2017039: vII MASTER SERVICES AGREEMENT between HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE OF BRITISH COLUMBIA, AS REPRESENTED BY THE MINISTER OF MANAGEMENT SERVICES and IBM CANADA LIMITED as of December 3, 2004
B.C. government IBM Service Agreement
Dec 04, 2014
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V A ~ O I : 2017039: vIIMASTER SERVICES AGREEMENTbetweenHER MAJESTY THE QUEEN IN RIGHT OF THEPROVINCE OF BRITISH COLUMBIA, AS REPRESENTEDBY THE MINISTER OF MANAGEMENT SERVICESandIBM CANADA LIMITEDas of December 3, 2004MASTER SERVICES AGREEMENTTABLE OF CONTENTSARTICLE 1 - INTERPRETATION 11.1 Definitions 11.2 Recitals 11.3 Headings 11.4 Interpretation ; 11.5 Acting Reasonably 21.6 Accounting Policy 21.7 Calculation of Time Periods 21.8 Currency References : 31.9 Tune 31.10 Schedules 31.11 Document Conflicts 31.12 Joint Drafting : 41.13 Objectives of the Parties 41.14 Co-operation of the Parties 61.15 General Scope 6ARTICLE 2 - AGREEMENT TERM AND RENEWAL 62.1 Initial Term 62.2 No Renewal Assurances 72.3 No Expropriation 72.4 Renewal Option 72.5 Renewal Notice 72.6 Renewal Negotiations 72.7 One Year Extension 82.8 Extension Notice 82.9 Extension Terms 82.10 Tennination Assistance 82.11 Effect9ARTICLE 3 - TRANSITION 93.1 Transition Overview 93.2 Modifications to Transition Plan 93.3 Transition Requirements 93.4 Stage 1 Transition : 103.5 Failure to Complete Stage 1 Transition Plan 103.6 Stage 2 Transition 113.7 Province License for Space 113.8 Transition Costs 113.9 In-Flight Projects 113.10 Transition Plan 12ARTICLE 4 - SERVICES 124.1 Overview of SerVices 124.2 Included or Inherent Services 134.3 Services Changes 134.4 Continuous Improvement Recommendations 134.5 Quality Management. 13- i -VANOl: 2017039vll4.6 Documentation and Ongoing Knowledge Exchange 134.7 Province Retained Responsibilities 14ARTICLE 5 - SERVICE AND DATA LOCATIONS 145.1 Overview of Service Locations 145.2 Relocation of IBM Service Locations 155.3 Service Location Policies 155.4 Access to Province Locations 15ARTICLE 6 - SERVICE LEVELS 156.1 General Compliance 156.2 Interim Service Level Targets 166.3 Monitoring , ; 166.4 Reports of A c h i e v ~ d Service Levels 176.5 Reports of Service Level Failures 176.6 Problem Alert and Escalation Procedures 176.7 ProblemManagement and Root Cause Analysis 176.8 Service Level Classifications 176.9 Chronic Failure 186.10 Remediation Plan. 186.11 Service Level Credits 186.12 Relief 206.13 Joint Review of Service Levels 216.14 Customer Satisfaction 21ARTICLE 7 - BUSINESS CONTINUITY AND RECOVERY 217.1 Acknowledgement. 217.2 Services Recovery Management. 227.3 Roles and Responsibilities 227.4 Recovery Time Objectives 237.5 Testing of IBM Services Recovery Plan 237.6 Business Continuity Representative 237.7 Actual Disaster 24ARTICLE 8 - RELATIONSHIP MANAGEMENT AND HUMAN RESOURCES 248.1 Governance 248.2 Power and Authority of IBM 258.3 Province's Right to Issue Directives ~ 258.4 Reliance on Instructions , 258.5 Required Province Approval. ~ 258.6 Key Positions 258.7 Changes in Province Key Positions 268.8 Changes in IBM Key Positions 268.9 IBM Key Position Failures 278.10 Training 278.11 General Principles Regarding Personnel. 288.12 Relationship with Province Clients and Stakeholders 298.13 Annual Strategic Plan 30ARTICLE 9 - BENCHMARKING 309.1 Benclunarking :: 309.2 Benclunarking Cooperation 309.3 Comparison to Representative Sample 309.4 Benchmarker's Report 31- 11-VANOl:2017039vllARTICLE10 - INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS 3110.1 Application of Sections 3110.2 Excluded Projects ; 3110.3 Province Intellectual Property 3110.4 IBM Intellectual Property 3110.5 Third Party Intellectual Property 3210.6 Assignment Re: Intellectual Property 3210.7 IBM Personnel and Subcontractors 3210.8 Province Personnel and Subcontractors 3310.9 IBM's Use of Province Intellectual Property for Services 3310.10 IBM's Use of Modifications 3310.11 Province's Use of Embedded IBM Intellectual Property 3410.12 Province Modifications to Embedded IBM Intellectual Property 3510.13 Province's Use of IBM Software 3510.14 Post-Termination Maintenance and Support 3510.15 Third Party Intellectual Property 3510.16 Reservation of Rights 3510.17 Marking 3610.18 System Contaminants 3610.19 System Protection Features 3610.20 Residual Information 3610.21 Ownership of Other Assets : 36ARTICLE11- BRANDING AND TRADEMARKS 3711.1 Province Marks 3711.2 Brand Use 38ARTICLE12 - CHARGES 3812.1 Charges 3812.2 Invoices 3812.3 Method of Payment. 3812.4 Taxes 3912.5 Value For Money 3912.6 Rectification and Right of Set-Off 3912.7 Disputed Payments 3912.8 "Withholding Payment. 4012.9 Expenses 40ARTICLE13 - BENEFIT SHARING AND GROWTH .4113.1 Benefit Sharing Principles 4113.2 Marketing and Reference Assistance .4113.3 Gain Sharing 4213.4 Promotional Materials 43ARTICLE 14 - PRNACY, SECURITY AND CONFIDENTIALITy .4314.1 Acknowledgements 4314.2 Ownership and Control of Personal Information .4314.3 Disclosure of Personal Information .4414.4 Collection, Storage, Removal of Personal Information .4414.5 Request for Access to Personal Information .4514.6 Privacy Obligations For Personal Information .4514.7 USA Patriot Act. 4514.8 Safeguarding Confidential Information ; .4614.9 Permitted Disclosure and Use of Confidential Information 4614.10 Confidentiality ofthis Agreement and Transaction Documents .47- iii -VANOl:2017039vll14.11 Exceptions to Obligation of Confidentiality 4714.12 Disclosure Compelled by Law 4814.13 No Rights to Confidential Information .4814.14 Residual Information 4814.15 Notification of Unauthorized Use of Confidential Information .4914.16 Breach of Confidentiality 4914.17 Organizational Structure of IBM and Subcontractors 5014.18 Organizational Security 5014.19 Privacy Training 5014.20 Authentication Project and Standards 5114.21 FOIPPA Inspections 51ARTICLE15 _ MAINTENANCE OF RECORDS AND AUDIT RIGHTS 5115.1 Maintenance of Records 5115.2 Custody of Province Records5215.3 Control of Province Records 5215.4 Return of Province Records 5315.5 Costs of Record Keeping 5315.6 Disposal of Records 5315.7 Locations of Records 5315.8 Storage Responsibilities 5415.9 Access Rights , : 5415.10 Financial Audit Rights 5415.11 Audit, Investigation and Inspection Rights 5515.12 Costs of Audits, Investigations and Inspections 5515.13 Operational Audit Rights 5515.14 Office of the Comptroller GeneraL 5615.15 General Audit Provisions 5615.16 Costs of Audits : 5715.17 General Principles Regarding Audit, Investigation and Inspection Rights : 5715.18 Deficiencies 5815.19 Cost of Audits, Investigations and Inspections 58ARTICLE 16 - REPORTmG 5916.1 Reports to be Conlpleted 5916.2 Format ofReports5916.3 Annual Review of Reporting Requirements 59ARTICLE 17 - CHANGE MANAGEMENT 5917.1 Operational Change Management. 5917.2 Change Order Process 5917.3 Initiating the Change Order Process 6017.4 Province Initiated Change 6017.5 IBM Initiated Change , 6117.6 Change Request Impact on Charges 6217.7 Implementation of Changes 6217.8 Consequential Amendments to tins Agreement. 6217.9 Record of Changes 62ARTICLE 18 -DEFAULT .AND TERMmATION 6218.1 Events of Termination 6218.2 Remedies of the Province 6418.3 Termination for Chronic Failure 6418.4 Province Termination Event. 6418.5 Remedies of IBM 65- iv-
18.6 Termination by Province for Convenience 6518.7 Termination Notice 6518.8 Termination Fees 65ARTICLE 19 - TERMINATION SERVICES 6619.1 Termination Services 6619.2 Termination Assistance Plan 6719.3 Quality of Services 6819.4 Charges for Termination Services ~ 6919.5 Transfer of Assets and Contracts 6919.6 Transfer of PersonneL 7019.7 IBM Severance Costs 7019.8 Province Severance Costs 7019.9 Additional Ternrination Arrangements 7119.10 Equitable Remedies of the Province 71ARTICLE 20 - GENERAL DUTIES AND OBLIGATIONS 7220.1 General Duties and Obligations of Province , 7220.2 General Duties and Obligations of IBM ~ 7220.3 Compliance with Applicable Laws 7220.4 Compliance with Specific Laws 7320.5 Compliance with Core Policy Manual. , 7420.6 Obtaining and Maintaining Licences and Permits 74ARTICLE 21-REPRESENTATIONS, WARRANTIES AND COVENANTS 7521.1 IBM Representations and Warranties 7521.2 Province Representations and Warranties 7721.3 Service VolumeslNumber of Seats 7721.4 Disclaimer of Warranties 77ARTICLE 22 - INDEMNIFICATION AND LllvIITATION OF LIABILITY 7822.1 General Intent. 7822.2 Indemnification by Province 7822.3 Indemnification.by IBM 7822.4 IBM Intellectual Property Indemnification 8022.5 Province Intellectual Property Indemnification 8122.6 Third Party Claim Process : 8122.7 Mitigation , ~ 8322.8 Limitation 8322.9 Limitation of Liability 83ARTICLE 23 - INSURAN'CE 8523.1 Insurance 8523.2 Certificate of Insurance : 8523.3 Adequacy of Insurance 85ARTICLE 24 - DISPUTES 8524.1 ITIformal Dispute Resolution 8524.2 Arbitration 8724.3 Confidentiality' 8824.4 Exceptions to Dispute Resolution Procedure 8824.5 Continuity of Services 89ARTICLE 25 - CRITICAL SERVICES AND FORCE MAJEURE 8925.1 Critical Services 89-V-VANOl: 20l7039vll25.225.325.425.525.625.725.825.925.10Services Recovery Plan 89Labour Disruption Plan 89Labour Disruption 90Force Majeure Events 90Notice of Force Majeure Event. 90Mitigation of Force Majeure Event. 91Consequences of Force Majeure Event. ; 91Establishing a Force Majeure Event. 92Extension for Force Majeure Event. 92ARTICLE 26 - SUBCONTRACTORS ORGANIZATIONAL STRUCTURE 9226.1 Responsibility for Subcontractors 9226.2 Inconsistent Subcontract Terms 9226.3 General Contract Terms (Subcontractors) 9326.4 Subcontractor Monitoring 9326.5 Non-Disclosure Documents 9326.6 Confidentiality Breaches ~ 9426.7 Confidentiality Re Assigned Contracts : 9426.8 Copies of Extracts 9426.9 Consent to Use of Subcontractors 9426.10 Exception 9526.11 Province Criteria for Key Subcontractors 9526.12 Removal of Subcontractor 9526.13 Other Business with Subcontractors 9626.14 Suppliers 96ARTICLE 27 - ASSIGNMENT 9627.1 Assignment by Province 9627.2 Assignment by IBM 96ARTICLE 28 - CONTRACTUAL RELATIONSHIP ~ 9728.1 Relationship of the Parties : 9728.2 No Partnership or Joint Venture 9728.3 . Conflict of Interest. 9828.4 Code ofCoIiduct. 9828.5 Province's Conflict of Interest Policy 98ARTICLE 29 - PROVINCE SHARED INFRASTRUCTURE 9829.1 Ownership and Control of Province Shared Infrastructure 9829.2 Use of Province Shared Infrastructure 9929.3 Restrictions on Access and Use 9929.4 Ordinary Course Changes to the Province Shared Infrastructure 10029.5 Material Changes to the Province Shared Infrastructure 10029.6 Payments from IBM 10129.7 Failure in Province Shared InfrastructuTe 10129.8 Termination of Rights to Province Shared Infrastructure 102ARTICLE 30 - TECHNOLOGY CHANGE / TECHNOLOGY STANDARDS 10230.1 Technology Change 10230.2 Technology Standards 10230.3 Implementing Irrlproved Technology 10330.4 IBM Assistance re Standards 103ARTICLE 31 - PRODUCT PURCHASE 10431.1 Relationship Between the Parties for Product Procurement. 104- VI -VANOl: 20l7039vll31.2 Procurement Terms and Conditions 10431.3 Purchase Order Forecasting 10431.4 Failure to Supply Machines or Programs 10431.5 Request to Change Technology Brand 10531.6 Risk of Loss 105ARTICLE 32 -MISCELLANEOUS 10532.1 Notice 10532.2 Appropriation and Approvals 10632.3 Severability 10732.4 Entire Agreement. 