OPERATIONS MANAGEMENT SERVICES AGREEMENT
THIS AGREEMENT made effective as of the _____ day of ______________, _______.
BETWEEN:
____________________ (insert the name of provider)
(the “Provider”)
OF THE FIRST PART
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____________________ (insert the name of customer)
(the “Customer”)
OF THE SECOND PART
WHEREAS:
A. The Provider offers a wide range of operations services, including but not limited to the
manufacture, support and maintenance of computer systems, systems management for data
center operations, systems management for distributed computing environments, network
management, and desktop services (call management, help desk services, information reporting,
web site design and implementation, planning and design, staging and distribution, common
operations, environment services, maintenance, financing, asset management, migration, and
user training);
B. The Customer wishes to contract for certain operations services from the Provider whereby the
Provider will operate, manage and maintain the Customer’s Information Systems environment as
described in Schedule “A”, attached hereto and forming a part hereof;
C. The Provider is willing to perform these operations services for the Customer pursuant to the
terms and conditions set out herein.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual covenants
and agreements contained in this Agreement and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged by the parties, the parties hereby agree as follows:
1. Definitions
(a) “Agreement” means this Operations Services Management Agreement, together with all
schedules and attachments hereto and replacements thereof or revisions thereto, and any
amendments hereafter made as agreed to by both parties as hereinafter provided.
(b) “Copy” means a reproduction of computer programs and other information onto any medium,
whether electronically reproduced or otherwise.
(c) “Customer Hardware” means the computer systems, peripherals, terminals, communications
equipment and all related hardware products owned or leased by the Customer which will be
used by the Provider in performing the Operations Services under this Agreement as listed in
Schedule “B”, attached hereto and forming a part hereof, and which may be modified and
upgraded, from time to time.
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(d) “Customer Software” means the computer programs including documentation with respect
thereto, all updates and new releases thereof, whether licensed from the Provider or third parties,
or owned by the Customer as listed in Schedule “C”, attached hereto and forming a part hereof,
which will be used by the Provider in performing the Operations Services hereunder.
(e) “Intellectual Property Rights” shall include all copyrights, patents, trade marks, service marks,
design rights (whether registered or unregistered), semiconductor topography rights, trade
secrets and other similar proprietary rights.
(f) “Materials” means all tangible materials developed during the term of this Agreement including
documents, records, and other copies including materials which embody computer programs.
(g) “Operations Services” means the services to be performed by the Provider as described in
Schedule “A” hereof.
(h) “Provider Hardware” means the computer systems, peripherals, terminals, communications
equipment and all related hardware products owned by the Provider which will be used by the
Provider in performing the Operations Services under this Agreement as listed in Schedule “D”,
attached hereto and forming a part hereof, and which may be modified and upgraded, from time
to time.
(i) “Provider Software” means the computer programs including documentation with respect
thereto, all updates and new releases thereof, which the Provider licenses or owns as listed in
Schedule “E”, attached hereto and forming a part hereof, which will be used by the Provider in
performing the Operations Services hereunder, but not including software licensed by the
Customer from the Provider.
(j) “Service Fees” means the fees payable by the Customer as specified in Schedule “F”, attached
hereto and forming a part hereof.
(k) “Service Level Objectives” means the predetermined, objective performance criteria for delivery
of the Operations Services as described in Schedule “G”, attached hereto and forming a part
hereof.
(l) “Subcontractor” means any person or party engaged by the Provider to perform any of the
Operations Services on behalf of the Provider.
2. Operations Services to be Provided by the Provider
2.1 The Provider shall perform the Operations Services for the Customer at the location(s) described
in Schedule “H”, attached hereto and forming a part hereof, using all reasonable efforts to meet the
Service Level Objectives.
2.2 The Provider’s obligation to deliver the Operations Services shall commence upon the
Customer’s completion of the implementation tasks to be performed by the Customer as described in
Schedule “I”, attached hereto and forming a part hereof. Completion shall be deemed to have occurred
upon the Provider’s written notice to the Customer that the tasks are complete. However, the Provider
reserves the night to temporarily discontinue its performance hereunder if the Provider discovers
additional implementation tasks that must be completed by the Customer in order for the Provider to
continue to deliver the Operations Services.
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2.3. The Provider shall provide the Customer with periodic reports as described in Schedule “J”,
attached hereto and forming a part hereof, setting out a comparison of the Provider’s performance to the
Service Level Objectives. In the event the Provider does not meet the Service Level Objectives during the
agreed-upon time period specified in Schedule “G” hereof, the Provider will follow the steps outlined in
Schedule “K” hereof to improve its delivery of the Operations Services so that the Service Level
Objectives are met.
