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HomeMy WebLinkAboutRES2023-054 Util-Assist Contract CITY OF SEWARD,ALASKA Sponsored by: Bower RESOLUTION 2023-054 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE CITY MANAGER TO ENTER INTO A CONTRACT WITH UTIL-ASSIST, INC. TO OUTSOURCE THE CITY'S CUSTOMER BILLING SERVICES FOR ELECTRIC AND WATER/SEWER IN AN AMOUNT NOT TO EXCEED $138,000, INCLUDING A ONE-TIME FEE OF $36,000 TO COMPLETE ONSITE DISCOVERY, DUE DILIGENCE AND TRAINING WHEREAS,the City has historically managed all billing services for the Electric and Public Works departments; and WHEREAS, ongoing employee turnover in utility desk functions and the resulting lack of institutional knowledge has made it difficult for the department to operate efficiently and effectively; WHEREAS, in an effort to more efficiently and effectively manage billing services, the City Manager proposes entering into a contract with Util-Assist, Inc., for comprehensive billing services; and WHEREAS, Util-Assist, Inc., has provided innovative billing, technology and data- driven solutions for utilities since 2005; and WHEREAS, billing services for the City will include but not be limited to: general administration, account management, cash processing services, contact center services, supervisory services, state-of-the-art platforms for voicemail and email functions, and infrastructure queue management services; and WHEREAS,the Firm's duties will be performed primarily offsite after completing a three- day onsite visit for discovery and due diligence; and WHEREAS,the monthly rate for these services is $8,500 or$102,000 per year; and WHEREAS, there is an additional one-time fee of$36,000 for travel/accommodations, discovery/research, workshop coordination,training and materials; and WHEREAS, the use of these services will allow the City to eliminate a budgeted full-time utility billing position,which at the current pay scale and benefit rates will result in estimated savings of$80,000 to offset some of these costs; and WHEREAS,the contract will be structured to terminate with reasonable notice the billing services for electric and adjust the contract's pricing should the City's electric system be sold to Homer Electric Association. CITY OF SEWARD,ALASKA RESOLUTION 2023-054 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD,ALASKA that: Section I. The City Manager is hereby authorized to enter into a contract with Util-Assist, Inc.,to outsource the City's customer billing services electric and water/sewer Section 2. Funding in an amount not to exceed $138,000, including a one-time fee of $36,000 to complete discovery, due diligence and training, is hereby appropriated from 01000- 0000-3400 General Fund Unassigned Fund Balance to 01000-1140-7009-0123 Contracted services expense for the Utility Billing Processing. Section 3. This resolution shall take effect immediately upon adoption. PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 8th day of May, 2023. THE CITY OF SEWARD, ALASKA QAt*MITVILL re Sue McClure, Mayor AYES: Calhoon, Barnwell, Wells, DeMoss, Osenga, McClure NOES: Finch ABSENT: None ABSTAIN: None ATTEST: Brenda J. Ba ou, C City Clerk ++++++1181%,, •`'+s'4 OF $l/L''#4, (City Seal) SC> p`��9••• • r 4 • e� 9htl� OFALPS,�.•• City Council Agenda Statement Meeting Date: May 8, 2023 To: City Council Through: Janette Bower, City Manager From: Rob Montgomery Subject: Resolution 2023-054: Authorizing the City Manager to Enter into a Contract with Util-Assist, Inc. to Outsource the City's Customer Billing Services for Electric and Water/Sewer in an Amount not to exceed $138,000, Including a One-Time Fee of $36,000 to Complete Onsite Discovery, Due Diligence and Training Background and justification: Over the past several years, the city has had difficulty recruiting and retaining employees in the utility desk positions related to customer billing for the Electric and Public Works departments. In fact, during much of this time, the utility desk functions were being handled by a single employee who recently moved into another department within the city. These challenges, along with software limitations, have made it difficult for billing services to operate efficiently and effectively, making it difficult to stay current with customer billing. Util-Assist, Inc., is a firm that has provided innovative billing, technology and data-driven solutions for utilities in the Lower 48 and in Canada since 2005. The Firm's mission is"to develop simplified solutions to position our clients as leaders in efficiency, innovation and conservation. We understand the utility perspective and have developed innovative, compelling solutions to address utility needs, increase efficiencies, and ensure best value." The Account Manager will take direction from and assign tasks for completion as directed by the City Manager/Assistant City Manager or designee. Services will be managed primarily offsite and will include but not be limited to: general administration, account management, cash processing services, contact center services, supervisory services, state-of-the-art platforms for voicemail and email functions, and infrastructure queue management. The assignments will be completed by designated Firm team members. City support employees will be available to assist the Firm Team by providing information, documentation, and explanations. The city will also continue to manage all meter reading and provide those readings to the Firm Team monthly. The monthly rate for these outsourced services is $8,500 or $102,000 per year. There is also a one-time fee of$36,000 for travel/lodging accommodations, onsite discovery/research, workshop coordination, training and materials. The use of these services will allow the City to eliminate a budgeted full-time utility billing position, which at the current pay scale and benefit rates will result in estimated savings of $80,000 to offset some of these costs. 124 The contract will be structured to terminate with reasonable notice the billing services for electric billing and adjust the contract's pricing should the City's electric system be sold Homer Electric Association. Comprehensive and Strategic Plan Consistency Information This legislation is consistent with (citation listed): Comprehensive Plan: 3.7.1.3 "Continue to improve the quality and efficiency of city governmental services." Strategic Plan: Other: Certification of Funds Total amount of funds listed in this legislation: $ 0 This legislation (✓): Creates revenue in the amount of: $ x Creates expenditure in amount of: $ 138,000 x Creates a savings in the amount of: $ 80,000 Has no fiscal impact Funds are (✓): Budgeted Line item(s): 01000-1140-7009-0123 X Not budgeted Not applicable Fund Balance Information Affected Fund (✓): X General SMIC Electric Wastewater Boat Harbor Parking F1 Wat F1 Healthcare Motor Pool Other Note:amounts are unaudited Fund Balance/Net position — restricted $ 2,597,995 Fund Balance/Net position — unrestricted/unassigned $ 5,860,108 Available Unrestricted Cash Balance: $ 8,526,929 Finance Director Signature: Attorney Review RxYes Attorney Signature: Not applicable Comments: 125 Administration Recommendation e✓ Adopt AM Other: 126 MASTER SERVICES AGREEMENT THIS MASTER SERVICES AGREEMENT by and between City of Seward, Alaska ("SEWARD") ("Client"), with a place of business at 410 Adams Street City Hall Building, Seward, AK 99664, and Util-Assist Inc. ("UTIL-ASSIST") ("Supplier"), with a place of business at 470 Harry Walker Parkway South, Newmarket, Ontario L3Y 0133 is made and entered into as of the day of month, 2023 ("Effective Date"). RECITALS: WHEREAS, Client wishes to retain Supplier to perform certain services on behalf of Client, and Supplier wishes to perform such services, all on the terms and conditions set forth in this Agreement. NOW, THEREFORE, the parties hereby agree as follows: ARTICLE 1 INTERPRETATION Section 1.1 Defined Terms. As used in this Agreement, the following terms have the following meanings: "Account Manager" has the meaning specified at Section 15.1. "Agreement" means this master services agreement. "Arbitration Notice" has been the meaning specified in Article 16. "Business Continuity Plan" has the meaning set out in Section 11.2(1). "Change request" has the meaning specified at Section 9.1(1). "Claim" has the meaning specified at Section 12.1(1). "Client" means City of Seward. ("SEWARD"). "Client Data" has the meaning specified at Section 3.1. "Client Technologies" has the meaning specified at Section 3.1. "Confidential Information" means all confidential information in documents or other tangible materials