10732.5 Amendments ; 10732.6 No Liens or Charges against Provincial Assets : 10732.7 Waiver 10732.8 Further Assurances 10832.9 Obligations as Covenants 10832.10 Transaction Fees and Commissions 10832.11 Survival. , 10832.12 Language 10932.13 Governing Law 1.1032.14 Change of Law 11032.15 No Fettering of Legislative Authority , 11132.16 Procurement. 11132.17 Binding Effect. 11132.18 No Third-Party Beneficiaries 11132.19 Publicity 11232.20 Environmental Policy 11232.21 Counterparts ~ 113Schedule ASchedule BSchedule CSchedule DSchedule ESchedule FSchedule GSchedule HSchedule ISchedule JSchedule KSchedule LSchedule MSchedule NSchedule 0Schedule PSchedule QSchedule RSchedule SSchedule TSchedule USchedule VSchedule WSchedule XVANOl: 2017039vllDefinitionsServicesCertified Copies of Extracts of Key SubcontractsService LevelsShared InfrastructureChargesTechnical TransitionJRefreshOrganizational StructureApplication and Operating Software ListsEquipmentStandards - HardwareFacilitiesKey PositionsSummary Financial InformationTermination FeesGovernanceForm of Certificate of InsurancePrivacy Obligations- Reporting- "Brand PermissionChange Order Process FormsForm of Non-Disclosure AgreementForm of InvoiceServices Recovery- vii -Schedule YSchedule ZVANOl:2017039vllPurchase Tenns and ConditionsTransition- viii -THISMASTERSERVICESAGREEMENTis enteredinto as ofDecember 3,2004 (the "EffectiveDate"), between IBMCanada Limited("IBM"), a companyincorporated under thelawsof Canada andHer Majesty the Queen in Right of the 'Province of British Columbia as represented by the Ministerof Management Services (the "Province").RECITALSA. The Province conducted a competItIve procurement process under the JSRFP forpurposes of establishing a contractual business alliance with an experienced and qualified third party to,among other things, manage and deliver certain workplace support services to the Province;B. Asa result of theJSRFP process, theProvinceselected IBMtoprovidetheworkplacesupport services to the Province subject to, and in accordance with, the terms of this Agreement;C. IBM is a wholly-owned subsidiary of IBM World Trade Corporation;D. ThePartiesarecommitted tofulfillingtheirobligationswithrespect tothesecurityofinformation and protection of privacy of Personal Information, and have therefore structured thisAgreement, and the relationship between theParties, inorder toensurethat thesame isachieved whereIBM has access to or Custody of Personal Information;INCONSIDERATIONofthe foregoing andthemutual covenants andagreements containedinthisAgreement, the Parties covenant and agree as follows:ARTICLE 1 - INTERPRETATION1.1 Definitions.Unless otherwise provided in this Agreement (or in any Schedules attached to this Agreement),capitalized termsshall have the meanings given to those terms in the attached Schedule A (Definitions).In addition to the definitions containedinSchedule A(Definitions), any capitalized terms definedelsewhere in this Agreement shall have the meanings so given to them.1.2 Recitals.TherecitalstothisAgreementareintendedtobeageneral introductiontothisAgreementandare' notintendedto expandthe scope of the Parties' obligations under this Agreement or to alter the plainmeaning of the terms and conditions of this Agreement.1.3 Headings.The divisionofthis Agreement intoArticles, Sections, Subsections, paragraphs and .clauses andtheinsertionofheadings are for convenienceof reference onlyandshall not affect the constructionorinterpretation of this Agreement.1.4 Interpretation.In this Agreement, unless expressly stated to the contrary:(a) the terms "Agreement", "hereof', "hereunder", and similar expressions refer, unlessotherwise specified, to this Agreement taken as a whole and not to any particular Article,Section, Subsection, paragraph, clause or other portion of this Agreement;- 1 -VANOl:2017039vll(b) wordsimportingthesingular numberonlyshall includetheplural, andviceversa, andwords importing gender shall include all genders;(c) unless something in the subject matter or context is inconsistent therewith, all referencesin thisAgreement toArticles, Sections, Subsections, paragraphs, clauses andSchedulesrefer to Articles, Sections, Subsection, paragraphs, clauses and Schedules of thisAgreement;(d) words and phrases denoting inclusiveness (such as "including" or "includes"), whether ornot statedasbeingwithout limitation, arenot limitedbytheircontext or thewordsorphrases which precede or succeed them;(e) unless otherwise provided in this Agreement, whenever the words. "discretion", "option"or any variations thereof are used with respect toa Party, they shall be deemed to meansuch Party's sole and absolute discretion or option; and(f) any reference to a statute shall be deemed to refer to the statute and any regulations madethereunder in forceasat thedatehereof, asthesamemay besubsequently amended orreplaced from time to time, unless otherwise expressly provided.1.5 Acting Reasonably.Any requirement set forth in this Agreement for a Party to use reasonable efforts shall mean commerciallyreasonable efforts having regard to the surrounding circumstances unless provided otherwise.Notwithstandingthe foregoing, anyrequirement set forth inthis Agreement for theProvincetoactreasonably(includinganyrequirementfor approvalsbytheProvincenottobeunreasonablywithheld)shall not require the Province to act in a manner that is contrary to or is inconsistent with any:(a) Treasury Board decisions (by means of Treasury Board directives, regulations orotherwise);(b) formal policies,rules, directives, executivedirectionsorguidelines of theProvince thatareof general application, arenot specificallyintendedtoresolveDisputesunderthisAgreement, or are not otherwise contrary to or inconsistent with the express provisions ofthe Agreement; or(c) legislation or other similar determinations of the Province.1.6 Accounting Policy.Inthis Agreement all references to"GAAP" refer, unless otherwisespecified, togenerallyacceptedaccounting principles from time to time approved by the Canadian Institute of Chartered Accountants (orany applicable successor institute thereto) as at the date on which such calculation is made or required tobemade, consistentlyapplied. Unless otherwiseprovidedinthis Agreement, all accounting, recordkeeping, book keeping and other actions of IBM contemplated in this Agreement shall be performed andcarried out in a manner that .is consistent with GAAP."1.7 Calculation of Time Periods.Unless otherwise specifiedintp.is Agreement, whencalculatingtheperiodof time withinwhichorfollowingwhich any act is to be done or any step taken,the date which is the reference date for starting- 2 - the calculation of such period shall be excluded and the final date for completing such act or step shall beincluded.1.8 Currency References.Unless otherwise specified, all dollar references in this Agreement are deemed to refer to lawful money ofCanada.1.9 Time.Time shall be of the essence of this Agreement, provided that this provision shall not prevent either Partyfrom relying on any cure periods expressly provided for in this Agreement.1.10 Schedules.ThefollowingaretheSchedulesattachedtothisAgreement, whichareexpresslyincorporated intothisAgreement and are deemed to be an integral part of this Agreement:Schedule ASchedule BSchedule CSchedule DSchedule ESchedule FSchedule GSchedule HSchedule ISchedule JSchedule KSchedule LSchedule MSchedule NSchedule 0Schedule PSchedule QSchedule RSchedule SSchedule TSchedule USchedule VSchedule WSchedule XSchedule YSchedule ZDefinitionsServicesCertified Copies of Extracts of Key SubcontractsService LevelsShared InfrastructureChargesTechnical Transition/RefreshOrganizational StructureApplication and Operating Software ListsEquipmentStandards -HardwareFacilitiesKey PositionsSummary Financial InformationTermination FeesGovernanceForm of Certificate of InsurancePrivacy ObligationsReportingBrand PermissionChange Order Process FormsForm of Non-Disclosure AgreementForm offuvoiceServices RecoveryPurchase Terms l,ind ConditionsTransition1.11 Document Conflicts.The mainbodyofthis Agreement, the Schedules attached to this Agreement andthe TransactionDocuments areto beinterpreted so that all of the provisionsaregiven asfull effect as possible. In theevent ofa conflict amongthe foregoing, and unless expressly statedto the contrary, the order ofprecedence shall be as follows:- 3 -VANOl: 2017039vll(a) first, the n1ain body of this Agreement (which for clarity means the Recitals and Articles1 - 32) providedthat withrespect tothepurchasebytheProvinceof Machines andPrograms, thePurchasetermsandconditionsset forthin Schedule Y(PurchaseTermsand Conditions) shall apply;(b) second, any Schedules (with the exception of Schedule Y(Purchase Terms andConditions)) attached to this Agreement;(c) third, any other Transaction Documents; and(d) fourth, any provisions of the JSDA that expressly survive the termination of the JSDA, ascontemplated in Section 52 of the JSDA, with respect to matters under that agreement.1.12 Joint Drafting.ThePartieshave jointlycontributedtothedraftingof thisAgreement, theSchedulesattachedtothisAgreement, the Transaction Documents and all other documents referenced herein or therein.Accordingly, it is the intention of the Parties that the principle of contra proferentem shall not apply withrespect to interpretation matters in respect thereof.1.13 Objectives of the Parties.The Parties aclmowledge and agree that the primary objectives of their contractual relationship under thisAgreement are as follows(it being aclmowledged by the Parties that all such objectives are important tothePartiesandtheorderthereof set forthbelowdoesnot reflect anydifferingimportanceororderofpriority of such objectives):(a) for IBMtodeliver the Services totheProvince, as well as other additional servicescontemplated by this Agreement and added to the Agreement through the Change OrderProcess or as Project Services;(b) to assist the Ministryinachievingthe goals andobjectives set forth inthe JSRFP,including the following;(i) the ongoingreductionofthe annual cost ofperformingworkstationservicescalculated on a per Seat basis,(ii) to implement rapid advancement of standardization of equipment andregionalized service levels,(iii) to ensure continual improvement in service levels to achieve "best-in-class"standards as soon as possible,(iv) to establish and maintain positive and productive working relationships with theMinistry and the Client Ministries; and(v) toe n ~ b l e a rapid transition to a new service delivery model;(c) todevelopalongtermandmutuallybeneficial businessrelationshipcharacterizedby,among other things, a positive relationship based upon mutual trust, respect andunderstandingof each Party'sinterests, mutual cooperation, andflexibilitytoallowforthe addition of services within the scope of theServices described in this Agreement,as-4-VANOl: 2017039vllwell as the flexibility to allow for the addition or removal of Seats as may be necessary asa result of volume fluctuations and any unforeseen conditions or circumstances;(d) toallowIBMtomeetor exceed theService LevelsandtheProvince'sservicedeliveryrequirementsasdescribedinthisAgreement, toproactivelyseek _improvementsonanongoing basisin