Exhibit 10.25


 


CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH
RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1934, AS AMENDED, AND RULE
24B-2 PROMULGATED THEREUNDER.  OMITTED
INFORMATION HAS BEEN REPLACED WITH ASTERISKS.


 


 


 


 


 


MASTER PROFESSIONAL SERVICES AGREEMENT


 


AMONG


KRAFT FOODS GLOBAL, INC.,


EDS INFORMATION SERVICES, L.L.C.,


AND


ELECTRONIC
DATA SYSTEMS CORPORATION


 


 


 


 


KRAFT / EDS CONFIDENTIAL









 



 


MASTER PROFESSIONAL SERVICES AGREEMENT


This Master Professional Services Agreement (this “Agreement”) is entered into effective April 27, 2006 (the “Effective Date”) by and between Kraft Foods Global, Inc., a
Delaware corporation having a principal place of business at Three Lakes Drive,
Northfield, Illinois 60093 (“Kraft”), and EDS Information Services, L.L.C. (“EIS”), a Delaware
limited liability company and
Electronic Data Systems Corporation (“EDS”), a Delaware corporation, each having
a principal place of business at 5400 Legacy Drive, Plano, Texas 75024 (EIS and
EDS are collectively referred to herein as the “Supplier”).


WHEREAS, Kraft and Supplier have engaged in extensive
negotiations, discussions and due diligence that have culminated in the
formation of the contractual relationship described in this Agreement; and


WHEREAS, Kraft desires to procure from Supplier, and
Supplier desires to provide to Kraft and the Eligible Recipients, the
information technology and other products and services described in this
Agreement, on the terms and conditions specified herein;


NOW THEREFORE, in consideration of the mutual promises
and covenants contained herein, and of other good and valid consideration, the
receipt and sufficiency of which is hereby acknowledged, Kraft and Supplier
(collectively, the “Parties” and
each, a “Party”) hereby agree as follows:


1.             BACKGROUND
AND OBJECTIVES


1.1                               Performance
and Management by Supplier.


Kraft desires that certain information technology and
other functions and services presently performed and managed by or for Kraft
and the Eligible Recipients, as each is described in this Agreement, be
performed and managed by Supplier. Supplier has carefully reviewed Kraft’s
requirements, has performed all due diligence it deems necessary, and desires
to perform and manage such information technology and other business processes
and services for Kraft and the Eligible Recipients.


1.2                               Goals
and Objectives.


The Parties acknowledge and agree that the specific
goals and objectives of the Parties in entering into this Agreement are to:


(1)                                  Reduce
Kraft infrastructure capital and operating expenses, both initially and over
the Term of this Agreement, in accordance with this Agreement;


(2)                                  Utilize
enabling technologies to add value to Kraft’s business processes;


(3)                                  Continue
to deliver year-on-year cost reductions;


(4)                                  Design
new capabilities and innovations to enable growth;


(5)                                  Implement
common processes and move toward an integrated enterprise-wide reporting system
across Kraft;


(6)                                  Provide
committed levels of service quality that are consistent and harmonized across
differentiating or core processes;


(7)                                  Enhance
the morale and career opportunities of displaced employees by transitioning
Kraft information technology personnel to positions of opportunity with a
first-tier provider of information technology services;



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(8)                                  Gain
access to world class capabilities by contracting with a first tier Supplier
that can attract the “best and brightest” individuals;


(9)                                  Enhance
the ability of Kraft and its affiliated companies to focus on their core
businesses;


(10)                            Provide
Kraft with a service structure that will enhance its ability to quickly and
effectively adapt to changing business requirements and changes in the Kraft
business environment;


(11)                            Standardize
and reduce complexity in similar processes, taking into account relative
advantages of cost and functionality;


(12)                            Institutionalize
ongoing governance to ensure a new way of working is maintained with continuous
improvement opportunities;


(13)                            Create
the potential for sustainable long-term cost savings due to continuous
improvement and reduction or spreading of fixed costs over a multi-year period;


(14)                            Enhance
Kraft’s ability to manage its business to predictable costs;


(15)                            Provide
a contract structure that will minimize the occurrence of true-ups after the
Effective Date that would result in unplanned changes in the Services, Service
performance, pricing or to other costs to Kraft;


(16)                            Leverage
the Supplier’s scale in the procurement of goods and services associated with
the agreement;


(17)                            Minimize
and/or eliminate Third Party Contract breakage penalties and costs;


(18)                            Provide
the information required to support Kraft’s internal chargeback and support
Kraft’s management of individual services and cost; and


(19)                            Obtain
access to best practices in the area of information technology business
processes and services.


1.3                               Interpretation.


The provisions of this Article 1
are intended to be a general introduction to this Agreement and are not
intended to expand the scope of the Parties’ obligations or alter the plain
meaning of this Agreement’s terms and conditions, as set forth hereinafter.
However, to the extent the terms and conditions of this Agreement are unclear
or ambiguous, such terms and conditions are to be construed so as to be
consistent with the background and objectives set forth in this Article 1.


2.             DEFINITIONS
AND DOCUMENTS


2.1                               Definitions.


The terms used with initial capital letters in this
Agreement shall have the meanings ascribed to them in Schedule
1.



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2.2                               Other
Terms.


The terms defined in this Article include the plural
as well as the singular and the derivatives of such terms. Unless otherwise
expressly stated, the words “herein,” “hereof,” and “hereunder” and
other words of similar import refer to this Agreement as a whole and not to any
particular Article, Section, Subsection or other subdivision. Article, Section
and Subsection references refer to articles, sections and subsections of this
Agreement. The words “include” and “including” shall not be construed as terms of limitation.
The words “day,” “month,”
and “year” mean, respectively, calendar day,
calendar month and calendar year. As stated in Section
21.3, the word “notice” and “notification” and their derivatives shall mean notice or notification
in writing. Other terms used in this Agreement are defined in the context in
which they are used and shall have the meanings there indicated.


2.3                               Companion
Agreements.


2.3.1                     Operation.
The Parties will enter into one or more companion agreements to this
Agreement between Eligible Recipients outside of the United States and
corresponding Supplier Affiliates in those same countries for the purpose of
memorializing the implementation of this Agreement with respect to such
Eligible Recipients, compliance with Laws applicable to such Eligible
Recipients or otherwise to effect the intent of the Parties under this
Agreement with respect to such Eligible Recipients (each, a “Companion Agreement”). All references to this Agreement
include all Companion Agreements. Each Companion Agreement will be in form of Exhibit 1, unless otherwise agreed
by the Parties. Kraft and Supplier agree that the execution of Companion
Agreements shall in no way limit or reduce the obligations of either Party
under this Agreement, including with respect to the provision of Services to
any Eligible Recipient, except (i) for provisions in a particular Companion
Agreement that are expressly acknowledged to be an amendment to this Agreement
for purposes of such Companion Agreement, or (ii) as required by applicable
local law.


2.3.2                     Enforcement.
Kraft and Supplier acknowledge and agree that with respect to each
Companion Agreement, Kraft shall be fully responsible and liable for all
obligations of the applicable Eligible Recipient, and Supplier shall be fully
responsible and liable for all obligations of itself or any Supplier Affiliate
or Subcontractor, as may be applicable. Kraft shall have the right to enforce
this Agreement (including the terms of all Companion Agreements) on behalf of
each Eligible Recipient that enters into a Companion Agreement, and to assert
all rights and exercise and receive the benefits of all remedies (including
monetary damages) of each such Eligible Recipient, to the same extent as if
Kraft were such Eligible Recipient, subject to the limitations of liability
applicable under this Agreement. Supplier shall have the right to enforce this
Agreement (including the terms of all Companion Agreements) on behalf of each
Affiliate or Subcontractor that enters into a Companion Agreement, and to
assert all rights and exercise and receive the benefits of all remedies
(including monetary damages) of each such Affiliate or Subcontractor hereunder,
to the same extent as if Supplier were such Affiliate or Subcontractor, subject
to the limitations of liability applicable under this Agreement.
Notwithstanding anything to the contrary in any Companion Agreement, any and
all disputes arising under or relating to any Companion Agreement shall be
subject to the provisions of Article 19,
and under no circumstances shall Kraft or any Eligible Recipient, on the one
hand, or Supplier or any Supplier Affiliate or Subcontractor, on the other
hand, bring or attempt to bring any claim or other action arising under or
relating to any Companion Agreement or this Agreement in any jurisdiction
except as provided in Article 19.
Any amendment, variation or modification to
this Agreement will be binding upon each Supplier Affiliate and each Kraft
Affiliate to the extent that the provisions of this Agreement apply (expressly
or by implication) to the business arrangements entered into by those parties



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pursuant
to the Companion Agreement, whether such Companion Agreement was entered into
before or after the said amendment, variation or modification came into effect.


2.4                               Associated
Contract Documents.


This Agreement includes each of the following
Schedules and Exhibits, all of which are attached to this Agreement and
incorporated into this Agreement by this reference. Unless otherwise expressly
stated, references to specific Schedules include all numbered subsidiary
Schedules (e.g., references to Schedule 1 mean, collectively, Schedule 1 and Schedule
1.1, and references to Schedule 2
mean, collectively, Schedules 2.1, 2.2,
2.3, 2.4, and 2.5).


1            Definitions


1.1         Common
Terms and Acronyms


2.1         Cross
Functional General


2.2         Cross
Functional Equipment and Software


2.3         Servers
and Mainframe Services


2.4         Managed
Network Services


2.5         End
User Computing


3            Service
Levels Methodology


3.1         Service
Levels Matrix


3.2         Service
Levels Definitions


3.3         Critical
Deliverables


3.4         Service
Level Outcome Examples


3.5         Measuring
Tools and Methodology


3.6         Service
Level Deferred Implementation


3.7         Non-Baselined
Service Levels


4            Pricing
Methodology


4.1         Charges


4.2         Financial
Responsibility Matrix


4.3         Financial
Base Case (IT and PIM)


4.4         Resource
Baselines


4.5         Resource
Unit Definitions


4.6         Termination
Charges


4.6.1      Termination
Tables


4.7         Pass-Through
Expenses


4.8         Foreign
Currency Exchange Rates


4.9         Supplemental
Payments for Transitioned Employees


4.10       Supplier
Value Add Services


5.1         Affected
Personnel


5.1.1      Affected
Kraft Foods Global Personnel


5.1.2      Affected
Tech Center Personnel


5.2         Personnel
Projection Matrix (including Directed Employees)


5.3         Critical
Affected Personnel


5.4         Key
Supplier Personnel


5.5         Employee
Benefit Plans


5.6         Supplier
Employment Offer Conditions


 


6            Governance


7            Kraft
Sites


7.1         Kraft
Facilities


7.2         Supplier
Facilities



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8            Technical
Architecture and Standards


9            Projects


10          Kraft
Provided Equipment


11.1       Kraft
Software


11.2       Supplier
Software


12.1       Kraft
Third Party Contracts


12.2       Supplier
Third Party Contracts


13          Reports


13.1       Report
Samples


14          Customer
Satisfaction Survey


15          Business
Continuity Plan


16          IT
Disaster Recovery Plan


17.1       Data
Security


17.2       Physical
Security


17.3       Kraft
Rules


17.4       Kraft
Internal Controls


17.5       Kraft
Labor Policies


18          Network
Services Demarcation


19          Subcontractors


20          Acquired
Assets


21          Transition
Plan


21.1       Policies
and Procedures Manual Content


22          Transformation
Plan


23          Termination
Assistance Services


24.1       Direct
Kraft Competitors


24.2       Direct
Supplier Competitors


25          Approved
Benchmarkers


26          Directed
Employees


27          Global
Personal Data Protection Principles


28          Lifecycle
Projects


Exhibit 1               Form
of Companion Agreement


Exhibit 2               [Not
used]


Exhibit 3               Form
of Non-Disclosure Agreement


Exhibit 4               Form
of Invoice


Exhibit 5               Form
Source Code Escrow Agreement


3.             TERM


3.1                               Initial
Term.


The initial Term of this Agreement shall commence as
of 12:00:01 a.m., United States Central Time on the Effective Date and continue
until 11:59:59 p.m., United States Central Time, on the date preceding the
seventh anniversary of the Commencement Date, unless this Agreement is
terminated as provided herein or extended as provided in Section
3.2 or 4.4.1.3, in
which case the Term shall end at 11:59:59 p.m., United States Central Time, on
the effective date of such termination or the date to which this Agreement is
extended.



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3.2                               Extension.


Supplier shall offer to Kraft complete terms and
conditions for renewal of this Agreement, including pricing, at least 12 months
prior to any scheduled expiration of the Term. If Kraft desires to renew this
Agreement after the Initial Term, Kraft will notify Supplier at least 180 days
prior to the scheduled expiration date. If the Parties are unable to reach
agreement and execute such renewal at least 30 days prior to the scheduled
expiration of the Term, then Kraft, at its sole option, may extend the Term for
up to two extension periods of up to one year each, on the terms and conditions
then set forth in this Agreement, including applicable pricing and price
adjustments specified in Schedule 4.
No Termination Charges shall be applicable to any termination on or after the
expiration of the initial seven-year Term, unless, during any such extension
period, it becomes necessary for Supplier to enter into new commitments (such
as refresh of equipment, in order to provide the Services or meet the Service
Levels), in which case Termination Charges may be payable with regard to such
commitments, provided that Supplier notifies Kraft in advance of such
commitments and the associated costs and obtains Kraft’s prior approval
thereof, which approval will not be unreasonably withheld.


4.             SERVICES


4.1                               Overview.


4.1.1                     Services.
Supplier shall provide the Services to Kraft, and, upon Kraft’s request, to
Eligible Recipients and Authorized Users designated by Kraft, including for all
Kraft Sites, subject to the initial delay in the start date for Services to be
provided in Deferred Countries. The Services shall consist of the following, as
they may evolve during the Term of this Agreement or be supplemented, enhanced,
modified or replaced:


4.1.1.1                                                               The
services, functions, processes and responsibilities described in this Agreement
and its Schedules and attachments, which include the Technological Evolution
and the following:


4.1.1.1.1                                                      the
Services, as further described in Schedule 2;


4.1.1.1.2                                                      the
Transition Services, as described in Section 4.2
and Schedule 21;


4.1.1.1.3                                                      the
Transformation Services, as described in Section 4.3
and Schedule 22; and


4.1.1.1.4                                                      the
Termination Assistance Services, as described in Section
4.4 and Schedule 23.


4.1.1.2                                                               The
following additional services, functions, processes and responsibilities, even
if not specifically described in this Agreement, so long as they are related to
the services, functions, processes and responsibilities described in Section 4.1.1.1 above (provided
that, in the event of a direct conflict between Schedule
2 and the scope of services, functions and responsibilities
described in this Section 4.1.1.2,
this Section 4.1.1.2 shall not be
construed as altering and/or superceding Schedule 2):


4.1.1.2.1                                                      the
services, functions, processes and responsibilities related to the activities
described in Schedule 2 that were performed
by Kraft Personnel in the 18 months preceding the Commencement Date (or for
Services to be performed in the Deferred Countries such later date as
determined in accordance with this Agreement), and not discontinued



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during
such 18 month period so that such discontinued services are not being performed
on a recurring basis as of the Commencement Date, by Kraft Personnel who were
displaced or whose functions were displaced as a result of this Agreement,
including all Affected Personnel (including, for the avoidance of doubt, those
services, functions and responsibilities performed by Directed Employees); and


4.1.1.2.2                                                      the
services, functions, processes and responsibilities reflected in those
categories of the Kraft Base Case that Supplier is assuming pursuant to this
Agreement.


4.1.2                     Included
Services. If any services, functions or responsibilities not specifically
described in this Agreement are an inherent, necessary or customary part of the
Services or are required for proper performance or provision of the Services in
accordance with this Agreement, they shall be deemed to be included within the
scope of the Services to be delivered for the Charges, as if such services,
functions or responsibilities were specifically described in this Agreement.


4.1.3                     Commencement
of Services. Supplier shall commence providing the Services as follows:


4.1.3.1                                                               in
the case of the Transition Services and the Transformation Services, on the
date stated in the Transition Plan or Transformation Plan, respectively;


4.1.3.2                                                               in
the case of the Services described in Schedule 2,
at 12:00:01 a.m., United States Central Time on the Commencement Date (or at
such later time as Kraft may specify);


4.1.3.3                                                               in
the case of Services comprising Projects, New Services and Termination
Assistance Services, on the date determined in accordance with this Agreement;
and


4.1.3.4                                                               the
value add Services provided pursuant to Schedule 4.10..


4.1.4                     Required
Resources. Except as otherwise expressly provided in this Agreement,
Supplier shall be responsible for providing the facilities, personnel,
Equipment, Software, technical knowledge, expertise and other resources
necessary to provide the Services.


4.1.5                     Supplier
Responsibility. Supplier shall be responsible for the provision of the
Services in accordance with this Agreement even if, by written agreement of the
Parties, such Services are actually performed or dependent upon services
performed by (i) Subcontractors, (ii) subject to Section
10.2, non-Supplier Personnel, including Kraft employees, or
(iii) subject to Section 6.6,
Managed Third Parties.


4.2                               Transition
Services.


4.2.1                     Transition.
During the Transition Period, Supplier shall perform the Transition
Services and provide the deliverables described in the Transition Plan, which
is attached to this Agreement as Schedule 21.
If any services, functions or responsibilities not specifically described in
the Transition Plan are an inherent, necessary or customary part of the
Transition Services or are required for the proper performance of the
Transition Services in accordance with this Agreement, they shall be deemed to
be included within the scope of the Transition Services to be delivered for the
transition charges, as if such services, functions or responsibilities were
specifically described in the Transition Plan. During the Transition Period,
Kraft will perform those tasks which are designated to be Kraft’s
responsibility in the Transition Plan, provided that,



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Kraft
shall not be obligated to perform any tasks during the Transition Period that
are not set forth in such Transition Plan, other than any services, functions
or responsibilities that are an inherent, necessary or a customary part of the
designated tasks. Unless otherwise agreed, Kraft shall not incur any charges,
fees or expenses payable to Supplier or third parties in connection with the
Transition Services, other than those charges, fees and expenses specified in Schedule 4 and those incurred by
Kraft in connection with its performance of tasks designated in the Transition
Plan as Kraft’s responsibility. During the Transition Period, Supplier shall
confer with Kraft regarding the Deferred Countries and the timetable for
Supplier’s assumption of responsibility for the Services originating from such
Deferred Countries. In addition, after the Commencement Date and until Supplier’s
assumption of responsibility therefor, Supplier shall cooperate and coordinate
with Kraft’s management of the services originating from such Deferred
Countries so as to coordinate such Services with the Services provided by Supplier
during such period.


4.2.2                     Initial
Transition Plan. The initial Transition Plan is attached to this Agreement
as Schedule 21. During the 30 days
immediately following the Effective Date, Supplier shall prepare and deliver to
Kraft a detailed Transition Plan for Kraft’s review, comment and approval. The
proposed detailed Transition Plan shall describe in greater detail the specific
transition activities to be performed by Supplier, but, unless otherwise agreed
by Kraft, shall be consistent in all respects with the initial Transition Plan,
including the activities, deliverables, Transition Milestones and Deliverable
Credits described therein and in Schedule 3.
Supplier shall address and resolve any questions or concerns Kraft may have as
to any aspect of the proposed detailed Transition Plan and incorporate any
modifications, additions or deletions to such Transition Plan requested by
Kraft, to the extent such modifications, additions or deletions are not
inconsistent with the Transition Plan set forth in Schedule
21. If approved by Kraft, or if Kraft fails within ten business
days of receipt of the Transition Plan to provide any comments and Supplier
provides Kraft with notice thereof and an additional seven days to provide
comments, the detailed Transition Plan shall be appended to and incorporated in
this Agreement as part of Schedule 21.


4.2.3                     Transition
Plan. The detailed Transition Plan shall identify, among other things, (i)
the transition activities to be performed by Supplier and the significant components
and subcomponents of each such activity for each Eligible Recipient, (ii) the
deliverables to be completed by Supplier, (iii) the date(s) by which each such
activity or deliverable is to be completed (the “Transition
Milestones”), (iv) Supplier’s plans for the hiring and retention of
Transitioned Employees, (v) a process and set of standards acceptable to Kraft
to which Supplier will adhere in the performance of the Transition Services and
that will enable Kraft to determine whether Supplier has successfully completed
the transition and the activities and deliverables associated with each
Transition Milestone, including measurable success criteria by each Tower that
Supplier must meet before transitioning the work any further, (vi) a process
for Kraft to delay all or any part of the transition if Kraft determines that
any part of the transition poses a risk or hazard to Kraft’s or an Eligible
Recipient’s business interests (without any increase in Supplier’s Charges to
the extent Kraft’s determination is based on Supplier’s failure to perform
satisfactorily its transition obligations), (vii) the contingency or risk
mitigation strategies to be employed by Supplier in the event of disruption or
delay, (viii) any transition responsibilities to be performed or transition
resources to be provided by Kraft or the Eligible Recipients and (ix) a
detailed work plan identifying the specific transition activities to be
performed by Supplier Personnel (at the individual or team level, as
appropriate) on a weekly basis during the Transition Period. The Transition
Plan also shall identify any related documents contemplated by the Agreement
and/or required to effectuate the transition to be executed by the Parties.


4.2.4                     Performance.
Supplier shall perform the Transition Services described in the Transition Plan
in accordance with the timetable and the Transition Milestones set forth in the
Transition Plan.



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Supplier
shall provide all cooperation and assistance reasonably required or requested
by Kraft in connection with Kraft’s evaluation or testing of the deliverables
set forth in the Transition Plan. Supplier shall perform the Transition
Services in a manner that will not (i) disrupt or have an unnecessary adverse
impact on the business or operations of Kraft or the Eligible Recipients, (ii)
degrade the Services then being received by Kraft or the Eligible Recipients,
or (iii) disrupt or interfere with the ability of Kraft or the Eligible
Recipients to obtain the full benefit of the Services, except as may be otherwise
provided in the Transition Plan. Prior to undertaking any transition activity,
Supplier shall discuss with Kraft all known Kraft-specific material risks and
shall not proceed with such activity until Kraft is reasonably satisfied with
the plans with regard to such risks (provided that, neither Supplier’s
disclosure of any such risks to Kraft, nor Kraft’s acquiescence in Supplier’s
plans, shall operate or be construed as limiting Supplier’s responsibilities
under this Agreement). Supplier shall identify and resolve, with Kraft’s
reasonable assistance, any problems that may impede or delay the timely
completion of each task in the Transition Plan that is Supplier’s
responsibility and shall use commercially reasonable efforts to assist Kraft
with the resolution of any problems that may impede or delay the timely
completion of each task in the Transition Plan that is Kraft’s responsibility.


4.2.5                     Reports.
Supplier shall meet at least weekly with Kraft to report on its progress in
performing its responsibilities and meeting the timetable set forth in the
Transition Plan. Supplier also shall provide written reports to Kraft at least
weekly regarding such matters, and shall provide oral reports more frequently
if reasonably requested by Kraft. Promptly upon receiving any information
indicating that Supplier may not perform its responsibilities or meet the
timetable or Transition Milestones set forth in the Transition Plan, Supplier
shall notify Kraft in writing of material delays and shall identify for Kraft’s
consideration and reasonable approval specific measures to address such delay
and mitigate the risks associated therewith.


4.2.6                     Suspension
or Delay of Transition Activities. Kraft reserves the right, in its sole
discretion and subject to Change Control Procedures, to suspend or delay the
performance of the Transition Services and/or the transition of all or any part
of the Services. If Kraft elects to exercise this right and Kraft’s decision is
based, at least in material part, on reasonable concerns about Supplier’s
ability to perform the Services or Supplier’s failure to perform its
obligations under this Agreement, Kraft shall not incur any additional Charges
or reimbursable expenses in connection with such decision. If Kraft’s decision
is not based in material part on reasonable concerns about Supplier’s ability
to perform the Services or Supplier’s failure to perform its obligations under
this Agreement, Kraft shall reimburse Supplier for any additional costs
reasonably incurred by Supplier as a result of such decision, but only to the
extent Supplier notifies Kraft in advance of such costs, obtains Kraft’s
approval prior to incurring such costs, and uses commercially reasonable
efforts to minimize such costs. The Parties acknowledge that the Transition
Milestones and any Service or Service Levels directly dependent upon achieving
those Milestones may be equitably adjusted as a result of Kraft’s decision to
delay the performance of the Transition Services and/or the transition of all
or any part of the Services.


4.2.7                     Failure
to Meet Transition Milestones. The Parties acknowledge and agree that the
Transition Plan specifies various Transition Milestones by which Transition
activities and/or deliverables are to be completed. Supplier recognizes that
its failure to meet the Transition Milestones may have a material adverse
impact on the business and operations of Kraft and the Eligible Recipients and
that the damages resulting from Supplier’s failure to meet such Transition
Milestones are not capable of precise determination. Accordingly, if Supplier
fails to meet a Transition Milestone, then, in addition to any other remedies
available to Kraft under this Agreement, at law, or in equity, and subject to
any exceptions to meeting Service Levels or Transition Milestones set forth in Schedule 3, Supplier shall be
subject to the imposition of the Deliverable Credits specified in



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Schedule 3 for such
Transition Milestone, as compensation for Kraft’s damages and not as a penalty.
If Kraft recovers other monetary damages from Supplier as a result of Supplier’s
failure to meet one or more Transition Milestones, Supplier shall be entitled
to set off against such damages any Deliverable Credits paid for the failures
giving rise to such recovery. Neither the transition nor the activities and
deliverables associated with individual Transition Milestones shall be deemed
complete until the Parties have mutually determined that Supplier has
successfully completed them in accordance with the process and standards
identified in the Transition Plan.


4.2.8                     Termination
for Cause. Notwithstanding the foregoing, Kraft may terminate this
Agreement for cause if (i) Supplier fails to comply with its obligations with
respect to the provision of Transition Services and such failure causes or will
cause a material disruption to or otherwise has or will have a material adverse
impact on the operations or businesses of Kraft or the Eligible Recipients,
and, in the case of a failure that will have a material adverse impact that has
not yet occurred, Supplier fails to cure such failure within 15 days after its
receipt of notice of such failure or, in the case of a failure that has caused
a material adverse impact, Supplier fails to cure such failure within 5 days
after its receipt of notice of such failure, (ii) Supplier materially breaches
its obligations with respect to the provision of Transition Services and fails
to cure such breach within 15 days after its receipt of notice, or (iii)
Supplier fails to meet a Transition Milestone and such failure constitutes a
material breach of this Agreement and Supplier fails to cure such breach within
15 days after its receipt of notice. In addition, unless otherwise agreed, if
Supplier fails to meet the Transition Milestone for the completion of the
transition of all Services to Supplier by more than 45 days, Kraft may
terminate this Agreement for cause without requirement of notice or opportunity
to cure. In all such events, subject to Section 18.3,
Kraft may recover the damages suffered by Kraft or the Eligible Recipients in
connection with such a termination, provided that, if such termination is based
on Supplier’s failure to meet a Transition Milestone, Supplier shall be
entitled to set off against such damages any Deliverable Credits Supplier has
paid for the failure to meet such Transition Milestone.


4.3                               Transformation
Services.


4.3.1                     Transformation.
Without limiting any of Supplier’s other obligations hereunder with respect to
Technological Evolution, Supplier shall perform the transformational activities
and implement the technology and other changes described in the Transformation
Plan attached to this Agreement as Schedule 22.
If any services, functions or responsibilities not specifically described in
the Transformation Plan are an inherent, necessary or customary part of the
Transformation Services or are required for proper performance or provision of
the Transformation Services or the completion of the changes described in the
Transformation Plan in accordance with this Agreement, they shall be deemed to
be included within the scope of the Transformation Services to be delivered
without additional charge, as if such services, functions or responsibilities
were specifically described in the Transformation Plan. Kraft will perform
those tasks which are designated to be Kraft’s responsibility in the
Transformation Plan, and any services, functions or responsibilities that are
an inherent, necessary or a customary part of the designated tasks. Unless
otherwise agreed in writing, Kraft shall not incur any charges, fees or
expenses payable to Supplier in connection with the transformation, other than
those charges, fees and expenses specified in Schedule
4 and those incurred by Kraft. At Supplier’s request or as
specified in the Transformation Plan, Kraft shall provide reasonable
cooperation to Supplier in connection with its performance of the
Transformation Services.


4.3.2                     Transformation
Plan. The initial Transformation Plan is attached to this Agreement as Schedule 22.



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4.3.3       Contents of
Transformation Plan. The Transformation Plan shall identify, among other
things, (i) the transformational activities to be performed by the Supplier and
the changes in technology and business processes to be implemented by Supplier,
(ii) the date(s) by which each such activity or implementation is to be
completed (“Transformation Milestones”), (iii)
a process and set of standards acceptable to Kraft to which Supplier will
adhere in the performance of the transformation and that will enable Kraft to
determine whether Supplier has successfully completed the transformation and
the activities and deliverables associated with each Transformation Milestone,
including measurable success criteria by each Tower that Supplier must meet
before transforming the work any further, (iv) providing a process for Kraft to
delay Supplier from proceeding with any part of the transformation, either
current or future plans, or altering the timing for implementation of parts of
the transformation without any increase in Supplier’s Charges, if Kraft
reasonably determines that any part of the transformation poses a risk or
hazard to Kraft’s or an Eligible Recipient’s business interests, (v) the
contingency or risk mitigation strategies to be employed by Supplier in the
event of disruption or delay, and (vi) any transformational activities to be
performed by Kraft or the Eligible Recipients (provided that Kraft and the
Eligible Recipients shall not be obligated to perform any transformational
activities that are not specifically contemplated by this Agreement and
expressly set forth in the Transformation Plan).


4.3.4       Implementation
Plan. Within 45 days after the Effective Date, and thereafter at least 30
days before the end of each calendar year during the Term, Supplier shall
deliver to Kraft for Kraft’s review, comment and approval a detailed plan for
the implementation of the activities required for the implementation of the
Transformation Plan for the succeeding calendar year. In addition, until
implementation of the Transformation Plan is completed, Supplier shall deliver
to Kraft, at least 30 days before the end of each calendar quarter, a detailed
plan, consistent with the annual plan, for the implementation of
transformational activities related to the Transformation Plan that will be
taking place during the succeeding quarter, for Kraft’s review, comment and
approval. Such implementation plan shall be based on and consistent with Schedule 22, and shall identify
each transformational activity to be performed by Supplier Personnel, and the
acceptance testing and review process for the changes being implemented. If
approved by Kraft, each such plan for each calendar year shall become a part of
the Transformation Plan and be incorporated in Schedule
22. In addition, Supplier may propose an update of the overall
Transformation Plan in Schedule 22
at the time it submits its annual implementation plan, which update shall be
subject to Kraft’s review, comment, and approval. The implementation plans
described above are in addition to and separate from the annual Technology Plan
described in Section 9.5.5, though Supplier’s
update to the Transformation Plan may arise from changes contemplated by the
Technology Plan.


4.3.5       Performance.
Supplier shall perform the Transformation Services and implement the
Transformation Plan in accordance with the timetable and Transformation
Milestones set forth in the Transformation Plan, and Kraft shall reasonably
cooperate with Supplier to assist Supplier in implementing the Transformation Plan.
Supplier shall provide all cooperation and assistance reasonably required or
requested by Kraft in connection with Kraft’s evaluation or testing of the
deliverables resulting from implementation of the Transformation Plan. Supplier
shall implement the Transformation Plan in a manner that will not (i) disrupt
or have an unnecessary adverse impact on the business or operations of Kraft or
the Eligible Recipients, (ii) degrade the Services then being received by them,
or (iii) interfere with their ability to obtain the full benefit of the
Services, except as may be otherwise provided in the Transformation Plan. Prior
to undertaking any transformation activity, Supplier shall discuss with Kraft
all known Kraft-specific material risks and shall not proceed with such
activity until Kraft is reasonably satisfied with the plans with regard to such
risks (provided that neither Supplier’s disclosure of any such risks to Kraft



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nor
Kraft’s acquiescence in Supplier’s plans shall operate or be construed as
limiting Supplier’s responsibilities under this Agreement). Supplier shall
identify and resolve, with Kraft’s reasonable assistance, any problems that may
impede or delay the timely completion of any phase of the Transformation Plan.


4.3.6       Failure to
Meet Transformation Milestones.


4.3.6.1                     The
Parties acknowledge and agree that the Transformation Plan specifies various
Transformation Milestones by which transformational activities and/or
deliverables are to be completed. Supplier recognizes that its failure to meet
the Transformation Milestones may have a material adverse impact on the
business and operations of Kraft and the Eligible Recipients and that the
damages resulting from Supplier’s failure to meet such Transformation
Milestones are not capable of precise determination. Accordingly, if Supplier
fails to meet a Transformation Milestone, then, in addition to any other
remedies available to Kraft under this Agreement, at law, or in equity, and
subject to any exceptions to meeting Service Levels or Transformation Milestones
set forth in Schedule 3, Supplier shall be
subject to the imposition of Deliverable Credits specified in Schedule 3 for such Transformation
Milestone, as compensation for Kraft’s damages and not as a penalty. If Kraft
recovers other monetary damages from Supplier as a result of Supplier’s failure
to meet one or more Transformation Milestones, Supplier shall be entitled to
set off against such damages any Deliverable Credits paid for the failures
giving rise to such recovery.


4.3.6.2                     Neither
the transformation nor the activities and deliverables associated with
individual Transformation Milestones shall be deemed complete until the Parties
have mutually determined that Supplier has successfully completed them in
accordance with the process and standards identified in the Transformation
Plan.


4.4          Termination
Assistance Services.


4.4.1       Availability.
As part of the Services, and for the Charges set forth in Section
4.4.2.8 and Schedule 4,
Supplier shall provide to Kraft, the Eligible Recipients and/or their
designee(s) the Termination Assistance Services described in Section 4.4.2 and Schedule 23.


4.4.1.1                     Period of Provision. Supplier shall provide such Termination
Assistance Services to Kraft and the Eligible Recipients, or their designee(s)
(i) with reasonable prior written notice given the nature of the tasks being
requested, with such services commencing on the date specified in the notice,
which may be up to six months prior to the expiration of the Term or on such
earlier date as Kraft may reasonably request given the nature of the tasks
being requested, and continuing for the period of time requested by Kraft in
its notice to Supplier, which may be up to 12 months following the effective
date of the expiration of the Term (as such Term may be extended pursuant to Section 3.2), (ii) commencing upon
any notice of termination (including notice based upon breach or default by
Kraft, breach or default by Supplier, or termination in whole or in part for
convenience by Kraft) of the Term with respect to all or any part of the
Services, and continuing for the period of time requested by Kraft in its
notice to Supplier, which may be up to 12 months following the effective date
of such termination of all or part of the Services, or (iii) commencing upon
notice of termination of all or part of the Services to an Eligible Recipient
no longer Controlled by Kraft and continuing for the period of time requested
by Kraft in



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its
notice to Supplier, which may be up to 12 months following the effective date
of such termination.


4.4.1.2                     Extension of Termination Assistance Services. Kraft may
elect, upon 30 days’ prior notice, to extend the effective date of any
expiration/termination of all or part of the Termination Assistance Services,
in its sole discretion, provided that the total of all such extensions will not
exceed 180 days following the originally specified effective date without
Supplier’s prior written consent. If Kraft provides less than 30 days’ prior
notice of an extension, Supplier shall nonetheless use commercially reasonable
efforts to comply with Kraft’s request and provide the requested Services
and/or Termination Assistance Services.


4.4.1.3                     Extension of Other Services. As part of the Termination
Assistance Services, for a period of 12 months following the expiration or
termination date, Supplier shall provide to the Eligible Recipient(s), under
the terms and conditions of this Agreement, at Kraft’s request in a written
notice provided to Supplier at least 60 days in advance of such expiration or
termination date, any or all of the Services being performed by Supplier prior
to the expiration or termination date, including those Services described in Article 4 and Schedule
2; provided that Kraft may extend the period for the provision
of such Services for up to an additional 180 days in accordance with Section 4.4.1.2. To the extent
Kraft requests such Services, Kraft will pay Supplier the Charges specified in Schedule 4 that Kraft would have
been obligated to pay Supplier for such Services if this Agreement had not yet
expired or been terminated. To the extent Kraft requests a portion (but not
all) of the Services included in a particular Charge, the amount to be paid by
Kraft will be equitably adjusted by the amount attributable to the portion of
the Services that Supplier will not be providing or performing.


4.4.1.4                     Firm Commitment. Supplier shall provide Termination
Assistance Services to Kraft and the Eligible Recipients, or their designee(s)
regardless of the reason for the expiration or termination of the Term;
provided, if this Agreement is terminated by Supplier under Section 20.1.2 for failure to pay
undisputed amounts, Supplier may require payment by Kraft in advance for
Termination Assistance Services to be provided or performed under this Section 4.4. At Kraft’s request,
Supplier shall provide Termination Assistance Services directly to an Eligible
Recipient or an Entity acquiring Control of an Eligible Recipient; provided
that, unless otherwise agreed by the Parties, all such Termination Assistance
Services shall be performed subject to and in accordance with the terms and
conditions of this Agreement.


4.4.1.5                     Performance. All such Termination Assistance Services shall
be provided subject to and in accordance with the terms and conditions of this Agreement.
Supplier shall perform the Termination Assistance Services with at least the
same degree of accuracy, quality, completeness, timeliness, responsiveness and
resource efficiency as it provided and was required to provide with respect to
the same or similar Services during the Term. The quality and level of
performance of the Termination Assistance Services provided by Supplier
following the expiration or termination of the Term as to all or part of the
Services or Supplier’s receipt of a notice of termination or non-renewal shall
continue to meet or exceed the Service Levels and shall not be degraded or
deficient in any respect. Accordingly, Service Level Credits may still be
assessed for failure to meet Service Levels during the period Termination Assistance
Services are



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provided.
Supplier Personnel (including all Key Supplier Personnel) reasonably considered
by Kraft to be critical to the performance of the Services and Termination
Assistance Services that are performing or overseeing Services Kraft has
requested Supplier to continue performing shall be retained on the Kraft
account through the completion of the Services, including Termination
Assistance Services, they are performing. If Kraft requests Supplier to perform
less than all of the Services as part of the Termination Assistance Services,
and at such time Supplier can reasonably demonstrate that the Service Levels
for the remaining Services will be negatively impacted due to the partial
termination of a Tower or the termination of any Services within the Cross
Functional Services Tower, then the Parties agree to work together to adjust
the Service Levels and the Service Level Credits accordingly.


4.4.2       Scope of
Termination Assistance Service. As part of the Termination Assistance
Services, Supplier will timely transfer the control and responsibility for all
Services previously performed by or for Supplier to Kraft, the Eligible
Recipients and/or their designee(s) by the execution of any documents
reasonably necessary to effect such transfers. Additionally, Supplier shall
provide any and all reasonable assistance requested by Kraft to allow, among
other things:


(a)           the
Systems and processes associated with the Services to operate efficiently;


(b)           the
Services to continue with as little interruption or adverse effect as is
reasonable under the circumstances; it being understood that Supplier shall not
be responsible for Kraft’s or the replacement supplier’s failure to properly
perform any in-sourced or re-sourced part of the Services; and


(c)           the
orderly transfer of the Services to Kraft, the Eligible Recipients and/or their
designee(s).


The
Termination Assistance Services shall include, as requested by Kraft, the
Services, functions and responsibilities set forth on Schedule
23. In addition, in connection with such termination or
expiration, Supplier will provide the following assistance and Services at
Kraft’s direction:


4.4.2.1                     General Support. Supplier shall (i) assist Kraft, an
Eligible Recipient and/or their designee(s) in developing a written transition
plan for the transition of the Services to Kraft, such Eligible Recipient, or
their designee(s), which plan shall include (as requested by Kraft) capacity
planning, business process planning, facilities planning, human resources
planning, telecommunications planning and other planning necessary to effect
the transition, (ii) perform programming and consulting services as requested
to assist in implementing the transition plan, (iii) train personnel designated
by Kraft, an Eligible Recipient and/or their designee(s) in the use of any
business processes or associated Equipment, Software, Systems, Materials or
tools used in connection with the provision of the Services, (iv) provide Kraft
a catalog all business processes, Software, Kraft Data, Equipment, Materials,
Third Party Contracts and tools used to provide the Services, (v) provide
machine readable and printed listings and associated documentation for source
code for Software owned by Kraft and source code to which Kraft is entitled
under this Agreement and assist in its re-configuration, (vi) analyze and
report on the space required for the Kraft Data and the Software needed to
provide the Services, (vii) assist in the execution of a parallel operation,
data migration and testing process until the successful completion of the
transition to Kraft, an Eligible Recipient and/or their designee(s), (viii)
create



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and
provide copies of the Kraft Data in the format and on the media reasonably
requested by Kraft, an Eligible Recipient and/or their designee(s), (ix)
provide a complete and up-to-date, electronic copy of the Policy and Procedures
Manual in the format and on the media reasonably requested by Kraft, an
Eligible Recipient and/or their designee(s), and (x) provide other technical
assistance as requested by Kraft, an Eligible Recipient and/or their
designee(s).


4.4.2.2                     Personnel.


4.4.2.2.1                  Kraft,
the Eligible Recipients and/or their designee(s) shall be permitted to
undertake, without interference from Supplier, Supplier Subcontractors or Supplier
Affiliates (including counter-offers), to hire, effective after the later of
the termination of the Term or completion of any Termination Assistance
Services, any Supplier Personnel primarily assigned to the performance of
Services within the 12-month period prior to the expiration or termination
date. Supplier shall waive, and shall cause its Subcontractors and Affiliates
to waive, their rights, if any, under contracts with such personnel restricting
the ability of such personnel to be recruited or hired by, or to provide any
services to, Kraft, the Eligible Recipients and/or their designee(s). Supplier
shall provide Kraft, the Eligible Recipients and/or their designee(s) with
reasonable assistance in their efforts to hire such Supplier Personnel, and
shall give Kraft, the Eligible Recipients and/or their designee(s) reasonable
access to such Supplier Personnel for interviews, evaluations and recruitment.
Kraft shall endeavor to conduct the above-described hiring activity in a manner
that is not unnecessarily disruptive of the performance by Supplier of its
obligations under this Agreement.


4.4.2.2.2                  Promptly
upon Kraft providing notice for provision of Termination Assistance Services,
Supplier shall provide to Kraft a list, organized by country, of the Supplier
Personnel who are eligible for solicitation for employment pursuant to this Section 4.4.2.2. Subject to
applicable Privacy Laws, such list shall specify each such Supplier Personnel’s
job title and annual rate of pay.


4.4.2.3                     Software. Supplier shall provide Software in accordance with
Section 14.6.


4.4.2.4                     Equipment. Subject to Section 6.4.3,
Kraft, the Eligible Recipients and/or their designee(s) shall have the right
(but not the obligation) to purchase, or assume the lease for, any Equipment (including
the Acquired Assets) owned or leased by Supplier that is primarily used by
Supplier, Supplier Subcontractors or Supplier Affiliates to perform the
Services. Such Equipment shall be transferred in good working condition,
reasonable wear and tear excepted, as of the expiration or termination date or
the completion of any Services requiring such Equipment, whichever is later.
Supplier shall maintain such Equipment for which Supplier has the maintenance
obligation under the terms of this Agreement through the date of transfer so as
to be eligible for the applicable manufacturer’s maintenance program at no
additional charge to Kraft, so long as Kraft’s instructions to Supplier under
this Agreement regarding such Equipment have not voided the applicable manufacturer’s
maintenance program and such maintenance program is available (provided that
Supplier has notified Kraft in writing in advance that Kraft’s instructions
will void the applicable manufacturer’s maintenance program



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and
Kraft does not change its instructions following receipt of Supplier’s
notification). In the case of Supplier-owned equipment, Supplier shall grant to
Kraft, the Eligible Recipients and/or their designee(s) a warranty of title and
a warranty that such Equipment is free and clear of all liens and encumbrances.
Such conveyance by Supplier to Kraft, the Eligible Recipients and/or their
designee(s) shall be at the net book value which shall be calculated in
accordance with GAAP, a depreciation method that is either straight line (or,
at Supplier’s option, accelerated) for a period of time that is no longer than
the refresh cycle specified in Schedule 4
for the applicable Equipment. At Kraft’s request, the Parties shall negotiate
in good faith and agree upon the form and structure of the purchase. In the
case of leased Equipment, Supplier shall (i) represent and warrant that
Supplier, or its Affiliate or Subcontractor if such entity is the lessee, is
not in default under the Lease, (ii) represent and warrant that all payments
thereunder have been made through the date of transfer, and (iii) notify Kraft
of any lessor defaults of which it is aware at the time.


4.4.2.5                     Kraft Facilities, Equipment and Software. Supplier shall
vacate the Kraft Facilities and return to Kraft, if not previously returned,
any Kraft owned or leased Equipment, Kraft Owned Software and Kraft licensed
Software, in condition at least as good as the condition when made available to
Supplier, ordinary wear and tear excepted. Such Kraft Facilities, Equipment and
Software shall be vacated and returned at the expiration or termination date of
the Term or the completion of any Services requiring such Kraft Facilities,
Equipment and Software, whichever is later.


4.4.2.6                     Supplier Subcontracts and Third Party Contracts. Supplier
shall inform Kraft of all subcontracts or Third Party Contracts primarily used
by Supplier, Supplier Subcontractors or Supplier Affiliates to perform the
Services. Subject to Sections 6.4.3,
Supplier shall, at Kraft’s request, cause any such Subcontractors (other than
product vendor specialists who Supplier engages on a temporary basis to address
urgent problems, and excluding Supplier Overhead Materials), Supplier
Affiliates or third party contractors to permit Kraft, the Eligible Recipients
and/or their designee(s) to assume prospectively any or all such contracts or
to enter into new contracts with Kraft, the Eligible Recipients and/or their
designees on substantially the same terms and conditions, including price.
Supplier shall so assign the designated subcontracts and Third Party Contracts
to Kraft, the Eligible Recipients and/or their designee(s) as of the expiration
or termination date or the completion of any Termination Assistance Services
requiring such subcontracts or Third Party Contracts, whichever is later. There
shall be no charge or fee imposed on Kraft, the Eligible Recipients and/or
their designee(s) by Supplier or its Subcontractors, Affiliates or third party
contractors for such assignment. Supplier shall (i) represent and warrant that it
is not in default under such subcontracts and Third Party Contracts, (ii)
represent and warrant that all payments thereunder through the date of
assignment are current, and (iii) notify Kraft of any Subcontractor’s or third
party contractor’s default with respect to such subcontracts and Third Party
Contracts of which it is aware at the time.


4.4.2.7                     Other Subcontracts and Third Party Contracts. In addition to
its obligations under Section 4.4.2.6,
and subject to Kraft’s consent to the contrary in Section
6.4.3, Supplier shall make available to Kraft, the Eligible
Recipients and/or their



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CONFIDENTIAL MATERIAL APPEARING IN THIS
DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION IN ACCORDANCE WITH RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF
1934, AS AMENDED, AND RULE 24B-2 PROMULGATED THEREUNDER.  OMITTED INFORMATION HAS BEEN REPLACED WITH
ASTERISKS


 


designee(s),
pursuant to reasonable terms and conditions, any Subcontractor or third party
services then being utilized by Supplier in the performance of the Services.
Supplier shall retain the right to utilize any such Subcontractor or third
party services in connection with the performance of services for any other
Supplier customer. Kraft and the Eligible Recipients shall retain the right to
contract directly with any Subcontractor or third party previously utilized by
Supplier to perform any Services or to assume Supplier’s contract with such
Subcontractor or third party to the extent provided in Section
4.4.2.6.


4.4.2.8                     Rates and Charges. Except as otherwise provided in this Section 4.4.2.8 and Section 4.4.2.9, if Kraft requests
that Supplier provide or perform Termination Assistance Services in accordance
with this Agreement, Kraft shall pay Supplier the rates and charges specified
in Schedule 4 for the additional
Supplier Personnel or resources required to perform such Termination Assistance
Services. To the extent rates and charges for such Supplier Personnel or
resources are not specified in Schedule 4,
Kraft shall pay Supplier a negotiated fee, which will be that is  *  *  *
the  *  *  *
reflected in the applicable rates under this Agreement from Supplier’s  * * *. To the
extent the Termination Assistance Services requested by Kraft can be provided
by Supplier using personnel and resources already assigned to Kraft to provide
the Services and that are not removed as a result of Kraft’s request that
Services be reduced, and without adversely impacting the remaining personnel’s
ability to perform their responsibilities in accordance with this Agreement,
including the applicable Service
Levels, there will be no additional charge to Kraft for such Termination
Assistance Services. If the Termination Assistance Services requested by Kraft
cannot be provided by Supplier using personnel and resources as described in
the preceding sentence, Kraft, in its sole discretion, may forego or delay any
work activities or temporarily or permanently adjust the work to be performed
by Supplier, the schedules associated therewith or the Service Levels to permit
the performance of such Termination Assistance Services using such personnel or
resources already assigned to perform the Services that are not removed as a
result of Kraft’s request that Services be reduced.


4.4.2.9                     Proprietary Communications Network. If Supplier uses a
proprietary communications network to provide Services to Kraft or the Eligible
Recipients, then for a period of up to two years following the expiration or
termination date, upon Kraft’s request Supplier shall continue to provide such
proprietary communications network and other Network Services at the rates, and
subject to the terms and conditions, set forth in this Agreement.


4.4.3       Resources.
Supplier shall ensure that, at all times during the Term, on 30 days’ notice,
it is able to deploy all necessary resources to perform Termination Assistance
Services in accordance with this Section 4.4.


4.4.4       Survival of
Terms. This Section 4.4
shall survive termination/expiration of the Term.


4.5          Use
of Third Parties.


4.5.1       Right of Use.
Nothing in this Agreement shall be construed as a requirements contract, and
notwithstanding anything to the contrary contained herein, this Agreement shall
not be interpreted to prevent Kraft or any Eligible Recipient from obtaining
from third parties, including by and through Altria, (each, a “Kraft Third Party Contractor”), or providing to itself, any
or all of the



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Services
or any other services. Nor shall anything in this Agreement be construed or
interpreted as limiting Kraft’s right or ability during the Term to change the
requirements of Kraft or the Eligible Recipients, move parts of Towers in and
out of scope, add or delete Eligible Recipients or to increase or decrease its
demand for Services. To the extent Kraft or an Eligible Recipient obtains from
Kraft Third Party Contractors, or provides to itself, any of the Services, the
amount to be paid to Supplier by Kraft will be adjusted in accordance with Schedule 4, and such adjustments
shall  *  *  *
(unless  *  *  *
elects to declare a  *  *  *
pursuant to  *  *  *).
Similarly, to the extent Kraft adds or deletes Eligible Recipients or increases
or decreases its demand for Services, the amount to be paid to Supplier by
Kraft will be adjusted in accordance with Schedule 4
and the rates specified therein. Without limiting the forgoing, if and to the
extent Kraft purchases telecom transport services from Supplier, Kraft will
have the right to discontinue purchase of any or all telecom transport services
from Supplier on  *  *  *
notice in the United States and  *  *  * notice outside the United States
*  *  *, and, at its election, to
include any replacement telecom transport services contract that Kraft enters
into as a Managed Telecom Transport Agreement.


4.5.2       Supplier
Cooperation. Supplier shall fully cooperate with and work in good faith
with Kraft or Kraft Third Party Contractors as described in Schedule 2 or requested by Kraft
and, except as provided below, at no additional charge to Kraft. Such
cooperation may include: (A) timely providing access to any facilities being
used to provide the Services, as necessary for Kraft personnel or Kraft Third
Party Contractors to perform the work assigned to them; (B) timely providing
reasonable electronic and physical access to the business processes and
associated Equipment, Software and/or Systems to the extent necessary and
appropriate for Kraft personnel or Kraft Third Party Contractors to perform the
work assigned to them; (C) timely providing written requirements, standards,
policies or other documentation for the business processes and associated
Equipment, Software or Systems procured, operated, supported or used by
Supplier in connection with the Services; (D) ensuring that there is no
degradation in the provision of the Services caused by the adjustments made by
Supplier in transferring Services to a third party, Kraft or an Eligible
Recipient; or (E) any other cooperation or assistance reasonably necessary for
Kraft personnel or Kraft Third Party Contractors to perform the work in question.
Kraft personnel and Kraft Third Party Contractors shall comply with Supplier’s
reasonable security and confidentiality requirements, and shall, to the extent
performing work on Software, Equipment or Systems for which Supplier has
operational responsibility, or accessing any Supplier facilities, comply with
Supplier’s reasonable standards, methodologies and procedures, so as to not
compromise the confidentiality or security of any Supplier information,
including information of any other customer of Supplier. If, in connection with
providing the foregoing assistance to Kraft Third Party Contractors, Supplier
is required to use resources it would not otherwise have been required to use
to provide the Services either because of the specific skill levels involved or
to avoid any adverse impact on the Services or the Service Levels, and Supplier
is not compensated for such additional resources through the charging mechanism
in Schedule 4, then Kraft will
compensate Supplier for such assistance on a time and materials basis provided
that (i) Supplier notifies Kraft prior to its final decision that Supplier will
not be able, using commercially reasonable efforts, to cooperate with the Kraft
Third Party Contractor without such additional resources under such circumstances
and Supplier provides a reasonable estimate of any impact of such additional
resources on the Charges, (ii) Supplier identifies and considers commercially
reasonable alternatives, if any, available to avoid such additional resource
requirement, and (iii) Supplier uses commercially reasonable efforts to
minimize usage of such additional resources.


4.5.3       Notice by
Supplier. Supplier shall immediately notify Kraft when it becomes aware
that an act or omission of a Kraft Third Party Contractor will cause, or has
caused, a problem or delay in providing the Services, and shall use
commercially reasonable efforts, using existing Supplier



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Personnel
assigned to perform the Services, to work with Kraft, the Eligible Recipients
and the Kraft Third Party Contractor to prevent or circumvent such problem or
delay; provided, that the Parties acknowledge and agree that Supplier has no
responsibility for the work of Kraft Third Party Contractors or any delays
therein or problems therewith, unless and to the extent Supplier or its
Affiliates or Subcontractors are responsible for managing such third parties or
have caused such problems or delays. Supplier shall cooperate with Kraft, the
Eligible Recipients and Kraft Third Party Contractors to resolve differences and
conflicts arising between the Services and other activities undertaken by
Kraft, the Eligible Recipients or Kraft Third Party Contractors. Any
notification provided by Supplier in accordance with this Section
4.5.3 shall not excuse Supplier from the performance of any of
its obligations under this Agreement.


4.6          Projects.


4.6.1       Procedures
and Performance. Supplier shall perform Projects requested and approved by
Kraft as part of the Services. The Projects underway as of the Effective Date
are specified in Schedule 9.
If Supplier desires to make any change to a Project that is underway as of the
Effective Date, then Supplier shall submit to Kraft a written proposal
describing such change and the potential impact of such change, and Kraft may,
in its sole discretion approve or reject such proposal. A “Project”
is a discrete unit of non-recurring work that is (i) not an inherent, necessary
or customary part of the day-to-day Services, (ii) not required to be performed
by Supplier to meet the existing Service Levels (other than Service Levels
related to Project performance and except as provided in Sections
21.4 and 22.4 of Schedule 3), and (iii) that
requires at least 
*  *  * of a Supplier Personnel’s effort
to complete. A Project may consist of or include work that would otherwise be
treated as New Services. The Supplier Personnel assigned to perform such
Projects shall possess the training, education, experience, competence and
skill to perform such work. The Kraft Contract Manager or his or her designee
shall request, define and set the priority for such Projects. Supplier shall
maintain appropriate continuity of personnel assigned to perform Projects.
Kraft shall pay for Projects performed by Supplier at Kraft’s request in
accordance with Schedule 4.


4.6.2       Project
Proposals. To the extent required under this Agreement or the Policy and
Procedures Manual, Supplier shall prepare a Project proposal that conforms with
the requirements for New Services proposals in accordance with Section 11.5.1 prior to beginning such
Project. Kraft may accept or reject such Project proposal in its sole
discretion. The hours expended by Supplier in preparing proposals or plans or
reporting on the status of such Projects shall be included in the Monthly Base
Charges and shall not be counted as FTE Services. If there is significant
growth in the monthly number of Project proposals or plans requested by Kraft
as compared to the monthly number of Project proposals and plans typically
prepared by Kraft prior to the Effective Date, the Parties agree to meet and
develop an equitable solution.


4.6.3       Additional
Work or Reprioritization. In addition to the FTEs provided for in
accordance with Section 4.6.1,
the Kraft Contract Manager or his or her designee may identify new or
additional work activities to be performed by Supplier Personnel (including
work activities that would otherwise be treated as New Services) or
reprioritize or reset the schedule for existing work activities to be performed
by such Supplier Personnel. Unless otherwise agreed, Kraft shall incur no
additional charges for the performance of such work activities by Supplier
Personnel to the extent then assigned to Kraft. Supplier shall use commercially
reasonable efforts to perform such work activities without impacting the established
schedule for other tasks or the performance of the Services in accordance with
the Service Levels. If after using such efforts it is not possible to avoid
such an impact, Supplier shall notify Kraft of the anticipated impact and
obtain its consent prior to proceeding with such work activities. Kraft, in its
sole discretion, may forego or delay such work activities or temporarily adjust
the work to be performed by Supplier, the schedules



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associated
therewith or the Service Levels to permit the performance by Supplier of such
work activities. The foregoing shall not be interpreted to and is not intended
to diminish Supplier’s right to reduce the resource assigned to Kraft, so long
as such reduction is not in contravention of its obligations hereunder, and
does not require that Supplier Personnel work longer hours than normally
required of full time FTEs.


4.6.4       Baselining
Non-Billable Project Work.


4.6.4.1     A
“Non-Billable Project” is a discrete
unit of non-recurring project work initiated by Kraft that is (i) not an
inherent, necessary or customary part of the day—to-day Services, (ii) not
required to be performed by Supplier to meet the existing Service Levels (other
than Service Levels related to Non-Billable Project performance), and (iii)
that requires less than  *  *  * of a Supplier Personnel’s effort
to complete. The Parties acknowledge that Non-Billable Projects will not
include the effort required of Supplier to meet its obligations under this
Agreement, including performing activities such as: (i) System maintenance
activities, including the correction of security deficiencies and flaws (ii)
maintenance and continuous improvement in Service Levels, (iii) Technological
Evolution (except as otherwise provided in Section 9.17.1),
including technology refresh requirements and Software currency requirements;
(iv) changes required to comply with all Supplier Laws; (v) “run the business”
changes of type periodically performed by Kraft’s in-scope personnel prior to
the Effective Date; and (vi) compliance with the Kraft Standards as of the
Effective Date. A Non-Billable Project may consist of or include work that
would otherwise be treated as New Services.


4.6.4.2     The
Supplier Personnel assigned to perform Non-Billable Projects shall possess the
training, education, experience, competence and skill to perform such work.
Supplier shall maintain appropriate continuity of personnel assigned to perform
Non-Billable Projects. Except as provided in this Section
4.6.4, Non-Billable Project Work will be performed by Supplier
as part of the Monthly Base Charges.


4.6.4.3     Commencing
on the Commencement Date, Supplier will implement a service request management
system to capture work requests from Kraft personnel. Requests for work from
Kraft personnel will be entered into the service request management system by
Supplier Personnel. The information entered will include a description of the
services the Supplier Personnel performed and the amount of effort required.
The sole purpose for capturing this information during the first 6 months is to
provide the Parties with a library of information to be used to tailor the
service request management system and establish the rules as described in Section 4.6.4.4.


4.6.4.4     During
the first 6 months following the Commencement Date, Supplier and Kraft will
work together to tailor the service request management system to provide
automated workflow and approvals. In addition, Kraft and Supplier will mutually
agree upon the rules for allocating work requests among (i) Projects, (ii) Non-Billable
Projects, and (iii) other in-scope work required to be performed by Supplier as
part of its Service obligations. Commencing by the date set forth in the
Transition Plan, authorized Kraft Personnel will begin entering work requests
directly into the service request management system.


4.6.4.5     Commencing
no earlier than month 7 following the Commencement Date and for a period of 12
consecutive months, the service request management system will track the number
of Non-Billable Projects fulfilled by Supplier during that 12 month period and
Supplier and Kraft will use that information to establish a quarterly baseline
of Non-Billable



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Projects. In establishing the baseline level of
Non-Billable Projects, Kraft and Supplier expect that the Supplier Personnel
performing Non-Billable Projects should be capable of performing a level of
Non-Billable Projects similar to the level of comparable work generally
performed by Kraft personnel during the 12 month period prior to the
Commencement Date. Unless mutually agreed differently through the governance
process, taking into consideration the processes that Kraft uses after the
Effective Date to manage the level of work requests in comparison to the
processes it used for managing the level of requests for similar work in the 12
month period prior to the Effective Date, Supplier shall at minimum perform the
quantity required to prevent any increase in the backlog of Non-Billable
Project work as of the beginning of the 12 month measurement period referred to
above. If, within 60 days after the end of that 12 month period, the Parties
have not agreed to a quarterly baseline of Non-Billable Projects, then either
Party may submit the dispute to the dispute resolution process described in Section 19.


4.6.4.6     If,
during any calendar quarter during the Term, Supplier is requested to perform a
significant number of Non-Billable Projects over or under the agreed baseline,
then through the governance process described in Schedule
6, the Parties will meet and agree on appropriate adjustments,
including working with Kraft to reduce the number of Non-Billable Projects,
adjusting priorities of Supplier’s then existing personnel, or adding or
decreasing the FTEs to handle the increased or reduced number of Non-Billable
Projects, or some other approach as the governance committee may determine is
appropriate.


4.6.5       Life Cycle
Project. Schedule 28 includes a list of
projects underway at Kraft prior to the Effective Date that do not constitute
Projects and therefore are not subject to the foregoing provisions of this Section 4.6.


4.7          Acquisition
and Divestiture Services.


Supplier shall
provide the following Services related to Entities acquired or divested by
Kraft.


4.7.1       Acquisition
and New Entity Support. With respect to a potential acquisition by Kraft,
or formation by Kraft of a new Affiliate, partnership, joint venture or other
Entity that may become an Eligible Recipient, upon Kraft’s request, Supplier
will provide support (including assessments of the current technology
environments to be acquired, potential integration approaches, and the
potential net economic impact of the acquisition in connection with the
Services) as reasonably necessary to assist Kraft’s assessment of the portion
of the acquisition or new Entity to which the Services will relate and
subsequently provide the Services as they apply to such Entity on the terms and
conditions of this Agreement, including Section 11.5,
if and to the extent that the Services as they apply to such Entity satisfy the
definition of New Services. Such support will be provided within the timeframe
reasonably requested by Kraft or as required by the timing of the acquisition
or formation of such Entity.


4.7.2       Migration of
Systems and Business Processes. As requested by Kraft and as they relate to
the Services, Supplier will migrate the business processes, systems,
applications and data of such Entity to the Kraft environment on the terms and
conditions of this Agreement, including Section 11.5,
if and to the extent that the Services as they apply to such Entity satisfy the
definition of New Services.


4.7.3       Personnel
Support. As requested by Kraft, Supplier will provide personnel, at the
rates set forth in Schedule 4
or such other rates as may be agreed upon by the Parties, to staff vacancies and
to



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provide
management for the information technology functions needed to support such
Entity, including on-site support at the location of such Entity.


4.7.4                     Divestitures.
From time to time, Kraft may divest business units or Affiliates. In such
cases, Supplier will provide transition support services to Kraft, the divested
Entity or the acquiring Entity as if such services are Termination Assistance
Services. Supplier shall provide the services described in Sections
4.7.1 through 4.7.3  and Section 11.1.6 to the divested Entity or the
acquiring Entity with respect to such divestitures as described in Section 11.1.6.


5.             REQUIRED
CONSENTS


5.1                               Supplier
Responsibility.


At no additional cost to Kraft, Supplier shall
undertake all administrative activities necessary to obtain all Required
Consents. At Supplier’s request, Kraft will cooperate with Supplier in
obtaining the Required Consents by executing appropriate Kraft-approved written
communications and other documents prepared or provided by Supplier. In
addition, in those instances where Kraft is the contracting party or licensee,
Kraft will make the initial contact with and make introductions to the
applicable third parties as Supplier may reasonably request. With Kraft’s
approval, Supplier shall exercise for the benefit of Kraft and the Eligible
Recipients any rights Supplier has to utilize or transfer license rights or
other applicable rights under Supplier’s existing third party licenses, leases
or contracts, and the Parties shall cooperate in minimizing or eliminating any
costs associated therewith.


5.2                               Financial
Responsibility.


*  *  * shall pay all transfer, re-licensing or termination
fees or expenses associated with obtaining any Required Consents or terminating
any licenses or agreements as to which  *  *  * is unable to obtain such Required
Consents. *  *  * will cooperate with  *  *  *
in good faith to minimize such fees and expenses.


