11.10      Savings
Clause.


 


(a)           Customer shall not be deemed
to be in breach of this Agreement for failing to perform an obligation (other
than an obligation to pay Fees) which is necessary to enable Supplier to
perform an obligation hereunder, provided that, subject to the procedures set forth
in the remainder of this Section 11.10 (Savings Clause), Supplier shall be
excused from the failure to perform an obligation hereunder or the failure to
achieve a Service Level, if and to the extent such failure is caused by and
such failure would not have occurred but for the following: (i) Customer’s
or a Customer’s Related Party’s failure to perform an obligation expressly
assigned to Customer in this Agreement (including the failure to perform within
the specified time period, or if no time period is specified, within a
reasonable time), (ii) Customer’s direction to Supplier to take or refrain
from taking certain actions or to reallocate or reprioritize Supplier
resources, provided that such direction is provided by the Customer Account
Executive to Supplier in writing, and provided that in each case such
information relates primarily to Customer’s business requirements as opposed to
means of performing the Services; (iii) acts or omissions of Customer’s
Contractors (which the Parties agree includes the failure of a Customer
Contractor to cooperate with Supplier), except to the extent such acts or
omissions are directed by Supplier; (iv) Customer’s failure to obtain
Required Consents which Customer is obligated to secure; or (v) the
applicability of any other provision of this Agreement that expressly provides
for relief from nonperformance or Service Level failures in accordance with
such provision (each of the foregoing, a “Possible
Excuse”).


 


(b)           In the event of any such
Possible Excuse, Supplier shall promptly provide Customer with advance written
notice of such Possible Excuse, identifying Customer’s applicable obligations
and the relevant Supplier obligation or Service Level  that is at risk and as much time to correct
such failure as is reasonably practical under the circumstances.  Supplier shall not be excused pursuant to Section 11.10(a) if
Customer rectifies (or causes to be rectified) the situation giving rise to a
Possible Excuse prior to the time frame in which Supplier is required to perform.  Notwithstanding any provision of this
Agreement to the contrary, under no circumstances shall Supplier be obligated
to perform any of Customer’s responsibilities set forth in this Agreement.


 


11.11      Termination
Fees and Wind Down Expenses.  Customer shall
not be obligated to pay Termination Fees or Wind Down Expenses set forth in the
applicable Schedule(s) except upon a “Termination Fee Triggering
Event”, which shall consist of (a) any termination of such
Schedule by Customer “for convenience” under Section 11.1; (b) any
termination of such Schedule by Supplier “for cause” under Section 11.7;
and (c) wherever another provision of this Agreement expressly states that
Customer is obligated to pay such amounts.


 


11.12      Partial
Terminations.  To the
extent Customer is entitled to terminate less than all of the Services under a
Schedule, Customer’s obligation to pay for the terminated Services shall cease,
provided that if the Fees for such Services are not separately stated, the Fees
under the 


 


21

















 


Schedule will be equitably adjusted downwards
to reflect the removal of such Services in accordance with Section 8.3
(Equitable Adjustments) of Exhibit B (Services).


 


12.           Termination
Assistance and Exit Rights.


 


12.1        Services.  Upon expiration or
termination of any Schedule or any Services provided under a Schedule for any
reason, or if Customer rejects the Agreement pursuant to section 365 of the
Bankruptcy Code in a bankruptcy case, Supplier shall continue to provide all or
part of such Services, as requested by Customer, for a period of up to twelve
(12) months (the “Termination Assistance
Period”).


 


12.2        Termination
Assistance.  Commencing upon
either Party providing the other a notice of termination, or twelve (12) months
prior to the expiration date, and continuing through the end of the Termination
Assistance Period, Supplier shall provide Customer with such information,
cooperation and assistance as Customer may request to effect a smooth and
seamless transition of the Services to Customer or to a third party designated
by Customer (a “Successor”) (such
information, cooperation and assistance, “Termination
Assistance”).  Termination
Assistance shall include, without limitation: 
(a) providing appropriate information concerning the migration of
the Services in a format reasonably requested by Customer, including parameters
and application and network identification numbers, data network and data
center configuration information, and control information; (b) obtaining
and utilizing additional equipment (e.g. tape duplicating equipment),
sufficient to facilitate timely data transfer and transition as described
above; (c) developing (to the extent they do not already exist) tools and
utilities to assist in the extraction of data and configuration-related
information; (d) reviewing applicable software libraries with Customer or
other services providers; (e) assisting in establishing naming conventions
for the new data center site; (f) unloading production databases; (g) tendering
tapes of production databases (with content listing) to the appropriate
operations staff; (h) assisting with the loading of the databases; (i) assisting
in the execution of a parallel operation; (j) allowing interconnectivity
through secure firewalls to the data center; (k) assisting Customer with
development of a transition plan; (l) providing know-how and technical
knowledge and training to Customer staff or designees with respect to use of
any Equipment, Software, processes or networks that are subject to the
Termination Assistance; (m) cataloging existing applications, system
software, data files and tape libraries, and update procedures; (n) transferring
program and data files to Customer or an alternate provider, including
information on how any Software is configured (e.g., configuration files) and
business rule logic for Software; (o) explaining operating
procedures, job streams, backup procedures and disaster recovery methods; (p) providing
reasonable technical assistance Customer may need, including, without
limitation, capacity planning, consulting services, facilities planning,
software configuration, telecommunications planning, reviewing all system
software, generating machine readable listings of source code, uploading
production databases, providing parallel processing and testing and providing
hardware where practical; (q) providing system operational procedures
knowledge; (r) providing network operational procedures and design
knowledge; (s) attendance at scheduled transition status meetings; (t) preparation
of a final report summarizing the turnover tasks results; (u) information
relating to the number and function of each of the Supplier Personnel; (v) reasonable
training for personnel of Successor in the performance of the Services being
transitioned to Successor; (w) 


 


22

















 


information related to the Services that will
assist Customer in drafting requests for proposals relating to the Services,
and cooperation with, and due diligence information for, recipients of such
requests for proposal; and (x) other services requested by Customer
necessary to facilitate the transfer of Services.


 


12.3        Terms.  During the Termination
Assistance Period, all terms and conditions of this Agreement will remain in
effect, including Fees, Service Levels (to the extent Supplier has not
transitioned responsibility for the underlying Service(s) to Customer or
its Contractors), and Service Credits, except that any minimum purchase
requirements, revenue commitments, utilization requirements or other such
requirements will not be applicable, and the Fees for the Services will be
equitably adjusted downwards as Services are assumed by Customer or Successor.