thedelivery of theServices where appropriate and possible, to providethe Services to the Province throughout the Term in a more flexible and efficient mannerthan that in which the Province has been able to provide previously, and to allow IBM tomaintain and-exceed all Service Level RequireI1!ents, outcomes and Client satisfaction;(e) to protect thesecurity and privacy of thePersonalInformation of the Province to whichIBMmay have access as a result of changes to the Services or in the procedure,applications or- technology used by IBM in performing or delivering the Services after theEffective Date, in accordance withthe Change Order Process, so that there are nocircumstances pursuant to which any such information: -(i) isdisclosedor usedcontrary totheterms of thisAgreement or any ApplicableLaws of Canada or British Columbia; or(ii) is stored or can otherwise be accessed anywhere other than in Canada, whether inits original form or otherwise;(f) toprovideforthetransitionof theServicestoIBMby theCommencementDate, andback to the Province or an Alternate Service Provider on the expiration or termination ofthis Agreement, in a manner that is efficient, enables continued and uninterrupteddelivery of such Services during each such transition, and minimizes any adverse impacton the businesses of the Province in connection therewith;(g) toimplement, to the extent possible, standardizationasa "best practice" withrespect totheworkstations, with a view tofacilitatingthe reductionof operationalandownershipcosts of the Services;(h) tofacilitatetheabilityof theProvincetocontinuetoprovidealeadershiproleinthedevelopment, communication and ongoing maintenance of standards with respect totheServices;(i) toassist the Province in establishing a framework forthe whole of government toadoptand maintain standards set by the office of the Chief Information Officer or its successor,for purposes of facilitating:(i) the ability of the Clients to maximize the value of the Services;(ii) coordinationof theClients' businessrequirementsandtheselectionand timingof new standards and technologies; and(iii) cost reductionswhileimproving theServicesandmaintainingorexceedingtheService Levels;(j) to allowtheParties tojointlymonitor andreport toClients the trends andachievedbenefits realized as a result of standardization and to thereby facilitate the activepromotion of the adoption of standards;- 5 -
(k) toadopt a technologystandard platform which willassist theleveraging of the Servicesto the Broader Public Sector in accordance with the tenns of this Agreement;(1) tofacilitatetheacceleration of onboarding of Client Ministriesand theextension of theto the Broader Public Sector using joint marketing plans and effective executionthereof, in accordance with the provisions contemplating the same under this Agreement;(nl) providing fair treatment and expanded career opportunities for the TransferredEmployees on a long-term basis;(n) toprovideIBMwithareferenceablecustomerthat builds onIBM'sexcellent servicedelivery reputation; and(0) to provide IBM with a fair and reasonable return over the term of the Agreement.ThePartiesacknowledgeandagreethat theabovenotedobjectivesarenot, assuch, intended tocreatelegal obligationsforthe Parties,but instead, areintended todocument the mutual primary objectives ofthe Parties in entering into this Agreement. The specific provisions ofthis Agreement are to beinterpretedaccordingtotheirplainmeaning, providedthat, wherethereis uncertaintyconcerningthemeaning of any specific provision, such provision is to be interpreted in light of such primary objectiyes.1.14 Co-operation of the Parties.Each party shallcooperate with theother, ingoodfaith, in theperformance of itsobligationsunder thisAgreement. Inconnectiontherewith, .eachPartyshall makeavailable, asreasonablyrequestedbytheother Party, such management decisions, information, approvals and acceptances such that the provisionof theServices under this Agreement may be accomplished in a proper, timely and efficient manner andin accordance with the processes and procedures set forth in this Agreement. Unless specifically providedotherwise in this Agreement, where agreement, approval, acceptance or consent of either Party is requiredbi any provision of this Agreement, such action shall not be unreasonably withheld or delayed.1.15 General Scope.The scope of the Services for the Term of this Agreement is as follows:(a) the Services described as being in-scope for this Agreement in the prOVISIons ofScheduleB(Services) (whichshall include, forgreatercertainty, Schedule Bl - B21);and(b) thein-scopeservicesasdescribedintheJSRFP, subjecttotheimplementation of suchservices as Project Services or in accordance with the Change Order Process.ARTICLE 2 - AGREEMENT TERM AND RENEWAL2.1 Initial Term.The Initial Term of thisshall commence on the date of this Agreement and shall continue untilthe earlier of: .(a) thedateuponwhichthisAgreement isterminatedinaccordancewith theprovisionsofthis Agreement; or- 6 -VANOl: 2017039vll(b) March 31, 2015.2.2 No Renewal Assurances.The Province is giving no assurances whatsoever to ffiM,expressed or implied, that this Agreement shallbe renewed or extended beyond theexpiry of the Initial Tenn. IBM hasarranged its business affairs onthe assumption that this Agreement shall tenninate at the end of the Initial Tenn.2.3 No Expropriation.Any tennination of this Agreement in accordance with its tenns, either at the expiry of the Initial Tenn oras otherwiseprovidedinthis Agreement, shall not constituteanexpropriationbytheProvinceor betantalTIOunt toanexpropriationbythe Province at domestic or international law(including, but notlimited to the North American FreeTrade Agreement), and shall not constitute grounds for asserting anyclaim of expropriation or similar claims under any international agreement or domestic law implementinganinternational agreement (including, butnot limitedto, ChapterElevenof theNorthAmericanFreeTrade Agreement and the General Agreement on Trade in Services). For greater clarification, theforegoing provision shall not prevent IBM from bringing forth a Dispute on the basis that a tennination ofthis Agreement bytheProvinceconstitutes aterminationfor conveniencetowhichtheprovisionsofSection18.6 (Terminationby Province forConvenience)apply, as opposed toa terminationforcause towhich the provisions ofSections 18.1 (Events ofTermination) and 18.3 (Terminationfor ChronicFailure)apply,or any other claim under domestic law with respect to tennination,other than a claim forexpropriation, andanysuchDisputeshallbedetenninedinaccordancewithitsmeritshaving regard tothe surrounding circumstances and the provisions of Article18 (Default and Termination).2.4 Renew"al Option.TheProvince, at itssoleoptionandactinginitsdiscretion, mayelectto renew theInitial Tenn of thisAgreement for one (1) additional renewal termoftwo (2) years expiring on March 31, 2017 (the"Renewal Term"), by delivering written notice of such renewal to IBM in accordance with the provisionsof Section 2.5(Renewal Notice), but subject to the provisions of Section 2.6 (Renewal Negotiations). Nosuchrenewal of theInitial Tennshall prevent eitherPartyfromexercisingitsrightstoterminatethisAgreement in accordanGe with the tenns of Article18 (Default and Termination).2.5 Renewal Notice.Where the Province intends to renew the Initial Tenn, it shall provide IBM with prior written notice of itsintent to renew theInitial Tenn not lessthan twenty-four (24)months' prior to theexpiry of theInitialTenn, beingonor beforeMarch31, 2013. If theProvincedoesnot deliversuch noticetoIBMonorbefore March 31,2013, then the Province shall be deemed to have elected not to renew the Initial Term ofthis Agreement.2.6 Renewal Negotiations.The temis and conditions ofthis Agreement shall apply during the Renewal Tennexcept for thefollowing, which may be subject to renegotiation and agreement by the parties:(a) the p r o v ~ s i o n s of Section 12.1 (Charges). and Schedule F (Charges) relating to theCharges to be paid to IBM for the Services performed during the Renewal Tenn;-7-VANOl:2017039vll(b) the provisions ofSection 6.1 (General Compliance) andSchedule D(ServiceLevels)relating to the Service Levels for the Services performed during the Renewal Term; and(c) such provisions of thisAgreement and anySchedulesattached tothisAgreement whichmay require consequential amendments as a result of the foregoing.If the Partiessuccessfullyconcludeanagreement upon theforegoing, then they shallexecutea renewalagreement (the "Renewal Agreement") on or b ~ f o r e March 31, 2014 setting forth the renegotiated tennsthat shallapply tothe Renewal Term, which termsshall be effectivefromand after April 1; 2015, beingthefirst calendardayfollowingtheexpiry of theTerm. If thePartiesfail toagreeupontheforegoingterms on or before the earlier of March 31, 2014 (or such other date as may be agreed to in writing by theParties), then thereshall be deemed to be no Renewal Term, and subject toSections 2.7 to 2.9, the Termshall expire at the end of the Initial Term or earlier in accordance with the terms of this Agreement.2.7 One Year Extension.TheProvince, at itssoleoptionand acting in itsdiscretion, mayelect toextend theInitial Term (unlesstheParties have entered into a Renewal Agreement, in which case, the Province may elect to extend theRenewal Term), for one (1) additional periodofup to twelve (12) months (the "Extension"), bydelivering written notice of such extension, including the period of such extension, to IDM in accordancewiththeprovisionsof Section 2.8 (ExtensionNotice). TheParties acknowledgethat thepurposeforgranting the Province the option to extend the Initial Term, or the Renewal Term, as the case may be, is toallow the Province to conclude any procurement or other process that it may undertake in connection withthe selection of a new service provider for the Services or the repatriation of the Services by the. Province.2.8 Extension Notice.Where the Province intends to extend the Initial Term (or the Renewal Term,as the case may be), it shallprovideIDM with prior writtennotice of itselection toextend notless thansix (6)months' prior totheexpiry of the following (as applicable):(a) the Initial Term, being on or before September 30,2014; or(b) the Renewal Term, being on or before September 30,2016;If the Provincedoes notdeliver such noticeto IBM within thetimerequired, thenthe Province shall bedeemed to have elected not to extend the Initial Term or the Renewal Term, as the case may be.2.9 Extension Terms.Unless otherwise agreed to in writing by the Parties, the terms and conditions in effect as at the end of theInitial Term or the Renewal Term, as the case may be, of thisAgreement,as may bechanged, modified,amended or supplemented, shall apply during such Extension.2.10 Termination Assistance.Following the expiry or earFer terminationofthis Agreement, IDMshall provide the TerminationServices to the Province in accordance with Article 19 (Termination Services).