5.3                               Contingent
Arrangements.


If, despite using commercially reasonable efforts,
Supplier is unable to obtain a Required Consent with Kraft’s reasonable
cooperation, with respect to Kraft licensed Third Party Software, Supplier
shall, at Supplier’s option and with Kraft’s approval (which shall not be
unreasonably withheld), (i) replace the Kraft license for such Third Party Software
with a Supplier license; (ii) replace such Third Party Software with other
Software offering equivalent features and functionality, or (iii) secure the
right to manage the Kraft licensed Third Party Software on behalf of Kraft. If,
despite using commercially reasonable efforts with Kraft’s reasonable
cooperation, Supplier is unable to obtain a Required Consent with respect to
any other Kraft Third Party Contract, then, unless and until such Required
Consent is obtained, Supplier shall manage such Third Party Contract on Kraft’s
behalf and perform all obligations and enforce all rights under such Third
Party Contract as if Supplier were a party to the agreement in Kraft’s place.
If, despite using commercially reasonable efforts with Kraft’s reasonable cooperation,
management of such Third Party Contract is not legally or contractually
possible or Supplier is unable to obtain any other Required Consent, Supplier
shall use all commercially reasonable efforts to determine and adopt, subject
to Kraft’s prior approval, such alternative approaches as are necessary and
sufficient to provide the Services without such Required Consent. If such
alternative approaches are required for a period longer than 90 days following
the Commencement Date (or, in the case of Required Consents specific to a
Deferred Country, 90 days after Supplier begins performing Services for such
Deferred Country), the Parties will equitably adjust the terms and reduce the
prices specified in this Agreement to reflect any additional costs being
incurred by Kraft and any Services not being received by Kraft and the Eligible
Recipients. In addition, if Supplier fails to obtain any Required Consent
within 90 days after the Commencement Date (or, in the case of a Deferred
Country, the applicable start date for the Services for such Deferred Country
requiring 



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such consent) and such
failure has a material adverse impact on the use or enjoyment of such Services
by Kraft or the Eligible Recipients, *  *  *
the affected  *  *  *
of any  * * *.
Except as otherwise expressly provided herein, the failure to obtain any
Required Consent shall not relieve Supplier of its obligations under this
Agreement and  *  *  *
shall not be entitled to any  *  *  * in connection with  *  *  *
any Required Consent or implementing any alternative approach.


6.             FACILITIES,
SOFTWARE, EQUIPMENT, CONTRACTS AND ASSETS ASSOCIATED WITH THE PROVISION OF
SERVICES


6.1                               Service
Facilities.


6.1.1                     Service
Facilities. The Services shall be provided at or from (i) the Kraft
Facilities described on Schedule 7.1,
(ii) the Supplier Facilities described on Schedule 7.2,
or (iii) any other service location approved by Supplier and Kraft. Supplier
shall obtain Kraft’s prior approval for any proposed relocation by Supplier,
its Affiliates or Subcontractors of the provision of a Service to a new or
different Supplier Facility. Kraft agrees that it will not withhold its
approval, unless Kraft reasonably believes that the new location will result in
increased costs to Kraft or the Eligible Recipients, a negative impact to the
Services or Service Levels, or increased business (including public relations),
operational or regulatory risk to Kraft or the Eligible Recipients. Supplier
agrees that help desk relocation will be more broadly subject to Kraft’s
approval, which approval may be subject to sharing of cost savings associated
with such relocation in the event the relocation is to a different country from
the prior location. Kraft acknowledges and has approved the Supplier Facilities
set forth on Schedule 7.2 as of the
Effective Date for the provision of the Services and scope thereof described
therein. Supplier shall be financially responsible for all additional costs,
Service Taxes (including telecom taxes) and property taxes or expenses related
to or resulting from any Supplier-initiated relocation to a new or different
Supplier Facility, including any costs or expenses incurred or experienced by
Kraft or any Eligible Recipient as a result of such relocation.


6.1.2                     Kraft
Facilities. Kraft shall provide Supplier with the use of and access to the
Kraft Facilities (or equivalent space) described in Schedule
7.1 for the periods specified therein solely as necessary for
Supplier to perform its obligations under this Agreement. All Kraft owned or
leased assets provided for the use of Supplier under this Agreement shall
remain in Kraft Facilities unless Kraft otherwise agrees. In addition, all
improvements or modifications to Kraft Facilities requested by Supplier shall
be (i) subject to review and approval in advance by Kraft, (ii) in strict
compliance with Kraft’s then-current policies, standards, rules and procedures,
and (iii) performed by and through Kraft at Supplier’s expense. THE KRAFT
FACILITIES ARE PROVIDED BY KRAFT TO SUPPLIER ON AN AS-IS, WHERE-IS BASIS. KRAFT
EXPRESSLY DISCLAIMS ANY WARRANTIES, EXPRESS OR IMPLIED, AS TO THE KRAFT
FACILITIES, OR THEIR CONDITION OR SUITABILITY FOR USE BY SUPPLIER.


6.1.3                     Office
Space, Furniture, Fixtures and Equipment. At the Kraft Facilities described
in Schedule 7.1, Kraft shall provide
office space and office furniture for the number of Supplier Personnel and for
such periods specified in Schedule 7.1.
Except as otherwise provided in Schedule 7.1
or to the extent Supplier agrees otherwise, the office space and office
furniture provided by Kraft for the use of Supplier Personnel will be office
space and office furniture that reasonably meets Supplier Personnel’s
requirements, provides reasonably acceptable working conditions, is equivalent
to office space and office furniture provided by Kraft to other contractors
performing information technology or similar services at the same Kraft
Facility, except to the extent Supplier provides lesser quality office
space and office furniture to its own similarly situated employees. In the case
of Transitioned Employees only, for the first two Contract Years, such office
space shall be located in such part of the Kraft Facility as is generally



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made
available to similarly situated Kraft employees, except to the extent Supplier
provides lesser quality office space and office furniture to its own similarly
situated employees. Supplier shall be financially responsible for providing all
other office space, office furniture and fixtures needed by Supplier or
Supplier Personnel (including Transitioned Employees) to provide the Services,
and for all upgrades, replacements and additions to such office furniture or
fixtures; provided that any such office furniture and fixtures in Kraft
Facilities must meet Kraft’s then-current standards and procured by Kraft on
Supplier’s behalf, but only with Supplier’s
prior written consent to the terms of the procurement; and provided
further that Supplier shall use commercially reasonable efforts to purchase and
use surplus Kraft furniture and fixtures to the extent available and where to be used by Supplier within Kraft Facilities.
Supplier Personnel using the office facilities provided by Kraft will be
accorded reasonable access to the communications wiring in such facilities
(including fiber, copper and wall jacks, subject to Section
6.1.4) and the use of certain shared office equipment and
services, such as photocopiers, local and long distance telephone service for
Kraft-related calls, telephone handsets, mail service, office support service
(e.g., janitorial), heat, light, and air conditioning; provided that such
access and usage shall be solely for and in connection with the provision of
Services by such Supplier Personnel; and provided further that Supplier shall
reimburse Kraft for the additional incremental costs incurred by Kraft or the
Eligible Recipients if and to the extent Supplier’s technology solution,
service delivery model and/or inefficiency cause its usage or consumption of
such resources to exceed historical levels. Supplier shall be responsible for
providing all other office related equipment and services needed by Supplier or
Supplier Personnel at such Kraft Facilities to provide the Services, and for
upgrades, improvements, replacements and additions to such equipment or
services.


6.1.4                     Supplier’s
Responsibilities Regarding Kraft’s Network. To the extent any Equipment
provided or used by Supplier or Supplier Personnel is connected directly to the
network(s) of Kraft or any Eligible Recipient, such Equipment (and all Software
installed thereon or that may be subsequently added) shall
be (i) subject to review and approval in advance by Kraft (Supplier shall
cooperate with Kraft in the testing, evaluation and approval of such
Equipment), (ii) in strict compliance with Kraft’s then-current security
policies, architectures, standards, rules and procedures, and (iii) in strict
compliance with Kraft’s then-current hardware and software specifications.
Supplier shall promptly investigate any security breach of Kraft’s networks or
Systems associated with Supplier Personnel or the performance of the Services.
Supplier shall notify Kraft and permit Kraft to participate in any audit or
investigation of any such security breach. Supplier shall promptly report the
findings of any such audit or investigation to Kraft and, within five business
days after the report of such audit or inspection is completed, shall provide
Kraft with a written statement of the details of such report to the extent it
pertains to Kraft, and, to the extent not provided in such statement, a written
summary of such report that includes at least the following: (A) scope of the
audit; (B) control weaknesses found; (C) the impact to Kraft (financial,
operational or otherwise) of such security breach; and (D) Supplier’s plan for
remediation within 60 days; provided that Supplier may redact name or other
identifying information of other Supplier customers from any information
provided to Kraft and Supplier will be under no obligation to disclose any
Supplier cost information (other than Pass-Through Expenses and reimbursable
costs) or any information that is the proprietary or confidential information
of any other Supplier customer or vendor.


6.1.5                     Supplier’s
Responsibilities. Except as provided in Sections
6.1.1, 6.1.2 and 6.1.3 and Section
6.4, Supplier shall be responsible for providing all furniture,
fixtures, Equipment, space and other facilities required to perform the
Services and all upgrades, improvements, replacements and additions to such
furniture, fixtures, Equipment, space and facilities. Without limiting the
foregoing, Supplier shall provide (i) all maintenance, site management, site
administration and



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similar
services for the Supplier Facilities, (ii) uninterrupted power supply services
for the Supplier Facilities and for the Software, Equipment and Systems in
Kraft Facilities as designated in Schedule 7.1
and (iii) telecommunications transport (voice and data) between Supplier
Facilities and Kraft Sites and Facilities.


6.1.6                     Physical
Security. Kraft is responsible for the physical security of the Kraft
Facilities; provided, that Supplier shall be responsible for the safety and
physical access and control of the areas that are dedicated solely for use by
Supplier for its performance of the Services and Supplier shall not permit any
person to have access to, or control of, any such area unless such access or
control is permitted in accordance with control procedures approved by Kraft,
including the procedures described in Schedule 17.2,
or any higher standard agreed to by Kraft and Supplier. Supplier shall be
solely responsible for compliance by Supplier Personnel with such control
procedures, including obtaining advance approval to the extent required.


6.1.7                     Standards,
Requirements and Procedures at Kraft Facilities. Supplier shall adhere to
and enforce, and cause Supplier Personnel to adhere to and enforce, the
operational, safety and security standards, requirements and procedures
described in the applicable lease and/or then in effect at the Kraft
Facilities, as such standards, requirements and procedures may be modified by
Kraft from time to time. Supplier shall regularly advise Kraft of other
operational, safety and security practices, procedures and safeguards that
Supplier sees in general use in the industry.


6.1.8                     Employee
Services. Subject to applicable security requirements, Kraft will permit
Supplier Personnel to use certain employee facilities (e.g., designated parking
facilities, cafeteria and common facilities) at the Kraft Facilities that are
generally made available to the employees and contractors of Kraft or the
Eligible Recipients. The employee facilities in question and the extent of
Supplier Personnel’s permitted use shall be specified in writing by Kraft and
shall be subject to modification in Kraft’s sole discretion with the same
advance notice, if any, that Kraft provides its own employees. Supplier
Personnel will not be permitted to use employee facilities designated by Kraft
for the exclusive use of certain Kraft or Eligible Recipient employees and will
not be entitled to the provision or reimbursement of paid parking.


6.1.9                     Use
of Kraft Facilities.


6.1.9.1                                                               Unless
Supplier obtains Kraft’s prior written agreement, which Kraft may withhold in
its sole discretion, Supplier shall use the Kraft Facilities, and the Equipment
and Software located therein, only to provide the Services to Kraft and the
Eligible Recipients.


6.1.9.2                                                               Kraft
reserves the right to relocate any Kraft Facility from which the Services are
then being provided by Supplier to another geographic location; provided that,
in such event, Kraft will provide Supplier with comparable office space in the
new geographic location. In such event, Kraft shall pay the applicable labor
rate(s) for additional personnel reasonably required by Supplier, for the incremental
Out-of-Pocket Expenses reasonably incurred by Supplier in physically relocating
to such new geographic location, and for any additional ongoing costs incurred
by Supplier that would not have been incurred but for the required relocation;
provided that such relocation is not expressly contemplated in this Agreement,
and that Supplier notifies Kraft of such additional required personnel,
incremental Out-of-Pocket Expenses, and ongoing costs, obtains Kraft’s approval
prior to using such personnel or incurring such expenses and costs, and uses
commercially reasonable efforts to minimize such personnel, expenses and costs.



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6.1.9.3                                                               Kraft
also reserves the right to direct Supplier to cease using all or part of the
space in any Kraft Facility from which the Services are then being provided by
Supplier and to thereafter use such space for its own purposes. In such event,
Kraft shall reimburse Supplier for any reasonable incremental Out-of-Pocket
Expenses incurred by Supplier in leasing required substitute new space, and for
any additional ongoing costs incurred by Supplier that would not have been
incurred but for the required relocation; provided that such relocation
direction is not expressly contemplated in this Agreement and that Supplier
notifies Kraft of such additional required incremental Out-of-Pocket Expenses
and ongoing costs, obtains Kraft’s approval prior to incurring such expenses
and costs, and uses commercially reasonable efforts to minimize such expenses
and costs.


6.1.9.4                                                                   In
connection with any decision by Kraft to relocate any Kraft Facility or to
direct Supplier to cease using any Kraft Facility as described in Section 6.1.9.2 or 6.1.9.3, Supplier will provide to
Kraft for its review, comment, and approval, a written plan for such relocation
which shall include the cost of such plan, and any commercially reasonable
alternatives for reducing such costs, which alternatives may in some cases
include limited impacts of the availability of the affected Services.


6.1.10              Conditions
for Return. When the Kraft Facilities are no longer to be used by Supplier
as contemplated by Section 6.1.2
or are otherwise no longer required for performance of the Services, Supplier
shall notify Kraft as soon as practicable and shall vacate and return such
Kraft Facilities (including any improvements to such facilities made by or at
the request of Supplier) to Kraft in substantially the same condition as when
such facilities were first provided to Supplier, subject to reasonable wear and
tear.


6.1.11              No
Violation of Laws. Supplier shall (i) treat, use and maintain the Kraft
Facilities in a reasonable manner, and (ii) ensure that neither Supplier nor
any of its Subcontractors commits, and use commercially reasonable efforts to
ensure that no business visitor or invitee commits, any act in violation of any
Laws in such Supplier occupied Kraft Facility or any act in violation of Kraft’s
insurance policies or in breach of Kraft’s obligations under the applicable
real estate leases in such Supplier occupied Kraft Facilities (in each case, to
the extent Supplier has received notice of such insurance policies or real
estate leases or should reasonably be expected to know of such obligations or
limitations). Such commercially reasonable efforts include, by way of example,
providing the visitor or invitee with notice of any requirements regarding such
facilities that are not common or self-evident; accompanying visitors and
invitees while in Kraft facilities; and exercising appropriate oversight over
such visitors and invitees activities while in Kraft facilities.


6.2                               Use
of Supplier Facilities.


During the Term and solely for the purpose of
conducting audits, and reviews of the Services and other work directly related
to the Services, Supplier will provide to Kraft at no charge (i) reasonable
access to and use of Supplier Facilities from which the Services are being
performed, and (ii) access to reasonable work/conference space at such Supplier
Facilities, for the conduct of Kraft’s business pertaining to the Services. All
such access shall be in compliance with Supplier’s security rules and
procedures communicated in advance and applicable to other parties visiting
Supplier’s facility.



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6.3                               Kraft
Rules/Employee Safety.


6.3.1                     Kraft
Rules and Compliance. In performing the Services and using the Kraft
Facilities, Supplier shall observe and comply with all Kraft policies, rules
and regulations applicable to Kraft Facilities or the provision of the Services
which have been communicated to Supplier or Supplier Personnel in advance by such
means as are generally used by Kraft to disseminate such information to its
employees or contractors, including those set forth on Schedule
17.3 and those applicable to specific Kraft Sites (collectively,
“Kraft Rules”). The Parties acknowledge
and agree that, as of the Commencement Date, Supplier is fully informed as to
the Kraft Rules, both through due diligence and its hiring of the Transitioned
Employees. Supplier shall be responsible for the promulgation and distribution
of Kraft Rules to Supplier Personnel as and to the extent necessary and
appropriate. Additions or modifications to the Kraft Rules may be (i)
communicated orally by Kraft or an Eligible Recipient directly to Supplier or
Supplier Personnel, (ii) disclosed to Supplier and Supplier Personnel in
writing, (iii) conspicuously posted at a Kraft Facility, (iv) electronically
posted, or (v) communicated to Supplier or Supplier Personnel by means
generally used by Kraft to disseminate such information to its employees or
contractors. Supplier and Supplier Personnel shall observe and comply with such
additional or modified Kraft Rules. If Supplier believes that any new or
modified Kraft Rule negatively impacts Supplier’s ability to provide the
Services, or meet the Service Levels, Supplier shall notify Kraft and Kraft and
Supplier will meet to discuss appropriate workarounds.


6.3.2                     Safety
and Health Compliance. Supplier and Supplier Personnel shall familiarize
themselves with the premises and operations at each Kraft Site or Facility at
or from which Services are rendered and the Kraft Rules applicable to each such
Site or Facility. Supplier and Supplier Personnel shall observe and comply with
all Laws applicable to the use by it and them of each Kraft Facility or Site or
the provision of the Services, including environmental Laws and Laws regarding
occupational health and safety. Supplier shall be responsible for the
compliance of Equipment, Software, Systems and Services for which it is
operationally responsible with such Laws and shall be responsible for any acts
or omissions of Supplier Personnel in contravention of such Laws. Supplier and
Supplier Personnel also shall observe and comply with all Kraft Rules with
respect to safety, health, security and the environment and shall take
commercially reasonable precautions to avoid injury, property damage, spills or
emissions of hazardous substances, materials or waste, and other dangers to
persons, property or the environment. To the extent required by Kraft, Supplier
Personnel shall receive prescribed training prior to entering certain Kraft
Sites or Facilities.


6.4                               Software,
Equipment and Third Party Contracts.


6.4.1                     Financial
Responsibility. Supplier shall be responsible for any third party fees or
expenses attributable to periods on or after the Commencement Date that are
associated with Software, Equipment, Equipment Leases and related Third Party
Contracts used to provide the Services, except those for which Kraft is
financially responsible under the main body of Schedule
4 (i.e., not including the sub schedules attached thereto) or Schedule 4.2. Kraft shall be
responsible for third party fees or expenses incurred on or after the
Commencement Date that are associated with Software, Equipment, Equipment
Leases and Third Party Contracts used to provide the Services for which Kraft
is financially responsible under such Schedule 4
or Schedule 4.2. Unless otherwise
expressly provided, each Party also shall be responsible for any third party
fees or expenses attributable to periods on or after the Commencement Date that
are associated with new, substitute, renewal or replacement Software,
Equipment, Equipment leases or Third Party Contracts (including Upgrades,
enhancements, new versions or new releases of such Software or Equipment) for
which such Party is financially responsible under such Schedule
4 or Schedule 4.2.
With respect to Third Party Software licenses, Equipment Leases and Third Party
Contracts



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that
are transferred to Supplier by Kraft or for which Supplier otherwise assumes
financial responsibility under this Agreement, Supplier shall (i) pay all
amounts becoming due under such licenses, leases or contracts, and all related
expenses, to the extent attributable to periods on or after the Commencement
Date in connection with which such licenses, leases and contracts are
transferred to Supplier; (ii) rebate to Kraft any prepayment of such amounts in
accordance with Section 11.9.1;
(iii) pay all modification, termination, cancellation, late payment, renewal or
other fees, penalties, charges, interest or other expenses relating to periods
on or after the Commencement Date; (iv) pay all costs associated with the
transfer of such licenses, leases and contracts to Supplier, including all
taxes associated with such transfer; and (v) be responsible for curing any
defaults in Supplier’s performance under such licenses, leases and contracts on
or after the Commencement Date. Kraft will remain responsible for all amounts
due under such license, leases and contracts that are attributable to periods
prior to the Commencement Date.


6.4.2                     Operational
Responsibility. With respect to Software, Equipment, Equipment leases and
Third Party Contracts for which Supplier is operationally responsible under Schedule 2, 4.2,
11 or 12
and any other Third Party Contracts (excluding Third Party Contracts
administered by Supplier on a pass-through basis, which are addressed in Section 11.2) used by Supplier to
provide the Services, Supplier shall be responsible for (i) the evaluation,
procurement (i.e., performing administrative activities, but not assuming
financial responsibility unless otherwise provided herein), testing,
installation, rollout, use, support, management, administration, operation and
maintenance of such Software, Equipment, Equipment leases and Third Party Contracts;
(ii) the evaluation, procurement (i.e., performing administrative activities,
but not assuming financial responsibility unless otherwise provided herein),
testing, installation, rollout, use, support, management, administration,
operation and maintenance of new, substitute or replacement Software,
Equipment, Equipment leases and Third Party Contracts (including Upgrades,
enhancements, new versions or new releases of such Software); (iii) the
performance, availability, reliability, compatibility and interoperability of
such Software, Equipment and Third Party Contracts each in accordance with this
Agreement, including the Service Levels and Change Control Procedures; (iv) the
compliance with and performance of all operational, administrative and contractual
obligations specified in the applicable licenses, leases and contracts; (v) the
administration and exercise as appropriate of all rights available under such
licenses, leases and contracts; and (vi) the payment of any fees, penalties,
charges, interest or other expenses due and owing under or with respect to such
licenses, leases and contracts that are incurred, caused by or result from
Supplier’s failure to comply with or perform its obligations under this Section 6.4.2 (except to the extent
that such failure directly results from the acts or omissions of Kraft under
those licenses, leases or contracts in contravention of its obligations under
this Agreement). Kraft agrees that, during the Term, Supplier, in consultation
with Kraft, shall direct the actions of the applicable third party vendors with
respect to the leases, licenses and Third Party Contracts for which Supplier
has operational responsibility hereunder.


6.4.3                     Rights
Upon Expiration/Termination. With respect to all Third Party Software licenses,
Equipment leases and Third Party Contracts for which Supplier is financially
responsible under this Agreement, except for (a) product vendor specialists who
Supplier engages on a temporary basis to address urgent problems and (b)
contracts for Supplier Overhead Materials, Supplier shall use commercially
reasonable efforts to (i) obtain for Kraft, the Eligible Recipients and/or
their designee(s) the license, sublicense, assignment and other rights
specified in Sections 4.4.2 and 14.6, (ii) ensure that the granting
of such license, sublicense, assignment and other rights is not subject to
subsequent third party approval or the payment by Kraft, the Eligible
Recipients or their designee(s) of license, assignment or transfer fees, (iii)
ensure that the terms, conditions and prices applicable to Kraft, the Eligible
Recipients and/or their designee(s) following expiration or termination of this
Agreement (or any portion thereof) are no less favorable than those otherwise



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applicable
to Supplier, and at least sufficient for the continuation of the activities
comprising the Services, (iv) ensure that neither the expiration or termination
of this Agreement (or any portion thereof) nor the assignment of the license,
lease or contract will trigger less favorable terms, conditions or pricing, and
(v) not replace any perpetual software licenses with subscription term licenses
or use subscription term licenses for any new Software not currently licensed
by Kraft. If Supplier is unable to obtain any such rights and assurances, it
shall notify Kraft in advance and, except for those licenses, leases or Third
Party Contracts made available to Supplier by Kraft pursuant to this Agreement,
shall not use such Third Party Software license, Equipment lease or Third Party
Contract without Kraft’s approval (and absent such approval, Supplier’s use of
any such Third Party Software license, Equipment lease or Third Party Contract
shall obligate Supplier to obtain or arrange, at no additional cost to Kraft,
for such license, sublicense, assignment or other right for Kraft, the Eligible
Recipients and their designee(s) upon expiration or termination). The exception
in the preceding sentence which permits Supplier to use licenses and contracts
made available by Kraft under this Agreement shall not be interpreted to be a
consent which excuses Supplier’s obligation to obtain post-termination rights
for Kraft under those licenses and contracts, except to the extent permitted by
Section 5.3. If Kraft consents to
Supplier’s use of specific Third Party Software licenses, Equipment leases or
Third Party Contracts under these circumstances, such consent shall be deemed
to be conditioned on Supplier’s commitment to use commercially reasonable
efforts to cause such third party to agree at expiration or termination of this
Agreement or the completion of Termination Assistance Services to permit Kraft,
the Eligible Recipients and/or their designee(s) to assume prospectively the
license, lease or contract in question or to enter into a new license, lease or
contract with Kraft, the Eligible Recipients and/or their designee(s) on
substantially the same terms and conditions, including price. Kraft consents to
the specific exceptions set forth in Schedule 12.2
with respect to the corresponding Third Party Contracts described in that
Schedule.


6.4.4                     Evaluation
of Third Party Software, Equipment. In addition to its obligations under Section 6.4.1 and 6.4.2 and in order to facilitate
Kraft’s control of architecture, standards and plans pursuant to Section 9.5, Supplier shall use
commercially reasonable efforts to evaluate any Third Party Software and
Equipment selected by or for Kraft or an Eligible Recipient to determine
whether such Software and Equipment will adversely affect Kraft’s environment,
Kraft’s ability to interface with and use the Software, Equipment and Systems
and/or Supplier’s ability to provide the Services. Supplier shall develop and
provide such an evaluation to Kraft within 15 days of its receipt of Kraft’s
request and receipt of the Software or Equipment Supplier is being asked to
evaluate; provided that (i) Supplier shall use commercially reasonable efforts
to respond more quickly in the case of a pressing business need or an emergency
situation, and (ii) if the complexity of the evaluation would make it
impractical to complete the evaluation within 15 days, Supplier shall promptly
notify and confer with Kraft regarding the time Supplier will reasonably
require to complete the evaluation.


6.4.5                     Kraft
Provided Equipment.


6.4.5.1                                                               Provision. Kraft shall provide Supplier with the use of the
Kraft owned and leased Equipment identified on Schedule
10 (collectively, the “Kraft Provided Equipment”)
for the periods specified in such Schedule solely for and in connection with
the provision of the Services. THE KRAFT PROVIDED EQUIPMENT IS PROVIDED BY
KRAFT TO SUPPLIER ON AN AS-IS, WHERE-IS BASIS. KRAFT EXPRESSLY DISCLAIMS ANY
WARRANTIES, EXPRESS OR IMPLIED, AS TO THE KRAFT PROVIDED EQUIPMENT, OR ITS
CONDITION OR SUITABILITY FOR USE BY SUPPLIER TO PROVIDE THE SERVICES, INCLUDING
WARRANTIES OF



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NON-INFRINGEMENT,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Notwithstanding the
foregoing, Kraft will pass through to Supplier any representations and
warranties for such Equipment provided by the vendors and manufacturer that
Kraft is able to pass through without additional cost to Kraft.


6.4.5.2                                                               Upgrades. If and to the extent Supplier upgrades (including
adding components or features or otherwise modifying) any Kraft Provided
Equipment, Supplier will retain ownership of such upgrade until the earlier of
(i) the date Supplier has fully expensed or amortized such upgrade; or (ii) the
date Supplier ceases to use the upgraded Equipment to provide the Services
(whether due to refresh, decline in resource requirements or any other reason),
at which time Supplier shall be deemed to have hereby automatically transferred
title and ownership of such upgrade to Kraft or the applicable Eligible
Recipient that owns the corresponding Kraft Provided Equipment. Supplier shall
take any and all actions necessary, including executing any documents, to
transfer title of such upgrades to, and vest title of such Kraft Provided
Equipment upgrades in, Kraft or the applicable Eligible Recipient to the extent
provided above.


6.4.5.3                                                               Return. Upon the expiration of the period specified in Schedule 10 for each item of Kraft
Provided Equipment (or when such Kraft Provided Equipment is no longer required
by Supplier for the performance of the Services), Supplier shall promptly
return such Kraft Provided Equipment to Kraft in substantially the same
condition (as it may have been modified or improved by Supplier with Kraft’s
approval) as when such Kraft Provided Equipment was first provided to Supplier,
subject to reasonable wear and tear.


6.4.5.4                                                               Responsibility for Other Equipment. Notwithstanding the
foregoing, except as provided in this Section 6.4.6,
6.1.2, 6.1.3
and 6.4.1, and Schedule
4.2, Supplier shall be responsible for providing all Equipment
required to perform the Services and all Upgrades, improvements, replacements
and additions thereto.


6.4.6                     Surplus
Equipment. Supplier shall, at its cost, prepare surplus Kraft owned
Equipment for shipment. The responsibilities of the Parties with respect to
transportation and disposal of such Equipment is set forth in Schedules 2 and 4.2. If and to the extent Supplier
is responsible for disposal of any Kraft-owned Equipment, Supplier shall (i)
obtain Kraft’s consent to dispose of such Equipment before disposing of it; and
(ii) maintain reasonable documentation regarding the disposition, including the
costs of and revenues from disposal and as proof of appropriate disposal, and
shall make such documentation available to Kraft upon Kraft’s request.


6.5                               Assignment
of Licenses, Leases and Related Agreements.


6.5.1                     Assignment
and Assumption. Subject to Supplier obtaining any Required Consents, on and
as of the Commencement Date on which Supplier assumes responsibility for the
Services in question, Kraft shall assign to Supplier, and Supplier shall assume
and agree to perform all obligations arising on or after the applicable
Commencement Date that are related to, the Third Party Software licenses,
Equipment Leases and Third Party Contracts for which Supplier is financially
responsible under Sections 6.4
or Schedule 4.2, unless otherwise
specified in Schedule 11 or 12; provided,
however, that such assignment shall not include any assignment or transfer of
any intellectual property rights in Materials developed under such Third Party
Software licenses, Equipment Leases and Third Party Contracts prior to the date
of such assignment and, as between the Parties, Kraft hereby expressly reserves
and retains such



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intellectual
property rights. Kraft and Supplier shall execute and deliver a mutually
satisfactory assignment and assumption agreement with respect to such leases,
licenses and agreements, evidencing the assignment and assumption provided for
herein.


6.5.2                     Items
Not Assignable by Commencement Date. With respect to any such Third Party
Software licenses, Equipment Leases or Third Party Contracts for which Supplier
is financially responsible under Section 6.4
or Schedule 4.2 and that can not, as
of the Commencement Date on which Supplier assumes responsibility for the
Services in question, be assigned to Supplier without breaching their terms or
otherwise adversely affecting the rights or obligations of Kraft or Supplier
thereunder, the performance obligations shall be deemed to be subcontracted or
delegated to Supplier until any requisite consent, notice or other prerequisite
to assignment can be obtained, given or satisfied by Supplier. It is understood
that Supplier, as a subcontractor or delegatee, shall be financially and
operationally responsible for all obligations arising on or after the
applicable Commencement Date under such Third Party Software license, Equipment
Lease or Third Party Contract as Kraft’s agent pursuant to Section
9.11.2. Supplier shall use commercially reasonable efforts to
satisfy the consent, notice or other prerequisites to assignment and, upon
Supplier doing so, the Third Party Software license, Equipment Lease or Third
Party Contract shall immediately be assigned and transferred to and assumed by
Supplier.


6.5.3                     Non-Assignable
Items. If, after using commercially reasonable efforts for a reasonable
period of time but not longer than 90 days after the Commencement Date,
Supplier cannot assign a Third Party Software license, Equipment Lease or Third
Party Contract without breaching its terms or otherwise adversely affecting the
rights or obligations of Kraft or Supplier thereunder, the Parties shall take
such actions and execute and deliver such documents as may be necessary to
cause the Parties to realize the practical effects of the allocation of
responsibilities intended to be effected by this Agreement.


6.5.4                     Modification
and Substitution. Supplier may terminate, shorten, modify or extend the
Third Party Software licenses, Equipment Leases and Third Party Contracts for
which Supplier is financially responsible under Schedule
4.2 and, subject to Section 9.12,
may substitute or change vendors relating to goods or services covered thereby;
provided that, except as otherwise disclosed by Supplier and agreed to by
Kraft, such change(s) (i) shall not constitute a breach of any obligation of
Kraft or the Eligible Recipients under such Software licenses, Equipment Leases
or Third Party Contracts, (ii) shall not result in additional financial
obligations, financial or operational risk or Losses to Kraft or the Eligible
Recipients, (iii) shall not result in any increase to Kraft or the Eligible
Recipients in the cost of receiving the Services, and (iv) if assumable by
Kraft or the Eligible Recipients, shall not provide for less favorable terms,
conditions or prices for Kraft, the Eligible Recipients and/or their
designee(s) following the expiration or termination of the Term or any
applicable Service than would otherwise be applicable to Supplier (except for
terms, conditions or prices available to Supplier because of its volume
purchases). Supplier’s rights under the immediate preceding sentence are
conditioned upon Supplier paying all applicable termination or cancellation
charges, Losses and other amounts due to the applicable vendor associated with
such action and indemnifying Kraft and the Eligible Recipients against any such
charges, Losses or other amounts associated therewith. Notwithstanding anything
to the contrary herein, Supplier shall not terminate, shorten or modify without
Kraft’s prior written consent any license for Third Party Software either
created exclusively for Kraft or the Eligible Recipients or otherwise not
commercially available. Supplier shall reimburse Kraft and the Eligible
Recipient(s) for any termination charges, cancellation charges, or other
amounts paid by them at Supplier’s direction in connection with obtaining any
such modification.



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6.6                               Managed
Third Parties.


6.6.1                     Responsibility.


6.6.1.1                                                               Supplier
shall cause Managed Third Parties to perform in accordance with this Agreement,
including Service Levels, and comply with all applicable duties and obligations
imposed on Supplier under this Agreement, except that:


6.6.1.1.1                                                      Supplier
shall be excused of such obligation to the extent the terms of Kraft’s or,
where applicable, Altria’s agreement with a Managed Third Party do not permit
Supplier to enforce the terms of this Agreement;


6.6.1.1.2                                                      Supplier
will not be liable for a Managed Third Party’s breach of this Agreement with
respect to matters not involving performance of the Services, such as
confidentiality obligations, but only if and to the extent that (i) such breach
is not a result of Supplier’s failure to properly manage such Managed Third
Party, (ii) Supplier, following discovery of the breach, promptly notifies
Kraft of such breach and takes prompt action to demand the Managed Third Party
to so comply and (iii) Supplier uses commercially reasonable efforts, in
cooperation with Kraft, to mitigate any damage resulting from such breach (with
any incremental expense of mitigation being borne by the Party which has
financial responsibility for such Managed Third Party’s performance); and


6.6.1.1.3                                                      Supplier
will be excused from its failure to comply with its Service-related
obligations, including meeting the Service Levels, under this Agreement if and
to the extent Supplier (i) confirms through a Root Cause Analysis that a
Managed Third Party caused Supplier to fail to perform any Services in
accordance with the applicable Service Levels for such Services, and (ii) Kraft
declines to take such action demanded by Supplier under its agreement with the
Managed Third Party which Kraft or, where applicable, Altria is contractually
entitled to take; provided that Supplier shall indemnify and defend Kraft from
any third party claims (including any increased costs payable by Kraft or an
Eligible Recipient under its agreement with such Managed Third Party) resulting
from Kraft compliance with Supplier’s direction. In the event Kraft declines to
take the requested action, Supplier shall nonetheless use commercially
reasonable efforts without additional costs to Supplier to perform such
Services notwithstanding the Managed Third Party’s failure to perform.


6.6.1.2                                                               Unless
otherwise specified in Schedule 4.2,
Section 6.6.2, or agreed in writing
by the Parties, Supplier is responsible for all costs and charges associated
with Managed Third Parties and, subject to the exceptions noted in Sections 6.6.1.1.1, 6.6.1.1.2, and 6.6.1.1.3,
for any failure by any Managed Third Party or its personnel to perform in
accordance with this Agreement or to comply with any duties or obligations
imposed on Supplier under this Agreement, to the same extent as if such failure
to perform or comply was committed by Supplier or Supplier Personnel. Supplier
shall be Kraft’s and the Eligible Recipients’ sole point of contact regarding
the services provided by such Managed Third Parties. Where Altria is the party
to a Managed Third Party’s Third Party Contract which Supplier requires to meet
its obligations hereunder, Kraft will be responsible for



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arranging
for Altria to take such actions with respect to that Third Party Contract as
would be required hereunder if Kraft and not Altria were the party to that
Third Party Contract.


6.6.2                     Modification.
If a Managed Third Party’s Third Party Contract is terminated (other than
by Kraft for convenience) or a Managed
Third Party ceases to perform or fails to perform in accordance with this
Agreement, Supplier shall be responsible for the continued performance of the
Services in accordance with this Agreement and shall either provide such
Services itself or enter into an agreement for such Services with a replacement
Managed Third Party. In that event, if and to the extent Kraft is financially
responsible for that Managed Third Party (including, where applicable,
contracts to which Altria is a party), Kraft (i) will determine whether
Supplier provides the Services itself or through a replacement Managed Third
Party, and (ii) will either pay Supplier amounts to be mutually agreed where
Supplier assumes responsibility at Kraft’s direction for performance or will
pay the replacement Managed Third Party directly as a Pass-Through Expense.
Kraft reserves all rights to modify, amend, renew, terminate, extend or
otherwise replace any Managed Third Party and/or the applicable Third Party
Contract, and to negotiate any Pass-Through Expenses associated therewith. If a
modification, amendment or replacement of a Managed Third Party materially
affects Supplier’s ability to meet its obligations under this Section 6.6, then, within 30 days
after Supplier receives notice of such modification, amendment or replacement,
Supplier shall notify Kraft in writing in sufficient detail to explain Supplier’s
concerns, and thereafter the Parties shall meet and agree to any appropriate
modifications or relief to Supplier’s obligations that are directly affected by
such change. Kraft shall agree to reimburse Supplier for reasonable, actual and
demonstrable increases in costs and expenses incurred by Supplier as a direct
result of Kraft’s modification, amendment or replacement of such a Third Party
Contract or Managed Third Party, provided that Supplier (i) notifies Kraft in
writing of all such costs and expense within 30 days after Supplier’s receipt
of a copy of the modification, amendment or replacement to the applicable Third
Party Contract, and (ii) uses commercially reasonable efforts to minimize such
costs and expenses.


6.7                               Notice
of Defaults.


Kraft and Supplier shall promptly inform the other
Party in writing of any material breach of, or misuse or fraud in connection
with, any Third Party Contract, Equipment lease or Third Party Software license
used in connection with the Services of which it becomes aware and shall
cooperate with the other Party to prevent or stay any such breach, misuse or
fraud.


6.8                               Acquired
Assets.


6.8.1                     Kraft
agrees to convey (or shall cause the applicable Eligible Recipient to convey)
to Supplier, and Supplier agrees (or shall cause an
Affiliate to agree) to accept, as of the Commencement Date, all of Kraft’s (or
the applicable Eligible Recipient’s) right, title and interest in and to the
Acquired Assets, other than the Acquired Assets in the Deferred Countries. In
consideration for such conveyance, Supplier agrees to pay Kraft on the
Commencement Date the Acquired Assets Credit specified in this Agreement. In
addition, Supplier shall be responsible for, and shall pay, or provide evidence
of exemption from, all sales, use, goods and services and other similar taxes
arising out of the conveyance of the Acquired Assets, excluding income taxes
and franchise taxes. Kraft represents and warrants to Supplier that Supplier
(or its Affiliates) shall take good title to the Acquired Assets as of the
Commencement Date, free and clear of all liens. The conveyance of the Acquired
Assets shall be effected by the delivery of each Acquired Asset to the Supplier
where possible or, where this is not possible, by the delivery of a bill of
sale in substantially the form set forth in Exhibit 2.
Except as otherwise expressly provided in this Section
6.8, Kraft CONVEYS THE ACQUIRED ASSETS TO SUPPLIER ON AN AS-IS,
WHERE-IS AND



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WITH-ALL-FAULTS
BASIS. KRAFT HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT
TO THE ACQUIRED ASSETS, OR THE CONDITION OR SUITABILITY OF SUCH ACQUIRED ASSETS
FOR USE BY SUPPLIER TO PROVIDE THE SERVICES, INCLUDING WARRANTIES OF
NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Kraft
shall convey and Supplier shall pay for the Acquired Assets in each Deferred
Country, on the same terms described in this Section
6.8.1, on the date Supplier assumes responsibility for providing
Services from such country.


6.8.2                     Taxes.
The Acquired Assets Credit is exclusive of all taxes. Supplier shall be
responsible for, and shall pay, or provide
evidence of exemption from, all sales, use, goods and services and other
similar taxes arising out of the conveyance of the Acquired Assets. Kraft and
Supplier intend that Article 5 of the Sixth Council Directive 77/388/EEC of May
17, 1977, as implemented in the relevant jurisdiction, and similar applicable
Laws will apply to the conveyance of the Acquired Assets pursuant to this
Agreement in those jurisdictions in which such Laws apply and agree to use all
reasonable endeavors to secure that the conveyance is treated neither as a
supply of goods nor a supply of services. If, nevertheless, any Service Taxes
are chargeable in respect of any supply in connection with the conveyance of
the Acquired Assets pursuant to this Agreement, then Supplier shall forthwith
pay or procure the payment to Kraft of an amount equal to any such tax in
respect of the conveyance of the Acquired Assets (in addition to the
consideration or any other sum payable to Kraft) subject to the production of a
valid tax invoice in respect of such conveyance, and shall indemnify Kraft for
any fines, penalties or interest imposed by any Tax Authority arising out of
the treatment by Kraft and Supplier of such conveyance. Supplier warrants to
Kraft that Supplier is registered for any Service Tax or will be registered for
such tax with effect from a date not later than the Commencement Date and
shall, on or before that date, provide Kraft with proof of such registration
reasonably satisfactory to Kraft. Supplier warrants to Kraft that the Acquired
Assets are to be used by Supplier in carrying on the same kind of business as
that carried on by Kraft and Supplier will after the Commencement Date continue
to carry on such business. In relation to records pertaining to Service Taxes: (i)
Kraft shall on the Commencement Date deliver to Supplier all records required
to be so delivered under the applicable legislation; and (ii) Supplier shall
preserve or shall procure to be preserved those records for such period as may
be required by law and during that period permit Kraft reasonable access to
them to inspect or make copies of them. All sums payable in connection with the
transfer of the Acquired Assets are exclusive of Service Taxes and Supplier
shall, in addition to such sums, pay any Service Taxes properly chargeable
thereon, on receipt of a valid invoice for such Service Taxes.


7.                                      SERVICE
LEVELS


7.1                               General.


7.1.1                     General
Performance Standards. Beginning on the Commencement Date, or for the
Deferred Countries such later date
as Supplier assumes responsibility for providing Services in those Deferred
Countries, Supplier shall perform the Services at levels of accuracy, quality,
completeness, timeliness, responsiveness and resource efficiency that are at
least equal to those received by Kraft or the Eligible Recipients 12 months
prior to such date. In addition, for those Services for which there are no Service
Levels, Supplier shall perform such Services at levels of accuracy, quality,
completeness, timeliness, responsiveness, resource efficiency and productivity
that are equal to or higher than the accepted industry standards of first tier
providers of such business process and outsourcing services. This Section 7.1.1 shall not be deemed
to supersede the Service Levels specified in Schedule
3.



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7.1.2                     Service
Level Performance Standards. Beginning on the dates specified in Schedule 3, Supplier shall perform
the Services so as to
meet or exceed the Service Levels, as set forth in Schedule
3.


7.1.3                     Multiple
Service Levels. If more than one Service Level applies to any particular
obligation of Supplier, Supplier shall
perform in accordance with the most stringent of such Service Levels.


7.1.4                     Responsibility.
Supplier shall be responsible for meeting or exceeding the applicable Service
Levels even where doing so is
dependent on the provision of Services by (i) Subcontractors, (ii) subject to Section 10.2, non-Supplier
Personnel, including Kraft employees, or (iii) subject to Section
6.6, Managed Third Parties.


7.2                               Service
Level Credits; Deliverable Credits.


7.2.1                     Service
Level Credits. Supplier recognizes that Kraft is paying Supplier to deliver
the Services at specified Service Levels.
If Supplier fails to meet such Service Levels, then, in addition to other
remedies available to Kraft, Supplier shall pay or credit to Kraft the
performance credits specified in Schedule 3
(“Service Level Credits”) in recognition
of the diminished value of the Services resulting from Supplier’s failure to
meet the agreed upon level of performance, and not as a penalty. Under no
circumstances shall the imposition of Service Level Credits be construed as
Kraft’s sole or exclusive remedy for any failure to meet the Service Levels.
However, if Kraft recovers monetary damages from Supplier as a result of
Supplier’s failure to meet a Service Level, Supplier shall be entitled to set
off against such damages any Service Level Credits paid for the failure giving
rise to such recovery, as reduced by any applicable earnback pursuant to Schedule 3.


7.2.2                     Deliverable
Credits. Supplier recognizes that Kraft is paying Supplier to provide
certain Critical Deliverables by the
time and in the manner agreed by the Parties. If Supplier fails to meet its
obligations with respect to such Critical Deliverables, then, in addition to
other remedies available to Kraft, Supplier shall pay or credit to Kraft the
Deliverable Credits specified in Schedules 3, 21  or 22 or
established by Kraft as part of the Project approval process on a case by case
basis in recognition of the diminished value of the Services resulting from
Supplier’s failure to meet the agreed-upon level of performance, and not as a
penalty. If Kraft recovers monetary damages from Supplier as a result of
Supplier’s failure to meet its obligations with respect to one or more Critical
Deliverables, Supplier shall be entitled to set off against such damages any
Deliverable Credits paid for the failures giving rise to such recovery.


7.3                               Problem
Analysis.


If Supplier fails to provide Services in accordance
with the Service Levels and this Agreement, Supplier shall (after restoring
service or otherwise resolving any immediate problem) (i) promptly investigate
and report on the causes of the problem; (ii) provide a Root Cause Analysis of
such failure as soon as practicable after such failure or at Kraft’s request;
(iii) correct the problem as soon as practicable (regardless of cause or fault)
or coordinate the correction of the problem if Supplier does not have
responsibility for the cause of the problem; (iv) advise Kraft of the status of
remedial efforts being undertaken with respect to such problem; (v) demonstrate
to Kraft’s reasonable satisfaction that the causes of such problem have been or
will be corrected on a permanent basis and (vi) take all commercially
reasonable actions to prevent any recurrence of such problem. Supplier shall
complete all Root Cause Analyses in accordance with the requirements of Schedule 3. If the Root Cause
Analysis indicates that neither Supplier nor any Directed Employee while
performing a function under Supplier’s direction was responsible for the cause
of the breach or potential breach and Supplier is unable to perform remediation
efforts without adding substantial additional Supplier resources or third party
contractors



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(beyond the Subcontractor personnel then assigned to
perform Services for Kraft), Kraft may elect to either (i) reprioritize the
Services, in which event Supplier will perform the remediation at no additional
charge, or (ii) authorize Supplier to perform the remediation as a Project.


7.4                               Continuous
Improvement Reviews.


7.4.1                     Improvement
of Services Quality. Supplier acknowledges that the quality of the Services
provided in certain Service
areas can and will be improved during the Term and agrees that the Service
Levels in such Service areas will be enhanced periodically in recognition of
the anticipated improvement in service quality. Supplier will improve the
quality of the Services provided in such areas to meet or exceed the enhanced
Service Levels and will do so at no additional charge to Kraft.


7.4.2                     Increase
of Service Levels. In addition to the foregoing, Kraft and Supplier shall
periodically review the Service Levels
and the performance data collected and reported by Supplier in accordance with Schedule 3 and relevant industry
data and trends on an annual basis (or more frequently if requested by Kraft).
Supplier shall give Kraft any assistance it reasonably requires to review and
verify such data. As part of this review process, the Parties shall,  *  *  *,
increase the Service Levels to reflect the higher performance levels actually
attained or attainable by Supplier in accordance with Schedule
3. In addition, subject to Schedule 3,
the Parties shall agree, to the extent reasonable and appropriate, to (i)
increase the Service Levels to reflect improved performance capabilities
associated with advances in the proven processes, technologies and methods available
to perform the Services; (ii) add new Service Levels to permit further
measurement or monitoring of the accuracy, quality, completeness, timeliness,
responsiveness, cost-effectiveness, or productivity of the Services; (iii)
modify or increase the Service Levels to reflect changes in the processes,
architecture, standards, strategies, needs or objectives defined by Kraft; and
(iv) modify or increase the Service Levels to reflect agreed upon changes in
the manner in which the Services are performed by Supplier.


7.5                               Measurement
and Monitoring.


Supplier shall, not later than the date by which
Supplier is required to collect Service Level related data to enable it to
comply with the requirements set forth in Schedule 3,
implement measurement and monitoring tools and metrics as well as standard
reporting procedures, all acceptable to Kraft, to measure and report Supplier’s
performance of the Services at a level of detail sufficient, as determined by
Kraft, to verify Supplier’s compliance with the applicable Service Levels.
Kraft or its designee shall have the right to audit all such measurement and
reporting tools, performance metrics and reporting procedures. Supplier shall
provide Kraft with on-line access to up-to-date problem management data and
other data regarding the status of service problems, service requests and user
inquiries. Supplier also shall provide Kraft with access to the data used by
Supplier to calculate its performance against the Service Levels and the
measurement and monitoring tools and procedures utilized by Supplier to
generate such data for purposes of audit and verification. Kraft shall not be
required to pay any amount in addition to the Charges for such measurement and
monitoring tools or the resource utilization associated with their use.


7.6                               Satisfaction
Surveys.


7.6.1                     General.
Within 90 days after the applicable Commencement Date or within such other time
as may be specified in Schedule
14, and at agreed upon intervals thereafter, Supplier and/or
independent third parties engaged by Supplier shall conduct the satisfaction
surveys of Kraft’s management and Authorized Users in accordance with the
survey protocols and procedures specified in Schedule
14 in order to determine their satisfaction with Supplier’s
provision of the Services. To the extent Supplier engages an independent third
party to perform all or any part of



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any
satisfaction survey, such third party shall be approved in advance by Kraft.
Supplier shall be responsible for all costs associated with conducting the satisfaction
surveys.


7.6.2                     Kraft
Conducted Surveys. In addition to the satisfaction surveys to be conducted
by an independent third party pursuant
to Section 7.6.1, Kraft may survey
Authorized User satisfaction with Supplier’s performance in connection with and
as part of broader Authorized User satisfaction surveys periodically conducted
by Kraft. At Kraft’s request, Supplier shall cooperate and assist Kraft with
the formulation of the survey questions, protocols and procedures and the
execution and review of such surveys.


7.6.3                     Survey
Follow-up. If the results of any satisfaction survey conducted pursuant to Section 7.6.1 or 7.6.2 indicate that the level of satisfaction with Supplier’s
performance is less than the target level specified in Schedule
3 or Schedule 14,
Supplier shall promptly: (i) conduct a Root Cause Analysis as to the cause of
such dissatisfaction; (ii) develop an action plan to address and improve the
level of satisfaction, provided that Kraft will be responsible for taking
action where it has agreed to do so as part of such plan; (iii) present such
plan to Kraft for its review, comment and approval; and (iv) take action in
accordance with the approved plan and as necessary to improve the level of
satisfaction. Kraft and Supplier shall establish a schedule for completion of a
Root Cause Analysis and the preparation and approval of the action plan which
shall be reasonable and consistent with the severity and materiality of the
problem; provided, that the time for completion of such tasks shall not exceed
30 days from the date such user survey results are finalized and reported, or
such longer period as may be agreed upon by the Parties. Supplier’s action plan
developed hereunder shall specify the specific measures to be taken by Supplier
and the dates by which each such action shall be completed. Following
implementation of such action plan, Supplier shall conduct follow-up surveys
with the affected Kraft users and management to confirm that the cause of any
dissatisfaction has been addressed and that the level of satisfaction has
improved.


7.7                               Notice
of Adverse Impact.


If Supplier becomes aware of any failure by Supplier
to comply with its obligations under this Agreement or any other situation (i)
that has impacted or reasonably could impact the maintenance of Kraft’s or any
Eligible Recipient’s financial integrity or internal controls, the accuracy of
Kraft’s or any Eligible Recipient’s financial, accounting, quality, inventory,
procurement or human resources records and reports or compliance with Kraft
Rules, Kraft Standards or applicable Laws, or (ii) that has had or reasonably
could have any other material adverse impact on the Services in question or the
impacted business operations of Kraft or the Eligible Recipients, then,
Supplier shall immediately inform Kraft in writing of such situation and the
impact or expected impact and Supplier and Kraft shall meet to formulate an
action plan to minimize or eliminate the impact of such situation.


8.                                      PROJECT
PERSONNEL


8.1                               Transitioned
Personnel.


8.1.1                     Offers
and Employment.


8.1.1.1                                                               Supplier Offers of Employment. Except as otherwise provided with
respect to employees in Deferred Countries and Directed Employees, Supplier
shall (a) extend offers of at-will employment to all Affected Kraft Foods
Global Personnel (other than contractors) at least 30 days before the
Commencement Date, on a schedule and in a manner that is pre-approved and in
coordination with Kraft and the Eligible Recipients; and (b) extend offers of
at-will employment to all



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Affected
Tech Center Personnel (other than contractors) at least 30 days before the
Commencement Date, on a schedule and in a manner that is pre-approved by and in
coordination with Altria and its Affiliates. Supplier shall extend offers to
the Directed Employees who are designated in Schedule
26 as receiving an offer, at least 30 days before the end of
such employee’s Directed Employee Period, and shall extend offers to the
Affected Employees in Schedules 5.1.1
and 5.1.2 (other than contractors) who
are in a Deferred Country at least 30 days before Supplier is scheduled to
begin performing Services in that country. Such offers will be made in
accordance with Supplier’s normal employment policies to the extent such
policies are consistent with the requirements of this Agreement. Except as
provided in Schedule 5.6, Supplier shall
waive any preconditions to such offers, including background checks, drug
testing and/or medical examinations. Such offers shall be for employment for an
indeterminate period of time with Supplier in positions comparable to those
held by such employees at Altria, Kraft or another Eligible Recipient, as
applicable, and with initial base wages or salaries at least equal to that paid
or provided to such personnel as of the Effective Date (or, in the case of
Affected Tech Center Personnel, the initial base wages or salaries that will
become effective as of May 1, 2006), except for those employees in Deferred
Countries who, with Kraft’s approval, transition to Supplier on or after April
1, 2007, in which event such offers
will be at initial base wages or salaries at least equal to that paid or
provided to such personnel as of April 1, 2007 (or May 1, 2007 in the case of
Affected Tech Center Personnel). In addition, Supplier will allocate and pay
the amounts described in Schedule 4.9.
Unless otherwise specified in Schedule 5.1
or agreed by the Parties, personnel accepting such offers shall be hired by
Supplier effective as of the Commencement Date.


8.1.1.2                                                               On-Leave Employees. With respect to any Affected Personnel
who, on the Commencement Date, is not actively at work or is on leave status,
including without limitation personal, medical, disability, industrial or sick
leave, such individual shall remain an employee of the applicable employing
Entity until such employee returns to work, with physician’s release or other
appropriate documentation, as applicable, releasing the employee to resume his
or her prior work schedule. If such personnel returns to work within six months
after the Commencement Date or, if later where required by applicable law
outside of the United States, immediately following the expiration of their such
leave, with physician’s release or other appropriate documentation, as
applicable, releasing the employee to resume his or her work schedule, Supplier
shall promptly extend an offer of employment to such employee and the
compensation and other terms and conditions of such offer shall be as set forth
in this Article 8. In the event the
two U.S.-based Affected Personnel who are on military leave return to work
later than six months after the Commencement Date, Supplier will consider such
Affected Personnel for open positions at Supplier. Personnel accepting such
offers shall be hired by Supplier effective on such person’s first day of work with
Supplier. If such personnel do not return within such six-month period or, if
later where required by applicable law, immediately following the expiration of
their such leave, Supplier shall be under no obligation to offer employment to
such employee or to treat such employee as a Transitioned Employee hereunder.


8.1.1.3                                                               Employment Effective Date. All personnel who accept Supplier’s
offer of employment and begin work with Supplier pursuant to the foregoing
paragraphs



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are
herein referred to as “Transitioned Employees.”  Each such Transitioned Employee’s “Employment Effective Date” shall be the effective date on
which Supplier actually employs such employee, as set forth in Sections 8.1.1.1 and 8.1.1.2.


8.1.1.4                                                               Years of Service Credit. Supplier’s employment offers will
grant credit for all years of service recognized by Altria, Kraft or another
Eligible Recipient, as applicable, for purposes of seniority, career
advancement, promotion consideration, and other rights attaching to length of
service, including all benefits referenced in Section
8.2; provided, however, that Supplier shall not grant any credit
for such years of service for severance purposes for (i) Affected Tech Center
Personnel, or (ii) the Affected Kraft Foods Global Personnel who received severance
payment from Kraft or another Eligible Recipient prior to their employment by
Supplier.


8.1.1.5                                                               Communications Regarding Affected Personnel. Supplier shall,
together with Altria, Kraft and the other Eligible Recipients, as applicable,
jointly plan, execute and communicate information regarding the transfer of
employment, including communication to the Affected Personnel, using methods
and content to be agreed upon as soon as practicable after the Effective Date
except to the extent earlier communication is required by applicable Law.
Supplier shall not disclose information relating to the transfer of employment,
including internal employee communications or external communications, without
the prior consent of Altria, Kraft or another Eligible Recipient, as
applicable.


8.1.1.6                                                               Non-U.S. Employee Requirements. Without limiting the
provisions of this Agreement relating to communications with employees and
third parties, the following provisions shall apply with respect to Affected
Personnel located outside the United States:


8.1.1.6.1                                                      Offers. Except as set forth below, following the Effective
Date, Supplier will make to each Affected Personnel (other than contractors)
outside the United States an offer to employ that person in accordance with
applicable Law (and will do all such things as are required by the Law to cause
such person to be employed by Supplier) as an employee of Supplier on the
Commencement Date.


8.1.1.6.2                                                      In
Brazil, prior to the Commencement Date, Kraft shall completely sever its
employment relationship with the Affected Personnel who are employees (“Brazilian Affected Employees”) and shall in all cases be
responsible for the liquidation and timely payment of severance, termination
and any other benefits or entitlements to Brazilian Affected Employees, and
shall, upon the reasonable request of Supplier, provide Supplier with legal
documentation evidencing (i) termination of Brazilian Affected Employees in
accordance with applicable laws of Brazil, and (ii) timely payment of all
severance, termination and any other benefits or entitlements to Brazilian
Affected Employees.


8.1.1.6.3                                                      Kraft Commitments. Kraft shall, and shall arrange for Altria
and any applicable Eligible Recipients to: (i) not hinder Supplier in offering
employment to Affected Personnel outside the United States; and (ii) as
requested by Supplier, give reasonable assistance to employ Affected



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Personnel
who are employees outside the United States, including: (A) providing
reasonable access for Supplier to the Affected Personnel who are employees
outside the United States for interviews and recruitment; and (B) providing an
organizational chart showing the roles, responsibilities, authority, and
salaries or resource values of all Affected Personnel who are employees outside
the United States.


8.1.2                     Transitioned
Employee Retention. Except as otherwise provided in a Companion Agreement,
if a Transitioned Employee’s
employment with Supplier is terminated within the first 24 months after such
Transitioned Employee’s Employment Effective Date for any reason other than
Cause, that Transitioned Employee will be eligible to receive a severance
payment as provided in Section 8.2.9.
Supplier also shall not relocate a Transitioned Employee outside of their
current geographic location (i.e., 50 miles during the 12 months immediately
following such Transitioned Employee’s Employment Effective Date, unless the
possibility of such relocation is expressly disclosed in the Transitioned
Employee’s offer letter and agreed to by him or her at the time of hiring or
thereafter. For a period of 12 months following the Effective Date, the
Supplier will inform Kraft each month of Transitioned Personnel terminated by
Supplier, or who otherwise leave the Supplier’s employment for voluntary
reasons. In addition, during such 12 month period, Supplier will keep the
Transitioned Employees who remain employed by Supplier in jobs requiring skills
that are similar to the skills required for their positions prior to
transitioning to Supplier, and will evaluate such employees based on those
required skills.


8.1.3                     [Intentionally left blank]


8.1.4                     Additional
Transitioned Employees. During the six months following the Commencement
Date, Kraft may designate
additional employees of Kraft or its Affiliates who performed functions that
were transferred to Supplier under this Agreement to whom offers of employment
are to be extended by Supplier, provided that the number of such additional
personnel cannot exceed five percent (5%) of the Transitioned Employees. The
compensation and other terms and conditions of such offers of employment shall
be as set forth in this Article 8
and personnel accepting such offers shall be treated as Transitioned Employees
for all purposes.


8.1.5                     Training/Career
Opportunities. Supplier shall offer training, skills development and career
growth opportunities to
Transitioned Employees that are at least as favorable as those offered
generally to its similarly situated employees.


8.1.6                     Personnel
Projection Matrix. Set forth in Schedule 5.2
is a staffing plan showing the planned deployment of Transitioned
Employees (the “Personnel Projection Matrix”).
Supplier shall not make material changes to the number of Transitioned
Employees in the Personnel Projection Matrix for  * 
*  * from the Commencement Date without
Kraft’s prior approval, which shall not be unreasonably withheld and which
shall be based on Kraft’s reasonable satisfaction that such changes shall not
have an adverse impact on the Supplier’s ability to perform its obligations
under the Agreement. Supplier shall report monthly to Kraft any material
changes to the Personnel Projection Matrix during the first 24 months following
the Effective Date and quarterly through the 
*  *  * after the Effective Date. For purposes of
this provision, a material change to the staffing is considered to be a change
of  * 
*  * or more in any number (on
a regional, but not Tower, basis) in the Personnel Projection Matrix. The
Parties agree that such review and approval of the Personnel Projection Matrix
or changes in the Personnel Projection Matrix shall not constitute joint
employment.


8.1.7                     Employment
Status. The Parties agree that Transitioned Employees will no longer be
considered employees of Altria, Kraft or any other
Eligible Recipient, on and after their



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Employment
Effective Dates. In addition, Supplier and Kraft will conduct their respective
businesses in a manner to eliminate, or reduce to a significantly low level,
the risk that, following the Commencement Date, Altria, Kraft or any other
Eligible Recipient might be considered an employer, co-employer or joint
employer of any employee of Supplier or its Affiliates or Subcontractors
performing the Services, including the Transitioned Employees.


8.1.8                     Subcontractors.
Unless otherwise specified in Schedule 5.1,
all offers of employment to personnel must be for employment
by Supplier. To the extent Schedule 5.1
specifies that any personnel will be offered employment with or transitioned to
a Subcontractor or Affiliate of Supplier (rather than Supplier itself), such
employment must be subject to and in strict accordance with the same
requirements of this Agreement applicable to Supplier.


8.1.9                     Employees
Who Reject or Do Not Receive Offers. For a period of 12 months after the
Commencement Date, the Supplier will not permit any
Supplier Personnel, who obtains information about Affected Personnel who did
not receive or accept an offer from Supplier or its Subcontractors, to directly
or indirectly offer employment to any such Affected Kraft Foods Global
Personnel.


8.2                               Employee
Benefit Plans.


8.2.1                     General.
Except as otherwise provided in this Article 8,
each Transitioned Employee and his or her dependents shall
be eligible to enroll, effective as of his or her Employment Effective Date, in
the employee plans of Supplier that are made available to similarly situated
employees of Supplier. Supplier has listed all of such employee plans on Schedule 5.5 and provided Kraft
with true and complete copies of the most recent summary plan descriptions and
summary of material modifications for such employee plans or has provided a
written summary where no current summary plan description exists. The
compensation and benefits provided by Supplier to Transitioned Employees shall
be no less favorable in the aggregate than the compensation and benefits
generally available to similarly situated Supplier employees.


8.2.2                     Employee
Welfare Benefit Plans. Each Transitioned Employee shall be eligible as of
his or her Employment Effective Date to participate
immediately in Supplier’s employee welfare benefit plans (“welfare
plans”), which shall include medical care, hospitalization, life,
accidental death and dismemberment, prescription drug, dental insurance
benefits, short term disability and long term disability, to the extent such
benefits are provided to similarly situated Supplier employees. Subject to the
general comparability requirements of Section 8.2.1,
eligibility for, the benefits of, and the amount, if any, of employee
contributions toward welfare plan coverage will be determined by Supplier;
provided, however, that each of Supplier’s welfare plans shall waive all
pre-existing condition exceptions, evidence of insurability, exclusionary
provisions and/or waiting periods for each such Transitioned Employee and any
eligible spouse or covered dependents (except that proof of insurability may be
required for life insurance coverage that exceeds the coverage amount such
employee had with Kraft as of the Effective Date). In addition, any deductible
amounts paid by any Transitioned Employee in the calendar year of his or her
Employment Effective Date shall be applied toward any deductible requirement by
Supplier’s group insurance program for the calendar year of his or her
Employment.


8.2.3                     Paid-Time-Off
(Vacation/Sick Leave). Beginning on his or her Employment Effective Date,
Supplier shall make available to all Transitioned
Employees paid-time-off benefits for vacation and sick leave under its
applicable plans. The paid-time-off vacation benefits provided by Supplier
shall be no less favorable than the vacation benefits provided under the
Transitioned Employee’s existing plan as of his or her Employment Effective
Date and generally available to similarly situated Supplier employees. The paid
time-off benefits for sick-leave provided by



 42














 


 


Supplier
shall be no less favorable than the sick-leave benefits generally available to
similarly situated Supplier employees. Supplier shall recognize vacations plans
made by the Transitioned Employees and approved by Altria, Kraft or another
Eligible Recipient prior to his or her Employment Effective Date, that in each
case were approved by Kraft prior to his or her Employment Effective Date
(which Kraft will verify upon Supplier’s request), and shall permit such
Transitioned Employees to incur negative leave balances for this purpose so
long as such balances will be earned during the current calendar year or other
vacation plan period as may be required by applicable law.


8.2.4                     Pension
Plans. Each Transitioned Employee shall be eligible as of his or her Employment
Effective Date to participate immediately in Supplier’s applicable defined
benefit or defined contribution pension plan .


8.2.5                     Savings
Plans. Each Transitioned Employee shall be eligible as of his or her
Employment Effective Date to participate immediately in Supplier’s applicable
savings plan .


8.2.6                     Flexible
Spending Account Plans. Each Transitioned Employee shall be eligible as of
his or her Employment Effective Date to participate in Supplier’s applicable
health care and dependent care reimbursement accounts .