 


12.4        Payment.  Termination Assistance
activities provided by Supplier which Supplier is otherwise obligated to
provide as part of the Services (e.g., which Supplier is obligated to provide
pursuant to any section of this Agreement other than Section 12.2) shall
be provided at no additional charge to Customer.  Termination Assistance activities which are
outside of the scope of the Services (e.g., the basis for Supplier’s obligation
to perform such activities is Section 12.2) shall be subject to Section 8.1
(Service Changes) of Exhibit B (Services) (and the then current time and
materials rates provided for in the applicable Schedule or any other Schedule
shall govern).  In the event of a
termination pursuant to Section 11.5 (Termination for Cause by Customer),
the Parties agree that Customer’s payment of Fees for Termination Assistance
Services shall not preclude Customer from asserting that such Fees are direct
damages, which shall be subject to Section 14.2.


 


12.5        Exit
Rights.  For the avoidance of doubt,
Customer shall be required to pay any costs specified in this Section 12.5
in addition to Wind Down Expenses paid by Customer under the applicable
Schedule(s), to the extent such costs are not duplicative, provided that to the extent they are
duplicative, costs paid under this Section 12.5 shall be deducted from the
Wind Down Expenses.


 


(a)           Customer
Property.  At Customer’s
request, Supplier shall, and shall cause Supplier’s Related Parties to, deliver
to Customer, at no cost to Customer, a current copy of all Materials owned by
Customer or for which Customer has a license pursuant to Section 5
(Property Rights), as well as all Equipment, Customer Personal Data and any
other Customer property.  With respect to
Software, Software will be provided in the form used to provide the Services as
of the time of Customer’s request.  At
the request of Customer, Supplier shall, and shall cause Supplier Contractors
to, destroy or erase all copies of all such Materials which are owned by
Customer.  An authorized officer of
Supplier shall certify to Customer that all such copies have been destroyed or
erased.


 


(b)           Supplier
Owned and Licensed Materials.  Customer shall have the rights provided for
in Section 5 (Property Rights).


 


23

















 


(c)           Dedicated
Agreements.  Upon
Customer’s request, to the extent assignment is permitted (subject to Section 3.4
(Non-Commercially Available Materials), Supplier will assign to Customer any
agreements for subcontracted Services or Materials which are dedicated to
Customer.


 


(d)           Shared
Contracts.  Upon Customer’s
request, Supplier shall provide reasonable assistance to Customer or Successor
to obtain directly from third parties any subcontracted Services or substitute
therefor.


 


(e)           Equipment.  Upon Customer’s request, Supplier shall, and
shall cause Supplier Contractors to, (i) assign to Customer or its
designee leases for some or all of the Equipment (excluding laptops, printers
and other such non-datacenter equipment used by Supplier Personnel) dedicated
to providing the Services to Customer, to the extent assignment is permitted,
subject to Section 3.4 (Non-Commercially Available Materials); and (ii) sell
to Customer, at Supplier’s then-current book value, some or all of the
Equipment owned by Supplier or Supplier Contractors and dedicated to providing
the Services to Customer (and all user and other documentation in its
possession that relates to such Equipment) free and clear of all liens,
security interests or other encumbrances.


 


(f)            Personnel.  Unless otherwise agreed to by the Parties in
writing, during the Term and twelve (12) months thereafter, neither Party
shall, directly or indirectly, knowingly solicit for employment, offer
employment to or employ or retain (whether as an employee, officer, agent,
consultant, advisor or in any other capacity) any employee of the other Party
who is or was actively involved in the performance or evaluation of the
Services.  Notwithstanding the foregoing,
the Parties acknowledge and agree that this Agreement shall not prohibit (i) solicitations
through general public advertising or other publications of general public
circulation; or (ii) the hiring of any employee of a Party who responds to
such solicitations or who otherwise contacts the other Party without such other
Party having solicited such employee.


 


13.           Indemnification.


 


13.1        Bodily
Injury and Property Damage.  Each Party shall indemnify, defend and hold
harmless the other Party and its Affiliates, and their respective employees,
directors, officers, principals (partners, shareholders or holders of an
ownership interest, as the case may be), Contractors and agents (collectively,
each Party and such persons and entities, the “Indemnitees”), from and against any Losses arising from claims
by third parties relating to personal injury (including bodily injury or death)
of any person or damage to real and/or tangible personal property to the extent
caused by the negligence or willful misconduct of the indemnifying party or
Related Parties or Personnel.


 


13.2        Indemnification
by Supplier.  Supplier shall
indemnify, defend and hold harmless Customer, Customer Affiliates and their
Indemnitees from and against any and all Losses arising from claims by third
parties, whether based in whole or in part in contract, tort, negligence,
statute or otherwise, to the extent caused by any of the following:


 


24

















 


(a)           The failure of Supplier to
perform any obligations under any license, lease or other agreement between
Supplier and a third party;


 


(b)           The failure of Supplier to
perform any obligations under any third-party license, lease or other agreement
assigned by Supplier and assumed by Customer in connection with the expiration
or termination of this Agreement, provided that this Section 13.2(b) shall
apply only to Losses payable to such third party that are based on acts or
omissions occurring during the period preceding the date of such assumption;


 


(c)           The failure of Supplier to
comply with Supplier Laws;


 


(d)           Supplier’s failure to obtain
any Required Consents; provided, however, if the failure to obtain a Required
Consent is an infringement or alleged infringement of intellectual property,
this Section 13.2 shall not apply and Section 13.4 shall constitute
Supplier’s sole and exclusive obligation and liability with respect to the failure
to obtain such Required Consent;


 


(e)           To the extent not related to
any wrongful acts or omissions committed or alleged to have been committed by
Customer or any Customer Affiliate or any Authorized Users, any claims brought
by any Contractor or Related Party of Supplier arising under or in connection
with an agreement between Supplier and such Contractor or Related Party;


 


(f)            Supplier’s breach of any of
its representations and warranties set forth in Section 10.1(a);


 


(g)           Any breach of Supplier’s obligations
hereunder with respect to Taxes; or


 


(h)           Any claims brought by other
customers of Supplier caused by the provision of the Services from a Service
Location that is shared with other customers of Supplier.