- 8 -VANOl:2017039vll2.11 Effect of Termination.The expiry or earlier tennination of this Agreement shall cause, and shall be deemed to cause, the expiryor earlier termination of all Transaction Documents as of the same date, except for those provisions herein(as set forth in Section 32.11(Survival)) and therein which are stated to survive termination.ARTICLE 3 - TRANSITION3.1 Transition Overview.Following the execution of thisAgreement, thePartiesshall useall reasonable efforts tocomplete theirrespective activities set forth in the Transition Plan with diligence and within the times required in respectthereof as set forth in the Transition Plan, and shall do such other acts as may be reasonably necessary toenableIBMtocompleteeachstageof theTransition Plan. IBMshallprovidetheProvincewithsuch. servicesthat arereasonablynecessarytocompletetheTransitionPlaninamanner that shall, tothegreatest extent possible minimizethedisruption tothe businessoperations of the Province. For clarity,the Parties acknowledge that the TransitionPlancomprises four (4) stages as follows: Stage 1-Employee/HR Transition; Stage 2 - Interim Services Period; Stage 3 - Process and ToolsImplementation; and Stage 4 - Workstation Refresh. The activities carried out and the Services providedby IBM tothe Province in Stage 2 through Stage 4 transitionwilloccur,in part,concurrently, providedthat the Interim Services Period shall expire upon IBM's completion of the Stage 3 activities.3.2 Modifications to Transition Plan.Notwithstandingthelevel of detail .containedintheTransitionPlan, thePartiesacknowledgethat theTransition Plan may require modification after the execution of this Agreement. The Parties shall workcooperatively together through the Governance Process during the Transition Period and shall make suchmodifications to the Transition Plan as may be mutually agreed between them. Any such modificationsshall beincorporatedintotheTransition Plan, andtheTransitionPlanshall bedeemedtobeamendedaccordingly; provided that any changes to the Commencement Date shall require the joint approval of theParties at the Joint Executive Steering Committee level through the Governance Process.3.3 Transition Requirements.The transfer of the provision and performance of theServices from the Province to IBM shall be subjecttothe satisfactionor waiver bybothParties ofeachofthe transitionrequirements set forthbelow("Transition Requirements") on or before the Commencement Date:(a) eachof theTransactionDocumentsshallhavebeenexecuted byeach of thepartiestosuch agreements and delivered to both Parties, and each Party shall be satisfied with theform and substance of such Transaction Documents;(b) evidence shall bedelivered by IBM to the Provincedemonstrating tothesatisfaction ofthe Province that: .(i)- ISM has entered into a Memorandum of Agreement with the BCGEU which willr e s u l t ~ inacollectivebargainingagreement effectiveas of theCommencementDate; and(ii) ISM has been approved as a participating member in the Public Service PensionPlan;- 9 -VANOl:2017039vll(c) all personnel who are initially assigned to IBM Key Positions, as set forthin Schedule M(KeyPositions), areemployeesof IBMorISM, asthecasemaybe, andhavebeensoappointed to such positions;(d) all transactions contemplatedin the other Transaction Documents to be completed on orbeforetheCommencementDateshall havebeencompletedinamannersatisfactory toboth Parties or both Parties are satisfied that such transactions shall be completed on theCommencement Date;(e) there has not been a material adverse change to the business or assets of IBM or ISMinthe period from the Effective Date to the Commencement Date; and(f) sincetheEffectiveDate, theProvinceshall not haveenacted, issuedorapprovedanystatute, regulation, bylaw, policy, directive, executive direction, Treasury Board decision(bymeans of directives, regulationsor otherwise) rulesor guidelinesor announcedanyproposed implementation of the same that will materially and adversely affect:(i) the Services; or(ii) the ability of IBM to provide the Services.3.4 Stage 1IBM shall take such steps as may be reasonably necessary to complete the Stage 1 transition requirementsset forth in the HRTransition Plan and each Party shall performits respective employee-relatedobligations as set out in the Master Transfer Agreement.3.5 Failure to Complete Stage 1 Transition Plan.If theTransitionRequirementshavenotbeensatisfiedor waivedby theappropriateParty, on or beforethe Commencement Date, then the Parties shall mutually agree to, either:(a) Postponement - postponetheCommencement Datetosuchreasonablelater dateas theParties maymutuallyagree, whichpostponedCommencement Dateshall beprior toMarch 31, 2005 (the "2ndCommencement Date"), in which event:(i) the Parties shall use reasonable efforts to complete the Stage1 Transition Planinaccordance with its terms, applied mutatis mutandis, on or before such postponedCommencement Date, and(ii) if the StageI Transition Plan is not completed by such postponedCommencement Date (asmay be extendedin accordance herewith up toand nolater thanthe 2ndCommencement Date), theneither Party maygivewrittennoticeof terminationof this Agreement totheotherPartyinwhichevent theprovisions of SectionI8.8(e) (Termination Fees) shall apply, or(b) Partial - if the StageI Transition Plan is substantially complete and it isreasonably practicable to do so, the Parties may agree to commence all available ServicesontheCommencement Date(the "Partial Commencement"),and touseallreasonableefforts tocompletethe outstandingobligations under the Stage 1TransitionPlan inaccordancewithitsterms, applied mutatis mutandis, after theCommencement Date and- 10-
as soon as reasonably practicable (but inany event on or before the 2ndCommencementDate), in which event the Parties shalladjust the Chargesfor the Services having regardtotheportionof suchServiceswhichhavenot beencommenced provided that, if theParties, actingreasonably, areunabletomutuallyagree uponall of theterms of thePartialCommencement of theServices asset forthabovewithinfive(5) Business Daysafter the earlier of the Commencement Date or writtennotice ofdelayhavingbeenreceived by a Party, then the Parties shall be deemed to have selected a postponement ofthe Commencement Date, in' which case the provisions of Subsection 3.5(a)(Postponement) shall apply.3.6 Stage 2 Transition.Uponthe Commencement Date, IBMshall providetheProvincewiththeinterimservices ("InterimServices") inaccordancewiththeInterimServicesPlanandshall usereasonableefforts tomeet theInterim Service Levels. The Interim Service Levelsshall be phased in, in accordance with Schedule D(Service Levels). In performing theInterim Services, liMs4all use reasonable efforts toensure, tothegreatest extent possible, the continued, uninterrupted and efficient delivery of the Services and that shallminimize the disruption to the business operations of the Province.3.7 Province License for Space.The ProvinceshallprovideIBMwith use of theSwingSpaceandtheSwingSpaceServices, asmoreparticularly described in an agreement between the Parties of even date (the "License Agreement"),forpurposes of housing the Transferred Employees and -certain additional personnel of IBM, or itsSubcontractors, required in connection with the Services. IBMshall comply, and shall cause itsSubcontractors to comply, with the provisions of Section 5.3" (Service Location Policies) in respect of itsuse, andthat of its Subcontractors, of theSwingSpace. liMshall vacatetheVictoriaSwingSpacewithin six (6) months after the Commencement Date (the "Permanent Move Date"). liM shall pay theProvince for its use of the Swing Space and the Swing Space Services in the amounts and at the times setforthin the License Agreement. UnlessthePartiesagreeotherwise in writing, liMacknowledgesandconfirmsthatit shall not bepermittedor otherwiseentitled toanyholdingover intheVictoriaSwingSpace past the Permanent Move Date. Accordingly, if IBM isunable, forany reason,tomove intotheIBM Facilities on or before the Permanent Move Date, then it shall vacate the VictoriaSwing Space bysuchdate, andshall relocateall suchpersonnel toothertemporaryspaceuntil suchtimeastheIBMFacilities are available, all at the sole cost and expense of IBM. In any event, upon vacating theSwingSpace, IBMshall leavetheSwingSpaceinthesameconditionas it wasinimmediatelypriortotheCommencement Date, normal wear and tear excepted. .3.8 Transition Costs.The Partiesacknowledge that the Base Fees set forthinSchedule F(Charges), includes allof the costsincurredbyIBM(or its Subcontractors) for completingtheTransitionPlan, inCludingall direct andindirect costs incurredinconnectionwiththeimplementationof theTransitionPlan, andthe overallmanagement of the Transition Plan, but excluding therefrom those costs identified in the Master TransferAgreement as being the responsibility of the Province.3.9' In-Flight Projects. "The Parties acknowledge that there are certain In-Flight Projects existing as of the date of this Agreementinrespect of whichtheremay beworkwhichwill notbecompletedbytheCommencementDateandwhich will constitute ongoing projects as of such date, as more particularly described in Schedule B2 (In--11-
Flight Project Services). The Parties shall handle the In-Flight Projects in accordance with the followingprinciples:(a) the Provinceshall havefinancial and operational responsibility for the In-Flight Projectsprior to the Commencement Date; and(b) from and after the Con1mencement Date:(i) IBMshallassumeoperational responsibilityfortheIn-Flight Projectsthat havenot been completed by the Commencement Date which are designated inSchedule B2(In-Flight Project Services)as being IBM In-Flight Projects, to becompleted byIBM inaccordancewith theapplicable In-Flight Projects Planforsuch In-Flight Project, and(ii) theProvinceshall maintainfinancial responsibility inrespectof suchIn-FlightProjects and shall pay for services performed by IBM in connection with such In-Flight Projectsasspecified intheapplicableIn-Flight Project Planwhichshall,forgreatercertainty, specify whethertheservicessetforthintheapplicableIn-Flight Project Plan are chargeable at a fixed price or on a time and materials basisand the amount therefore; and(c) In-Flight Projects shall otherwise be managed as set forth in the In-Flight Projects Plan.For greater certainty, the Province may, in its sole discretion, determine that it is in the best interest of theapplicable Client that all or certain in-flight projects in respect of such Client should be completed by theProvince without involvement of IBM, in which event such in-flight projects shall be excluded from theIn-Flight Projects Plan. All such matters and changes with respect to In-Flight Projects shall in each casebe recorded in the In-Flight Projects Plan.3.10 Transition Plan.IBM' shall deliveradraft of theTransition Plan totheProvinceonor beforetheCommencement Date.IBM and the Province shall mutually approve the Transition Plan within ten (10) Business Days after theCommencement Date. .The Transition Plan shailformthe basisforIBManditsSubcontractors and theProvince to develop the detailed transition project plan that will be completed and approved by the Partieswithin thirty (30) Business Days after Commencement Date.ARTICLE 4 - SERVICES4.1 Overview of Services.Subject to a partial commencement of the Services pursuant to Article 3 (Transition) and to thetransformation of the Services during the Term in accordance with the provisions of this Agreement, IBMshallprovide