about, or disclosed by, either party to this Agreement, including knowledge, technical and business information relating to such party's products, research and development, production, costs, engineering processes, artwork, designs, computer software, formulas, methods, ideas, concepts, contemplated new services, improvements, associations with other organizations, accounting or financial information, customers, suppliers, marketing, and past, present or future business plans and business arrangements, together with the existence, terms and conditions of this Agreement; but does not include information: (i) is generally known to the public on the date of disclosure of same or becomes generally known to the public after such date through no breach of this Agreement or any other obligation of confidentiality; (ii) was Util-Assist Managed Services MSA 129 -2- known by the party receiving such information under this Agreement without any obligation to hold it in confidence at the time of disclosure; (iii) is received by the receiving party after the date of disclosure by the other party hereunder from a third- party without imposition, knowledge or breach of any obligation of confidentiality; (iv) is independently developed by the receiving party after the date of disclosure by the receiving party without access to Confidential Information of the disclosing party; (v) is approved for release by written authorization of the disclosing Party; or (vi) that Client is required to make public by state law, Section 1.6 of the City of Seward Charter or SCC 2.05. "Deliverables" shall mean all work product first created by Supplier for delivery to Client in connection with the Services provided hereunder, whether individually by Supplier or jointly with Client, but shall not include any third-party software or related documentation licensed directly to Client from a third-party or any Supplier Technology. "Dependencies" has the meaning specified in Section 3.2. "Designated Executives" means [insert] for Client and Mark Henderson, President and CEO and Sabina Fjodorova, Chief Operating Officer for Supplier. "Dispute" has the meaning specified at Section 15.4(1). "Effective Date" means the date of this Agreement. "Fees" has the meaning specified in Section 8.1. "Governance Committee" has the meaning specified at Section 15.2. "Indemnified Party" has the meaning specified at Section 12.3(1). "Indemnifying Party" has the meaning specified at Section 12.3(1). "Intellectual Property Rights" means any and all rights, in any jurisdiction, provided under: (a) patent law; (b) copyright law (including moral rights); (c) trade-mark law (including laws governing trade-marks, trade names and logos); (d) design patent or industrial design law; (e) semi-conductor chip or mask work law; or (f) any other statutory provision (including laws governing domain names), common law principle (including trade secret law and law relating to information of the same or similar nature and protected in the same or similar way) or equitable principle governing intellectual property, whether registered or unregistered, and including rights in any and all applications and registrations in respect of the foregoing. "Law" means any and all (i) laws, constitutions, treaties, statutes, codes, ordinances, principles of common and civil law and equity, orders, decrees, rules, regulations and municipal by-laws, whether domestic, foreign or international, (ii) judicial, arbitral, administrative, ministerial, departmental and regulatory judgments, orders, writs, injunctions, decisions, rulings, decrees and awards of any governmental entity and (iv) policies practices and guidelines of any governmental entity which, although not actually having the force of law, are considered by such governmental entity as requiring compliance as if having the force of law. "Losses" has the meaning specified at Section 13.1. 6835026v7 130 -3 - "Residuals" has the meaning specified at Section 10.1(6). "Services" has the meaning specified at Section 2.1. "Service Levels" has the meaning specified at Section 2.3(1). "Statement of Work" has the meaning specified at Section 2.1. "Supplier" means Util-Assist Inc. ("UTIL-ASSIST"). "Supplier Technology" has the meaning specified in Section 7.4. "Term" has the meaning specified at Section 14.1. "Transition Period" has the meaning specified at Section 14.4(1). "Transition SOW" has the meaning specified in Section 14.1(1). Section 1.2 Priority. In the event of a conflict or inconsistency in any provisions in the Agreement, the main body of this Agreement governs over the schedules to this Agreement. The Agreement governs over any individual Statement of Work except to the extent that the Statement of Work expressly specifies otherwise. If the parties intend a Statement of Work to change or override the provisions of the Agreement, the Statement of Work must clearly indicate the parties' intention to establish a different priority, including a clear acknowledgement specifically referring to the provisions of the Agreement that are changed or overridden Notwithstanding the foregoing, no provision in a Statement of Work may override any provision in the following Sections of the Agreement: Article 7 (Intellectual Property, Licenses), Article 10 (Confidentiality) Article 12 (Indemnification), or Article 13 (Limitation of Liability). Section 1.3 Rules of Interpretation. In this Agreement, unless there is something in the subject matter or context inconsistent therewith or unless otherwise herein provided: (a) all references to a designated "Article", "Section" or other subdivision or to a Schedule are to the designated Article, Section or other subdivision of, or Schedule to, this Agreement; (b) the provision of a Table of Contents, the division of this Agreement into Articles, Sections and other subdivisions and the insertion of headings are for convenient reference only and do not affect the construction or interpretation of this Agreement; (c) any reference to gender includes all genders. Words importing the singular number only include the plural and vice versa; (d) the word "or" is not exclusive. The words "including", "includes" and "include" means "including without limitation"; 6835026v7 131 -4- (e) references to "days" are to all days including, for the avoidance of doubt, Saturdays, Sundays and bank holidays; (f) all references to dollars or to I" are expressed in currency of the United States of America; (g) any capitalized term used in this Agreement or a Statement of Work that is not otherwise defined will have the generally accepted industry or technical meaning given to such term; (h) unless otherwise specified, time periods within or following which any payment is to be made or Notice is to be given will be calculated by excluding the day on which the period commences and including the day on which the period ends and by extending the period to the next Business Day following if the last day of the period is not a Business Day. When a party has a right to performance by the other party or a right to terminate this Agreement as of a particular date, that right may be enforced or exercised notwithstanding any principles of equity, and the party will be entitled to that performance or to terminate this Agreement on or after such date; and (i) a reference to any applicable law is to that applicable law as now enacted or as the same may from time to time be amended, re-enacted or replaced. ARTICLE 2 SERVICES Section 2.1 Statements of Work. Supplier shall provide to Client the services and deliverables in accordance with this Agreement and each statement of work (each, a "Statement of Work") executed by the parties (the "Services"). The form of Statement of Work to be used by the parties which specifies the scope and terms upon which Services are to be provided to Client is attached hereto as Schedule A. The parties may mutually agree to additional Statements of Work, which shall become effective, upon execution by authorized representatives of both parties. All subsequent Statements of Work shall incorporate the terms of this Agreement except as provided for in Section 1.2. Each Statement of Work shall specify: (i) Supplier's specific obligations, including all deliverables ("Deliverables") and tasks Supplier shall perform, develop or provide in the course of performing the Services; (ii) the term of and performance schedule relating to such Services; (iii) the applicable fees and payment terms for the Services; (iv) any responsibilities of Client; (v) certain assumptions on which Supplier's performance of Services is based; and (vi) any other