 


13.3        Indemnification
by Customer.  Customer shall
indemnify, defend and hold harmless Supplier, Supplier Affiliates and their
Indemnitees from and against any and all Losses arising from claims by third
parties, whether based in whole or in part in contract, tort, negligence,
statute or otherwise, to the extent caused by any of the following:


 


(a)           The failure of Customer to
perform any obligations under any license, lease or other agreement between
Customer and a third party;


 


(b)           The failure of Customer to
perform any obligations under any third-party license, lease or other agreement
assigned by Supplier and assumed by Customer in connection with the expiration
or termination of this Agreement, provided that this Section 13.3(b) shall
apply only to Losses payable to such third party that are based on acts or
omissions occurring during the period from and after the date of such
assumption;


 


(c)           Customer’s failure to obtain
any Required Consents; provided, however, if the failure to obtain a Required
Consent is an infringement or alleged infringement of intellectual property,
this Section 13.3 shall not apply and Section 13.5 and Section 11.10
(Savings) shall 


 


25

















 


constitute Customer’s sole and exclusive
obligation and liability with respect to the failure to obtain such Required
Consent;


 


(d)           Any third-party claim which
arises in connection with the use by Customer of any Deliverable or Services
provided by Supplier to Customer under this Agreement, except to the extent
covered by Supplier’s indemnity obligations under this Agreement;


 


(e)           Any breach of Customer’s
obligations hereunder with respect to Taxes;


 


(f)            The failure of Customer to
comply with Customer Laws; or


 


(g)           Customer’s breach of any of
its representations and warranties set forth in Sections 10.1(a) of this
Agreement and Sections 9.2 and 9.3 of the Verizon Sublicense Agreement.


 


13.4        Supplier’s
Infringement Indemnity.


 


(a)           Supplier shall indemnify,
defend and hold harmless Customer, Customer Affiliates and their Indemnitees
from and against any and all Losses that result or are claimed to result in
whole or in part from the contention that any Equipment, Supplier Materials or
Deliverables or other resources provided by or on behalf of Supplier to
Customer pursuant to this Agreement or otherwise provided and used by Supplier
in connection with this Agreement, or any Commissioned Materials, Developed IP
or modifications made by Supplier to Materials, constitute infringement or
misappropriation of any third party’s patents validly issued as of the Schedule
Effective Date of the applicable Schedule, or in the case of Commissioned
Materials, the date Supplier commences such development (but in all cases only
with respect to patent rights in the countries from which the Service is being
provided or to which the Service is provided), trademarks, copyrights, or trade
secrets.


 


(b)           Supplier shall not indemnify
Customer, however, to the extent the claim of infringement is caused by:


 


(i)            Customer’s misuse or
modification of a Deliverable;


 


(ii)           Customer’s failure to use
corrections or enhancements made available by Supplier if (A) Supplier has
notified Customer at the time of provisioning that use of such correction or
enhancement is necessary to avoid infringement in cases where Supplier has
knowledge that their purpose was to avoid infringement, and (B) such
corrections or enhancements do not adversely affect the functionality,
performance or compatibility of the applicable item;


 


(iii)         Customer’s use of a
Deliverable in combination with any product not owned, developed or approved by
Supplier and not intended by the Parties to be used with the Deliverable where
such combination is the source of the claim, provided that, for the avoidance
of doubt, where the Deliverable is installed in, or interfaces with, or is used
in connection with, a Supplier Managed Customer System or any other Software
which Supplier is obligated to maintain or which is identified in a Schedule,
the Parties will be 


 


26

















 


deemed to have intended to use such Deliverable with such Supplier
Managed Customer System (including the Software therein) or Software;


 


(iv)          Customer’s distribution,
marketing or use for the benefit of third parties who are not Permitted
Recipients or Authorized Users of a Deliverable;


 


(v)            Supplier’s compliance in
developing a Deliverable with information, direction, specification or
materials provided by Customer in connection with this Agreement, and the
infringement cannot be remedied by modifying the Deliverable while maintaining
compliance with the information, direction, specification or materials; or


 


(vi)          The infringing material was
furnished to Supplier by Customer or by Customer’s previous or current service
provider working on the services to be transitioned to Supplier.


 


(c)           If any Deliverable is, or in
Supplier’s opinion is likely to be, held to be infringing, Supplier shall, in
addition to its obligations under Section 13.4(a), at its expense and
option, except to the extent the cause of such infringement is set forth in Section 13.4(b),
either:


 


(i)            Procure the right for
Customer to continue using it;


 


(ii)           Replace it with a
non-infringing item of equivalent or better performance, functionality and
compatibility; or


 


(iii)         Modify it to make it
non-infringing but of equivalent or better performance, functionality and
compatibility.


 


(d)           If Sections 13.4(c)(i) —
(iii) are not commercially reasonable, Supplier may, upon twelve (12)
months notice, direct the return of the Deliverable and refund to Customer the
fees paid for such Deliverable, and any other Deliverable whose use is
adversely affected in a material respect by the unavailability of the
infringing Deliverable, less a reasonable amount for Customer’s use of the
Deliverable up to the time of return.    In addition, Customer may terminate any
Schedule or portion thereof that is affected in a material or adverse manner by
such discontinuation, and the Fees for the remaining Services will be equitably
adjusted downwards to reflect the discontinuance of the infringing Item.


 


(e)           The foregoing remedies
constitute Customer’s sole and exclusive remedies and Supplier’s entire
liability with respect to infringement.


 


13.5        Customer
Infringement Indemnity.


 


(a)           Customer shall indemnify,
defend and hold harmless Supplier, Supplier Affiliates and their Indemnitees
from and against any and all Losses that result or are claimed to result in
whole or in part from the contention that any Equipment, Customer Materials or
other Software or Materials or other resources provided by or on behalf of
Customer to Supplier pursuant to this Agreement (including the Customer
Materials or other Software or Materials made 


 


27

















 


available to Supplier in connection with the
Verizon Sublicense Agreement) or otherwise provided and used by Customer in
connection with this Agreement constitute infringement or misappropriation of
any third party’s patents validly issued as of the Schedule Effective Date of
the applicable Schedule, or in the case of Commissioned Materials, the date
Supplier commences such development (but in all cases only with respect to
patent rights in the countries from which the Service is being provided or to
which the Service is provided, trademarks, copyrights, or trade secrets.


 


(b)           Customer shall not indemnify
Supplier, however, if the claim of infringement is caused by:


 


(i)            Supplier’s misuse or
modification of the Customer resource or item;


 


(ii)           Supplier’s failure to use
corrections or enhancements made available by Customer if Customer has notified
Supplier at the time of provisioning that use of such correction or enhancement
is necessary to avoid infringement in cases where Customer has knowledge that
their purpose was to avoid infringement; or


 


(iii)         Supplier’s use of the
Customer resource or item in combination with any product not owned, developed
or approved by Customer and not intended by the Parties to be used with the
Customer resource or item and such combination is the source of the claim,
provided that, for the avoidance of doubt, where the resource or item is
installed in a Supplier Managed Customer System, the Parties will be deemed to
have intended to use such resource or item Deliverable with such Supplier
Managed Customer System (including the Software therein).


 


(c)           For the avoidance of doubt,
Supplier’s use, reproduction, modification and creation of derivative works of
any Unknown Third Party Software and Third Party Modules (each as defined in
the Verizon Sublicense Agreement) made available to Supplier by Customer shall
not be considered misuse, provided that such activity is undertaken during the
Term or the Termination Assistance Period and for the sole purpose of providing
the Services to Customer and its Affiliates; and further provided that Customer
has not provided Supplier with notice under last paragraph of Section 8 of
the Verizon Sublicense Agreement to cease all use or certain uses of the
Unknown Third Party Software for Third Party Module.