tothe Province, and theProvinceshallobtainfromIBM, thefollowingServices fromandafter the Commencement Date, upon the terms and conditions set forth in this Agreement:(a) the Transition Services, as more particularly described in Schedule Z (Transition);(b) the Services, as more particularly described in Schedules B1- B21 (Services);- 12 -VANOl: 2017039vll(c) the Termination Services, as more particularlydescribed inArticle 19 (TerminationServices);and(d) such other services or additional services as may beagreed to by the Parties pursuant tothe Change Order Process under Article17 (Change Management).4.2 Included or Inherent Services.TheParties aclmowledgethat there are functions or tasks not specificallylistedor describedinthisAgreement that are customarily required for the proper performance and provision of the Services, or asmay otherwise be required to perform theServices in a manner consistent with the performance thereofby theProvince in the twelve(12) month period prior to the Commencement Date (as thesame may beimproved, changed or transformed as contemplated under this Agreement). Without limiting theforegoing and subject to the provisions of this Section 4.2 (Included or Inherent Services), such functionsor tasks shall be deemed to be implied or included in the scope of the services to the same extent and inthe same manner as ifthose functions or tasks hadbeenspecificallydescribed inthis Agreement.Notwithstanding the foregoing, this Section 4.2 (Included or Inherent Services) is not intended to expandthe scope of the services beyond the Services described in this Agreement, or to require a higher standardof service delivery than that which is otherwise described in this Agreement.4.3 Services Changes.Allchanges, modifications,amendmentsor supplements to theServices provided under thisAgreementshall be undertaken in accordance with the Operational Change Management Process or the Change OrderProcess described in Article 17 (Change Management).4.4 Continuous Improvement Recommendations.Aspart of theServicesIDMshall, fromtimetotime as it maydeemtobeappropriatebut not lessfrequently than annually, make recommendations to the Province for improvements to the Services basedupon known changes and trends of which IDM has lmowledge(after making due enquiry) in the field ofworkstation support servicesand relevant available new technologies. Recommendations made by IDMunderthis SectionmaybeapprovedbytheProvinceinaccordancewiththeGovernanceProcessandimplementedin accordance with the Change Order Process. Uponthe completion of theChange OrderProcess, the descriptions of the Services as set forth in this Agreement, or in documents referenced in thisAgreement, shall be deemed to be amended accordingly.4.5 Quality Management.In providing the Services to the Province during the Term, IDM shall:(a) be responsible for implementingprograms, practices andmethodologies for ongoingquality management and improvement for the Services; and(b) monitor quality management progress through Service Level reporting.4.6 Documentation and Ongoing Knowledge Exchange.IBMshall maintain documentation relevant to the delivery of theServices, such documentation to be intheformof theProcessInterfaceManual, as updatedbyIDMfromtimetotimeinaccordancewithSchedule B-14 (CommonServices). The Process Interface Manual is intended to enable the Province to- 13 - .
understandthetechnical, operational andbusiness componentsof theServices. Inaddition, ongoingknowledgeexchangebetweenthePartiesshall beaccomplishedthroughthe joint periodicreviewandupdateof theProcessInterfaceManual andthroughongoingregularlyscheduled joint operationsandreporting forums, in the form of meetings and other communications between the Parties. The provisionsset forth in this Section 4.6 (Documentationand Ongoing Knowledge Exchange) are intended to describeto the Province how the Province and IDM will interact during the delivery of the Services over the Term.Nothing in this Section 4.6 (Documentation and Ongoing Knowledge Exchange) shall be interpreted so asto relieve either Partyof any of its performance obligations under this Agreement. The Partiesacknowledgethat atnotimewill thedocumentationset forthinthisSection4.6 (DocumentationandOngoing Knowledge Exchange) include IDM Confidential Information or IDM proprietary information.4.7 Province Retained Responsibilities.During the Term, the Province shall remain responsible for and shall retain control of:(a) the obligations of the Province set frth in any Schedules to this Agreement;(b) setting of all Province policies and guidelines including, without limitation, relating to theServices, records management, and privacy and security;(c) relations with Clients, Ministries and Broader Public Sector;(d) any agreements between the Province and Client Ministries relating to the Services;(e) approval of theannouncements, publicnoticesandother publicity materials relatingtothis Agreement or the transactions contemplated by this Agreement in which theProvince'snameorProvinceMarks aremaintainedinaccordancewithSection32.19(Publicity);(f) theexerciseof powers for andonbehalf of HerMajestytheQueeninRight of theProvince of British Columbia, as represented by the Minister of the ManagementServices; and(g) such other direct responsibilities as may be expressly contemplated in this Agreement.TheParties acknowledge that these responsibilitiesare vested solely in the Province. IBM has no rightnor obligationinrespect of anyresponsibilitiesof theProvinceset forthinthisSection 4.7(ProvinceRetained Responsibilities) and shall not be accountable for any actions taken by the Province in respect ofthe same.ARTICLE 5 - SERVICE AND DATA LOCATIONS5.1 Overview of Service Locations.NoServicesshall beprovidedorperformedbyIDMat anylocationoutsideof Canada. Theon-siteServices provided by IBM or its Subcontractors to the Clients or Ministries shall at all times be providedby IDM to such Clients in British Columbia.- 14 -VANOl: 2017039vll5.2 Relocation of IBM Service Locations.Subject to the requirements of Sections 5.1(Overview of Service Locations), IBM may relocate the IBMFacilities at any time upon prior written notice thereof to the Province, provided that the relocation of theIBM Facilities outside of British Columbia shall be subject to the prior written approval of the Province.5.3 Service Location Policies.At all timeswhileaccessing any premises of the other Party (including any Subcontractors of that otherParty)inconnectionwith theServicesbeingperformed under thisAgreement, orasmayotherwisebecontemplated under this Agreement, each Party shall, and shall cause their respective Personnel,Subcontractors, representatives or other parties for whom they are responsible at law or under the terms ofthisAgreelnent, tocomplywithanystandardworkplacesecurity, safety, operational andothersimilarpolicies and procedures applicable to visitors for such Party, as may be provided, in writing by each Partyto the other from time to time. For darity, the foregoing shall not limit or otherwise prohibit the Provinceor its representatives from accessing information that is properly within the scope of an audit,investigation or inspectionunder Article 15 (Maintenance of Records andAudit Rights) when theProvince or its representatives require access to the same for purposes of conducting an audit, inspectionor investigation under Article15(Maintenance ofRecords and Audit Rights),.provided that the Provinceor its representatives comply with IBM's standard policies and procedures referred to above.5.4 Access to Province Locations.During the Telm, the Province shall provide IBM with access to Province Facilities and service locationsas may be required by IBMfor purposes ofperforming the Services, including, for purposes ofperforming the desk-side support services for Province employees and/or Clients.ARTICLE 6 - SERVICE LEVELS6.1 General Compliance.IBM acknowledges that the establishment of the Service Levels is a matter of fundamental importance tothe Province. The Parties acknowledge and agree that:(a) theService Levels are comprised of the:(i) specific Service Level Requirements set forth in Section 3.0 ofSchedule D(Service Levels); and(ii) ServiceLevel Objectives (beingperformancemeasures andindicators) as setforth in Section 3.0 ofSchedule D (Service Levels);(b) fromandafter the Interim Service Level Period, IBMshall useall reasonableefforts toperform the Services to a standard and level of performance which is required to meet orexceed the relevant Service Level Requirements and the Service Level Objectives for theServices, unless otherwise mutually agreed in writing by the Parties;(c) theServiceLevels set out inthisAgreement, asmaybeamendedfromtimetotimethrough the Change Order Process in accordance with this Agreement,are intended to bebaseline performance standards and levels for the delivery and performance of theServices;- 15 -VANOI:2017039vll(d) duringtheTerm, IBMshall usereasonablecommercial effortstoidentifyactions andopportunitiestoimproveor increasetheAchievedServiceLevels, on anongoing basis,includingmonitoringandevaluatingchangesand trendsintheindustry and monitoringand evaluating newand available technologies and service delivery processes andstrategies that are applicable to the Services;(e) during the Term, IBMshalluse reasonablecommercialeffortsto improve the AchievedService Levels, on an ongoing basis, in a manner consistent with the terms and intent ofthisAgreement, actingreasonablyandtakingintoaccountthecost ascomparedtothebenefit of such improvements; and(f) anyimprovements inAchievedServices Levels or performance standards andlevelsachieved by IBM, whether or notaspart of any progressiveimprovement requirementscontemplatedinthisAgreement, will notresult inanincreaseintheChargespayableunder this Agreement unless otherwise agreed to by the Province in writing.6.2 Interim Service Level Targets.Effective as of the Commencement Date and for a period of twenty-four (24) months after theCommencement Date (the "Interim Service Level Period"), IBM shall use reasonable efforts to performtheServicesat or abovetheperformancestandard and level of theInterim Service Level Targetsassetforth inSchedule D(ServiceLevels). IBMshall measUreits Service Level performanceduringtheInterimServiceLevel Periodfor monitoringpurposesusingtheProvince'smeasuringandmonitoringtoolsand processesineffectasof theCommencement Dateuntil theIBMservice level measuringandmonitoringtoolshavebeenimplementedandareoperational, whichshallbenolaterthantwenty-four(24) months after the Commencement Date. For greater clarity, the Parties acknowledge and agree that ifIBMfails tomeet anyoneormoreServiceLevel Requirements, ServiceLevel ObjectivesorInterimServiceLevel Targets duringthe InterimServiceLevel Period, the Province shall not beentitledtoService Level Credits or to terminate the Agreement for Chronic Failure.6.3 Monitoring.From and after the Interim Service Level Period, IBM shallestablish and maintainin place, at all times,thetoolsandprocessesnecessarytomonitorandevaluatetheachievement of theSemceLevelsonamonthly basis, in order to permit IBM to satisfy its reporting obligations under Schedule S (Reporting) tothis Agreement. The Province acknowledges that, as of the Effective Date, the reporting obligations underSchedule S (Reporting) to this Agreement are sufficient to allow it to:(a) evaluate Achieved Service Levels;(b) satisfy its reporting obligations;(c) respondtoenquiresfromtheClient MinistriesortheProvincecustomersinrespect ofIBM's performance of the Services; and(d) confirm and verify Achieved Service Levels in respect of any Service Level from time totime upon reasonable notice.