8.2.7                     Tuition
Assistance. Transitioned Employees shall be eligible to participate in all
tuition assistance programs provided by Supplier to its similarly situated
employees. Courses which are in progress as of the enrolled Transitioned
Employee’s Employment Effective Date, for which tuition assistance has been
approved by Kraft, and Courses which have been approved and paid for by the
Transitioned Employee prior to the Transitioned Employees Employment Effective
Date (which Kraft shall confirm at Supplier’s request), shall be reimbursed by
Supplier at the completion of the Course, provided all of the requisites for
reimbursement under the Transitioned Employee’s existing program have been
approved. “Course” refers to specific classes
in progress or scheduled to start during a particular term and does not refer
to a degree program.


8.2.8                     Bonus
Programs. Supplier shall provide to the Transitioned Employees the same
variable compensation, incentive compensation, and bonus programs as are available
to similarly situated Supplier employees.


8.2.9                     Severance Pay
Plans. Supplier’s employment offer to each Affected Kraft Foods Global
Personnel will state that if the Affected Kraft Foods Global Personnel accepts
the employment offer and is subsequently terminated by Supplier within the
first *  *  * of employment with Supplier for any reason
other than Cause, the Affected Kraft Foods Global Personnel (other than
Affected Kraft Foods Global Personnel outside of Canada who received severance
from Kraft or another Eligible Recipient at the time they became Transitioned
Employees) will be paid a lump sum payment in lieu of any other separation or
severance payment in an amount equal to (1) the greater of (A) the *  *  * under the *  *  *
as of the *  *  * with Kraft or the Eligible
Recipient (other than Altria), as applicable, or (B) the *  *  *
under *  *  * then current severance plan, plus (2) an additional amount to cover such employee’s *  *  * (including a *  *  *) of obtaining *  *  * coverage for a time period equal
to what would have been *  *  *
had the *  *  * in clause (1) above been *  *  *. The Affected Kraft Foods Global
Personnel outside of Canada who received severance from Kraft at the time they
became Transitioned Employees, and the Affected Tech Center Personnel shall
only be entitled to the severance payment calculated under Supplier’s then
current severance plan. Supplier shall be entitled to reduce its
severance payment to each Affected Kraft Foods Global Personnel in Canada, by
the severance payment amount paid by Kraft to such personnel at the time such
personnel was severed by Kraft, to the extent such reduction is permitted by
applicable Law. After such 24 month period, all Transitioned 



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Employees
shall only be entitled to the severance payment calculated under Supplier’s
then-current severance plan. Payment of any such amount shall be contingent
upon the Transitioned Employee signing a separation agreement deemed
appropriate and used non-discriminatorily by Supplier (which will include,
amongst its other terms, a release and/or waiver of any claims the Transitioned
Employee may have against Supplier).


8.2.10              Benefits
Information Outside the U.S. At the request of Supplier and within a
reasonable time frame, Kraft, Altria or another applicable Eligible Recipient
will deliver or make available the information set forth below.


8.2.10.1                                                         UK-Specific Information. In the United Kingdom, copies of
such information as is required to initiate and complete the transfer of
employment per the EU Acquired Rights Directive and all tax, PAYE, social
security and national insurance records and copies of any other agreed-upon
documents or records that are relevant to the Affected Kraft Foods Global
Personnel or Affected Tech Center Personnel, if any, and any employees who
transfer pursuant to the EU Acquired Rights Directive or similar applicable
Laws, including, without limitation, those referred to in Regulation 55(2)
Income Tax (Employment) Regulations 1993 and paragraph 32(1) schedule 1 Social
Security (Contribution) Regulations 1979).


8.2.10.2                                                         Other Countries. In countries other than the United States
and the United Kingdom, such information as is required to initiate and
complete the transfer of employment per the EU Acquired Rights Directive or similar
applicable Laws; provided that:


8.2.10.2.1                                                Kraft
shall, or shall arrange for Altria or an Eligible Recipient to, preserve the
originals of such records or documents for a period of at least five years (or
such shorter or longer period as may be required by any relevant laws) after
the Commencement Date and shall allow Supplier access to the same at all
reasonable times to the extent necessary to enable Supplier to deal with any
matters relating to the Affected Personnel, and any employees who transfer
pursuant to the EU Acquired Rights Directive or similar applicable Laws, and
shall, as and when requested by Supplier to do so, produce the same to the
relevant authorities.


8.2.10.2.2                                                Should
Kraft, Altria or an Eligible Recipient wish to dispose of or destroy any such
records or documents prior to the expiration of three years after the
Commencement Date, it shall not do so without informing Supplier of its
intention to do so and if Supplier so requests, it shall deliver to Supplier
such of the records or documents as Supplier may request.


8.2.11              EU Benefits
Liabilities. All wages, salaries and entitlement to other benefits for
Transitioned Employees in the EU (except as otherwise provided in this Section 8.2.12), and all the
employer’s liabilities for Transitioned Employees in the EU in respect of PAYE,
tax deductions, social security payments and national insurance contributions
relating thereto and arising on or after the Employment Effective Date shall be
discharged by the Supplier during employment with the Supplier or its
Subcontractors or Affiliates. In addition, except where otherwise required by
applicable Laws, Kraft shall retain responsibility for administering and paying
the pension benefits that were earned at Kraft or its Affiliates by the Transitioned
Employees immediately 



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prior
to their Employment Effective Date. Kraft, Altria or the applicable Eligible
Recipient shall be and remain liable for the payment of all such amounts
accrued up to the Employment Effective Date.


8.2.12              Non-EU
Benefits Liabilities. All wages, salaries and entitlement to other benefits
for Transitioned Employees in non-EU countries, and all the employer’s
liabilities for Transitioned Employees in non-EU countries relating thereto and
arising on or after the Employment Effective Date shall be discharged by the
Supplier, during employment with the Supplier or its Subcontractors or
Affiliates. Kraft, Altria or the applicable Eligible Recipient shall be and
remain liable for the payment of all such amounts accrued up to the Employment
Effective Date.


8.3                               Other
Employee Matters.


8.3.1                     Responsibility
for Transitioned Employees. As of the Employment Effective Date, the
Transitioned Employees shall be employees of Supplier for all purposes.
Supplier shall be responsible for all necessary recruiting and hiring costs
associated with employing appropriate staff. In addition, Supplier shall be
responsible for funding and distributing benefits under the benefit plans in
which Transitioned Employees participate on or after the Transitioned Employee’s
Employment Effective Date and for paying any compensation and remitting any
income, disability, withholding and other employment taxes for such
Transitioned Employees beginning on the Employment Effective Date. Unless
otherwise agreed, Altria, Kraft or the other applicable Eligible Recipient
shall be responsible for funding and distributing benefits under the Kraft
benefit plans in which Transitioned Employees participated prior to the
Employment Effective Date and for paying any compensation and remitting any
income, disability, withholding and other employment taxes for such
Transitioned Employees for the period prior to the Employment Effective Date of
such Transitioned Employee. Altria, Kraft or another applicable Eligible
Recipient shall provide Supplier with such information in Kraft’s possession
reasonably requested by Supplier in order to fulfill its obligations under this
Article 8.


8.3.2                     Principles
for Other Countries. The principles, rights, responsibilities and
obligations articulated in this Article 8 with respect to
the hiring of the Affected Personnel in the United States (“Principles”) shall be applicable to Affected
Personnel in countries other than the United States to the extent that the
applicable Laws of such countries are not inconsistent with the Principles. To
the extent the applicable Laws of any country are inconsistent with any of the
Principles, the Parties shall, with regard to such Principles as they apply to
Supplier Personnel in such country, restate such Principles to reflect as
nearly as possible the original intentions of the Parties regarding such
Principles in accordance with applicable Law. In any event, Supplier
performance of its obligations under this Section 8.3.2
must both (i) comply with applicable Laws in each country, and (ii) comply with
the Principles, as a minimum, except where applicable Law requires otherwise,
all at no additional cost to Kraft


8.3.3                    Hiring of
Supplier Personnel at Expiration. If, at the expiration of the Term,
Kraft is required to hire any Supplier Personnel as a result of the EU Acquired
Rights Directive or similar applicable Laws, *  *  *
will reimburse * 
*  * for any *  *  * made by *  *  * to
(i) any such Supplier Personnel where Kraft or its Affiliates are assuming
responsibility for the Services being performed by or on behalf of Supplier
prior to the expiration of the Term, or (ii) any such Supplier Personnel
performing Services from a location other than a Kraft Facility where Kraft is
transferring responsibility for those Services to a third party that is not a
Kraft Affiliate; provided in each case that Kraft, its Affiliates, or such
third party, as the case may be, severs such Supplier Personnel within a
reasonable period of time after such entity assumes responsibility for the
Services.



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8.4                               Key
Supplier Personnel and Critical Affected Personnel.


8.4.1                     Approval
of Key Supplier Personnel.


8.4.1.1                                                               Before
assigning an individual to act as one of the Key Supplier Personnel whether as
an initial assignment or a subsequent assignment, Supplier shall notify Kraft
of the proposed assignment at least 40 business days prior to the planned
assignment, shall introduce the individual to appropriate Kraft
representatives, shall provide reasonable opportunity for Kraft representatives
to interview the individual, and shall provide Kraft with a resume, a plan
describing the steps and education that will be performed regarding the
turnover of responsibility to the proposed individual, and such other
information about the individual as may be reasonably requested by Kraft. If
Kraft in good faith objects to the proposed assignment, the Parties shall
attempt to resolve Kraft’s concerns on a mutually agreeable basis. If the
Parties have not been able to resolve Kraft’s concerns within five business
days of Kraft communicating its concerns, Supplier shall not assign the
individual to that position and shall propose to Kraft the assignment of
another individual of suitable ability and qualifications.


8.4.1.2                                                               Prior
to the Commencement Date, Supplier shall identify and obtain Kraft’s approval
of all Supplier Personnel who will serve as Key Supplier Personnel. The
positions designated by Kraft as being Key Supplier Personnel positions and the
individuals that have been selected and approved for such positions as of the
Effective Date are listed in Schedule 5.4.


8.4.1.3                                                               Kraft
may from time to time change the positions designated as Key Supplier Personnel
under this Agreement with Supplier’s approval which shall not be unreasonably
withheld.


8.4.2                     Continuity of
Key Supplier Personnel. For so long as the Key Supplier Personnel remains
employed by Supplier, Supplier shall cause each of the Key Supplier Personnel
to devote full time and effort to the provision of Services under this
Agreement for a minimum of *  *  *
from the date he or she assumes the position in question (provided that, in the
case of Key Supplier Personnel assigned prior to any Commencement Date, the
minimum period shall be *  *  *
from the Commencement Date), to the extent permissible under applicable Laws.
Supplier shall not transfer, or reassign any of the Key Supplier Personnel
(except as a result of cause, or illness) or announce its intention to do so
during the specified period without Kraft’s prior approval, which Kraft may
withhold in its sole discretion, except in the case of personal hardship, in
which case Kraft will not unreasonably withhold its approval. In addition, even
after the specified period, Supplier shall transfer, or reassign one of its Key
Supplier Personnel only after (i) giving Kraft at least 40 business days prior
notice of such action, (ii) identifying and obtaining Kraft’s approval of a
suitable replacement at least 30 days prior to such transfer, reassignment or
removal and (iii) demonstrating to Kraft’s reasonable satisfaction that such
action will not have an adverse impact on Supplier’s performance of its
obligations under this Agreement. If Kraft in good faith objects to the
proposed transfer, or reassignment, the Parties shall attempt to resolve Kraft’s
concerns on a mutually agreeable basis. If the Parties have not been able to
resolve Kraft’s concerns within five business days of Kraft communicating its
concerns, Supplier shall not transfer, or reassign the individual from that
position. Unless otherwise agreed, * 
*  * shall *  *  *
than *  *  * of the Key Supplier Personnel in
any *  *  * . In the event of the voluntary
resignation or termination of one of its Key Supplier Personnel during or after
the specified period, Supplier shall (i) give Kraft as much notice as
reasonably possible of such development, and (ii) expeditiously identify and
obtain Kraft’s approval of a suitable replacement.



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8.4.3                     Engagement
of Contractors and Continuity of Critical Affected Personnel. Supplier will
take an assignment of Kraft contracts specified in Schedule
12.1 for the Critical Affected Personnel who are contractors, or
enter into replacements with such contractors. Subject to Supplier’s employment policies, Supplier will not (i) transfer
or reassign any Critical Affected Personnel who are Transitioned Employees
during the * 
*  * after his or her
Employment Effective Date, or (ii) transfer, reassign or discontinue the
contract for Critical Affected Personnel who are contractors except for Cause
during the * 
*  * after the
Commencement Date (or, in the case of contractors in Deferred Countries, *  *  * after the date Supplier begins
providing Services from such country), in each case without Kraft’s approval.
In addition, in the event Supplier intends to terminate any Critical Affected
Personnel who are Transitioned Employees during the *  *  *
following the applicable Employment Effective Date, for any reason except
Cause, Supplier will (A) provide timely notice to Kraft of its intent to
terminate any of such Critical Affected Personnel in accordance with this
Section, (B) take reasonable measures to ensure and demonstrate to Kraft’s
reasonable satisfaction that there will be adequate transfer of knowledge
between such Critical Affected Personnel and Supplier, and (C) give due
consideration to Kraft’s concerns with respect to the impact of terminating
such Critical Affected Personnel prior to so terminating any such person.
Further, in the event Supplier wishes to terminate the contract for Critical
Affected Personnel who are contractors anytime between the *  *  *
after Supplier first engaged such contractors as provided above, for any reason
except Cause, Supplier will (1) provide timely notice to Kraft of its intent to
terminate the contract for contractors, (2) take reasonable measures to ensure
and demonstrate to Kraft’s reasonable satisfaction that there will be adequate
transfer of knowledge between such contractors and Supplier, and (3) give due
consideration to Kraft’s concerns with respect to the impact of terminating
such contractors prior to such * * *.


8.4.4                     Retention
and Succession. Supplier shall implement and maintain a retention strategy
designed to retain Key Supplier Personnel and Critical Affected Personnel (but
only if reasonably necessary in the case of contractors) on the Kraft account
for the prescribed period. Supplier shall also maintain active succession plans
for each of the Key Supplier Personnel positions. Supplier shall implement
various retention strategies to retain Key Supplier Personnel and Critical
Affected Personnel, which, except for contractors, may include granting stock
options, awards, salary increases, recognition events and other retention and
incentive programs offered to similarly situated Supplier employees. Upon
separation of any Key Supplier Personnel, Supplier shall provide notice to
Kraft of such separation and identify potential suitable replacements.


8.5                               Supplier
Account Executive.


Supplier shall designate a Supplier Account Executive
for the Services who, unless otherwise agreed by Kraft, shall maintain his or
her office at Three Lakes Drive, Northfield, Illinois 60093. The Supplier
Account Executive shall (i) be one of the Key Supplier Personnel; (ii) be a
full time employee of Supplier; (iii) devote his or her full time and effort to
managing the Services; (iv) not be transferred, or reassigned for *  *  * from the initial assignment
(except as required by law or as a result of illness or disability); (v) serve
as the single point of accountability for the Services; (vi) be the single
point of contact to whom all Kraft communications concerning this Agreement may
be addressed; (vii) have authority to act on behalf of Supplier in all
day-to-day matters pertaining to this Agreement; and (viii) have day-to-day
authority for ensuring customer satisfaction and attainment of all Service
Levels.


8.6                               *  *  *
Supplier Account Executive and Key Supplier Personnel.


8.6.1                     Supplier
Account Executive. At a minimum, *  *  *
of the Supplier Account Executive’s *  *  *,
to the extent such *  *  *
is generally available to such employee in accordance with *  *  *
program, shall be based upon (i) the level of *  *  *
reflected in the periodic *  *  *;
(ii) the 



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extent
to which *  *  * has *  *  *
the *  *  *, *  *  *
and *  *  * other *  *  *
under *  *  *; (iii) *  *  *
of the *  *  * relating to *  *  *
and its *  *  * in *  *  *,
as reasonably determined by *  *  *
and (iv) *  *  * determination as to whether *  *  * has *  *  *
the *  *  * set by the *  *  * or
his or her designee.


8.6.2                     Key
Supplier Personnel. At a minimum, *  *  *
of the  *  *  *,
to the extent such *  *  *
is generally available to such employee in accordance with *  *  *,
of the Key Supplier Personnel listed on Schedule 5.4
shall be based upon the factors set forth in Section
8.6(a) above.


8.6.3                     Evaluation
Input. Kraft shall have a meaningful opportunity to provide information to
Supplier with respect to Kraft’s evaluation of the performance of the Supplier
Account Executive and the other Key Supplier Personnel and such evaluation
shall be considered and accorded substantial weight by Supplier in establishing
the *  *  * and *  *  *
of such individuals.


8.7                               Supplier
Personnel Are Not Kraft Employees.


Except as otherwise expressly set forth in this
Agreement, the Parties intend to create an independent contractor relationship
and nothing in this Agreement shall operate or be construed as making Kraft (or
Altria or any Eligible Recipients) and Supplier partners, joint venturers,
principals, joint employers, agents or employees of or with the other. No
officer, director, employee, agent, Affiliate, contractor or subcontractor
retained by Supplier to perform work hereunder shall be deemed to be an
officer, director, employee, agent, Affiliate, contractor or subcontractor of
Altria, Kraft or the Eligible Recipients for any purpose. Supplier, not Altria,
Kraft or the Eligible Recipients, has the right, power, authority and duty to
supervise and direct the activities of the Supplier Personnel, to compensate
such Supplier Personnel for any work performed by them on the behalf of Altria,
Kraft or the Eligible Recipients pursuant to this Agreement, and to terminate
Supplier’s employment of such personnel. Supplier, and not Altria, Kraft or the
Eligible Recipients, shall be responsible and therefore solely liable for all
acts and omissions of Supplier Personnel acting in the course of their
employment, including acts or omissions constituting negligence, gross
negligence, willful misconduct and/or fraud.


8.8                               Replacement,
Qualifications and Retention of Supplier Personnel.


8.8.1                     Sufficiency
and Suitability of Personnel. Supplier shall assign (or cause to be
assigned) sufficient Supplier Personnel to provide the Services in accordance
with this Agreement and such Supplier Personnel shall possess suitable
competence, ability and qualifications and shall be properly educated and
trained for the Services they are to perform.


8.8.2                     Requested
Replacement. In the event that Kraft determines lawfully and in good faith
that the continued assignment to Kraft of any individual Supplier Personnel
(including Key Supplier Personnel) is not in the best interests of Kraft or the
Eligible Recipients, then Kraft shall give Supplier notice to that effect
requesting that such Supplier Personnel be replaced. Supplier shall have 10
business days following Kraft’s request for removal of such Supplier Personnel
in which to investigate the matters forming the basis of such request, correct
any deficient performance and provide Kraft with assurances that such deficient
performance shall not recur (provided that, if requested to do so, Supplier
shall immediately remove (or cause to be removed) the individual in question
from all Kraft sites pending completion of Supplier’s investigation and
discussions with Kraft). If, following such 10 business day period, Kraft is
not reasonably satisfied with the results of Supplier’s efforts to correct the
deficient performance and/or to ensure its non-recurrence, Supplier shall, as
soon as possible, remove and replace such Supplier Personnel with an individual
of suitable ability and qualifications, without cost to Kraft. Nothing in this
provision shall operate or be construed to limit Supplier’s responsibility for
the acts or omission of the Supplier Personnel, or be construed as joint
employment.



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8.8.3                     Turnover
Rate and Data. Supplier will use commercially reasonable efforts to keep
the turnover rate of personnel performing the Services to a level comparable or
better than averages for large, well-managed first tier service providers
performing similar services, and in any case as necessary to comply with the
applicable Service Levels. If Kraft determines that the turnover rate of
Supplier Personnel is higher than that noted above or otherwise has an adverse
effect on Kraft, and so notifies Supplier, Supplier shall within 30 days (i)
provide Kraft with data concerning Supplier’s turnover rate, (ii) meet with
Kraft to discuss the reasons for the turnover rate, and (iii) submit a proposal
for reducing the turnover rate for Kraft’s review and approval. Notwithstanding
any transfer or turnover of Supplier Personnel, Supplier shall remain obligated
to perform the Services without degradation and in accordance with the Service
Levels.


8.8.4                     Restrictions
on Performing Services to Competitors. Neither Supplier nor any
Subcontractor shall cause or permit any dedicated, client-facing Transitioned
Personnel; Transitioned Personnel who are SAP basis programmers or database
administrators; Critical Affected Personnel, other than contractors; or Key Supplier
Personnel (who remain employed by Supplier or a Subcontractor) to perform
services directly or indirectly for or market Supplier’s services to a Direct
Kraft Competitor either while engaged in the provision of Services or during
the first *  *  * after the Effective Date for the
Transitioned Employees and, with respect to: (a) each Key Supplier Personnel,
for a period of *  *  * immediately following the termination of his
or her involvement in the provision of such Services without Kraft’s prior written
consent, and (b) each Critical Affected Personnel (who is not a Key Supplier
Personnel and not a contractor), for a period of *  *  *
immediately following the termination of his or her involvement in the
provision of such Services without Kraft’s prior written consent.


8.8.5                     Supplier
Personnel. Supplier shall comply with applicable Laws with respect to
verifying the authorization of Supplier Personnel to work in any country in
which they are assigned to perform Services. To the extent allowed by applicable
laws and to the extent of consistency with market practice, for newly-hired
Supplier employees (which does not include Transitioned Employees), Supplier
shall perform or have performed a background check, drug test and credit test
on all Supplier Personnel assigned to work hereunder, provided that, if a
satisfactory background check was completed in connection with the hiring of
such Supplier Personnel, it need not be repeated. Supplier Personnel who do not
meet Supplier’s hiring criteria shall not be assigned to work hereunder.


8.9                               Conduct
of Supplier Personnel.


8.9.1                     Conduct
and Compliance. While at Kraft Sites or Kraft Facilities, Supplier
Personnel shall (i) comply with the Kraft Rules and other rules and regulations
regarding personal and professional conduct, including Kraft Labor Policies listed in Schedule
17.5, generally applicable to personnel at such Kraft Sites
(and communicated to Supplier in writing or by any other means generally used
by Kraft to disseminate such information to its employees or contractors), (ii)
comply with reasonable requests of Kraft or the Eligible Recipients personnel
pertaining to personal and professional conduct, (iii) attend workplace
training offered by Kraft and/or the Eligible Recipients at Kraft’s request, and
(iv) otherwise conduct themselves in a businesslike and professional manner.
Provided Supplier has received reasonable notice from Kraft, Supplier shall
ensure that any Supplier Personnel who provide Services at the applicable Kraft
Site shall have passed background screening and drug testing to the extent such
screening or testing is generally required of third party service providers
performing work in such Kraft Sites for comparable periods of time, provided
such requirement is permitted by applicable Law.


8.9.2                     Identification
of Supplier Personnel. All Supplier Personnel shall clearly identify
themselves as Supplier Personnel and not as employees of Kraft and/or the
Eligible Recipients. This shall 



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include
any and all communications, whether oral, written or electronic. Each Supplier
Personnel shall wear a badge indicating that he or she is employed by Supplier
or its Subcontractors when at a Kraft Site or Facility. Supplier personnel will
be required to display a Kraft badge while at a Kraft Facility or Kraft Site,
such badge will be clearly marked with the words “Contractor,” on the front of
the badge in an offsetting color to the badge background, to indicate that the
Supplier personnel are not employees of Kraft or an Eligible Recipient.


8.9.3                     Restriction
on Marketing Activity. Except for marketing representatives designated in
writing by Supplier to Kraft, none of the Supplier Personnel shall conduct any
marketing activities to Kraft or Eligible Recipient employees at Kraft
Facilities or sites (including marketing of any New Services), other than,
subject to Section 13.3, reporting
potential marketing opportunities to Supplier’s designated marketing
representatives.


8.10                        Substance
Abuse.


8.10.1              Employee
Removal. To the extent permitted by applicable Laws, Supplier shall
immediately remove (or cause to be removed) any Supplier Personnel who is known
to be or reasonably suspected of engaging in substance abuse while at Kraft
Facility or Site, in a Kraft vehicle or while performing Services. In the case
of reasonable suspicion, such removal shall be pending completion of the
applicable investigation. Substance abuse includes the sale, attempted sale,
possession or use of illegal drugs, drug paraphernalia, or, to the extent not
permitted on at Kraft Facilities or Kraft Sites, alcohol, or the misuse of
prescription or non-prescription drugs.


8.10.2              Substance
Abuse Policy. Supplier represents and warrants that it has and will
maintain substance abuse policies, in each case in conformance with applicable
Laws, and Supplier Personnel will be subject to such policies. Supplier
represents and warrants that it shall require its Subcontractors (other than
Commodity Equipment and Transport Providers, product vendor specialists who
Supplier engages on a temporary basis to address urgent problems, and Third
Party Contractors under Third Party Contracts assumed by Supplier to the extent
such contracts do not comply with this requirement as of the Effective Date)
and Affiliates providing Services to have and maintain such policy in
conformance with applicable Law and to adhere to this provision.


8.11                        Union
Agreements and WARN ACT.


8.11.1              Notice
by Supplier. Supplier shall provide Kraft not less than 90 days notice of
the expiration of any collective agreement with unionized Supplier Personnel if
the expiration of such agreement or any resulting labor dispute could
potentially interfere with or disrupt the business or operations of Kraft or an
Eligible Recipient or impact Supplier’s ability to timely perform its duties
and obligations under this Agreement.


8.11.2              WARN
Act Commitment. Supplier shall not, for a period of 90 days after the
Commencement Date, cause any of the Transitioned Employees who were located at
Kraft’s Bannockburn facility prior to their Employment Effective Date to suffer
“employment loss” as that term is construed under the Worker Adjustment and
Retraining Notification Act (“WARN Act”), if
such employment loss could create any liability for Altria, Kraft, the Eligible
Recipients, or any of their respective Affiliates, under the WARN Act with
respect to Kraft’s Bannockburn facility, unless Supplier delivers notices under
the WARN Act in a manner and at a time such that Altria, Kraft, the Eligible
Recipients or their respective Affiliates bear no liability with respect
thereto.


8.11.3              Responsibility.
Supplier shall be responsible for any liability, cost, claim, expense,
obligation or sanction attributable to any breach by Supplier of Section 8.11.2 that results in
Altria, Kraft or the 



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Eligible
Recipients being in violation of the WARN Act or the regulations promulgated
thereunder with respect to Kraft’s Bannockburn facility.


8.12                        Application
of Acquired Rights Directive and Similar Laws. Each Party agrees to comply
fully with its legal obligations under the EU
Acquired Rights Directive and similar applicable Laws if and where applicable
to the transfer of Affected Personnel to Supplier’s or Supplier’s Affiliate’s
employment, including (without limitation) its obligations regarding
consultation and the giving of information.


8.13                        Altria
Affiliates. For purposes of this Article 8,
references to Altria shall include its Affiliates.


8.14                        Directed
Employees. Kraft shall make available to Supplier for use in Supplier’s
performance of Services the employees of Kraft and
its Affiliates (including Altria) listed on Schedule
26 (so long as they remain employees with Kraft or its
Affiliates (including Altria) and are not unavailable due to reasons beyond
Kraft’s reasonable control) for the period commencing on the Commencement Date
and extending through the date specified for each such employee on Schedule 26 (such period with
respect to each such employee, the “Directed Employee Period”
and each such employee during such respective period, a “Directed
Employee”). Supplier shall provide direction to Kraft management
personnel who will instruct (or arrange for Altria to instruct) Directed
Employees to perform activities in connection with Supplier’s performance of
the Services in a manner consistent with the technical direction provided by
Supplier. Supplier shall not have authority to fire, impose discipline or
otherwise to take personnel related actions with respect to the Directed
Employees. The Parties agree that no employer and employee relationship is to
be created between Supplier and the Directed Employees, and that no
co-employment relationship is created nor is intended to be created, and
further that no employee benefits available to employees of Supplier shall
accrue to the Directed Employees during the period such employees are employed
by Kraft or its Affiliates. Supplier will at all times exercise its right to
provide Kraft management with technical direction regarding the activities of
the Directed Employee in accordance with Kraft’s or Altria’s policies, and in
consultation, as necessary, with the Kraft Contract Manager or his/her
designee. In respect of the Directed Employees, Supplier shall not be
responsible for implementing and administering Kraft or Altria human resources
policies, practices or procedures, including without limitation those
addressing hiring, compensation, promotions, transfers, terminations,
employment related complaints, or general career development and performance
management. Deficient performance by any Directed Employee while performing a
function under Supplier’s direction shall not constitute a failure by Kraft to
perform any of its obligations under this Agreement, and, except as provided in
the last sentence of this Section 8.14,
shall not excuse Supplier from any of its obligations under this Agreement.
Other terms applicable to the Directed Employees shall otherwise be as provided
in Schedule 26. Supplier shall be
excused for a Directed Employee’s failure to perform as directed by Supplier if
Supplier has notified Kraft in writing of such failure and Kraft has not
thereafter caused the Directed Employee to promptly correct such failure.


9.             SUPPLIER
RESPONSIBILITIES.


9.1                               Policy
and Procedures Manual.


9.1.1                     Content.
As part of the Services, and at no additional cost, Supplier shall provide to
Kraft and the Eligible Recipients a manual describing the policies and
procedures that will govern the provision of the Services, including the
content required by Schedule 21.1
and those policies and 



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procedures
of Kraft and the Eligible Recipients that Kraft may designate from time to time
(the “Policy and Procedures Manual”).


9.1.2                     Delivery.
Supplier shall deliver the Policy and Procedures Manual to Kraft for its
review, comment and approval in accordance with the following deadlines:


9.1.2.1                                                               Initial Outline. Supplier shall deliver a detailed outline
of the content to be included in the Policy and Procedures Manual within 30
days after the Effective Date.


9.1.2.2                                                               Content Required Prior to the Commencement Date. Supplier
shall deliver the portions of the Policy and Procedures Manual that are
required to be completed prior to the Commencement Date (including content
identified as such in Schedule 21.1)
at least 30 days prior to the Commencement Date.


9.1.2.3                                                               Content Required Following the Commencement Date. Supplier
shall deliver the complete Policy and Procedures Manual no later than 120 days
after the Commencement Date (or, in the case of Deferred Countries, within 30
days after Supplier assumes responsibility for providing Services in those countries,
if that date is later than the 120 days after the Commencement Date).


9.1.2.4                                                               Kraft Review and Comments. Supplier shall make any changes
reasonably requested by Kraft with respect to the Materials delivered pursuant
to this Section 9.1.2 within 15
business days after receipt from Kraft, and shall resubmit such Materials for
Kraft’s further review and approval.


9.1.3                     Revision
and Maintenance. Following approval of the complete Policy and Procedures
Manual, and to the extent not in conflict with the rights and responsibilities
set forth in this Agreement or the Schedules, Supplier shall incorporate any
additional comments or suggestions of Kraft into the Policy and Procedures
Manual and shall deliver a final revised version to Kraft for Kraft’s approval
within 30 days of Supplier’s receipt of such comments and suggestions. The
Policy and Procedures Manual will be delivered and maintained by Supplier in
hard copy and electronic formats and will be accessible electronically to Kraft
management and Authorized Users in a manner consistent with Kraft’s security
policies.


9.1.4                     Compliance.
Subject to Supplier’s responsibilities in Sections 9.4
and 9.10.9, Supplier
shall keep its records related to this Agreement in accordance with GAAP, and
perform the Services in accordance with Kraft’s requirements related to the
Sarbanes-Oxley Act of 2002 as set forth in Schedule 2
or Schedule 17.4, or otherwise
provided in writing by Kraft, and any and all applicable Laws and Kraft’s then
current policies and procedures until the Policy and Procedures Manual is
finalized and agreed upon by the Parties. Thereafter, Supplier shall perform
the Services in accordance with the Policy and Procedures Manual. In the event
of a conflict between the provisions of this Agreement and the Policy and
Procedures Manual, the provisions of this Agreement shall control unless the
Parties expressly agree otherwise and such agreement is set forth in the
relevant portion of the Policy and Procedures Manual. Without limiting Supplier’s
obligations under this Section 9.1.4
and Sections 9.4 and 9.10.9, Kraft acknowledges and
agrees that it retains responsibility for its compliance with GAAP and the
Sarbanes-Oxley Act of 2002.


9.1.5                     Modification
and Updating. Supplier shall promptly modify and update the Policy and
Procedures Manual monthly to reflect changes in the operations or procedures
described therein and to comply with Kraft Standards, the Technology Plan and
Strategic Plans as described in 



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Section 9.5. Supplier shall
provide the proposed changes in the manual to Kraft for review, comment and
approval. To the extent such change could (i) increase Kraft’s total costs of
receiving the Services; (ii) require material changes to the facilities,
systems, software or equipment of Kraft and/or the Eligible Recipients; (iii)
have an adverse impact on the functionality, interoperability, performance,
accuracy, speed, responsiveness, quality or resource efficiency of the
Services, or (iv) violate or be inconsistent with the Kraft Standards, the Technology
Plan or Strategic Plans, Supplier shall not implement such change without first
obtaining Kraft’s approval, which Kraft may withhold in its sole discretion.


9.1.6                     Annual
Review. The Parties shall meet to perform a formal annual review of the
Policy and Procedures Manual on each anniversary of the Commencement Date.


9.2                               Reports.


9.2.1                     Reports.
Supplier shall provide Kraft with reports pertaining to the performance of the
Services and Supplier’s other obligations under this Agreement sufficient to
permit Kraft to monitor and manage Supplier’s performance (“Reports”). The Reports to be provided by Supplier shall
include those described in Schedule 13
in the format and at the frequencies provided therein, as well as those
provided by Kraft prior to the Commencement Date. In addition, from time to
time, Kraft may identify additional Reports to be generated by Supplier and
delivered to Kraft on an ad hoc or periodic basis. All Reports listed on Schedule 13 shall be provided to
Kraft as part of the Services and at no additional charge to Kraft. If Supplier
can generate such additional reports using Supplier Personnel, Systems and
Software then-assigned to provide the Services without degradation of Services
or Service Levels, Supplier will do so at no additional charge. The Reports
described in Schedule 13 and, to the extent
reasonably possible, all other Reports shall be provided to Kraft (i) by secure
on-line connection in an electronic format capable of being accessed by
Microsoft Office components and downloadable by Kraft, with the information
contained therein capable of being displayed graphically and accessible from a
web browser, and (ii) in traditional printed form.


9.2.2                     Back-Up
Documentation. As part of the Services, Supplier shall provide Kraft with such
documentation and other information available to Supplier as may be reasonably
requested by Kraft from time to time in order to verify the accuracy of the
Reports provided by Supplier. In addition, Supplier shall provide Kraft with
all documentation and other information reasonably requested by Kraft from time
to time to verify that Supplier’s performance of the Services is in compliance
with the Service Levels and this Agreement.


9.2.3                     Correction
of Errors. As part of the Services, Supplier shall promptly correct any
errors or inaccuracies in or with respect to the Reports, the information or
data contained in such Reports, or other contract deliverables. Corrections
will be done at no additional charge where the error or inaccuracy was caused
by Supplier or its agents, or Subcontractor’s failure to perform its
obligations in accordance with this Agreement, or by Managed Third Parties
subject to Section 6.6.


9.3                               Governance
Model; Meetings.


9.3.1                     Governance
Model. The Parties shall manage their relationship under this Agreement
using the governance model in Schedule 6.


9.3.2                     Meetings.
During the Term, representatives of the Parties shall meet periodically or as
requested by Kraft to discuss matters arising under this Agreement, including
any such meetings provided for under the Transition Plan. Each Party shall bear
its own costs in connection with the 



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attendance
and participation of such Party’s representatives in such meetings. Such
meetings shall include, at a minimum, the following:


9.3.2.1                                                               a
periodic meeting at least monthly to review performance and monthly reports,
planned or anticipated activities and changes that might impact performance,
and such other matters as appropriate;


9.3.2.2                                                               a
quarterly management meeting to review the monthly reports, review Supplier’s
overall performance under the Agreement, review progress on the resolution of
issues, provide a strategic outlook for Kraft’s and the Eligible Recipients’
information systems requirements, and discuss such other matters as
appropriate;


9.3.2.3                                                               a
meeting associated with the transition and ongoing provision of the Services,
quarterly during the first year of the Term and semi-annually thereafter;


9.3.2.4                                                               a
quarterly meeting of senior management of both Parties to review relevant
contract and performance issues;


9.3.2.5                                                               a
periodic meeting of management of both Parties in which Supplier will (A)
explain how the Systems that Supplier operates in connection with the provision
of the Services work and are operated, (B) explain how the Services are
provided (in such detail as Kraft may request), and (C) provide such training
and documentation as Kraft may require for Kraft to understand and operate such
Systems and provide the Services after the termination or expiration of the
Agreement; and


9.3.2.6                                                               such
other meetings of Kraft and Supplier Personnel, including senior management of
Supplier, as Kraft may reasonably request.


9.3.3                     Agenda
and Minutes. For each such meeting, upon Kraft request, Supplier shall
prepare and distribute an agenda, which will incorporate the topics designated
by Kraft. Supplier shall distribute such agenda in advance of each meeting so
that the meeting participants may prepare for the meeting. In addition, upon
Kraft request, Supplier shall record and promptly distribute minutes for every
meeting for review and approval by Kraft.


9.3.4                     Authorized
User and Eligible Recipient Meetings. Supplier shall notify the Kraft
Contract Manager in advance of scheduled meetings with Authorized Users or
Eligible Recipients (other than meetings pertaining to the provision of
specific Services on a day-to-day basis) and shall invite the Kraft Contract
Manager to attend such meetings or to designate a representative to do so.


9.4                               Quality
Assurance and Internal Controls.


9.4.1                     Supplier
shall develop and implement Quality Assurance and internal control processes
and procedures, including implementing tools and methodologies, to ensure that
the Services are performed in an accurate and timely manner, in accordance with
(i) the Service Levels and other requirements of this Agreement, generally
accepted practices of first-tier providers within the information technology
industry, (iii) the Sarbanes-Oxley Act of 2002 to the extent of Supplier’s
obligations set out in Schedule 2,
or the requirements in Schedule 17.4
or otherwise provided in writing by Kraft, (iv) subject to Section
15.10, the Laws applicable to Kraft and the Eligible Recipients,
and (vi) industry practice standards applicable to Kraft and the Eligible
Recipients and the performance of the Services to the extent of Supplier’s
obligations set out in Schedule 2.



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 Such processes, procedures and controls shall
include verification, checkpoint reviews, testing, acceptance, and other
procedures for Kraft to assure the quality and timeliness of Supplier’s
performance. Without limiting the generality of the foregoing, Supplier will:


9.4.1.1                                                               Maintain
a strong control environment in day-to-day operations, to assure that the
following fundamental control objectives are met: (i) operational information
and financial information (to the extent required to be provided under this
Agreement, including for audit purposes) is valid, complete and accurate; (ii)
operations are performed efficiently and achieve effective results, consistent
with the requirements of this Agreement; and (iii) assets are safeguarded;


9.4.1.2                                                               Build
the following basic control activities into work processes: (i) accountability
clearly defined and understood; (ii) access properly controlled; (iii) adequate
supervision; (iv) transactions properly authorized; (v) transactions properly
recorded; (vi) policies, procedures, and responsibilities documented; (vii)
adequate training and education; (viii) adequate separation of duties; and (ix)
recorded assets compared with existing assets;


9.4.1.3                                                               Develop
and execute a process to ensure periodic control self-assessments are performed
with respect to all Services (such self-assessments to be performed at least
annually unless and until Kraft approves less frequent self-assessments);


9.4.1.4                                                               Maintain
an internal audit function to sufficiently monitor the processes and Systems
used to provide the Services (i.e., perform audits, track control measures,
communicate status to management, drive corrective action, etc.). As part of
such internal audit function, Supplier will:


9.4.1.4.1                                                      Provide
to Kraft, promptly after conducting any audit of Supplier’s or its Affiliates’
operations relating to the Services, a summary report that (i) describes the
scope of audit, (ii) identifies control weaknesses and any adverse impacts on
Kraft’s operations, and (iii) sets forth a plan for remediation for any control
weaknesses or adverse impacts that have been identified.


9.4.1.5                                                               Conduct
investigations of suspected fraudulent activities within Supplier’s
organization that impact or could impact Kraft or the Eligible Recipients.
Supplier shall promptly notify Kraft of any such suspected fraudulent activity
and the results of any such investigation as they relate to Kraft or the
Eligible Recipients. At Supplier’s request, Kraft shall provide reasonable
assistance to Supplier in connection with any such investigation;


9.4.1.6                                                               Comply
with all applicable requirements and guidelines set forth in Schedule 17.4, or otherwise
provided in writing by Kraft in order to assist Kraft to meet the requirements
of the Sarbanes-Oxley Act of 2002 and implementing regulations promulgated by
the United States Securities and Exchange Commission and the Public Company
Accounting Oversight Board, as well as similar Laws in other jurisdictions;


9.4.1.7                                                               Recommend
and, with Kraft’s prior approval, implement compliance measures to satisfy
Sarbanes-Oxley requirements and similar requirements in other jurisdictions,
including as described in Schedule 2
and Schedule 17.4; and



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9.4.1.8                                                               Cause
the policies, processes and procedures used by
Supplier to interface with Kraft to provide the Services and the reports, user interfaces,
and deliverables or outputs of the Services that are made available to
Kraft to be in conformance with the generally accepted practices of
the Information Technology Infrastructure Library (“ITIL”)
within 36 months after the Commencement Date, except as otherwise required in Schedule 2
or as otherwise agreed upon by the Parties.


9.4.2                     Supplier
shall submit such processes, procedures and controls for any changes made or
new functions introduced by Supplier to Kraft for its review, comment and
approval within 60 days after the Effective Date and shall use commercially
reasonable efforts to finalize such processes, procedures and controls and
obtain Kraft’s final approval within 60 days after the Effective Date. Where
Supplier is required to document any processes, procedures and controls of
Kraft existing as of the Effective Date, Supplier shall provide that
documentation to Kraft for its review, comment and approval within 120 days
after the Effective Date. Upon Kraft’s approval, such processes and procedures
shall be included in the Policy and Procedures Manual. Prior to the approval of
such processes and procedures by Kraft, Supplier shall adhere strictly to Kraft’s
then current policies procedures, and controls. No failure or inability of the
quality assurance procedures to disclose any errors or problems with the
Services shall excuse Supplier’s failure to comply with the Service Levels and
other terms of this Agreement.


9.5                               Processes,
Procedures, Architecture, Standards and Planning.


9.5.1                     Supplier
Support. As requested by Kraft, Supplier shall assist Kraft on an on-going
basis in defining (A) information technology and other standards, policies,
practices, processes, procedures and controls to be adhered to and enforced by
Supplier in the performance of the Services; and (B) the associated IT
technologies architectures, standards, products and systems to be provided,
operated, managed, supported and/or used by Supplier in connection therewith
(collectively, the “Kraft Standards”).
As of the Effective Date, the Kraft Standards include the standards set forth
on Schedule 8. Supplier also shall
assist Kraft on an annual basis or otherwise as requested by Kraft in preparing
Strategic Plans and short-term implementation plans. The assistance to be
provided by Supplier shall include: (i) active participation with Kraft
representatives on permanent and ad-hoc committees and working groups
addressing such issues; (ii) assessments of the then-current Kraft Standards at
a level of detail sufficient to permit Kraft to make informed business
decisions; (iii) analyses of the appropriate direction for such Kraft Standards
in light of business priorities, business strategies, competitive market
forces, and changes in technology; (iv) the provision of information to Kraft
regarding Supplier’s technology, business processes and telecommunications
strategies for its own business that Supplier generally makes available to its
customers; and (v) recommendations regarding standards, processes, procedures
and controls and associated technology architectures, standards, products and
systems. With respect to each recommendation, Supplier shall provide the
following at a level of detail sufficient to permit Kraft to make an informed business
decision: (i) the projected cost to Kraft and the Eligible Recipients and
cost/benefit analyses; (ii) the changes, if any, in the personnel and other
resources Supplier, Kraft and/or the Eligible Recipients will require to
operate and support the changed environment; (iii) the resulting impact on the
total costs of Kraft and the Eligible Recipients; (iv) the expected
performance, quality, responsiveness, efficiency, reliability, security risks
and other service levels; and (v) general plans and projected time schedules
for development and implementation. Any assistance provided by  *  *  *
under this  *  *  *
or  *  *  *
(except as otherwise provided in  *  *  *) shall be at no  *  *  *
beyond the  *  *  *
specified in  *  *  *for
the Services, unless an  *  *  * has been approved by  *  *  *.



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9.5.2                     Supplier
Familiarity with Kraft Standards. Supplier is fully informed as to the
Kraft Standards as of the Commencement Date, including through due diligence
and its hiring of the Transitioned Employees, to the extent such Kraft
Standards have been made available to Supplier. Supplier shall be responsible
for including in the applicable Policy and Procedures Manual in accordance with
Section 9.1 the Kraft Standards
delivered to Supplier in writing prior to the Effective Date and indicated as
such. Additions, deletions or modifications to the Kraft Standards shall be
communicated in writing by Kraft to Supplier.


9.5.3                     Kraft
Authority and Supplier Compliance. Kraft shall have final authority to
promulgate Kraft Standards and Strategic Plans and to modify or grant waivers
from such Kraft Standards and Strategic Plans. Supplier shall (i) comply with
and implement the Kraft Standards and Strategic Plans in providing the
Services, (ii) work with Kraft to enforce the Kraft Standards and Strategic
Plans, (iii) modify the Services as and to the extent necessary and to a
schedule to conform to such Kraft Standards and Strategic Plans, and (iv)
obtain Kraft’s prior written approval for any deviations from such Kraft Standards
and Strategic Plans. Notwithstanding the requirements in this Agreement
regarding Supplier’s compliance with the Kraft Standards, Kraft acknowledges
that Supplier’s shared service Systems, which Supplier uses to provide services
to both Kraft and Supplier’s other customers, will not be required to be in
compliance with the Kraft Standards, provided that such Systems must still meet
the requirements set forth in Sections 13.2
and 15.11.1, and must otherwise be
sufficient to enable Supplier to meet its other obligations under this
Agreement.


9.5.4                     Financial,
Forecasting and Budgeting Support. To support Kraft’s forecasting and
budgeting processes, Supplier shall provide the following processes information
regarding the costs to be incurred by Kraft and/or the Eligible Recipients in
connection with the Services and the cost/benefit to Kraft and/or the Eligible
Recipients associated therewith: (i) actual and forecasted utilization of
Resource Units; (ii) actual and forecasted changes in the total cost or resource
utilization of Kraft and the Eligible Recipients associated with changes to the
environment; (iii) opportunities to modify or improve the Services, to reduce
the Charges, Pass-Through Expenses or retained expenses incurred by Kraft; and
(iv) such other information as Kraft may reasonably request. Such information
shall be provided at Kraft’s request and in accordance with the schedule
established by Kraft.


9.5.5                     Technology
Plan. Supplier shall develop and implement a technology and business
process plan that is consistent with the Kraft Standards and Strategic Plan and
that shows how Supplier will provide the Services to enable Kraft to achieve
the Strategic Plan objectives and to implement and support Kraft’s business,
information technology objectives and strategies (“Technology
Plan”). The development of the Technology Plan will be an iterative
process that Supplier shall carry out in consultation with Kraft. The timetable
for finalization of the Technology Plan shall be set each year having regard to
the timetable for the Strategic Plan.


9.5.5.1                                                               Process. The process for developing and approving the
Technology Plan shall be as follows. Supplier shall provide a draft Technology
Plan each year that includes multi-year implementation plans to achieve multi-year
objectives. Kraft shall review the draft Technology Plan and provide requested
amendments. Supplier shall incorporate any such amendments, unless it
reasonably believes that any requested amendment would not assist Kraft to
achieve its objectives and strategies. Kraft and Supplier shall escalate any
disagreements about requested amendments to the draft Technology Plan in
accordance with the dispute resolution procedure in Article
19. Following approval by Kraft, the draft Technology Plan will
replace the previous plan. Approval of the



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Technology
Plan by Kraft shall not relieve Supplier of any obligation under this Agreement
in relation to its provision of the Services.


9.5.5.2                                                               Contents. In the Technology Plan, Supplier shall, among
other things, include plans for: (A) refreshing Equipment and Software
(consistent with the refresh cycles defined in defined in this Agreement or its
Schedules); (B) adopting new technologies and business processes as part of the
Technology Evolution of the Services, as defined in this Agreement; and (C)
maintaining flexibility as described in Section 9.17.
In the Technology Plan, Supplier shall also present a reasonably detailed
implementation plan for the upcoming year, and a high
level implementation plan for subsequent years, in each case for the
achievement of the Strategic Plan and the Kraft Standards.


9.5.5.3                                                               Compliance. Supplier shall comply with the Technology Plan
at all times, unless Kraft agrees to depart from the Technology Plan. Any such
agreement to depart from the Technology Plan from the date on which it is
signed by Kraft will not relieve Supplier of its responsibilities under the
previous plan prior to the date of such agreement.


9.6                               Change
Control.


9.6.1                     Compliance
with Change Control Procedures. In making any change in the information
technology or other standards, processes, procedures and controls or associated
IT technologies, architectures, standards, products, Software, Equipment,
Systems, Services or Materials provided, operated, managed, supported or used
in connection with the Services, Supplier shall comply with the change control
procedures specified in the Policy and Procedures Manual (“Change
Control Procedures”). The Policy and Procedures Manual shall contain
a procedure that allows Kraft to exercise the approval rights in this Section
and complies with the following requirements:


9.6.1.1                                                               Impact Assessment. If Supplier desires to make any change,
upgrade, replacement or addition that may have an adverse impact or require
changes as described in Section 9.6.3
or increase the risk of Supplier not being able to provide the Services in
accordance with this Agreement or violate or be inconsistent with Kraft
Standards or Strategic Plans, then Supplier shall prepare a written risk
assessment and mitigation plan: (i) describing in detail the nature and extent
of such adverse impact or risk; (ii) describing any benefits, savings or risks
to Kraft or the Eligible Recipients associated with such change; and (iii)
proposing strategies to mitigate any adverse risks or impacts associated with
such change and, after consultation and agreement with Kraft, implement the
plan.


9.6.1.2                                                               Comparison Testing. Each time that Supplier makes a material
change (more than, for instance, routine maintenance or like for like changes
in the environment) to the Software, Equipment, Systems, Services or Materials
Supplier shall perform a comparison test at a reasonable and mutually agreed
level of detail to ensure the change will not have an adverse impact on the
costs, business, or environment of Kraft or an Eligible Recipient or on the
functionality interoperability, performance, accuracy, speed, legality,
responsiveness, quality or resource efficiency of, the Services. In addition,
at Kraft’s request, Supplier shall perform a comparison at a reasonable and
mutually agreed level of detail, between the amount of Resource Units required
to perform a representative sample of the Services being performed for Kraft
and the Eligible Recipients 



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immediately
prior to the change and immediately after the change. Kraft shall not be
required to pay for increased Resource Unit usage due to a change except to the
extent that such change is requested or approved by Kraft after notice from
Supplier of such increased Resource Unit usage.


9.6.1.3                                                               Prior
to making any change or using any new (e.g., not tested in or for the Kraft
environment) Software, Equipment or System to provide the Services, Supplier
shall have verified by appropriate testing that the change or item has been
properly installed, is operating in accordance with its specifications, is
performing its intended functions in a reliable manner and is compatible with
and capable of operating as part of the Kraft environment. This obligation
shall be in addition to any unit testing done by Supplier as part of routine
deployment or installation of Software or Equipment.


9.6.2                     Financial
Responsibility for Changes. Unless otherwise set forth in this Agreement,
including specified in Schedule 2, 4.2,
11  or  12, or approved in accordance with Section 9.6.3 or otherwise,
Supplier shall bear all charges, fees and costs associated with any change
desired by Supplier, including all charges, fees and costs associated with (i)
the design, installation, implementation, testing and rollout of such change,
(ii) any modification or enhancement to, or substitution for, any impacted
business process or associated Software, Equipment, System, Services or
Materials, (iii) any increase in the cost to Kraft or the Eligible Recipients
of operating, maintaining or supporting any impacted business process or
associated Software, Equipment, System, Services or Materials, and (iv) subject
to Section 9.6.8, any increase in
Resource Unit usage resulting from such change.


9.6.3                     Kraft
Approval – Cost, Adverse Impact. Supplier shall make no change which will
(i) increase Kraft’s total cost of receiving the Services; (ii) require
material changes to, or have an adverse impact on, Kraft’s or an Eligible
Recipient’s business, operations, facilities, business processes, systems,
software, utilities, tools or equipment (including those provided, managed,
operated, supported and/or used on their behalf by Kraft Third Party
Contractors); (iii) require Kraft or the Eligible Recipients, at their expense,
to install a new version, release, upgrade of, or replacement for, any Software
or Equipment or to modify any Software or Equipment; (iv) have a material
adverse impact on the functionality, interoperability, performance, accuracy,
speed, responsiveness, quality or resource efficiency of the Services; (v) have
an adverse impact on any Applications run by Kraft or the Eligible Recipients;
(vi) have an adverse impact on Supplier’s ability to adequately deliver the
Services; (vii) have an adverse impact on the cost, either actual or planned,
to Kraft of terminating all or any part of the Services or exercising its right
to in-source or use third parties; (viii) have an adverse impact on Kraft’s or
an Eligible Recipient’s environment (including its flexibility to deal with
future changes, interoperability and its stability); (ix) introduce new
technology to Kraft’s or an Eligible Recipient’s environment or business, to
the extent that such introduction has or may have an impact on Kraft’s or an
Eligible Recipient’s environment; (x) have an adverse impact on the
functionality, interoperability, performance, accuracy, speed, responsiveness,
quality, cost or resource efficiency of Kraft’s Retained Systems and Business
Processes; or (xi) violate or be inconsistent with Kraft Standards or Strategic
Plans as specified in Section 9.5,
without first obtaining Kraft’s approval, which approval Kraft may withhold in
its sole discretion. If Supplier desires to make such a change, it shall
provide to Kraft a written proposal describing in detail the extent to which
the desired change may affect the functionality, performance, price or resource
efficiency of the Services and any benefits, savings or risks to Kraft or the
Eligible Recipients associated with such change.


9.6.4                     Information
for Exercise of Strategic Authority. In order to facilitate Kraft’s
strategic control pursuant to Section 9.5,
Supplier will provide Kraft with such information as Kraft shall



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reasonably
require prior to making any proposed change. Such information shall include, at
a minimum, a description of the proposed rights of Kraft and the Eligible
Recipients with respect to ownership and licensing (including any related
restrictions) relating to such Software, Equipment or other technology or
Materials. Such description shall include the license fees, maintenance fees
and/or purchase or lease terms (if any) for use of such Software, Equipment or
other technology or Materials by Kraft, the Eligible Recipients and their
respective third party contractors upon termination or expiration of the Term
and any limitations or conditions on such use.


9.6.5                     Temporary
Emergency Changes. Notwithstanding the foregoing, Supplier may make
temporary changes required by an emergency if it has been unable to contact the
Kraft Contract Manager or his or her designee to obtain approval after making
reasonable efforts. Supplier shall document and report such emergency changes
to Kraft not later than the next business day after the change is made. Such
changes shall not be implemented on a permanent basis unless and until approved
by Kraft.


9.6.6                     Implementation
of Changes. Supplier will schedule and implement all changes so as not to
(i) disrupt or adversely impact the business or operations of Kraft or the
Eligible Recipients, (ii) degrade the Services then being received by them, or
(iii) interfere with their ability to obtain the full benefit of the Services.


9.6.7                     Planning
and Tracking. On a monthly basis, Supplier will prepare a rolling quarterly
“look ahead” schedule for ongoing and planned changes for the next three
months. The status of changes will be monitored and tracked by Supplier against
the applicable schedule.


9.6.8                     Comparisons.
For any change, Supplier shall, upon Kraft’s request, perform a comparison at a
reasonable and mutually agreed level of detail, between the amount of Resource
Units required to perform a representative sample of the Services being
performed for Kraft and the Eligible Recipients immediately prior to the change
and immediately after the change. Kraft shall not be required to pay for
increased Resource Unit usage due to a change except to the extent that such
change is requested or approved by Kraft after notice from Supplier of such
increased Resource Unit usage.


9.7                               Software
Currency.


9.7.1                     Currency
of Software. Subject to and in accordance with Sections
6.4, 9.5, 9.6, 9.7.3
and Schedule 4, Supplier will maintain
reasonable currency, in compliance at least with the currency requirements set
forth in Schedule 2 (including the
subsidiary schedules to Schedule 2)
and Schedule 4.2, for Software for
which it is financially responsible under this Agreement and to provide
maintenance and support for new releases and versions of Software for which it
is operationally responsible. At Kraft’s direction, Supplier shall operate
multiple releases or versions of Software, without any increase in the Monthly
Base Charges, consistent with Supplier’s obligations under Schedule
2.2. Supplier shall use commercially reasonable efforts to
support Software that is beyond the support requirements of Schedule 2.2. In addition, unless
otherwise directed by Kraft, Supplier shall keep Software within release levels
supported by the appropriate third party vendor to ensure compatibility with
other Software or Equipment components of the Systems and of Kraft’s Retained
Systems and Business Processes. For purposes of this Section, “reasonable currency” shall mean that, unless otherwise
directed by Kraft, (i) Supplier shall maintain Software within one Major
Release of the then current Major Release, unless otherwise specified in Schedule 2 and Schedule
4.2, and (ii) Supplier shall install Minor Releases promptly or
earlier, if requested by Kraft.



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9.7.2                     Evaluation
and Testing. Prior to installing a new Major Release or Minor Release,
Supplier shall evaluate and test such Release to verify that it will perform in
accordance with this Agreement and the Kraft Standards and Strategic Plans and
that it will not (i) increase Kraft’s total cost of receiving the Services;
(ii) require material changes to Kraft’s or the Eligible Recipient’s business,
facilities, systems, software or equipment; (iii) adversely impact the
functionality, interoperability, performance, accuracy, speed, responsiveness,
quality or resource efficiency of the Services; or (iv) violate or be inconsistent
with Kraft Standards or Strategic Plans or applicable Laws. The evaluation and
testing performed by Supplier shall be at least consistent with the reasonable
and accepted industry norms applicable to the performance of such Services and
shall be at least as rigorous and comprehensive as the evaluation and testing
usually performed by highly qualified service providers under such
circumstances.


9.7.3                     Approval
by Kraft. Notwithstanding Section 9.7.1,
Supplier shall confer with Kraft prior to installing any Major Release or Minor
Release, shall provide Kraft with the results of its testing and evaluation of
such Release and a detailed implementation plan and shall not install such
Release if directed not to do so by Kraft; provided that Supplier will be
provided relief from meeting any affected Service Levels due to Kraft’s
decision not to install such Release, but only if (i) Supplier notifies Kraft
that not installing the Release will impact Supplier’s ability to meet a
Service Level; (ii) Supplier identifies and considers all reasonable
alternatives available to address and avoid the impending performance failure;
and (iii) Supplier uses commercially reasonable efforts to meet such Service
Levels notwithstanding Kraft’s rejection of the Release. Where specified by
Kraft, Supplier shall not install new Software releases or make other Software
changes until Kraft has completed and provided formal signoff on successful
user acceptance testing. Supplier shall not install new Software releases or
make other Software changes if doing so would require Kraft or the Eligible
Recipients to install new releases of, replace, or make other changes to
Applications Software or other Software for which Kraft is financially
responsible unless Kraft consents to such change. Supplier shall install,
operate and support multiple versions of the same Software as and to the extent
directed to do so by Kraft.


9.7.4                     Updates
by Kraft. Kraft and the Eligible Recipients shall have the right, but not
the obligation, to install new releases of, replace, or make other changes to
Applications Software or other Software for which Kraft is financially
responsible under this Agreement.


9.8                               Network
Configuration Data.


Supplier (i) shall provide Kraft (and its third party
vendors) with network configuration data to the extent relevant to Kraft’s and
the Eligible Recipients use of the network supported by Supplier; and (ii)
hereby grants to Kraft (and its third party vendors) the unlimited right to use
such data in connection with businesses of Kraft and the Eligible Recipients.


9.9                               Access
to Specialized Supplier Skills and Resources; Disagreements Regarding New
Services.


9.9.1                     Specialized
Services. Upon Kraft’s request, Supplier shall provide Kraft and the
Eligible Recipients with prompt access to Supplier’s specialized services,
personnel and resources pertaining to information technology standards,
processes and procedures and associated software, equipment and systems on an
expedited basis taking into account the relevant circumstances (the “Specialized Services”). The Parties acknowledge that the
provision of such Specialized Services may, in some cases, constitute New
Services for which Supplier is entitled to additional compensation, but in no
event shall Supplier be entitled to any additional compensation for New
Services under this subsection unless the Kraft Contract Manager and Supplier
Account Executive, or their authorized designee, expressly agree upon such
additional 



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compensation
or Supplier’s entitlement to additional compensation is established through the
dispute resolution process.


9.9.2                     *  *  *
Regarding  *  *  *. If  *  *  *
authorizes  *  *  *
to proceed but the Parties disagree as to whether the  *  *  *
constitutes  *  *  *,  *  *  *
shall proceed with  *  *  *
to the extent that  *  *  * that
(a)  *  *  *
reasonably believes is  *  *  * to  *  *  *
or an  *  *  *(e.g.,  *  *  *
that if not  *  *  *
could  *  *  *
provision of  *  *  * or
(b) if  *  *  *
does not reasonably believe  *  *  * is  *  *  *
to     *  *  *,
and such  *  *  *
(i) can be performed by  *  *  * without requiring it to  *  *  *,
or (ii) if it requires  *  *  * use of a  *  *  *,
such  *  *  *
is within the  *  *  *
performing  *  *  *.
If        *  *  *
is required to proceed with the  *  *  * pursuant to the above, the  *  *  *
shall be submitted to  *  *  * pursuant to  *  *  *.
In that event, the Parties agree to expedite the  *  *  *.
For all other requests not meeting the conditions in clauses (a) or (b)
above,  *  *  *
may elect to not  *  *  *
on such       *  *  * until
the Parties agree on the key terms and conditions for  *  *  *,
including the scope and pricing for  *  *  *.


9.10                        Audit
Rights.


9.10.1              Contract
Records. Supplier shall, and shall cause its Subcontractors and suppliers to,
maintain complete and accurate records of and supporting documentation for all
Charges, all Kraft Data and all transactions, authorizations, changes,
implementations, soft document accesses, reports, filings, returns, analyses,
procedures, controls, records, data or information created, generated,
collected, processed or stored by Supplier in the performance of it’s
obligations under this Agreement (“Contract Records”);
provided, however, that the requirement above to cause Subcontractors and
suppliers to comply shall not apply to product vendor specialists who Supplier
engages on a temporary basis to address urgent problems, to Third Party
Contracts assumed from Kraft to the extent such contracts do not cover such
requirement, or vendors of Supplier Overhead Materials; it being understood
that Supplier shall remain responsible for retaining Contract Records
pertaining to its transactions with such Subcontractors and suppliers. Supplier
shall maintain such Contract Records in accordance with applicable Laws, subject
to Section 15.10.1. Supplier shall
retain Contract Records in accordance with Kraft’s record retention policy as
modified from time to time and provided to Supplier in writing during the Term
and any Termination Assistance Services period and thereafter through the end
of the second full calendar year after the calendar year in which Supplier
stopped performing Services (including Termination Assistance Services).


9.10.2              Operational
Audits. During the Audit Period Supplier shall, and, if and to the extent (i)
appropriate in Kraft’s reasonable judgment given the nature of the services or
products being provided by them and (ii) the purpose for the audit of any
Subcontractor or supplier cannot be reasonably satisfied, in the reasonable
judgment of Kraft’s auditors, through an audit of Supplier, shall cause its
Subcontractors and suppliers (other than Commodity Equipment and Transport
Providers, product vendor specialists who Supplier engages on a temporary basis
to address urgent problems, Third Party Contractors under Kraft assigned
contracts to the extent such contracts do not comply with this requirement as
of the Effective Date, and vendors of Supplier Overhead Materials) to provide
to Kraft (and internal and external auditors, inspectors, regulators and other
representatives that Kraft may designate from time to time, including
customers, vendors, licensees and other third parties to the extent Kraft or
the Eligible Recipients are legally or contractually obligated to submit to
audits by such entities) access at reasonable hours, and following reasonable
notice to the extent such notice is available to Kraft, to Supplier Personnel,
to the facilities at or from which Services are then being provided and to
Supplier records and other pertinent information, all to the extent relevant to
the Services and Supplier’s obligations under this Agreement. Such access shall
be provided for the purpose of performing audits and inspections, to (i) verify
the integrity of Kraft Data; (ii) examine the systems that process, store,



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support
and transmit that data; (iii) examine the internal controls (e.g., information
technology controls, organizational controls, input/output controls, system
modification controls, processing controls, system design controls, and access
controls) and the security, disaster recovery and back-up practices and
procedures; (iv) examine Supplier’s performance of the Services; (v) verify
Supplier’s reported performance against the applicable Service Levels; (vi)
examine Supplier’s measurement, monitoring and management tools; and (vii)
enable Kraft and the Eligible Recipients to meet applicable legal, regulatory
and contractual requirements (including those associated with the
Sarbanes-Oxley Act of 2002 and the implementing regulations promulgated by the
United States Securities and Exchange Commission and Public Company Accounting
Oversight Board), in each case (i) through (vii) to the extent applicable to
the Services. Supplier shall (i) provide any assistance reasonably requested by
Kraft or its designee in conducting any such audit, including installing and
operating audit software; (ii) make requested personnel, records and
information available to Kraft or its designee; and (iii) in all cases, provide
such assistance, personnel, records and information in an expeditious manner to
facilitate the timely completion of such audit. If an audit reveals a breach of
this Agreement by Supplier that is material relative to the scope of the audit,
Supplier shall promptly reimburse Kraft for the actual cost of such audit and
any damages, fees, fines, or penalties assessed against or incurred by Kraft as
a result thereof.