 


(d)           If any Customer resource or
item is, or in Customer’s opinion is likely to be, held to be infringing,
Customer shall, in addition to its obligations under Section 13.5(a), at
its expense and option, except to the extent the cause of such infringement is
set forth in Section 13.5(b), either (i) procure the right for
Supplier to continue using it; (ii) replace it with a non-infringing
equivalent; (iii) modify it to make it non-infringing, or (iv) direct
its return to Supplier if it was provided to Supplier and or otherwise
discontinue its use, provided that the removal of such resource or item may be
deemed a Possible Excuse if such discontinuation qualifies as such under Section 11.10
(Savings).


 


28














 


(e)           The foregoing remedies and
Supplier’s rights under Section 11.10 (Savings) constitute Supplier’s sole
and exclusive remedies and Customer’s entire liability with respect to
infringement.


 


13.6        Indemnification
Procedures.  If a third
party makes a claim against a Party for any amounts which would be subject to
indemnification by the other Party under this Section 13 or a third party
brings a legal proceeding or claim against a Party and such Party seeks or
plans to seek indemnification from the other Party pursuant to this Section 13
(Indemnification) (each such Party an “Indemnified
Party” and each such claim a “Third
Party Claim”), the Indemnified Party will give the other Party (the
“Indemnifying Party”) prompt
written notice of any such Third Party Claim for which it seeks
indemnification; provided that the failure or delay in doing so will not excuse
the Indemnifying Party of its indemnification obligations except to the extent
prejudiced by such failure or delay.  The
Indemnifying Party shall have the right to control the defense and
investigation of such claim and to employ and engage attorneys to handle and
defend the same, at the Indemnifying Party’s sole cost and expense.  The Indemnified Party shall cooperate, at the
cost of the Indemnifying Party, in all reasonable respects with the
Indemnifying Party and its attorneys in the investigation, trial and defense of
such claim and any appeal arising therefrom; provided, however, that the
Indemnified Party may, at its own cost and expense, participate, through its
attorneys or otherwise, in such investigation, trial and defense of such claim
and any appeal arising therefrom.  No
settlement of a claim that involves a remedy other than the payment of money by
the Indemnifying Party shall be entered into without the consent of the
Indemnified Party.  After notice by the
Indemnifying Party to the Indemnified Party of its election to assume full
control of the defense of any such claim, the Indemnifying Party shall not be
liable to the Indemnified Party for any legal expenses incurred thereafter by
such Indemnified Party in connection with the defense of that claim.  If the Indemnifying Party does not assume
full control over the defense of a claim subject to such defense as provided in
this Section, the Indemnifying Party may participate in such defense, at its
sole cost and expense, and 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.


 


13.7        Conflicts.  Where the Party defending a
Third Party Claim pursues a defense strategy that results in or may result in
Losses for which the other Party is obligated under this Section 13, as
opposed to a strategy where neither Party is obligated to pay any Losses in connection
with such claim, the defending Party shall so notify the other Party and the
other Party shall have the right to hire counsel of its choice and at its
expense and assume the defense of such claim as it relates to such Party.  Following resolution, Losses will be
allocated based on the relative fault of each Party.


 


14.           Damages.


 


14.1        Exclusion
of Damages.  NEITHER PARTY
SHALL BE LIABLE TO THE OTHER UNDER THIS AGREEMENT, WHETHER BASED ON AN ACTION
OR CLAIM IN CONTRACT, EQUITY, NEGLIGENCE, TORT OR OTHERWISE, FOR ANY
CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL OR PUNITIVE DAMAGE, LOSS OR
EXPENSES (INCLUDING BUT NOT LIMITED TO BUSINESS INTERRUPTION, LOST 


 


29

















 


BUSINESS, LOST PROFITS, OR LOST SAVINGS) EVEN
IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.


 


14.2        Limitation
on Damages.  THE MAXIMUM
LIABILITY OF EITHER PARTY TO THE OTHER FOR ANY CLAIM UNDER THIS AGREEMENT
(WHETHER BASED ON A BREACH OF CONTRACT, TORT OR ANY OTHER THEORY),  SHALL NOT EXCEED AN AMOUNT EQUAL TO THE
AGGREGATE OF THE FEES PAID AND PAYABLE TO SUPPLIER UNDER THIS AGREEMENT FOR THE
TWELVE (12)-MONTH PERIOD PRECEDING THE DATE THE CLAIM ARISES (AND IF FEWER THAN
TWELVE (12) MONTHS HAVE ELAPSED FROM THE EFFECTIVE DATE, THEN TWELVE (12) TIMES
THE AVERAGE MONTHLY FEES PAID DURING THE ELAPSED TIME SINCE THE EFFECTIVE DATE)
(the “General Liability Cap”).  EACH PARTY ACKNOWLEDGES THAT THE FOREGOING
LIMITATIONS ARE AN ESSENTIAL ELEMENT OF THE AGREEMENT BETWEEN THE PARTIES AND
THAT IN THE ABSENCE OF SUCH LIMITATIONS THE PRICING AND OTHER TERMS SET FORTH
IN THIS AGREEMENT WOULD BE SUBSTANTIALLY DIFFERENT.


 


14.3        Exceptions
to Damages Exclusion and Cap.


 


(a)           The exclusions in Section 14.1
and the General Liability Cap shall not apply to the liability of the
applicable Party to the extent such liability results from (i) such
Party’s obligation to indemnify (Section 13); (ii) such Party’s
breach of its general obligations with respect to Confidential Information (Section 6.1-6.4);
or (iii) damages resulting from fraud. 
In addition, Customer’s obligation to pay amounts due, and each Party’s
liability for claims resulting from damage to real property or tangible
personal property, shall not be subject to the General Liability Cap.