- 16 -VANOl: 2017039vll6.4 Reports of Achieved Service Levels.Without limitingtheapplication of Section 6.3(Monitoring), beginning nolater thanthesecond monthafter completionof theInterimServiceLevel Periodandmonthlythereafter, IBMshall prepareanddeliver totheProvince. standardreports smnmarizingIBM's performanceduringthe previous monthagainst the Service Level Requirements and the Service Level Objectives, in such form and content as setout inScheduleS(Reporting), or suchotherformandcontent asthePartiesmayagreethroughtheGovernance Process, and shall make such reports available to the Province by the tenth (10) Business Dayafter the end of each month or as otherwise agreed by the Paliies through the Governance Process.6.5 Reports of Service Level Failures.TheReportsreferredtoinSection 6.4(Reports of AchievedServiceLevels) aboveshall identifyeachfailure to meet a Service Level of which IBM is aware in respect of the provision of a Service.' IBM shallprovide reasonable detail as to such failure in order to allow the Parties to evaluate the remedies availableasa result of such failure, and for the Provincetocommun,icate with or respond to the applicableClientMinistry in respect of such failure, to cooperate to rectify and remediate the cause of such failure, and toprevent similar failuresin thefuture. Such reportsshallincludea description of themeasures takenorplanned tobetaken by IBMtorectifyand remedyeachfailuretomeetaServiceLevel (including thetimelines in which such measures were or will be taken).6.6 Problem Alert and Escalation Procedures.Fromandafter theCommencement Date, IBMshall develop, implement, maintainandcomplywithproblem alert, escalation,and management procedures mutually agreed upon by the Parties from time totime(acting reasonably) through the Governance Process and having consideration for the provisions ofSchedule B14 (Common Services) (the "Problem Alert and Escalation Procedures"). In the event thatIBM becomes aware of any event, occurrence, error, deficiency, defect, interruption, malfunction or other -similar matterwith respect totheServices, oranyotherorservice provided by aSubcontractor or anyother Person which is related toor otherwiseimpacts theServices, andwhich IBM reasonably believescouldhave amaterial adverse effect onthedeliveryof the Services (a"Problem"), thenIBMshallpromptly notify the Province through the Joint Program Office of such Problem.6.7 Problem Management and Root Cause Analysis.Intheevent of aProblem, IBMshall treat theProblemasapriority, shall workdiligentlyt6avert orminimize any adverse effect that the Problem may have on the performance of the Services at the ServiceLevels. Upon the occurrence of any Problem, IBM shall perform a root cause analysis in respect thereofassoon as practicable, for purPoses of identifying the cause of such Problem, and in order toassist IBMin developingandimplementingaproposal for correctingtheProblemandimplementingimprovedprocesses to detect and avoid similar Problems in the future. IBM will correct Problems and shall use allreasonableeffortstominimizereoccurrenceof ProblemsforwhichIBMisresponsible. TheProvinceagrees to correct and use all reasonable efforts to minimize problems for which the Province isresponsible and that prevent IBM from meeting the Service Levels.6.8 Service Level Classifications.All Service LevelRequirementsshallbedesignatedasLevelA, B orC. Asof theEffective Date, thePerformanceMeasureforeachServiceLevelRequirement isset forthinSchedule D(ServiceLevels).IBMacknowledgesthat theProvinceshallproposeappropriateServiceLeveldesignationsforany newServiceLevelRequirementsaddedatanytimeduring the Term whichshall be reviewed by theParties- 17 -VANOl: 2017039vllthroughtheJoint ProgramOfficeandin1plementedinaccordance with theChangeOrder Process. TheJoint ProgramOffice shall also determine, and may fromtime to time modify if appropriate, themechanism for determining the designation that should be given to a new Service Level Requirement.6.9 Chronic Failure.A "Chronic Failure" shall be deemed to occur in any of the following circumstances:(a) LevelAService Level Failure: failure of thesame LevelAService Level Requirementfor three (3) consecutive months or failure of the same Level A Service LevelRequirement that occurs four (4) or more times in any twelve (12) month period;(b) LevelBService Level Failure: failure of thesameLevelBService LevelRequirementfor four (4) consecutive months or failure of the same Level B Service LevelRequirement that occurs five (5) or more times in any twelve (12) month period; or(c) Level CServiceLevel Failure: failure of thesameLevel CService LevelRequirementfor six (6) consecutive months or failure of the same Level C Service Level Requirementthat occurs seven (7) or more times in any twelve (12) month period.Intheevent of aChronicFailureunderthisSection6.9(ChronicFailure) theProvinceshall havetheright, inits discretion, to terminate the Agreement without liabilityfor anypayment to IBMor itsSubcontractors, relating. to, in connection with or arising out of the Province's termination ofthisAgreement for ChronicFailure, otherthanpayment forTerminationServicesas set out inArticle 19(TerminationServices). For certainty, the foregoingright of termination shall be the Province's sole andexclusive remedy for Chronic Failure.6.10 Remediation Plan.IBM agrees that in addition to the obligations otherwise set forth in this Article 6 (Service Levels) it shallpromptlypreparearemediationplan (the"Remediation Plan")anddeliver the same to theProvinceinany of the following circumstances:(a) Level A Service Levels: a failure of a Level A Service Level Requirement occurs;(b) Level BService Levels: failure of the same Level BService Level Requirement for two(2) consecutivemonthsorfailureof thesameLevel BServiceLevel Requirementthatoccurs three (3) or more times in any twelve (12) months period; or(c) Level C Service Levels: failure of the same Level C Service Level Requirement for three(3) consecutivemonthsorfailureof thesameLevel CServiceLevel Requirementthatoccurs four (4) or more times in any twelve (12) month period.6.11 Service Level Credits.IBMacknowledges that shpuldit fail toachieve a ServiceLevel Requirement, theProvincemaybedamaged by such failure. the precise amount of such damages, if any, would be difficult, in mostcases, toascertain, IBMagreesthat intheevent of suchfailuretheProvincewill, inlieuof all otherremediesavailabletotheProvince, receiveaservicelevel credit("ServiceLevel Credit")against anyamounts owing to IBM under this Agreement, as its sole and exclusive remedy with respect to the failurefor which the Service Level Credits are payable, in accordance with this Section as follows:- 18 -
(a) IBM'sfailuretomeetanyServiceLevel Requiren1entsshallnot entitletheProvincetoanyService Level Credits unless suchfailure occurs after the InterimService LevelPeriod;(b) for clarity,Service Level Credits may only be earned in the event of a failure by IBM tomeet a Service Level Requirement not a Service Level Objective;(c) the monthly maximum Service Level Credits to which the Province shall be entitled shallnot exceed fivepercent (5%) of the Base Monthly Fees (the "At Risk Amount")for themonth in which such Service Level Requirement failure occurred;(d) theProvincehas attachedweightings totheServiceLevel Requirements. ThePartiesmay mutually agree to redistribute the weightings attached to the Service LevelRequirements, provided that theaggregate weightingsmay not exceed twohundredandthirty percentage (230%) points;(e) if IBM fails tomeet any Service Level Requirement in any given month, then subject toparagraphs6.11 (g)and6.11 (h)of thisSection, theProvinceshall earnaServiceLevelCredit in respect of such missed Service Level Requirement equal to the product of:(i) the weighting attached to the missed Service Level Requirement, and(ii) the At Risk Amount.If IBMfails tomeet morethanoneServiceLevel Requirement inagivenmonth, theProvince shall earn the sum of the number of Service Level Credits corresponding to thenumber offailedService LevelRequirements, providedthattheProvincemay not earnmore than the At Risk Amount in Service Level Credits in any month;(f) IBMshall beentitledtoearncredits for eachServiceLevel Requirement whereIBMmeets or exceeds that same Service Level Requirement in a period of six (6) consecutivemonths ("Banked Credits" and each a "Banked Credit"), to be applied by IBM to offsetService Level Credits for that same Service Level Requirement as set out inSubsection (g) of this Section. Banked Credits shall be earned as follows:(i) ifIBMmeets or exceeds the same Service Level Requirement for any sixconsecutive months (the"BankedCredit Period") IBMshall eanl one IBMService Level Credit for that Service Level Requirement;(ii) calculation ofthe Banked Credit Period shall begin for each Service LevelRequirement in the eighteenth month after the Commencement Date;(iii) uponmeeting or exceeding the same Service Level Requirement for six (6)consecutive months and earning a Banked Credit for that Service LevelRequirement, calculation of the Banked Credit Period shall begin again;(iv) in the..event IBM should failto meet a Service Level Requirement in any month,calculation of the Banked Credit Period for that Service Level Requirement shallbegin again;- 19 -VANOl:2017039vll(v) IBMmayaccumulateuptoamaximumof three(3) BankedCredits for eachService Level Requirement at any given tin1e. Upon accumulating three (3)BankedCredits for anyService Level Requirement, IBMshall not earnanyfurther Banked Credits for that Service Level Requirement until such time as oneormoreof accumulatedBankedCredits is utilized. IBMmaythereuponearnfurther Banked Credits, up to the maximumof three (3), as set out inSubsection (i) above.