pertinent terms and conditions. Section 2.2 Provision of Services. (1) The method and means of providing the Services shall be under the exclusive control, management and supervision of Supplier. Unless otherwise specified in a Statement of Work, it is understood and agreed that Supplier is not under any obligation to utilize any specific software packages, hardware or technologies in the discharge of its responsibilities under this Agreement. In addition, Supplier shall have the right to: (i) control and supervise the activities of Supplier personnel who provide Services; (ii) determine which persons shall perform the Services; and (iii) with respect to any 6835026v7 132 -5 - individual, hire, reassign, promote, demote or terminate such person. In performing its obligations under this Agreement, Supplier will be entitled to rely upon any routine instructions, authorizations, approvals or other information provided to Supplier by employees, contractors or agents of Client. (2) Supplier may subcontract all or any portion of the Services from time to time; provided, however, that Supplier shall remain responsible hereunder to Client for performance of all such Services. Client hereby grants to such subcontractors all licenses, rights and authorizations granted to Supplier herein and in any Statement of Work. Section 2.3 Service Levels (1) Supplier will perform the Services and/or Deliverables in accordance with the service levels, if any, set out in the applicable Statement of Work ("Service Levels"). Any changes to such Service Levels will be subject to the change control process set out in Article 9. (2) If Supplier fails to meet a Service Level, Supplier will use commercially reasonably efforts to: (i) investigate and report on the causes of the problem giving rise to the Service Level failure; (ii) advise Client of steps to be taken or already taken to remediate the problem; (iii) provide Client with periodic updates as to the status of remediation; and (iv) take appropriate preventative measures to mitigate future Service Level failures arising from the same problem. (3) Supplier will deliver to Client, with the agreed to frequency and level of detail required, any reports set out in the applicable Statement of Work to enable Client: (i) to review the fulfillment and accuracy of Supplier's provision of the Services; and (ii) compare Supplier's actual performance against any specified Service Levels. Section 2.4 Right to Perform Services for Others. Supplier may market, develop, use and perform services, deliverables and products that are the same as or similar to those provided to Client under this Agreement for other Supplier clients. This Agreement shall not prevent or limit Supplier from using any of its personnel, equipment, facilities or technology for such purposes. ARTICLE 3 CLIENT OBLIGATIONS; DEPENDENCIES Section 3.1 Client Obligations. (1) In connection with Supplier's provision of the Services, Client shall perform those tasks and fulfill those responsibilities specified in this Agreement and each Statement of Work. Client shall cooperate with Supplier in the performance of the Services, including, without limitation, by providing Supplier with: (i) timely use of and access to Client's systems, software, facilities and other Client-owned, controlled or licensed hardware, software, and technologies (collectively, "Client Technologies") reasonably necessary for the performance of the Services; (ii) access to and support of qualified employees, contractors and agents of Client; and (iii) accurate, reliable and timely information required by Supplier for the performance of the Services ("Client Data"). Client warrants that it has all necessary rights or approvals for Supplier to use all Client Technologies, 6835026v7 133 - 6 - Client Data and other Client provided resources in connection with the performance of the Services. Client shall be responsible for the performance of its employees, contractors and agents, and represents and warrants that any information and data provided by Client to Supplier (including Client Data), on which Supplier has based the Services and prices, are accurate and complete in all material respects. (2) Client will notify Supplier in a timely manner regarding changes in laws and regulations, including without limitation those that are particular to its industry, which may affect Supplier's provision of, or Client's use of, the Services. If necessary, the parties shall initiate the change control process set forth in Article 9 to address any performance- related issues which may arise as a result of any such changes. Section 3.2 Dependencies. The parties acknowledge and agree that the Services under any Statement of Work may be dependent upon the timely and satisfactory completion of certain conditions by Client ("Dependencies"). Dependencies shall include without limitation: (i) the completeness, accuracy and quality of information (including Client Data), resources, changes, work product or support provided by Client or a third-party, if any; (ii) Client's timely exercise of relevant rights of approval or consent; (iii) Client's satisfactory performance of its responsibilities; (iv) Client's provision of required access to Client facilities and personnel, consents to use of third-party license or Client Technologies; and (v) the validity of any assumptions described in a Statement of Work. In the event any Dependencies have not been satisfied, Supplier may, without liability, suspend or delay work under the applicable Statement of Work and proceed by implementing the change control process described in Article 9 of this Agreement. Section 3.3 No Responsibility for Third-Party Actions. While Supplier will use reasonable efforts to cooperate and coordinate the Services with third-party suppliers of services to Client, Supplier will not be liable or otherwise responsible for any Service delays, interruption or degradation attributable to acts or omissions of any such third-party. ARTICLE 4 INSURANCE Section 4.1 Supplier Insurance. (1) Supplier will procure and maintain in force throughout the Term and for a period of one year after the expiration or termination of this Agreement the insurance coverage as set out in Schedule B. (2) Supplier will provide Client with acceptable evidence of insurance, in the form of a certificate of insurance to be signed by the authorized broker or agent, prior to commencing the Services. 6835026v7 134 - 7- ARTICLE 5 AUDITS AND RECORD RETENTION Section 5.1 Record Retention. (1) During the Term and for three (3) years after the expiration of the Term of the Agreement, the Supplier shall maintain all necessary records to substantiate all charges and payments under the Agreement within the prior one (1) year period. (2) Client may, at its own expense and upon reasonable advance notice to the other Party (but no more than once during each year of the Agreement), engage an independent accounting firm reasonably acceptable to Supplier to conduct an audit of the relevant financial records of the Supplier solely to the extent necessary to verify the accuracy of Supplier's invoices. Any such audit shall be conducted: (i) in accordance with Supplier's security policies and procedures; (ii) during the Supplier's normal business hours for the location at which the audit is being provided or at other times mutually agreed upon by the parties; (iii) in such a manner so as to minimize interference with the Supplier's normal business operations; and (iv) subject to the reasonable confidentiality restrictions required by Supplier that are at least as restrictive as those provided in this Agreement. No access will be provided to any records related to Supplier's cost of providing the Services, profit or loss or third-party charges not payable by Client as pass through charges. ARTICLE 6 REPRESENTATIONS AND WARRANTIES Section 6.1 Representations of Supplier. (1) As of the Effective Date and continuing throughout the Term, Supplier represents, warrants and covenants to Client, that: (a) Supplier has, and shall continue to have for the duration of this Agreement and for such time after the expiry or termination of this Agreement and each Statement of Work as is necessary for the performance of its obligations under this Agreement and each Statement of Work, full capacity and authority and all necessary governmental, administrative and regulatory authorizations, licenses, permits and consents to enter into and to perform this Agreement and to provide the Services; (b) Supplier is a company duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation and this Agreement is executed