 


(b)           The following will be deemed
direct damages (i.e., not excluded by Section 14.1) but will count towards
the applicable liability cap: (i) Customer’s costs of implementing and
performing work-arounds; (ii) Customer’s costs of replacing lost, stolen
or damaged goods or materials (other than data); (iii) Customer’s costs to
procure replacement services from an alternate source as a result of a failure
to perform, to the extent in excess of the applicable Fees; (iv) overtime,
straight time and related expenses and allocated overhead (including travel,
lodging, wages and benefits) as a result of Supplier’s failure to perform its
obligations; (v) reasonable attorneys fees incurred in connection with
enforcing each Party’s rights under this Agreement; (vi) damages resulting
from Supplier errors in transactions processed by Supplier in connection with
the Services; (vii) Customer’s costs to replace, reload, correct, restore
or reconstruct lost or damaged data caused by Supplier or Supplier Related
Parties or by a breach of Supplier’s obligations under this Agreement; and (viii) the
following costs incurred in connection with a security breach of Customer
Personal Data to the extent the breach is caused by Supplier:  communication costs (including costs to
notify and provide information and instructions to individuals, costs to accept
and answer questions from individuals, and costs to provide relevant
information to individuals), costs to procure credit reports and to procure
credit and identity theft monitoring services and insurance for affected
individuals, costs to identify the cause and extent of data loss (including
costs to engage consultants, such as forensic computer specialists), costs 


 


30

















 


provided for in Section 6.6(h), costs to
investigate and mitigate incidents of identity theft, costs to issue fraud
security alerts and notify and work with creditors, credit bureaus and law
enforcement personnel to restore credit accuracy.


 


(c)           The following will be deemed
direct damages (i.e., not excluded by Section 14.1), and will not count
towards the General Liability Cap, but instead will be subject to a separate
and stand alone cap equal to two (2) times the General Liability Cap, the
“Double Liability Cap”):  payments or penalties imposed on Customer by
a governmental or regulatory body as a result of Supplier’s failure to perform
its obligations.  The following will not
count towards the General Liability Cap, but instead will be subject to the
Double Liability Cap:  damages resulting
from Gross Negligence.


 


(d)           The following will not count
towards the General Liability Cap or the Double Liability Cap, but instead will
be subject to a separate and stand alone cap equal to fifty million dollars
($50,000,000) (the “Maximum Cap”):  (i) damages resulting from willful
misconduct, including intentional actions taken by a Party knowing they will
result in harm to the other Party, (ii) damages resulting from a breach of
Supplier’s obligations under Section 3.2 (Service Locations; Location of
Customer Personal Data); or (iii) damages resulting from a breach of
Supplier’s obligations set forth in Section 6.6 that result in a data
security breach.


 


(e)           The following will not be
deemed excluded by the exclusions in Section 14.1 and will not count
towards the General Liability Cap or the Double Liability Cap, but instead will
be subject to the Maximum Cap:  damages
incurred by Customer resulting from Supplier’s cessation or suspension of, or
refusal to provide, any Services then required to be provided by Supplier
(including Supplier’s failure to perform any of its obligations under Section 12
(Termination Assistance and Exit Rights)), where such cessation, suspension or
refusal (i) was a deliberate decision by Supplier and (ii) was not
the result of a permissible termination or suspension of this Agreement by
Supplier; provided that Supplier shall have two (2) business days
following receipt of written notice from Customer, expressly alleging such
cessation, suspension or refusal with reference to this Section 14.3(e),
to cure such cessation, suspension or refusal. 
Such cure period shall not be construed to limit the accrual of damages
under this Section 14.3(e) during the cure period, if the cessation,
suspension or refusal is not cured within such period.  For the avoidance of doubt, Supplier’s
allocation of resources from one aspect of the Services to another does not
constitute a deliberate decision to cease performing the former Services for
the purposes of this Section 14.3(e) unless such re-allocation is a
breach of the Agreement.


 


(f)            Notwithstanding anything
herein to the contrary, if damages incurred pursuant to this Agreement exceed
thirty percent (30%) of any of the Double Liability Cap or Maximum Cap, the
Party incurring such damages (and not the Party causing such damages) shall
have the right to terminate this Agreement, in whole, but not in part, pursuant
to Section 11.5 (Termination for Cause by Customer) or Section 11.7
(Termination for Cause by Supplier).


 


14.4        Liability
for Third Parties.  Each Party will
be responsible hereunder for any acts or omissions of itself, its Affiliates,
its Contractors and its Personnel, as if such acts and omissions were the acts
and omissions of such Party.


 


31

















 


14.5        Basis of
the Bargain.  Each Party
acknowledges that the foregoing limitations are an essential element of the
Agreement between the Parties and that in the absence of such limitations the
pricing and other terms set forth in this Agreement would be substantially
different.


 


14.6        Injunctive
Relief.  Each Party acknowledges and
agrees that a breach of Section 5 (Property Rights), Section 6
(Confidentiality) or Section 12 (Termination Assistance and Exit Rights)
will result in damages to the other Party for which monetary remedies are
inadequate.  As such, each Party agrees
that if such a breach occurs, the injured Party shall be entitled to seek
injunctive relief and any and all other remedies available at law or in equity.


 


14.7        Duty to
Mitigate.  Each Party has
a duty to mitigate the damages and losses that would otherwise be recoverable
from the other Party pursuant to this Agreement (including under any indemnity)
by taking appropriate and commercially reasonable actions to reduce or limit
the amount of such damages or amounts.


 


14.8        Service
Credits.  Customer agrees that any
Service Credits issued to Customer in connection with a Service Level failure
will count towards any other damages Customer is entitled to in connection with
such Service Level failure, and shall apply towards the General Liability Cap
set forth in Section 14.2.


 


15.           Insurance.  Supplier shall comply with
the insurance requirements set forth in Exhibit H (Insurance).


 


16.           Miscellaneous
Provisions.


 


16.1        Assignment.  No Party shall, without the
consent of the other Party, assign this Agreement or any amounts payable
pursuant to this Agreement, except that (a) Customer may assign this
Agreement, in whole or in part, without such consent:  (i) to an Affiliate; (ii) an entity
which acquires all or substantially all of the assets of Customer and which is
not a Supplier Competitor; or (iii) any successor in a merger involving
Customer where Customer is not the surviving entity, provided the surviving
entity is not a Supplier Competitor; and (b) Supplier may assign this
Agreement without such consent (i) to an entity which acquires all or
substantially all of the assets of Supplier and which is not a Customer
Competitor; (ii) any Affiliate; or (iii) any successor in a merger or
acquisition involving Supplier where Supplier is not the surviving entity where
the surviving entity is not a Customer Competitor; provided that in each case
of (a) or (b) herein, such assignee assumes in writing all of the
covenants and obligations of the assigning Party set forth in this
Agreement.  Notwithstanding the foregoing
or anything herein to the contrary, if Supplier assigns this Agreement to a
vendor that would, by virtue of reputation or past experience known to
Customer, be undesirable to have in a position of control or influence over
Supplier), Customer shall have the right to terminate for convenience this
Agreement by providing written notice, effective as of a date specified in such
notice, subject to all payment obligations, including Wind Down Fees, if any, but specifically excluding Termination
Fees.  Each Party shall notify the other
Party as promptly as reasonably possible as to the occurrence, or likely
occurrence, of any assignment under this Section 16.1.  The consent of a Party to any assignment of
this Agreement shall not constitute such Party’s consent to any further
assignment.  This Agreement shall be 


 


32

















 


binding on the Parties and their respective
successors and permitted assigns, and neither Party shall be relieved of its
obligations under this Agreement as a result of any such assignment.  Any assignment in contravention of this
subsection shall be void.  
Notwithstanding the foregoing or anything herein to the contrary,
nothing herein shall be deemed to prohibit Customer from making a public
offering of its securities or give Supplier any rights, termination or
otherwise, if Customer so offers its securities.