9.10.3              Financial
Audits. During the Audit Period Supplier shall, and, if and to the extent
the purpose for the audit of any Subcontractor cannot be reasonably satisfied,
in the reasonable judgment of Kraft’s auditors, through an audit of Supplier,
shall cause its Subcontractors (other than Commodity Equipment and Transport
Providers, product vendor specialists who Supplier engages on a temporary basis
to address urgent problems, Third Party Contractors under Kraft assigned
contracts to the extent such contracts do not comply with this requirement as
of the Effective Date, and vendors of Supplier Overhead Materials) to, provide
to Kraft (and internal and external auditors, inspectors, regulators and other
representatives that Kraft may designate from time to time, including
customers, vendors, licensees and other third parties to the extent Kraft or
the Eligible Recipients are legally or contractually obligated to submit to
audits by such entities) access at reasonable hours, and following reasonable
notice to the extent such notice is available to Kraft, to Supplier Personnel
and to Contract Records and other pertinent information to conduct financial
audits, all to the extent relevant to the performance of Supplier’s obligations
under this Agreement. Such access shall be provided for the purpose of
performing audits and inspections to (i) verify the accuracy and completeness
of Contract Records, (ii) verify the accuracy and completeness of Charges and
any Pass-Through Expenses and Out-of-Pocket Expenses, (iii) examine the
financial controls, processes and procedures utilized by Supplier, (iv) examine
Supplier’s performance of its other financial and accounting obligations, and
(v) enable Kraft and the Eligible Recipients to meet applicable legal,
regulatory and contractual requirements, in each case (i) through (v) to the
extent applicable to the Services and/or the Charges for such Services. Supplier
shall (A) provide any assistance reasonably requested by Kraft or its designee
in conducting any such audit, (B) make requested personnel, records and
information available to Kraft or its designee, and (C) in all cases, provide
such assistance, personnel, records and information in an expeditious manner to
facilitate the timely completion of such audit. If any such audit reveals an
overcharge by Supplier, and Supplier does not successfully dispute the amount
questioned by such audit in accordance with Article
19, Supplier shall promptly pay to Kraft the amount of such
overcharge, together with interest from the date of Supplier’s receipt of such
overcharge at the Interest Rate. In addition, if any such audit reveals an
overcharge of more than two percent of the audited Charges in any Charges
category, Supplier shall promptly reimburse Kraft for the actual cost of such
audit (including auditors’ fees). If any such audit reveals an undercharge by
Supplier in the Charges for a particular Charges category,



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Kraft
shall promptly pay to Supplier the amount of such undercharge, except to the
extent the invoice for such undercharge is not permitted by Section 12.1.4.


9.10.4              Audit
Assistance. Kraft and certain Eligible Recipients may be subject to
regulation and audit by governmental bodies, standards organizations, other
regulatory authorities, customers or other parties to contracts with Kraft or
an Eligible Recipient under applicable Laws, rules, regulations, standards and
contract provisions. If a governmental body, standards organization, other
regulatory authority or customer or other party to a contract with Kraft or an
Eligible Recipient exercises its right to examine or audit Kraft’s or an
Eligible Recipient’s books, records, documents or accounting practices and
procedures pursuant to such Laws, rules, regulations, standards or contract
provisions, Supplier shall provide all assistance reasonably requested by Kraft
or the Eligible Recipient in responding to such audits or requests for
information and shall do so in an expeditious manner to facilitate the prompt
closure of such audit or request.


9.10.5              General
Procedures.


9.10.5.1                                                         Supplier
shall obtain audit rights equivalent to those specified in this Section 9.10 from all
Subcontractors and will cause such rights to extend to Kraft.


9.10.5.2                                                         Notwithstanding
the intended breadth of Kraft’s audit rights, Kraft shall not be given access
to (A) the proprietary information of other Supplier customers, (B) Supplier
locations that are not related to Kraft, the Eligible Recipients or the
Services, (C) Supplier’s internal costs, except to the extent such costs are
the basis upon which Kraft is charged (e.g., reimbursable expenses,
Out-of-Pocket Expenses, Pass-Through Expenses or cost-plus Charges) and/or are
necessary to calculate the applicable variable Charges, or (D) other Supplier
Proprietary Information unrelated to the Services that Kraft does not otherwise
have a right to obtain pursuant to this Agreement.


9.10.5.3                                                         In
performing audits, Kraft shall use commercially reasonable efforts to avoid
unnecessary disruption of Supplier’s operations and unnecessary interference
with Supplier’s ability to perform the Services in accordance with the Service
Levels. If Kraft elects to install audit software within Supplier’s environment
notwithstanding Supplier’s willingness and ability to provide Kraft with all
data Kraft has the right to access hereunder and that it requires for its audit
review, Kraft will indemnify and hold harmless Supplier from any Losses arising
as a result of the installation or operation of that audit software.


9.10.5.4                                                         Following
any audit, Kraft shall conduct (in the case of an internal audit), or request
its external auditors or examiners to conduct, an exit conference with Supplier
to obtain factual concurrence with issues identified in the review.


9.10.5.5                                                         Kraft
shall be given adequate private workspace in which to perform an audit, plus
access to photocopiers, telephones, facsimile machines, computer hook-ups, and
any other facilities or equipment needed for the performance of the audit.


9.10.5.6                                                         In
performing audits, Kraft, Eligible Recipients and their internal and external
auditors, inspectors, regulators or other representatives shall comply with
Supplier’s physical and information security procedures and shall cause
external auditors (other than government auditors) to comply with Kraft’s
confidentiality obligations in Section 13.4.
External auditors designated by Kraft shall not be



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direct
Supplier competitors, which shall not in any case include professional
accounting organizations.


9.10.6              Supplier
Internal Audit. If Supplier determines as a result of its own internal
audit that it has overcharged Kraft, then Supplier shall promptly pay to Kraft
the amount of such overcharge, together with interest from the date of Supplier’s
receipt of such overcharge at the Interest Rate.


9.10.7              Supplier
Response. Supplier and Kraft shall meet promptly upon the completion of an
audit conducted pursuant to this Section 9.10
(i.e., an exit interview) and/or issuance of an interim or final report to
Supplier and Kraft following such an audit. Supplier will respond to each exit
interview and/or audit report in writing within 30 days, unless a shorter
response time is specified in such report. Supplier and Kraft shall develop and
agree upon an action plan to promptly address and resolve any deficiencies,
concerns and/or recommendations identified in such exit interview and/or audit
report and Supplier, at its own expense, shall undertake remedial action in
accordance with such action plan and the dates specified therein to the extent
necessary to comply with Supplier’s obligations under this Agreement.


9.10.8              Supplier
Response to External Audits. If an audit by a governmental body, standards
organization or regulatory authority having jurisdiction over Kraft, an
Eligible Recipient or Supplier results in a finding that Supplier is not in
compliance with any applicable Law or standard required by this Agreement,
including any generally accepted accounting principle, Supplier shall, at its
own expense and within the time period specified by such auditor, address and
resolve the deficiency(ies) identified by such governmental body, standards
organization or regulatory authority.


9.10.9              SAS 70
Audit.


9.10.9.1                                                         Regular Audits. Supplier shall appoint one of the American
Institute of Certified Public Accountants member firms (“AICPA
Auditors”) to conduct Type II SAS 70 audit of each of the following
Supplier’s operating systems using Supplier control standards located at a
Supplier’s Service Management Centers (“SMC”):
Mainframe OS 390, Windows NT/2000/2003, Unix HP, Unix IBM AIX, Unix Sun
Solaris, Linux, and AS 400 platforms. Each such audit is called a “SAS 70 Audit”. Supplier’s obligation under the preceding
sentences extends to Kraft, only to the extent that Supplier processes Kraft
Data on any such operating system. Supplier agrees that, each calendar year
during the Term, it will have one of the AICPA Auditors conduct, at Supplier’s
expense, at least one SAS 70 Audit covering each type of operating system from
which Kraft Data is processed at each SMC. Supplier shall provide Kraft with
one copy of each applicable audit report resulting from such SAS 70 Audit (“SAS 70 Report”). To the extent Kraft obtain Services from
Supplier’s SMC’s, any incremental remediation costs due to Supplier’s
non-compliance with its obligation to provide the Services in accordance with
Supplier’s control standards shall be borne by Supplier. For purposes of
clarification, the Parties agree that if Kraft changes its environment in a
manner that does not meet Supplier control standards, Supplier shall so notify
Kraft and any operating system so affected may be excluded from the SAS 70
Audits discussed above.


9.10.9.2                                                         Additional Audits. To the extent Kraft provides reasonable
notice and requests that, in addition to the SAS 70 Audit described in Section 9.10.9.1, Supplier conducts
a Kraft-specific SAS 70 Audit, Supplier shall do so at Kraft’s expense
(provided, Supplier notifies Kraft of such expense, obtains Kraft’s approval
and



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uses
commercially reasonable efforts to minimize such expense). If, however,
Supplier undertakes additional or different SAS 70 Audits (or equivalent
audits) of Supplier Facilities at, from or through which Services are provided
to Kraft and/or the Eligible Recipients (other than customer-specific audits
requested and paid for by other Supplier customers), Supplier shall accord
Kraft the rights described in the preceding paragraph with respect to such
audits.


9.10.9.3                                                         Audit Requirements. Supplier shall permit Kraft to
participate in the planning of each SAS 70 Audit described in Section 9.10.9.2, confer with Kraft
as to the scope and timing of each such audit and accommodate Kraft’s
requirements and concerns to the extent practicable. Unless otherwise agreed by
the Parties, each SAS 70 Audit described in Section
9.10.9.2 shall be designed and conducted by an independent
public accounting firm approved by Kraft to facilitate periodic compliance
reporting by Kraft and the Eligible Recipients under the Sarbanes-Oxley Act of
2002 (and implementing regulations promulgated by the United States Securities
and Exchange Commission and Public Company Accounting Oversight Board) and
comparable Laws in other jurisdictions. To the extent the resulting audit
report is relevant to Kraft and/or the Eligible Recipients, Supplier shall
provide a copy of such report to Kraft and its independent auditors for review
and comment as soon as reasonably practicable and in all events within 60 days
of completion. Supplier shall respond to such report in accordance with Section 9.10.7.


9.10.10       Information-Technology
Support. Supplier shall provide all information-technology support
reasonably related to the Services and required for Kraft and the Eligible
Recipients to meet all of the requirements imposed by applicable Laws,
including the Sarbanes-Oxley Act of 2002, and to meet Kraft’s and the Eligible
Recipients’ audit-compliance requirements, as such requirements may evolve from
time to time, and which requirements may be more stringent than regulatory
requirements imposed by applicable Laws. Notwithstanding the foregoing, Kraft
is solely responsible for providing Supplier in writing Kraft policies and
procedures with regard to finance and accounting standards and other regulatory
and applicable law requirements, including without limitation those related to
the Sarbanes-Oxley Act of 2002. Kraft shall retain responsibility for the
interpretation of applicable laws, rules, and regulations in order to determine
Kraft’s requirements for compliance. Kraft acknowledges that Supplier’s
compliance with Kraft’s changes in such Laws or audit compliance requirements
could result in Supplier performing New Services pursuant to Section 11.5.


9.10.11       Audit Costs.
*  * 
* and its  *  *  * and suppliers shall provide
the  *  *  *
described in  *  *  *
Section   * 
*  * at  *  *  *
to  *  *  *,
except as otherwise provided in  *  *  *  Section  * 
*  *.


9.11                        Agency
and Disbursements.


9.11.1              Disbursements.
Beginning on the Commencement Date, Supplier shall make payments to certain
lessors, licensors and vendors as paying agent of Kraft or the Eligible
Recipients, or shall reimburse Kraft for payments made by Kraft or the Eligible
Recipients to such lessors, licensors and vendors, if and to the extent such
payments relate or to Third Party Contracts, Equipment leases or Third Party
Software licenses as to which Supplier is financially responsible, but which
have not been formally transferred to Supplier.


9.11.2              Limited
Agency. Kraft hereby appoints Supplier as its limited agent during the Term
solely for the purposes of and to the extent required for the administration of
and payment of Pass-Through Expenses, amounts under Managed Third Party
Contracts and Managed Telecom Transport



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Agreements,
and amounts under Third Party Contracts, Equipment leases and Third Party
Software licenses for which Supplier is financially responsible under Schedules 2, 4.2,
11  or 12.
Kraft shall appoint Supplier as its limited agent during the Term for other
purposes as and to the extent it becomes necessary in order for Supplier to
perform its responsibilities under this Agreement. At Supplier’s request, Kraft
shall provide additional authorizations reasonably required to enable Supplier
to fulfill its responsibilities hereunder in connection with such contracts,
agreements and licenses. Kraft shall provide, on a timely basis, such
affirmation of Supplier’s authority to such lessors, licensors, suppliers and
other third parties as Supplier may reasonably request.


9.11.3              Reimbursement
for Substitute Payment. If either Party in error pays to a third party an
amount for which the other Party is responsible
under this Agreement, the Party that is responsible for such payment shall
promptly reimburse the paying Party for such amount.


9.11.4              Notice
of Decommissioning. Supplier agrees to notify Kraft promptly if and to the
extent any Kraft or Eligible Recipient owned
Equipment or Kraft or Eligible Recipient leased Equipment will no longer be
used to provide the Services. The notification will include the identification
of the Equipment, and the date it will no longer be needed by Supplier, along
with the reason for decommissioning. Upon receipt of any such notice, Kraft may
(or may cause the applicable Eligible Recipient to), in its sole discretion,
terminate the Equipment lease for such leased Equipment as of the date
specified in such notice and sell or otherwise dispose of or redeploy such
Kraft or Eligible Recipient owned Equipment that is the subject of such a notice
as of the date specified in such notice. Upon Supplier ceasing to use any
Equipment (or, in the case of leased Equipment, upon the last day Kraft or
Eligible Recipient is obligated to make such leased Equipment available to
Supplier, if earlier), Supplier shall return the same to Kraft, the Eligible
Recipients and/or their designee(s) in condition at least as good as the
condition thereof on the date Supplier took possession or control thereof,
ordinary wear and tear excepted. Supplier shall, at Supplier’s expense, deliver
such Equipment to the location designated by Kraft, the Eligible Recipients
and/or their designee(s).


9.11.5              Telecom
Transport Services. To the extent necessary to provide the Services, Kraft
hereby appoints Supplier as its limited agent
during the Term solely for the purpose of negotiating, executing and
administering one or more agreements with third party telecom transport
providers with whom Supplier is legally incapable of contracting directly
(collectively, “Managed Telecom Transport Providers”);
provided, that Supplier shall obtain Kraft’s prior written consent to any such
agency agreement. Supplier shall notify Kraft of changes that must be made to
cause the terms and conditions of such agreements with Managed Telecom Transport
Providers (“Managed Telecom Transport Agreements”)
to be consistent in all material respects with the terms and conditions of this
Agreement, and, at Kraft’s request, assist Kraft in making those changes.
Supplier shall manage each Managed Telecom Transport Provider as a managed
third party pursuant to Section 6.6.


9.12                        Subcontractors.


9.12.1              Use
of Subcontractors. Prior to entering into a subcontract with a third party,
or otherwise adding an existing Supplier
subcontractor, for any portion of the Services that does not qualify as a
Shared Subcontractor in accordance with Section 9.12.3,
Supplier shall (i) at Kraft’s request, provide Kraft with a detailed
description of the scope and material terms (other than pricing and other terms
not pertinent to Kraft) of the proposed subcontract, including the duration of
the contract, termination rights, obligations for which Kraft would be liable
in the event Kraft elects to terminate this Agreement for convenience, and
other information Kraft may reasonably request; (ii) give Kraft reasonable
prior notice of the subcontract, specifying the components of



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the
Services affected, the scope of the proposed subcontract, the identity and
qualifications of the proposed Subcontractor, and the reasons for
subcontracting the work in question, the location of the Subcontractor
facilities from which the Services will be provided, the extent to which the
subcontract will be dedicated, and the Subcontractor’s willingness to grant the
rights described in Section 6.4.3
upon expiration or termination; and (iii) obtain Kraft’s prior written approval
of such Subcontractor. Kraft’s approval of a Subcontractor shall not be deemed
in any way to relieve Supplier from its obligations to perform the Services
being performed by the Subcontractor on Supplier’s behalf. Supplier’s
agreements for Supplier’s provision of commodity Equipment that Supplier is
required to supply as part of the Services (i.e., not on a cost-reimbursement
or Pass-Through Expense basis) shall not constitute subcontracts that are
subject to Kraft’s approval under this Section 9.12,
provided that such contracts do not include the provision of any Services and
do not affect any right, liability or obligation of Kraft during or after the
Term.


9.12.2              Right
to Revoke Approval. Kraft also shall have the right during the Term to
revoke its prior approval of a Subcontractor and
direct Supplier to replace such Subcontractor as soon as possible. Supplier
shall have a reasonable opportunity to investigate Kraft’s concerns, correct the
Subcontractor’s deficient performance and provide Kraft with a written action
plan to assure that such deficient performance will not recur. If Kraft is not
reasonably satisfied with the Supplier’s efforts to correct the Subcontractor’s
deficient performance and/or to ensure its non-recurrence, the Supplier shall,
as soon as possible, remove and replace such Subcontractor. Supplier shall
continue to perform its obligations under the Agreement, notwithstanding the
removal of the Subcontractor. If Kraft requests the removal of the
Subcontractor because the Subcontractor’s performance is materially deficient
or because of the Subcontractor’s failure to comply with its obligations in
this Agreement, such removal shall be at no additional cost to Kraft. If Kraft
requests the removal of the Subcontractor for other reasons, then Kraft will be
responsible for the net amount of (i) any termination or cancellation costs
Supplier reasonably incurs with respect to removing such Subcontractor, and
(ii) the differential between the cost of the replacement Subcontractor to
Supplier as compared to the cost of the removed Subcontractor, provided that
Supplier has (a) notified Kraft of such costs before Kraft’s final decision,
and (b) Supplier uses commercially reasonable efforts to minimize such costs.
Kraft shall have no responsibility under this Section
9.12.2 for any termination charges, cancellation fees, or other
costs that Supplier may incur to the extent the removal of a Subcontractor
results from changes in the volume or scope of Services, recognizing that such
changes will be subject to the pricing set forth in Schedule
4..


9.12.3              Shared
Subcontractors. Supplier may, in the ordinary course of business, enter
into subcontracts related to Kraft (A) for 
*  *  * and (B) with a total estimated
value of less than  *  *  *
for (i) for  *  *  *
that are not  *  *  *
and that do not  *  *  *
with  *  *  *personnel
or the  *  *  *
at    *  *  *,
(ii) with  *  *  *for
the provision of  *  *  *,
or (iii)  *  *  *
specialists who Supplier engages on a  *  *  * to address  *  *  *
(collectively, “Shared Subcontractors”); provided,
that such Shared Subcontractors possess the training and experience, competence
and skill to perform the work in a skilled and professional manner. Supplier
shall not be required to obtain Kraft’s prior approval of Shared
Subcontractors. If, however, Kraft expresses dissatisfaction with the services
of a Shared Subcontractor, Supplier shall work in good faith to resolve Kraft’s
concerns on a mutually acceptable basis and, at Kraft request, replace such
Shared Subcontractor at no additional cost to Kraft.


9.12.4              Supplier
Responsibility. Unless otherwise approved by Kraft, the terms of any
subcontract (but not including contracts for
Supplier Overhead Materials) must be consistent with this Agreement, including:
(i) confidentiality and intellectual property obligations; (ii) Kraft’s
approval rights (which must apply directly to the Subcontractor); (iii)
compliance with Kraft Standards, Strategic



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Plans
and applicable Laws; (iv) compliance with Kraft’s policies and directions; (v)
audit rights as described in Section 9.10;
(vi) Key Supplier Personnel; and (vii) insurance coverage, as described in Section 16.1.1, with coverage
limits consistent with the scope of the work to be performed by such
Subcontractors. Supplier shall use a common methodology and tool set to ensure
all of the Subcontractors are managed effectively and efficiently. Kraft
acknowledges and approves Supplier’s use of Kraft assigned contracts notwithstanding
that such contracts do not comply with all of the requirements of this
Agreement as of the Effective Date. Notwithstanding the terms of the applicable
subcontract, the approval of such Subcontractor by Kraft or the availability or
unavailability of Subcontractor insurance, Supplier shall be and remain
responsible and liable. Supplier shall be responsible for any failure by any
Subcontractor or Subcontractor personnel to perform in accordance with this
Agreement or to comply with any duties or obligations imposed on Supplier under
this Agreement to the same extent as if such failure to perform or comply was
committed by Supplier or Supplier employees. Supplier shall be responsible for
the performance of all such Subcontractors and Subcontractor personnel
providing any of the Services hereunder. Supplier shall be Kraft’s sole point
of contact regarding the Services, including with respect to payment.


9.13                        Government
Contract Flow-Down Clauses.


9.13.1              General.
The Parties acknowledge and agree that, as a matter of federal procurement law,
Supplier may be deemed a “subcontractor” to Kraft
and/or an Eligible Recipient under one or more of their contracts with the
federal government, that the Services provided or to be provided by Supplier in
such circumstances constitute “commercial items” as that term is defined in the
Federal Acquisition Regulation, 48 C.F.R. Section 52.202, and that “subcontractors”
providing “commercial items” under government contracts are subject to certain
mandatory “flow-down” clauses (currently, (i) Equal Opportunity, (ii)
Affirmative Action for Special Disabled and Vietnam Era Veterans, and (iii)
Affirmative Action for Handicapped Workers) under the Federal Acquisition
Regulation, 48 C.F.R. Section 52.244-6. The Parties agree that to the extent
these specific clauses and any other government-mandated clauses are required
to be flowed down to Supplier, Supplier shall comply with such clauses at no
additional cost to Kraft.


9.13.2              Special
Requirements. The Parties do not believe that the Services provided by
Supplier under this Agreement will be subject to
government flow-down requirements other than those associated with any
subcontracts for commercial items. Should compliance by Supplier with
additional flow-down provisions nevertheless be required by the federal
government due to Supplier being a subcontractor under a government contract in
which the Services fail to qualify as “commercial items”, then Kraft will
reimburse Supplier for additional direct incremental costs of compliance
approved by Kraft provided that (i) Supplier notifies Kraft of such costs
before Supplier incurs them or begins providing the applicable Services, (ii)
uses commercially reasonable efforts to minimize such costs, and (iii) Supplier
equitably allocates such costs among Kraft and any other Supplier customers who
have similar compliance requirements.


9.13.3              Special
Purchases Support. Kraft’s intent is to purchase products and services from
Small Disadvantaged Businesses and Small Woman
Owned Businesses (collectively “SDBs”) in order
to satisfy its goals and comply with government procurement laws and
regulations. To help Kraft achieve its goals, Supplier agrees to establish as a
goal the purchase, when commercially feasible, of products and services from
SDBs, on behalf of Kraft and/or the Eligible Recipients, in the performance of
Supplier’s obligations under this Agreement. Supplier, as part of the Service,
shall track invoice payments made to SDBs, and shall submit a quarterly summary
to Kraft with respect to such activity. The failure of Supplier to meet its
goal under this Section will not be considered a material breach of this
Agreement.



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9.14                        Additional
Telecommunications Matters.


9.14.1              Connection.
To the extent technologically and operationally compatible and permitted by
applicable Laws, (including any applicable tariffs
other than tariffs filed by Supplier), the Services may be
connected/interconnected by Kraft or an Eligible Recipient to other services
provided by Supplier or to services provided by Kraft or an Eligible Recipient
itself or any other vendor.


9.14.2              Change
of Provider. To the extent Supplier elects to change one or more of its
underlying providers of inter-exchange facilities,
such change shall not, unless otherwise agreed, result in any interruption,
diminution in service quality or increase in the Charges.


9.14.3              Compatibility.
With respect to the compatibility of the Services with Equipment for which
Kraft is financially and operationally
responsible, Supplier agrees to consult with Kraft on request concerning the
compatibility of Services with such Equipment including, in the case of
Equipment and related software that Kraft proposes to acquire, informing Kraft
of the likely effects (if any) of the use of such Equipment and related
software on the quality, operating characteristics and efficiency of the
Services and the effects (if any) of the Services on the operating
characteristics and efficiency of such Equipment and related software. Supplier
further agrees to provide all interface specifications requested by Kraft with
respect to any Service.


9.14.4              Interconnections.
Without limiting Supplier’s other obligations hereunder, at Kraft’s request,
Supplier shall connect new Eligible Recipients and
Authorized Users to the Kraft voice and data networks and systems as soon as
practicable. If Supplier determines that the Systems used by such new Eligible
Recipients or Authorized Users are incompatible in any material respect with
the Kraft Standards or any other requirements for interconnection with the
Kraft voice and data networks and systems, Supplier shall promptly notify Kraft
prior to proceeding with such connection. Kraft shall have the right to require
that Supplier proceed with the interconnection notwithstanding Supplier’s concerns
regarding incompatibility. Supplier’s failure to meet the Service Levels or its
other obligations shall be excused if and to the extent such failure is
attributable to the connection of such new Eligible Recipients and Authorized
Users to the Kraft voice and data networks and systems upon Kraft’s
authorization, and despite Supplier’s notice that such connection may cause
such failure as a result of the reported technical incompatibility.


9.15                        Applicable
Authority Actions.


9.15.1              Applicable
Tariff. If Supplier, its Subcontractors and/or any Managed Telecom
Transport Providers are required to file a tariff
or other regulatory submission pursuant to Section 9.15.2,
below, and the initial tariff option or regulatory submission to implement this
Agreement is not permitted to become effective by the Applicable Regulatory
Authority or if any ruling, order or determination of such Applicable
Regulatory Authority shall materially and adversely affect Supplier’s or its
Subcontractors’ or Managed Telecom Transport Providers’ ability to offer the
Services under the terms and conditions set forth herein, Supplier shall
develop a proposal the purpose of which will be to provide comparable service
to Kraft or an Eligible Recipient at rates at or below those set forth in, and
on terms and conditions substantially equivalent to those contained in, this
Agreement, to the extent permissible under applicable Laws. Kraft shall
cooperate with Supplier in the development of such a proposal. Such service may
be provided under (i) other existing Supplier, Subcontractor or Managed Third
Party Telecom Transport Provider tariffs (if that can be done at such tariffs’
then-effective rates without further revision) or (ii) newly filed tariffs or
regulatory submissions or (iii) public postings by Supplier, Subcontractor or
Managed Third Party Telecom Transport Provider of rates and other terms of
service. If (x) Supplier is unwilling or unable to develop such proposal within
20 business days



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of
any such event, (y) such proposal is not reasonably acceptable to Kraft and
Kraft notifies Supplier thereof as soon as Kraft becomes aware it is not
reasonably acceptable and provides Supplier with ten (10) business days to
cause the proposal to be reasonably acceptable to Kraft or (z) such proposal
fails to take effect within 20 business days of the Parties’ agreement to such
proposal, Kraft, as its sole remedy for the failure to develop or so implement
such a proposal, shall have the right to terminate any affected portions of
this Agreement in accordance with Section 4.5.1.
A proposal shall be deemed not reasonably acceptable to Kraft if it fails to
comply with applicable Law, increases Kraft’s total costs of receiving the
Services, requires material changes to Kraft’s or an Eligible Recipient’s
facilities, systems, software, utilities, tools or equipment, has a material
adverse impact on the functionality, interoperability, performance, accuracy,
speed, responsiveness, quality or resource efficiency of the Services or
violates or is inconsistent with Kraft Standards or Strategic Plans as
specified in Section 9.5.


9.15.2              Regulatory
Submission. To the extent required by Law, and within 30 days after the
Effective Date of this Agreement, Supplier, its
Subcontractors and/or any Managed Third Party Telecom Transport Provider shall
file any applicable tariff, tariff option or other regulatory submission
required to implement the Agreement. Such filing shall be consistent in all
material respects with all applicable provisions of this Agreement and shall
not be less favorable to Kraft and the Eligible Recipients than the rates and
other terms and conditions of this Agreement. Supplier shall make a copy of any
applicable filings available to Kraft for Kraft’s review and inspection and
shall provide Kraft with a copy of all amendments to such tariffs or other
filings having a bearing on the Agreement when such amendments are filed with
the appropriate governmental agencies. In addition, Supplier shall provide a
draft of any revisions that may substantively affect Kraft’s rights and
obligations under this Agreement at least 10 days before such revisions are
filed with and Applicable Regulatory Authority, where feasible. If Supplier,
its Subcontractors and/or any Managed Third Party Telecom Transport Provider
makes revisions to a tariff, tariff option or other submission that materially
and adversely affect Kraft’s rights hereunder without obtaining Kraft’s prior
written consent, Kraft shall have the right to terminate any affected portions
of this Agreement without payment of Termination Charges or other liability.


9.15.3              Agreement
to Not Interpose Defense. Each of the Parties agrees that it will not (and
Supplier shall cause its Subcontractors and use
commercially reasonable efforts to cause Managed Telecom Transport Providers
not to) interpose as a defense in any action to enforce the other Party’s
rights under this Agreement that such terms and conditions are invalid or
unenforceable because of inconsistency with Supplier’s or its Subcontractors’
or Managed Telecom Transport Providers’ tariffs, tariff options or other
regulatory submission, if any.


9.15.4              Detariff.
If, at any time during the Term, an Applicable Regulatory Authority with
jurisdiction over a material portion of the
Services, pursuant to a final order that is not subject to further appeal,
alters the rules or regulations applicable to Supplier, its Subcontractors
and/or Managed Telecom Transport Providers or the Services in a manner that
requires or permits Supplier, its Subcontractors and/or Managed Telecom
Transport Providers to detariff all or any material portion of the Services,
Supplier shall, shall cause its Subcontractors and use commercially reasonable
efforts to cause Managed Telecom Transport Providers to, promptly detariff (and
withdraw any tariff, tariff option or other regulatory submission specifically
relating to) such Services or the affected portions thereof.


9.15.5              Tariff
Copy and Revision. Supplier shall make a copy of its, its Subcontractors’
and/or Managed Telecom Transport Providers’ filed
tariffs available to Kraft for Kraft’s review and inspection and shall, in
accordance with Supplier’s, its Subcontractors’ and/or Managed Telecom
Transport Providers’ standard tariff update service, provide Kraft with a copy
of all amendments to the tariffs related to this Agreement when such amendments
are filed with the appropriate



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regulatory
authority. In addition, Supplier shall provide a draft of any of its tariff
revisions that substantively adversely affect Kraft’s rights and obligations
under this Agreement at least 10 days before such revisions are filed with the
Applicable Regulatory Authority, where feasible. Supplier shall use
commercially reasonable efforts to cause its Subcontractors, and use
commercially reasonable efforts to cause Managed Telecom Transport Providers
to, make no revisions to a tariff or a tariff option that materially and
adversely affect Kraft’s rights hereunder without obtaining Kraft’s prior
written consent.


9.15.6              Division
of Agreement. If, at any time during the Term, an Applicable Regulatory
Authority with jurisdiction over a material
portion of the Services determines that it is unlawful for Supplier, its
Subcontractors and/or Managed Telecom Transport Providers to provide both
regulated and non-regulated Services under a single agreement, the Parties
agree to execute a separate agreement under which the non-regulated services
will be provided and, except as otherwise agreed by the Parties or required by
applicable Laws, the terms and conditions applicable to such non-regulated
Services shall be identical in all non-material respects to those provided
herein.


9.15.7              Adverse
Law. If, at any time during the Term, an Applicable Regulatory Authority
with jurisdiction over a material portion of the
Services promulgates or passes a Law that adversely affects Supplier’s or its
Subcontractors’ ability to offer the Services under the terms and conditions
set forth herein, to the extent permitted by applicable law Supplier shall
provide service to Kraft and the Eligible Recipients under other arrangements
with rates, terms and conditions no less favorable to Kraft and the Eligible
Recipients than those set forth in this Agreement. If any such Law shall
require the enhancement or improvement of a Service provided under this
Agreement, Supplier shall not, and shall use commercially reasonable efforts to
cause its Subcontractors not to, resist same and shall improve or enhance such
Service as required.


9.16                        Unauthorized
Use.


Kraft and Supplier shall cooperate fully in efforts to
prevent and cure unauthorized use of the Services by expeditiously informing
each other of suspected abuse and, when known, the identity of the responsible
individuals. Supplier shall advise Kraft regarding methods to minimize Kraft’s
and the Eligible Recipients’ exposure to misuse and abuse of Kraft’s and the
Eligible Recipients’ service that results from the operation of Kraft or
Eligible Recipient-provided systems, equipment, facilities or services
interconnected with Supplier’s Services. Supplier shall provide assistance to
Kraft and/or the Eligible Recipients’ upon Kraft’s request in Supplier’s
efforts to minimize ongoing misuse or abuse through timely reconfiguration and
limitation of the Services. Appropriate representatives of Supplier, Kraft and
Eligible Recipient shall meet at the request of Kraft to establish appropriate
operational fraud control procedures. The Parties acknowledge and agree that
Supplier’s performance of its obligations under this Section
9.16 shall be subject to and in accordance with applicable
Privacy Laws.


9.17                        Technological
Evolution.


9.17.1              Obligation
to Evolve. Supplier acknowledges and agrees that its current technologies
and business processes shall continue to evolve
and change over time, and at a minimum, shall remain consistent with (i) the
established best practices of leading providers of information technology and
other in-scope services; (ii) the business, information technology objectives
and competitive needs of Kraft and the Eligible Recipients; and (iii) the
services, functions, processes and responsibilities that are of a nature and
type that would ordinarily be performed by the organization or part of the
organization performing services similar to the Services within a company in
the packaged-consumer-goods industry. Supplier acknowledges that Kraft operates



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in
an environment characterized by constant change that directly affects the
delivery of Services. Subject to Section 9.5,
Supplier shall provide the Services using current technologies and business
processes that will enable Kraft and the Eligible Recipients to take advantage
of advances in the industry and support their efforts to maintain
competitiveness in the markets in which it competes. In addition, subject to Section 9.5, Supplier shall make such
current technologies and business processes available to Kraft to perform
information technology services and other related services and functions on
behalf of itself and/or the Eligible Recipients at or from Kraft facilities.
Supplier will, with Kraft’s prior approval, use such advancements and
improvements without additional charge to Kraft unless such advancements and
improvements fall within the definition of New Services. The foregoing shall
not be interpreted to require Supplier to refresh Equipment at a rate that is
faster than the rate specified in Schedule 4.2
for such Equipment.


9.17.2              Annual
Technology and Business Process Audit. Kraft may elect to conduct an annual
technology and business process audit to benchmark
Supplier’s then-current technologies and business processes against the
established best practices of leading providers of information technology
services and other in-scope outsourcing services. If any such audit reveals
that the technologies and business process then utilized by Supplier are not at
the level of such established best practice,
then Kraft and the Supplier will review the results of the audit and promptly
establish and implement a plan to implement identified established best
practices.


9.17.3              Obligation
to Propose Technological Evolutions. Supplier shall identify and propose
the implementation of Technological Evolutions
that are likely to: (i) improve the efficiency and effectiveness of the
Services (including cost savings); (ii) improve the efficiency and effectiveness
of the information technology services and functions performed by or for Kraft
and the Eligible Recipients at or from Kraft Facilities; (iii) result in cost
savings or revenue increases to Kraft and the Eligible Recipients in areas of
their business outside the Services; (iv) enhance the ability of Kraft and the
Eligible Recipients to conduct their business and serve their customers; and
(v) achieve the objectives of Kraft and the Eligible Recipients (as described
in Section 1.2) faster and/or more efficiently
than the then current strategies. Supplier shall regularly make recommendations
to Kraft with regard to the Technology and Business Process Evolution that
Supplier sees in established best practice in the industry.


9.17.4              Supplier
Briefings and Technology and Business Process Audit. Supplier shall
routinely and regularly monitor and analyze
Technological Evolutions of possible interest or applicability to Kraft and the
Eligible Recipients. At least semi-annually, Supplier shall meet with Kraft to
formally brief Kraft regarding such Technological Evolutions. Such briefing
shall include Supplier’s assessment of the business impact, performance
improvements and cost savings associated with such Technological Evolutions.
Where requested by Kraft, Supplier shall develop and present to Kraft proposals
for (i) implementing Technological Evolutions or (ii) changing the direction of
Kraft’s then current strategy.


9.17.5              Supplier
Developed Advances. If Supplier develops or implements technological
advances in or changes to the business processes
and services and associated technologies used to provide the same or
substantially similar services to other Supplier customers or Supplier develops
or implements new or enhanced processes, services, software, tools, products or
methodologies to be offered to such customers (collectively, “New Advances”), Supplier shall, subject to Section 11.5 and its contractual
obligations to its other customers, (i) offer Kraft the opportunity to serve as
a pilot customer in connection with the implementation of such New Advances;
and (ii) if  *  *  *
, offer  *  *  *
preferred  *  *  *
and the  *  *  *
to be  *  *  *
of the  *  *  *
to implement and receive the  *  *  * of any  *  *  *.



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9.17.6              Flexibility.
Supplier shall ensure that the technologies and business process strategies it
employs to provide the Services meet industry
standards and are flexible enough to allow integration with new technologies or
business processes, or significant changes in Kraft’s or an Eligible Recipient’s
business objectives and strategies. For example, Equipment must have sufficient
scalability and be sufficiently modular to allow integration of new
technologies without the need to replace whole, or significant parts of,
systems or business processes (e.g., made to be a one-to-many model) to enable
Kraft’s and/or the Eligible Recipients’ business to become more scalable and
flexible.


9.17.7              Equipment
Implementation and Refresh. Supplier shall be fully responsible for the
implementation of new Equipment in the ordinary
course of Technological Evolution, provided that the foregoing shall not be
interpreted to require Supplier to refresh Equipment at a rate that is faster
than the rate specified in Schedule 4.2
for such Equipment. Supplier shall refresh all Equipment in accordance with
Kraft’s refresh strategies, as set out in the Technology Plan, and as necessary
to provide the Services in accordance with the Service Levels and satisfy its
other obligations under this Agreement. If Supplier is aware that these
strategies differ from generally accepted practice (or there are any other
areas of concern in relation to such strategies) it shall provide Kraft with
notice of that fact and, upon request, provide Kraft with further information
as to how to more closely align the strategies with generally accepted
practice. Kraft shall have the right to waive refresh of Equipment under its
control. If Kraft does waive refresh of Equipment under its control, Supplier
will work with Kraft to assess and address any impact on Supplier’s support
costs consistent with Section 11.2.
Supplier’s failure to meet the Service Levels shall be excused if and to the
extent such failure is attributable to Kraft’s waiver of Equipment refresh but
only if: (i) Supplier notifies Kraft prior to its final decision that Supplier
will not be able, using commercially reasonable efforts, to meet such Service
Levels under such circumstances; (ii) Supplier identifies and considers
commercially reasonable alternatives available to address and avoid the
impending performance failure; and (iii) Supplier uses commercially reasonable
efforts, without additional cost to Supplier, to meet such Service Levels
notwithstanding Kraft’s rejection of or insistence on waiving such Equipment
refresh.


9.17.8              Software
Implementation and Refresh. Supplier shall be fully responsible for the
implementation of new or changed Software, tools
and methodologies with respect to and consistent with the then current scope of
Supplier’s Services as set forth in Schedule 2
and elsewhere in this Agreement, and consistent with the allocation of
financial and operational responsibilities set forth in Schedule
4.2, in the ordinary course of Technological Evolution. Supplier
shall (i) refresh Software in accordance with Section
9.7 of this Agreement and the Technology Plan; and (ii) provide
training to Kraft staff regarding the use of any new or changed Software, tools
and methodologies. Kraft shall have the right to waive refresh of Software,
tools or methodologies under its control. If Kraft does waive refresh of
Software, tools or methodologies under its control, Supplier will work with
Kraft to assess and address any impact on Supplier’s support costs. Supplier’s
failure to meet the Service Levels shall be excused if and to the extent such
failure is attributable to Kraft’s waiver of Software, tools or methodologies
refresh but only if: (i) Supplier notifies Kraft that Supplier will not be
able, using commercially reasonable efforts, to meet such Service Levels under
such circumstances; (ii) Supplier identifies and considers commercially
reasonable alternatives available to address and avoid the impending
performance failure; and (iii) Supplier uses commercially reasonable efforts,
without additional cost to Supplier, to meet such Service Levels
notwithstanding Kraft’s rejection of or insistence on waiving such of Software,
tools or methodologies refresh.


9.17.9              Included
in  * 
*  *. *  *  *
and  *  *  *
shall be included in the  *  *  * and  *  *  *
shall deploy, implement and support  *  *  *
and  *  *  *
throughout  *  *  *.
*  *  * shall be financially



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responsible
for the  *  *  *
of implementing  *  *  *
and  *  *  *
to the extent such implementation involves categories of   *  *  *
as to which responsibility is allocated to 
*  *  *. The performance of projects
required to implement  *  *  * also shall be included within
the  *  *  *.
Kraft shall       *  *  *
sums for implementation only if and to the extent (i) the  *  *  *
or  *  *  *
is considered a     *  *  *
pursuant to  *  *  *,
or (ii)  *  *  *
requests accelerated implementation of the 
*  *  * or  *  *  *
(i.e., more rapidly than previously contemplated in the  *  *  *
or established * 
*  *), and in each
case, only if and to the extent additional 
*  *  * and  *  *  *
are required to implement the  *  *  * or *  *  *
in the desired  *  *  *.


9.18                        Retained
Systems and Business Processes.


9.18.1              No
Adverse Effect. Supplier shall not, by any act or omission, adversely
affect or alter the functionality, interoperability,
performance, accuracy, speed, responsiveness, quality, cost or resource
efficiency of Kraft’s Retained Systems and Business Processes without the prior
consent of Kraft. Nor shall Supplier, by any act or omission, require changes
to Kraft’s Retained Systems and Business Processes, including associated
business processes, applications, systems, software, utilities, tools or
equipment, without the prior consent of Kraft.


9.18.2              Interface.
Supplier shall ensure that the processes, Systems, Software and Equipment used
by Supplier to provide the Services will interface
and integrate with the Retained Systems and Business Processes.


9.18.3              Keep
Informed. Supplier shall inform itself and maintain up to date knowledge
about all aspects of the existing and future Retained
Systems and Business Processes related to the Services, provided Supplier is
given reasonable access to, and notice of changes affecting, such systems and
business processes.


9.18.4              Assistance.
As part of the Services, Supplier shall provide Kraft (upon Kraft’s request)
with Services in relation to Retained Systems and
Business Processes, including: (i) liaising with Kraft or third parties
regarding the impact of any alterations to the Retained Systems and Business
Processes and vice versa; and (ii) identifying favorable vendors, and acting as
Kraft’s agent, in relation to the acquisition, support and development of
Retained Systems and Business Processes.


9.19                        Annual
Reviews.


Annually, or more frequently if Kraft requires, the
Parties shall conduct a detailed review of the Services then being performed by
the Supplier. As part of this review, the Parties shall review the Resource
Baselines against actual service volumes for the previous year, and forecast
the service volumes for the next year. In addition, the Parties shall examine: (i)
whether the Charges are consistent with Kraft’s forecasts, and industry norms;
(ii) the quality of the performance and delivery of the Services; (iii) whether
the Supplier has delivered cost saving or efficiency enhancing proposals; (iv)
the level and currency of the technologies and business processes employed; (v)
the business and technology strategy and direction; and (vi) such other things
as Kraft may reasonably require related to the Services.


10.          KRAFT
RESPONSIBILITIES


10.1                        Responsibilities.


In addition to Kraft’s responsibilities as expressly
set forth elsewhere in this Agreement, Kraft shall be responsible for the
following:



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10.1.1              Kraft
Contract Manager. Kraft shall designate one individual to whom all Supplier
communications concerning this Agreement may be
addressed (the “Kraft Contract Manager”), who
shall have the authority to act on behalf of Kraft and the Eligible Recipients
in all day-to-day matters pertaining to this Agreement. Kraft may change the
designated Kraft Contract Manager from time to time by providing notice to
Supplier. Additionally, Kraft will have the option, but will not be obligated,
to designate additional representatives who will be authorized to make certain
decisions (e.g., regarding emergency maintenance) if the Kraft Contract Manager
is not available.


10.1.2              Cooperation.
Kraft shall cooperate with Supplier by, among other things, making available,
as reasonably requested by Supplier, management
decisions, information, approvals and acceptances so that Supplier may
accomplish its obligations and responsibilities hereunder.


10.1.3              Requirement
of Writing. To the extent Supplier is required under this Agreement to
obtain Kraft’s approval, consent or agreement,
such approval, consent or agreement must be in writing and must be signed by or
directly transmitted by electronic mail from the Kraft Contract Manager or an
authorized Kraft representative. Notwithstanding the preceding sentence, the
Kraft Contract Manager may agree in advance in writing that as to certain
specific matters oral approval, consent or agreement will be sufficient.


10.2                        Savings
Clause.


10.2.1              Requirements.
Supplier’s failure to perform its responsibilities under this Agreement or to
meet the Service Levels shall be excused if and to
the extent such Supplier non-performance is caused by (i) the wrongful or
tortious act or failure to act by Kraft, an Eligible Recipient, or a Kraft
Third Party Contractor or an agent or employee thereof performing obligations
on behalf of Kraft (unless and to the extent, as to Kraft Third Party
Contractors, such failure is attributable to Supplier’s failure to properly
manage such Kraft Third Party Contractor), or (ii) the failure of Kraft or an
Eligible Recipient to perform (either directly or through a third party engaged
by Kraft or an Eligible Recipient to do so) Kraft’s obligations described in
this Agreement, but only if Supplier, upon actual or constructive knowledge of
such an occurrence, expeditiously:


10.2.1.1                                                         notifies
Kraft of such wrongful or tortious act or failure to act, or such failure to
perform and the impact thereof on Supplier’s ability to perform under such
circumstances,


10.2.1.2                                                         provides
Kraft with reasonable opportunity to correct such wrongful or tortious act or
failure to act, or correct such failure to perform and thereby avoid such
Supplier non-performance,


10.2.1.3                                                         identifies
and pursues commercially reasonable means to avoid or mitigate the impact of
such wrongful or tortious act or failure to act, or failure to perform, so long
as Supplier is not obligated to incur additional costs in connection therewith
that will not be reimbursed by Kraft,


10.2.1.4                                                         uses
commercially reasonable efforts to perform notwithstanding such wrongful or
tortious act or failure to act, or failure to perform, so long as Supplier is
not obligated to incur additional costs in connection therewith that will not
be reimbursed by Kraft, and


10.2.1.5                                                         conducts
a Root Cause Analysis and thereby demonstrates that such act or omission or
failure to perform is the cause of Supplier’s non-performance.



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10.2.2              No
Other Circumstances. Supplier acknowledges and agrees that the
circumstances described in this Section 10.2,
and in Schedule 3,
together with force majeure, are the only circumstances in which its failure to
perform its responsibilities under this Agreement or to meet the Service Levels
will be excused and that Supplier will not assert any other act or omission of
Kraft or the Eligible Recipients as excusing any such failure on Supplier’s
part.


10.2.3              Authorized
User Actions. For the avoidance of doubt with respect to clause (ii) of Section
10.2.1  and except as provided in clause (i) of Section
10.2.1, Supplier will not be excused of any of its
responsibilities, including its failure to meet any Service Levels, with
respect to an operational area due to  *  *  * in such operational area, except
to the extent * 
*  * has failed to
perform  *  *  *
on which  *  *  *
performance was dependent.


11.          CHARGES


11.1                        General.


11.1.1              Payment
of Charges. In consideration of Supplier’s performance of the Services,
Kraft agrees to pay Supplier the applicable
Charges that are set forth in Schedule 4
beginning as of the Commencement Date. Supplier shall continually seek to
identify methods of reducing such Charges and will notify Kraft of such methods
and the estimated potential savings associated with each such method.


11.1.2              No
Additional Charges. Kraft shall not pay any Charges for the Services other
than those set forth in this Agreement. Any costs
incurred by Supplier prior to the Effective Date are included in the Charges as
set forth in Schedule 4 and are not to be
separately paid or reimbursed by Kraft.


11.1.3              Incidental
Expenses. Supplier acknowledges that, except as expressly provided
otherwise in this Agreement, expenses that
Supplier incurs in performing the Services (including management, travel and
lodging, document reproduction and shipping, desktop Equipment and other office
Equipment required by Supplier Personnel, and long-distance telephone) are
included in Supplier’s charges and rates set forth in this Agreement.
Accordingly, such Supplier expenses are not separately reimbursable by Kraft
unless Kraft has agreed in advance and in writing to reimburse Supplier for the
expense.


11.1.4              No
Charge for Reperformance. At no additional expense to Kraft, Supplier shall
reperform (including any required backup or
restoration of data from scheduled backups or, if not available on such
backups, restoration by other means with Kraft’s reasonable cooperation) any Services
that result in incorrect outputs due to an error or breach by Supplier, and the
resources required for such performance shall not be counted in calculating the
Charges payable or resources utilized by Kraft hereunder.


11.1.5              Charges
for Contract Changes. Unless otherwise agreed from time to time, and except
as noted in Section 4(a) of Schedule 4,
changes in the Services (including changes in Kraft Standards, Strategic Plans,
Technology Plans, business processes, Software, Equipment and Systems) and changes
in the rights or obligations of the Parties under this Agreement (collectively,
“Contract Changes”) shall result in
changes in the applicable Charges only if and to the extent (i) the Agreement
expressly provides for a change in the Supplier Charges in such circumstances;
(ii) the agreed-upon Charges or pricing methodology expressly provides for a
price change in such circumstances (for example, Schedule
4 specifies the number of FTEs or hours of coverage to be
provided for the quoted price, or defines a Resource Baseline for the Resource
Unit in question with ARCs and RRCs for increased or decreased usage); or (iii)
the Contract Change meets the



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definition
of New Services for purposes of Section 11.5
and additional Charges are applicable in accordance therewith.


11.1.6              Eligible
Recipient Services.


11.1.6.1                                                         Eligible Recipients. Supplier shall provide the Services to
Eligible Recipients designated by Kraft. To the extent a designated Eligible
Recipient will receive less than all of the Services, Kraft shall identify the
categories of Services to be provided by Supplier to such Eligible Recipient.


11.1.6.2                                                         New Eligible Recipients. From time to time Kraft may request
that Supplier provide Services to Eligible Recipients not previously receiving
such Services. Except as provided in Section 11.5
or otherwise agreed by the Parties, such Services shall be performed in
accordance with the terms, conditions and prices (excluding any non-recurring
transition or start-up activities specific to such Eligible Recipients) then
applicable to the provisions of the same Services to existing Eligible
Recipients.


11.1.6.3                                                         Election Procedure. In the event of a transaction described
in clause (c) or (d)
within the definition of Eligible Recipient in Schedule
1, Kraft may elect, on behalf of the Eligible Recipient in
question, either (i) that such Eligible Recipient shall continue to obtain
Services in some or all of the Services or Tower subject to and in accordance
with the terms and conditions of this Agreement for the remainder of the Term,
(ii) that the Entity shall obtain some or all of the Services under a separate
agreement between Supplier and such Entity containing the same terms and
conditions as this Agreement or (iii) that the Term shall be terminated as to
such Eligible Recipient with respect to some or all Services as of a specified
date, subject to its receipt of Termination Assistance Services pursuant to Section 4.4. If the Services are
provided under a separate agreement, Kraft shall have no obligation to pay any
fees in relation to the Services provided to such Entity. To the extent that
such Entity obtains only a portion of the Services within a Tower or less than
all of the related Cross Functional Services required to support the selected
Services, Supplier will promptly notify Kraft if it believes the Service Levels
and the pricing for the partial services may have to be modified to take
account of Supplier’s diminished control of the Service Levels and any change
in Supplier cost structure for providing the partial set of Services. In such
event, Supplier and Kraft will in good faith promptly negotiate any Service
Level or pricing adjustments required. In addition, if in connection with such
a transaction, Kraft specifically requests that Supplier enter into a separate
agreement with the Entity, and that Supplier separate its systems and/or
delivery organization for such Entity from that of the remainder of Kraft and
the Eligible Recipients, then, in addition to any Charges for Projects approved
by Kraft for such activity (including Projects to implement new network and
security requirements) and changes in costs resulting from changes in locations
and System architecture, Supplier may increase its Monthly Base Charges in the
aggregate by an amount equal to the additional costs Supplier will incur in
complying with Kraft’s request. Services provided to such Entity pursuant to
clause (i) of this Section shall be included in the calculation of Service
volumes, if any, under this Agreement (as allocated by Kraft). Services
provided to such Entity pursuant to clause (ii) of this Section shall be
excluded when determining any Termination Charges payable as a result of
termination for convenience.



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11.2                        Pass-Through
Expenses.


11.2.1              Procedures
and Payment. Supplier shall administer Pass-Through Expenses identified in Schedule 4.7 as follows. Unless
otherwise agreed by the Parties, Kraft shall pay all Pass-Through Expenses
directly to the applicable vendors following review, validation and approval of
such Pass-Through Expenses by Supplier. Where the applicable information was
provided to Supplier, Supplier shall review taxes, surcharges and user fees for
reasonableness on a periodic basis, however Kraft acknowledges that
Supplier will have no obligation to verify the accuracy of any taxes,
surcharges or usage fees. No new Pass-Through Expenses may be added without
Kraft’s prior consent. Before submitting an invoice to Kraft for any
Pass-Through Expense, Supplier shall (i) review and validate the invoiced
charges, (ii) identify any errors or omissions, and (iii) communicate with the
applicable vendor to correct any errors or omissions, use commercially
reasonable efforts to resolve any questions or issues, and obtain any
applicable credits for Kraft. Supplier shall deliver to Kraft the original
supplier invoice, together with any documentation supporting such invoice and a
statement that Supplier has reviewed and validated the invoiced charges, within
10 days after Supplier’s receipt thereof; provided that, if earlier, Supplier
shall use commercially reasonable efforts to deliver such invoice,
documentation and statement at least five business days prior to the date on
which payment is due; and provided further that, if it is not possible to
deliver such invoice, documentation and statement at least five business days
prior to the due date, Supplier shall promptly notify Kraft and, at Kraft’s
option, either request additional time for review and validation or submit the
invoice for payment subject to subsequent review and validation. In addition,
if the vendor offers a discount for payment prior to a specified date, Supplier
shall use commercially reasonable efforts to deliver such invoice and
associated documentation to Kraft at least five business days prior to such
date. To the extent Supplier fails to comply with its obligations hereunder, it
shall be financially responsible for any discounts lost or any late fees or
interest charges incurred by Kraft and/or the Eligible Recipients. No new
Pass-Through Expenses may be added without Kraft’s prior consent, which it may
withhold in its sole discretion.


11.2.2              Efforts
to Minimize. Supplier will continually seek to identify methods of reducing
and minimizing Kraft’s retained and Pass-Through Expenses and will notify Kraft
of such methods and the estimated potential savings associated with each such
method.


11.2.3              *  *  *.
If  *  *  *
proposes an  *  *  *
not  *  *  *
by  *  *  *,
and not otherwise  *  *  *
by  *  *  * ,
that  * 
*  * elects to implement,
then  *  *  *,
in its sole discretion, may agree on a case by case basis to  *  *  *
a  *  *  *
of the  *  *  *
directly  *  *  *
to the  *  *  *
for a  *  *  *
not to exceed  *  *  *.
The foregoing shall not be interpreted to require  *  *  *
to share with  *  *  *
the benefit of the *  *  *that  *  *  *
is able to achieve without requiring  *  *  *.


11.3                        Procurement.


11.3.1              In
procuring such products and services on a Pass-Through Expense or
cost-reimbursement basis, where Supplier is procuring third party products and
services for which Kraft shall pay on a Pass-Through Expense, or, where agreed
upon by the Parties, on a cost-reimbursement basis, Supplier shall: (i) give
Kraft and the Eligible Recipients the benefit of Supplier’s most favorable
vendor arrangements where permitted by such vendors; (ii) use commercially
reasonable efforts to obtain the most favorable pricing and terms and
conditions then available from any source for such products and services; (iii)
use the scale of Supplier’s procurements on behalf of itself, Kraft, the
Eligible Recipients and other customers as leverage in negotiating such pricing
or other terms and conditions; (iv) ensure that Kraft receives at least an
equitable and proportionate share of the total refunds, credits, discounts,
rebates, incentives and other benefits then available to Supplier in connection
with such procurements; and (v) adhere to (A) the procurement procedures
specified



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in
the Policy and Procedures Manual, as such procedures may be modified from time
to time by Kraft, and (B) Kraft’s product and services standards and shall not
deviate from such standards without Kraft’s prior approval.


11.3.2              To
the extent an authorized Kraft representative specifies the vendor, pricing
and/or terms and conditions for procurement of products or services for which
Kraft shall pay on a Pass-Through Expense basis or, where agreed upon by the
Parties, on a cost-reimbursement basis, Supplier shall not deviate from such
instructions without Kraft’s prior approval. Unless otherwise agreed by the
Parties, the procurement price of such products and services shall be treated
as a Pass-Through Expense or otherwise passed through to Kraft without Supplier
markup. For all other products and services Kraft may request Supplier to
procure on Kraft’s behalf, Supplier will quote to Kraft terms, including
prices, for such products and services, and upon Kraft’s approval, will obtain
the products and services on Kraft’s behalf on those terms.


11.3.3              Supplier
may use, with Kraft’s prior approval, master agreements, existing as of the
Commencement Date, that are between Kraft and various third party vendors to
procure products and services requested by Kraft. Supplier’s use of such Kraft
master agreements shall be conditioned on and subject to the following: (i)
Supplier obtaining any Required Consents to the use of such master agreements;
(ii) Supplier complying with the terms and conditions of such master
agreements; and (iii) Supplier accepting responsibility for curing any breaches
by Supplier of such master agreements and indemnifying, in accordance with Section 17.5, Kraft or the Eligible
Recipients for any Losses in connection with such breaches.


11.3.4              Supplier
may use existing agreements between Supplier and third party vendors or enter
into new agreements with third party vendors to procure such products and
services on a Pass-Through Expense or, if agreed upon by the Parties, on a
cost-reimbursement basis. Supplier’s use of such agreements for such purchases
shall be conditioned on and subject to the following:  (i) Kraft approving in advance the terms,
conditions and pricing of such agreements and any financial or other
commitments made therein by or on behalf of Kraft or the Eligible Recipients;
(ii) Supplier complying with the terms and conditions of such agreements and
accepting responsibility for meeting any minimum volumes; (iii) Supplier
passing through to Kraft any refunds, credits, discounts or other rebates; (iv)
Supplier retaining responsibility for curing any breaches of such agreements
and indemnifying, in accordance with Section 17.5,
Kraft or the Eligible Recipients for any Losses in connection with such
breaches; and (v) such agreements offering more favorable pricing and equivalent
or better terms and conditions for the requested product or service than the
master agreements existing as of the Commencement Date that are between Kraft
and third party vendors.


11.3.5              If,
at any time, Kraft determines that the pricing and terms and conditions
available through Supplier are not as favorable as those Kraft could obtain on
its own, Kraft reserves the right to select and negotiate with the provider of
such third party products and services and Supplier shall comply with Kraft’s
decision with respect thereto.


11.3.6              With
respect to all products and services purchased by Supplier for Kraft and/or the
Eligible Recipients on Pass-Through Expense or, where agreed upon by the
Parties, on a cost-reimbursement basis during the course of performing the
Services, Supplier shall use commercially available efforts to pass through, or
otherwise provide, to Kraft and/or the applicable Eligible Recipient(s) all
benefits offered by the manufacturers and/or vendors of such products and
services(including all warranties, refunds, credits, rebates, discounts,
training, technical support and other consideration offered by such
manufacturers and vendors) except to the extent otherwise agreed by Kraft. If
Supplier is unable to pass through any such benefit to



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Kraft
and/or the applicable Eligible Recipient(s), it shall notify Kraft in advance
and shall not purchase such product or service without Kraft’s prior approval.


11.3.7              Except
as expressly agreed in writing by Kraft, Supplier represents and warrants that Supplier
will only procure such products and services for Kraft with manufacturers
and/or vendors with whom Supplier has an arm’s-length relationship. Supplier
will fully disclose to Kraft and obtain Kraft’s prior written approval prior to
procuring any products or services for Kraft from any manufacturer and/or
vendor in whom Supplier has an ownership interest, affiliation, referral or
marketing agreement, or any other similar relationship. Supplier will fully
disclose to Kraft any affiliation it may have with such manufacturers and/or
vendors.


11.4                        Taxes.


The Parties’ respective responsibilities for taxes
arising under or in connection with this Agreement shall be as follows:


11.4.1              Income
Taxes. Each Party shall be responsible for its own Income Taxes.


11.4.2              Sales,
Use and Property Taxes. Each Party shall be responsible for any sales,
lease, use, personal property, stamp, duty or other such taxes on Equipment,
Software or property it owns or leases from a third party, including any lease
assigned pursuant to this Agreement, and/or for which it is financially
responsible under this Agreement.


11.4.3              [Intentionally
left blank]


11.4.4              Taxes
on Goods or Services Used by Supplier. Supplier shall be responsible for
all sales, service, value-added, lease, use, personal property, excise,
consumption, and other taxes and duties payable by Supplier on any goods or
services used and consumed by Supplier in providing the Services (including
services obtained from Subcontractors) where the tax is imposed on Supplier’s acquisition
of such goods or services and the amount of tax is measured by Supplier’s costs
in acquiring or procuring such goods or services and not by Kraft’s cost of
acquiring such goods or services from Supplier.


11.4.5              Service
Taxes. Unless Kraft provides Supplier with a valid and applicable exemption
certificate there shall be added to any Charges under this Agreement, or a
separate billing for, and Kraft will be financially responsible for and shall
pay or reimburse Supplier for any and all Service Taxes however designated,
assessed, imposed or levied on or against either Party on the provision of the
Services as a whole, or on any particular Service received by Kraft or the
Eligible Recipients, provided however, where required by applicable local tax Laws,
Charges shall be increased to include the applicable Service Taxes. If new or
higher Service Taxes thereafter become applicable to the Services as a result
of either Party moving all or part of its operations to a different
jurisdiction (e.g., Kraft opening a new office, Supplier relocating performance
of Services to a shared service center or assigning this Agreement to an
Affiliate), the Party initiating such move shall be financially responsible for
such new or higher Service Taxes. *  *  *
will provide  *  *  *
with advice and assistance from  *  *  * to assist  *  *  *
in analyzing and minimizing  *  *  * obligations for  *  *  *
related to  *  *  *.


11.4.6              Telecommunication
Surcharges or User Fees. To the extent Kraft is responsible under Schedule 4 for telecommunication
surcharges or user fees and related telecommunication taxes imposed by
government authorities and associated with the Services and the allocation of
such fees, taxes or surcharges is within Supplier’s or its Subcontractors’
discretion, Supplier and its Subcontractors shall act fairly and equitably in
allocating such fees, taxes and surcharges to Kraft, and Kraft and the Eligible
Recipients shall not receive more than a proportionate share of such



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fees,
taxes and surcharges; it being understood that Supplier will not be deemed to
have such discretion on allocation where the surcharge, tax or user fee is
directed specifically at Kraft. In addition, in the event any such fee, tax or
surcharge for which Kraft or an Eligible Recipient is responsible is
subsequently reduced or vacated by the appropriate regulatory authority or
court of competent jurisdiction, then where the Parties agree and at Kraft’s
expense, Supplier shall use commercially reasonable efforts to obtain on behalf
of Kraft a refund of any overpayment of such fee or surcharge by Kraft or the
Eligible Recipient.


11.4.7              Notice
of New Taxes and Charges. Supplier shall promptly notify Kraft when it
becomes aware of any new taxes or other charges (including changes to existing
taxes or charges) to be passed through and/or collected by Kraft under this
Section.


11.4.8              Efforts
to Minimize Taxes. The Parties agree to cooperate fully with each other to
enable each to more accurately determine its own tax liability and to minimize
such liability to the extent legally permissible. Supplier’s invoices shall
separately state the Charges that are subject to taxation and the amount of
taxes included therein. Supplier shall be responsible for any unrecovered
Service Taxes that Kraft is required to pay as a result of Supplier’s failure
to provide invoices (or corrected invoices, to the extent they can enable Kraft
to avoid the tax payment obligation) in such format. Each Party will provide
and make available to the other any resale certificates, information regarding
out-of-state or out-of-country sales or use of equipment, materials or
services, and other exemption certificates or information reasonably requested
by either Party. At Kraft’s reasonable request, Supplier shall provide Kraft
with (i) an annual written certification signed by an authorized representative
of Supplier, and, if required more frequently than annually, other evidence
confirming that Supplier has filed all required tax forms and returns required
in connection with any Service Taxes collected from Kraft, and has collected
and remitted all applicable Service Taxes, and (ii) such other information
pertaining to applicable Taxes as Kraft may reasonably request.