by duly authorized representatives of Supplier; (c) all of Supplier's responsibilities and obligations pursuant to this Agreement shall be: (i) fulfilled by appropriately experienced, qualified and trained professional personnel with all due skill, care and diligence; and (ii) performed in good and workmanlike manner, consistent with generally accepted industry practices; 6835026v7 135 - 8 - (d) shall perform its obligations in a manner that complies, in all material respects, with all statutory and regulatory requirements applicable to Supplier; (e) the Services will conform to any specifications and other requirements specified in the applicable Statement of Work; (f) the receipt and use by Client of the Services in accordance with this Agreement, the provision by Supplier or its subcontractors of the Services, and the grant of rights to Client pursuant to Section 7.2 will not constitute an infringement or misappropriation of any intellectual property rights of any third-party; (g) as at the date of their supply or performance and only to the extent that the Services require access to Client's information technology systems, the Services will not contain anything and nothing will, as at the date of their supply or performance or thereafter arising from such supply or performance, be inserted or entered into the Services or any systems of Client by virtue of any access provided hereunder, including any computer program code, computer virus, computer worm, Trojan horse, authorization key, license control utility or Software lock, which is likely to: (i) impair the operation of the Services or any computer systems or programs used by Client; or (ii) cause loss of, or corruption or damage to, any program or data held on the Services or any computer systems or programs used by Client. Section 6.2 Disclaimer The warranties set forth in this Section 6.1 are the only warranties provided by Supplier and are exclusive and in lieu of all other warranties and conditions, express, implied, statutory or otherwise with respect to the Services or Deliverables (including the performance of materials or processes developed or provided or the results that can be obtained therefrom) pursuant to this Agreement. All other warranties including all implied warranties and conditions of merchantability and fitness for a particular purpose are expressly disclaimed. Supplier shall not be liable for any services, products or materials provided by third-party vendors, developers or consultants, including but not limited to the selection thereof. Section 6.3 Representations of Client. As of the Effective Date and continuing throughout the Term, Client represents, warrants and covenants to Supplier, that: (a) Client has, and shall continue to have for the duration of this Agreement and for such time after the expiry or termination of this Agreement and each Statement of Work as is necessary for the operation of its business and the receipt of the Services under this Agreement and each Statement of Work, full capacity and authority and all necessary governmental, administrative and regulatory authorizations, licenses, permits and consents to operate its business; 6835026v7 136 - 9 - (b) Client is a company duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation and this Agreement is executed by duly authorized representatives of Client; (c) shall perform its obligations in a manner that complies, in all material respects, with all statutory and regulatory requirements applicable to Client; and (d) the grant of rights to Supplier for the receipt and use of any Client Intellectual Property by Supplier or its contractors in the performance of its obligations hereunder and in accordance with the terms of the Agreement will not constitute an infringement or misappropriation of any Intellectual Property Rights of any third-party. ARTICLE 7 INTELLECTUAL PROPERTY; LICENSES Section 7.1 Supplier Technology. (1) Supplier has created, acquired or otherwise has rights in, and may, in connection with the performance of the Services hereunder, employ, provide, modify, create, acquire or otherwise obtain rights in, various data, technology, methods and methodologies, processes, know-how, ideas, techniques, models, templates, algorithms, development tools, software code, documentation, tools, software and interfaces, utilities and routines, and logic, coherence and methods of operation of systems (collectively, the "Supplier Technology"). (2) Client acknowledges that Supplier has expended material expense in creating the Supplier Technology and has a proprietary interest therein. Client covenants that it will not sublicense, disclose, display, copy, distribute or use the Supplier Technology for any other purpose than that set out in Section 7.2 and will hold in strict confidence the Supplier Technology. Neither Client, nor any third-party, shall modify, adapt, translate, prepare derivative works from, decompile, reverse engineer, or, if applicable, otherwise attempt to derive any source code from the Supplier Technology. Neither Client, nor any third-party, shall remove, obscure or alter Supplier's copyright notices, trademarks or other proprietary rights or notices affixed to or contained in the Supplier Technology. (3) Client further acknowledges and agrees that in the event of a breach or threatened breach by Client of any of the provisions of this paragraph, Supplier may suffer irreparable damages and have no adequate remedy at law and accordingly will be entitled to seek injunctive relief and Client agrees not to plead sufficiency of damages as a defense. Section 7.2 Intellectual Property Rights of Client. (1) Subject to Client's performance of all of its material obligations under this Agreement (including full payment of amounts due to Supplier under the Agreement), Supplier hereby grants to Client (i) a non-transferable, non-exclusive, non-sub-licensable, royalty- free license to fully use the Deliverables in any manner for its internal business purposes; and (ii) a non-transferable, non-exclusive, non-sub-licensable, royalty-free, license to use, solely in connection with Client's receipt of the Services, any Supplier Technology contained in the Deliverables. Supplier shall retain and shall own exclusively 6835026v7 137 - 10 - all right, title and interest in and to all Supplier Technology and derivative works thereof (including the Deliverables) and all Intellectual Property Rights inherent therein or appurtenant thereto. In addition, Supplier retains the right to use, in any manner whatsoever and on its own behalf or on behalf of others, all Supplier Technology from Supplier's knowledge, experience and know-how, including processes, ideas, concepts and techniques developed in connection with or as a result of the Services provided under this Agreement. Section 7.3 License Grant to Supplier. Client hereby grants to Supplier, solely for the benefit and use by Supplier to provide the Services to Client during the Term (as defined below) and during any transition period as set forth in Section 14.4(1), a non-exclusive, non-transferable, sub licensable and royalty-free license to access, make, use, execute, reproduce, display, perform, distribute and prepare modifications, enhancements, upgrades or other derivative works based on any Client Data or Intellectual Property Rights of Client solely in the performance of the Services (including the creation of any Deliverables) for Client in accordance with the terms of this Agreement. Section 7.4 No Rights. (1) Except as expressly set forth herein, no license is granted by either Party to the other with respect to any technical or business information, or with respect to rights in any patents, trademarks, copyrights or other rights of authorship and other Intellectual Property Rights, including but not limited to Supplier Technology. Nothing in this Agreement shall be construed to grant to either Party any ownership or other interest, in the Confidential Information or proprietary technology of the other or of third parties, except as may be provided under a license specifically applicable to such Confidential Information or technology. (2) Neither Party shall use any mark or logo of the other Party except where required to perform an obligation, or enforce a right, set forth hereunder, and only if it has received the prior written permission of the Party owning such mark or logo to do so. Section 7.5 Suggestions and Feedback. Client acknowledges and agrees that the provision or disclosure of suggestions or feedback to Supplier ("Suggestions") will not be subject to any obligation of confidentiality. By providing