 


16.2        Divestitures.  If Customer divests a
business unit or entity, or an Affiliate is divested such that it is no longer
an Affiliate (collectively, “Divested
Entities”), Supplier shall continue to provide, at Customer’s
request, to the Divested Entity, any Services identified by Customer which such
Divested Entity was receiving prior to the divestiture for up to twelve (12)
months from the effective date of such divestiture, under the then-current
terms, conditions and pricing of this Agreement; provided that in no event
shall Supplier be obligated to perform such Services following the end of the
Termination Assistance Period.  In
addition, with respect to any such divestitures, Supplier shall provide
Termination Assistance Services, as provided for in Section 12.2
(Termination Assistance).  Any increased
costs to Supplier for providing such Termination Assistance Services are
subject to Section 12.4.  To the
extent the applicable Schedule contains any minimum spending requirements,
volumes or other such commitments, (a) if the Divested Entity or an
Affiliate agrees to any minimum requirements or commitments, then Customer’s
minimum spending requirements or commitments under such Schedule shall be
equitably adjusted downwards by the value of any requirements and commitments
assumed by the Divested Entity, and (b) if the Divested Entity or an
Affiliate does not commit to any such minimum requirements or commitments, then
any spending or consumption by such Divested Entity for services of comparable
scope will count towards Customer’s commitments and requirements.  In addition, to the extent any portion of the
fees payable under such Schedule are attributable to the Divested Entity, such
fees shall be equitable adjusted downwards as provided for in Section 8.3
(Equitable Adjustments) of Exhibit B (Services).


 


16.3        Bankruptcy.


 


(a)           General.
The Parties hereby agree that if Supplier becomes a debtor or
debtor-in-possession under the Bankruptcy Code and this Agreement or any
Schedule is rejected or proposed to be rejected under Section 365 of the
Bankruptcy Code, any and all Deliverables licensed to Customer pursuant to this
Agreement shall be deemed to fall within the definition of “intellectual
property” under Section 101 of the Bankruptcy Code and, in connection
therewith, Section 365(n) of the Bankruptcy Code shall be implicated
by such rejection or proposed rejection. 
If either Party files for bankruptcy under any non-United States
bankruptcy Laws, this provision shall be deemed to apply to the extent
necessary to preserve the rights provided for in this provision.  Notwithstanding anything to the contrary in
this Agreement, during the pendency of Customer’s Bankruptcy Code Chapter 11
cases currently pending before the U.S. Bankruptcy Court for the District of
Hawaii (such court, the “Bankruptcy Court,”
and such cases, the “Chapter 11 Cases”),
if Customer fails to provide Supplier with payment of undisputed Fees due and
payable in excess of one (1) month’s Fees while Customer is a
debtor-in-possession in the Chapter 11 Cases, or if Customer rejects this
Agreement under Section 365 of the Bankruptcy Code in connection with the
Chapter 11 Cases, in either case, Supplier shall be entitled to suspend 


 


33

















 


performance of the Services seven (7) days
after providing Customer with written notice of Supplier’s intent to suspend,
without any liability to Supplier and without further notice to, or order from,
any applicable court with jurisdiction over the matter, including without
limitation, the Bankruptcy Court.


 


(b)           Approval
Motion.  The Parties agree that this
Master Agreement, together with Schedule A amend and restate in its entirety
the Prior Agreement.  Promptly after the
execution of this Master Agreement and Schedule A, Customer will file a motion
(the “Approval Motion”) with the Bankruptcy
Court, upon proper notice to creditors, seeking an order in a form acceptable
to both Parties in each Party’s sole discretion (the “Approval
Order”) (i) authorizing Customer to assume the Prior Agreement,
as amended and restated in its entirety by this Master Agreement and Schedule
A, and (ii) approving this Master Agreement and Schedule A, and (iii) providing
for payment to Supplier of a claim for all pre-petition amounts due to Supplier
to cure all defaults in the Prior Agreement pursuant to Section 365 of the
Bankruptcy Code in the amount of $733,000, which Supplier hereby stipulates
represents the entire unpaid pre-petition obligation due to it from Customer
(“Cure Claim”).  In connection with the
foregoing and Customer’s assumption of this Master Agreement and Schedule A,
upon the Approval Order becoming a final order, Supplier shall waive and be
deemed to have waived, payment of the Cure Claim by Customer. This Master
Agreement, including Schedule A, will be attached as an exhibit to the Approval
Motion, provided that Customer will seek and obtain confidential treatment of
the portions of this Master Agreement and Schedule A that are confidential, as
provided for in Section 6 (Confidentiality), and Customer shall obtain all
necessary approvals from the Bankruptcy Court or otherwise to permit such
filing under seal at its sole cost and expense. 
Customer will incorporate comments provided by Supplier in connection
with redacting this Master Agreement and Schedule A which comments are reasonable
and consistent with Section 6.


 


(c)           Conditions
to Effectiveness.  Unless
expressly waived in writing by both Parties, this Master Agreement and Schedule
A and the transactions contemplated hereunder and thereunder shall not become
effective until the Bankruptcy Court enters the Approval Order  in a form satisfactory to the Parties in each
Party’s sole discretion.


 


(d)           Termination.  Failure of the conditions set forth under
subsection (c) above to occur on or before April 30, 2009, or be
waived in writing by the Parties, shall cause this Master Agreement and
Schedule A to be null and void, and the Parties shall retain all rights,
remedies, defenses, obligations and liabilities existing as of the date
immediately prior to the execution of this Master Agreement and Schedule A.


 


16.4        Notices.  Except as otherwise
specified in this Agreement, all notices, requests, consents, approvals,
agreements, authorizations, acknowledgements, waivers and other communications
required or permitted under this Agreement shall be in writing (which shall
include email transmission to the email address below and it expressly states
“Official [PARTY NAME] Notice under Master Services Agreement” in the subject
line and is followed up by notice by another approved means).  Wherever under this Agreement one Party is
required to give notice to the other, such notice shall be deemed effective
when received, except that in the case of notices provided by facsimile, which
will be deemed effective upon the sender’s receipt of confirmation, 


 


34

















 


in each case, addressed to the addresses
below (or such other address as either party may be notified of as described
above).


 


	
  If to Customer:

   

  Hawaiian Telcom
  Communications, Inc.