11.4.9              Tax
Audits or Proceedings. Each Party shall promptly notify the other Party of,
and coordinate with the other Party, the response to and settlement of, any
claim for taxes asserted by applicable taxing authorities for which the other
Party is financially responsible hereunder. With respect to any claim arising out
of a form or return signed by a Party to this Agreement, such Party will have
the right to elect to control the response to and settlement of the claim, but
the other Party will have all rights to participate in the responses and
settlements to the extent of its potential responsibility or liability. Each
Party also shall have the right to challenge the imposition of any tax
liability for which it is financially responsible under this Agreement or, if
necessary, to direct the other Party to challenge the imposition of any such
tax liability. If either Party requests the other to challenge the imposition
of any tax liability, such other Party shall do so (unless and to the extent it
assumes financial responsibility for the tax liability in question), and, the
requesting Party shall reimburse the other for all fines, penalties, interest,
additions to taxes or similar liabilities imposed in connection therewith, plus
the reasonable legal, accounting and other professional fees and expenses it
incurs. Each Party shall be entitled to any tax refunds or rebates obtained
with respect to the taxes for which such Party is financially responsible under
this Agreement. Supplier reserves the right to settle any and all claims,
without notification to, or approval by, Kraft, provided however, that in such
event, Kraft shall not be responsible for such settled taxes, and Supplier
shall reimburse Kraft to the extent Kraft had paid such taxes.


11.4.10       Tax
Filings. Each Party represents, warrants and covenants that it will file
appropriate tax returns, and pay applicable taxes owed arising from or related
to the provision of the Services in applicable jurisdictions. Supplier
represents, warrants and covenants that it is registered to remit Service Taxes
that it collects from Kraft.



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11.4.11       Where
Kraft is required by the Laws of any foreign tax jurisdiction to withhold
income or other similar taxes from a payment, the amount payable by Kraft upon
which the withholding is based shall be paid to Supplier net of such
withholding. Kraft shall pay any such withholding to the applicable tax
authority and timely provide Supplier with applicable documentation,
certificates of withholding, or receipts necessary for Supplier to claim the
withholding taxes from the applicable Taxing Authority. If after 60 days of
receipt of such documentation by Kraft from the taxing authority, Kraft has not
supplied Supplier with the required certificates of withholding, documentation
or receipts, then Supplier shall invoice Kraft or the applicable Eligible
Recipient for such withholding taxes and Kraft or such Eligible Recipient shall
either pay to Supplier an amount equal to such withholding or provide the
required certificates of withholding, documentation or receipts within 60 days
after Kraft’s or such Eligible Recipient’s receipt of an invoice for such
amounts from Supplier. In the event that Supplier does not agree with any
particular withholding Supplier shall request, and Kraft or such Eligible
Recipient shall provide, a reasonable explanation for such withholding. If,
after receipt of such reasonable explanation, Supplier still disputes the
withholding, Supplier may use the dispute resolution provisions in Article 19 to resolve such dispute.


11.5                        New
Services.


11.5.1              Procedures.


11.5.1.1                                                         New Services Proposals. If Kraft requests that Supplier
perform any New Services reasonably related to the Services or other services
generally provided by Supplier, Supplier shall promptly prepare a New Services
proposal for Kraft’s consideration. Unless otherwise agreed by the Parties,
Supplier shall prepare such New Services proposal  *  *  * and
shall deliver such proposal to Kraft within 10 days of its receipt of Kraft’s
request; provided, that (a) Supplier shall use all commercially reasonable
efforts to respond more quickly in the case of a pressing business need or an
emergency situation; and (b) Supplier shall promptly notify Kraft if the
complexity of the requested New Services makes it impractical for the Supplier
to provide a proposal within 10 days, in which case Supplier shall promptly
advise Kraft of the time Supplier will require, and shall provide such proposal
as soon as reasonably practicable. Kraft shall provide such information as
Supplier reasonably requests in order to prepare such New Service proposal.
Such New Services proposal shall include, among other things, the following at
a level of detail sufficient to permit Kraft to make an informed business
decision:  (i) a project plan and fixed
price or price estimate for the New Service; (ii) a breakdown of such price or
estimate, (iii) a description of the service levels to be associated with such
New Service, (iv) a schedule for commencing and completing the New Service, (v)
a description of the new hardware or software to be provided by Supplier in
connection with the New Service, (vi) a description of the software, hardware
and other resources, including Resource Unit utilization, necessary to provide
the New Service, (vii) any additional facilities or labor resources to be
provided by Kraft or the Eligible Recipients in connection with the proposed
New Service, and (viii) in the case of any Developed Materials to be created
through the provision of the proposed New Services, any ownership rights
therein that differ from the provisions of Section 14.2.


11.5.1.2                                                         Acceptance or Rejection. Kraft may accept or reject any New
Services proposal in its sole discretion and Supplier shall not be obligated to
perform any New Services to the extent the applicable proposal is rejected.
Unless the Parties



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otherwise
agree, if Kraft accepts Supplier’s proposal, Supplier will perform the New
Services and be paid in accordance with the proposal submitted by Supplier and
the provisions of this Agreement. Upon Kraft’s acceptance of a Supplier
proposal for New Services, the scope of the Services will be expanded and this
Agreement will be modified to include such New Services. If Supplier is unable
to provide such New Services related to the Services using its own resources,
Kraft may require Supplier to engage (as Supplier’s subcontractor) a third
party approved or selected by Kraft to provide such services. Notwithstanding
any provision to the contrary, (i) Supplier shall act reasonably and in good
faith in formulating such pricing proposal, (ii) Supplier shall use commercially
reasonable efforts to identify potential means of reducing the cost to Kraft,
including utilizing Subcontractors as and to the extent appropriate, (iii) such
pricing proposal shall be no less favorable to Kraft than the pricing and labor
rates set forth herein for comparable Services, and (iv) such pricing proposal
shall take into account the existing and future volume of business between
Kraft and Supplier.


11.5.1.3                                                         *  *  * Expenses. The  *  *  *
requirement set forth in  *  *  * of the definition of   *  *  *
(in Schedule 1) shall not apply to  *  *  *
for purchase of  *  *  *
which cannot be performed  *  *  * or the purchase of  *  *  *
to the extent that such        *  *  *: (1) result in changes to  *  *  *
specifically requested  *  *  * and are not otherwise required
for  *  *  *
to meet its then current obligations under 
*  *  *including its obligations
under  *  *  *
below; (2) are approved by  *  *  * in writing in advance; and (3)
are not offset by costs or expenses that are avoided as a result of  *  *  *.


11.5.2              Use
of Third Parties. Kraft may elect to solicit and receive bids from third
parties to perform any New Services. If Kraft elects to use third parties to
perform New Services, (i) such New Services shall not be deemed “Services”
under the provisions of this Agreement, and (ii) Supplier shall cooperate with
such third parties as provided in Section 4.5.


11.5.3              Services
Evolution and Modification. The Parties anticipate that the Services will
evolve and be supplemented, modified, enhanced or replaced over time to keep
pace with technological advancements and improvements in the methods of
delivering Services and changes in the businesses of Kraft and the Eligible
Recipients, provided that the foregoing shall not be interpreted to require
Supplier to refresh Equipment at a rate that is faster than the rate specified
in Schedule 4.2 for such Equipment.
The Parties acknowledge and agree that these changes will modify the Services
and will not be deemed to result in New Services unless the changed services
meet the definition of New Services.


11.5.4              Authorized
User and Eligible Recipient Requests. Supplier will promptly inform the
Kraft Contract Manager of requests for New Services from Authorized Users or
Eligible Recipients, and shall submit any proposals for New Services to the
Kraft Contract Manager or his or her designee. Supplier shall not agree to
provide New Services to any Authorized Users or Eligible Recipients without the
prior written approval of the Kraft Contract Manager or his or her designee. If
Supplier fails to comply strictly with this Section
11.5.4, it shall receive no compensation for any services
rendered to any person or entity in violation of such provision.


11.5.5              Efforts
to Reduce Costs and Charges. The Supplier will continually explore and
identify opportunities to improve the Services and reduce Kraft’s costs, and
will advise Kraft management of each opportunity that is identified and
estimate the potential savings. From time to time, Kraft may request that the
Parties work together to identify ways to achieve reductions in the cost of



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service
delivery and corresponding reductions in the Charges to be paid by Kraft by
modifying or reducing the nature or scope of the Services to be performed by
Supplier, the applicable Service Levels or other contract requirements. If
requested by Kraft, Supplier shall promptly prepare a proposal at a level of
detail sufficient to permit Kraft to make an informed business decision
identifying all viable means of achieving the desired reductions without
adversely impacting business objectives or requirements identified by Kraft. In
preparing such a proposal, Supplier shall give due consideration to any means
of achieving such reductions proposed by Kraft. Supplier shall negotiate in
good faith with Kraft about each requested reduction in Charges and, without
disclosing the actual cost of providing the Services, shall identify for Kraft
if and to what extent the cost of service delivery may be reduced by
implementing various changes in the contract requirements. Kraft shall not be
obligated to accept or implement any proposal; and Supplier shall not be
obligated to implement any change that affects the terms of this Agreement
unless and until such change is reflected in a written amendment to this
Agreement. The foregoing shall not be interpreted to require Supplier to share
with Kraft the benefit of the cost efficiencies that Supplier is able to
achieve without requiring Kraft’s investment or approval.


11.6                        Extraordinary
Events.


11.6.1              Definition.
As used in this Agreement, an “Extraordinary Event”
shall mean a circumstance in which an event or discrete set of events has
occurred or is planned with respect to the business of Kraft or the Eligible
Recipients that results or will result in a change in the scope, nature or
volume of the Services that the Eligible Recipients will require from Supplier,
and which is expected to cause the estimated average monthly amount of
chargeable Resource Unit usage in any Resource Baseline to increase or decrease
by  *  *  *
or more consecutive  *  *  *.
Examples of the kinds of events that might cause such substantial increases or
decreases include the following:


11.6.1.1                                                         changes
in locations where the Eligible Recipients operate;


11.6.1.2                                                         changes
in products of, or in markets served by, the Eligible Recipients;


11.6.1.3                                                         mergers,
acquisitions, divestitures or reorganizations of the Eligible Recipients;


11.6.1.4                                                         changes
in the method of service delivery;


11.6.1.5                                                         changes
in the applicable regulatory environment;


11.6.1.6                                                         changes
in Kraft’s policy, technology or processes;


11.6.1.7                                                         changes
in market priorities; or


11.6.1.8                                                         changes
in the business units being serviced by Supplier.


11.6.2              Consequence.
If an Extraordinary Event occurs, Kraft may, at its option, request more
favorable pricing with respect to applicable Charges for any Service or Tower
in accordance with the following:


11.6.2.1                                                         *  *  *  and  *  *  * shall  *  *  *
determine on a reasonable basis the  *  *  * if any, resulting from such
Extraordinary Event and, upon  *  *  * shall then proceed to implement
such  *  *  *
as quickly as practicable and in accordance with the agreed-upon schedule. As
the  *  *  *
are realized, the Charges specified on Schedule 4
and any affected  *  *  *
shall be promptly and equitably adjusted to pass through to  *  *  *
the full benefit of such  *  *  *; provided, that  *  *  *



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shall
reimburse  *  *  *
for any net costs or expenses incurred to realize such  *  *  * if
and to the extent  *  *  *
(i) notifies  *  *  *
of such additional costs and obtains     *  *  * approval prior to incurring such
costs, (ii) uses commercially reasonable efforts to identify and consider
practical alternatives, and reasonably determines that there is no other more
practical or cost effective way to obtain 
*  *  *without incurring such expenses,
and (iii) uses commercially reasonable efforts to minimize the additional costs
to be  *  *  *.


11.6.2.2                                                         An
Extraordinary Event shall not result in  *  *  * to  *  *  *
being  *  *  *
than such Charges would have been if the RRCs, ARCs and other rates and charges
then specified in Schedule 4
had been applied. *  *  *
may, at its sole option, elect, for each Extraordinary Event, at any time to
forego its rights under this Section 11.6
and instead, apply RRCs, ARCs and other rates and charges specified in Schedule 4 to adjust the Charges.


11.7                        Unanticipated
Change.


If an Unanticipated Change occurs, and if Kraft
requests that the Services be modified to incorporate such Unanticipated Change
after the completion of Transformation for those Services to be transformed, or
after Transition for all other Services, the Parties shall use the procedures
in Section 11.6.2 to equitably adjust
the Charges and other relevant provisions of this Agreement to take such
Unanticipated Change into Account. An “Unanticipated Change”
shall consist of a material change in the technologies and/or business
processes available to provide all or part of the Services which is outside the
normal evolution of technology experienced by the information technology and
other in-scope services, that was not generally available as of the Effective
Date, and that would materially reduce Supplier’s cost of providing the
Services.


11.8                        Proration.


Periodic charges under this Agreement are to be
computed on a calendar month basis, and shall be prorated for any partial month
on a calendar day basis.


11.9                        Refundable
Items.


11.9.1              Prepaid
Amounts. Where Kraft and/or the Eligible Recipients have prepaid for a
service or function for which Supplier is assuming financial responsibility
under this Agreement, Supplier shall promptly refund to Kraft or such Eligible
Recipient, upon either Party identifying the prepayment, that portion of such
prepaid expense that is attributable to periods on and after the Commencement
Date; provided, however, that if Supplier had not received notice of the
prepayment prior to the Effective Date, Supplier shall only be obligated to
refund amounts to Kraft to the extent Supplier received an economic benefit
from the prepayment (e.g., if Supplier can demonstrate that it had planned to
use a replacement service at a lower cost, Supplier would only be obligated to
refund such lower cost amount).


11.9.2              Refunds
and Credits. If Supplier should receive a refund, credit, discount or other
rebate for goods or services paid for by Kraft and/or the Eligible Recipients
on a Pass-Through Expense, Retained Expense, cost-plus or cost-reimbursement
basis, then Supplier shall (i) notify Kraft of such refund, credit, discount or
rebate and (ii) pay the full amount of such refund, credit, discount or rebate
to Kraft or such Eligible Recipient.


11.9.3              Allocation
of Balloon, Roll-Over and Similar Payments. With respect to contracts
assigned to Kraft in connection with any Termination Assistance Services, where
the costs under any such



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contracts
entered into by Supplier, a Supplier Affiliate or Subcontractor are to be
apportioned between the Parties, Supplier shall be responsible for the payment
of any costs required to be paid by Kraft after the assignment of such
contracts to Kraft, to the extent such costs are attributable to periods during
the Term and the provision of any Termination Assistance Services.
Additionally,  if lease, license,
maintenance, service charges or other periodic payments under any such contract
increase after assignment to Kraft (other than to account for cost of living or
similar increases) (e.g., balloon or similar payments), unless Kraft has
expressly agreed to assume such increase, all such payments shall be recalculated
so that, as between the Parties, the entire cost shall be amortized evenly over
the entire term of such contract. In the case of licenses, such allocation of
costs shall not apply to the initial one-time license fees paid or payable by
Supplier. Supplier shall be responsible for those back-end and recalculated
costs that are attributable to periods during the Term and the provision of any
Termination Assistance Services, and, upon assignment to Kraft, Kraft shall be
responsible for all other payments. Supplier shall provide a credit to Kraft
for any such back-end costs and recalculated costs against any amounts then due
and owing by Kraft or, if there are no amounts then owed by Kraft, pay such
back-end or recalculated amounts to Kraft within 30 days after the assignment
of the applicable contract to Kraft.


11.10                 Kraft
Benchmarking Reviews.


11.10.1       Benchmarking
Review. Commencing 24 months after the Commencement Date, and no more
frequently than once every 12 months thereafter for each scope of Services that
is benchmarked, Kraft may, subject to this Section 11.10,
request that a benchmarking study be performed by an independent third party
with the characteristics noted in Section 11.10.2
(a “Benchmarker”) to compare the quality
and price of all or any portion of the Services against the quality and price
of other well-managed suppliers performing similar services to ensure that
Kraft is receiving from Supplier pricing and levels of service that are
competitive with market rates, prices and service levels, given the nature,
volume and type of Services provided by Supplier hereunder (“Benchmarking”). The Benchmarker may be hired and Kraft may
provide the Benchmarker with instructions and information prior to the 25th month after the Commencement Date, but the
actual benchmarking study may not commence earlier than 24 months after the
Commencement Date. In addition, Kraft shall not require Benchmarking more than
3 times in any Contract Year. In making this comparison, the Benchmarker shall
consider such factors as the Benchmarker typically considers in its
benchmarking methodology, including the following factors, and adjust the
prices as and to the extent appropriate: 
(i) any financial engineering, such as whether supplier transition
charges are paid by the customer as incurred or amortized over the term of this
Agreement; (ii) the extent to which supplier pricing includes the purchase of
the customer’s existing assets; (iii) the extent to which supplier pricing
includes the cost of acquiring future assets; (iv) the extent to which this
Agreement calls for Supplier to provide and comply with unique Kraft
requirements; (v) whether Service Taxes are included in such pricing or stated
separately in supplier invoices; (vi) nature, size, scope and term of the contract,
and (vii) service locations.


11.10.2       General.
Any Benchmarker engaged to perform the benchmarking study shall execute a
non-disclosure agreement substantially in the form attached hereto as Exhibit 3, and must be an
independent, established and industry recognized third party with demonstrated
benchmarking expertise, methodology and data sources, must not be a provider of
the Services, Direct Kraft Competitor or a Direct Supplier Competitor or
affiliated or associated with either Party in such a manner that an objective
person would regard the Benchmarker as likely to have a material conflict of
interest, such as because of its status as a consultant or auditor of either
Party, and therefore be unable to conduct the benchmark study objectively and independently.
Notwithstanding the foregoing, Supplier hereby irrevocably consents to Kraft’s
use of any



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Benchmarker
listed in Schedule 25 at any time during
the Term. The Benchmarker shall be engaged on terms consistent with this Section 11.10 and otherwise
acceptable to Kraft, provided that Supplier shall have an opportunity to review
and comment on the proposed agreement, and may at its option elect to be a
party to such agreement and share equally with Kraft in the amounts payable to
such Benchmarker. Supplier and Kraft shall cooperate fully with the Benchmarker
and shall provide reasonable access to any premises, equipment, personnel or
documents and provide any assistance required by the Benchmarker to conduct the
Benchmarking, all at Kraft’s and Supplier’s respective cost and expense. The
Benchmarking shall be conducted so as not to unreasonably disrupt Supplier’s
operations under this Agreement.


11.10.3       Result
of Benchmarking. If the Benchmarker finds that the Charges paid by Kraft
for all Services or for any service element are greater than  *  *  *
of the prices charged by other well-managed suppliers for work of a similar
nature, type or volume (the “Benchmark Standard”),
the Charges shall be  *  *  * provided that Supplier shall not
be obligated to implement Benchmarking  *  *  * to the extent such  *  *  *
would result in Supplier’s total Charges 
*  *  * as compared to its pricing
absent such  *  *  *.
Such  *  *  *
shall become effective immediately upon receipt of the Benchmarker’s report,
though *  *  * reserves  *  *  *
the Benchmarker’s report pursuant to the dispute resolution proceedings
described in Section 11.10.4. Any reversal
of the Benchmarking findings will be effective prospectively only from the date
the dispute is resolved.


11.10.4       Supplier
Review and Dispute. Kraft shall provide Supplier with a copy of the
Benchmarker’s report and Supplier shall have 10 days to review such report and
contest the Benchmarker’s findings. If the Parties are unable to agree upon the
validity of such findings, the matter shall be resolved pursuant to the dispute
resolution procedures set forth in Article 19.
*  *  * in Supplier’s Charges shall be
implemented effective as of the date the Benchmarker’s final report was  *  *  *
to  *  *  *.


11.11                 *  *  * Customer.


Supplier’s Charges to Kraft for Services to be
provided under this Agreement shall be  *  *  *Supplier’s    *  *  *
under other contracts entered into by Supplier after the Effective Date with
companies in the consumer packaged goods industry for comparable services
(taking into consideration  *  *  * for capital, financial
structuring, other financial terms and conditions, geography and service
levels) and having a contract value in excess of  *  *  *.
If Supplier offers  *  *  *
under any such contract, Supplier shall  *  *  * effective as of the  *  *  *
were first  *  *  *.
At the end of each Contract Year,  *  *  * will provide  *  *  * a letter from a 
*  *  * senior executive either
confirming that in the aggregate that Kraft’s *  *  *
are  *  *  *
to any such other customers or Supplier will 
*  *  * accordingly at the beginning of
the next Contract Year. In no event will (i) 
*  *  * be required to disclose to  *  *  *
or any agent or auditor for Kraft any confidential information of any  *  *  *,
(ii)  *  *  *
be required to breach any confidentiality agreement it has with  *  *  *,
and (iii)  *  *  *
be entitled to audit  *  *  * books and records for purposes
of verifying      *  *  *
compliance with this Section 11.11.


12.          INVOICING AND PAYMENT


12.1                        Invoicing.


12.1.1              Invoice.
Within fifteen days after the beginning of each month, Supplier will present
Kraft with an invoice for any Charges due and owing for the preceding month
(the “Monthly Invoice”), including Monthly
Base Charges, Charges for Transition Services and Transformation Services, and
ARCs and RRCs. The invoice shall be delivered in hard copy and/or
electronically to such



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billing
address(es) as Kraft may direct. Supplier shall not invoice Kraft for any
advance or concurrent charges or other amounts.


12.1.2              Form
and Data. At Kraft’s request, Supplier shall provide separate Monthly
Invoices for each country to which Supplier is then providing Services. With
respect to the Resource Units in the Application Servers Tower that reside in
Supplier Facilities or, if prior to the completion of Transition and
Transformation, in the Kraft Facilities, Kraft may allocate the Charges for
those Resource Units to Eligible Recipients in the countries that are receiving
the benefit of the Services reflected by those Resource Units based on an
allocation formula Kraft provides to Supplier. Supplier will calculate the
Charges based on the location of the Resource Units and internally allocate
those Charges from that location to the Eligible Recipients in a country or
countries designated by Kraft and invoice Eligible Recipient in country for
those Charges.  Unless otherwise agreed by the Parties, invoicing for
Kraft’s existing in-scope entities shall be done in accordance with Schedule 4.8. If Kraft adds
business that consumes Services in a country and Supplier is not then issuing
invoices to an Eligible Recipient in that country, Kraft can require Supplier
to begin issuing invoices to that country. Supplier shall issue such invoice
either from a Supplier Affiliate located in the same country, or, if Supplier
does not have an Affiliate in that country, from another country as mutually
agreed by Kraft and Supplier. Each invoice shall be in the form specified in Exhibit 4 and shall (i) comply with
all applicable legal, regulatory and accounting requirements; and (ii) allow
Kraft to validate volumes and fees. Each invoice shall include the pricing
calculations and related data utilized to establish the Charges and sufficient
information to validate the service volumes and associated Charges. The data
underlying each invoice shall be delivered to Kraft electronically (if
requested by Kraft) in a form and format compatible with Kraft’s accounting
systems. In addition, Supplier shall provide Kraft with a database of current
and detailed information regarding its Charges, with the information in a
format approved by Kraft, that can be used by Kraft to produce chargebacks by
Kraft business unit.


12.1.3              Credits.
To the extent a credit may be due to Kraft pursuant to this Agreement, Supplier
shall provide Kraft with an appropriate credit against amounts then due and
owing; if no further payments are due to Supplier, Supplier shall pay such
amounts to Kraft within 15 days.


12.1.4              *  *  *.
If  *  *  *
fails to provide an  *  *  *
to  *  *  *
for (i) the  *  *  *
within  *  *  *
after the  *  *  *
for which those  *  *  *,
(ii) any other  *  *  *
(excluding any  *  *  *
and  *  *  *)
within  *  *  *
after the  *  *  *
in which the Services subject to  *  *  * are rendered (or a total of  *  *  *
so long as       *  *  *
has notified  *  *  *
within such  *  *  *
of the delay and the estimated amount of the 
*  *  *), or (iii)  *  *  *
within  *  *  *
after the  *  *  *
in which the applicable  *  *  * or  *  *  *
of the   *  *  *
is received by  *  *  *
, then  *  *  *
shall waive any right it may otherwise have to 
*  *  * for and   *  *  *
such amount (and, with respect to  *  *  * and  *  *  *
shall be required to  *  *  * such  *  *  *
and  *  *  *
and any associated  *  *  *
or  *  *  *
without  *  *  *).
*  *  * shall notify  *  *  *
of any delays of any  *  *  * extending more than  *  *  *
of which  *  *  *
is aware.


12.2                        Payment
Due.


Subject to the other provisions of this Article 12 and except as otherwise
provided in  Schedule
4.8 for the countries specified therein, each Monthly Invoice provided
for under Section 12.1 shall be due and
payable by Kraft by wire transfer in immediately available funds within 30 days
after receipt by Kraft of such Monthly Invoice unless the amount in question is
disputed in accordance with Section 12.4.
Any amount due under this Agreement for which a time for payment is not
otherwise specified also shall be due and payable within 30 days, subject to
Kraft’s right to withhold pursuant to Section 12.4.
Any undisputed amounts not paid when due will thereafter bear interest until
paid at the Interest Rate.



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12.3                        Set Off.


With respect to any amount to be paid or reimbursed by
Kraft hereunder, Kraft may set off against such amount any amount that Supplier
is obligated to pay or credit Kraft hereunder; provided that (i) Kraft will
first set off amounts due with respect to any Services in any country against
invoices for the same country; (ii) Kraft will notify Supplier if the invoice
for the same country is insufficient to set off the full amount due and permit
Supplier or the applicable Supplier Affiliate to pay remaining amount due, and
(iii) Kraft will be responsible for currency risk for amounts Kraft elects to
set off against another country’s invoice to the extent such other country uses
a different currency.


12.4                        Disputed
Charges.


Kraft may withhold payment of particular Charges that
Kraft reasonably disputes in good faith subject to the following:


12.4.1              Notice
of Dispute. If Supplier’s invoice includes sufficient detail and supporting
documentation to enable Kraft to reasonably determine whether Supplier’s
Charges are in accordance with this Agreement, Kraft shall notify Supplier on
or before the payment due date of such invoice if it disputes any of the
Charges in such invoice.


12.4.2              Notice
of Insufficient Detail, Documentation and Dispute. If Supplier’s invoice
does not include sufficient detail and supporting documentation to enable Kraft
to reasonably determine whether Supplier’s Charges are in accordance with this
Agreement, Kraft shall so notify Supplier on or before the payment due date.
Supplier shall promptly provide such reasonable detail and supporting
documentation, and Kraft shall notify Supplier within 10 business days after
receipt thereof by the Kraft Contract Manager whether it disputes any of the
Charges in Supplier’s invoice.


12.4.3              Description
and Explanation. If Kraft disputes any Supplier Charges, Kraft shall so
notify Supplier promptly after becoming aware of the issue and provide a
description of the particular Charges in dispute and an explanation of the
reason why Kraft disputes such Charges.


12.4.4              Continued
Performance. Subject to compliance with the provisions of Section 12.4.6, each Party agrees
to continue performing its obligations under this Agreement while any dispute
is being resolved unless and until such obligations are terminated by the
termination or expiration of this Agreement.


12.4.5              No
Waiver. Neither the failure to dispute any Charges or amounts prior to
payment nor the failure to withhold any amount shall constitute, operate or be
construed as a waiver of any right Kraft may otherwise have to dispute any
Charge or amount or recover any amount previously paid.


12.4.6             Amount
of Withholding. In no event may Kraft withhold from any monthly invoice an
amount in excess of  * 
*  * of the aggregate
amount of the monthly invoices, provided that Kraft will be responsible for
currency to the extent the amount withheld from a country invoice pertains to
Services billed under an invoice for another country. If at any time Kraft is
withholding disputed amounts that, in the aggregate, exceed  *  *  *,
then Kraft shall place the full amount of the withheld amounts into an interest
bearing escrow account with a nationally recognized financial institution. The
Parties agree to work in good faith and expeditiously to resolve all Charges
disputes. Interest earned in the
account will be distributed to the Parties in the proportion to the amounts
they receive from the account.



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13.                               KRAFT
DATA AND OTHER PROPRIETARY INFORMATION


13.1                        Kraft
Ownership of Kraft Data.


Kraft Data is and shall remain the property of Kraft
(and/or the applicable Eligible Recipients). Supplier shall promptly deliver
Kraft Data (or the portion of such Kraft Data specified by Kraft) to Kraft in
the format and on the media prescribed by Kraft (i) at any time at Kraft’s
request, (ii) at the end of the Term and the completion of all requested
Termination Assistance Services (except Contract Records, which shall be
retained by Supplier for the Audit Period specified in Section
9.10.1 unless and to the extent Supplier is directed by Kraft to
deliver such Contract Records to Kraft prior to the expiration of such audit
period), or (iii) with respect to particular Kraft Data, at such earlier date
that such data are no longer required by Supplier to perform the Services.
Thereafter, Supplier shall return or destroy, as directed by Kraft, all copies
of the Kraft Data in Supplier’s possession or under Supplier’s control as soon
as possible, but in any event within 10 business days and deliver to Kraft
written certification of such return or destruction signed by an authorized
representative of Supplier. Supplier shall not withhold any Kraft Data as a
means of resolving any dispute. Kraft Data shall not be utilized by Supplier
for any purpose other than the performance of Services under this Agreement and
for use by Supplier in formal dispute resolution proceedings that may arise
between the Parties pursuant to this Agreement. Supplier shall at all times
comply with Kraft’s privacy policy, as modified by Kraft from time to time.
Kraft Data shall not be sold, assigned, leased, encumbered or commercially
exploited or otherwise provided to third parties by or on behalf of Supplier or
any Supplier Personnel. Supplier shall promptly notify Kraft if it believes
that any use of Kraft Data by Supplier contemplated under this Agreement or to
be undertaken as part of the Services is inconsistent with the foregoing.


13.2                        Safeguarding
Kraft Data.


13.2.1              Safeguarding
Procedures. Supplier shall establish and maintain environmental, safety and
facility procedures, data security procedures and other safeguards against the
destruction, loss, unauthorized access or alteration of Kraft Data in the
possession of Supplier which are (i) no less rigorous than those maintained by
Kraft as of the Effective Date and made available to Supplier at its request
(or implemented by Kraft in the future to the extent deemed necessary by
Kraft), including the security and control requirements described in Schedule 17.1 and elsewhere in this
Agreement; and (ii) no less rigorous than those maintained by Supplier for its
own information of a similar nature where the Kraft Data is being maintained at
a Supplier Facility, and, after completion of Transformation or Transition, as
applicable, for Kraft Data maintained by Supplier at a Kraft Site, subject to
Kraft’s responsibility for maintaining physical security at such Kraft Site;
(iii) no less rigorous than accepted security standards in the industry (such
as ISO 17799), and (iv) adequate to permit Supplier to meet its obligations
under Section 13.3. Within 90 days
following the Effective Date, Supplier shall evaluate the then-current Kraft
security policy and shall prepare and submit for Kraft review and approval
recommendations with respect to changes or modifications to such policy.
Supplier shall maintain and enforce the then-current Kraft security policy
until any changes or modifications are approved by Kraft in writing for
implementation. The Parties acknowledge and agree that modifications or
additions to the Kraft security or other policies or the information security
requested by Kraft after the Effective Date may result in Supplier performing
New Services to comply with such modifications or additions if such services
meet the definition of New Services. Kraft shall have the right to establish
backup security for Kraft Data and to keep backup copies of the Kraft Data in
Kraft’s possession at Kraft’s expense if Kraft so chooses. Supplier shall
provide Kraft with downloads of Kraft Data, as requested by Kraft, to enable
Kraft to maintain such backup security or backup copies of Kraft Data. Supplier
shall remove all Kraft Data from any media taken out of service and shall
destroy or securely erase such media in accordance with the Policy and
Procedures Manual. No



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media
on which Kraft Data is stored may be used or re-used to store data of any other
customer of Supplier or to deliver data to a third party, including another
Supplier customer, unless securely erased in accordance with the Policy and
Procedures Manual. In the event Supplier discovers or is notified of a breach
or potential breach of security relating to Kraft Data in the possession or
control of Supplier or its Affiliates or Subcontractors or System that Supplier
is supporting, Supplier shall (i) expeditiously notify Kraft of such breach or
potential breach, (ii) investigate such breach or potential breach and perform
a Root Cause Analysis thereon, (iii) remediate the effects of such breach or
potential breach of security to the extent possible, (iv) provide Kraft with
such assurances as Kraft shall request that such breach or potential breach
will not recur and (v) provide periodic updates during the investigation to
Kraft and provide Kraft the Root Cause Analysis reports. If the Root Cause
Analysis indicates that Supplier was not responsible for the cause of the
breach or potential breach and Supplier is unable to perform remediation
efforts without adding substantial additional Supplier resources or third party
contractors (beyond the Subcontractor personnel then assigned to perform
Services for Kraft), Kraft may elect to either (i) reprioritize the Services,
in which event Supplier will perform the remediation at no additional charge,
or (ii) authorize Supplier to perform the remediation as a Project.


13.2.2              Reconstruction
Procedures. As part of the Services, Supplier shall be responsible for
developing and maintaining procedures for the reconstruction of lost Kraft Data
which are (i) no less rigorous than those maintained by Kraft as of the
Effective Date (or implemented by Kraft in the future to the extent deemed
necessary by Kraft), and (ii) no less rigorous than those maintained by
Supplier for its own information of a similar nature.


13.2.3              Corrections.
Supplier shall restore all destroyed, lost or altered Kraft Data using
generally accepted data restoration techniques consistent with the requirements
of Schedule 2, where
applicable. In addition, if Supplier or its Affiliates or Subcontractors has
caused the destruction, loss or alteration of any Kraft Data, Supplier shall be
responsible for the cost of restoring such data. If Supplier or its Affiliates
or Subcontractors have not caused the destruction, loss or alteration of any
Kraft Data, and Supplier is unable to perform the restoration efforts without
either adding substantial additional Supplier resources or third party
contractors (beyond the Subcontractor personnel then assigned to perform Services
for Kraft), Supplier will so notify Kraft. Kraft may elect to either (i)
reprioritize the Services, in which event Supplier will perform the restoration
at no additional charge, or (ii) authorize Supplier to perform the restoration
as a Project. Supplier shall at all times adhere to the procedures and
safeguards specified in Section 13.2.1
and 13.2.2 and shall correct (including
any required back-up or restoration of data from scheduled backups, or if not
available on such backups, restoration by other means with Kraft’s reasonable
cooperation), at no charge to Kraft, any destruction, loss or alteration of any
Kraft Data attributable to the failure of Supplier or Supplier Personnel to
comply with Supplier’s obligations under this Agreement.


13.2.4              Advice
on Better Procedures. Without disclosure of confidential information about
other customers, Supplier shall regularly advise Kraft of data security
practices, procedures and safeguards in effect for other Supplier customers,
where such practices, procedures and safeguards are of a higher standard than
those contemplated under this Agreement.



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13.3                        Kraft and
Supplier Personal Data.


The Parties shall be bound
by and comply the requirements of Schedule 27
(Global Personal Data Protection Principles) to the extent applicable as specified in
that Schedule.


13.4                        Confidentiality.


13.4.1              Proprietary
Information. Supplier and Kraft each acknowledge that the other possesses
and will continue to possess information that has been developed or received by
it, has commercial value in its or its customers’ business and is not generally
available to the public. Except as otherwise specifically agreed in writing by
the Parties, “Proprietary Information” shall
mean (i) this Agreement and the terms hereof; (ii) all non-public information
and Materials marked confidential, restricted or proprietary by either Party,
and (iii) in the case of Kraft and the Eligible Recipients, Software provided
to Supplier by or through Kraft or the Eligible Recipients, Developed
Materials, Kraft Data, customer lists, customer contracts, customer
information, rates and pricing, information with respect to competitors,
strategic plans, account information, rate case strategies, research
information, plant and equipment design information, financial/accounting
information (including assets, expenditures, mergers, acquisitions,
divestitures, billings collections, revenues and finances), human resources and
personnel information, marketing/sales information, information regarding
businesses, plans, operations, third party contracts, licenses, internal or
external audits, lawsuits, regulatory compliance or other non-public
information, Materials or data obtained, received, transmitted, processed,
stored, archived, or maintained by Supplier under this Agreement; and (iv) in
the case of Supplier, financial information, account information, information
regarding Supplier’s business plans and operations, research information, human
resources and personnel information, trade secrets, third party contracts or
licenses, and proprietary software, tools and methodologies owned by Supplier
and used in the performance of the Services. The terms of, and performance
reports issued in connection with, this Agreement will be deemed the
Proprietary Information of each Party and, except as permitted by Section 13.4.2.3, neither Party may
disclose such Proprietary Information without the prior written consent of the
other Party. The Parties agree that Proprietary Information of Kraft includes,
but is not limited to:  plans for changes
in Kraft’s or an Eligible Recipient’s facilities, business units and product
lines, plans for business mergers, acquisitions or divestitures, rate
information, plans for the development and marketing of new products, financial
forecasts and budgets, technical information, employee lists and company
telephone or e-mail directories.


13.4.2              Obligations.


13.4.2.1                                                         During
the term of this Agreement and at all times thereafter as specified in Section 13.4.6, Supplier and Kraft
shall not disclose to any third party, except as allowable herein, and shall
maintain the confidentiality of, all Proprietary Information of the other Party
(and in the case of Supplier, the Eligible Recipients). Kraft and Supplier
shall each use at least the same degree of care to safeguard and to prevent
disclosing to third parties, except as allowable herein, the Proprietary
Information of the other Party as it employs to avoid unauthorized disclosure,
publication, dissemination, destruction, loss, or alteration of its own Proprietary
Information (or Proprietary Information of its customers) of a similar nature,
but not less than reasonable care. Supplier Personnel shall not have access to
Kraft’s Proprietary Information without proper authorization from the Kraft
Contract Manager or a designee thereof. Upon receiving such authorization,
authorized Supplier Personnel shall have access to Kraft’s Proprietary
Information only to the extent necessary for such person to perform



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his
or her obligations under or with respect to this Agreement or as otherwise
naturally occurs in such person’s scope of responsibility, provided that such
access is not in violation of Law.


13.4.2.2                                                         The
Parties may disclose Proprietary Information of the other Party to their
Affiliates, auditors, attorneys, accountants, consultants, contractors and
subcontractors, where (A) such disclosure is necessary for the performance of
such person’s or entity’s obligations under or with respect to this Agreement
or otherwise naturally occurs in such person’s or entity’s scope of
responsibility, (B) the entity or individual agrees in writing to assume the
obligations described in this Section 13.4,
and (C) the disclosing Party assumes full responsibility for the acts or
omissions of such person or entity and takes all reasonable measures to ensure
that the Proprietary Information of the other Party is not disclosed or used in
contravention of this Agreement. Any disclosure to such person or entity shall
be under the terms and conditions as provided herein. Each Party’s Proprietary
Information shall remain the property of such Party. The Parties may, to the
extent required and subject to appropriate confidentiality notices, provide
Proprietary Information to tax authorities, pertinent to tax filings, claims,
and assessments without approval by the other Party, but subject to notice to
the other party except where prohibited by applicable Law.


13.4.2.3                                                         Neither
Party shall (A) make any use or copies of the Proprietary Information of the
other Party except as contemplated by this Agreement, (B) acquire any right in
or assert any lien against the Proprietary Information of the other Party, (C)
sell, assign, transfer, lease, or otherwise dispose of the other Party’s
Proprietary Information to third parties, except as allowable herein, or
commercially exploit such Proprietary Information of the other Party, including
through Derivative Works, or (D) refuse for any reason (including a default or
material breach of this Agreement by the other Party) to promptly provide the
other Party’s Proprietary Information (including copies thereof) to the other
Party if requested to do so. Notwithstanding the foregoing, either Party may
disclose Proprietary Information relating to the financial or operational terms
of this Agreement and/or Supplier’s performance hereunder (e.g., applicable
Service Levels and measurements of Supplier’s performance with respect to such
Service Levels) in connection with a benchmarking under Section
11.10. Kraft may disclose Proprietary Information relating to
its operations, the Services, the Service Levels, and its costs for the
Services (but not the Resource Unit Charges or Supplier’s actual performance
against its Service Level obligations hereunder), in connection with the
solicitation of proposals for or the procurement of the same or similar
services from Kraft Third Party Contractors. Upon expiration or any termination
of this Agreement and completion of each Party’s obligations under this
Agreement, each Party shall return or destroy, as the other Party may direct, all
documentation in any medium that contains, refers to, or relates to the other
Party’s Proprietary Information within 30 days (except Contract Records, which
shall be retained by Supplier for the Audit Period, unless and to the extent
Supplier is directed by Kraft to deliver such Contract Records to Kraft prior
to the expiration of such audit period). Each Party shall deliver to the other
Party written certification of its compliance with the preceding sentence
signed by an authorized representative of such Party. In addition, each Party
shall take all necessary steps to ensure that its employees comply with these
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13.4.3              Exclusions.
Section 13.4.2 shall not apply to any particular information or
Materials which the receiving Party can demonstrate (i) is, at the time of
disclosure to it, generally available to the public other than through a breach
of the receiving Party’s or a third party’s confidentiality obligations; (ii)
after disclosure to it, is published by the disclosing Party or otherwise
becomes generally available to the public other than through a breach of the
receiving Party’s or a third party’s confidentiality obligations; (iii) is
lawfully in the possession of the receiving Party at the time of disclosure to
it; (iv) is received from a third party having a lawful right to disclose such
information; or (v) is independently developed by the receiving Party without
reference to Proprietary Information of the furnishing Party, provided however,
that the exclusions in the foregoing subsections (i) and (ii) shall not be
applicable to the extent that the disclosure or sharing of such information by
one or both Parties is subject to any limitation, restriction, consent or
notification requirement under any applicable federal or state information
privacy law or regulation then in effect. The Parties acknowledge and agree
that Proprietary Information of the other Party that is not generally available
to the public shall not be deemed public or subject to this exclusion merely
because it is combined with information that is generally available to the
public. In addition, the receiving Party shall not be considered to have
breached its obligations under this Section 13.4
for disclosing Proprietary Information of the other Party as required, in the
opinion of legal counsel, to satisfy any legal requirement of a competent
government body, provided that, promptly upon receiving any such request, such
Party, to the extent it may legally do so, advises the other Party of the other
Party’s Proprietary Information to be disclosed and the identity of the third
party requiring such disclosure prior to making such disclosure in order that
the other Party may interpose an objection to such disclosure, take action to
assure confidential handling of its Proprietary Information, or take such other
action as it deems appropriate to protect the Proprietary Information. Further,
and notwithstanding anything to the contrary in this Agreement, each Party may
disclose, without prior notice to, or approval or consent by, the other Party,
to taxing authorities and to such Party’s representatives, attorneys and
advisers, any Confidential Information that is required to be disclosed in
connection with such Party’s tax filings, reports, claims, audits or
litigation, provided the disclosing Party takes such action as is reasonable to
assure confidential handling of the other Party’s Proprietary Information. The
receiving Party shall use commercially reasonable efforts to cooperate with the
disclosing Party in its efforts to seek a protective order or other appropriate
remedy or in the event such protective order or other remedy is not obtained,
to obtain assurance that confidential treatment will be accorded such
Proprietary Information.


13.4.4              Loss
of Proprietary Information. Each Party shall upon the knowledge or belief
of a loss of the other Party’s Proprietary Information (i) immediately notify
the other Party of any possession, use, knowledge, disclosure, or loss of such
other Party’s Proprietary Information in contravention of this Agreement, (ii)
promptly furnish to the other Party all known details and assist such other
Party in investigating and/or preventing the reoccurrence of such possession,
use, knowledge, disclosure, or loss, (iii) cooperate with the other Party in
any investigation or litigation deemed necessary by such other Party to protect
its rights, and (iv) promptly use all commercially reasonable efforts to
prevent further possession, use, knowledge, disclosure, or loss of the other
Party’s Proprietary Information in contravention of this Agreement. Each Party
shall bear any costs it incurs in complying with this Section
13.4.4.


13.4.5              No
Implied Rights. Nothing contained in this Section
13.4 shall be construed as obligating a Party to disclose its
Proprietary Information to the other Party, or as granting to or conferring on
a Party, expressly or impliedly, any rights or license to any Proprietary
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13.4.6              Survival.
Supplier’s obligations with respect to Kraft Personal Data and Kraft’s human
resources and personnel information and Kraft’s obligations with respect to
Supplier’s human resources and personnel information shall survive the
expiration or termination of this Agreement and shall be perpetual. The Parties’
obligations of non-disclosure and confidentiality with respect to all of the
other Party’s Proprietary Information shall survive the expiration or
termination of this Agreement for a period of 15 years from the expiration or
termination of this Agreement (including all periods of Termination Assistance
Services); provided, however, that the passage of this 15 year period shall not
absolve either Party of responsibility for any breach of this Article 13 occurring prior to the
expiration of such 15 year period.


13.5                        File
Access.


Subject to the limitations expressly noted in this Section 13.5, Kraft shall have
unrestricted access to, and the right to review and retain the entirety of, all
computer or other files containing Kraft Data, as well as all systems and
network logs, system parameters and documentation. At no time shall any of such
files or other materials or information be stored or held in a form or manner
not readily accessible to Kraft. Supplier shall provide to the Kraft Contract Manager
all passwords, codes, comments, keys, documentation and the locations of any
such files and other materials promptly upon the request of Kraft, including
Equipment and Software keys and such information as to format, encryption (if
any) and any other specification or information necessary for Kraft to
retrieve, read, revise and/or maintain such files and information. Upon the
request of the Kraft Contract Manager, Supplier shall confirm that, to the best
of its knowledge, all files and other information provided to Kraft are
complete and that no material element, amount, or other fraction of such files
or other information to which Kraft may request access or review has been
deleted, withheld, disguised or encoded in a manner inconsistent with the purpose
and intent of providing full and complete access to Kraft as contemplated by
this Agreement. Kraft shall comply with Supplier’s reasonable security and
confidentiality requirements, and, to the extent such access requires use of
Supplier’s software, equipment, systems or facilities, shall comply with
Supplier’s reasonable security and confidentiality requirements, and with
Supplier’s reasonable standards and procedures in order to avoid disclosure of
or access to any information of any other Supplier customers, or other Supplier
Proprietary Information that Kraft is not otherwise entitled to obtain pursuant
to this Agreement, including Supplier’s internal costs.


13.6                        Requirements
for Information in Legal Proceedings.


13.6.1              Preservation
of Legal Privileges. If Kraft notifies Supplier, or Supplier is otherwise
aware, that particular Kraft Data or Kraft’s Proprietary Information may be
within Kraft attorney-client or work-product privileges of Kraft, then
regardless of any applicable exclusions, Supplier (i) shall not disclose such
Kraft Data or Kraft Proprietary Information or take any other action that would
result in waiver of such privileges and (ii) shall instruct all Supplier
Personnel and Subcontractors who may have access to such communications to maintain
privileged material as strictly confidential and otherwise protect Kraft
privileges. Communications to and from any lawyer employed or retained on
behalf of Kraft shall be deemed to contain privileged material unless Kraft
otherwise states, and Supplier acknowledges it is aware of this.


13.6.2              Litigation
Response Plan. If Kraft so requests, Supplier shall participate in periodic
meetings to discuss implementation and updating of policies and procedures to
prepare for and respond to discovery requests, subpoenas, investigatory
demands, and other requirements for information related to legal and regulatory
audits and proceedings (the “Litigation Response Plan”).
At such meetings, Supplier shall fully cooperate with Kraft in providing all
information requested by Kraft or that would assist Kraft in connection with
such Litigation Response Plan. Supplier shall comply with the Litigation
Response Plan, to the extent capable of being performed by the Supplier
Personnel then providing the Services, as it may be revised by Kraft from time
to time,



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including
preparing for and complying with requirements for the preservation and
production of data in connection with legal and regulatory proceedings and
government investigations.


13.6.3              Response
to Preservation and Production Requirements.


13.6.3.1                                                         If
Kraft is required to, or sees a risk that it will be required to, preserve
and/or produce any Materials, Kraft Data, Kraft’s Proprietary Information or
related Systems possessed by Supplier or under Supplier’s control in the
context of legal proceedings or investigations (“Litigation
Data”), Kraft may send Supplier a notice (a “Litigation
Requirements Notice”) describing the Litigation Data to be preserved
or produced in reasonable detail. If Kraft so requests, Supplier shall promptly
provide Kraft with information needed to determine with greater specificity the
scope of the request.


13.6.3.2                                                         Upon
receipt of a Litigation Requirements Notice, Supplier shall (A) designate a
legal information management representative who shall be responsible for
managing Supplier’s response and any resulting Services and (B) cooperate with
Kraft to the fullest extent to preserve and/or produce the Litigation Data
described in such Litigation Requirements Notice.


13.6.3.3                                                         Without
limiting the foregoing, Supplier shall immediately take all necessary measures
to preserve all Litigation Data described in a Litigation Requirements Notice
and unless otherwise instructed by Kraft, to deliver such Litigation Data to
Kraft by the date set forth in the Litigation Requirements Notice (or within 30
days, if no date is given). If Supplier is unable to determine from the
Litigation Requirements Notice what Litigation Data is to be preserved and/or
produced, or is not able for technical or other reasons to take effective steps
to fully preserve or produce such Litigation Data, Supplier shall immediately
so notify Kraft and undertake all necessary measures to comply with the
Litigation Requirements Notice to the fullest extent possible.


13.6.3.4                                                         Supplier
shall cooperate with Kraft in generating information to be presented in legal
proceedings, including, as Kraft requests, (A) Charges estimates, (B)
descriptions of systems, data, media and processes, (C) reports, declarations
and affidavits, (D) reasons why it may be infeasible to preserve or produce
certain items, and (E) other material as requested by Kraft, so long as it does
not require the disclosure of Supplier Proprietary Information or internal cost
information that Kraft does not have a right to obtain. Without limiting the
generality of the foregoing, Supplier shall fully document all actions taken by
Supplier pursuant to any Litigation Requirements Notice. Supplier shall
promptly report to Kraft on its activities related to complying with the requirements
described in the Litigation Requirements Notice, and shall issue periodic
reports pursuant to Section 9.2
on a schedule to be agreed to by the Parties.


13.6.4              Supplier
Responsibility for Kraft Information. Upon receipt by Supplier from a third
party of any request, demand, notice, subpoena, order or other legal
information request relating to legal proceedings or investigations relating to
any Materials, Kraft Data, Kraft Proprietary Information or related Systems in
Supplier’s possession (“Third Party Litigation
Data”), Supplier shall immediately notify Kraft Contract Manager (or
his or her designee) and provide Kraft with a copy of all Third Party
Litigation Data requested, to the extent Supplier legally may do so. Prior to
responding to such legal information request, Supplier shall meet and confer
with Kraft and shall cooperate with Kraft in preserving Kraft’s legal rights,
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objections,
reservations, limitations and privileges, relating to such legal information
request. If legally permissible, Kraft at its sole discretion may demand tender
of the request by Supplier and assume primary responsibility for responding, in
which case (i) Supplier shall cooperate fully with Kraft in preparing the
response and (ii) Kraft shall inform Supplier of all proceedings related to the
response and protect Supplier’s interests and legal rights. If Supplier is
barred legally from notifying Kraft of the legal information request, Supplier
shall take commercially reasonable steps to protect Kraft’s legal rights in
connection with any response.


13.6.5              Cost
of Compliance. The Parties acknowledge that compliance with this Section 13.6 may, in some cases,
constitute New Services for which Supplier is entitled to additional
compensation. However, in no event shall Supplier be entitled to any additional
compensation for New Services under this subsection unless the Kraft Contract
Manager and Supplier Account Executive, or their authorized designee, expressly
agree upon such additional compensation or Supplier’s entitlement to additional
compensation is established through the dispute resolution process.


14.          OWNERSHIP AND LICENSE OF MATERIALS


14.1                        Kraft
Owned and Licensed Materials.


14.1.1              Ownership
of Kraft Owned Materials. Kraft shall be the sole and exclusive owner of
(i) all intellectual property, Software and other Materials owned by Kraft or
the Eligible Recipients, including Kraft Owned Software and other Materials
owned by Kraft and the Eligible Recipients, and (ii) all enhancements and Derivative
Works of such intellectual property, Software and Materials, including all
United States and foreign patent, copyright and other intellectual property
rights in such Materials (collectively, “Kraft Owned Materials”).
As between Kraft and Supplier, Kraft Owned Materials shall include (i) all
intellectual property, Software and Materials pertaining to Kraft products or
services created by or obtained from third party sellers, distributors,
purchasers or users of such products or services, and (ii) all enhancements or
derivative works of such intellectual property, Software and Materials.


14.1.2              License
to Kraft Owned Materials. As of the Commencement Date, Kraft hereby grants
Supplier and, to the extent necessary for Supplier to provide the Services, to
Subcontractors designated by Supplier that sign a written agreement to be bound
by all of the terms contained herein applicable to such Materials (such
agreement shall be agreed to by the Parties and shall include the terms
specified in this Section as well as those pertaining to the ownership of such
Materials and any Derivative Works developed by the Parties, the scope and term
of the license, the restrictions on the use of such Materials, the obligations
of confidentiality, etc.) a non-exclusive, non-transferable, royalty-free
limited right and license during the Term (and thereafter to the extent
necessary to perform any Termination Assistance Services requested by Kraft) to
access, use, execute, reproduce, display, perform, modify and distribute the Kraft
Owned Materials for the express and sole purpose of providing the Services.
Supplier and its Subcontractors shall have no rights in the source code to such
Kraft Owned Materials unless and to the extent approved in writing in advance
by Kraft. Kraft Owned Materials shall remain the sole property of Kraft.
Supplier and its Subcontractors shall not (i) use any Kraft Owned Materials for
the benefit of any person or Entity other than Kraft or the Eligible
Recipients, (ii) separate or uncouple any portions of the Kraft Owned
Materials, in whole or in part, from any other portions thereof, or (iii)
reverse assemble, reverse engineer, translate, disassemble, decompile or
otherwise attempt to create or discover any source or human readable code,
underlying algorithms, ideas, file formats or programming interfaces of the
Kraft Owned Materials by any means whatsoever, without the prior written
approval of Kraft, which may be withheld at Kraft’s sole discretion. Except as
otherwise requested or approved by Kraft in writing, Supplier and its
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end
of the Term and the completion of any Termination Assistance Services and shall
certify such cessation to Kraft in a notice signed by an officer of Supplier
and each applicable Subcontractor. THE KRAFT OWNED MATERIALS ARE PROVIDED BY
KRAFT TO SUPPLIER AND ITS SUBCONTRACTORS ON AN AS-IS, WHERE-IS BASIS, EXCEPT
FOR KRAFT’S INFRINGEMENT INDEMNITY IN SECTION 17.2.5.
KRAFT EXPRESSLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED, AS TO SUCH KRAFT OWNED MATERIALS, OR THE CONDITION OR SUITABILITY OF
SUCH MATERIALS FOR USE BY SUPPLIER OR ITS SUBCONTRACTORS TO PROVIDE THE
SERVICES, INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.


14.1.3              License
to Kraft Licensed Third Party Materials. Subject to Supplier having
obtained any Required Consents, Kraft hereby grants to Supplier, for the sole
purpose of performing the Services and solely to the extent of Kraft’s
underlying rights, the same rights of access and use as Kraft possesses under
the applicable software licenses with respect to Kraft licensed Third Party
Materials. Kraft also shall grant such rights to Subcontractors designated by
Supplier if and to the extent necessary for Supplier to provide the Services;
provided that, Supplier shall pay all fees, costs and expenses associated with
the granting of such rights to such Subcontractors. Supplier and its
Subcontractors shall comply with the duties, including use restrictions and
those of nondisclosure, imposed on Kraft by such licenses. In addition, each
Subcontractor shall sign a written agreement to be bound by all of the terms
contained herein applicable to such Third Party Materials (such agreement shall
be agreed to by the Parties and shall include the terms specified in this
Section as well as those pertaining to the ownership of such Third Party
Materials and any derivative materials developed by the Parties, the scope and
term of the license, the restrictions on the use of such Third Party Materials,
the obligations of confidentiality, etc.). Except as otherwise requested or
approved by Kraft (or the relevant licensor), Supplier and its Subcontractors
shall cease all use of such Third Party Materials upon the end of the Term and
the completion of any Termination Assistance Services. THE KRAFT LICENSED THIRD
PARTY MATERIALS ARE PROVIDED BY KRAFT TO SUPPLIER AND ITS SUBCONTRACTORS ON AN
AS-IS, WHERE-IS BASIS, EXCEPT FOR KRAFT’S INFRINGEMENT INDEMNITY IN SECTION 17.2.5. KRAFT EXPRESSLY
DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES, EXPRESSED OR IMPLIED, AS TO SUCH
KRAFT LICENSED THIRD PARTY MATERIALS, OR THE CONDITION OR SUITABILITY OF SUCH
MATERIALS FOR USE BY SUPPLIER OR ITS SUBCONTRACTORS TO PROVIDE THE SERVICES,
INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.


14.2                        Developed
Materials.


14.2.1              Ownership
by  * 
*  *. Unless the Parties agree
otherwise, all Developed Materials created by Supplier in connection with the
Services provided by Supplier under this Agreement shall be       *  *  *
and considered to be  *  *  * (as that term is used in
Section  *  *  *
of the United States Copyright Act, 17 U.S.C. § 
*  *  *, or in analogous provisions of
other applicable Laws) and owned by  *  *  *. If any such Developed Materials
may not be considered a  *  *  *under applicable Law,  *  *  *
hereby irrevocably assigns, and shall assign, to  *  *  *
without further consideration, all of  *  *  * right, title and interest in and
to such Developed Materials, including United States and foreign patent,
copyright and other intellectual property rights. *  *  *
acknowledges that  *  *  *
and the successors and assigns of  *  *  * shall have the right to obtain
and hold in their own name any patent, copyright and other intellectual
property rights in and to such Developed Materials. *  *  *
agrees to execute any documents and take any other actions reasonably requested
by  *  *  *
to effectuate the purposes of this Section 14.2.1.
*  *  * hereby 



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grants  *  *  *
certain license and other rights with respect to such Developed Materials and
associated intellectual property rights, as described in Sections
14.1.2 and 14.1.4. *  *  * may, in its sole discretion and
upon such terms and at such financial arrangement as  *  *  *
and  *  *  *
may agree, grant  *  *  *
a written license to use such Developed Materials for other purposes and to
sublicense such Developed Materials.


14.2.2              Source
Code and Documentation. At Kraft’s request, Supplier shall, promptly as it
is developed by Supplier, provide Kraft with the source code and object code
and documentation for all Developed Materials used by Supplier. To the extent
Kraft has not requested that Supplier provide such code to Kraft, Supplier
shall maintain such code in a location and in a form that is readily accessible
by Kraft upon its request. In each case, such source code shall be sufficient
to allow a reasonably knowledgeable and experienced programmer to maintain and
support such Developed Materials; and the user documentation for such Developed
Materials shall accurately describe in terms understandable by a typical end
user the functions and features of such Developed Materials and the procedures
for exercising such functions and features.


14.2.3              Supplier
Owned Developed Materials. Notwithstanding Section
14.2.1, Derivative Works of Supplier Owned Materials created by
Supplier in the course of providing Services under this Agreement shall be
owned by Supplier (provided, however, if the creation of such Derivative Work
is specifically requested by Kraft, it shall be treated as a work made for hire
under Section 14.2.1 or assigned to Kraft
and, unless otherwise agreed, shall be owned by Kraft). Supplier hereby grants
to Kraft a worldwide, perpetual, irrevocable, non-exclusive, fully paid-up
license, with the right to grant sublicenses, to use, execute, reproduce,
display, perform, modify, enhance, distribute and create Derivative Works of
such Developed Materials for the benefit and use of Kraft and the Eligible
Recipients.


14.2.4              Third
Party Materials. The ownership of Derivative Works of Third Party Materials
created by Supplier in connection with the Services shall, as between Supplier
and Kraft, be considered Developed Materials owned by Kraft. Kraft’s ownership
of such Derivative Works may be subject to or limited by the terms of the
underlying agreement with the owner of the underlying Third Party Materials,
provided, that Supplier shall notify Kraft in advance if the terms of any such
agreement will preclude or limit Kraft’s ownership of such Derivative Work and
shall obtain Kraft’s written consent prior to proceeding with such Derivative
Work.


14.2.5              Disclosure
by Supplier of Developed Materials. Supplier shall promptly disclose in
writing to Kraft each Developed Material that is developed in connection with
the Services. With respect to each disclosure, Supplier shall indicate the
features or concepts that it believes to be new or different.


14.2.6              Agreement
Regarding Inventions and Patents. With
respect to patented inventions arising out of Developed Materials, but not
including inventions by Transitioned Employees while working on the Kraft
account during the first twelve (12) months following their relevant Employment
Effective Date, and not including any inventions solely conceived and reduced
to practice by or on behalf of Kraft or any Eligible Recipients, by a party
other than Supplier or its subcontractors hereunder, Kraft shall not, and shall
cause the Eligible Recipients and each of their respective employees to not,
sue or seek injunctive relief for patent infringement against Supplier or any
customer of Supplier which is (i) then currently receiving services from
Supplier as evidenced by Supplier’s business records, or (ii) using software or
systems developed and delivered by Supplier, which in the case of either
clauses (i) or (ii) above, that are alleged to be infringing of such rights,
where the allegedly infringing inventions or services are independently
developed by Supplier employees not primarily dedicated to the Kraft account or
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information related to the subject matter of the patent.
The foregoing covenant shall not extend to any copyrights or other intellectual
property rights of Kraft or the Eligible Recipients.


14.3        Supplier
Owned and Licensed Materials.


14.3.1     Ownership of Supplier
Owned Materials. Supplier shall be the sole and exclusive owner of the (i)
intellectual property, Software and Materials lawfully owned by it, (ii)
intellectual property, Software and Materials acquired by Supplier (including
any such Materials purchased from Kraft pursuant to this Agreement) other than
acquisitions for Kraft or an Eligible Recipient in connection with the
performance of the Services, (iii) Derivative Works of Supplier owned
intellectual property, Software and Materials created by or for Supplier in
accordance with Section 14.2.3,
(iv) Materials developed by or on behalf of Supplier other than in the course
of the performance of its obligations under this Agreement or in connection
with the use of any Kraft Data or Kraft Owned Materials, including all United
States and foreign patent, copyright and other intellectual property rights in
such Materials described in clauses (i) through (iv) of this paragraph (“Supplier Owned Materials”).


14.3.2     License to
Supplier Owned Materials. Effective upon the first use by the Supplier of
any Supplier Owned Materials to provide the Services, Supplier hereby grants to
Kraft and the Eligible Recipients, at no additional charge, a world-wide,
non-exclusive, royalty-free right and license during the Term and any
Termination Assistance Services period to (i) access, use, execute, reproduce,
display, distribute (among themselves and, where appropriate for Kraft and the
Eligible recipients to receive the benefit of this Section, to Kraft Third
Party Contractors) and perform, such Supplier Owned Materials (including all
modifications, replacements, Upgrades, enhancements, methodologies, tools,
documentation, materials and media related thereto), and (ii) modify, enhance
and create Derivative Works of such Supplier Owned Materials, provided that
Kraft will notify Supplier of any such modifications, enhancements or creation
of  Derivative Works and obtain Supplier’s
approval through the Change Control Procedures if Kraft’s modifications,
enhancements or the creation of Derivative Works would impair Supplier’s
ongoing use of such Material to perform the Services. In addition, at no
additional Charge, Supplier hereby grants to Kraft Third Party Contractor(s) a
non-exclusive, royalty-free right and license during the Term and any
Termination Assistance Services period, for the benefit of Kraft and the
Eligible Recipients,  to (x) access use,
execute, reproduce, display, perform, and distribute (to Kraft and the Eligible
Recipients and, where appropriate for Kraft and the Eligible recipients to
receive the benefit of this Section, to Kraft Third Party Contractors) and (y)
modify, enhance and create Derivative Works of such Supplier Owned Materials
and Software (including all modifications, replacements, Upgrades, enhancements,
methodologies, tools, documentation, materials and media related thereto),
provided that Kraft will notify Supplier of any such modifications,
enhancements or creation of Derivative Works and obtain Supplier’s approval
through the Change Control Procedures if any Kraft Third Party Contractor’s
modifications, enhancements or Derivative Works would impair Supplier’s ongoing
use of such Material to perform the Services. Supplier Owned Materials shall
remain the property of Supplier Kraft, the Eligible Recipients and Kraft Third
Party Contractors may only exercise the rights granted to the Supplier Owned
Materials pursuant to this Section 14.3.2
in order to (A) receive the full benefit of the Services provided by Supplier,
and (B) perform or have performed services that entail the same or similar
types of use for which Supplier used or uses such Material in connection with
the provision of the Services. The rights and obligations of Kraft, the
Eligible Recipients and Kraft Third Party Contractors with respect to such
Supplier Owned Materials following the expiration or termination of the
Agreement or termination of any Service are set forth in Section
14.6.


14.3.3     Embedded
Materials. To the extent that Supplier Owned Materials are embedded in any
Developed Materials owned by Kraft pursuant to Section
14.2.1, Supplier shall not be deemed to



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have
assigned its intellectual property rights in such Supplier Owned Materials to
Kraft, but Supplier hereby grants to Kraft a worldwide, perpetual, irrevocable,
non-exclusive, fully paid-up license, with the right to grant sublicenses, to
use, execute, reproduce, display, perform, modify, enhance, distribute and
create Derivative Works of such Supplier Owned Materials (including all
modifications, replacements, Upgrades, enhancements, methodologies, tools,
documentation, materials and media related thereto) solely for the benefit and
use of Kraft, Kraft Affiliates and the Eligible Recipients for so long as such
Supplier Owned Materials remain embedded in such Developed Materials and are
not separately commercially exploited. Following the expiration or termination
of the Term and the termination of the Service(s) for which such Materials were
used, Supplier shall, at Kraft’s request, provide Upgrades, maintenance, support
and other services for such embedded Supplier Owned Materials in accordance
with Section 14.6.2 or 14.6.3, as
applicable.