Suggestions to Supplier, Client hereby assigns to Supplier and waives any and all of Client's rights in and to such Suggestions. ARTICLE 8 FEES AND PAYMENTS Section 8.1 Fees. During the Term, Client shall pay to Supplier, in accordance with Article 8, the fees set out in each Statement of Work, plus any applicable taxes and duties, including, excise, sales, use and value added taxes and any reasonable out-of-pocket expenses (collectively the "Fees"). Client agrees that on each anniversary of the Effective Date, there will be an annual increase of 3% or CPI, whichever is higher. Such fee increase shall be effective without further 6835026v7 138 - 11 - notice required to be provided by Supplier and will be reflected on the first invoice to be sent to Client after the effective date of such increase. Section 8.2 Taxes. (1) Client shall bear all taxes, duties, levies, and other similar charges (and any related interest and penalties), however designated, imposed as a result of the existence or operation of this Agreement, including but not limited to any tax which Client is required to withhold or deduct from payments to Supplier. (2) If Client is required to bear a tax pursuant to Section 8.2(1) above, Client shall pay such taxes and other charges and any additional amounts as are necessary to ensure that the net amounts received by Supplier after all such payments or withholdings equal the amounts to which Supplier is otherwise entitled under this Agreement as if such taxes, or other charges, did not exist. Section 8.3 Payment Obligation of Client. (1) All amounts invoiced by Supplier are due within 30 days of the date of the invoice. If Client fails to pay, when due, any amount payable hereunder, without limitation of any right or remedy available to Supplier at law, in equity or by contract, Client agrees to pay, in addition to any amount past due, interest accrued thereon calculated at a rate of one and one-half percent (1.5%) per month and all reasonable expenses incurred by Supplier in enforcing this Agreement, including all reasonable attorneys' fees and other costs of collection. Without limitation of the foregoing, if Client is delinquent in payment, Supplier may, upon notice to Client and at its discretion (i) modify the payment terms to require full payment before providing further Services; or (ii) require other assurances to secure Client's payment obligations. (2) Any dispute in respect of Fees shall be subject to dispute resolution set out in Article 15. Notwithstanding the foregoing, Client shall be liable to make timely payment on all undisputed Fees. Section 8.4 No Abatement or Set-Off. Client agrees that any sums payable to Supplier under this Agreement shall not be subject to any abatement, set-off, or recoupment. ARTICLE 9 CHANGE CONTROL Section 9.1 Change Control Process. (1) Either Party may request a change to the Services and Deliverables provided under the Agreement or a Statement of Work by submitting to the other Party a written change request reasonably detailing the scope and priority of the desired changes. Such change request shall be delivered to the other Party's Account Manager and shall be expressly identified as a "Change Request". The Supplier shall promptly evaluate each change requested by Client and shall promptly provide Client with a written impact assessment that addresses relevant factors, including the implications for deadlines, fees and any other terms and conditions. 6835026v7 139 - 12- (2) No change request shall be implemented or incorporated unless and until both parties have executed a written change order. Each change order shall contain a description of any additional services to be performed, a statement of the impact of the changes on the Services, Deliverables, deadlines, costs or other requirements of the Statement of Work, if applicable and signatures of each Party. ARTICLE 10 CONFIDENTIALITY Section 10.1 Confidentiality Obligations. (1) Each Party will, in its capacity as a receiving Party: (a) not use Confidential Information of the disclosing Party for any purpose, other than as may be reasonably necessary for the performance of its obligations set out in this Agreement or the exercise of its rights hereunder; (b) not disclose, provide access to or transfer any Confidential Information of the disclosing Party except to those employees, contractors and agents with a need to know or access such information to perform the obligations set out in this Agreement and to such Party's legal, financial, accounting or other advisors who are subject to obligations of confidentiality to provide applicable professional advisory services; (c) shall protect the Confidential Information of the other Party by exercising at least the same measures that such Party uses to protect its own Confidential Information of like character, which shall be no less than a reasonable standard of care; and (d) advise all employees, agents and contractors having access to any or all of the Confidential Information of the other Party of the confidentiality obligations set forth herein. (2) Notwithstanding Section 10.1(1) each Party, in its capacity as a receiving Party, may disclose Confidential Information of the other Party: (a) if and to the extent required by a governmental or regulatory authority or otherwise as required by applicable law, provided that the receiving Party provides the disclosing Party notice of such compelled disclosure (except where prohibited by applicable law from doing so) and uses commercially reasonable efforts to provide the disclosing Party with an opportunity to take such steps, at the expense of the disclosing Party, to challenge or contest such disclosure or seek a protective order. Thereafter, the receiving Party may disclose the Confidential Information of disclosing Party, but only to the extent required by applicable law and subject to any protective order that applies to such disclosure; and (b) to potential permitted assignees or successors of the receiving Party if and to the extent that such persons need to know such Confidential Information in connection with a potential sale, merger, amalgamation or other corporate transaction involving the business or assets of receiving Party. 6835026v7 140 - 13 - (3) Each Party is liable for any breach by its respective employees, agents or contractors of the confidentiality obligations set out herein. (4) Supplier shall, at all times and upon the expiration or termination of this Agreement, promptly follow any instructions provided by Client for the return or destruction of Client's Confidential Information, provided that (i) Supplier may retain such copies in its archival or back-up computer storage for the period it normally archives backed-up computer records, and (ii) such back-up copies shall be subject to the provisions of this Agreement until the same are destroyed, and shall not be accessed by Supplier during such period of archival or back-up storage other than as might be permitted herein. (5) Notwithstanding anything to the contrary in this Agreement, Supplier shall have the irrevocable right to use for any purpose the Residuals resulting from Supplier's performance of the Services. "Residuals" means disclosed Client Confidential Information remembered by those individuals within the scope of Supplier's obligations under this Agreement who no longer have access to the disclosed Client Confidential Information. However, Residuals does not include any detailed financial or personnel data, or the identity of Client. (6) The parties acknowledge that breach of any provisions of this Article may cause irreparable harm to the disclosing Party or to any third-party to whom the disclosing Party owes a duty of confidence, and that the injury to the disclosing Party or to any third-party may be difficult to calculate and inadequately compensable in damages. The receiving Party agrees that the disclosing Party may be entitled to obtain injunctive relief (without proving any damage sustained by it or by any third-party) or any other remedy against any actual or potential breach of the provisions of this Article. ARTICLE 11 SECURITY Section 11.1 Supplier Obligations. (1) Supplier shall maintain adequate and appropriate technological, physical and organizational security measures and standards for security and configuration with respect to its facilities, computer systems, employees, contractors, third parties under its control, and other matters relating to this Agreement, in accordance with the applicable policies of Supplier. Supplier shall take reasonable precautions, as applicable, including the implementation of appropriate access controls to prevent unauthorized access of the Confidential Information of Client while such information is in the possession of Supplier or through the Supplier's access privileges. In addition, Supplier shall take the same measures that it uses with its own Confidential Information to prevent the loss, damage, unauthorized modification or destruction of the Confidential Information of Client in its possession or control. (2) Supplier shall ensure that all Client Data that it receives and stores, and which has not previously been disposed of in accordance with this Agreement, is maintained, accessed, used and transmitted from, to and within a secure environment as appropriate to the Services performed. Supplier and Client are each responsible for fully complying with any and all obligations applying respectively to them under applicable laws, including, but not limited to those laws pertaining to data protection and privacy. 