  1177 Bishop Street

  Honolulu, Hawaii 96813

  Attention:  Chief Information Officer (Rose Hauser)

  Facsimile Number: (808)
  546-8956

  Email:  Rose.Hauser@hawaiiantel.com

   

  With a copy to:

  Hawaiian Telcom
  Communications, Inc.

  1177 Bishop Street

  Honolulu, Hawaii 96813

  Attention:  General Counsel

  Facsimile Number: (808)
  546-8956

  Email:  John.Komeiji@hawaiiantel.com

  With a copy to:

  McDermott Will &
  Emery

  2049 Century Park East,
  38th Floor

  Los Angeles, CA 90067

  Attention:  Adel Bebawy

  Facsimile Number:  (310) 277-4730

  Email:  Abebawy@mwe.com

  	
  If to Supplier:

   

  Accenture

  300 Campus Drive

  Florham Park, NJ  07932

  Attention:  Victor Nhaisi

  Facsimile Number: (973)
  301-1056

  Email:  victor.nhaisi@accenture.com

   

  With a copy to:

   

   

  Accenture

  Attn:  C&HT Legal Counsel (Steve Olson)

  161 N. Clark Street

  Chicago, IL  60601

  USA

  Facsimile Number:  312.652.5787

  Email:  Steve.Olson@accenture.com

   

  



 


16.5        Counterparts.  This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one single agreement
between the Parties.


 


16.6        Relationship.  The Parties intend to create
an independent contractor relationship and nothing contained in this Agreement
shall be construed to make the Parties partners, joint venturers, principals,
agents or employees of the other.  No
officer, director, employee, agent, Affiliate or Contractor retained by
Supplier to perform work on Customer’s behalf under this Agreement shall be
deemed to be an Employee or Contractor of Customer.  No Party shall have any right, power or
authority, express or implied, to bind the other.


 


16.7        Consents,
Approvals and Requests.  Except as
specifically set forth in this Agreement, all consents and approvals to be
given by a Party under this Agreement shall not be unreasonably withheld or
delayed and each Party shall make only reasonable requests under this
Agreement.


 


35

















 


16.8        Severability.  If any provision (or portion
thereof) of this Agreement conflicts with applicable Law or if any provision is
held to be null, void or otherwise ineffective or invalid by a court of
competent jurisdiction, then (a) such provision (or portion thereof as
applicable) will be deemed to be restated to reflect as nearly as possible the
original intentions of the Parties in accordance with applicable Law, and (b) the
remaining terms, provisions, covenants and restrictions of this Agreement will
remain in full force and effect.


 


16.9        Waivers.  No forbearance or delay by a
party in enforcing any terms or conditions of this Agreement, will prejudice
the rights or remedies of that party.  No
waiver of any terms or conditions of this Agreement will be valid or binding on
a party unless such party makes the waiver in writing.  The failure of one party to enforce any of
the provisions of this Agreement, or the failure to require at any time the
performance of the other party of any of the provisions of this Agreement, will
in no way be construed to be a present or future waiver of such provisions, nor
in any way affect the ability of a party to enforce each and every provision
thereafter.


 


16.10      Timing and
Cumulative Remedies.  Each Party
acknowledges and agrees that time is of the essence with respect to its
performance of its obligations under this Agreement.  No right or remedy herein conferred upon or
reserved to a Party is exclusive of any other right or remedy, and each and
every right and remedy shall be cumulative and in addition to any other right
or remedy under this Agreement, or under applicable Law, whether now or
hereafter existing.  No Party shall be
entitled to recover duplicative amounts regardless of whether such Party
prevails on one or more causes of action.


 


16.11      Entire
Agreement.  This Agreement
(including all Exhibits and each Schedule), constitutes the complete, final and
exclusive statement of the terms of the agreement among the Parties pertaining
to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations, communications, promises and discussions of the
Parties, whether oral or written, with respect to such subject matter.  Each Party has been represented by counsel in
the negotiation and drafting of this Agreement, and neither party has relied on
any statement, representation, warranty or promise not expressly contained in
this Agreement.  There are no conditions
precedent to the effectiveness of this Agreement except as specifically stated
herein.  The provisions of this Agreement
may not be explained, supplemented or qualified through evidence of trade usage
or a prior course of dealings.


 


16.12      Amendments.  No amendment to, or change,
waiver or discharge of, any provision of this Agreement shall be valid unless
in writing and signed by a duly authorized representative of each Party.


 


16.13      Survival.  The terms of the following
sections and any exhibits which correspond to such sections shall survive the
expiration or termination of this Agreement: 1 (Agreement Structure), 4
(Governance; Dispute Resolution) (excluding Section 4.4 (Continuity of Services)),
5 (Property Rights) (excluding Section 5.4 (License Rights During the
Term), 6 (Confidentiality), 7 (Fees; Payments; Taxes), 8 (Audits), 11.11
(Termination Fees and Wind Down Expenses), 12 (Termination Assistance and Exit
Rights), 13 (Indemnification), 14 (Damages) and 16 


 


36

















 


(Miscellaneous Provisions), and any other
provision which expressly states that its terms survive the expiration or
termination of this Agreement.


 


16.14      Third-Party
Beneficiaries.  Nothing
contained in this Agreement is intended or shall be construed to confer upon
any person (other than the Parties hereto, the Parties Affiliates pursuant to Section 4.5,
and the Indemnitees specifically identified in Section 13 with regard to
indemnification rights set forth therein) any rights, benefits or remedies of
any kind or character whatsoever, and, subject to Section 4.5, no person
or entity shall be deemed a third-party beneficiary under or by reason of this
Agreement.


 


16.15      Governing
Law; Venue; Arbitration.  The validity,
interpretation, and performance of this Agreement shall be controlled by and
construed under the laws of the State of New York, U.S.A., excluding any
choice-of-law rules that would require the application of the laws of any
other jurisdiction, and excluding the applicability of the United Nations
Convention on Contracts for the International Sales of Goods.  To the extent a dispute cannot be resolved in
accordance with the dispute resolution process set forth in Section 4,
each Party will be free to exercise any other rights available to it, including
litigation, provided that any such litigation may only be brought in the State
and Federal Courts in the State of Hawaii. 
In the event the Parties mutually agree to arbitrate such unresolved
dispute, the dispute shall be submitted to binding arbitration in accordance rules and
procedure for commercial arbitration of the American Arbitration Association
(AAA) at the office of the AAA located in Honolulu, Hawaii (or such other
arbitration organization located in Honolulu on which the parties may mutually
agree) and with Hawaii Revised Statutes §658A, and the Parties hereby agree
that the arbitrator’s award shall be final, and, pursuant to the New York
Convention on the Recognition and Enforcement of Foreign Arbitral Awards, may
be filed with and enforced as a final judgment by any court of competent
jurisdiction.  Either Party may seek
interim measures of protection, including but not limited to interim injunctive
relief, in a court of competent jurisdiction located in Honolulu, Hawaii.  The Parties consent and agree to the
jurisdiction of the tribunals mentioned in this paragraph, and waive any and
all objections to such forums, including but not limited to objections based on
improper venue or inconvenient forum.