2.4. The Provider shall not be liable to continue performance of the Operations Services where
provision of the same would, in the sole opinion of the Provider, involve a safety, health or
environmental hazard. Such discontinuance by the Provider shall not constitute a breach of this
Agreement.
2.5. The Provider shall not be liable for failure to achieve the Service Level Objectives due to
problems resulting from alterations made to the Customer Hardware or the Customer Software or any
part thereof by anyone other than the Provider or without the prior written approval of the Provider.
2.6. The Provider reserves the right to change the location where the Provider uses the Customer
Software and to move the Customer Software and data upon written notice to the Customer, so long as
the Provider does not seek to change the Service Level Objectives.
2.7. The Provider’s obligation to deliver the Operations Services is subject to and conditional upon
the full performance and observance by the Customer of its obligations under this Agreement, including,
but not limited to, the Customer responsibilities described in Section 6 hereof.
3. Hardware
3.1. The Provider will perform the Operations Services using the Customer Hardware. Subject to
mutual agreement, the Provider may use the Provider Hardware instead of, or in addition to, the
Customer Hardware.
3.2. In the event the parties agree that the Provider will purchase certain computer systems and other
hardware products from the Customer prior to or after delivery of Operations Services, the terms and
conditions for that purchase will be as set out in Schedule “L”, attached hereto and forming a part hereof.
Such purchased equipment will be added to Schedule “D” hereof and form part of the Provider
Hardware if such purchased equipment is to be used by the Provider in performing the Operations
Services.
3.3. Title to the Provider Hardware shall remain vested solely in the Provider, and the Customer shall
have no rights thereto except as specifically permitted under this Agreement. When the Provider
Hardware is installed at the Customer sites, the Customer shall be responsible for all physical loss and
damage of such the Provider Hardware other than that caused directly and solely by the Provider. The
Provider may upgrade and replace the Provider Hardware as the Provider in its sole discretion deems
appropriate so long as the Provider does not seek to change the Service Level Objectives.
3.4. Title to the Customer Hardware shall remain vested solely in the Customer, and the Provider
shall have no rights thereto except as specifically permitted under this Agreement. When the Customer
Hardware is installed at the Provider sites, the Provider shall be responsible for all physical loss and
damage of such the Customer Hardware other than that caused directly and solely by the Customer.
When the Customer Hardware is installed at the Customer sites, the Customer shall be responsible for all
physical loss and damage of such the Customer Hardware other than that caused directly and solely by
the Provider.
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3.5. The Customer shall assign its maintenance agreements, as listed in Schedule “M”, attached hereto
and forming a part hereof, covering the Customer Hardware to the Provider and shall obtain any
required approvals and consents from the vendors permitting the Provider to act as the Customer’s agent
under such maintenance agreements. The Customer shall remain responsible for payment and renewal of
maintenance agreements covering the Customer Hardware unless they have been assigned to the
Provider.
3.6. Any of the Customer Hardware to be maintained directly by the Provider under this Agreement
will be governed by the terms and conditions of Schedule “N”, attached hereto and forming a part hereof.
4. Customer Software
4.1. The Provider will perform the Operations Services using the Customer Software and the Provider
Software.
4.2. The Customer grants the Provider a non-exclusive license at no charge to use the Customer
Software owned by the Customer during the term of this Agreement and, if applicable during any
holdover period after expiration or termination of the Agreement, solely for the purpose of delivering the
Operations Services. This Customer Software will be supported as described in Schedule “O”, attached
hereto and forming a part hereof.
4.3. The Provider’s obligation to perform the Operations Services under this Agreement is conditional
upon the Customer obtaining the right for the Provider to use any the Customer Software licensed from
third parties (the “Third Party Software”). The Customer shall provide the Provider with evidence that
any Third Party Software vendors have consented to the Customer’s assignment of its software license to
the Provider or to the Provider’s use of the Third Party Software on the Customer’s behalf under the
terms of the Customer’s license for the Third Party Software, which will include the right for the Provider
to change the location where the Provider uses such Third Party Software.
4.4. In the event any claim is brought against the Provider, its employees, agents or subcontractors
alleging the disclosure to the Provider or use by the Provider of the Customer Software (except software
licensed from the Provider) resulted in infringement of third party Intellectual Property Rights or breach
of confidentiality or other contractual obligations owed by the Customer to any third party, the Customer
hereby agrees to indemnify, defend and save harmless the Provider from all damages, costs, demands,
liabilities, expenses and losses incurred by the Provider in connection with such claim including
reasonable solicitors’ fees and court costs.