6835026v7 141 - 14- Section 11.2 Business Continuity (1) Supplier shall at all times comply with its business continuity and disaster recovery plan ("Business Continuity Plan"). Upon written request of Client, Supplier shall provide a copy of its Business Continuity Plan to Client within thirty (30) days of such request. ARTICLE 12 INDEMNIFICATION Section 12.1 Intellectual Property Indemnity. (1) Subject to Section 12.1(3), if a third-party claims that any Services provided or Deliverables delivered to the Client by the Supplier infringes any Intellectual Property Rights enforceable in Canada, the Supplier will defend Client against such third-party claim, demand or action ("Claim") at the Supplier's expense. The Supplier will pay all costs, damages and legal fees that a court finally awards or are included in a settlement agreed to by the Supplier, provided that the Client: (a) promptly notifies the Supplier in writing of the Claim; and (b) cooperates with the Supplier, and allows the Supplier to control, with the Client's participation and cooperation, the defense and any related settlement negotiations. (2) If such a Claim is made or appears likely to be made under Section 12.1(1), Client agrees that the Supplier may (i) procure the right for Client, at the Supplier's cost for Client to continue to use the Services and Deliverables; or (ii) provide Client with a non- infringing replacement or modification which meets the specifications and functionality required in this Agreement and the applicable Statement of Work in all material respects. (3) The Supplier has no obligation and no liability pursuant to this Agreement regarding any Claim based upon any of the following: (a) Client's modification of the Service, Deliverables or use of any software provided hereunder in other than the operating environment specified for the software; (b) the combination, operation or use of the Service, Deliverables or anything provided under this Agreement with any programs, hardware or software that the Supplier did not provide, unless the Supplier has specifically approved of the other programs, hardware or software for such combination, operation or use; (c) compliance with Client's written requirements for the Services and Deliverables; or (d) infringement by anything provided first by Client for use in providing the Services and Deliverables including pursuant to the license grant in Section 7.3. (4) If a third-party claims that any Services provided or Deliverables delivered to the Client by Supplier under this Agreement infringes any Intellectual Property Right enforceable in United States and the alleged infringement is based upon: 6835026v7 142 - 15 - (a) compliance with Client's written requirements for the Services and Deliverables; or (b) infringement by anything provided first by Client for use in providing the Services and Deliverables including any Client Data or Client Confidential Information; then the Client will defend the Supplier against the Claim at Client's expense. In this regard, Client will pay all costs, damages and reasonable legal fees that a court finally awards or are included in a settlement agreed to by Client, provided that the Supplier: (i) promptly notifies Client in writing of the Claim; and (ii) cooperates with Client in, and allows Client to control, with the Supplier's participation and cooperation, the defense and any related settlement negotiations. Section 12.2 General Indemnities. (1) Supplier shall indemnify and defend Client, in accordance with the procedures set forth in Section 12.3, from and against any losses suffered by Client pursuant to a Claim, to the extent arising from: (a) any breach of the Agreement as a result of the gross negligence, fraud or willful misconduct of the Supplier; (b) damage to or loss of any real or tangible personal property of Client in the possession or under the control of Supplier from (i) a breach of the Agreement by Supplier; or (ii) the gross negligence, fraud or willful misconduct of Supplier;or (2) Client shall indemnify and defend Supplier, in accordance with the procedures set forth in Section 12.3, from and against any losses suffered by Supplier pursuant to a Claim to the extent arising from: (a) Any breach of the Agreement as a result of the gross negligence, fraud or willful misconduct of Client; (b) damage to or loss of any real or tangible personal property of Supplier in the possession or under the control Client from (i) a breach of the Agreement by Client or (ii) the gross negligence, fraud or willful misconduct of Client (c) a breach by Client of its obligations under Article 10 (Confidentiality); or (d) the breach or alleged breach or misrepresentation by Client of any agreement with its customers arising from Client's use of the Services provided by Supplier in compliance with this Agreement. Section 12.3 Indemnification Procedures. (1) The Party seeking indemnification under this Agreement (the "Indemnified Party") shall notify the other Party (the "Indemnifying Party") promptly after the Indemnified Party receives notice of a Claim for which indemnification is or may be sought under this 6835026v7 143 - 16 - Agreement, provided, however, that no failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party of its indemnification obligations under this Agreement except to the extent that it is materially prejudiced by such failure. The Indemnifying Party will have the right to control, in a manner not adverse to the Indemnified Party, the defense and settlement of any Claim using counsel reasonably acceptable to the Indemnified Party. The Indemnified Party may employ counsel, at its own expense, with respect to any such Claim (provided that if counsel is employed due to a conflict of interest or because the Indemnifying Party does not assume control of the defense, the Indemnifying Party will bear such expense). The Indemnifying Party will not enter into any settlement of a Claim that adversely affects the Indemnified Party's rights or interests without the Indemnified Party's prior written approval, provided that the Indemnifying Party may agree to any monetary settlement of any Claim without any admission of liability of the Indemnified Party. (2) The indemnification rights of the Indemnified Party under this Agreement shall be the exclusive remedy of the Indemnified Party with respect to the Claims to which such indemnification relates. ARTICLE 13 LIMITATION OF LIABILITY Section 13.1 Maximum Liability. (1) Subject to Section 13.2 below, the maximum aggregate amount of either Party's liability for any and all losses, damages and other similar amounts payable by either Party, and arising out of or in connection with this Agreement or any Statement of Work, shall not exceed two times the Fees paid by Client to Supplier for the immediately preceding twelve (12 month) period prior to the notice of Claim for that specific Statement of Work. Section 13.2 Direct Damages. Except for a Party's indemnification obligations, to the maximum extent permitted by applicable law, in no event shall either Party or its subsidiaries or affiliates be liable to the other Party for any incidental, consequential, indirect, special, or punitive damages (including, but not limited to, lost profits (except on Supplier's fees for services), business interruption, loss of business information or other pecuniary loss, and including any of such alleged to result from such Party's exercise of its rights under this agreement) regardless of whether such liability is based on breach of contract, tort (including negligence), strict liability, breach of warranties, failure of essential purpose or otherwise and even if advised of the possibility of such damages. The Parties understand and agree that the exclusions and limitations of liability set forth in this Section 13 represent the parties' agreement as to allocation of risk between them in connection with their respective obligations under this agreement. The fees payable to Supplier reflect, and are set in reliance upon, this allocation of risk and the exclusions and limitations of liability set forth in this Agreement. 