14.3.4     Source Code
Escrow. At Kraft’s request and expense with respect to the escrow agent
charges, Supplier shall deposit in escrow with an escrow agent selected by
Kraft the source code and related documentation for Supplier Owned Software
and, to the extent available to Supplier, the source code for any Third Party
Software used by Supplier to perform the Services. The escrow shall be governed
by and subject to the terms and conditions appearing in the Escrow Agreement
attached hereto as Exhibit 5,
as such terms and conditions may be modified by Kraft and the escrow agent.
Unless approved by Kraft, Supplier shall not use any non-commercially available
Third Party Software for the performance of the Services without obtaining the
right to the source code for such software, whether by escrow or otherwise.


14.3.5     License to
Supplier Licensed Third Party Materials. Effective upon the first use by
Supplier of any Third Party Materials to provide the Services and subject to
Supplier having obtained any Required Consents, Supplier hereby grants to Kraft
and the Eligible Recipients, and, solely for the benefit of Kraft and the
Eligible Recipients, to the Kraft Third Party Contractors, at no additional
charge, a non-exclusive, royalty-free right and license to access and/or use
the Third Party Materials as to which Supplier holds the license or for which
Supplier is financially responsible under this Agreement (including all
modifications, substitutions, Upgrades, enhancements, methodologies, tools,
documentation, materials and media related thereto), during the Term and any
Termination Assistance Services period Kraft, the Eligible Recipients and Kraft
Third Party Contractors may only exercise the rights granted to the Third Party
Materials pursuant to this Section 14.3.5
in order to (A) receive the full benefit of the Services provided by Supplier,
and (B) perform or have performed services that entail the same or similar
types of use for which Supplier used or uses such Material in connection with
the provision of the Services. The rights and obligations of Kraft, the
Eligible Recipients and Kraft Third Party Contractors with respect to such Supplier
licensed Third Party Materials following the expiration or termination of the
Agreement or termination of any Service are set forth in Section
14.6.


14.4        Other
Materials.


This Agreement shall not confer upon either Party
intellectual property rights in Materials of the other Party (to the extent not
covered by this Article 14)
unless otherwise so provided elsewhere in this Agreement.


14.5        General
Rights.


14.5.1     Copyright
Legends. Each Party agrees to reproduce copyright legends which appear on
any portion of the Materials which may be owned by the other Party or third
parties.



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14.5.2     Residuals.
Nothing in this Agreement (including Article 9)
shall restrict any employee or representative of a Party from using general
ideas, concepts, practices, learning or know-how relating to the processing of
information technology that are retained in the unaided memory of such employee
or representative after performing the obligations of such Party under this
Agreement, except to the extent that such use infringes upon any patent,
copyright or other intellectual property right of a Party or its Affiliates
(or, in the case of Supplier, any Eligible Recipient); provided, however, that
this Section 14.5.2 shall not (i) be
deemed to limit either Party’s obligations under this Agreement with respect to
the disclosure or use of Proprietary Information, or (ii) operate or be
construed as permitting an employee or representative of Supplier to disclose,
publish, disseminate or use (a) the source of any Proprietary Information of
Kraft or an Eligible Recipient, (b) any financial, statistical or personnel
information of Kraft or an Eligible Recipient, or (c) the business plans of
Kraft or the Eligible Recipients. An individual’s memory is unaided if the
individual has not intentionally memorized the other Party’s Proprietary
Information for the purpose of retaining and subsequently using or disclosing
it and does not identify the information as the other Party’s Proprietary
Information upon recollection. For avoidance of doubt, the foregoing would not
permit Supplier Personnel to use Proprietary Information of Kraft or an
Eligible Recipient for any purpose other than the provision of Services under
this Agreement.


14.5.3     No Implied
Licenses. Except as expressly specified in this Agreement, nothing in this
Agreement shall be deemed to grant to one Party, by implication, estoppels or
otherwise, license rights, ownership rights or any other intellectual property
rights in any Materials owned by the other Party or any Affiliate of the other
Party (or, in the case of Supplier, any Eligible Recipient).


14.5.4     Incorporated
Materials. Should either Party incorporate into Developed Materials any
intellectual property subject to third party patent, copyright or license
rights, any ownership or license rights granted herein with respect to such
Materials shall be limited by and subject to any such patents, copyrights or
license rights; provided that, prior to incorporating any such intellectual
property in any Materials, the Party incorporating such intellectual property
in the Materials has disclosed this fact and obtained the prior approval of the
other Party.


14.6        Kraft
Rights Upon Expiration or Termination of Agreement.


As part of the Termination Assistance Services,
Supplier shall provide the following to Kraft, Kraft Affiliates and the
Eligible Recipients with respect to Materials and Software:


14.6.1     Kraft Owned
Materials and Developed Materials. With respect to Kraft Owned Materials
and Developed Materials, Supplier shall, at no cost to Kraft:


14.6.1.1                   deliver
to Kraft all Kraft Owned Materials and Developed Materials and all copies
thereof in the format and medium in use by Supplier in connection with the
Services as of the date of such expiration or termination; and


14.6.1.2                   following
confirmation by Kraft that the copies of the Kraft Owned Materials and
Developed Materials delivered by Supplier are acceptable and the completion by
Supplier of any Termination Assistance Services for which such Materials are
required, destroy or securely erase all other copies of such Materials then in
Supplier’s possession and cease using such Materials and any information
contained therein for any purpose.



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14.6.2     Supplier Owned
Materials.


14.6.2.1                   With
respect to those Materials owned by Supplier or Supplier Affiliates or (subject
to Section 6.4.3) Subcontractors
(other than Commodity Equipment and Transport Providers, product vendor
specialists who Supplier engages on a temporary basis to address urgent
problems, and Third Party Contractors under Third Party Contracts assumed by
Supplier to the extent such contracts do not comply with this requirement as of
the Effective Date) and used by them during the 12-month period immediately
preceding the expiration or termination of the Term to provide the Services
(and any modifications, substitutions, Upgrades, enhancements, methodologies,
tools, documentation, materials and media related thereto):


14.6.2.1.1                Supplier
hereby grants to Kraft and the Eligible Recipients (or, at Kraft’s election, to
their designee(s)) a worldwide, perpetual, non-exclusive, non-transferable,
irrevocable, fully paid-up license to use, execute, reproduce, display,
perform, and distribute (among
themselves and, where appropriate for Kraft and the Eligible Recipients to
receive the benefit of this Section, to Kraft Third Party Contractors), and
modify, enhance and create Derivative Works and to permit a third party to use,
execute, reproduce, display, perform, and distribute (to Kraft and such
Eligible Recipients, and, where appropriate for Kraft and the Eligible
Recipients to receive the benefit of this Section, to Kraft Third Party
Contractors) such Supplier Owned Materials for the benefit or use of Kraft,
Kraft Affiliates and the Eligible Recipients upon the expiration or termination
of the Term, but only with respect to replacement services that are the same or
similar to the Services for which such Supplier Owned Materials and Derivative
Works were used (without the obligation by Supplier to maintain, support,
upgrade or provide other services with respect thereto except as provided in Section 14.6.2.1.3 below);


14.6.2.1.2                Supplier
shall deliver to Kraft and the Eligible Recipients (or, at Kraft’s election, to
their designee(s)) (A) a copy of such Supplier Owned Materials and related
documentation, (B) the source code and object code for such Supplier Owned
Materials to the extent such code is reasonably necessary to permit them to use
such Supplier Owned Materials, (C) the source code and object code for Supplier
Owned Materials that are not commercial off-the-shelf products, and (D) the
source code and object code for Supplier Owned Materials that are commercial
off-the-shelf products if Supplier does not offer or provide upgrades,
maintenance, support and other services for such Materials as provided in Section 14.6.2.1.3, but only with
respect to replacement services that are the same or similar to the Services
for which such Supplier Owned Materials and Derivative Works were used (without
the obligation to maintain, support, upgrade or provide other services with
respect thereto except as reflected in Section 14.6.2.1.3
below; and


14.6.2.1.3                Supplier
shall offer to provide to Kraft and the Eligible Recipients (or, at Kraft’s
election, to their designee(s)), Upgrades, maintenance, support and other
services for Supplier Owned Materials commercial off-the-shelf



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Materials,
and any other Materials provided by Supplier on Supplier’s then-current
standard terms and conditions for such services.


14.6.2.2                   Unless
Kraft has otherwise agreed in advance, Kraft and the Eligible Recipients (and,
to the extent applicable, Kraft’s designee(s)) shall not be obligated to pay
any license or transfer fees in connection with its receipt of the licenses and
other rights to Supplier Owned Materials above. Supplier shall not use any
Supplier Owned Materials for which it is unable to offer such license or other
rights without Kraft’s prior written approval (and absent such approval,
Supplier’s use of any such Supplier Owned Materials shall obligate Supplier to
provide, at no additional cost, such license and other rights to Kraft, Kraft
Affiliates, the Eligible Recipients and Kraft’s designees).


14.6.3     Third Party
Materials.


14.6.3.1                   Subject
to any exceptions to which Kraft has consented pursuant to Section 6.4.3,
with respect to Third Party Materials licensed by Supplier or Supplier
Affiliates or Subcontractors (other than product vendor specialists who
Supplier engages on a temporary basis to address urgent problems, Third Party
Contractors under Kraft assigned contracts to the extent such contracts do not
comply with this requirement as of the Effective Date, and vendors of Supplier
Overhead Materials) and used by them to provide the Services, Supplier hereby
grants to Kraft and the Eligible Recipients (or, at Kraft’s election, to their
designee(s)) a sublicense (with the right to grant sublicenses) offering the
same rights and warranties with respect to such Third Party Materials available
to Supplier (or Supplier Affiliates or Subcontractors), on the same terms and
conditions, for the benefit and use of Kraft, Kraft Affiliates and the Eligible
Recipients upon the expiration or termination of the Term with respect to
services that are the same or similar to the Services for which such Third
Party Materials were used; provided that, during the Termination Assistance
Services period, Supplier may, with Kraft’s approval, substitute one of the
following for such sublicense:


14.6.3.1.1                the
assignment to Kraft and the Eligible Recipients (or, at Kraft’s election, to
their designee(s)) of the underlying license for such Third Party Materials;


14.6.3.1.2                the
procurement for Kraft and the Eligible Recipients (or, at Kraft’s election, to
their designee(s)) of a new license (with terms at least as favorable as those
in the license held by Supplier or its Affiliates or Subcontractors and with
the right to grant sublicenses) to such Third Party Materials for the benefit
or use of Kraft, Kraft Affiliates and the Eligible Recipients; or


14.6.3.1.3                the
procurement for Kraft and the Eligible Recipients (or, at Kraft’s election, to
their designee(s)) of a substitute license for Third Party Materials sufficient
to perform, without additional cost, support or resources and at the levels of
performance and efficiency required by this Agreement, the functions of the
Third Party Materials necessary to enable Kraft or its designee to provide the
Services after the expiration or termination of the Term.



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14.6.3.2                   In
addition, Supplier shall deliver to Kraft and the Eligible Recipients (or, at
Kraft’s election, to their designee(s)) a copy of such Third Party Materials
(including source code, to the extent it has been available to Supplier) and
related documentation, and shall cause (or in the case of commercially
available Materials, use commercially reasonable efforts to cause) maintenance,
support and other services to continue to be available to Kraft and the
Eligible Recipients (or, at Kraft’s election, to their designee(s)) to the
extent it has been available to Supplier), provided that Kraft or its designee
shall be responsible for the cost of such Services after termination. Unless
Kraft has otherwise agreed in advance in accordance with Section
6.4.3, Kraft and the Eligible Recipients shall not be obligated
to pay any license or transfer fees in connection with its receipt of the
licenses, sublicenses and other rights specified in this Section
14.6.3. Supplier shall not use any Third Party Materials for
which it is unable to offer such license, sublicense or other rights without
Kraft’s prior approval (and absent such approval, Supplier’s use of any such
Third Party Materials shall obligate Supplier to provide, at no additional
cost, such licenses, sublicenses and other rights). Kraft, however, shall be
obligated to make monthly or annual payments attributable to periods after the
expiration or termination of the Term with respect to the Services for which
such Third Party Materials were used for the right to use and receive
maintenance or support related thereto, but only to the extent Supplier would
have been obligated to make such payments if it had continued to hold the
licenses in question or Kraft has agreed in advance to make such payments.


14.6.3.3                   To
the extent Kraft has agreed in advance to pay any fees in connection with its receipt
of such licenses, sublicenses or other rights, Supplier shall, at Kraft’s
request, identify the licensing and sublicensing options available to Kraft and
the Eligible Recipients and the license or transfer fees associated with each.
Supplier shall use commercially reasonable efforts to obtain the most favorable
options and the lowest possible transfer, license, relicense, assignment or
termination fees for Third Party Materials. Supplier shall not commit Kraft or
the Eligible Recipients to pay any such fees or expenses without Kraft’s prior
written approval. If the licensor offers more than one form of license, Kraft
(not Supplier) shall select the form of license to be received by Kraft, the
Eligible Recipients or their designee(s).


15.          REPRESENTATIONS,
WARRANTIES AND COVENANTS


15.1        Work
Standards.


Supplier warrants that the Services shall be executed
in a workmanlike manner, in accordance with the best practices of the
information technology outsourcing industry and the Service Levels, Supplier
covenants that (i) the Services shall be rendered with promptness, due care,
skill and diligence; (ii) Supplier shall use adequate numbers of qualified
individuals with suitable training, education, experience, know-how, competence
and skill to perform the Services; (iii) Supplier shall provide such
individuals with training as to new products and services prior to the
implementation of such products and services in the Kraft/Eligible Recipients
environment; and (iv) Supplier shall have the resources, capacity, expertise
and ability in terms of Equipment, Software, know-how and personnel to provide
the Services. In all cases where Supplier has committed to a specific Service
Level in Schedule 3 and there is a
conflict between that Service Level and a service level obligation under this
Section 15.1, the specific Service Level will apply.



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15.2        Maintenance.


15.2.1     Supplier
Responsibility. Unless otherwise agreed and to the extent Supplier has
operational responsibility under this Agreement, Supplier shall maintain the
Equipment and Software so that they operate substantially in accordance with
the Service Levels and their Specifications, including (i) maintaining
Equipment in good operating condition, subject to normal wear and tear, (ii)
undertaking repairs and preventive maintenance on Equipment in accordance with
the applicable Equipment manufacturer’s recommendations and requirements, and
(iii) performing Software maintenance in accordance with the applicable
Software supplier’s documentation, recommendations and requirements.


15.2.2     Out of Support
Third Party Equipment and Software. For Third Party Equipment and Software
no longer supported by the licensor or manufacturer for which Supplier has
operational responsibility under this Agreement, Supplier shall use
commercially reasonable efforts to perform maintenance for such Equipment or
Software as required to meet its obligations under this Agreement.


15.2.3     Refresh. To
the extent Supplier has financial responsibility under this Agreement for
Equipment or Software, Supplier shall, subject to Section
9.7 or as otherwise agreed by the Parties, Upgrade or replace
such Equipment or Software in accordance with Schedule
4.2 or as otherwise required to enable Supplier to
meet its obligations under this Agreement, at no additional cost to
Kraft. Supplier shall also comply with the Technology and Business Plan, so
long as such compliance does not require Supplier to refresh Equipment at a
rate that is faster than the rate specified in Schedule
4.2 for such Equipment.


15.3        Efficiency
and Cost Effectiveness.


Supplier covenants that it shall use commercially
reasonable efforts to provide the Services in the most cost-effective manner
consistent with the required level of quality and performance. Without limiting
the generality of the foregoing, such actions shall include:


15.3.1     Timing of
Actions. Making adjustments in the timing of actions (consistent with Kraft
priorities and schedules for the Services and Supplier’s obligation to meet the
Service Levels).


15.3.2     Timing of Functions.
Delaying or accelerating, as appropriate, the performance of non-critical
functions within limits acceptable to Kraft.


15.3.3     Systems
Optimization. Tuning or optimizing the Systems (including memory) and/or
Applications Software for which Supplier has operational responsibility under
this Agreement, in order to optimize performance and minimize costs.


15.3.4     Usage
Scheduling. Controlling its use of the System and/or the Kraft data network
by scheduling usage, where possible, to low utilization periods.


15.3.5     Alternative
Technologies. Subject to Section 9.5,
using alternative technologies to perform the Services.


15.3.6     Efficiency.
Efficiently using resources for which Kraft is charged hereunder, consistent
with industry norms, and compiling data concerning such efficient use in
segregated and auditable form whenever possible.



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15.4        Software.


15.4.1     Ownership and
Use. Subject to Supplier’s obligation to obtain Required Consents pursuant
to Article 5, and except with respect
to Software made available by Kraft hereunder, Supplier represents, warrants
and covenants that it is either the owner of, or authorized to use, any and all
Software provided and used by Supplier in providing the Services. As to any
such Software that Supplier does not own but is authorized to use, Supplier
shall advise Kraft as to the ownership and extent of Supplier’s rights with
regard to such Software to the extent any limitation in such rights would
impair Supplier’s performance of its obligations under this Agreement.


15.4.2     Performance.
Supplier represents, warrants and covenants that any Supplier Owned Software
will perform in conformance with its Specifications and will provide the
functions and features and operate in the manner described therein.


15.4.3     Developed
Materials Compliance.


15.4.3.1                   Supplier
warrants and covenants that Developed Materials shall be free from material
errors in operation and performance, shall Comply with the applicable
documentation and Specifications in all material respects and shall provide the
functions and features and operate in the manner described in Schedule 2 or Schedule 8 or as
otherwise agreed by the Parties, for the applicable period after Acceptance as
follows:


15.4.3.1.1                Six
months for Developed Materials that execute on a daily, weekly or monthly
cycle,


15.4.3.1.2                Twelve
months for Developed Materials that execute on a quarterly cycle, and


15.4.3.1.3                Two
years for Developed Materials that execute on an annual cycle.


15.4.3.2                   During
such warranty period with respect to any Developed Materials developed by
Supplier, Supplier shall correct any failure of such Developed Material to
Comply at no additional Charge to Kraft and shall use commercially reasonable
efforts to do so as expeditiously as possible; provided that in the case of Developed
Materials produced by Supplier on a time-and-materials or cost-plus basis,
Supplier’s obligation to perform such correction at no additional charge shall
be limited to 10% (measured by Charges) of Supplier’s original development
effort for producing those materials. The foregoing warranty period will not
extend to any failure to Comply attributable to (i) a change or modification to
the applicable Developed Material by Kraft or its Third Party Contractors not
contemplated by this Agreement or recommended, performed or approved by
Supplier or (ii) Kraft operating the applicable Developed Material other than
(x) in accordance with the applicable documentation and Specifications, (y) for
the purposes contemplated in this Agreement or (z) on types of hardware
contemplated by this Agreement or recommended, supplied or approved by
Supplier. In the event that Supplier fails or is unable to repair or replace
such nonconforming Developed Material, Kraft shall, in addition to any and all
other remedies available to it hereunder, be entitled to obtain from Supplier a
copy of the source code and/or object code to such Developed Material.



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15.4.4     Nonconformity
of Supplier Owned Software. In addition to the foregoing, in the event that
the Supplier Owned Software (excluding Supplier Owned Developed Materials which
are addressed in Section 15.4.3)
does not conform to the Specifications and criteria set forth in this
Agreement, and/or materially adversely affects the Services provided hereunder,
Supplier shall expeditiously repair such Software or replace such Software with
conforming Software.


15.4.5     Out of Support
Third Party Software. To the extent Third Party Software for which Supplier
has operational responsibility under Schedule 2,
4.2, 11,
or 12 is no longer supported by the
applicable licensor or manufacturer, Supplier shall use commercially reasonable
efforts to perform maintenance for such Software as required.


15.5        Non-Infringement.


15.5.1     Perfomance of
Responsibilities. Except as otherwise provided in this Agreement, each
Party covenants that it shall perform its responsibilities under this Agreement
in a manner that does not infringe, or constitute an infringement or
misappropriation of, any patent, copyright, trademark, trade secret or other
proprietary  rights of any third party;
provided, however, that the performing Party shall not have any obligation or
liability to the extent any infringement or misappropriation is caused by (i)
modifications made by the other Party or its contractors or subcontractors,
without the knowledge or approval of the performing Party, (ii) the other Party’s
combination of the performing Party’s work product or Materials with items not
furnished, specified or reasonably anticipated by the performing Party or
contemplated by this Agreement, (iii) a breach of this Agreement by the other
Party, (iv) the failure of the other Party to use corrections or modifications
provided by the performing Party offering equivalent features and
functionality, or (v) Third Party Software, except to the extent that such
infringement or misappropriation arises from the failure of the performing
Party to obtain the necessary licenses or Required Consents or to abide by the
limitations of the applicable Third Party Software licenses. Each Party further
covenants that it will not use or create materials in connection with the
Services which are libelous, defamatory or obscene. The foregoing non-infringement covenant will not cover any claims of
infringement arising out of, under or in connection with the provision of any
call center services for Kraft’s customers or automated attendant services for
such customer call centers involving computer telephony integration. As of the
Effective Date, the Services do not include the provision of any such customer
call center or automated attendant services.


15.5.2     Third Party
Software Indemnification. In addition, with respect to Third Party Software
provided by Supplier pursuant to this Agreement, Supplier covenants that it
shall obtain and provide intellectual property indemnification for Kraft and
the Eligible Recipients (or obtain intellectual property indemnification for
itself and enforce such indemnification on behalf of Kraft and the Eligible
Recipients) from the suppliers of such Software. Unless otherwise approved in
advance by Kraft, such indemnification shall be comparable to the intellectual
property indemnification provided by Supplier to Kraft and the Eligible
Recipients under this Agreement.


15.6        Authorization.


Each Party represents, warrants and covenants to the
other that:


15.6.1     Corporate
Existence. It is a corporation duly incorporated, validly existing and in
good standing under the Laws of its State of incorporation;


15.6.2     Corporate Power
and Authority. It has the requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement;



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15.6.3     Legal Authority.
It has obtained all licenses, authorizations, approvals, consents or permits
required to perform its obligations under this Agreement under all applicable
federal, state or local laws and under all applicable rules and regulations of
all authorities having jurisdiction over the Services, except to the extent the
failure to obtain any such license, authorizations, approvals, consents or
permits is, in the aggregate, immaterial;


15.6.4     Due
Authorization. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated by this Agreement have
been duly authorized by the requisite corporate action on the part of such
Party; and


15.6.5     No Violation or
Conflict. The execution, delivery, and performance of this Agreement shall
not constitute a violation of any judgment, order, or decree; a material
default under any material contract by which it or any of its material assets
are bound; or an event that would, with notice or lapse of time, or both,
constitute such a default.


15.7        Inducements;
Kraft Code of Business Conduct and Ethics.


15.7.1     Inducements.
Supplier represents, warrants and covenants that it has not given and will not
give commissions, payments, kickbacks, lavish or extensive entertainment, or
other inducements of more than minimal value to any employee or agent of Kraft
in connection with this Agreement. Supplier also represents, warrants and
covenants that, to the best of its knowledge, no officer, director, employee,
agent or representative of Supplier has given any such payments, gifts,
entertainment or other thing of value to any employee or agent of Kraft.
Supplier also acknowledges that the giving of any such payments, gifts,
entertainment or other thing of value is strictly in violation of Kraft policy
on conflicts of interest, and may result in the cancellation of this Agreement
and other existing and future contracts between the Parties.


15.7.2     Kraft Code of
Conduct. Supplier covenants that, in the performance of the Services and
its other contractual obligations hereunder, it shall comply with the Kraft
Foods Code of Conduct for Compliance and Integrity, as set forth in Schedule 17.3, and as such Code may
be reasonably modified from time to time to the extent Supplier has been given
notice of it (which notice may be by electronic communications including
notices of information contained on a website).


15.8        Malicious
Code.


Each Party shall cooperate with the other Party and
shall take commercially reasonable actions and precautions consistent with Schedule 2 to prevent the
introduction and proliferation of Malicious Code into Kraft’s or an Eligible
Recipient’s environment or any System used by Supplier to provide the Services.
Without limiting Supplier’s other obligations under this Agreement, in the
event Malicious Code is found in Equipment, Software or Systems managed or
supported by Supplier or used by Supplier to provide the Services, Supplier
shall eliminate or quarantine the Malicious Code and reduce the effects of such
Malicious Code and, if the Malicious Code causes a loss of operational
efficiency or loss of data, to mitigate such losses and restore such data with
generally accepted data restoration techniques. If the Malicious Code was
introduced notwithstanding Supplier’s and its Subcontractors’ compliance with
the obligations of this Section 15.8,
then if eliminating and reducing the effects of the Malicious Code and the
restoration of data requires adding substantial additional Supplier resources
or third party contractors (beyond the Subcontractor personnel then assigned to
perform Services for Kraft), Kraft may elect to either (i) reprioritize the
Services, in which event Supplier will perform the remediation at no additional
charge, or (ii) authorize Supplier to perform the remediation as a Project.



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15.9                        Disabling
Code.


Supplier covenants that, without the prior written
consent of Kraft, Supplier shall not, and shall not permit its Subcontractors
(which shall not include Software providers who are not performing any
Services) to intentionally insert into the Software any code, or invoke any
code that has already been inserted, with the purpose of disabling or otherwise
shutting down all or any portion of the Software, Equipment and/or Systems.
Supplier also  covenants that it shall
use only Third Party Software (i) without disabling code or (ii) with respect
to which the Third Party Software licensor and any other entity controlling
invocation of such disabling code has agreed to refrain from invoking such
disabling code at any time without the prior approval of Kraft. For purposes of
this provision, code that serves the function of ensuring software license
compliance (including passwords) shall not be deemed disabling code, provided
that Supplier notifies Kraft in advance of all such code of which Supplier is
aware after exercise of reasonable due diligence and obtains Kraft’s approval
prior to installing such code in any Software, Equipment or System.


15.10                 Compliance with
Laws.


15.10.1       Compliance
by Supplier. Subject to Sections 15.10.4,
15.10.5 and 15.10.6,
Supplier covenants that, with respect to the provision of the Services and the
performance of any of its other legal and contractual obligations hereunder, it
is and shall be in compliance in all material respects with all applicable Laws
and shall remain in compliance with such Laws for the Term and any Termination
Assistance Services period including identifying and procuring applicable
permits, certificates, approvals and inspections required under such Laws. In
addition, Supplier shall be obligated to promptly correct any other violations
(i.e., even if not material) of which Supplier knew. Without limitation to the
generality of the foregoing, Supplier specifically covenants as follows:


15.10.1.1                                                   Supplier
and its Subcontractors shall comply in all material respects with all
applicable Laws regarding minimum wage, living conditions, overtime, working
conditions, and the applicable labor and environmental Laws.


15.10.1.2                                                   Supplier
shall not use, and shall ensure that none of its Subcontractors use, any child
labor, prison inmates, or knowingly use convicted felons or criminals, nor
shall they contract with any prison system, to perform any Services.


15.10.1.3                                                   All
products supplied by Supplier pursuant to this Agreement shall conform to and
satisfy the requirements of The Occupational Safety and Health Act of 1970 (or
any state or local Laws passed in lieu thereof) and all standards and
regulations issued thereunder.


15.10.1.4                                                   Supplier
shall be an equal opportunity employer, as described in Section 202 of
Executive Order 11246, dated September 24, 1976, as amended, and as such, shall
comply with the provisions of such Executive Order and its implementing
regulations during the performance of this Agreement.


15.10.1.5                                                   Supplier
shall comply with the affirmative action requirements of Part 60-741.4 Title
41, Code of Federal Regulations, with respect to individuals with disabilities
during the performance of this Agreement.


15.10.1.6                                                   Supplier
shall comply with the affirmative action requirements of Part 60-250.4 Title
41, Code of Federal Regulations, with respect to Disabled Veterans and Veterans
of the Vietnam Era during the performance of this Agreement.



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15.10.1.7                                                   Supplier
shall comply with the provisions of Executive Order 11625 and its implementing
regulations with respect to the utilization of minority business enterprises
during the performance of this Agreement.


15.10.2       Compliance
Data and Reports. At no additional charge and at Kraft’s request, Supplier
shall provide Kraft with data and reports in Supplier’s possession necessary
for Kraft to comply with all Laws applicable to the Services. If a charge of
non-compliance by Supplier with any such Laws occurs, Supplier shall promptly
notify Kraft of such charge.


15.10.3       Software,
Equipment, Systems and Materials Compliance. Supplier covenants that the
Software, Equipment, Systems and Materials owned, provided or used by Supplier
in providing the Services (other than the Acquired Assets) are in compliance in
all material respects with all applicable Laws and shall remain in compliance
with such Laws in all material respects for the Term and any Termination
Assistance Services period. Notwithstanding the foregoing, (i) Supplier shall
be obligated to promptly correct any other violations (i.e., even if not material)
of which Supplier knew ; and (ii) Supplier shall have a reasonable period of
time, not to exceed 90 days after the date that Kraft provides any Software,
Equipment, Systems or Materials to Supplier, to correct any non-compliance in
the Software, Equipment, Systems or Materials supplied by Kraft for Supplier’s
use hereunder and during such period the covenant set forth above shall not
apply to such Software, Equipment, Systems and Materials.


15.10.4       Notice
of Laws. Supplier shall notify Kraft of any Laws and changes in Laws
applicable to (i) Supplier’s performance of the Services and (ii) Supplier as a
provider of outsourced information technology and other in-scope services,
including those applicable to the employment of Supplier Personnel and the provision
of Services from the countries in which Supplier Facilities are located
(collectively, “Supplier Laws”). Kraft shall
notify Supplier of any other Laws and any changes in such other Laws applicable
to Kraft’s and/or the Eligible Recipients’ principal businesses to the extent
applicable to Supplier’s performance of the Services (other than Supplier Laws)
(collectively, “Kraft Laws”). Supplier shall,
through the Supplier Personnel, maintain general familiarity with Kraft Laws,
and shall bring additional or changed requirements to Kraft’s attention to the
extent the changed law comes to Supplier’s attention. Subject to its
non-disclosure obligation under other customer contracts, Supplier also shall
make commercially reasonable efforts to obtain information regarding such
requirements from other outsourcing customer engagements and to communicate
such information to Kraft in a timely manner. Each Party shall use commercially
reasonable efforts to advise the other of Laws and changes in Laws about which such
Party becomes aware in the other Party’s area of responsibility, but without
assuming an affirmative obligation of inquiry, except as otherwise provided
herein, and without relieving the other Party of its obligations hereunder. At
Kraft’s request, Supplier Personnel shall participate in Kraft provided
compliance training programs.


15.10.5       Interpretation
of Laws or Changes in Laws. Kraft shall be responsible, with Supplier’s
cooperation and assistance, for interpreting Kraft Laws or changes in Kraft Laws
and for identifying the impact of such Kraft Laws or changes in Kraft Laws on
Supplier’s performance and Kraft’s and/or the Eligible Recipients’ receipt and
use of the Services. Supplier shall be responsible, with Kraft’s cooperation
and assistance, for interpreting Supplier Laws or changes in Supplier Laws and
for identifying the impact of such Supplier Laws or changes in Supplier Laws on
Supplier’s performance and Kraft’s and/or the Eligible Recipients’ receipt and
use of the Services. To the extent the impact of any Supplier Law or change in
Supplier Law cannot be readily identified by Supplier, the Parties shall
cooperate in interpreting such Law or change in Law and shall seek in good
faith to identify and agree upon the impact on Supplier’s performance and Kraft’s
and/or the Eligible Recipients’ receipt and use of the Services. If the Parties
are



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unable
to agree upon such impact, Supplier shall adopt an interpretation based on its
reasonable judgment, taking into consideration alternatives that have the least
adverse affect on both Parties.


15.10.6       Implementation
of Changes in Laws. In the event of any changes in Laws (including Kraft
Laws to the extent Supplier receives notice of such Kraft Laws from Kraft or as
otherwise provided in Section 15.10.4),
Supplier shall implement any necessary modifications to the Services prior to
the deadline imposed by the regulatory or governmental body having jurisdiction
for such requirement or change. Except as noted in the next succeeding
sentence, Supplier shall bear the costs associated with implementing changes in
such Laws. If the change is a change to Kraft Laws and the effort required to
implement that change meets the definition of 
“New Services” with the exception that for purposes of this Section 15.10.6 the requirement of
clause (ii) of such definition will be deemed satisfied if the additional level
of effort required exceeds *  *  *,
then that effort shall be treated as a Project. *  *  *
shall bear the costs associated with the ongoing compliance with such changed
Laws unless such change meets the  *  *  * of     *  *  *.
At Kraft’s request, Supplier Personnel shall participate in Kraft provided
regulatory compliance training programs.


15.10.7       Compliance
by Kraft. Kraft covenants that, with respect to its receipt and use of the
Services and the performance of any of its other legal and contractual
obligations hereunder, it is and shall be in compliance in all material
respects with all applicable Kraft Laws and shall remain in compliance with
such Kraft Laws for the Term and any Termination Assistance Services period
including identifying and procuring applicable permits, certificates, approvals
and inspections required under such Laws. If Supplier provides written notice
to Kraft of any applicable Law where Kraft is not in compliance in all
respects, Kraft agrees that it will take steps to get in compliance.


15.10.8       Assistance
to Kraft. Subject to Section 15.10.6,
as part of the Services and on an ongoing basis, Supplier shall assist Kraft
and the Eligible Recipients as they may reasonably require in their efforts to
comply with applicable Laws (including any changes to Laws) not applicable to
Supplier but related to the Services.


15.10.9       Termination.
In the event that any change in Laws results in an increase of  *  *  *%
or more in the estimated average monthly Charges, or otherwise has a  *  *  *
on  *  *  *
ability to  *  *  *
the  *  *  *,
and Kraft would not have incurred such additional cost or impact if it had not
outsourced the Services in question to Supplier, then Kraft may, at its option,
terminate the Agreement or the impacted Services by giving Supplier at least 90
days prior notice, designating a date upon which such termination shall be
effective, and paying to Supplier the applicable Termination Charges specified
in Schedule 4.6.


15.11                 Interoperability;
Currency.


15.11.1       Interoperability.
Supplier covenants that the Software, Equipment and Systems provided by
Supplier, and/or used to provide the Services, will be interoperable with the
software, equipment and systems used by Kraft or the Eligible Recipients to
provide the same or similar services and/or to deliver records to, receive
records from, or otherwise interact with the Software, Equipment and Systems to
receive the Services; provided that such interoperability requirement shall not
be interpreted to require Supplier to (i) make Kraft Systems interoperable to
the extent they are not interoperable as of the Commencement Date, or (ii) make
any Software, Equipment or Systems that are introduced by Kraft after the
Commencement Date interoperable, to the extent the non-interoperability was
approved by Kraft in accordance with the Change Control Procedures.



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15.11.2       Currency.
Supplier covenants that the Software, Equipment, Systems and Services provided
and/or used by Supplier will be able to receive, transmit, process, store,
archive, maintain and support information in U.S. Dollars.


15.12                 Disclaimer.


EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS, CONDITIONS OR WARRANTIES TO
THE OTHER PARTY, WHETHER EXPRESS OR IMPLIED, INCLUDING IMPLIED WARRANTIES AND
CONDITIONS OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE OR ANY
IMPLIED WARRANTY OR CONDITION OTHERWISE ARISING FROM COURSE OF DEALING OR USAGE
OF TRADE.


16.          INSURANCE
AND RISK OF LOSS


16.1                        Insurance.


16.1.1              Requirements.


16.1.1.1                                                         Supplier
agrees to keep in full force and effect and maintain at its sole cost and
expense the following policies of insurance with the specified minimum limits
of liability during the term of this Agreement:


16.1.1.1.1                                                Workers’
Compensation and Employer’s Liability Insurance in full compliance with the
applicable Laws of the state and/or country in which the work is to be
performed or the country of hire (whichever is applicable), including any
applicable Laws relating to self-insurance (if applicable).


(a)                                  The
limits of liability of Workers’ Compensation Insurance shall be not less than
the limits required by applicable Law.


(b)                                 The
limits of liability of Employer’s Liability Insurance with minimum limits of
$1,000,000 per employee by accident/$1,000,000 per employee by
disease/$1,000,000 policy limit by disease (or, if higher, the policy limits
required by applicable Law).


16.1.1.1.2                                                Commercial
General Liability Insurance (including coverage for Contractual Liability
assumed by Supplier under this Agreement, Premises-Operations, Completed
Operations-Products, and Independent Contractors) providing coverage for bodily
injury, personal injury and property damage with combined single limits of not
less than $5,000,000 per occurrence.


16.1.1.1.3                                                Commercial
Business Automobile Liability Insurance including coverage for all owned,
non-owned, leased, and hired vehicles providing coverage for bodily injury and
property damage liability with combined single limits of not less than
$5,000,000 per occurrence.


16.1.1.1.4                                                Professional
Liability (also known as Errors and Omissions Liability) Insurance covering
acts, errors and omissions arising out of Supplier’s operations or Services in
an amount not less than $20,000,000 per occurrence.



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16.1.1.1.5                                                Comprehensive
Crime Insurance, including Employee Dishonesty and Computer Fraud Insurance
covering losses arising out of or in connection with any fraudulent or
dishonest acts committed by Supplier employees, acting alone or with others, in
the amount of $5,000,000 per occurrence. Kraft, Kraft Affiliates and Eligible
Recipients shall be added as Loss Payees as Their Interests May Appear with
respect to this coverage. Supplier’s policy will not provide any coverage to
the extent such loss results from the dishonest acts of the employees of Kraft,
Kraft Affiliates or Eligible Recipients.


16.1.1.1.6                                                All-risk
property insurance covering loss or damage to Supplier owned or leased Equipment
and other Supplier assets used to provide the Services with limits and terms
similar to those normally maintained by operations of a similar nature
operating in similar locations.


16.1.1.2                                                         Supplier
shall be responsible for all deductibles payable with respect to claims arising
under this Agreement covered by the Supplier’s insurance described above.


16.1.2              Approved
Companies. All such insurance shall be procured with reputable insurance
companies and in such form as is usual and customary to Supplier’s business.
Such insurance companies shall maintain a rating at least “A-”
and be at least a Financial Size Category VIII as both criteria are defined in
the most current publication of Best’s Policyholder Guide.


16.1.3              Endorsements.
Supplier’s insurance policies as required herein under Sections
16.1.1.1.2 and 16.1.1.1.3
shall name Kraft, Kraft Affiliates and Eligible Recipients and their respective
officers, directors and employees as Additional Insureds for any and all
liability, to which such insurance applies, arising at any time in connection
with Supplier’s or Supplier Personnel’s performance under this Agreement. Each
policy shall provide that it will not be canceled or materially altered except
after 30 days advance written notice to Kraft. Should any policy expire or be
canceled during the Term and Supplier fails to immediately procure replacement
insurance as specified, Kraft reserves the right (but not the obligation) to
procure such insurance and to deduct the cost thereof from any sums due Supplier
under this Agreement. All insurance required under this Section
16.1 shall be primary insurance and any other valid insurance
existing for Kraft’s benefit shall be excess of such primary insurance.
Supplier shall obtain such endorsements to its policy or policies of insurance
as are necessary to cause the policy or policies to comply with the
requirements stated herein.


16.1.4              Certificates
and Policy Information. Supplier shall provide Kraft with certificates of
insurance evidencing compliance with this Article 16
(including evidence of renewal of insurance) signed by authorized
representatives of the respective carriers for each year that this Agreement is
in effect. Each certificate of insurance shall provide that the issuing company
shall not cancel, reduce, or otherwise materially alter the insurance afforded
under the above policies unless notice of such cancellation, reduction or
material alteration has been provided at least 30 days in advance to:


Kraft Foods
Global, Inc.


Three Lakes Drive


Northfield, Illinois 
60093-2469


Attention:  Vice President and Associate General Counsel


Global Supply Chain &
Global IS



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Kraft may from time to time change its address or
designee for receipt of the deliveries and notices described above and the date
upon which such change shall become effective.


16.1.5              No
Implied Limitation. The obligation of Supplier and its Affiliates to
provide the insurance specified herein shall not limit or expand in any way any
obligation or liability of Supplier provided elsewhere in this Agreement. The
rights of Kraft and its subsidiaries, Affiliates and Eligible Recipients to
insurance coverage under policies issued to one or more of them are independent
of this Agreement and shall not be limited by this Agreement.


16.2                        Risk of
Loss.


Each Party shall be responsible for damages to their
respective tangible personal or real property (whether owned or leased), and
each party agrees to look only to their own insuring arrangements (if any) with
respect to such damages. Supplier, Kraft, Kraft Affiliates and Eligible
Recipients waive all rights to recover against each other for any loss or
damage to their respective tangible personal or real property (whether owned or
leased) from any cause covered by insurance maintained by each of them, including
their respective deductibles or self-insured retentions. Each Party will cause
their respective insurers to issue appropriate waivers of subrogation rights
endorsements to all property insurance policies maintained by each Party.


17.          INDEMNITIES


17.1                        Indemnity
by Supplier.


Supplier agrees to indemnify, defend and hold harmless
(i) Kraft and its Affiliates, Altria and its Affiliates (even if Altria ceases
to be an Affiliate of Kraft) and the Eligible Recipients (excluding the
Eligible Recipients identified in clauses (h) and (i) in the definition of
Eligible Recipients); and (ii) all of their respective officers, directors,
employees, agents, representatives, successors and assigns, from any and all
Losses and threatened Losses due to third party claims (the Eligible
Recipients, other than those in clauses (h) and (i) in the definition of such
term, and Affiliates of a Party shall not be deemed third parties for purposes
of this Section 17.1 except as
provided in Section 17.1.9) arising from
or in connection with any of the following:


17.1.1              Representations,
Warranties and Covenants. Supplier’s breach of any of the representations,
warranties and covenants set forth in  *  *  * (regardless of whether  *  *  *),
and the first sentence of  *  *  *.


17.1.2              Assumed
Contracts. Supplier’s decision to terminate or failure to observe or
perform any duties or obligations to be observed or performed by Supplier under
any of the Third Party Software licenses, Equipment Leases or Third Party
Contracts assigned to Supplier or for which Supplier has assumed financial or
operational responsibility pursuant to this Agreement, but only to the extent
the cause of action accrues after the date of such assignment to Supplier with
respect to contracts assigned to Supplier, or after the Commencement Date with
respect to contracts not assigned to Supplier but for which Supplier has
assumed financial or operational responsibility pursuant to this Agreement.


17.1.3              Licenses,
Leases and Contracts. Supplier’s failure to observe or perform any duties
or obligations to be observed or performed by Supplier under Third Party
Software licenses, Equipment leases or Third Party Contracts used by Supplier
to provide the Services to the extent Supplier is financially or operationally
responsible or is otherwise informed thereof (but only after the time Supplier
is informed thereof).



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17.1.4              Kraft
Data or Proprietary Information. Supplier’s breach of its obligations with
respect to Kraft Data or Kraft Proprietary Information set forth in Sections 13.1, 13.2.1,
13.3, 13.4, 13.5, and 13.6.


17.1.5              Infringement.
Infringement or misappropriation or alleged infringement or alleged
misappropriation of a patent, trade secret, copyright or other proprietary
rights in contravention of Supplier’s representations, warranties and covenants
in Sections 15.4 and 15.5. The foregoing indemnity will not cover any claims of infringement arising
out of, under or in connection with the provision of call center services for
Kraft’s customers or automated attendant services for such customer call
centers involving computer telephony integration. As of the Effective Date, the
Services do not include the provision of any such customer call center or
automated attendant services.


17.1.6              Government
Claims. Claims for fines, penalties, sanctions, interest or other monetary
remedies imposed by a governmental body, regulatory agency or standards
organization resulting from Supplier’s failure to perform its responsibilities
under this Agreement (in the case of  *  *  *, regardless of whether  *  *  *).


17.1.7              Taxes.
Taxes, together with interest and penalties that are the responsibility of
Supplier under Section 11.4.


17.1.8              Claims
Arising in Shared Facility Services. Systems, services or products provided
by Supplier to a third party from any shared Supplier facility or using any
shared Supplier resources (excluding Services provided to an Eligible Recipient
pursuant to this Agreement).


17.1.9              Affiliate,
Subcontractor or Assignee Claims. Any claim, other than an indemnification
claim under this Agreement, initiated by (i) a Supplier Affiliate or
Subcontractor asserting rights under this Agreement or (ii) any entity to
which  *  *  *or  *  *  *
its rights to receive  *  *  * from  *  *  *
under  *  *  *
to the extent related to this Agreement or such 
*  *  *unless the  *  *  *
by the provisions of  *  *  *.


17.1.10       Supplier
Personnel Injury Claims. Any claim by Supplier Personnel for death,
personal injury or bodily injury suffered on a Kraft Site, except to the extent
caused by Kraft’s gross negligence or willful misconduct.


17.1.11       Employment
Claims. Any claim (including claims by Transitioned Employees) relating to
any (i) violation by Supplier, Supplier Affiliates or Subcontractors, or their
respective officers, directors, employees, representatives or agents, of any
Laws or any common law protecting persons or members of protected classes or
categories, including Laws prohibiting discrimination or harassment on the
basis of a protected characteristic; (ii) liability arising or resulting from
the employment of Supplier Personnel (including Transitioned Employees) by
Supplier, Supplier Affiliates or Subcontractors (including liability for any
social security or other employment taxes, workers’ compensation claims and
premium payments, and contributions applicable to the wages and salaries of
such Supplier Personnel); (iii) payment or failure to pay any salary, wages or
other cash compensation due and owing to any Supplier Personnel (including
Transitioned Employees from and after their Employment Effective Dates), (iv)
employee pension or other benefits of any Supplier Personnel (including
Transitioned Employees) accruing from and after their Employment Effective
Date, (v) other aspects of the employment relationship of Supplier Personnel
(including Transitioned Employees) with Supplier, Supplier Affiliates or
Subcontractors or the termination of such relationship, including claims for
wrongful discharge, claims for breach of express or implied employment contract
and claims of joint employment; and/or (vi) liability resulting from
representations (oral or written) to the Affected Kraft Foods



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Global
Personnel, Affected Tech Center Personnel or any other Affected Personnel by
Supplier, Supplier Affiliates or Subcontractors (or their respective officers,
directors, employees, representatives or agents), or other acts or omissions
with respect to Affected Kraft Foods Global Personnel, Affected Tech Center
Personnel or any other Affected Personnel by such persons or entities,
including any act, omission or representation made in connection with the
interview, selection, hiring and/or transition process, the offers of
employment made to such employees, the failure to make offers to any such
employees or the terms and conditions of such offers (including compensation
and employee benefits), except, in each case, to the extent resulting from the
wrongful actions of Altria, its Affiliates, Kraft, the Eligible Recipients, or
Kraft Third Party Contractors, errors or inaccuracies in the information provided
by Kraft and faithfully communicated by Supplier or the failure of Altria, its
Affiliates, Kraft, the Eligible Recipients, or Kraft Third Party Contractors to
comply with Kraft’s responsibilities under this Agreement. For purposes of this
Agreement, Supplier has no liability, and is not responsible, for claims by
Transitioned Employees accruing prior to their Employment Effective Date to the
extent Kraft has an indemnity obligation for such claim under Section 17.2.9.


17.1.12       WARN
Act. Supplier’s breach of its obligations under Section
8.11.2 to the extent such breach results in Altria or any of its
Affiliates, Kraft or any Eligible Recipient being in violation of the WARN Act
or the regulations promulgated thereunder with respect to Kraft’s Bannockburn
facility referred to in Section 8.11.2.


17.2                        Indemnity
by Kraft.


Kraft agrees to indemnify, defend and hold harmless
Supplier and its officers, directors, employees, agents, representatives,
successors and assigns, from any Losses and threatened Losses due to third
party claims (the Eligible Recipients and Affiliates of a Party shall not be
deemed third parties for purposes of this Section 17.2
except as provided in Section 17.2.7)
arising from or in connection with any of the following:


17.2.1              Representations,
Warranties and Covenants. Kraft breach of any of the representations,
warranties and covenants set forth in Section 15.6  and Section  *  *  *(regardless
of whether        *  *  *).


17.2.2              Licenses,
Leases or Contracts. Kraft’s failure to observe or perform any duties or
obligations to be observed or performed by Kraft under any of the applicable
Third Party Software licenses, Equipment Leases or Third Party Contracts to the
extent Kraft is financially or operationally responsible under this Agreement,
to the extent Kraft is informed thereof (but only after the time Kraft is
informed thereof), or is financially or operationally responsible under this
Agreement, or to the extent such licenses, leases or contracts are retained by
Kraft; provided Supplier’s notification to Kraft of a duty or obligation to a
third party shall not limit Supplier’s obligation to obtain the rights it
requires to perform the Services as provided in this Agreement.


17.2.3              Pre-Assignment
Date Matters. Kraft’s failure to observe or perform any duties or
obligations to be observed or performed by Kraft under any of the (a) Third
Party Software licenses, Equipment Leases or Third Party Contracts assigned to
Supplier by Kraft prior to the assignment or assumption of such license, lease
or contract by Supplier, or (b) under any other Third Party Software licenses,
Equipment Leases or Third Party Contracts made available to Supplier by Kraft,
except to the extent such failure occurred as a result of Supplier’s failure to
meet its obligations pursuant to this Agreement.



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17.2.4              Supplier’s
Proprietary Information. Kraft’s breach of its obligations with respect to
Supplier’s Proprietary Information set forth in Sections
13.3 and 13.4, or
breach of its obligations for privacy protection under the Global Master Data
Protection Agreement.


17.2.5              Infringement.
Infringement or misappropriation or alleged infringement or alleged
misappropriation of a patent, trade secret, copyright or other proprietary
rights with respect to any Software or Materials made available by Kraft to
Supplier hereunder or otherwise in contravention of Kraft’s representations,
warranties and covenants in  *  *  *. The Parties agree and
acknowledge that the Services do not include any call center services for Kraft’s customers or automated attendant
services for such customer call centers involving computer telephony
integration.


17.2.6              Taxes.
Taxes, together with interest and penalties that are the responsibility of
Kraft under Section 11.4.


17.2.7              Kraft
Affiliate, Eligible Recipient or Third Party Contractor Claims. Any claim,
other than an indemnification claim or insurance claim under this Agreement,
initiated by a Kraft Affiliate, an Eligible Recipient (other than Kraft, or an
entity described in clauses (h) and (i) in the definition of “Eligible
Recipient”) or a Kraft Third Party Contractor asserting rights under this
Agreement.


17.2.8              Government
Claims. Claims for fines, penalties, sanctions, interest or other monetary
remedies imposed by a governmental body, regulatory agency or standards
organization resulting from Kraft’s failure to perform its responsibilities
under this Agreement (in the case of Section  * 
*  *, regardless of
whether  *  *  *).


17.2.9              Employment
Claims. Any claim relating to any (a) violation by Kraft or the Eligible
Recipients, or their respective officers, directors, employees, representatives
or agents, of Federal, state, provincial, local, international or other Laws or
regulations or any common law protecting persons or members of protected classes
or categories, including laws or regulations prohibiting discrimination or
harassment on the basis of a protected characteristic, (b) liability arising or
resulting from a Transitioned Employee’s employment with Kraft prior to the
Employment Effective Date with Supplier, (c) payment or failure to pay any
salary, wages or other cash compensation due and owing to (i) any Kraft
employee who does not become a Transitioned Employee or (ii) any Transitioned
Employee prior to such Transitioned Employee’s Employment Effective Date with
Supplier, (d) (i) all accrued employee pension or other benefits of any Kraft
employee who does not become a Transitioned Employee and (ii) those employee
pension or other benefits of any Transitioned Employee accruing prior to such
Transitioned Employee’s Effective Employment Date with Supplier, (e) other
aspects of any Transitioned Employee’s employment relationship with Kraft or
the termination of such relationship, including claims for breach of an express
or implied contract of employment, and/or (f) liability resulting from
representations (oral or written) to the Kraft employees identified on Schedule 5.1 by Kraft or the
Eligible Recipients (or their respective officers, directors, employees,
representatives or agents) with respect to their employment by Supplier or its
Subcontractors or Affiliates (other than representations made with the
authorization or approval of Supplier, representations that Supplier knew to be
inaccurate and failed to correct and/or representations made by Supplier in
this Agreement), except, in each case, to the extent resulting from the
wrongful  actions
of Supplier, Supplier Affiliates or Subcontractors or their failure to comply
with Supplier’s responsibilities under this Agreement, or involving any matters
for which Supplier has an indemnity obligation under Section
17.1.11; and



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17.2.10       Kraft
Personnel Injury Claims. Any claim by Kraft Personnel for death, personal
injury or bodily injury suffered on a Supplier Facility, except to the extent
caused by Supplier’s gross negligence or willful misconduct.


17.3                        Additional
Indemnities.


Supplier agrees to indemnify, defend and hold harmless
the Entities and individuals that are entitled to indemnification pursuant to Section 17.1, and Kraft agrees
to indemnify, defend and hold harmless the Entities and individuals that are
entitled to indemnification pursuant to Section 17.2,
from any and all Losses and threatened Losses to the extent they arise from or
in connection with any of the following: 
(a) except as otherwise provided in Section 17.1.10 or
Section 17.2.10, third party claims
arising from the death, personal injury or bodily injury of any agent,
employee, customer, business invitee, business visitor or other person caused
by the negligence or other tortious conduct of the indemnitor or the failure of
the indemnitor to comply with its obligations under this Agreement; and (b) the
damage, loss or destruction of any third party’s real or tangible personal
property caused by the negligence or other tortious conduct of the indemnitor
or the failure of the indemnitor to comply with its obligations under this
Agreement.


17.4                        Infringement.


In the event that (i) any Software, Equipment,
Materials or Services for which Supplier has an indemnification obligation
pursuant to Section 17.1.5 or for which
Kraft has an indemnification obligation pursuant to Section
17.2.5, or in the reasonable opinion of the Party with the
indemnification obligation, are likely to be found, to infringe upon the
patent, copyright, trademark, trade secrets, intellectual property or
proprietary rights of any third party in any country in which Services are to
be performed or received under this Agreement, or (ii) the continued use of
such item(s) is enjoined, the party with the indemnification obligation shall,
in addition to defending, indemnifying and holding harmless the other Party as
provided in Section 17.1.5 or Section 17.2.5, as applicable, and
to the other rights the non-indemnifying Party may have under this Agreement,
promptly and at its own cost and expense and in such a manner as to minimize
the disturbance to the non-indemnifying Party’s business activities do one of
the following (subject to any applicable limitation of liability set forth in Section 18.3.2):


17.4.1              Obtain
Rights. Obtain for the non-indemnifying Party the legal right to continue
using such Software, Equipment or Materials.


17.4.2              Modification.
Modify the item(s) in question so that it is no longer infringing (provided
that such modification does not degrade the performance or quality of the
Services or adversely affect Kraft’s and the Eligible Recipients’ intended use
as contemplated by this Agreement).


17.4.3              Replacement.
Replace such item(s) with a non-infringing functional equivalent acceptable to
Kraft.


17.4.4              Removal.
If Kraft is the indemnifying Party, Kraft may at its option elect to require
Supplier to discontinue use of the infringing Material, in which case Supplier
shall be excused to the extent such removal prevents Supplier from meeting any
of its performance obligations under this Agreement.


17.5                        Indemnification
Procedures.


With respect to non-Party claims which are subject to
indemnification under this Agreement (other than as provided in Section 17.6 with respect to claims
covered by Section 17.1.6), the following
procedures shall apply:



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17.5.1     Notice.
Promptly after receipt by any entity entitled to indemnification under this
Agreement of notice of the commencement or threatened commencement of any
civil, criminal, administrative, or investigative action or proceeding
involving a claim in respect of which the indemnitee will seek indemnification
hereunder, the indemnitee shall notify the indemnitor of such claim. No delay
or failure to so notify an indemnitor shall relieve it of its obligations under
this Agreement except to the extent that such indemnitor has suffered actual
prejudice by such delay or failure. Within 15 days following receipt of notice
from the indemnitee relating to any claim, but no later than five days before
the date on which any response to a complaint or summons is due, the indemnitor
shall notify the indemnitee that the indemnitor elects to assume control of the
defense and settlement of that claim (a “Notice of Election”).


17.5.2     Procedure
Following Notice of Election. If the indemnitor delivers a Notice of
Election within the required notice period, the indemnitor shall assume sole
control over the defense and settlement of the claim; provided, however, that
(i) the indemnitor shall keep the indemnitee fully apprised at all times as to
the status of the defense, and (ii) the indemnitor shall obtain the prior
written approval of the indemnitee before entering into any settlement of such
claim asserting any liability against the indemnitee or imposing any
obligations or restrictions on the indemnitee or ceasing to defend against such
claim. The indemnitor shall not be liable for any legal fees or expenses
incurred by the indemnitee following the delivery of a Notice of Election;
provided, however, that (i) the indemnitee shall be entitled to employ counsel
at its own expense to participate in the handling of the claim, and (ii) the
indemnitor shall pay the fees and expenses associated with such counsel if
there is a conflict of interest with respect to such claim which is not
otherwise resolved or if the indemnitor has requested the assistance of the
indemnitee in the defense of the claim or the indemnitor has failed to defend
the claim diligently and the indemnitee is prejudiced or likely to be
prejudiced by such failure. The indemnitor shall not be obligated to indemnify
the indemnitee for any amount paid or payable by such indemnitee in the
settlement of any claim if (A) the indemnitor has delivered a timely Notice of
Election and such amount was agreed to without the written consent of the
indemnitor, (B) the indemnitee has not provided the indemnitor with notice of
such claim and a reasonable opportunity to respond thereto, or (C) the time
period within which to deliver a Notice of Election has not yet expired.


17.5.3     Procedure Where
No Notice of Election Is Delivered. If the indemnitor does not deliver a
Notice of Election relating to any claim within the required notice period, the
indemnitee shall have the right to defend the claim in such manner as it may
deem appropriate. The indemnitor shall promptly reimburse the indemnitee for
all such reasonable costs and expenses incurred by the indemnitee, including
reasonable attorneys’ fees.


17.6        Indemnification
Procedures – Governmental Claims.


With respect to claims covered by Section
17.1.6, the following procedures shall apply:


17.6.1     Notice.
Promptly after receipt by the indemnitee of notice of the commencement or
threatened commencement of any action or proceeding involving a claim in
respect of which the indemnitee will seek indemnification pursuant to Section 17.1.6, the indemnitee
shall notify the indemnitor of such claim. No delay or failure to so notify the
indemnitor shall relieve the indemnitor of its obligations under this Agreement
except to the extent that the indemnitor has suffered actual prejudice by such
delay or failure.


17.6.2     Procedure for
Defense. The indemnitee shall be entitled, at its option, to have the claim
handled pursuant to Section 17.5
or to retain sole control over the defense and settlement of such claim;
provided that, in the latter case, the indemnitee shall (i) consult with the
indemnitor on a regular basis regarding claim processing (including actual and
anticipated costs and expenses) and



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litigation
strategy, (ii) reasonably consider any the indemnitor settlement proposals or
suggestions, and (iii) use commercially reasonable efforts to minimize any
amounts payable or reimbursable by the indemnitor.


17.7        Subrogation.


Except as otherwise provided in Section
16.1, in the event that an indemnitor shall be obligated to
indemnify an indemnitee pursuant to any provision of this Agreement, the
indemnitor shall, upon payment of such indemnity in full, be subrogated to all
rights of the indemnitee with respect to the claims to which such
indemnification relates.


18.          LIABILITY


18.1        General
Intent.


Subject to the specific provisions and limitations of
this Article 18, it is the intent of the
Parties that each Party shall be liable to the other Party for any actual
damages incurred by the non-breaching Party as a result of the breaching Party’s
failure to perform its obligations in the manner required by this Agreement.


18.2        Force
Majeure.


18.2.1     General.
Subject to Section 18.2.4, no Party shall
be liable for any default or delay in the performance of its obligations under
this Agreement if and to the extent such default or delay is caused, directly
or indirectly, by fire, flood, earthquake, elements of nature or acts of God,
wars, riots, civil disorders, rebellions or revolutions, acts of terrorism, or
any other similar cause beyond the reasonable control of such Party except to
the extent that the non-performing Party could not have prevented such default
or delay using reasonable precautions, and provided that such default or delay
cannot reasonably be circumvented by the non-performing Party through the use
of alternate sources, workaround plans or other means. A strike, lockout or
labor dispute involving Supplier Personnel shall not excuse Supplier from its
obligations hereunder. The failure of any Equipment, Software or System for
which Supplier is operationally responsible to be year 2000 compliant shall not
be considered a force majeure event and shall not relieve Supplier of any of
its obligations under this Agreement, including its obligations to perform the
Services in accordance with the Service Levels. In addition, the refusal of
Supplier Personnel to enter a facility that is the subject of a labor dispute
shall excuse Supplier from its obligations hereunder only if and to the extent
such refusal is based upon a reasonable fear of physical harm.


18.2.2     Duration and
Notification. In the event of a force majeure event the non-performing
Party shall be excused from further performance or observance of the
obligation(s) so affected for as long as such circumstances prevail and such
Party continues to use commercially reasonable efforts to recommence
performance or observance whenever and to whatever extent possible without
delay. Any Party so prevented, hindered or delayed in its performance shall, as
quickly as practicable under the circumstances, notify the Party to whom
performance is due by telephone (to be confirmed in writing within one day of
the inception of such delay) and describe at a reasonable level of detail the
circumstances of the force majeure event, the steps being taken to address such
force majeure event, and the expected duration of such force majeure event.


18.2.3     Substitute
Services; Termination. If any event described in Section
18.2.1 has substantially prevented, hindered or delayed or is
reasonably expected to substantially prevent, hinder or delay the performance
by Supplier or one of its Subcontractors of Services necessary for the
performance of critical Kraft or Eligible Recipient functions for longer than
the recovery period specified in the applicable disaster recovery plan or, if
there is no such recovery period,  *  *  *, 



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Kraft
may procure such Services from an alternate source, and Supplier shall be
solely liable for payment for such services from the alternate source for so
long as the delay in performance shall continue, provided that Kraft continues
to pay Supplier the Charges for such Services with respect to the period of
non-performance, and Kraft has not terminated the affected portion of the
Services. Kraft may at its option elect to pay the alternate source directly in
lieu of paying Supplier for the affected services. In addition, if any event
described in Section 18.2.1 substantially
prevents, hinders or delays the performance by Supplier or one of its
Subcontractors of Services necessary for the performance of critical Kraft
functions (i) for more than  *  *  * days, and Supplier has not
obtained such Services from another source on a temporary basis, Kraft, at its
option, may terminate any portion of this Agreement so affected and the charges
payable hereunder shall be equitably adjusted to reflect those terminated
Services; or (ii) for more than     *  *  * days, and Supplier has not
obtained the Services from another source on a temporary basis,  Kraft, at its option, may terminate this
Agreement in its entirety. If the termination described in the preceding
sentence results from  *  *  * that impacts a Supplier Facility
or that otherwise  *  *  *
from being able to  *  *  *
shall not be obligated to pay any  *  *  * in connection with  *  *  *.
*  *  * shall be obligated to pay
the  *  *  *
in the event the  *  *  *
results from a  *  *  *
on a *  *  *. Except as described above,  *  *  *
shall not have the right to additional   
*  *  * or increased  *  *  *
as a result of any  *  *  *
affecting  *  *  *
ability to  *  *  *.


18.2.4     Disaster
Recovery and Business Continuity Plans. Within 90 days after the Effective
Date or by the Commencement Date, whichever occurs first, Supplier shall
document its disaster-recovery plan for the Services and ensure that it is
consistent with and will operate in conjunction with the standards and plans
referred to in Schedules 15
and 16. Supplier shall execute its
disaster-recovery plan upon the occurrence of a disaster and cooperate with
Kraft in the execution of Kraft’s and/or the Eligible Recipients’
business-continuity and disaster-recovery plans.


18.2.5     Payment
Obligation. If Supplier fails to provide Services in accordance with this
Agreement due to the occurrence of a force majeure event, all amounts payable
to Supplier hereunder shall be equitably adjusted in a manner such that Kraft
is not required to pay any amounts for Services that it is not receiving from
Supplier, unless such Services are obtained from an alternate source at
Supplier’s expense pursuant to Section 18.2.3.


18.2.6     Allocation of
Resources. Without limiting Supplier’s obligations under this Agreement,
whenever a force majeure event or disaster causes Supplier to allocate limited
resources between or among Supplier’s customers and Affiliates, Kraft and the
Eligible Recipients shall receive at least the same treatment as comparable
Supplier customers. In no event will Supplier re-deploy or re-assign any Key
Supplier Personnel to another customer or account in the event of the
occurrence of a force majeure event.


18.3        Limitation
of Liability.


18.3.1     Exclusions from
Liability. EXCEPT AS PROVIDED IN THIS SECTION 18.3,
NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR INDIRECT, CONSEQUENTIAL,
INCIDENTAL, COLLATERAL, EXEMPLARY OR PUNITIVE DAMAGES, INCLUDING LOST PROFITS,
REGARDLESS OF THE FORM OF THE ACTION OR THE THEORY OF RECOVERY, EVEN IF SUCH
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.


18.3.2     Liability
Caps.



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18.3.2.1                   *  *  * Liability Cap. Additionally,
except as provided below in Section 18.3.3,
the total aggregate liability of either Party for claims (other than claims
that are referenced in Section 18.3.2.2)
asserted by the other Party under or in connection with this Agreement
(including claims arising from parties to a Companion Agreement), regardless of
the form of the action or the theory of recovery, shall be limited to (1)  *  *  *
for claims for which the last act or omission giving rise to such liability
occurs within the  *  *  *
months after the Commencement Date, or (ii) the total Charges payable to
Supplier (including amounts payable to a Supplier Affiliate under a Companion
Agreement) during the  *  *  * period preceding the last act or
omission giving rise to such liability for claims for which the last act or
omission giving rise to such liability occurs more than  *  *  *
after the Commencement Date.