(g) if IBMfails tomeet anyServiceLevel Requirement inanygivenmonthentitlingtheProvincetoaServiceLevel Credit, thenIBMmayapplya BankedCreditforthesameService Level Requirement, if any, against such Service Level Credit, in accordance withparagraph (h) below;(h) if IBM has accumulated Banked.Credits for a particular Service Level Requirement, thennotwithstandingthattheProvincehasearnedaServiceLevel Credit inrespect of suchService Level Requirement in any given month, IBMshall be released fromtheobligationtopaythe Service Level Credit bysettingoffaBankedCredit against aService Level Credit for suchServiceRequirement; providedthat IBMshall not beentitledtoapplyaBankedCredit against aServiceLevel Credit, for anyoneServiceLevel Requirement,in two (2) consecutive months;(i) upontheoccurrence of asingle problem thatcausesafailurein multipleServiceLevelRequirements, the Province may only earn one (1) Service Level Credit in respect of one(and not all)of suchaffectedServiceLevel Requirements, whichServiceLevel Creditshall be selected and by the Province in its sole discretion; and(j) within thirty (30)daysafter theend of each month, the Parties shallmakeall necessaryadjustments to theService LevelCreditsascontemplated in Subsection 6.11(h) (ServiceLevel Credits) above, andanyServiceLevel Creditsremainingafter suchadjustmentshallbeset-off against ChargesinaccordancewithSection12.6 (Rectification and Set-Off).Notwithstanding the foregoing, and forgreater certainty, IBM shall useall reasonable efforts to meet allServiceLevels, whether ornot suchServiceLevels constituteaServiceLevel Requirement towhichService Level Credits apply.6.12 Relief.IBMwill berelievedof responsibilityfor meetinganyServiceLevels andfor anyassociatedServiceLevel Credits or other remedies:(a) to the extent affected by problems caused by the actions or inaction of the Province or theClientMinistries, third-partyvendors(excludingtheSubcontractors) andsuppliers, theProvince'sprioritization of availableresourcesor refusal toimplementaChangeOrdernecessaryto meet Service Levels,. or circumstances that constitute a Force MajeureEvent.(b) where, in any month, the relevant Baseline hasbeen exceeded in such month, providedthat, if the Parties agree that a Baseline has been exceeded as a result of an extraordinaryevent, the period of timeaffected by theextraordinary event shall be excluded fromthecalculation of such Service Level Attainment.- 20-VANOl: 2017039vll6.13 Joint Review of Service Levels.ThePartiesacknowledgethattheServiceLevelsareintendedtobecomprehensive, however, itistheintentionof thePartiesthat duringtheTermthePartiesmayagreetodifferent oradditional ServiceLevels in respect of any of the Services. Accordingly, on an annual basis during the Term, and pursuantto the Governance Process, the Parties shall jointly review:(a) the then-current Service Levels;(b) generallyavailable informationindicatingindustry-wide improvements indeliveryofsubstantiallysimilar services (including' anyavailableservicelevel informationintheBenchmarker's report commissioned in accordance with Article 9 (Benchmarking); and '(c) improved performance capabilities, including those associated with advances intechnology and methods used to provide the Services.On the basis of such review,the Parties shalldiscuss and agree upon whether any of the Service Levels. shall be adjusted. In determining whether an adjustment under this Section 6.13 (Joint RevIew ofServiceLevels) is warranted, the Parties shall take into consideration the relationship between the existing ServiceLevel Requirements and the remedies for failure to obtain such Service Level Requirements as set forth inthis Agreement as of the Effective Date. Any such adjustment shall be subject to the mutual agreement ofthe Parties in accordance with the Governance Process and as documented by a Change Order:6.14 Customer Satisfaction.IBM shallcooperate with the Province toobtain information concerning thelevels of client satisfactionwith the Services, including the following:(a) assistingthe Province to surveyMinistries as to their level ofsatisfactionwiththe.performance of the Services; and(b) tracking customer complaints received through the Weeldy Electronic Survey asdescribedinScheduleD(ServiceLeveli), as well as assistingtheProvincewiththeresponse to and handling of such complaints.Customer satisfaction surveys shall be conducted annually, unless the Parties mutually agree otherwise inwriting. The resultsof any satisfactionsurveysshallbe reviewed by thePartiesthrough theJoint Program Office. If the results of the survey indicate a decrease in the level of customer satisfaction,then within two (2) months of receipt of the survey results, IBM shall design and propose a remedial plan(in consultation with the Province through theGovernance Process) to increase customer satisfaction ofthe applicable Ministries. IBM shall implement the same in accordance with the Change Order Process.ARTICLE 7 - BUSINESS CONTINUITY AND RECOVERY7.1 Acknowledgement.For purposes of this Article7, (BusinessContinuity and Recovery), the Province and IBM recognize theimportance of recovering Sernces asquickly as reasonably possible in the event of a service disruption.The Province has not provided IBM with a comprehensive plan for recovering the services in the event ofaservice disruption. Duringtheperiodfromandafter the Commencement Date, inthe event of a- 21 -
disruptioninthecontinuity of theServices, as aresult of adisaster orotherwise, thenIBMshall usecommercially reasonable efforts to recover the Services.7.2 Services Recovery Management.InaccordancewithScheduleX(ServicesRecovery), IBMshall developaservicesrecoveryplanandmaintainsuchservices recovery plan fortheServices(the "mM Services RecoveryPlan"). Promptlyuponcompletion, IBMshall provide acopyof IBMServices RecoveryPlantotheProvincefor itsreview. If the Province identifies additional requirements forServices recovery planning over and abovethestandard IBM Services Recovery Plan, whether required for the Province generally or for a particularClientMinistry, theyshall beidentifiedthroughtheGovernanceProcessand, if agreed, implementedthrough the Change Order Process.7.3 Roles and Responsibilities.After completionof theIBMServicesRecoveryPlan, theroles andresponsibilitiesof theParties inrespect of the business continuity planning for the Services shall be as follows:(a) the roles and responsibilities of the Province are as follows:(i) to lead the Client Ministry's business continuity and services recovery planning,(ii) toprovideProvinceservicesrecoverystandardsandtemplatestoIBM if and tothe extent that the Province requires that IBM use or follow the same, which shallbe implemented through the Change Order Process,(iii) to provide business continuity planning for any services or functions retained bythe Province relating to the Services,(iv) to communicate with Client Ministries with respect to the integration andco-ordinationof theClientMinistries' servicerecoveryplanningandtheIBMServices Recovery Plan,(v) tonotify IBMintheevent of thedeclaration of a Disaster that may requiretheresulting activation of the IBM Services Recovery Plan, and(vi) to communicate requested changes to Recovery Time Objectives in respect of theIBM Services Recovery Plan, for consideration in consultation with IBM throughthe Governance Process as set out in Section 7.4 (Recovery Time Objectives); and(b) the roles and responsibilities of IBM are as follows:(i) to assess the requirements of the Ministrypolicy in accordance with Schedule X(Services Recovery), provided that any changes to Ministrypolicy shall beimplemented in accordance with the Change Order Process,(ii) toensurethat its Subcontractorsareabletomeettherequirementsof theIBMServices Recovery Plan to the extent applicable to them,(iii) to notifythe Province (through the Joint ProgramOffice) in the event ofaDisaster and the resulting activation of the IBM Services Recovery Plan, and- 22-
(iv) to ensure the preparedness andabilityofIBMtoexecute, the IBMServicesRecovery Plan.7.4 Recovery Time Objectives.The Recovery Time Objectives for the IBM Services Recovery Plan for the Services shall be as set forthinExhibit AtoScheduleX(Services Recovery). IneachContract Year, thePartiesshall reviewtheRecovery Time ObjectivesfOf theIBMServices Recovery Plan, and may, subject to mutual agreement,revise the Recovery Time Objectives through the Change Order Process. Any revisions so agreed to shallthereafter bedeemed toform part of theIBMServices Recovery Plan.Notwithstanding that the Partieshave identifiedspecific RecoveryTime Objectives, IBMshall use reasonable commercial efforts toensure that all Service interruptions are resolved as promptly as possible in the circumstances.7.5 Testing of IBM Services Recovery Plan.The testing of the IBM Services Recovery Plan shall be performed by IBM in accordance with the testingrequirementsset out in the IBMServices Recovery Plan, and,if and where the IBMServices RecoveryPlanrequires Provinceinvolvement, shall consist of process walkthroughanaawareness training(asopposedtofull production testing)withtheProvince. Such testingshall includethefollowing(totheextent consistent with the foregoing and applicable to IBM:(a) IBMshall completeatest of theIBM RecoveryPlanwithinthree(3)monthsfollowing the completion of IBM Services Recovery Plan;(b) IBMshall test theIBMServices RecoveryPlanat least onceineachContract Yearfollowing the initial test described in paragraph (a) above;(c) IBMshall complete a test of theIBMServices Recovery Plan within sixty (60) days ofimplementinganymaterial change inrespect of the Services (includinganymaterialchange in the technology, processes, facilities, infrastructure or Recovery TimeObjectives), for purposes ofdeterminingthe impact ofsuchmaterial changes to theServices and the effectiveness ofthe IBM Services Recovery Plan in respect thereof;(d) the Province shall have the right to participate in any testingofthe IBMServicesRecoveryPlanasanobserverinthetestingprocessandtoreviewanyresultsof suchtesting; and(e) IBM shall prepare and submit to the Province (through the Joint Program Office) withinthirty (30) days ofany testing conductedby IBMinrespect ofthe IBMServicesRecovery Plan, a report detailing the results of such testing and listing any deficiencies inrespectthereof, together withIBM'sproposedactionplanandassignedresponsibilitiesand timelines that shall be undertaken by IBM to address such deficiencies.7.6 Eusiness Continuity Representative.IBM and the Province shall each designate a "Business Continuity Representative", to be responsible forthe updating, testing and implementing of the IBM Services Recovery Plan, to act as the liaison betweentheParties(throughtheJointProgramOffice)toensuretheintegration of theIBMServicesRecoveryPlan with the business continuity plans of the Province, and assume responsibility for the coordination ofrecovery services as contemplated under this Article 7 (Business Continuity and Recovery), from and afterthe Commencement Date.- 23 -