6835026v7 144 - 17- ARTICLE 14 TERM AND TERMINATION Section 14.1 Term. (1) This Agreement shall remain in effect from the Effective Date until terminated pursuant to the terms of this Agreement. Section 14.2 Termination byClient. (1) Client may terminate this Agreement or a Statement of Work for cause: (a) with 30 days' prior written notice if Supplier party is in material breach or default of any obligation thereunder, which breach or default is not substantially cured within thirty (30) days of Client's written notice of such breach, provided that the failure to cure is not as a result of a breach by Client; (b) immediately upon written notice if Supplier files a petition in bankruptcy, makes application or files a petition seeking any re-organization, arrangement, composition or similar relief under any law regarding insolvency or relief for debtors or makes an assignment for the benefit of creditors, or if a receiver or receiver and manager, trustee or similar officer is appointed for the business or property of Supplier or any part thereof, or if any involuntary petition, application or other proceeding under any bankruptcy or insolvency law is instituted against Supplier and is not stayed, otherwise enjoined or discharged within fifteen (15) Business Days; Section 14.3 Termination or Suspension by Supplier. (1) Supplier may terminate this Agreement or a Statement of Work for cause: (a) with 30 days' prior written notice if, subject to Section 14.3(2), Client is in material breach or default of any obligation thereunder, which breach or default is not substantially cured within thirty (30) days of Supplier's written notice of such breach, provided that the failure to cure is not as a result of a breach bySupplier; (b) immediately upon written notice if Client files a petition in bankruptcy, makes an application or files a petition seeking any re-organization, arrangement, composition or similar relief under any law regarding insolvency or relief for debtors or makes an assignment for the benefit of creditors, or if a receiver or receiver and manager, trustee or similar officer is appointed for the business or property of Supplier or any part thereof, or if any involuntary petition, application or other proceeding under any bankruptcy or insolvency law is instituted against Supplier and is not stayed, otherwise enjoined or discharged within fifteen (15) Business Days; or (c) immediately upon written notice if there is a change in law or regulation that substantially prevents Supplier or Client from continuing its operations as they have previously been conducted; 6835026v7 145 - 18 - (2) In the event that Client fails to pay any material amount due to Supplier hereunder and does not cure such default within five (5) business days of being notified of such default, then Supplier may, by giving written notice thereof to Client, at its discretion, suspend performance of the Services or terminate this Agreement, or the applicable Statement of Work, as of a date specified in such notice. Supplier's election to suspend performance will not be a waiver of(i) its subsequent right to immediately terminate this Agreement or the applicable Statement of Work, if payment is not received by a date set forth in any notice provided by Supplier or (ii) any other remedies available to the Supplier. Section 14.4 Effect of Termination. (1) Upon the effective date of the expiration or termination of a Statement of Work, Supplier shall, upon Client's written request, for a period not to exceed three (3) months ("Transition Period") reasonably cooperate with Client to transition such terminated services to Client or a Client-designated third-party, which assistance, including the applicable rates and fees will be detailed in a Statement of Work ("Transition SOW"). (2) During such Transition Period, and upon Client's written request, Supplier may continue to provide the applicable Services at the then existing-terms and charges set forth in this Agreement and the applicable Statements of Work for the period of time set forth in the Transition SOW, provided that payment for such services shall be made in advance if there are undisputed amounts owed to Supplier at the time of expiration ortermination. (3) In connection with the Termination Transition and in order to facilitate the transition of such data to another system, Supplier may provide Client, at Client's expense and as further set out in the Transition SOW, access to all tables, file specifications, notes and reports prepared pursuant to this Agreement and of the Client Data, an updated data dictionary in connection therewith and a subject matter expert for assistance in data transition and, at the request of Client, provide (i) within ten (10) Business Days of a request to so provide, an estimate of all out-of-pocket expenses to be incurred by Supplier in connection with providing a replication of such tables, file specifications, notes and reports and the Client Data in such format indicated in such request and (ii) within fifteen (15) Business Days of Client indicating to Supplier that it must proceed with fulfilling such request and provided that Client shall reimburse all out-pocket expenses incurred by Supplier in connection therewith, a replication of such tables, file specifications, notes and reports and the Client in such format indicated in such request or as otherwise agreed by Client and Supplier. (4) Without limiting the foregoing, Client's obligation to pay all amounts due and owing to Supplier for all Services provided and expenses incurred as of the date of termination, and all costs and expenses related to any such expiration or termination, including any termination fees agreed to in any Statement of Work shall survive. (5) Section 2.4, Section 3.3, Section 5.1, Section 6.2, Section 7.1, Section 7.2, Section 7.4, Section 8.3, Section 8.4, Section 10.1, Article 13, Article 16, Article 17 and Article 18, and any provisions in a Statement of Work specified as surviving, shall survive any termination of this Agreement and termination or expiration of any Statement of Work. 6835026v7 146 - 19 - ARTICLE 15 GOVERNANCE AND DISPUTE RESOLUTION Section 15.1 Account Managers. Each Party shall appoint in the applicable Statement of Work an individual who shall serve as the primary representative of such Party under this Agreement (each, an "Account Manager"). The Account Managers shall: (i) have overall responsibility for managing and coordinating the performance of such Party under this Agreement; (ii) attend all Client regularly scheduled meetings and planning sessions as reasonably requested by Client; (iii) be authorized to act for and on behalf of such Party under this Agreement to resolve issues that may arise during the course of the Agreement; and (iv) attempt to resolve disputes in accordance with this Agreement. Section 15.2 Governance Committee. The parties each shall appoint its respective Account Manager and one senior officer to serve on a governance committee (the "Governance Committee"). The Governance Committee shall be authorized and responsible for (i) overseeing the overall progress of the Services; (ii) establishing general policies; and (iii) monitoring and resolving disputes referred to it by the Account Managers in accordance with this Agreement. Section 15.3 Governance Committee Meetings. The Governance Committee may meet by phone or other means or at such other frequency as mutually agreed to by the parties. Section 15.4 Dispute Resolution. (1) In the event that any question, dispute, difference or claim arises out of or in connection with this Agreement, including a question regarding its existence, validity, performance or termination (each a "Dispute"), the Account Managers shall initially attempt to resolve the Dispute in good faith. If after five (5) Business Days, the Dispute cannot be resolved, such Dispute shall be escalated to the Governance Committee. (2) The Governance Committees shall meet to discuss and seek to resolve an escalated Dispute within three (3) Business Days after the Account Managers have failed to resolve the Dispute. If the Dispute is not resolved by the Governance Committees