18.3.2.2                   *  *  * Liability Cap.  (a) Supplier’s liability under Section 17.1.1 for third party
claims that arise from a breach of Section 15.10.1,
and Section 17.1.4, and Losses occasioned by any breach of its
obligations under Article 13 and Section 15.10.1, and (b) Kraft’s liability under Section
17.2.1 for third party
claims that arise from a breach of Section 15.10.7, Section 17.2.4, and Losses occasioned by any breach of its
obligations under  Article
13 and Section
15.10.7, in the
aggregate for each Party (including claims arising from
parties to a Companion Agreement), shall
be limited to (i)  *  *  * for claims for which the last
act or omission giving rise to such liability occurs within the  *  * 
*  months after the
Commencement Date, or (ii) the total Charges payable to Supplier (including
amounts payable to a Supplier Affiliate under a Companion Agreement) during
the  *  *  *
period preceding the last act or omission giving rise to such liability, for
claims for which the last act or omission giving rise to such liability occurs
more than  *  *  *
after the Commencement Date. For the
avoidance of doubt, the 
*  *  * cap referred to above in this Section 18.3.2.2 is separate and
apart from the cap referred to in Section 18.3.2.1. 


18.3.3     Exceptions
to Limitations of Liability.


18.3.3.1                   18.3.3.1 The exclusions set forth in Section
18.3.1  and the liability caps set forth in Section
18.3.2 shall not apply with respect to Losses occasioned by the *  *  *, 
*  *  * of a Party.


18.3.3.2                   The
exclusions set forth in Section 18.3.1
shall not apply to amounts paid with respect to 
*  *  * that are the subject of
indemnification pursuant to Sections  * 
*  *. Losses occasioned by any
breach of a Party’s obligations under  *  *  *.


18.3.3.3                   The liability cap set
forth in Section 18.3.2.1 shall not
apply with respect to        *  *  * that are the subject of
indemnification pursuant to *  *  * (except
for amounts paid for  *  *  *
under Section  * 
*  * as provided in Section  * 
*  *).


18.3.3.4                   The
exclusions set forth in Section 18.3.1
shall not apply to amounts paid with respect to *  *  *that
are the subject of indemnification pursuant to Section  * 
*  *, but the cap set forth in
Section 18.3.2.1 shall apply.


18.3.3.5                   The
exclusions set forth in Section 18.3.1 and
the liability caps set forth in Section 18.3.2
shall not apply with respect to amounts paid for  *  *  *
by the       *  *  *
of this Agreement by  *  *  *; provided, however, that  *  *  *
may



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exercise
its express termination rights under this Agreement in good faith, in which
case the limitations in Sections 18.3.1
and 18.3.2 will apply.


18.3.3.6                   The
exclusions set forth in Section 18.3.1 and
the liability caps set forth in Section 18.3.2
shall not apply with respect to amounts paid for  *  *  *
by  *  *  *
to provide  *  *  *,
provided that  *  *  *
may exercise its express termination rights under this Agreement in good faith
(in which case the exclusions in Section 18.3.1
and the liability caps in 18.3.2 will
apply) subject to  *  *  *
continued obligation to provide  *  *  * as set forth in this Agreement.
For purposes of this provision, “refusal” shall
mean the intentional cessation by  *  *  *, in a manner impermissible under
this Agreement, of the performance of all or a material portion of the  *  *  *
then required to be provided by  *  *  * under this Agreement.


18.3.3.7                   The
exclusions set forth in Section 18.3.1 and
the liability caps set forth in Section 18.3.2
shall not apply with respect to amounts paid under Section  * 
*  * with respect to  *  *  *
of an  *  *  *
or  *  *  *
of  *  *  *.


18.3.3.8                   The
exclusions set forth in Section 18.3.1  and
the liability caps set forth in Section  18.3.2 shall not apply with respect
to amounts paid for  *  *  *
by any      *  *  *
of a Party’s  *  *  *
set forth in  Section  * 
*  *, or the first sentence
of        *  *  *.


18.3.4     Items Not
Considered Damages. The following shall not be considered damages subject
to, and shall not be counted toward the liability exclusions or caps specified
in, Section 18.3.1 or 18.3.2:


18.3.4.1                   *  *  * assessed against  *  *  *
pursuant to  *  *  *,
recognizing that the  *  *  * will reduce the amount paid
by  *  *  *
and thereby have the effect of reducing  *  *  * limitation of liability where
such liability is calculated based on the fees paid by  *  *  *
during the applicable period.


18.3.4.2                   Amounts
withheld by  *  *  *
in accordance with this Agreement due either to      *  *  *.


18.3.4.3                   Amounts
paid by  *  *  *
but subsequently recovered from  *  *  * due either to     *  *  *.


18.3.4.4                   *  *  * and other amounts that are due
and owing to  *  *  *
for  *  *  *
under this Agreement.


18.3.4.5                   *  *  * reimbursement obligations under Section 
*  *  *


18.3.5     Waiver of
Liability Cap. If, at any time, the total aggregate liability of one Party
for adjudicated claims by the other Party that arise under or in connection
with this Agreement during the  *  *  * after the Commencement Date
exceeds  *  *  *%
of either of the liability caps specified in Section
18.3.2 and, within  *  *  * from receipt of the request of
the other Party, the Party incurring such liability refuses to waive such cap
and/or increase the available cap to an amount at least equal to the original
liability cap, then the other Party may  *  *  * this Agreement without payment
of       *  *  *.


18.3.6     Acknowledged
Direct Damages. The following shall be considered direct damages and
neither Party shall assert that they are indirect, incidental, collateral,
consequential or special damages or



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lost
profits to the extent they result directly from the breaching Party’s failure
to perform in accordance with this Agreement:


18.3.6.1                   Costs
and expenses of  *  *  *
any lost, stolen or damaged  *  *  *.


18.3.6.2                   Costs
and expenses of  *  *  *in
respect of a failure to provide the  *  *  *.


18.3.6.3                   Costs
and expenses of replacing lost, stolen or damaged  *  *  *.


18.3.6.4                   Cover
damages, including the costs and expenses incurred to procure the *  *  * or corrected *  *  * from an alternate source, to the
extent in excess of  *  *  *
under this Agreement.


18.3.6.5                   *  *  * incurred by either Party,
including *  *  * of additional *  *  *, *  *  *
charges.


18.3.6.6                   Costs
and expenses incurred to bring  *  *  * or to contract to obtain *  *  * including the costs and expenses
associated with the retention of *  *  *
and  *  *  *
to assist with any *  *  *
resulting from a  *  *  *
to Section 
*  *  *.


18.3.6.7                   Damages
of a  *  *  *
which are direct damages of such  *  *  * and which would be direct
damages of  *  *  *
if they had instead been suffered by  * 
*  * (including being
so considered under this Section 18.37).


18.3.6.8                   *  *  * remedies imposed by a *  *  * or  *  *  *
or  *  *  *
for failure to comply with requirements or deadlines in violation of Section 
*  *  *.


18.3.6.9                   Lost  *  *  *
incurred by  *  *  *
and the  *  *  *
to the extent arising as the result of  *  *  * failure to properly review and *  *  * to  * 
*  * as required by this
Agreement.


19.          DISPUTE
RESOLUTION


19.1        Informal
Dispute Resolution.


Prior to the initiation of formal dispute resolution
procedures with respect to any dispute, other than as provided in Section 19.4 or Section 20.8, the Parties shall
first attempt to resolve such dispute informally, as follows:


19.1.1     Initial Effort.
The Parties agree that the Kraft Contract Manager and the Supplier Account
Executive shall attempt in good faith to resolve the dispute. In the event the
Kraft Contract Manager and the Supplier Account Executive are unable to resolve
a dispute in an amount of time that either Party deems reasonable under the
circumstances, such Party may refer the dispute for resolution to the senior
corporate executives specified in Section 19.1.2
below upon written notice to the other Party.


19.1.2     Escalation.
Within five business days of a notice under Section
19.1.1 above referring a dispute for resolution by senior
corporate executives, the Kraft Contract Manager and the Supplier Account
Executive will each prepare and provide to a Supplier Vice President and
General Manager, United States and the Kraft Chief Financial Officer,
respectively, summaries of the non-privileged relevant information and
background of the dispute, along with any appropriate non-privileged supporting
documentation, for their review. The designated senior corporate executives
will confer as often as they deem reasonably necessary in order to gather and
furnish to the other all non-privileged information with respect to the matter
in issue which the Parties



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believe
to be appropriate and germane in connection with its resolution. The designated
senior corporate executives shall discuss the problem and negotiate in good
faith in an effort to resolve the dispute without the necessity of any formal
proceeding. The specific format for the discussions will be left to the
discretion of the designated senior corporate executives, but may include the
preparation of agreed-upon statements of fact or written statements of
position.


19.1.3     Provision of
Information. During the course of negotiations under Section
19.1.1 or  Section 19.1.2 above, all
reasonable requests made by one Party to another for non-privileged
information, reasonably related to the dispute, will be honored in order that
each of the parties may be fully advised of the other’s position. All
negotiation shall be strictly confidential and used solely for the purposes of
settlement. Any materials prepared by one Party for these proceedings shall not
be used as evidence by the other Party in any subsequent arbitration or
litigation; provided, however, the underlying facts supporting such materials
may be subject to discovery.


19.1.4     Prerequisite to
Arbitration. Arbitration of a dispute may not be commenced until the
earlier of:


19.1.4.1                   the
designated senior corporate executives under Section
19.1.2 above concluding in good faith that amicable resolution
through continued negotiation of the matter does not appear likely; or


19.1.4.2                   30
days after the notice under Section 19.1.1
above referring the dispute to senior corporate executives.


19.2        Non-Binding
Mediation.


19.2.1     Requirement to
Attempt Non-Binding Mediation. Except for disputes described in Section 19.4 or Section 20.8 or termination of this
Agreement pursuant to Article 20,
any dispute arising out of or relating to this Agreement, or any breach
thereof, which cannot be resolved using the procedures set forth in Section 19.1 shall be first
attempted to be resolved through non-binding mediation under the mediation
rules of the Center for Public Resources.


19.2.2     Location and
Decision. The mediation shall take place in Chicago, Illinois, and shall
apply the governing law of this Agreement. The recommendations of the mediators
shall be non-binding. The mediators shall be instructed to state the reasons
for their recommendations. The mediators shall be bound by the warranties,
limitations of liability and other provisions of this Agreement.


19.2.3     Selection and
Qualification of Mediators. Within 10 days after delivery of written notice
(“Notice of Mediation”) by one Party to
the other in accordance with this Section, the Parties each shall use good
faith efforts to mutually agree upon one mediator. If the Parties are not able
to agree upon one mediator within such period of time, the Parties each shall
within 10 days: (i) appoint one mediator who has at no time ever represented or
acted on behalf of either of the Parties, and is not otherwise affiliated with
or interested in either of the Parties and (ii) deliver written notice of the
identity of such mediator and a copy of his or her written acceptance of such
appointment to the other Party. If either Party fails or refuses to appoint a
mediator within such 10-day period, the single mediator appointed by the other
Party shall decide alone the issues set out in the Notice of Mediation. Within
10 days after such appointment and notice, such mediators shall appoint a third
neutral and independent arbitrator who at no time ever represented or acted on
behalf of either of the Parties, and is not otherwise affiliated with or
interested in either of the Parties. In the event that the two mediators fail
to appoint a third mediator within 10 days of the appointment of the second
mediator, either mediator or either Party may apply for the appointment of a
third mediator to the Center for Public Resources.



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19.2.4     General.
All mediators shall be practicing attorneys with at least five years’
experience with the business processes, technology and law applicable to the
Services or similar services or transactions. The Parties shall use
commercially reasonable efforts to conclude the mediation within 60 days after
selection of the mediator or mediators. The recommendations of the mediator or
the majority of the three mediators, as applicable, shall be rendered within 15
days after the conclusion of the hearing, shall be in writing, shall set forth
the basis therefore. Each Party shall bear its own mediation costs and expenses
and all other costs and expenses of the mediation shall be divided equally between
the Parties.


19.3        Arbitration.


19.3.1     Arbitration.
Except for disputes described in Section 19.4,
any controversy or claim arising out of or relating to this Agreement, or any
breach thereof, which cannot be resolved using the procedures set forth above
in Section 19.1 or 19.2 shall be finally resolved
under the Commercial Arbitration Rules of the American Arbitration Association
then in effect; provided, however, that without limiting any rights at law or
in equity a Party may have because of an improper termination of this Agreement
by the other Party, nothing contained in this Agreement shall limit either
Party’s right to terminate this Agreement pursuant to Article
20.


19.3.2     Location and
Decision. Any arbitration under this Agreement shall take place in Chicago,
Illinois, and shall apply the governing law of this Agreement. The decision of
the arbitrators shall be final and binding and judgment on the award may be
entered in any court of competent jurisdiction. The arbitrators shall be
instructed to state the reasons for their decisions, including findings of fact
and law. The arbitrators shall be bound by the warranties, limitations of
liability and other provisions of this Agreement. Except with respect to the
provisions of this Agreement which provide for injunctive relief rights, such
arbitration shall be a precondition to any application by either Party to any
court of competent jurisdiction.


19.3.3     Selection and
Qualification of Arbitrators. Within 30 days, or such reasonable period
mutually agreed upon by the Parties, after delivery of written notice (“Notice of Arbitration”) by one Party to the other in
accordance with this Section, the Parties each shall use good faith efforts to
mutually agree upon one arbitrator. If the Parties are not able to agree upon
one arbitrator within such period of time, the Parties each shall within 30
days: (i) appoint one arbitrator who has at no time ever represented or acted
on behalf of either of the Parties, and is not otherwise affiliated with or
interested in either of the Parties and (ii) deliver written notice of the
identity of such arbitrator and a copy of his or her written acceptance of such
appointment to the other Party. If either Party fails or refuses to appoint an
arbitrator within such 30-day period, the single arbitrator appointed by the
other Party shall decide alone the issues set out in the Notice of Arbitration.
Within 30 days after such appointment and notice, such arbitrators shall
appoint a third neutral and independent arbitrator who at no time ever
represented or acted on behalf of either of the Parties, and is not otherwise
affiliated with or interested in either of the Parties. In the event that the
two arbitrators fail to appoint a third arbitrator within 30 days of the
appointment of the second arbitrator, either arbitrator or either Party may
apply for the appointment of a third arbitrator to the American Arbitration
Association.


19.3.4     Scope of
Discovery. Subject to the last two sentences of this Section
19.3.4, discovery will be limited to the request for and
production of documents, depositions and interrogatories. Interrogatories will
be allowed only as follows:  a Party may request the other Party to
identify by name, last known address and telephone number (i) all persons having
knowledge of facts relevant to the dispute and a brief description of that
person’s knowledge, (ii) any experts who may be called as an expert witness,
the subject matter about which the expert is expected to testify, the mental
impressions and opinions held by the expert and the facts known by the expert



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(regardless
of when the factual information was acquired) that relate to or form the basis
for the mental impressions and opinions held by the expert, and (iii) any
experts who have been used for consultation, but who are not expected to be
called as an expert witness, if such consulting expert’s opinions or
impressions have been reviewed by an expert witness.  All discovery will
be governed by the Federal Rules of Civil Procedure.  All issues
concerning discovery upon which the Parties cannot agree will be submitted to
the arbitrator for determination. Nothing in this Section
19.3.4 shall preclude either party from seeking limited third
party discovery under applicable AAA Rules or the
laws of the State of Illinois in the discretion of the arbitrator. In addition,
should a Party be able to prove that it will be unfairly prejudiced without
additional discovery on a certain issue, the arbitrator in its discretion can
permit additional limited discovery for the purpose of improving the efficiency
of the arbitration proceeding.


19.3.5     General.
All arbitrators shall be attorneys with experience with the technology and/or
law applicable to the Services or similar services or transactions. Any such
appointment shall be binding upon the Parties. The arbitrator will not have
authority to award damages in excess of the amount or other than the types
allowed by Section 18.3 and may not, in
any event, make any ruling, finding or award that does not conform to the terms
and conditions of this Agreement. The decision or award of the arbitrator or
arbitrators shall be final, binding and nonappealable, and may be enforced and
executed upon in any court having jurisdiction over the Party against whom the
enforcement of such decision or award is sought. Upon the request of a Party,
the arbitrator’s award will include written findings of fact and conclusions of
law.   Each Party shall bear its own
arbitration costs, attorneys’ fees and expenses.


19.4        Equitable
Remedies.


19.4.1     Eligible
Disputes. Notwithstanding the provisions of Section
19.1, Section 19.2,
and Section 19.3, either Party may
institute formal proceedings to obtain injunctive relief in order to:


19.4.1.1                   avoid
the expiration of any applicable limitations period,


19.4.1.2                   preserve
a superior position with respect to other creditors,


19.4.1.3                   address
a claim arising out of the breach of a Party’s obligations under Article 13,


19.4.1.4                   address
a claim arising out of the breach or attempted or threatened breach of the obligations
described in Section 19.4.2, or


19.4.1.5                   prevent
other damages that are so immediate, so large or severe, and so incapable of
adequate redress after the fact that a temporary restraining order or other
immediate injunctive relief is the only adequate remedy.


19.4.2     Irreparable
Harm. *  *  * acknowledges that, in the event
it breaches (or attempts or threatens to breach) its obligation to  *  *  *
in accordance with this Agreement, its obligation respecting  *  *  *
in accordance with Section  *  *  *, or its obligation to provide  *  *  *
in accordance with Section *  *  *,
*  *  * and/or  *  *  *
will be irreparably harmed.   *  *  *
acknowledgement is based on its reliance on 
*  *  * representation that it would
only utilize the provisions of this Section 19.4.2
when it has a good faith belief that it needs to obtain injunctive relief as
quickly as possible to avoid an adverse impact on the ability of  *  *  *
to conduct any segment of its business which
would be prevented or unreasonably disrupted in the event  *  *  *
denies, withdraws or restricts its  *  *  * to  *  *  *
or withholds  *  *  *
access to  *  *  *. 
In such a circumstance,  *  *  * may proceed directly to court.
If a court of competent jurisdiction should find that  *  *  *
has breached (or attempted or threatened to breach) any such obligations,  *  *  *




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agrees
that without any additional findings of irreparable injury or other conditions
to injunctive relief,  *  *  * shall be entitled to seek and
obtain injunctive relief, including entry of an appropriate order
compelling performance by  *  *  * and restraining it from any
further breaches (or attempted or threatened breaches).


19.4.3     Attorney’s Fees.
A Party filing a pleading seeking immediate injunctive relief, which is not
awarded in substantial part, shall pay all reasonable costs and attorneys’ fees
of the other Party.


19.5        Jurisdiction.


Each Party irrevocably agrees that any legal action,
suit or proceeding brought by it in any way arising out of this Agreement must
be brought solely and exclusively in Illinois, and each Party irrevocably
submits to the sole and exclusive jurisdiction of the federal and state courts
in Cook County, Illinois, in personam,
generally and unconditionally with respect to any action, suit or proceeding
brought by it or against it by the other Party.


19.6        Continued
Performance.


19.6.1     General.
Subject to Section 19.6.2, each Party
agrees that it shall, unless otherwise directed by the other Party, continue
performing its obligations under this Agreement while any dispute is being
resolved; provided, that this provision shall not operate or be construed as
extending the Term of this Agreement or prohibiting or delaying a Party’s
exercise of any right it may have to terminate the Term as to all or any part
of the Services. For purposes of clarification, Kraft Data may not be withheld
by Supplier pending the resolution of any dispute.


19.6.2     Non-Interruption
of Service. Supplier acknowledges and agrees that any interruption to the
Service may cause irreparable harm to Kraft and/or the Eligible Recipients, in
which case an adequate remedy at law would not be available. Subject to
Supplier’s right to terminate the Term pursuant to Section
20.1.2, Supplier expressly acknowledges and agrees that, pending
resolution of any dispute or controversy, it shall not deny, withdraw or
restrict Supplier’s provision of the Services to Kraft and/or the Eligible
Recipients under this Agreement, except as specifically and expressly agreed in
writing by Kraft and Supplier.


19.7        Governing
Law.


This Agreement and performance under it shall be
governed by and construed in accordance with the applicable laws of the State
of Illinois, without giving effect to the principles thereof relating to
conflicts of laws. The application of the United Nations Convention on
Contracts for the International Sale of Goods is expressly excluded.


19.8        Expiration
of Claims.


Without altering either Party’s rights or obligations
under Section 12.1.4, no claims to be
resolved under this Article 19 may
be asserted by either Party more than four (4) years after the later of (i) the
last date on which the act or omission giving rise to the claim occurred, or
(ii) with respect to invoices issued under this Agreement, the date on which
such act or omission was discovered or should reasonably have been discovered
(the election to conduct or not to conduct an audit with respect to an invoice
shall not, in and of itself, be evidence of reasonableness for this purpose);
provided, however, that the foregoing shall not apply to claims based upon a
Party’s fraud or willful misconduct, or a claim for which a Party has an
indemnity obligation under this Agreement in which event the applicable statute
of limitations shall apply. Failure to make such a claim (but not including
claims referred to in the proviso of the
preceding sentence) within such four-year period shall forever bar the claim.



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20.          TERMINATION


20.1        Termination
for Cause.


20.1.1     By Kraft.


20.1.1.1                   If
Supplier:


(1)           commits a
material breach of its obligations with respect to Transition Services as
provided in Section 4.2.7;


(2)           commits a
material breach of this Agreement, which breach is not cured within 30 days
after notice of the breach from Kraft; provided that if Supplier works
diligently and in good faith to cure such breach in accordance with this
provision and such breach is not capable of being cured within 30 days,
Supplier may have up to 15 additional days to cure such breach if it
demonstrates that it is capable of curing such breach within the additional
period and the breach does not materially impair the ability of Kraft or an
Eligible Recipient to conduct its business;


(3)           commits  *  *  *
of its duties or obligations of which Supplier has  *  *  *
and which  *  *  *of
this Agreement, and fails to (A) cure such breaches within thirty (30) days
after receiving notice from the time such breaches become a material breach,
and (B) give Kraft adequate assurance that the cause of each of such breaches
has been corrected so as not to be repeated again; provided, however that if,
within the twelve (12) month period following the thirty (30) day period
described in the preceding clause (A), Supplier again commits numerous breaches
of its duties or obligations of which Supplier has received notice and which
collectively constitute a material breach of this Agreement, Supplier shall not
be entitled to the cure rights described in the preceding clauses (A) and (B);


(4)           becomes
liable for or incurs Service Level Credits under this Agreement that, in the aggregate,
exceed   *  *  *%
of the cumulative At Risk Amount during any rolling six-month period, provided
that for purposes of determining whether there is a right to terminate under
this clause (4), no single Service Level in any month shall be counted for more
than  *  *  *%
of the At Risk Amount for that month;


(5)           fails to
perform in accordance with the Minimum Service Level for a Critical Service
Level for  *  *  *
consecutive months or during  *  *  * of any *  *  *
consecutive month period; or


(6)           commits a
material breach of Section 15.7
of this Agreement;


then
Kraft may, by giving notice to Supplier, terminate the Term with respect to all
or any part of the Services, as of a date specified in the notice of
termination. Supplier shall not be entitled to any Termination Charges in
connection with such a termination for cause. If Kraft chooses to terminate in
part pursuant to this Section 20.1.1,
the Charges will be adjusted in accordance with the pricing methodology set
forth in Schedule 4, to reflect such
partial termination.


20.1.1.2                   The
express acknowledgment that a certain amount of Service Level Credits or number
of Service Level defaults constitutes grounds for termination under Section 20.1.1.1 does not imply
that a lesser amount or number cannot constitute



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a
material breach of this Agreement and therefore grounds for termination under
other subsections.


20.1.1.3                  Kraft’s
right to terminate pursuant to Section 20.1.1.1 will
cease after 90 days following the date which is the later of the date (i) upon
which it has cured the breach that gave rise to Kraft’s termination right
pursuant to Section 20.1.1.1, and (ii) the
date that Supplier has provided written notification that it has cured the
breach.


20.1.2     By Supplier.
In the event that Kraft fails to pay Supplier undisputed charges exceeding in
the aggregate five million dollars  *  *  *, or Kraft fails to place
disputed amounts into escrow to the extent required by Section
12.4.6, by the
specified due date and fails to cure such default within 30 days after Kraft’s
Chief Information Officer receives a notice from Supplier of such failure and
Supplier’s intention to terminate for failure to make such payment, Supplier
may, by notice to Kraft, terminate the Term. Supplier acknowledges and agrees
that Sections 20.1.2 and 20.5 describe Supplier’s sole right
to terminate this Agreement and Supplier hereby waives any other rights it may
have to terminate this Agreement.


20.2        Termination
for Convenience.


Beginning  *  *  * after the Effective Date, Kraft
may terminate the Term with respect to all or any portion of the Services for
convenience and without cause with effect at any time by giving Supplier at
least three months’ prior notice designating the termination date. If Kraft
elects to terminate on this basis, Kraft shall pay to Supplier a Termination
Charge calculated in accordance with Schedule 4.6.
In the event that a purported termination for cause by Kraft under Section 20.1 is determined by a
competent authority not to be properly a termination for cause, then such
termination by Kraft shall be deemed to be a termination for convenience under
this Section 20.2.


20.3        Termination
Upon Supplier Change of Control.


In the event of a change in Control of Supplier (or
that portion of Supplier providing all or any material portion of the Services
under this Agreement) or the Entity that Controls Supplier (if any), where such
control is acquired, directly or indirectly, in a single transaction or series
of related transactions, or all or substantially all of the assets of Supplier
(or that portion of Supplier providing all or any material portion of the
Services under this Agreement) are acquired by any entity, or Supplier (or that
portion of Supplier providing all or any material portion of the Services under
this Agreement) is merged with or into another entity to form a new entity,
then at any time within 12 months after the last to occur of such events, Kraft
may at its option terminate the Term by giving Supplier at least 90 days’ prior
notice and designating a date upon which such termination shall be effective;
provided, however, if such change in Control of Supplier involves a  *  *  *,
Kraft may terminate the Term by giving Supplier at least 60 days’ prior notice,
and such  *  *  *
shall be prohibited from any contact with Kraft Data, Kraft Proprietary
Information and any and all other information about the Kraft account,
including discussions with Supplier Personnel regarding specifics relating to
the Services. Supplier shall be entitled to 
*  *  *, calculated in accordance with Schedule  * 
*  *, in connection with a
termination on this basis.


20.4        Termination
Upon Kraft Change of Control.


In the event that, in a single transaction or series
of transactions, Kraft acquires or is acquired by any other Entity (by stock
sale, asset sale or otherwise) or merges with any other Entity, then, at any
time within 12 months after the last to occur of such events, Kraft may at its
option terminate the Term by giving Supplier at least 90 days prior notice and
designating a date upon which such termination shall be effective. If Kraft
terminates on this basis, Supplier shall be entitled to Termination Charges,
calculated in accordance with Schedule 4.6.



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20.5                        Termination
for Insolvency.


In the event that any Party (i) commences a bankruptcy
case or a bankruptcy case is commenced against a Party, (ii) becomes or is
declared insolvent, is the subject of insolvency or similar proceedings under
state or federal law, or a receiver or similar officer or representative is
appointed with respect to all or substantially all of a Party’s assets, (iii)
passes a resolution for its voluntary liquidation, (iv) makes an assignment for
the benefit of all or substantially all of its creditors, (v) enters into an
agreement or arrangement for the composition, extension, or readjustment of
substantially all of its obligations , or (vi) experiences an event analogous
to any of the foregoing in any jurisdiction in which any of its assets are
situated, then the other Party may terminate this Agreement as of a date
specified in a termination notice; provided, however, that Supplier will not
have the right to exercise such termination under this Section so long as Kraft
pays for the Services to be received hereunder in advance on a month-to-month
basis. If any Party elects to terminate this Agreement due to the insolvency of
the other Party, such termination will be deemed to be a termination for cause
hereunder.


20.6                        *  *  *
Rights Upon  *  *  *
Bankruptcy.


20.6.1              General
Rights. In the event of  *  *  * bankruptcy or other formal
procedure referenced in Section 20.5
or of the filing of any petition under bankruptcy laws affecting the rights
of  *  *  *
which is not stayed or dismissed within  *  *  * days of filing, in addition to
the other rights and remedies set forth herein, to the maximum extent permitted
by Law, subject to the qualifications in the last two sentences below, *  *  * will have the right to retain
and take possession for safekeeping all  *  *  * to which  * 
*  * and/or the  *  *  * are
or would be entitled during the Term or upon the expiration or termination of
this Agreement. * 
*  * shall cooperate
fully with  *  *  *
and the  *  *  *
and assist  *  *  *
and the  *  *  *
in identifying and taking possession of the items listed in the preceding
sentence. *  *  * shall comply with  *  *  *
reasonable safety and security procedures, shall not have a right to access
data or materials which it would not have a right to obtain under the
provisions of this Agreement, and shall use reasonable efforts to avoid
disruptions to  *  *  *
operations. * 
*  * shall be excused
of any failure or inability to perform     
*  *  * in accordance with this
Agreement to the extent caused by  *  *  * actions. *  *  *
will have the right to hold such  *  *  * until such time as the trustee
or receiver in bankruptcy or other appropriate insolvency office holder can
provide adequate assurances and evidence to 
*  *  * that they will be protected from
sale, release, inspection, publication, or inclusion in any publicly accessible
record, document, material or filing. *  *  *
acknowledges that  * 
*  * has stated  that without this material provision,  *  *  *
would not have entered into this Agreement or provided any right to the
possession or use of  *  *  * Agreement. *  *  *
may not use its rights under this section to effect  *  *  *,
nor will  *  *  *
exercise of its rights hereunder alter in any manner the pricing under Schedule *  *  *.
To the extent  *  *  *
removal of any such  *  *  *
impairs  *  *  *
ability to perform, *  *  *
shall be excused pursuant to  * 
*  *, provided that  *  *  *
shall retain all rights it would otherwise have under this Agreement  *  *  *
subject to the *  *  * under Schedule   *  *  *.


20.6.2              Kraft
Rights in Event of Bankruptcy Rejection. Notwithstanding any other
provision of this Agreement to the contrary, in the event that Supplier becomes
a debtor under the United States Bankruptcy Code (11 U.S.C. §101 et. seq. or
any similar Law in any other country (the “Bankruptcy Code”))
and rejects this Agreement pursuant to Section 365 of the Bankruptcy Code (a “Bankruptcy Rejection”), (i) any
and all of the licensee and sublicensee rights, to the extent such rights are “intellectual
property rights”, of Kraft and the Eligible Recipients arising under or
otherwise set forth in this Agreement, including without limitation the rights
of Kraft and/or the Eligible Recipients referred to in Section
14.6, shall be deemed, upon election by Kraft under Section
365(n)(1)(b) of the Bankruptcy Code, fully retained by and vested in Kraft
and/or



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the
Eligible Recipients as protected intellectual property rights under Section
365(n)(1)(B) of the Bankruptcy Code and further shall be deemed to exist
immediately before the commencement of the bankruptcy case in which Supplier is
the debtor; (ii) Kraft shall have all of the rights afforded to non-debtor
licensees and sublicensees under Section 365(n) of the Bankruptcy Code; and
(iii) to the extent any license or sublicense rights of Kraft and/or the
Eligible Recipients under this Agreement which arise after the termination or
expiration of this Agreement are determined by a bankruptcy court not to be “intellectual
property rights” for purposes of Section 365(n), all of such license or
sublicense rights shall remain vested in and fully retained by Kraft and/or the
Eligible Recipients to the extent provided in this Agreement after any
Bankruptcy Rejection as though this Agreement were terminated or expired in
accordance with its terms. Kraft shall under no circumstances be required to
terminate this Agreement after a Bankruptcy Rejection in order to enjoy or
acquire any of its rights under this Agreement, including without limitation
any of the rights of Kraft referenced in Section 14.6,
unless termination of this Agreement by Kraft is required under the terms of
the Agreement for Kraft to enjoy or acquire any such rights.


20.7                        Critical
Services.


Without limiting Kraft’s rights under Section 20.1, if Supplier commits a
material breach which has a significant impact on the ability of Kraft or the
Eligible Recipients to conduct a material aspect of their businesses, and
Supplier is unable to cure such breach within  * 
*  *, Kraft may, in
addition to its other remedies at law and in equity, obtain from a third party
or provide for itself services which will allow Kraft or the Eligible
Recipients to conduct their businesses until Supplier has cured the breach or
this Agreement is terminated. Supplier shall reimburse Kraft for all costs and
expenses of obtaining or providing such services, at Kraft’s election, for up
to six  *  *  *
after Supplier has notified Kraft in writing that Supplier will be unable to
resume performance of the affected Services, which notice may not be given
until after the commencement of the breach. The express inclusion of this
remedy in this Section 20.7
does not limit Kraft’s right to use a similar remedy for other breaches by
Supplier of this Agreement.


21.          GENERAL


21.1                        Binding
Nature and Assignment.


21.1.1              Binding
Nature. This Agreement will be binding on the Parties and their respective
successors and permitted assigns.


21.1.2              Assignment.
Neither Party may, or will have the power to, assign this Agreement without the
prior written consent of the other, except in the following circumstances:


21.1.2.1                                                         Kraft
may assign its rights or obligations under this Agreement, without approval of
Supplier, to an Affiliate which expressly assumes Kraft’s obligations and
responsibilities hereunder, provided Kraft (i) remains fully liable for and is
not relieved from the full performance of its obligations under this Agreement,
and (ii) provides Supplier prompt written notice of the assignment; and


21.1.2.2                                                         Kraft
may assign its rights and obligations under this Agreement without the approval
of Supplier to an Entity acquiring, directly or indirectly, Control of Kraft,
an Entity into which Kraft is merged, or an Entity acquiring all or
substantially all of Kraft’s assets, provided the acquirer or surviving Entity
agrees in writing to be bound by the terms and conditions of this Agreement.


21.1.2.3                                                      Supplier
may assign its rights or obligations under this Agreement, without approval of
Kraft, to an Affiliate which expressly assumes Supplier’s obligations



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and
responsibilities hereunder, provided Supplier (i) remains fully liable for and
is not relieved from the full performance of its obligations under this
Agreement, and (ii) provides Kraft written notice of the assignment.


21.1.3              Impermissible
Assignment. Any attempted assignment that does not comply with the terms of
this Section shall be null and void.


21.2                        Entire
Agreement; Amendment.


This Agreement, including any Schedules and Exhibits
referred to herein and attached hereto, each of which is incorporated herein
for all purposes, constitutes the entire agreement between the Parties with
respect to the subject matter hereof. There are no agreements, representations,
warranties, promises, covenants, commitments or undertakings other than those
expressly set forth herein. This Agreement supersedes all prior agreements,
representations, warranties, promises, covenants, commitments or undertaking,
whether written or oral, with respect to the subject matter contained in this
Agreement. No amendment, modification, change, waiver or discharge hereof shall
be valid unless in writing and signed by an authorized representative of the
Party against which such amendment, modification, change, waiver, or discharge
is sought to be enforced.


21.3                        Notices.


21.3.1              Primary
Notices. Any notice, notification, request, demand or determination
provided by a Party pursuant to the following:


(1)                                  Section 4.4 (Termination Assistance
Services);


(2)                                  Section 4.5.1 (Use of Third Parties
— Right of Use);


(3)                                  Section 6.7 (Notice of Defaults);


(4)                                  Section 7.7 (Notice of Adverse
Impact);


(5)                                  Section 11.6 (Extraordinary
Events);


(6)                                  Section 13.4.4 (Loss of Proprietary
Information);


(7)                                  Sections 17.5 (Indemnification
Procedures);


(8)                                  Section 17.6 (Indemnification
Procedures — Government Claims);


(9)                                  Section 18.2 (Force Majeure);


(10)                            Section 18.3.5 (Waiver of Liability
Cap);


(11)                            Article 19 (Dispute Resolution);


(12)                            Article 20 (Termination); and


(13)                            Section 21.1 (Binding Nature and
Assignment);


shall
be in writing and shall be delivered in hard copy using one of the following
methods and shall be deemed delivered upon receipt:  (i) by hand, (ii) by an express courier with
a reliable system for tracking delivery, or (iii) by registered or certified
mail, return receipt requested, postage prepaid. Unless otherwise notified, the
foregoing notices shall be delivered as follows:



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In the case of Kraft:


Kraft
Foods Global, Inc.


Three
Lakes Drive


Northfield,
Illinois  60093-2469


Attention: Vice President Information Systems,
Operations Services


With a
copy to:


Kraft
Foods Global, Inc.


Three
Lakes Drive


Northfield,
Illinois  60093-2469


Attention:  Vice President and Associate General Counsel


Global Supply Chain & Global IS:


and


In the
case of Supplier:


EDS
Enterprise Client Executive


Three
Lakes Drive


Northfield,
Illinois 60093


Attention:


With a
copy to:


Office
of the General Counsel


5400
Legacy Drive


Plano,
TX  75024


Attention: General Counsel


With a
copy to:


5400
Legacy Drive


Plano,
TX  75024


Attention: Vice
President/General Manager of US Region


21.3.2              Other
Notices. All notices, notifications, requests, demands or determinations
required or provided pursuant to this Agreement, other than those specified in Section 21.3.1, may be sent in hard
copy in the manner specified in Section 21.3.1,
or by e-mail transmission (where receipt is acknowledged by the recipient) or
facsimile transmission (with acknowledgment of receipt from the recipient’s
facsimile machine) to the addresses set forth below:


In the case of Kraft:


Kraft
Foods Global, Inc.


Three
Lakes Drive


Northfield,
Illinois  60093-2469


Attention:
Vice President Information Systems, Operations Services 


Email
Address:  Lee.Coulter@kraft.com


Facsimile Number: (847) 646-2840


and


In the case of Supplier:



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EDS Enterprise
Client Executive


Three Lakes Drive


Northfield,
Illinois 60093


Attention:


21.3.3              Notice
of Change. A Party may from time to time change its address or designee for
notification purposes by giving the other prior notice of the new address or
designee and the date upon which it shall become effective.


21.3.4              Service
of Process. Notwithstanding the above, for the purpose of service of legal
process and receipt of notice or pleadings in judicial proceedings before the
federal or state courts of Illinois, both Parties to this Agreement irrevocably
appoint the company below as their agent for service of process and receipt of
such notice or notification, and further elect domicile at the address of said
company in Chicago, Illinois, as follows:


In the case of Kraft:


CT Corporation System


208 South LaSalle
Street


Chicago, IL 60604


With a copy to:


Kraft Foods
Global, Inc.


Three Lakes Drive


Northfield,
Illinois  60093-2469


Attention: 
Chief Litigation Counsel


and


In the case of Supplier:


Office of the
General Counsel


5400 Legacy Drive


Plano, TX  75024


Attention: General Counsel


With a copy to:


The Prentice-Hall
Corporation System, Inc.


33 North LaSalle
Street


Chicago, Illinois 
60602


21.4                        Counterparts.


This Agreement may be executed in several
counterparts, all of which taken together shall constitute one single agreement
between the Parties hereto.



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21.5                        Headings.


The article and section headings and the table of
contents used herein are for reference and convenience only and shall not be
considered in the interpretation of this Agreement.


21.6                        Relationship
of Parties.


Supplier, in furnishing services to Kraft and the
Eligible Recipients hereunder, is acting as an independent contractor, and
Supplier has the sole obligation to supervise, manage, contract, direct,
procure, perform or cause to be performed, all work to be performed by Supplier
under this Agreement. The relationship of the Parties under this Agreement
shall not constitute a partnership or joint venture for any purpose. Except as
expressly provided in this Agreement, Supplier is not an agent of Kraft or the
Eligible Recipients and has no right, power or authority, expressly or
impliedly, to represent or bind Kraft or the Eligible Recipients as to any
matters, except as expressly authorized in this Agreement.


21.7                        Severability.


In the event that any provision of this Agreement
conflicts with the law under which this Agreement is to be construed or if any
such provision is held invalid or unenforceable by a court with jurisdiction
over the Parties, such provision shall be deemed to be restated to reflect as
nearly as possible the original intentions of the Parties in accordance with
applicable law. The remaining provisions of this Agreement and the application
of the challenged provision to persons or circumstances other than those as to
which it is invalid or unenforceable shall not be affected thereby, and each
such provision shall be valid and enforceable to the full extent permitted by
law.


21.8                        Consents
and Approval.


Except where expressly provided as being in the sole
discretion of a Party, where agreement, approval, acceptance, consent,
confirmation, notice or similar action by either Party is required under this
Agreement, such action shall not be unreasonably delayed or withheld. An
approval or consent given by a Party under this Agreement shall not relieve the
other Party from responsibility for complying with the requirements of this
Agreement, nor shall it be construed as a waiver of any rights under this
Agreement, except as and to the extent otherwise expressly provided in such
approval or consent.


21.9                        Waiver of
Default; Cumulative Remedies.


21.9.1              Waiver
of Default. A delay or omission by either Party hereto to exercise any
right or power under this Agreement shall not be construed to be a waiver
thereof. A waiver by either of the Parties hereto of any of the covenants to be
performed by the other or any breach thereof shall not be construed to be a
waiver of any succeeding breach thereof or of any other covenant herein
contained. All waivers must be in writing and signed by the Party waiving its
rights.


21.9.2              Cumulative
Remedies. All remedies provided for in this Agreement shall be cumulative
and in addition to and not in lieu of any other remedies available to either
Party at law, in equity or otherwise. The election by a Party of any remedy
provided for in this Agreement or otherwise available to such Party shall not
preclude such Party from pursuing any other remedies available to such Party at
law, in equity,  by contract or otherwise.


21.10                 Survival.


Any provision of this Agreement which contemplates
performance or observance subsequent to any termination or expiration of this
Agreement shall survive any termination or expiration of this Agreement and
continue in full force and effect. Additionally, all provisions of this
Agreement will survive the



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expiration or termination of this Agreement to the
fullest extent necessary to give the Parties the full benefit of the bargain
expressed herein.


21.11                 Publicity.


Neither Party shall use the other Party’s name or mark
or refer to the other Party directly or indirectly in any media release, public
announcement, or public disclosure relating to this Agreement, including in any
promotional or marketing materials, customer lists or business presentations
without the prior written consent of the other Party prior to each such use or
release. Neither party shall make any public statements about this Agreement,
the Services or its relationship with the other Party without the other Party’s
prior approval.


21.12                 Service Marks.


Each Party agrees that it shall not, without the other
Party’s prior consent, use any of the names, service marks or trademarks of the
other Party in any of its advertising or marketing materials.


21.13                 Export.


The Parties acknowledge that certain Software and
technical data to be provided hereunder and certain transactions hereunder may
be subject to export controls under the laws and regulations of the United
States, the European Union, the United Nations and other jurisdictions. No
Party shall export or re-export any such items or any direct product thereof or
undertake any transaction or service in violation of any such laws or
regulations. To the extent within Supplier’s control, Supplier shall be
responsible for, and shall coordinate and oversee, compliance with such export
laws in respect of such items exported or imported hereunder. To the extent
within Kraft’s control, and not in Supplier’s control, Kraft shall be
responsible for, and shall coordinate and oversee, compliance with such export
laws in respect of such items exported or imported hereunder. Kraft will
provide to Supplier prior written notice of any of the Kraft Data, Kraft Owned
Software or Kraft Third Party Licensed Software or any other item provided by
Kraft that will be used or accessed by Supplier outside of the United States in
providing the Services which is controlled for export under the International
Traffic in Arms Regulations or is classified for export from the United States
under any classification other than EAR99. Supplier will be the importer of
record of any items for which import is required for delivery of any portion of
the Services outside the United States and for maintaining such records as may
be necessary or required as importer to comply with such Laws unless, (1) at Kraft’s
option, which may be exercised on a case by case basis,  Kraft notifies
Service Provider that Kraft will be the importer of record or (2) Supplier is
not able to be the importer of record (such as where Supplier does not have a
legal entity in place, or does not own the equipment being shipped) and Kraft
can be the importer of record.


21.14                 Enforcement and
Third Party Beneficiaries.


Kraft shall have the right to enforce this Agreement
and to assert all rights and exercise and receive the benefits of all remedies,
including monetary damages, on behalf of each Eligible Recipient to the same
extent as if such Eligible Recipient were Kraft under this Agreement. Except as
expressly provided herein, this Agreement is entered into solely between, and
may be enforced only by, Kraft (on behalf of itself and the other Eligible
Recipients) and Supplier (on behalf of itself and the Supplier Affiliates).
Except as expressly provided herein, this Agreement shall not be deemed to
create any rights or causes of action in or on behalf of any third parties,
including without limitation employees, suppliers and customers of a Party, or
to create any obligations of a Party to any such third parties. Kraft is
responsible for: (i) causing each Eligible Recipient to comply with the
provisions of this Agreement where to the extent that Supplier performs the
Services for Eligible Recipients, and (ii) payment of all of Supplier’s Charges
hereunder (including those that may be invoiced to an Eligible Recipient).
Supplier shall first



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look to the Eligible Recipient that has been invoiced
for payment under such invoice, provided that Kraft will be responsible for
payment should the Eligible Recipient fail to pay such amounts when due.


21.15                 Covenant
Regarding Pledging.


Supplier may assign, transfer, pledge, hypothecate or
otherwise encumber its rights to receive payments from Kraft under this
Agreement, provided that Supplier shall ensure that (a) no Entity to which
Supplier assigns, transfers, pledges, hypothecates or otherwise encumbers its
rights to receive payments hereunder shall have any right to enforce the terms
of this Agreement, except for its right to collect such payments from Kraft or
the Eligible Recipients in accordance with the terms and conditions of this
Agreement, (b) any Entity to which Supplier assigns, transfers, pledges,
hypothecates or otherwise encumbers its rights to receive payments hereunder
shall not be entitled to approve any amendment, modification or termination of
this Agreement, (c) any such transaction shall not limit Supplier’s rights to
amend, modify or terminate this Agreement in accordance with the terms hereof
and (d) Supplier shall continue to be Kraft’s sole point of contact with
respect to this Agreement, including with respect to payment, subject to a
third party’s right to collect payment owed hereunder as provided above. 
The person or Entity to which such rights are assigned, transferred, pledged,
hypothecated or otherwise encumbered shall only be able to exercise the
collection right referenced in clause (a) above if Kraft fails to pay Supplier for amounts due hereunder, other than amounts
disputed by Kraft pursuant to Section 12.4
(including amounts where the dispute has been resolved through the
dispute resolution process described in Article 19).


21.16                 Order of
Precedence.


In the event of a conflict, this Agreement shall take
precedence over the Schedules attached hereto, and the Schedules shall take
precedence over any attached Exhibits.


21.17                 Hiring of
Employees.


21.17.1       Solicitation
and Hiring. Except as expressly set forth herein, during the Term and for a
period of 12 months thereafter, Supplier will not solicit for employment
directly or indirectly, nor employ, any employees of Kraft or an Eligible
Recipient or individual Kraft Third Party Contractors involved in the
performance or consumption of the Services, or who become known to the Supplier
in connection with Supplier’s performance of the Services (unless Supplier is
not aware and should not have been reasonably expected to be aware that the
employer of the individual is a Kraft Third Party Contractor) without the prior
approval of Kraft. Except as expressly set forth herein in connection with the
expiration or termination of this Agreement, during the Term and for a period
of 12 months thereafter, Kraft will not, and will not permit any Kraft
Affiliate to, solicit for employment directly or indirectly, nor employ, any
employee of Supplier involved in the performance of Supplier’s obligations
under this Agreement without the prior consent of Supplier. In each case, the
prohibition on solicitation and hiring shall extend 90 days after the
termination of the employee’s employment or, in the case of Supplier employees,
the cessation of his or her involvement in the performance of Services under
this Agreement. This provision shall not operate or be construed to prevent or
limit any employee’s right to practice his or her profession or to utilize his
or her skills for another employer or to restrict any employee’s freedom of
movement or association.


21.17.2       Publications.
Neither the publication of classified advertisements in newspapers,
periodicals, Internet bulletin boards, or other publications of general
availability or circulation nor the consideration and hiring of persons
responding to such advertisements shall be deemed a breach of this Section 21.17, unless the
advertisement and solicitation is undertaken as a means to circumvent or
conceal a violation of this provision and/or the hiring party acts with
knowledge of this hiring prohibition.



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21.18                 Further
Assurances.


Each Party covenants and agrees that, subsequent to
the execution and delivery of this Agreement and without any additional
consideration, each Party 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.


21.19                 Liens.


Other than judgment liens that Supplier has obtained
in a court of competent jurisdiction, Supplier will not file, or by its action
or inaction permit, any liens to be filed on or against property or realty of
Kraft or any Eligible Recipient. In the event that any such liens arise as a
result of Supplier’s action or inaction, Supplier will obtain a bond to fully
satisfy such liens or otherwise remove such liens (other than judgment liens
mentioned in the previous sentence) at its sole cost and expense within 10
business days. If Supplier fails to do so, Kraft may, in its sole discretion,
pay the amount of such lien, and/or deduct such amounts from payments due to
the Supplier.


21.20                 Covenant of Good
Faith.


Each Party agrees that, in its respective dealings
with the other Party under or in connection with this Agreement, it shall act
in good faith.


21.21                 Notice of  * 
*  * Condition.


*  *  *  shall, within
fourteen (14) days after obtaining actual knowledge of the occurrence of a  *  *  *
provide notice to  * 
*  * of the occurrence
of such  *  *  *.
Promptly following the date  * 
*  * receives such
notice, senior executives of the Parties shall meet to discuss  *  *  *
condition and its ability to continue to perform its obligations hereunder. For
the purposes of this Section 21.21,  * 
*  * means (1) any  *  *  *
of the long term  *  *  * of
 *  *  *
below  *  *  *
or  *  *  *
or (2) the failure of  * 
*  * to have a    *  *  *
from both  *  *  *.


21.22                 Acknowledgment.


The Parties each acknowledge that the terms and
conditions of this Agreement have been the subject of active and complete
negotiations, and that such terms and conditions should not be construed in
favor of or against any Party by reason of the extent to which any Party or its
professional advisors participated in the preparation of this Agreement.


21.23                 References.


Supplier may only use Kraft as a reference for
prospective Supplier customers if Supplier obtains the advance approval of the
Kraft Contract Manager. If Kraft consents to serving as a reference, Kraft will
be entitled to freely discuss all aspects of Supplier’s performance and Kraft’s
satisfaction with such performance with prospective Supplier customers.


SIGNATURE PAGE FOLLOWS



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IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their
respective duly authorized representatives as of the Effective Date.


	
  KRAFT FOODS GLOBAL, INC.

  	
   

  	
  ELECTRONIC DATA SYSTEMS

  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: Alene M. Korby

  	
   

  	
   

  	
   

  	
  Name: Stephen F. Schuckenbrock

  	
   

  
	
   

  	
  Title:   Executive
  Vice President & CIO

  	
   

  	
   

  	
   

  	
   

  
	
  Date: April 27, 2006

  	
   

  	
   

  	
  Co-Chief Operating Officer

  	
   

  
	
   

  	
   

  	
   

  	
  Executive Vice President

  	
   

  
	
   

  	
   

  	
   

  	
  Global Sales & Client Solutions

  	
   

  
	
   

  	
   

  	
   

  	
  Date: April 27, 2007

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EDS INFORMATION SERVICES, L.L.C.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Stephen F. Schuckenbrock

  	
   

  
	
   

  	
   

  	
   

  	
  Title: Vice President

  	
   

  
	
   

  	
   

  	
   

  	
  Date: April 27, 2007

  	
   

  
										



 



 S-1














 


 


SCHEDULE 1


DEFINITIONS


References to the
preamble, articles, sections, schedules and exhibits in this Schedule 1 are to the preamble,
Articles and Sections of, and Schedules and Exhibits to, the Agreement unless
otherwise specified. As used in this Agreement:


“Acceptance” shall mean the determination, in Kraft’s sole
reasonable discretion, following implementation, installation, testing  and execution in the production environment
for an agreed upon number of business cycles that Software, Equipment, Systems
and/or other contract deliverables are in Compliance in all material respects
with the Specifications.


“Acquired Assets Credit” shall mean the amount (if any) set
forth on Schedule 4 that Supplier will
pay to Kraft as consideration for the Acquired Assets.


“Acquired Assets” shall mean the Equipment, Software and
other assets (if any) owned or controlled by Kraft or the Eligible Recipients
and listed on Schedule 20 that Supplier will
acquire pursuant to the terms of this Agreement.


“Actual Uptime” shall mean shall mean the measurement of time
that a particular System, Application, Software, Equipment, Network or any
other part of the Services is actually available during the Measurement Window,
and such measurement will be calculated by subtracting Downtime from the
Scheduled Uptime.


“Actual Volumes” means, for each Resource Unit during each
applicable measurement period, the actual volume of that Resource Unit measured
for that period in accordance with Schedule 4.5.


“Additional Resource Charge(s)” or “ARC(s)”
means, for any Billable Resource Unit, the incremental charge payable by Kraft
to Supplier based on the amount by which the Actual Volume of such Billable
Resource Unit exceeds the Resource Baseline for such Billable Resource Unit.


“Affected Contractors” means the Affected Personnel who are
contractors.


“Affected Kraft Foods Global Personnel” means the Kraft
Personnel, other than employees and contractors of Altria and its Affiliates,
who are identified in Schedule 5.1,
including all of the individuals listed in Schedule 5.1.1.


“Affected Personnel” means the Affected Kraft Foods Global
Personnel and the Affected Tech Center Personnel who are identified in Schedule 5.1.


 “Affected Tech Center
Personnel” means the employees and 
contractors of Altria and its Affiliates who are identified in Schedule 5.1, including all of the
individuals listed in Schedule 5.1.2.


“Affiliate” shall mean with respect to any Entity, any other
Entity that directly or indirectly Controls, is Controlled by or under common
Control with such Entity at the time in question.


“Agreement” shall have the meaning given in the preamble to
this Agreement.


“AICPA Auditors” shall have the meaning given in Section 9.10.9.1.



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“Allocation of Pool Percentage” shall mean the portion of the
Pool Percentage Available for Allocation that is specified for a Performance
Category. The total of all Allocation of Pool Percentages shall not exceed the
Pool Percentage Available for Allocation.


“Altria” shall mean Altria Group, Inc., a Virginia
corporation with its principal place of business at 120 Park Avenue, New York,
New York 10017.


“Applicable Regulatory Authority” shall mean, in the United
States, the Federal Communications Commission (the “FCC”)
or comparable national, territorial, regional, state, provincial or local
regulatory bodies of competent jurisdictions and in geographic regions other
than the United States from, to or in which the Services are provided,
comparable national, territorial, regional, state, provincial or local
regulatory authorities.


“Application Server(s)” shall mean Wintel Servers, AIX
Servers, LINUX Servers, UNIX Servers, and AS/400 Servers..


“Applications Software” or “Applications”
shall mean Software that is used to support day-to-day business operations and
accomplish specific business objectives.


“ARC Rate” means, in relation to each Billable Resource Unit,
the amount specified as the “ARC Rate” for that Billable Resource Unit on Schedule 4.1, as adjusted pursuant
to Section 12of Schedule
4.


“Asset Inventory and Management System”
shall mean an electronic, database-driven application used to store,
query, and frequently update asset inventory information for all assets used in
association with the Services, whether the assets are located at Kraft Sites or
Supplier Facilities.


“At Risk Amount” shall have the meaning given in Schedule 3..


“Audit Period” shall have the meaning given in Section 9.10.1.


“Authorized Users” shall mean users of Services within and
outside of Kraft including, but not limited to, Kraft employees, vendors,
customers and contractors.


“Availability” shall mean the Actual Uptime expressed as a
percentage of the Scheduled Uptime for a particular System, Application,
Software, Equipment, Network, or any other part of the Services (i.e.
Availability % = ((Actual Uptime)/(Scheduled Uptime)) x 100%). Where Systems are redundant, the outage of
one System will not be counted against Availability provided service is not
disrupted..


“Bankruptcy Code” shall have the meaning given in Section 20.6.2.


“Bankruptcy Rejection” shall have the meaning given in Section 20.6.2.


“Baseline FTEs” shall have the meaning given in Section 4.6.1.1.


“Benchmarking Standard” shall have the meaning given in Section 11.10.3.


“Benchmarker” shall have the meaning given in  Section 11.10.1.


“Benchmarking” shall have the meaning given in Section 11.10.1.



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“Billable Resource Unit” means, in relation to each Resource
Unit that is requested or approved by Kraft or is generated by Kraft’s business
activity and identified as a “Billable Resource Unit” on Schedule
4.5, for which distinct charging rates or other charging
mechanisms apply.


“Brazilian Affected Personnel” shall have the meaning given
in Section 8.1.1.6.2.


“Business
Continuity (Services)” shall mean the overall, company-wide plans and activities
that are intended to enable continued business operation in the event of any
unforeseen interruption.


“Cable Plant” in all forms whether
capitalized or not shall mean the physical Cables and Wires that make up the
Network infrastructure.


“Cabling”
or “Cable” shall mean cables that come with ends that permit the
physical connection between Equipment and a wall jack or patch panel, including
physical cabling media, peripheral cabling used to interconnect electronic
equipment and all terminating hardware and cross connect fields, but not
including conduits and pathways.


“Calls” shall mean the problems, questions, or requests
submitted to the Supplier by telephone, electronically, or other means approved
by Kraft.


“Cause” shall mean (i) material breach of any agreement
entered into between the employee and Supplier; (ii) material misconduct; (iii)
material or repeated failure to follow Supplier’s policies, directives or
orders applicable to Supplier employees holding comparable positions; (iv)
intentional destruction or theft of Supplier property or falsification of
Supplier documents; (v) material or repeated failure or refusal to faithfully,
diligently, and competently perform the usual and customary duties associated
with your position; (vi) conviction of a felony or any crime involving moral
turpitude; or (vii) material or repeated violation of the Supplier Code of
Business Conduct.


“Change Control Procedures” shall have the meaning given in Section 9.6.1.


“Charges” shall mean the amounts set forth in Article 11 and Schedule
4 (or otherwise set forth in the Agreement) as charges due to
the Supplier in return for providing the Services, including the applicable
taxes payable under Section 11.4.


“Collaborative
Applications” shall
mean Applications containing functionality to enable electronic communication
and messaging, work group collaboration, information transfers, frequently
asked questions, and similar Applications that allow collaborative interaction
and receipt/transfer of data and information both within and outside of Kraft.
Examples of current and/or future Collaborative Applications include electronic
mail, calendaring, and instant messaging.


“Commencement Date” shall mean June 1, 2006, or such other
date as the Parties may agree upon in writing as the date on which Supplier
will assume full responsibility for such Services (except for the Services in
the Deferred Countries). Supplier’s assumption of Services originating from
Deferred Countries shall occur in accordance with the Transition Plan, except
in the case of Slovakia, Ukraine, Bulgaria, Romania, Morocco, and Jamaica, for
which Supplier shall assume responsibility for the Services as soon as
practicable but in any event not later than (i) twelve (12) months after the
Commencement Date, in each case unless a later date has been approved or
specified by Kraft in writing. This Agreement shall be binding as of the
Effective Date, though certain obligations are contingent upon the Commencement
Date, as set forth in this Agreement.



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“Commercial
Off The Shelf” or “COTS” shall mean Equipment or
Software, as applicable, that is generally available to the public.


“Companion Agreement” shall have the meaning given in Section 2.3.1.


“Compliance” and “Comply” shall
mean, with respect to outsourced business process(es), Software, Equipment,
Systems or other contract deliverables to be implemented, designed, developed,
delivered, integrated, installed and/or tested by Supplier, in compliance in
all material respects with the Specifications.


“Conferencing (Services)” shall mean the
provision of audio, web and video conferencing services for Authorized Users as
described in the Agreement.


“Conferencing
Premise Equipment” shall mean the Equipment, features, accessories, and peripherals supported or
used by Supplier in connection with its provision of Conferencing Services to
the Authorized Users, including control computers, audio, web and video
conferencing bridges, muxes, multi-point bridging equipment, and associated
diagnostic equipment, and all additions, modifications, substitutions, Upgrades
or enhancements to such Equipment.


“Conferencing Premise System” shall mean
the Conferencing Premise Equipment and associated Software supported or used by
Supplier in connection with its provision of Conferencing Services.


“Connectivity”
shall mean the ability to
electronically access and exchange data, voice, and/or video electronic
impulses between various infrastructure components and with external sources as
approved by Kraft and provided to Authorized Users.


“Consumption-Based Resource Unit” means the Billable Resource
Units for which Kraft’s charge is calculated on a specific unit of consumption,
and not on a monthly basis, such as FTE hours or telecom minutes usage.


“Contract Changes” shall have the meaning given in Section 11.1.5.


“Contract Records” shall have the meaning given in Section 9.10.1.


 “Contract
Year” shall mean the period ending 12 months after the Commencement
Date and on each anniversary of such ending date thereafter during the Term. If
any Contract Year is less than 12 months, the rights and obligations under this
Agreement that are calculated on a Contract Year basis will be proportionately
adjusted for such shorter period. .


“Control” and its derivatives shall mean:  (a) the legal, beneficial, or equitable
ownership, directly or indirectly, of (i) more than 50% of the aggregate of all
voting equity interests in an Entity, or (ii) equity interests having the
right, in the event of dissolution, to more than 50% of the assets of an
Entity; (b) the right to appoint, directly or indirectly, a majority of the
board of directors; (c) the right to control, directly or indirectly, the
management or direction of the Entity by contract or corporate governance
document; or (d) in the case of a partnership, the holding by an Entity (or one
of its Affiliates) of the position of sole general partner.


“Course” shall have the meaning given in Schedule
8.2.7.



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“Critical Affected Personnel” shall mean those individuals
identified in Schedule 5.3 as critical to
the ongoing success of Supplier’s delivery of information technology services
to Kraft and the Eligible Recipients. For those countries where the Critical
Affected Personnel are not designated as of the Effective Date, Kraft shall
designate by the Commencement Date  (or
in the case of such individuals in Deferred Countries, at least by the date
that Supplier is required to make offers to those individuals pursuant to Section 8.1.1.1)  no more than fifteen percent (15%) of the
Affected Personnel as Critical Affected Personnel, provided that the total
number of Critical Affected Personnel who are contractors cannot exceed five
percent (5%) of the number of Affected Personnel who are contractors.


“Critical Deliverables” shall mean those milestone activities
and deliverables identified in Schedule 3.3
that have associated Deliverable Credits payable to Kraft in the event Supplier
fails to deliver such deliverables in accordance with Schedule
3.3.


“Critical Service Level” shall mean those Service Levels
established under Schedule 3
for which a Service Level Credit may be payable. Critical Service Levels are
identified in Schedule 3.1 and are described
in Schedule 3.2. Each Critical Service
Level has an Expected Service Level and a Minimum Service Level associated with
it unless otherwise specified. It is the intent of the Parties that all
Critical Service Levels shall be quantifiable, measurable, and objective.


“Cross
Functional Services” shall mean those Services described in Schedule 2.1
(Cross Functional – General Services) and Schedule
2.2  (Cross Functional – Equipment and Software Services).


“Deferred Countries” shall mean all countries other than the
United States and Canada.


“Deliverable Credits” shall have the meaning given in Section 7.2.2.


“Derivative Work” shall mean a work based on one or more
preexisting works, including a condensation, transformation, translation,
modification, expansion, or adaptation, that, if prepared without authorization
of the owner of the copyright of such preexisting work, would constitute a
copyright infringement under applicable Law, but excluding the preexisting
work.


“Developed Materials” shall mean any Materials, or any
modifications, enhancements or Derivative Works thereof, developed by or on
behalf of Supplier for Kraft or the Eligible Recipients as a result of or as
part of the Services excluding Materials developed at Supplier’s leveraged
facilities for Supplier’s customers generally and not specifically for Kraft.


“Development Tool” shall mean all Software that is used in
the development, testing, deployment and maintenance of Applications.


*  *  *  shall mean the Entities identified in Schedule 24.1, as well as
their  successors and assigns, as such
list of Entities may be modified by Kraft from time to time, including any divested
portions of companies identified in Schedule 24.1. Kraft may add to Schedule 24.1
other similar companies that may be created in the future, subject to Supplier’s
approval.


“Direct Supplier Competitor” shall mean the Entities
identified in Schedule 24.2.


“Directed Employee Period” shall have the meaning given in Section 8.14.


“Directed Employee” shall have the meaning given in Section 8.14.



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“Disaster
Recovery (Services)” shall mean the specific activities related to continued provisioning of the Services
in the event of an unforeseen interruption. Disaster Recovery activities
include support and coordination with the Business Continuity Services as
described in the Disaster Recovery Plan.


“Disaster Recovery Plan” shall mean the
plan for recovering data, systems and services in the event of a disaster and
for continuing the performance of the Services.


“Downtime” shall mean the period of time that a particular
System, Application, Software, Equipment, Network, or any other part of the
Services is not available during the Measurement Window. During a switchover, the architected
switchover time will not be counted towards Downtime; however, the Downtime
encountered prior to making the decision to cut over will be counted against
Availability. Maintenance Downtime shall not be counted towards Downtime.


“DSD Device” shall
have the meaning given in Schedule 4.5.


“Earnback” shall mean the methodology used to determine the
potential elimination of a Service Level Credit as described in Schedule 3.


“EDS” shall have the meaning given in the preamble to this
Agreement.


“Effective Date” shall have the meaning given in the preamble
to this Agreement.


“EIS” shall have the meaning given in the preamble to this
Agreement.