4.5. The Customer will assign its maintenance agreements covering Third Party Software to the
Provider and shall obtain the necessary approvals and consents of the third party vendors permitting
such assignment and permitting the Provider to act as the Customer’s agent under the maintenance
agreement(s). The Customer shall remain responsible for payment of all maintenance fees and renewal of
its maintenance agreements covering Third Party Software that has not been assigned to the Provider.
4.6. In the case of the Customer Software that is proprietary the Provider software licensed by the
Customer from the Provider, the same shall be used by the Provider and continue to be licensed to the
Customer under the terms of the applicable the Provider software license, which shall remain in full force
and effect.
4.7. Any the Customer Software to be supported directly by the Provider under this Agreement shall
be governed by the terms and conditions of Schedule “O” hereof.
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5. Payment of Service Fees
5.1. In consideration for the Provider’s delivery of Operations Services as described in this
Agreement, the Customer shall pay to the Provider the Service Fees as set out in Schedule “F” hereof.
Any additional costs and services requested by the Customer which are not described in Schedule “F”
hereof will be charged at the Provider’s standard service rates in effect as of the Effective Date of this
Agreement.
5.2. The Customer acknowledges that the Service Fees are based on data provided to the Provider by
the Customer and agrees that the Provider may adjust the Service Fees in the event the Provider
determines that the data received from the Customer was incorrect or incomplete.
5.3. Payment will be due ____ (insert number) days from the date of the Provider’s invoice. Service
Fees will be invoiced in advance. The Provider may change its credit terms without notice to the
Customer.
5.4. If the Customer falls to pay any sum when due after ____ (insert number) days written notice, the
Provider may discontinue performance under this Agreement until payment is received, and such
discontinuance of performance shall not be considered a breach of this Agreement.
5.5. Taxes are not included in the Service Fees. Applicable taxes will be invoiced as separate items.
6. Customer Responsibilities
6.1. The Customer shall allow the Provider to install and keep system and network diagnostic and
maintenance programs and system operation software resident on the Customer’s systems or site solely
for the Provider’s use in performing the Operations Services. The Customer acknowledges that the
Customer has no right or interest in or to such programs and that the Provider may remove these
programs from the Customer’s systems upon termination or expiration of this Agreement.
6.2. When the Provider is performing the Operations Services using equipment located at a the
Customer site, the Customer shall provide the Provider with and be responsible for expenses associated
with:
(a) full, unrestricted and safe access to the equipment being used by the Provider, its agents,
employees and subcontractors 24 hours per day, 365 days per year, and notify the Provider in
writing, in advance of any hazardous conditions or materials that are likely to be encountered;
(b) adequate working space, operating supplies and facilities, including telephones, power and
lighting, within a reasonable distance of the equipment.
6.3. The Customer shall provide the Provider with access to all of the Customer’s information, data,
records, the Customer Software, internal resources and facilities that the Provider shall deem necessary in
order to enable the Provider to perform the Operations Services.
6.4. The Customer shall secure the right for the Provider to use and maintain the Third Party
Software necessary to performance of the Operations Services as hereinbefore described.
6.5. The Customer shall supply data to the Provider for processing in the form and manner described
in Schedule “P”, attached hereto and forming a part hereof, and indicate its priorities for data processing
to the Provider.
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6.6. The Customer shall cooperate with the Provider and respond to all reasonable requests to
facilitate the Provider’s delivery of the Operations Services pursuant to the Service Level Objectives.
6.7. The Customer shall be responsible for all its own costs and expenses except for those costs and
expenses for which the Provider is specifically responsible as set out in this Agreement.
6.8. The Customer shall perform and observe all of its responsibilities as outlined in all Schedules and
attachments to this Agreement.
6.9. The Customer shall not remove any of the Customer Hardware or the Customer Software from
the location where it is being used by the Provider without the Provider’s prior written consent, which
will not be unreasonably withheld.
6.10. The Customer shall not modify the Customer Hardware, the Customer Software or system
configurations without the Provider’s prior written consent and, if requested by the Provider, compliance
with the change order process set out in Section 14 hereof, so as to allow the Provider to advise the
Customer how such modifications will affect the Service Fees or other terms and conditions of this
Agreement.
6.11. The Customer assumes sole responsibility for the compatibility of all products, network
components, devices and environments used in the Provider supported configurations except for
products licensed or sold by the Provider.
6.12. The Customer shall provide the Provider with complete and correct network, computer system,
and user documentation. If the Customer does not already have adequate documentation, the Provider
may develop such documentation at the Provider’s standard service rates. Network documentation
includes, but is not limited to, physical and logical network topology drawings, interconnect device
backplane drawings, and network node configuration information. User documentation includes, but is
not limited to, an accurate estimate of the number of users, peak load information, a list of supported
applications and a list of installed hardware and networking equipment.