 


16.16      Covenant of
Further Assurances.  The Parties
covenant and agree that, subsequent to the execution and delivery of this
Agreement and, without any additional consideration, each of the Parties shall
execute and deliver any further legal instruments and perform any acts that are
or may become necessary to effectuate the purposes of this Agreement.


 


16.17      Export.  Supplier
shall retain responsibility for its compliance with all applicable import and
export control Laws and economic sanctions programs in connection with the
performance of the Services, and Customer shall retain responsibility for its
compliance with all such Laws and sanctions programs in connection with its
receipt of the Services, including as such Laws relate to any Equipment,
Software, System, technology, part, technical data (including, without
limitation, any data defined as technical data by applicable United States
export regulations), element or sub-elements, personally identifiable data or
any other product or data provided by Customer to Supplier, in connection with
this Agreement.  Without limiting the
generality of the foregoing, Supplier shall not export or re-export any such
items, directly or 


 


37

















 


indirectly, to any destinations prohibited by
the United States Government. Prior to granting access or providing Supplier
any Customer goods, software and/or technical data subject to export control
laws controlled at a level other than EAR99/AT, Customer shall provide written
notice to Supplier specifying the relevant export control classification
numbers.  If Customer requests Supplier’s
assistance, Supplier shall provide any of the following assistance:  (a) upon Customer providing written
notice to Supplier specifying the relevant export control classification
numbers, Supplier will determine whether access from the Supplier Service
Location is permitted (or any conditions to that access, such as a license);
and (b) with respect to Customer Software: (i) Supplier will identify
which manufacturers have posted the export classification control number on
their publicly available websites and which have not; (ii) for
manufacturers which have posted the export classification control number, Supplier
shall obtain such number and determine whether such Software can be accessed
from the Supplier Service Locations (or any conditions to that access, such as
a license); and (iii) for Commissioned Materials, Supplier will provide
Customer the relevant technical specifications, as set forth in a mutually
agreed upon work order, necessary to support Customer’s determination of export
control classification, and once determined by Customer, Customer will provide
such number to Supplier and Supplier shall determine whether such Commissioned
Material can be accessed from the Supplier Service Location (or any conditions
to that access, such as a license). For the avoidance of doubt, Supplier will
be solely responsible for determining whether any Supplier provided goods,
software and/or technical data can be accessed from any Supplier Service
Locations.  Each Party acknowledges that
the other will not provide any suggestions, analyses or recommendations to it
pursuant to this Section 16.17, provided that the technical specifications
provided by Supplier with respect to Commissioned Materials will not be deemed
suggestions, analyses or recommendations pursuant to this sentence. Supplier
may decline to receive goods, software, and/or technical data subject to export
control laws controlled at a level other than EAR99/AT, or  obtain other relief from Customer.  Notwithstanding anything herein to the
contrary, Customer shall have no liability to Supplier whatsoever for
inaccurately determining any export classification control number or for
providing Supplier an inaccurate export classification control number, provided
that Customer implements a reasonable process for procuring the export
classification control numbers and Customer provides Supplier with the export
classification control numbers upon which Customer relies.


 


16.18      Conflict of
Interest.  Supplier
shall not pay any salaries, commissions, fees or make any payments or rebates
to any Customer Employee, or to any designee of such employee, or favor any
Customer Employee, or any designee of such Customer Employee, with gifts or
entertainment of significant cost or value or with services or goods sold at
less than full market value.  Supplier
further agrees to insert the provisions of this Section in each contract
with a Supplier Contractor.


 


16.19      Publicity.  Each of Customer and
Supplier shall (a) submit to the other all advertising, written sales
promotions, press releases and other publicity matters relating to this
Agreement in which the other Party’s name is mentioned or which contains
language from which the connection of such name may be inferred or implied and (b) not
publish or use such advertising, sales promotions, press releases or publicity
matters, nor make any public disclosure regarding the terms and conditions of
this Agreement or the business relationship between the Parties, without prior
written consent from the other Party’s authorized representative.  Notwithstanding the


 


38






 










 


foregoing, during the Term of this Agreement
and so long as Customer has not terminated this Agreement and unless otherwise
directed by Customer, Supplier may identify Customer as a client of Supplier
and generally describe the nature of the Services in Supplier’s promotional
materials, case studies, qualification statements, and proposals to current and
prospective clients, provided that such listing is factual only (e.g., Customer is listed with at least 10
other customers, in alphabetical order, without the use of any Customer
trademark or logo).  In addition, either
Party may make disclosures as required by a court order or as otherwise
required by Law (including disclosure requirements of the Securities Exchange Commission,
Public Utilities Commissions, Federal Communications Commission and any other
Governmental Authority and in connection with any legal or arbitration
proceeding relating to this Agreement). 
In no event may either Party use the trademarks, service marks, logos or
other such marks of the other Party without prior written consent for any
use.  The Parties agree to negotiate in
good faith a joint press release approved by both Parties announcing the
existence of this Agreement and the general nature of the Services, within
thirty (30) days after the Effective Date.


 


16.20      Good Faith and Fair Dealing.  In entering into this
Agreement, the Parties each acknowledge and agree that all aspects of the
worldwide business relationship and dealings between the Parties contemplated
by this Agreement shall be governed by the fundamental principle of good faith
and fair dealing except as otherwise explicitly provided herein.


 


16.21      Alliances Disclosure.  Supplier has alliance
relationships with third party product and services vendors.  As part of many such relationships, Supplier
is able to resell certain products and services and/or may receive compensation
from vendors in the form of fees or other benefits in connection with the
marketing, technical and other assistance provided by Supplier.  Customer acknowledges that such relationships
may be beneficial to Supplier and assist in its performance of the Services
hereunder.


 


39





















 


IN WITNESS WHEREOF, each of Customer and
Supplier has caused this Agreement to be signed and delivered by their duly
authorized representatives.


 


	
  HAWAIIAN TELCOM
  COMMUNICATIONS, INC.

  	
   

  	
  ACCENTURE LLP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Rose M. Hauser

  	
   

  	
  /s/ John F. Walsh

  
	
   

  	
   

  	
   

  
	
  Name: Rose M. Hauser

  	
   

  	
  Name: John F. Walsh

  
	
   

  	
   

  	
   

  
	
  Title: SVP & Chief
  Information Officer

  	
   

  	
  Title: Partner

  
	
   

  	
   

  	
   

  
	
  Date: March 16, 2009

  	
   

  	
  Date: March 14, 2009

  



 


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