“Eligible Recipients” shall mean, collectively, and to the
extent such Entity is receiving Services under this Agreement, the following:


(a)                                  Kraft;


(b)                                 any
Entity that is an Affiliate of Kraft on the Effective Date, or thereafter
becomes an Affiliate of Kraft;


(c)                                  any
Entity that purchases after the Effective Date from Kraft or any Affiliate of
Kraft, all or substantially all of the assets of Kraft or such Affiliate, or of
any division, marketing unit, business unit, administrative unit, or
manufacturing, research or development facility thereof, provided that such
Entity agrees in writing to be bound by the terms and conditions of this
Agreement;


(d)                                 any
Entity that after the Effective Date is created using assets of Kraft or any
Affiliate of Kraft, provided that such Entity agrees in writing to be bound by
the terms and conditions of this Agreement;


(e)                                  any
Entity into which Kraft or any Affiliate of Kraft merges or consolidates,
provided that such Entity has assumed Kraft’s obligations under this Agreement,
and provided further that such Entity agrees in writing to be bound by the
terms and conditions of this Agreement;


(f)                                    any
Entity which merges into or consolidates with Kraft or any Affiliate of Kraft;


(g)                                 any
Entity, including any corporation, joint venture, or partnership, in which on
or after the Effective Date, Kraft or any Affiliate of Kraft has an ownership
interest and/or as to



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which Kraft or such Affiliate has management or
operational responsibility by  law or
contract;


(h)                                 any
customer of an Eligible Recipient identified in clauses (a) through (h) above,
or an Entity to which such an Eligible Recipient is a contractor, but only in
connection with the provision of products or services by such Eligible
Recipient to such customer;


(i)                                     any
person or Entity providing outsourcing services to Kraft or any Eligible
Recipient, but only in connection with the provision of such outsourcing
services to Kraft or such Eligible Recipient; and


(j)                                     other
entities to which the Parties agree.


Except as used in Sections 17.1, 17.3, 17.4,
17.5, and 17.6,
Eligible Recipients shall include the employees, contractors, subcontractors,
agents and representatives, but only in their capacities as such, of the
Entities identified as Eligible Recipients in clauses (a) through (j) above.


“Employment Effective Date” shall mean, with respect to each
Transitioned Employee, the date that such Transitioned Employee begins
employment with Supplier, in accordance with applicable Laws.


“End User
Computing (Services)” shall mean the Services described in Schedule 2.5 (End User Computing
Services).


“Entity” shall mean a corporation, partnership, joint
venture, trust, limited liability company, limited liability partnership,
association or other organization or entity.


“Equipment” shall mean all computing, networking,
communications and related computing equipment (hardware and firmware)
procured, provided, operated, supported, or used by Kraft, Supplier or
Authorized Users in connection with the Services, including (i) mainframe,
midrange, server and distributed computing equipment and associated
attachments, features, accessories, peripheral devices, and cabling, (ii)
personal computers, laptop computers, terminals, workstations and associated
attachments, features, accessories, printers, multi-functional printers,
peripheral devices, and cabling, and (iii) voice, data, video and wireless
telecommunications and network and monitoring equipment and associated
attachments, features, accessories, cell phones, peripheral devices, and
cabling.


“Equipment Leases” shall mean all leasing arrangements
whereby Kraft, the Eligible Recipients or a Kraft Third Party Contractor leases
Equipment as of the Commencement Date which will be used by Supplier to perform
the Services after the Commencement Date. Equipment Leases shall include those
leases identified on Schedule 12.1,
those as to which the lease, maintenance and support costs are included in the
Kraft Base Case, and all other leases as to which Supplier received reasonable
notice and/or reasonable access prior to the Commencement Date.


“EU” shall mean the European Union.


“Expected Service Level Default” shall mean the Supplier’s
level of performance for a particular Critical Service Level that fails to meet
the applicable Expected Service Level (but does not fail to meet the applicable
Minimum Service Level) as specified in Schedule 3.1
and has failed to meet such Expected Service Level for *  *  *
in any rolling 12-month period for Critical Service Levels with a monthly
Measurement Window, or has failed to meet the Expected Service Level in any period
for Critical Service Levels with a quarterly, semi-annual or annual Measurement
Window.



 7
 






 



 


“Expected Service Level” shall mean the desired level of
current year performance for a Critical Service Level, as set forth in Schedule 3.1.


“External Storage Media” shall mean any
non-fixed-disk based storage media, including tape, optical disk, and CD.


“Extraordinary Event” shall have the meaning given in Section 11.6.1.


“FTE Rate” means, in relation to each FTE, the hourly and
monthly rates specified, and designated as “Mantime Rates”, in Schedule 4.1 for a particular skill
category or position, for onshore and offshore personnel, as identified on Schedule 4.1 and adjusted pursuant
to Section 12(c) of Schedule 4.


“FTE Services”
means Projects or New Services that Kraft requests to be provided by FTEs or
FTPs on a FTE Rate basis.


“Full Time Equivalent” or “FTE”
means the full time equivalent work effort charged on an hourly basis. Supplier
shall not charge Kraft for more than  * 
*  * hours per month
for one (1) individual’s work effort in a month.


“Full Time Person” or “FTP” shall mean
a level of effort of a full time individual that would result in at least  *  *  *
productive hours per month, excluding vacation, holidays, training,
administrative and other non-productive time (but including a reasonable amount
of additional work outside normal business hours). Without Kraft’s prior
written approval, one dedicated individual’s total work effort cannot amount to
more than one FTE.


“Hard IMAC”
shall mean an approved
IMAC request received from Kraft, which requires Supplier to dispatch a
technician to the affected Kraft Site or Authorized User’s location in order to
perform such required IMAC. A Hard IMAC will include a Soft IMAC, if necessary.


“Help Desk”
shall mean the
facilities, associated technologies, and trained staff who respond to Calls,
coordinate all Problem Management and Request Management activities and act as
a single point of contact for Authorized Users in regard to the Services.


“High
Availability Configurations” are Server Systems designed to either
automatically or manually switch to the fail-over system when a system failure
occurs. The fail over system can be in either the same data center or a
separate facility.


“IMAC(s)”
shall mean installations,
moves, adds, changes, de-installations, and cascades for Equipment, Software
and related services at designated Kraft Sites. The repair of Equipment or
Software is not an IMAC, even when repair entails a physical visit to a System.
Types of IMACs include Hard IMACs, Soft IMACs, Data IMACs, EUC IMACs, Voice
IMACs, and Project IMACs.


“Income Tax” shall mean any tax on or measured by the net
income of a Party (including taxes on capital or net worth, or gross receipts
that are imposed as an alternative to a tax based on net or gross income), or
taxes which are of the nature of excess profits tax, minimum tax on tax
preferences, alternative minimum tax, accumulated earnings tax, personal
holding company tax, and capital gains tax.


“Indirect Goods and Services” shall mean those goods and
services that are purchased by Kraft, consumed directly by Kraft, and not
utilized in Kraft’s provision of its services to its customers. Such



 8
 






 



 


goods and services
include, for example: travel; office supplies and equipment; maintenance,
repair, and operating supplies/MRO; advertising and marketing services;
contract labor; and desktop IT equipment.


“Interconnect
Devices” shall mean the devices used to enable a portion of the Network to connect with
another portion of the Network, in either a dedicated or dialup mode (e.g.,
modems, bridges, routers, hubs, switches, gateways).


“Interest Rate” shall mean the lesser of (i) the prime
commercial rate plus two percent per annum as announced from time to time by
Citibank, N.A., and (ii) the highest lawful rate of interest.


“Invoice Date” shall mean the date the vendor invoice is
received.


“ITIL” shall have the meaning given in Section
9.4.1.8.


“Key Measurements” shall mean those Service Levels for which
no Service Level Credit is payable, but which are meaningful to Kraft’s
business and are described in Schedule 3.2.


“Key Supplier Personnel” shall mean the Supplier Personnel
filling the positions designated in Schedule 5.4
as Key Supplier Personnel.


“Kraft” shall have the meaning given in the preamble to this
Agreement.


“Kraft Base Case” shall mean the summary financial base case
attached hereto as Schedule 4.3,
as well as the detailed financial and budget information underlying such
summary base case. The Kraft Base Case shall not be used to determine whether
either Party has financial or operational responsibility for any particular
Third Party Contract, or to establish the volume of any assets or Resource
Units.


“Kraft Baseline” shall have the meaning set forth in Schedule 4, Section
16(b).


“Kraft
Business Call Center” shall mean a department or group that handles
telephone calls and inquiries that are related to a particular business
function and is staffed by personnel, including Kraft Personnel or third party
personnel. PBX and adjunct systems are usually used to facilitate customer
calls, and also to provide reports and metrics to determine both individual and
group effectiveness. Kraft Business Call Centers include: Benefits/HR Call
Center, Consumer Response Call Center, and Accounts Payable Call Center and are
listed as of the Effective Date in Attachment 2.4-B of Schedule 2.4.


“Kraft Contract Manager” shall have the meaning given in Section 10.1.


“Kraft Data” shall mean any data or information of Kraft or
any Eligible Recipient that is provided to or obtained by Supplier in
connection with the negotiation and execution of this Agreement or the
performance of Supplier’s obligations under this Agreement, including data and
information with respect to the businesses, customer, operations, facilities,
products, rates, regulatory compliance, competitors, consumer markets, assets,
expenditures, mergers, acquisitions, divestitures, billings, collections,
revenues and finances of Kraft or any Eligible Recipient. Kraft Data also shall
mean any data or information that is (i) derived or compiled from data or
information provided by or on behalf of Kraft or the Eligible Recipients, (ii)
created, collected for Kraft or the Eligible Recipients by Supplier in the
performance of its obligations under this Agreement, including data processing
input and output, service level measurements, asset information, Reports, Kraft
third party service and product agreements, contract charges, and Retained
Expense and Pass-Through Expenses or (ii) that resides in or is accessed
through Software, Equipment or Systems provided, operated, supported, or used
by Supplier in connection with



 9
 






 



 


the Services, as
well as information derived from this data and information; provided that the
foregoing shall not include data on shared Systems located in Supplier
Facilities to the extent such data pertains to services Supplier provides to
its other customers.


“Kraft Facilities” shall mean the facilities listed in Schedule 7.1 that are provided by
Kraft or the Eligible Recipient for the use of Supplier to the extent necessary
to provide the Services.


“Kraft Laws” shall have the meaning given in Section 15.10.4.


“Kraft-Owned Materials” shall have the meaning given in Section 14.1.1.


“Kraft-Owned Software” shall mean Software owned by Kraft, a
Kraft Affiliate or an Eligible Recipient and used, operated, maintained or
supported by or on behalf of Supplier under or in connection with this
Agreement.


“Kraft Personal Data” shall mean that portion of Kraft Data
that is subject to any Privacy Laws.


“Kraft Personnel” shall mean the employees, agents,
contractors or representatives of Altria, its Affiliates, Kraft or any Eligible
Recipients who performed any of the Services to be provided by Supplier during
the 18 months preceding the Commencement Date.


“Kraft Rules” shall have the meaning given in Section 6.3.1.


“Kraft Sites” or “Sites” shall
mean the offices or other facilities, including those listed on Schedule 7 at or to which Supplier
is to provide the Services.


“Kraft Standards” shall have the meaning given in Section 9.5.1.


“Kraft Third Party Contractors” shall have the meaning given
in Section 4.5.


“LAN”
or “Local Area Network” shall mean a local, high-speed Network, consisting of
LAN Equipment, Software, Transport Systems, Interconnect Devices, Wiring and
Cabling, which are used to create, connect and transmit data, voice and video
signals to, within or among Kraft’s local area network segments. LANs are
typically confined within limited geographic areas (such as a single building
or group of buildings) and offer relatively high data rates, usually 10/100
mbps or above. LANs typically interconnect End User PCs, local servers, and
printers and may connect with WANs. LANs do not include telecommunication
circuits provided by carriers, however LANs can be inter-connected using
telecommunication circuits provided as a result of MAN or WAN Services, so as
to appear as a single LAN.


“LAN
Equipment” shall mean the Equipment and associated attachments, features, accessories, and
peripherals supported or used by Supplier in connection with its provision of
LAN Services to the Authorized Users (e.g., bridges, intelligent and non
intelligent hubs, switches, gateways, remote access devices, and associated
diagnostic equipment), and all additions, modifications, substitutions,
Upgrades or enhancements to such Equipment. LAN Equipment does not include
telecommunication circuits provided by telecommunications carriers, however LAN
Equipment can be inter-connected using telecommunication circuits provided by
carriers and MAN and or WAN Equipment, so as to appear as one LAN.



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“Laws” shall mean all federal, state, provincial, regional,
territorial and local laws, statutes, ordinances, regulations, rules, executive
orders, supervisory requirements, directives, circulars, opinions, interpretive
letters and other official releases of or by any government, or any authority,
department or agency thereof, including the United States Securities and
Exchange Commission and the Public Company Accounting Oversight Board. The
definition of Laws shall include Privacy Laws. For purposes of this Agreement,
Laws also shall include all generally accepted accounting principles of the
United States (“GAAP”), as such principles and
standards may be modified during the Term by the Financial Accounting Standards
Board or other applicable authorities. In addition, any other laws in force in
any jurisdiction (regulatory or otherwise) in which the Services are being
provided.


“Level 1
Support” shall
mean support that is provided as the entry point for inquiries or problem
reports from Authorized Users. If Level 1 Support personnel cannot resolve the
inquiry or problem, the inquiry or problem will be directed to the appropriate
Level 2 Support personnel or third party for resolution.


“Level 2
Support” shall
mean support that serves as a consolidation point for inquiries and problems
between Level 1 Support and Level 3 Support. For example, Level 2 Support might
exist in a computer operations or a distribution/mail out center. If Level 2 Support
personnel cannot resolve the inquiry or problem, the inquiry or problem will be
directed to the appropriate Level 3 Support personnel or third party for
resolution.


“Level 3
Support” shall
mean support provided by the personnel or third party that is most
knowledgeable about the underlying problem or question and is utilized when
efforts to resolve the problem or question by Level 1 Support and Level 2
Support have failed or are bypassed due to the technical difficulty of the
problem or question. Inquiries or problems for Level 3 Support  generally will be reported by Level 1 Support
or Level 2 Support personnel, but may be also initiated directly by Authorized
Users or Supplier.


“Litigation Data” shall have the meaning given in Section 13.6.3.1.


“Litigation Requirements Notice” shall have the meaning given
in Section 13.6.3.1.


“Litigation Response Plan” shall have the meaning given in Section 13.6.2.


“Losses” shall mean all losses, liabilities, damages
(including punitive and exemplary damages), fines, penalties, interest and
claims (including taxes), and all related costs and expenses (including
reasonable legal fees and disbursements and costs of investigation, litigation,
experts, settlement, judgment, interest and penalties).


“Mainframe”
shall mean a Server that
utilizes the VM, Z/OS, OS 390, or TPF operating software.


“Maintenance Downtime” shall mean the period of time that a
particular System, Application, Software, Equipment, Network, or any other part
of the Services is not available during the Measurement Windows  that have been approved (i) in writing by the
Kraft Contract Manager or a designee thereof or (ii) pursuant to Schedule 2.


“Major Release” shall mean a new version of Software that
includes changes to the architecture and/or adds new features and functionality
in addition to the original functional characteristics of the preceding
Software release. These releases are usually identified by full integer changes
in the numbering, such as from “7.0” to “8.0,” but may be identified by the industry as a major
release without the accompanying integer change.



 11
 






 



 


“Malicious Code” shall mean (i) any code, program, or
sub-program whose knowing or intended purpose is to damage or interfere with
the operation of the computer system containing the code, program or
sub-program, or to halt, disable or interfere with the operation of the
Software, code, program, or sub-program, itself; (ii) any device, method, or
token that permits any person to circumvent the normal security of the Software
or the system containing the code; or (iii) any adware, spyware, Internet bots,
malware, bugs, web bugs or other surreptitious code.


“MAN or Metropolitan Area Network” shall
mean a high-speed Network consisting of MAN Equipment, Software, Transport
Systems, and Interconnect Devices that are used to create, connect and
transmit data, voice and video signals between locations within a
metropolitan region or area. MANs cover an area larger than a LAN but
smaller than WANs.  MAN services are typically provisioned by a third-party.


“MAN Equipment” shall mean the Equipment
and associated attachments, features, accessories, peripherals and Cabling
supported or used by Supplier in connection with its provision of MAN
Services to the Authorized Users (e.g., multiplexors, access circuits,
backbone circuits, channel banks, CSU/DSUs, and associated diagnostic
equipment), and all additions, modifications, substitutions, Upgrades or
enhancements to such Equipment.


“Managed Telecom Transport Agreements” shall have the meaning
given in Section 9.11.5


“Managed Telecom Transport Providers” shall have the meaning
given in Section 9.11.5.


“Managed Third Parties” shall mean the Kraft Third Party
Contractors and Managed Telecom Transport Providers (as defined in Section 9.11.5), identified on Schedules 11 or 12, as such Schedules may be
amended from time to time.


“Management Tools” shall mean all Software that is used to
deliver and manage the Services.


“Materials” shall mean, collectively, Software, literary
works, other works of authorship, specifications, designs, analyses, processes,
methodologies, concepts, inventions, know-how, 
programs, program listings, programming tools, documentation, user
materials, reports, drawings, databases, spreadsheets, machine-readable text
and files and financial models, whether tangible or intangible.


“Measurement Window” shall mean the time during, or frequency
by, which a Service Level shall be measured. The Measurement Window will
exclude Kraft approved scheduled maintenance and Maintenance Downtime.


“Minimum Service Level Default” shall mean the Supplier’s
performance for a particular Critical Service Level fails to meet the
applicable Minimum Service Level at any time.


“Minimum Service Level(s)” shall mean the minimum level of
performance set forth in Schedule 3.1
with respect to each Critical Service Level and Key Measurement.


“Minor Release” shall mean a scheduled release containing
small functionality updates and/or accumulated resolutions to defects or
non-conformances made available since the immediately preceding release
(whether Major Release or Minor Release). Minor Releases shall include “Maintenance Releases” which are supplemental to and made
available between Major Releases and other Minor Releases, issued and provided
under specific vendor service level or maintenance obligations and contain



 12
 






 



 


only accumulated
resolutions  or mandated changes. These
releases are usually identified by a change in the decimal numbering of a
release, such as “7.12” to “7.13.”


“Mobile
Data Communications Equipment” shall mean the Equipment and associated attachments,
features, accessories, and peripherals supported or used by Supplier in
connection with its provision of Mobile Data Communications Services to the
Authorized Users (e.g., wireless modems, wireless access points (“WAPs”), mobile data terminals, or other devices that may be
mounted in vehicles either permanently or detachable for portability used to
deliver Mobile Data Communication Network Services, and associated diagnostic
equipment), and all additions, modifications, substitutions, Upgrades or
enhancements to such Equipment.


“Mobile
Data Communications Network” shall mean the wireless portion of Kraft’s Network
consisting of Mobile Data Communications Equipment, Software, Transport
Systems, Interconnect Devices, Wiring and Cabling used to create, connect and
transmit data to and from Mobile Data Communications Equipment via mobile IP
network roaming services.


“Mobile Data Communications Services”
shall mean the mobile Services as described in Schedule
2.4 (Managed Network Services).


“Mobile
Data Communications System” shall mean the Mobile Data Communications Equipment
supported or used by Supplier in connection with its provision of Mobile Data
Communications Services.


“Mobile
Short Messaging Equipment” or “MSM
Equipment” shall mean the Equipment and associated attachments, features, accessories, and
peripherals supported or used by Supplier in connection with its provision of
Mobile Short Messaging Services to the Authorized Users (pagers, paging
transmitters, and Portable Network Devices and associated diagnostic equipment)
and all additions, modifications, substitutions, Upgrades or enhancements to
such Equipment.


“Mobile
Short Messaging Network” shall mean the portion of the Network consisting of
Mobile Short Messaging Equipment, Software, Transport Systems, Interconnect
Devices, and Cabling used to create, connect and transmit data to Authorized
Users.


“Monthly Base Charge” means, with respect to each Tower, the
amount specified in Schedule 4.1,
as adjusted pursuant to Sections 6(e)
and 12(c) of Schedule
4, for that Tower in the applicable time period specified in Schedule 4.1.


“Monthly Invoice” shall have the meaning given in Section 12.1.1.


“N Release Level” shall mean the most
recently released and generally available Major Release of the Software.


“N-1 Release Level” shall mean the next
to most recently released and generally available Major Release of the
Software.


“N-2 Release Level” shall mean the next
to most recently released and generally available Major Release prior to N-1
Release Level.


“Network”
shall mean collectively,
Kraft’s Transport Services, WAN, MAN, BAN, LAN, Standard Voice Network, and
conferencing Network.



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“New Advances” shall have the meaning given in Section 9.17.5.


“New Services” shall mean services, functions, processes and
responsibilities  (i) that are  * 
*  * the Services
(which may include changes in  * 
*  * the Services are
performed), (ii) that require  *  *  * of effort or resources then
being used or expenses then being incurred by Supplier to provide the Services,
and (iii) for which there is no  * 
*  *or  *  *  *.


“Non-Billable Projects”
shall have the meaning given in Section 4.6.4.1..


“Notice of Arbitration” shall have the meaning given in Section 19.3.3.


“Notice of Election” shall have the meaning given in Section 17.5.1.


“Notice of Mediation” shall have the meaning given in Section 19.2.3.


“Out-of-Pocket Expenses” shall mean reasonable, demonstrable
and actual out-of-pocket expenses due and payable to a third party by Supplier
that are approved in advance by Kraft and for which Supplier is entitled to be
reimbursed by Kraft under this Agreement. Out-of-Pocket Expenses shall not
include Supplier’s overhead costs (or allocations thereof), general and/or
administrative expenses or other mark-ups. Out-of-Pocket Expenses shall be
calculated at Supplier’s actual incremental expense and shall be net of all
rebates and allowances.


“Party” and “Parties” shall have the meaning given in the
preamble to this Agreement.


“Pass-Through Expenses” shall mean the types of expenses, if
any, listed in Schedules 4.2
or  4.7,
as such list may be amended by Kraft from time to time, for which Kraft has
agreed in advance to be financially responsible, in accordance with Article 11 of this Agreement,
following processing and review of the third party invoice by Supplier.
Supplier shall not separately charge any handling or administrative charge in
connection with its processing or review of such invoices.


“Performance Category” shall mean a grouping of  Service Levels as set forth in Schedule 3.1. Critical Deliverables
do not constitute a Performance Category.


 “Personnel Projection
Matrix” shall have the meaning given in Section
8.1.6.


“Policy and Procedures Manual” shall have the meaning given
in Section 9.1.1.


“Pool Percentage Available for Allocation” shall have the
meaning given in Schedule 3.


“Portable
Network Devices” shall mean portable, hand-held Equipment used by Authorized Users for
telecommunications access and services devices, as listed in
Attachment 2.4-A of Schedule 2.4, where such list may be updated from time
to time by Kraft after a review of the update has gone through Change Control
Procedures in accordance with Section 9.6
of the Agreement. Portable Network Devices do not include personal computers or
laptops.


“Principles” shall have the meaning given in Section 8.3.2.


“Priority” shall mean the
classification of a problem or incident as recorded in the Problem Tracking
System. Priority shall be set at one of P1, P2, P3, or P4.



 14














 


 


“Priority
1” or “P1” shall mean that a problem or incident has a critical degree of
business impact and shall refer to a major system, product, or component
failure that impacts level of service and affects a major function of the
business, as a result of which the business is unable to function until the
failure is resolved.  Problems or incidents involving a single user’s
system or access will not be considered a Priority 1, except for those systems
or access identified as plant floor equipment.  Desktops and laptops may
not generate P1 problems, with the exception of the Kraft designated plant
floor desktops and laptops (which may generate P1 problems) that Supplier has
agreed may generate P1 problems.


.”Priority 2” or “P2” shall mean that a problem or incident
has a high degree of business impact and shall refer to a problem or incident
that impacts the business’ ability to complete daily work and therefore affects
daily level of service, as a result of which the business is able to perform
and function with either a workaround or manual processes but service is
degraded.  Desktops and laptops may not generate P2 problems, with the
exception of the Kraft designated plant floor desktops and laptops (which may
generate P2 problems) that Supplier has agreed may generate P2 problems.


“Priority
3” or “P3” shall mean that a problem or incident has a medium
degree of business impact and shall refer to a problem or incident that results
in limited loss of function, during which work can be completed using alternative
methods and there is no impact to daily levels of service, and as a result of
which the business can continue to function even though service may be
degraded.


“Priority
4” or “P4” shall mean that a problem or incident has a low
degree of business impact and shall refer to a minor issue or request which has
no impact on daily level of service and requires follow-up only.


“Privacy Laws” means Laws that relate to the security and
protection of personally identifiable information, data privacy, trans-border
data flow or data protection, including the Health Insurance Portability and
Accountability Act (HIPAA), the Gramm-Leach-Bliley Act and the implementing
legislation and regulations of the European Union member states under the
European Union Directive 95/46/EC.


“Problem
Management” shall mean the process of tracking and managing all problems arising in Kraft’s
information technology (“IT”)
environment and recorded in the Problem Tracking System, and resolving those
problems arising from or related to the Services.


“Problem Tracking System” shall mean the functionality and technical characteristics of the system
described in Schedule 2.1 (Cross
Functional – General Services).


“Procurement
Catalog” shall mean a list of Equipment and Software that are the approved products for
purchase or lease by Authorized Users. The Procurement Catalog may include the
provision of Services and also products purchased by Authorized Users as
Pass-Through Expenses.


“Projects” shall have the meaning given in Section 4.6.1.


“Project
IMAC” shall
mean a combination of ten or more IMACs that occur within the same building or
locale or some other similar requirements or timeframe that requires more than
routine scheduling of personnel to deliver this group of IMACs in a coordinated
manner. These types of requests typically involve a coordinated movement of
multiple Equipment in order to minimize the impact to the end users. Supplier
will work with Kraft to schedule these IMACs and  provide a written plan for Project IMACs as
described in Section 4.3.1
of Schedule 2.5 (End User Computing Services).
IMACS that have similar requirements that may require EDS to perform a Project
may be submitted to EDS as described in the



 15
 






 



 


Agreement. Project IMACS will be performed according to the schedule in
the written plan for Project IMACS or a Project plan, as approved by Kraft.


“Proprietary Information” shall have the meaning given in Section 13.4.1.


“Quality Assurance” means the actions, planned and performed,
to provide confidence that all business processes, Systems, Equipment, Software
and components that influence the quality of the Services are working as
expected individually and collectively.


“Reduced Resource Credit(s)” or “RRC(s)”
means, for any Billable Resource Unit, the incremental credit payable by
Supplier to Kraft based on the amount by which the Actual Volumes of Billable
Resource Units is below the Resource
Baseline for such Billable Resource Unit.


“Reports” shall have the meaning set forth in Section 9.2.1.


“Request
Management” shall mean the process of tracking and managing all requests from Authorized
Users arising in Kraft’s information technology environment recorded on the
Request Management System, and resolving those requests arising from or related
to the Services.


“Request Management
System” shall mean the functionality and technical characteristics of the System
described in Section 3.0 (Request Management) of Schedule
2.1 (Cross Functional — General Services).


“Required Consents” shall mean the consents (if any) required
to be obtained: (i) to assign or transfer to Supplier Kraft licensed Third
Party Software, Third Party Contracts, Equipment Leases or Acquired Assets
(including related warranties); (ii) to grant Supplier the right to use and/or
access the Kraft licensed Third Party Software in connection with providing the
Services; (iii) to grant Kraft and the Eligible Recipients the right to use
and/or access the Supplier Owned Software, Third Party Software and Equipment
acquired, operated, supported or used by Supplier in connection with providing
the Services; (iv) to change location of the installation or use of any
Software, Equipment or System (including consents to offshore use) or change
the permitted use thereof by Supplier; (v) except for Developed Materials that
are owned by Supplier pursuant to Section 14,
to assign or transfer to Kraft, the Eligible Recipients or their designee(s)
any Developed Materials; (vi) to assign or transfer to Kraft, the Eligible
Recipients or their designee(s) Supplier Owned Software, Third Party Software,
Third Party Contracts, Equipment leases or other rights following the Term to
the extent provided in this Agreement; and (vii) all other consents required
from third parties in connection with Supplier’s provision of the Services or
performance of its obligations hereunder.


“Resolvable Calls” shall mean those Calls that would be
possible to solve at first level, either through existing knowledge, transfer
of knowledge, or process changes. This does not include Calls that require
dispatch or transfer to another group for resolution.


“Resource Baselines” shall mean the estimated number of
Resource Units applicable to a defined period of time and included in the
Monthly Base Charges. The Resource Baselines as of the Commencement Date are
set forth in Schedule 4, and may be
adjusted in accordance with Section 6 of Schedule 4. The Resource Baselines may
also be revised from time to time by agreement of the Parties based on the
usage, demand and business requirements of Kraft and the Eligible Recipients
and the Monthly Base Charges will be adjusted accordingly.


“Resource Baseline Band(s)” means the volume bands (or, where
applicable, the multiple volume bands) represented as percentages above and
below the Resource Baseline. Each Resource Baseline Band has



 16
 






 



 


unique ARC Rates
and RRC Rates, as set forth on Schedule 4.1,
that shall apply to the volume of Billable Resource Units that fall within that
Resource Baseline Band. Unless otherwise indicated on Schedule
4.5, the Resource Baseline Band for each Resource Unit, other
than the Resource Units designated in Schedule 4.5
as not being subject to Resource Baseline Bands, will be  *  *  * %
above and  *  *  * %
below the Resource Baseline for that Resource Unit.


“Resource Unit(s)” means a particular unit of service
delivery resources. Each Resource Unit is either a “Non-Billable Asset” or a “Billable
Resource Unit” as indicated on Schedule 4.5.


“Retained Systems and Business Processes” means those systems
and business processes of Kraft or an Eligible Recipient for which Supplier has
not assumed responsibility under this Agreement (including those provided,
managed, operated, supported and/or used on their behalf by Kraft Third Party
Contractors). Retained Systems and Business Processes include equipment and
software associated with such systems and business processes.


“Root Cause Analysis” shall mean the formal process,
specified in the Policy and Procedures Manual, to be used by Supplier to
diagnose the underlying cause of problems at the lowest reasonable level so
that corrective action can be taken that will eliminate repeat failures.
Supplier shall implement a Root Cause Analysis in accordance with the Service
Levels.


“RRC Rate” means, in relation to each Billable Resource Unit,
the amount specified as the “RRC Rate” for that Billable Resource Unit on Schedule 4.1, as adjusted pursuant
to Section 12 of Schedule
4.


“SAS 70 Audit” shall have the meaning given in Section 9.10.9.1.


“SAS 70 Report” shall have the meaning given in Section 9.10.9.1.


“Scheduled Downtime” shall mean that period of time during
which a particular System, Application, Software, Equipment, Network or any
other part of the Services is expected not to be available during the
Measurement Window.


“Scheduled Uptime” shall mean that period of time during
which a particular System, Application, Software, Equipment, Network or any
other part of the Services is expected to be available during the Measurement
Window.


“SDBs” shall have the meaning given in Section
9.13.3.


“Self Service Tools” shall mean tools
and processes that allow an Authorized User to obtain Service or remediate a
problem without the direct intervention of Supplier.


“Server”
shall mean any computer,
but excluding desktops and laptops acting as a server, that provides shared processing
or resources such as printer, fax, Application processing, database, mail,
proxy, firewalls, and backup capabilities to Authorized Users or other
computers over the Network. A Server includes the operating system, associated
peripherals, such as local storage devices, attachments to centralized storage,
monitor, keyboard, pointing device, tape drives and external disk arrays (but
not desktops and laptops), and is identified by a unique manufacturer’s serial
number.


“Server Instances” shall have the meaning given in Schedule 4.5.


“Service Entitlement” shall have the meaning set forth in Schedule 3.2, Section
1.5.4.



 17
 






 



 


“Service Level(s)” shall mean, individually and collectively,
the quantitative performance standards for the Services set forth in Schedule 3.


“Service Level Credit Allocation Percentage” shall mean the
percentage of the Allocation of Pool Percentage allocated to a Critical Service
Level within a Performance Category.


“Service Level Credits” shall have the meaning given in Section 7.2 and Schedule 3.


“Service Level Default” shall mean a Minimum Service Level
Default or an Expected Service Level Default.


“Service Target” shall
mean a performance level to which (i) a particular service element is to be
delivered and (ii) Supplier’s solution is to be architected and designed to
deliver. Service Targets are not measured for Service Level purposes, however
may be reported by Supplier in accordance with Section 4.1 of Schedule
3.0 Service Targets are listed in Schedule 3.1 (Service Levels Matrix).


“Service Taxes” shall mean all sales, use, transaction based
gross receipts, excise, provincial, value added, COFINS, ISS and PIS and other
similar taxes that are assessed against either Party on the final provision of
the Services as a whole, or on any particular Service received by Kraft or an
Eligible Recipient from Supplier, excluding Income Taxes.


“Services” shall mean, collectively: (i) the services,
functions and responsibilities described in Article 4
and elsewhere in this Agreement (including Transition Services, Transformation
Services and Termination Assistance Services) as they may be supplemented,
enhanced, modified or replaced during the Term in accordance with this
Agreement; and (ii) any ongoing Projects required to be performed as specifically
described in this Agreement and any new Projects upon Kraft’s acceptance of
Supplier’s proposals for such Projects in accordance with Section
4.6 and the other provisions of this Agreement; and (iii) any
New Services, upon Kraft’s acceptance of Supplier’s proposal for such New
Services in accordance with Section 11.5
and the other provisions of this Agreement.


“Shared Subcontractors” shall have the meaning given in Section 9.12.3.


“SMC” shall have the meaning given in Section
9.10.9.1.


“Soft IMAC”
shall mean an approved
Soft IMAC request received from Kraft, which IMAC can be performed concurrently
with remote element management tools and does not require any physical on-site
intervention. A Software patch or error correction upgrade will not be considered
as a Soft IMAC, but is included in the Services.


“Software” shall mean all software programs and programming
(and all modifications, replacements, Upgrades, enhancements, documentation,
materials and media related thereto), to the extent a Party has financial or
operational responsibility for such programs or programming in connection with
the Services, including under Schedule 2,
4.2, 11
or 12. Software shall include all such
programs or programming in use or required to be used as of the Commencement
Date, including those set forth in Schedule 11,
those as to which the license, maintenance or support costs are included in the
Kraft Base Case, and those as to which Supplier received reasonable notice
and/or access prior to the Commencement Date. Software also shall include all
such programs or programming developed and/or introduced by or for Kraft or the
Eligible Recipients on or after the Commencement Date to the extent a Party has
financial or operational responsibility for such programs or programming under Schedule 2, 4.2,
11 or 12.
Software includes all Applications, Development Tools, Management Tools and
Systems Software.



 18
 






 



 


“Specialized Services” shall have the meaning given in Section 9.9.1.


“Specifications” shall mean, with respect to business
processes, Software, Equipment, Systems or other contract deliverables to be
designed, developed, delivered, integrated, installed and/or tested by
Supplier, the technical, design and/or functional specifications set forth in Schedule 2 or 8,
in third party vendor documentation, in a New Services or Project description
requested and/or approved by Kraft, or otherwise agreed upon in writing by the
Parties.


“Standard
Products” shall mean EUC Equipment and Software requirements and/or specific EUC Equipment
and Software that are designated as being in standard use within Kraft.


“Standard
Voice Network” shall mean the portion of the Network consisting of Standard Voice Premise
Systems, Software, Transport Systems, Interconnect Devices, and Cabling used to
create, connect and transmit voice to Authorized Users.


“Standard
Voice Premise Equipment” shall mean the Equipment and associated attachments,
features, accessories, and peripherals supported or used by Supplier in
connection with its provision of standard voice Services to the Authorized
Users, including PBXs and PBX rectifiers, handsets, key systems, voice mail
systems, and paging systems, American Disabilities Act (“ADA”) communications
devices (e.g., TDDs, teletype, special equipped handsets), voice communications
management systems, backup battery systems, and associated diagnostic
equipment.


“Standard
Voice Premise Systems” shall mean all Standard Voice Premise Equipment and
associated Software supported or used by Supplier in connection with its
provision of standard voice Services.


“Strategic Plan” shall mean the plans that may be
periodically developed by Kraft that set forth Kraft’s key business objectives
and requirements and outline its strategies for achieving such objectives and
requirements. Kraft may revise the Strategic Plan from time to time. The
Strategic Plan will include both annual and multi-year strategies, objectives
and requirements.


“Supplier” shall have the meaning given in the preamble to
this Agreement.


“Subcontractors” shall mean subcontractors (of any tier) of
Supplier, including Shared Subcontractors (as defined in Section
9.12.3). The initial
list of Subcontractors is set forth on Schedule 19,
each of which has been approved by Kraft to the extent such approval is
required and described thereon. Schedule 19
may be amended during the Term in accordance with Section
9.12.


“Supplier Account Executive” shall mean the Supplier
representative responsible for both the day-to-day relationship with Kraft as
well as the delivery of all Services to Kraft, as further described in Section 8.5.


“Supplier Facilities” shall mean, individually and
collectively, the facilities owned or leased by Supplier (or its Affiliates or
Subcontractors) from which Supplier (or its Affiliates or Subcontractors) provides
any Services. Supplier Facilities are listed on Schedule
7.2.


“Supplier Laws” shall have the meaning given in Section 15.10.4.


“Supplier Overhead Functions” means Supplier’s overhead
functions and activities, including those described in Section
11 of Schedule 4.



 19
 






 



 


“Supplier Overhead Materials” means for third party products
that are used by Supplier to perform its internal functions and which are not
directly used to provide the Services and for which Kraft does not have any
reimbursement or payment obligation either during the Term or upon any
termination of this Agreement. For avoidance of doubt, these are items such as
Supplier Personnel’s personal computers and associated software, and Supplier’s
internal accounting systems and internal database software which Kraft would
not need to enable it to provide the Services for itself.


“Supplier Owned Materials” shall have the meaning given in Section 14.3.1.


“Supplier Owned Software” shall mean any Software owned by
Supplier and used to provide the Services.


“Supplier Personnel” shall mean those employees,
representatives, contractor personnel, subcontractor personnel and agents of
Supplier, Subcontractors and Supplier Affiliates who perform any Services under
this Agreement.


“System” shall mean an interconnected grouping of manual or
electronic processes, including Equipment, Software and associated attachments,
features, accessories, peripherals and cabling, and all additions,
modifications, substitutions, Upgrades or enhancements to such System, to the extent
a Party has financial or operational responsibility for such System or System
components under Schedule 2.
System shall include all Systems in use or required to be used as of the
Commencement Date, all additions, modifications, substitutions, Upgrades or
enhancements to such Systems and all Systems installed or developed by or for
Kraft, the Eligible Recipients or Supplier following the Commencement Date.


“Systems Software” shall mean all Software that perform tasks
basic to the functioning of the Equipment and are required to operate the
Applications Software or otherwise support the provision of Services by
Supplier, including operating systems, systems utilities, data security
software, compilers, performance monitoring and testing tools and database
managers.


“Target Baselines” shall have the meaning set forth in Schedule 4, Section
16(b).


“Tax Authority” shall mean any federal, state, provincial,
regional, territorial, local or other fiscal, revenue, customs or excise
authority, body or official competent to impose, collect or assess tax.


“Technological Evolution” means any improvement, upgrade,
addition, modification, replacement, or enhancement to the standards, policies,
practices, processes, procedures, methods, controls, scripts, product information,
technologies, architectures, standards, Applications, Equipment, Software,
Systems, tools, products, transport systems, interfaces and personnel skills
associated with the performance of information technology services and related
functions in line with the established best practices of first-tier providers
of such services, as determined by Kraft. Technological Evolution includes: (i)
higher capacity, further scaling and commercializing of business processes,
more efficient and scalable business processes, new versions and types of
applications and systems/network software, new business or IT processes, and
new types of hardware and communications equipment that will enable Supplier to
perform the Services more efficiently and effectively as well as enable Kraft
and the Eligible Recipients to meet and support their business requirements and
strategies and (ii) any change to the Equipment, Software or methodologies used
to provide the Services that is necessary to bring that function,  Equipment or Software or those methodologies
into line with the Kraft Standards and/or current industry standards.


“Technology Plan” shall have the meaning given in Section 9.5.5.



 20
 






 



 


“Term” shall mean the period commencing on the Effective Date
and continuing until the expiration or termination of this Agreement, including
the termination of all Services (except Termination Assistance Services).


“Termination Assistance Services” shall mean the
termination/expiration assistance requested by Kraft to allow the Services to continue
without interruption or adverse effect and to facilitate the orderly transfer
of the Services to Kraft or its designee, as such assistance is further
described in Section 4.4 and Schedule 23.


“Termination Charges” shall mean the termination charges set
forth in Schedule 4.6.


“Third Party Contracts” shall mean all agreements between
third parties and Kraft, an Eligible Recipient or Supplier that have been or
will be used to provide the Services to the extent a Party has financial or
operational responsibility for such contracts under Schedule
2 or Schedule 4.2.
Third Party Contracts shall include all such agreements in effect as of the
Commencement Date, including those contracts identified in Schedules
12.1 and 12.2, those
as to which the costs are included in the Kraft Base Case, and those as to
which Supplier received reasonable notice and/or reasonable access prior to
the  Commencement Date. Third Party
Contracts also shall include those third party agreements entered into by
Supplier following the Commencement Date which Supplier uses to provide the
Services.


“Third Party  Litigation”
shall have the meaning given in Section 13.6.4.


“Third Party Materials” shall mean intellectual property,
Third Party Software or other Materials that are owned by third parties and
provided under license to Supplier (or its Affiliates or Subcontractors) or
Kraft (or the Eligible Recipients) and that have been or will be used to
provide or receive the Services.


“Third Party Software” shall mean all Software that is provided
under license or lease to Supplier, a Subcontractor, Kraft or an Eligible
Recipient. Third Party Software also shall include all such Software that is
licensed and/or leased after the Commencement Date.


“Three Year Architectural Plan” shall mean the long-range,
comprehensive plan for Kraft’s information technology systems, processes,
technical architecture and standards as described in Schedule 2.2 (Cross Functional —
Equipment and Software Services).


“Tower” shall mean any of the following components of the
Services:  Cross Functional Services, Application
Server Services, Mainframe Services, Managed Network Services, or End User
Computing Services.


“Transformation Milestone” shall have the meaning given in Section 4.3.3.


“Transformation Plan” means the plan or plans set forth in Schedule 22 and further developed
pursuant to Section 4.3 hereof, which
identifies the principal changes in technology and deliverables to be
undertaken by Supplier in connection with the transformational activities to be
completed during and after the Transition Period, and the dates by which each
will be completed by Supplier.


“Transformation Services” shall mean the services, functions
and responsibilities described in Section 4.3
and the Transformation Plan to be performed by Supplier.



 21
 






 



 


“Transition Milestone” shall mean each date identified in the
Transition Plan and Schedule 21
as a milestone by which Supplier shall have completed a key task or set of
tasks in accordance with the Transition Plan in a manner acceptable to Kraft.


“Transition Period” shall mean the period that commences on
the Effective Date and expires 11:59:59 p.m., United States Central Time, on
the date specified for the completion of the Transition Services as specified
in the Transition Plan, unless expressly extended in writing by Kraft.


“Transition Plan” shall mean the plan or plans set forth in Schedule 21 and developed pursuant
to Section 4.2 hereof, which
identifies all material transition tasks, Projects and deliverables to be
completed by Supplier in connection with the transition of Services to
Supplier, and the dates by which each is to be completed by Supplier.


“Transition Services” shall mean the services, functions and
responsibilities described in Section 4.2
and the Transition Plan to be performed by Supplier during the Transition
Period.


“Transitioned Employees” shall mean the Affected Personnel
who accept offers of employment from Supplier, its Affiliates or Subcontractors
and become employed by such Entities pursuant to Article 8.
Upon being employed by such Entities, such Transitioned Employees shall be
deemed to be Supplier Personnel as defined herein.


“Transport
Facilities” shall mean the entire medium over which transport takes place, including the
Equipment and associated attachments, features, accessories, and peripherals
supported or provided by Supplier in connection with Transport Services (for
example, data access lines and circuits; voice access lines and trunks; ISDN
lines; copper and fiber; microwave, and satellite, routers, hubs, switches, and
PBXs).


“Transport Services” shall mean a
commercial service providing the carriage or transmission of voice, video, or
data electronic impulses over a distance.


“Transport
Systems” shall
mean all Transport Facilities and associated Software supported or provided by
Supplier in connection with the provision, monitoring or management of
Transport Services.


“Transport
Vendor(s)” shall mean a provider of Transport Services.


“Unanticipated Change” shall have the meaning set forth in Section 11.7.


“Upgrade” and its derivatives shall mean the updates,
renovations, enhancements, additions and/or new versions or releases of
Software or Equipment by Supplier. Unless otherwise agreed, financial
responsibility for the costs, fees and expenses associated with an Upgrade of
Software or Equipment shall be allocated between the Parties in accordance with
Sections 6.4 and Schedule 4.


“WAN”
or “Wide Area Network” shall mean a long haul, high speed transmission
Network, consisting of WAN Equipment, Software, Transport Systems, and
Interconnect Devices that are used to create, connect and transmit data, voice
and video signals to within, between or among: 
(i) LANs; (ii) and non-Kraft locations that do business with
Kraft and for which Kraft is responsible for allowing Connectivity.


“WAN
Equipment” shall mean the Equipment and associated attachments, features, accessories,
peripherals and Cabling supported or used by Supplier in connection with its
provision of WAN Services to the Authorized Users (e.g., routers, multiplexors,
access circuits, backbone circuits, channel banks,



 22
 






 



 


CSU/DSUs, and associated diagnostic equipment), and all additions,
modifications, substitutions, Upgrades or enhancements to such Equipment.


“Warehouse Devices” shall have the meaning given in Schedule 4.5.


“WARN Act” shall have the meaning set forth in Section 8.11.2.


“welfare plans” shall have the meaning set forth in Section 8.2.2.


“Wiring”
or “Wire” shall mean the physical wire connection within walls,
between floors and between buildings terminating in a wall jack or other
equipment that allows a cable to be connected.


“Yearly Performance Average” shall mean, with respect to each
Critical Service Level for which there was a Service Level Default during the
preceding Contract Year, the average of the Supplier’s average monthly
performances in the Critical Service Level during the preceding Contract Year.



 23














 


 


CONFIDENTIAL MATERIAL
APPEARING IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH RULE 406 PROMULGATED
UNDER THE SECURITIES ACT OF 1934, AS AMENDED, AND RULE 24B-2 PROMULGATED
THEREUNDER.  OMITTED INFORMATION HAS BEEN
REPLACED WITH ASTERISKS


TABLE OF CONTENTS


	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
  1.

  	
   

  	
  BACKGROUND AND OBJECTIVES

  	
   

  	
  2

  
	
   

  	
   

  	
  1.1

  	
  Performance and Management by Supplier

  	
   

  	
  2

  
	
   

  	
   

  	
  1.2

  	
  Goals and Objectives

  	
   

  	
  2

  
	
   

  	
   

  	
  1.3

  	
  Interpretation

  	
   

  	
  3

  
	
  2.

  	
   

  	
  DEFINITIONS AND DOCUMENTS

  	
   

  	
  3

  
	
   

  	
   

  	
  2.1

  	
  Definitions

  	
   

  	
  3

  
	
   

  	
   

  	
  2.2

  	
  Other Terms

  	
   

  	
  4

  
	
   

  	
   

  	
  2.3

  	
  Companion Agreements

  	
   

  	
  4

  
	
   

  	
   

  	
  2.4

  	
  Associated Contract Documents

  	
   

  	
  5

  
	
  3.

  	
   

  	
  TERM

  	
   

  	
  6

  
	
   

  	
   

  	
  3.1

  	
  Initial Term

  	
   

  	
  6

  
	
   

  	
   

  	
  3.2

  	
  Extension

  	
   

  	
  7

  
	
  4.

  	
   

  	
  SERVICES

  	
   

  	
  7

  
	
   

  	
   

  	
  4.1

  	
  Overview

  	
   

  	
  7

  
	
   

  	
   

  	
  4.2

  	
  Transition Services

  	
   

  	
  8

  
	
   

  	
   

  	
  4.3

  	
  Transformation Services

  	
   

  	
  11

  
	
   

  	
   

  	
  4.4

  	
  Termination Assistance Services

  	
   

  	
  13

  
	
   

  	
   

  	
  4.5

  	
  Use of Third Parties

  	
   

  	
  18

  
	
   

  	
   

  	
  4.6

  	
  Projects

  	
   

  	
  20

  
	
   

  	
   

  	
  4.7

  	
  Acquisition and Divestiture Services

  	
   

  	
  22

  
	
  5.

  	
   

  	
  REQUIRED CONSENTS

  	
   

  	
  23

  
	
   

  	
   

  	
  5.1

  	
  Supplier Responsibility

  	
   

  	
  23

  
	
   

  	
   

  	
  5.2

  	
  Financial Responsibility

  	
   

  	
  23

  
	
   

  	
   

  	
  5.3

  	
  Contingent Arrangements

  	
   

  	
  23

  
	
  6.

  	
   

  	
  FACILITIES,
  SOFTWARE, EQUIPMENT, CONTRACTS AND ASSETS ASSOCIATED WITH THE PROVISION OF
  SERVICES

  	
   

  	
  24

  
	
   

  	
   

  	
  6.1

  	
  Service Facilities

  	
   

  	
  24

  
	
   

  	
   

  	
  6.2

  	
  Use of Supplier Facilities

  	
   

  	
  27

  



 



 i
 






 



 


	
  

  	
   

  	
  6.3

  	
  Kraft Rules/Employee Safety

  	
   

  	
  28

  
	
   

  	
   

  	
  6.4

  	
  Software, Equipment and Third Party Contracts

  	
   

  	
  28

  
	
   

  	
   

  	
  6.5

  	
  Assignment of Licenses, Leases and Related
  Agreements

  	
   

  	
  31

  
	
   

  	
   

  	
  6.6

  	
  Managed Third Parties

  	
   

  	
  33

  
	
   

  	
   

  	
  6.7

  	
  Notice of Defaults

  	
   

  	
  34

  
	
   

  	
   

  	
  6.8

  	
  Acquired Assets

  	
   

  	
  34

  
	
  7.

  	
   

  	
  SERVICE LEVELS

  	
   

  	
  35

  
	
   

  	
   

  	
  7.1

  	
  General

  	
   

  	
  35

  
	
   

  	
   

  	
  7.2

  	
  Service Level Credits; Deliverable Credits

  	
   

  	
  36

  
	
   

  	
   

  	
  7.3

  	
  Problem Analysis

  	
   

  	
  36

  
	
   

  	
   

  	
  7.4

  	
  Continuous Improvement Reviews

  	
   

  	
  37

  
	
   

  	
   

  	
  7.5

  	
  Measurement and Monitoring

  	
   

  	
  37

  
	
   

  	
   

  	
  7.6

  	
  Satisfaction Surveys

  	
   

  	
  38

  
	
   

  	
   

  	
  7.7

  	
  Notice of Adverse Impact

  	
   

  	
  38

  
	
  8.

  	
   

  	
  PROJECT PERSONNEL

  	
   

  	
  39

  
	
   

  	
   

  	
  8.1

  	
  Transitioned Personnel

  	
   

  	
  39

  
	
   

  	
   

  	
  8.2

  	
  Employee Benefit Plans

  	
   

  	
  42

  
	
   

  	
   

  	
  8.3

  	
  Other Employee Matters

  	
   

  	
  45

  
	
   

  	
   

  	
  8.4

  	
  Key Supplier Personnel and Critical Affected
  Personnel

  	
   

  	
  46

  
	
   

  	
   

  	
  8.5

  	
  Supplier Account Executive

  	
   

  	
  48

  
	
   

  	
   

  	
  8.6

  	
  * * * of Supplier Account Executive and Key Supplier
  Personnel

  	
   

  	
  48

  
	
   

  	
   

  	
  8.7

  	
  Supplier Personnel Are Not Kraft Employees

  	
   

  	
  48

  
	
   

  	
   

  	
  8.8

  	
  Replacement, Qualifications and Retention of
  Supplier Personnel

  	
   

  	
  49

  
	
   

  	
   

  	
  8.9

  	
  Conduct of Supplier Personnel

  	
   

  	
  50

  
	
   

  	
   

  	
  8.10

  	
  Substance Abuse

  	
   

  	
  50

  
	
   

  	
   

  	
  8.11

  	
  Union Agreements and WARN ACT

  	
   

  	
  51

  
	
   

  	
   

  	
  8.12

  	
  Application of Acquired Rights Directive and Similar
  Laws

  	
   

  	
  51

  
	
   

  	
   

  	
  8.13

  	
  Altria Affiliates

  	
   

  	
  51

  
	
  9.

  	
   

  	
  SUPPLIER RESPONSIBILITIES

  	
   

  	
  52

  



 



 ii
 






 



 


	
  

  	
   

  	
  9.1

  	
  Policy and Procedures Manual

  	
   

  	
  52

  
	
   

  	
   

  	
  9.2

  	
  Reports

  	
   

  	
  53

  
	
   

  	
   

  	
  9.3

  	
  Governance Model; Meetings

  	
   

  	
  54

  
	
   

  	
   

  	
  9.4

  	
  Quality Assurance and Internal Controls

  	
   

  	
  55

  
	
   

  	
   

  	
  9.5

  	
  Processes, Procedures, Architecture, Standards and
  Planning

  	
   

  	
  56

  
	
   

  	
   

  	
  9.6

  	
  Change Control

  	
   

  	
  58

  
	
   

  	
   

  	
  9.7

  	
  Software Currency

  	
   

  	
  61

  
	
   

  	
   

  	
  9.8

  	
  Network Configuration Data

  	
   

  	
  62

  
	
   

  	
   

  	
  9.9

  	
  Access to Specialized Supplier Skills and Resources;
  * * * Regarding * * *

  	
   

  	
  62

  
	
   

  	
   

  	
  9.10

  	
  Audit Rights

  	
   

  	
  62

  
	
   

  	
   

  	
  9.11

  	
  Agency and Disbursements

  	
   

  	
  67

  
	
   

  	
   

  	
  9.12

  	
  Subcontractors

  	
   

  	
  68

  
	
   

  	
   

  	
  9.13

  	
  Government Contract Flow-Down Clauses

  	
   

  	
  69

  
	
   

  	
   

  	
  9.14

  	
  Additional Telecommunications Matters.

  	
   

  	
  70

  
	
   

  	
   

  	
  9.15

  	
  Applicable Authority Actions

  	
   

  	
  71

  
	
   

  	
   

  	
  9.16

  	
  Unauthorized Use

  	
   

  	
  73

  
	
   

  	
   

  	
  9.17

  	
  Technological Evolution

  	
   

  	
  73

  
	
   

  	
   

  	
  9.18

  	
  Retained Systems and Business Processes

  	
   

  	
  75

  
	
   

  	
   

  	
  9.19

  	
  Annual Reviews

  	
   

  	
  76

  
	
  10.

  	
   

  	
  KRAFT RESPONSIBILITIES

  	
   

  	
  76

  
	
   

  	
   

  	
  10.1

  	
  Responsibilities

  	
   

  	
  76

  
	
   

  	
   

  	
  10.2

  	
  Savings Clause

  	
   

  	
  77

  
	
  11.

  	
   

  	
  CHARGES

  	
   

  	
  77

  
	
   

  	
   

  	
  11.1

  	
  General

  	
   

  	
  77

  
	
   

  	
   

  	
  11.2

  	
  Pass-Through Expenses

  	
   

  	
  79

  
	
   

  	
   

  	
  11.3

  	
  Procurement

  	
   

  	
  80

  
	
   

  	
   

  	
  11.4

  	
  Taxes

  	
   

  	
  81

  
	
   

  	
   

  	
  11.5

  	
  New Services

  	
   

  	
  84

  
	
   

  	
   

  	
  11.6

  	
  Extraordinary Events

  	
   

  	
  86

  



 



 iii
 






 



 


	
  

  	
   

  	
  11.7

  	
  Unanticipated Change

  	
   

  	
  87

  
	
   

  	
   

  	
  11.8

  	
  Proration

  	
   

  	
  87

  
	
   

  	
   

  	
  11.9

  	
  Refundable Items

  	
   

  	
  87

  
	
   

  	
   

  	
  11.10

  	
  Kraft Benchmarking Reviews

  	
   

  	
  88

  
	
   

  	
   

  	
  11.11

  	
  * * *

  	
   

  	
  89

  
	
  12.

  	
   

  	
  INVOICING AND PAYMENT

  	
   

  	
  89

  
	
   

  	
   

  	
  12.1

  	
  Invoicing

  	
   

  	
  89

  
	
   

  	
   

  	
  12.2

  	
  Payment Due

  	
   

  	
  90

  
	
   

  	
   

  	
  12.3

  	
  Set Off

  	
   

  	
  90

  
	
   

  	
   

  	
  12.4

  	
  Disputed Charges

  	
   

  	
  91

  
	
  13.

  	
   

  	
  KRAFT DATA AND OTHER PROPRIETARY INFORMATION

  	
   

  	
  92

  
	
   

  	
   

  	
  13.1

  	
  Kraft Ownership of Kraft Data

  	
   

  	
  92

  
	
   

  	
   

  	
  13.2

  	
  Safeguarding Kraft Data

  	
   

  	
  92

  
	
   

  	
   

  	
  13.3

  	
  Kraft and Supplier Personal Data

  	
   

  	
  94

  
	
   

  	
   

  	
  13.4

  	
  Confidentiality

  	
   

  	
  94

  
	
   

  	
   

  	
  13.5

  	
  File Access

  	
   

  	
  97

  
	
   

  	
   

  	
  13.6

  	
  Requirements for Information in Legal Proceedings

  	
   

  	
  97

  
	
  14.

  	
   

  	
  OWNERSHIP AND LICENSE OF MATERIALS

  	
   

  	
  99

  
	
   

  	
   

  	
  14.1

  	
  Kraft Owned and Licensed Materials

  	
   

  	
  99

  
	
   

  	
   

  	
  14.2

  	
  Developed Materials

  	
   

  	
  100

  
	
   

  	
   

  	
  14.3

  	
  Supplier Owned and Licensed Materials

  	
   

  	
  102

  
	
   

  	
   

  	
  14.4

  	
  Other Materials

  	
   

  	
  103

  
	
   

  	
   

  	
  14.5

  	
  General Rights

  	
   

  	
  104

  
	
   

  	
   

  	
  14.6

  	
  Kraft Rights Upon Expiration or Termination of
  Agreement

  	
   

  	
  104

  
	
  15.

  	
   

  	
  REPRESENTATIONS, WARRANTIES AND COVENANTS

  	
   

  	
  107

  
	
   

  	
   

  	
  15.1

  	
  Work Standards

  	
   

  	
  107

  
	
   

  	
   

  	
  15.2

  	
  Maintenance

  	
   

  	
  108

  
	
   

  	
   

  	
  15.3

  	
  Efficiency and Cost Effectiveness

  	
   

  	
  108

  
	
   

  	
   

  	
  15.4

  	
  Software

  	
   

  	
  109

  



 



 iv
 






 



 


	
  

  	
   

  	
  15.5

  	
  Non-Infringement

  	
   

  	
  110

  
	
   

  	
   

  	
  15.6

  	
  Authorization

  	
   

  	
  110

  
	
   

  	
   

  	
  15.7

  	
  Inducements; Kraft Code of Business Conduct and
  Ethics

  	
   

  	
  111

  
	
   

  	
   

  	
  15.8

  	
  Malicious Code

  	
   

  	
  111

  
	
   

  	
   

  	
  15.9

  	
  Disabling Code

  	
   

  	
  112

  
	
   

  	
   

  	
  15.10

  	
  Compliance with Laws

  	
   

  	
  112

  
	
   

  	
   

  	
  15.11

  	
  Interoperability; Currency

  	
   

  	
  114

  
	
   

  	
   

  	
  15.12

  	
  Disclaimer

  	
   

  	
  115

  
	
  16.

  	
   

  	
  INSURANCE AND RISK OF LOSS

  	
   

  	
  115

  
	
   

  	
   

  	
  16.1

  	
  Insurance

  	
   

  	
  115

  
	
   

  	
   

  	
  16.2

  	
  Risk of Loss

  	
   

  	
  117

  
	
  17.

  	
   

  	
  INDEMNITIES

  	
   

  	
  117

  
	
   

  	
   

  	
  17.1

  	
  Indemnity by Supplier

  	
   

  	
  117

  
	
   

  	
   

  	
  17.2

  	
  Indemnity by Kraft

  	
   

  	
  119

  
	
   

  	
   

  	
  17.3

  	
  Additional Indemnities

  	
   

  	
  121

  
	
   

  	
   

  	
  17.4

  	
  Infringement

  	
   

  	
  121

  
	
   

  	
   

  	
  17.5

  	
  Indemnification Procedures

  	
   

  	
  122

  
	
   

  	
   

  	
  17.6

  	
  Indemnification Procedures – Governmental Claims

  	
   

  	
  122

  
	
   

  	
   

  	
  17.7

  	
  Subrogation

  	
   

  	
  123

  
	
  18.

  	
   

  	
  LIABILITY

  	
   

  	
  123

  
	
   

  	
   

  	
  18.1

  	
  General Intent

  	
   

  	
  123

  
	
   

  	
   

  	
  18.2

  	
  Force Majeure

  	
   

  	
  123

  
	
   

  	
   

  	
  18.3

  	
  Limitation of Liability

  	
   

  	
  125

  
	
  19.

  	
   

  	
  DISPUTE RESOLUTION

  	
   

  	
  128

  
	
   

  	
   

  	
  19.1

  	
  Informal Dispute Resolution

  	
   

  	
  128

  
	
   

  	
   

  	
  19.2

  	
  Non-Binding Mediation

  	
   

  	
  129

  
	
   

  	
   

  	
  19.3

  	
  Arbitration

  	
   

  	
  129

  
	
   

  	
   

  	
  19.4

  	
  Equitable Remedies

  	
   

  	
  131

  
	
   

  	
   

  	
  19.5

  	
  Jurisdiction

  	
   

  	
  131

  



 



 v
 






 



 


	
  

  	
   

  	
  19.6

  	
  Continued Performance

  	
   

  	
  131

  
	
   

  	
   

  	
  19.7

  	
  Governing Law

  	
   

  	
  132

  
	
  20.

  	
   

  	
  TERMINATION

  	
   

  	
  132

  
	
   

  	
   

  	
  20.1

  	
  Termination for Cause

  	
   

  	
  132

  
	
   

  	
   

  	
  20.2

  	
  Termination for Convenience

  	
   

  	
  134

  
	
   

  	
   

  	
  20.3

  	
  Termination Upon Supplier Change of Control

  	
   

  	
  134

  
	
   

  	
   

  	
  20.4

  	
  Termination Upon Kraft Change of Control

  	
   

  	
  134

  
	
   

  	
   

  	
  20.5

  	
  Termination for Insolvency

  	
   

  	
  134

  
	
   

  	
   

  	
  20.6

  	
  * * * Rights Upon * * * Bankruptcy

  	
   

  	
  135

  
	
   

  	
   

  	
  20.7

  	
  Critical Services

  	
   

  	
  136

  
	
  21.

  	
   

  	
  GENERAL

  	
   

  	
  136

  
	
   

  	
   

  	
  21.1

  	
  Binding Nature and Assignment

  	
   

  	
  136

  
	
   

  	
   

  	
  21.2

  	
  Entire Agreement; Amendment

  	
   

  	
  137

  
	
   

  	
   

  	
  21.3

  	
  Notices

  	
   

  	
  137

  
	
   

  	
   

  	
  21.4

  	
  Counterparts

  	
   

  	
  139

  
	
   

  	
   

  	
  21.5

  	
  Headings

  	
   

  	
  139

  
	
   

  	
   

  	
  21.6

  	
  Relationship of Parties

  	
   

  	
  140

  
	
   

  	
   

  	
  21.7

  	
  Severability

  	
   

  	
  140

  
	
   

  	
   

  	
  21.8

  	
  Consents and Approval

  	
   

  	
  140

  
	
   

  	
   

  	
  21.9

  	
  Waiver of Default; Cumulative Remedies

  	
   

  	
  140

  
	
   

  	
   

  	
  21.10

  	
  Survival

  	
   

  	
  140

  
	
   

  	
   

  	
  21.11

  	
  Publicity

  	
   

  	
  141

  
	
   

  	
   

  	
  21.12

  	
  Service Marks

  	
   

  	
  141

  
	
   

  	
   

  	
  21.13

  	
  Export

  	
   

  	
  141

  
	
   

  	
   

  	
  21.14

  	
  Enforcement and Third Party Beneficiaries

  	
   

  	
  141

  
	
   

  	
   

  	
  21.15

  	
  Covenant Regarding Pledging

  	
   

  	
  142

  
	
   

  	
   

  	
  21.16

  	
  Order of Precedence

  	
   

  	
  142

  
	
   

  	
   

  	
  21.17

  	
  Hiring of Employees

  	
   

  	
  142

  
	
   

  	
   

  	
  21.18

  	
  Further Assurances

  	
   

  	
  143

  



 



 vi
 






 



 


	
  

  	
   

  	
  21.19

  	
  Liens

  	
   

  	
  143

  
	
   

  	
   

  	
  21.20

  	
  Covenant of Good Faith

  	
   

  	
  143

  
	
   

  	
   

  	
  21.21

  	
  Notice of * * * Condition

  	
   

  	
  143

  
	
   

  	
   

  	
  21.22

  	
  Acknowledgment

  	
   

  	
  143

  
	
   

  	
   

  	
  21.23

  	
  References

  	
   

  	
  143

  



 



 vii