7.7 Actual Disaster.The determinationas to whether a Disaster related to the Services has occurred shall be the soledetermination of the Province. In the event of a Disaster:(a) if either Party is prevented from, or delayedin, performingany of itsobligations undertheAgreement, thentheParty claimingsuchdisruptionshallpromptlynotify theotherPartythereof, andshallprovidetheotherPartywithafollow-upwrittennoticewithinfive(5)days of such Party becoming aware of the potential disruption, non-performanceordelay, theparticularsthereof includingreasonabledetailsof thenatureof theeventcausing the same, its expected duration and the obligations under this Agreement that willbe affected as a result thereof;(b) thePartyclaimingthedisruptionunderparagraph(a) aboveshall continuetoprovidereasonablestatus updatestotheother Party with respect tosuch disruption, on a timelybasis during the continuance of such disruption;(c) IBM, shall use all commercially reasonable efforts (including the redeployment orreassignment of other availableIBMor ISM personnel, having regard to the natureandextent of theDisaster andits impact onthe Province andother Client Ministries) toprovide delivery of the Critical Services in accordance with the Recovery TimeObjectives and use commercially reasonable efforts to restore allServices in accordancewith the illM Services Recovery Plan;(d) to the extent that suchDisaster is not addressed or not fully addressedin the illMServices Recovery Plan, illM shall use all commercially reasonable efforts to restore theServices;(e) within thirty (30) days of the recovery of the Services as a result of the implementation oftheillMServices RecoveryPlan, illMshall providetheProvince (throughtheJointProgram Office) with a written report detailing the reasonsfor the execution of the illMServices Recovery Plan, the steps taken by illM in respect thereof, and anyrecommendations that illMmay have with respect to improving the illMServicesRecovery Plan (including the responsibilities and timelines referred to therein); and(f) notwithstanding the foregoing, the Province shall retain the right to conduct anOperational Audit, sign-off andconfirmthefull recoveryof theServicesfollowingtheexecution of an illM Services Recovery Plan.ARTICLE 8 - RELATIONSIDP MANAGEMENT AND HUMAN RESOURCES8.1 Governance.Forthwithupontheexecutionof this Agreement, theParties shall establishagovernancestructureinaccordance with the governance framework described in the attached Schedule P (Governance). DuringtheTerm, the relationship of the P a ~ i e s shall beexpresslygoverned bytheprovisions of thisArticle8(RelationshipManagement a11;,dHumanResources) andtheprocesses andprocedures set forthin, orotherwise established by the Parties in accordance with the framework described in, the attachedSchedule P (Governance),as such schedule may be amended and supplemented by the Parties from timeto time in accordance with this Agreement.- 24-VANOl:2017039vll8.2 Power and Authority of mM.Exceptas set forth in Section 8.5 (Required Province Approval) and subject to the terms of thisAgreement, liMshall havethepower andauthoritytotakesuchactions asit deems tobeprudent,necessary or advisableto perform theServices inaccordancewith thetermsand conditionsset forthinthis Agreement including, without limitation, the Services Levels.8.3 Province's Right to Issue'Directives.The Province may,fromtime to time, at ffiM'srequest or at the Province's own initiative,issue writtendirectives and instructions and establish written policies and procedures relating to IBM's performance ofor delivery of the Services (including procedures with respect to confidentiality, privacy and security), inorder toensure that theServices performed by liMcomply with theProvince policies, whichshall beimplemented in accordance with the Change Order Process. The Province shall provide timely notice toliM of any such written directives, instructions, policies and procedures. liM shall indicate, in writing,itsintent to act in accordance with such written directives, instructions, policies and procedures which ithas receivedfromtheProvince, provided that theyshall not obligeIBMto perform anyServicethat isoutside the scope of the services provided for under the terms of the JSRFP.8.4 Reliance on Instructions.In performing itsobligationsunder thisAgreement, IBMshall beentitled to rely uponany instructions,authorizations, approvals or other informationprovidedto IBMbythe Province fromtime to timethrough the established governance channels described in Schedule P (Governance), or suchotherauthorized personnel as may be specifically identified in this Agreement, or agreed by the Parties.8.5 Required Province Approval.IBM shall not undertake any of the following matters without the prior approval of the Province throughthe Governance Process or as may otherwise be specifically provided in this Agreement:(a) those matters specifically identified in this Agreement as requiring the approval or otherauthorization or consent of the Province;(b) soliciting Clients (Client Ministries/BCBroader Public Sector) for potential projectservices within the scope of Services under this Agreement; or(c) making or agreeing to make any capital expenditure on behalf of the Province.8.6 Key Positions.The initial IBM Key Positions and the initial Province Key Position$, as well as the personnel assigned tosuch KeyPositions, areidentifiedin theattached Schedule M(KeyPositions). The Parties may, fromtime to timethrough the Joint Program Office mutually agree to redesignate the positions that constituteKey Positions. Recognizing the importance of executive continuity to the ongoing success of the Parties'relationship and the of the Services under this Agreement, the Parties shall use all reasonableefforts to minimize turnover of personnel in their respective Key Positions in order to maintain continuitywith respect thereto. Furthermore, IBM shall use all reasonable efforts to ensure that there is no turnoverintheIBMKeyPositionsfor therespectiveperiodssetforthinSchedule M(KeyPositions) for eachIBMKeyPosition. At all times duringtheTerm, theParties shall ensurethat their respectiveKey- 25 -VANOl:2017039vllPositionsareappropriately staffed with personnel of suitableskill, and availableduring such reasonabletimes as may be necessary to ensure the continuous and uninterrupted provision of the Services.8.7 Changes in Province Key Positions.Personnel changesinrespectof such Province Key Positionsshallbeimplemented bytheProvinceinaccordancewiththefollowing, whichshall applytotheWSSLOBExecutiveandDeliveryMariagerduringtheTransitionPeriod, andtothe DeliveryManager duringthe Termofthe Agreement, andprovided that such Province Key Positionsare notfilledby appointments made by way of anOrder-in-Council:(a) theProvincemayreplaceapersonholdingaProvinceKeyPositionorappoint anewperson to fill a vacancy caused by the resignation or other departure of a person holding aProvince Key Position, provided that:(i) the Province provides IBMwith reasonable pnor written notice thereof, ifpossible, and(ii) the Province provides IBM with theopportunity toconsult with the Province inrespect of the hiring or appointment of a successor to a Province Key Position;(b) in the event of an extended and unexpected absence of the incumbent in a Province KeyPosition, theProvinceshall forthwithadviseIBM of such absenceand thePartiesshallconsult with each other as to the appropriate steps to be taken by the Province in respectof such absence; and(c) any person assigned to a Province Key Position that is vacated for any reason shall be ofequal or better qualifications as the personwhopreviouslyheldsuchposition, withappropriateexperience, and such personshall besuitably trainedand transitioned to theProvince Key Position.8.8 Changes in mMKey Positions.The Province has entered into this Agreement in reliance upon and with the expectation that the personnelin the IBM Key Positions shall be engaged in the provision of the Services to the Province for the periodsspecified in Schedule M(KeyPositions), andwith theexpectation of reasonablecontinuityin theIBMKey Positions during suchperiods. Accordingly, personnel changes inrespect of suchIBMKeyPositions shall beimplementedbyIBMinaccordancewiththe following, whichshall applyfor therespective periods specified in Schedule M(Key Positions) for each IBM Key Position: .(a) IBM may replace a person holding an IBM Key Position or appoint a new person to fill a caused bytheresignationorotherdepartureof a personholdinganffiMKeyPosition, provided that:(i) IBMprovides the Province with reasonable prior written notice thereof, if together with relevant information regarding the backgroundqualif)cations of the person that IBM wishes to appoint in the IBM Key Position,and other informationregardingthequalifications of suchpersonas theProvince mayreasonablyrequest, providedall suchinformationis consistentwith ffiM personnel practices,- 26-
(ii) IBM will provide the Province with theopportunity to interview the person thatIBMwishes toappoint or hire into the IBMKeyPositionprior tothe finaldecision being made in respect of such appointment or hire, and IBM obtains andconsiderscomments from, andconsults with, theProvinceinrespect of suchinterview,(iii) IBMobtainstheapproval of theProvince; acting reasonably, in respect of anycandidate that will replace an incumbent in an IBM Key Position, and(iv) IBMwill maintain a successionplan or process for the replacement ofthepersonnel performing roles equivalent to the IBMKey Position, whichsuccessionplanor process shall include ajobdescriptionfor the IBMKeyPosition, therequired experienceandqualifications necessaryinorder tofulfillthemandateof theIBMKeyPosition, thetrainingandtransitionthat will beundertaken in respect of thesuccessor to theIBM Key Position, and thesearchprocedures that will be undertaken by IBM for purposes of filling any vacanciesthat may arise in an IBM Key Position;(b) intheevent of anextendedandunexpectedabsenceof theincumbent in. anIBMKeyPosition, IBMshallforthwithadvisetheProvince of such absenceandthePartiesshallconsult with each other as to the appropriate steps to be taken by IBM in respect of suchabsence; and(c) any personassignedtoanIBM Key Positionthat isvacatedforany reasonshall be ofequal orbetter qualifications andexperienceas thepersonwhopreviouslyheldsuchposition, with appropriate experience, andsuchpersonshall be suitablytrained andtransitioned to the IBM Key Position.8.9 IBM Key Position Failures.At any time, and from time to time, during the Term, the Province may by written notice to IBM, declarethat anIBMKeyPosition hasfailedtosatisfactorily perform thedutiesof such position, which noticeshall provideanexplanationof suchfailure. Theparties shall promptlydiscusstheCOncerns of theProvince in respect of such IBM Key Position, and IBM shall,as soon as possible thereafter, investigatethe matter and provide the Province with lBM's recommended course of action in respect thereof,. whichcourseof actionmayincludearemoval of theincumbent intheapplicableIBMKeyPosition. If theProvince does not agree with IBM's recommended course of action in respect of the IBM Key Position,thentheParties shall escalatethematter, onanexpeditedbasis, throughtheGovernanceProcess forresolution, or such other discreet channels of communication as may be appropriate under thecircumstances, for consideration. Where the issue is not resolved through theGovernance Process, thenthe Province shall have the right to require IBM to remove the incumbent from the IBM Key Position. Insuchevent, IBMshall promptlyremovetheincumbent fromsuchIBMKeyPositionandappoint analternate Person for such vacated IBM Key Position.8.10 Training.IBMshall ensurethat all of.JtsIBMKeyPositions, Personnel andall applicableExternal Personnelreceive quality training courses, refresher courses and retraining programs in respect of the delivery of theServices in accordance with the provisions of this Agreement and shall cause its Subcontractors to ensurethat the External Personnel receive appropriate training. Without limiting the generality of the foregoing,- 27 -VANOl: 2017039vllIBMshall ensurethat trainingwithrespect toprivacyandconfidentialityisconductedinthemannercontemplated in Section 14.19 (Privacy Training).8.11 General Principles Regarding Personnel.Atall timesduring the Term, IBM shallemploy sufficienfpersonnel of IBM, including both employeesand independent contractors of
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