6.13. Prior to commencement of the Operations Services, the Customer shall advise the Provider in
writing of all the Customer’s applicable rules and regulations which may affect the Provider’s provision
of the Operations Services, and of any subsequent changes thereto. The Provider will use its reasonable
efforts to comply with the Customer’s rules and regulations.
7. Dispute Resolution
7.1. Each party shall appoint an individual of suitable experience to be its contact person for the
duration of the Agreement (the "Service Account Manager ").
7.2. The parties, including the Service Account Managers, will meet regularly at mutually agreed
times and locations to discuss issues arising in connection with performance of this Agreement by both
parties.
7.3. In the event there is an issue which cannot be resolved at such meetings, either party may request
that their Service Account Managers meet separately to resolve the issue.
7.4. If the issue is still not resolved to the mutual satisfaction of both parties, then the Provider’s the
Customer Support Manager shall meet with management of the Customer to resolve the issue.
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7.5. As the final step in the dispute resolution process and prior to either party giving notice of
termination for cause as described in Section 10 hereof, the parties will each designate a corporate
executive who will meet to resolve the issue.
8. Confidential Information
8.1. Disclosure of confidential information belonging to the Provider or the Customer will be
governed by the terms and conditions of Schedule “Q”, attached hereto and forming a part hereof,
8.2. The Customer acknowledges that information, software and documentation created by the
Provider in the course of delivering Operations Services which relate to the Provider’s internal processes
and procedures for delivery of operations support services in general shall be owned by the Provider and
may be used by the Provider and its affiliated companies to facilitate delivery of similar services to other
customers.
8.3. Nothing herein shall be construed so as to prevent either party or its affiliates from using
techniques, ideas and other knowhow gained during the performance of this Agreement in the
furtherance of its business, to the extent that this does not result in disclosure of confidential information
or unauthorized use of any Intellectual Property Right of the other party.
9. Term
9.1 This Agreement shall commence on the Effective Date and continue for a term of _____ (insert
number) years thereafter. At the end of the initial term, this Agreement shall be automatically renewed for
additional ____ (insert number) year terms unless either party gives ______ (insert number) days written
notice of cancellation prior to the end of the initial term or the end of any additional ____ (insert number)
year term. Upon cancellation of this Agreement, the Provider will use reasonable efforts to perform the
Transition Services (as defined in Section 12 hereof) on a time and materials basis at the Provider’s
standard service rates.
10. Termination for Cause
10.1. Except in the event of default in payment of any amounts owing hereunder by the Customer,
either party may terminate this Agreement for material breach provided the dispute resolution process
set out in Section 7 hereof has been completed. If such dispute resolution process has failed to resolve the
issue, the terminating party shall give ______ (insert number) days written notice of termination to the
other party.
10.2. In the event of default in payment of any amounts owing hereunder by the Customer, the
Provider may give ____ (insert number) days written notice after payment was due and terminate
immediately if payment is not made by the end of the ____ (insert number) day notice period.
10.3. The Provider shall not be in material breach if its failure to perform the Operations Services
hereunder is due to problems caused by the Customer’s data, by applications or other software owned or
licensed by the Customer, by hardware failures for hardware not maintained by the Provider or by
hardware failures for hardware maintained by the Provider which failures were caused by:
(a) use of media and supplies not supplied by the Provider or use of items not designated for use
with products maintained by the Provider;
(b) site conditions that do not conform to the Provider’s site specifications; or
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(c) neglect, improper use, fire or water damage, electrical disturbances, improper or unauthorized
transportation by the Customer, work or modification by people other than the Provider
employees or subcontractors, or other causes beyond the Provider’s control.
10.4. If the Customer terminates due to the Provider’s material breach, the Provider shall be obligated
to use its reasonable efforts to perform the Transition Services for ____ (insert number) days at no charge
to the Customer.
10.5. If the Provider terminates due to the Customer’s material breach, the Customer shall:
(a) pay the Provider the early termination fees (the "Early Termination Fees") set out in Schedule
“R”, attached hereto and forming a part hereof;
(b) pay the Provider in full for all Operations Services performed by the Provider up to the date of
termination; and
(c) reimburse the Provider in full for any costs, losses, expenses or damages the Provider incurs as a
result of such termination.
The Provider will, upon the Customer’s request, use reasonable efforts to perform the Transition Services
on a time and materials basis at the Provider’s standard service rates.
10.6. If either party becomes insolvent, is unable to pay its debts as and when they become due, ceases
its normal business operations, has a receiver appointed, or has its assets assigned, it shall be considere