within five (5) Business Days thereafter, either Party may require that the Dispute be referred to the Designated Executives for resolution. (3) If the Designated Executives are unable to resolve the Dispute within five (5) Business Days thereafter, or such other period as the Designated Executives may agree upon, either Party may submit the Dispute to arbitration under Section 15.2. ARTICLE 16 ARBITRATION In the event that the parties are unable to resolve any dispute pursuant to Article 15, either Party may by means of written notice ("Arbitration Notice") to the other to require any such dispute to be settled by means of arbitration. In 6835026v7 147 -20 - the event that a Party elects to resolve such dispute by arbitration, the following provisions will apply: (1) The Arbitration Notice will contain a concise description of the matters submitted for arbitration and propose a single arbitrator. (2) The single arbitrator will be appointed by mutual agreement of the parties or, if they do not agree within ten (10) Business Days following the delivery of the Arbitration Notice, the arbitration will be heard by a panel of three arbitrators, with each Party naming a nominee to act as arbitrator and the two nominees selecting a third (or if the two nominees fail to agree on the third arbitrator within three (3) Business Days following their appointment, the third arbitrator will be appointed by the American Arbitration Association, acting solely as an appointing authority). (3) The arbitrator(s) will be qualified by training and education to rule upon the particular matters to be decided in the arbitration. (4) The arbitrator or arbitrators will determine the procedure for the arbitration. The procedure will include at least one opportunity for written submissions by or on behalf of each of the parties, and may include proceedings by way of exchange of oral argument, hearings with or without witnesses and such other procedures as the arbitrator or arbitrators deem appropriate. The arbitrator or arbitrators will have no power to amend the provisions of this Agreement. (5) The parties agree that time is of the essence in the conduct of the arbitration proceedings and the parties and the arbitrator or arbitrators will conduct the arbitration in an expeditious manner, unless the subject matter of the Dispute requires otherwise. The hearing will take place no more than forty-five (45) days after the appointment of the arbitrator or arbitrator, and the arbitration decision will be rendered by the arbitrator or arbitrators no later than thirty (30) days after the end of the hearing. (6) The arbitration will be take place in Anchorage, Alaska and the language of the arbitration shall be English. (7) The arbitration award will deal with the costs of the arbitration, which may include the arbitrators' fees and expenses, the provision of a reporter and transcripts, reasonable legal fees and reasonable costs of preparations, as appropriate. The arbitrator or arbitrators may also award the payment of interest on any award amount at a rate determined in the sole discretion of the arbitrator or arbitrators. (8) The arbitration award will be non-binding and will be subject to appeal by either Party. (9) The Parties agree that the arbitration will be kept confidential and that the existence of the proceeding and any element of it (including any pleadings, briefs or other documents submitted or exchanged, any testimony or other oral submissions and any awards) will not be disclosed beyond the arbitrator or arbitrators, the parties, their counsel and any Person necessary to the conduct of the proceeding, except as may lawfully be required in judicial proceedings relating to the arbitration or otherwise or as may be required by applicable Law. 6835026v7 148 -21 - (10) Nothing in this Section will be interpreted to prevent a Party from instituting legal proceedings at any time in its sole discretion. ARTICLE 17 NOTICES Section 17.1 Notices. All notices, authorizations, and requests in connection with this Agreement shall be deemed given on the day they are (i) deposited in the mails, postage prepaid, certified or registered, return receipt requested; or (ii) sent by air express courier (e.g., DHL, Federal Express or Airborne), charges prepaid; and addressed to the other Party at the address stated in the preamble hereto or any other such address as such Party has designated in writing; or (iii) delivered by hand. ARTICLE 18 MISCELLANEOUS Section 18.1 Assignment. (1) This Agreement may not be assigned, transferred or encumbered by the Parties hereto in any way, by operation of law or otherwise, nor may either Party delegate any of its duties under this Agreement (except as expressly permitted by this Agreement), without the prior written consent of the other Party, which shall not be unreasonably withheld. (2) Notwithstanding the foregoing, either Party may assign this Agreement and its rights and obligations hereunder to an entity that controls, or is controlled by, or is under the common control of such Party, or in connection with any merger, acquisition, divestiture or other corporate reorganization of such Party; provided, however, that Client may not so assign this Agreement or any portion thereof to (i) any competitor of Supplier, or (ii) any entity as to which Supplier has not given prior written approval based on the financial soundness of such entity (which approval shall not be unreasonably withheld). The Services are provided solely for the benefit of Client. Unless specifically permitted by Supplier in writing, the Services and the software and materials provided hereunder may not be transferred or sold by Client to any third-party. This Agreement shall apply to, inure to the benefit of, and be binding upon the parties hereto and upon their permitted successors in interest and permitted assigns. Any purported transfer, assignment, encumbrance or delegation in contradiction of this paragraph shall be null and void and of no force or effect. Section 18.2 Applicable Law. This Agreement shall be governed by the laws of the State of Alaska (without regard to its conflict of laws principles). The parties hereby consent to the exclusive jurisdiction and venue in the Third Judicial District of Alaska. Any action of any kind by any party against another Party arising as a result of this Agreement must be commenced within one (1) year from the date the right, claim, demand, or cause of action shall first accrue. 6835026v7 149 -22- Section 18.3 Entire Agreement. This Agreement and the Statements of Work constitute the entire agreement between Supplier and Client, and merge all prior and contemporaneous communications, with respect to the Services provided hereunder. The terms on any purchase order or other form submitted by Client shall not apply to this Agreement or any of the Services. This Agreement can be modified only by later written agreement (other than a Statement of Work) signed by both Supplier and Client. Section 18.4 Severability/Waiver. If a court holds that any provision of this Agreement is illegal, invalid or unenforceable, the remaining provisions shall remain in full force and effect. No waiver of any breach of this Agreement shall be a waiver of any other breach, and no waiver shall be effective unless made in writing and signed by an authorized representative of the waiving Party. Section 18.5 Independent Contractor. Each Party shall act at all times as an independent contractor, and shall be responsible for any and all social security, unemployment, workers' compensation and other withholding taxes for any and all of its employees. Neither Party shall have the authority to enter into any commitments on behalf of or otherwise bind the other Party. Section 18.6 No Recruitment. For the term of this Agreement, and for one (1) year following any termination or expiration hereof, Client shall not solicit the employment or engagement of any employee or agent of Supplier the other Party or induce or encourage any such employee or agent to leave their engagement or employment with Supplier. For the avoidance of doubt, neither Party is prohibited from employing an individual who approaches it about employment opportunities or who applies for a position in response to a posting, employment advertisement or other general solicitation of employment. Section 18.7 Force Majeure. Neither Party shall be liable for any default or delay in the performance of its obligations hereunder (other than a Party's obligation to pay) if and to the extent such default or delay is caused, directly or indirectly, by: fire, flood, earthquake, elements of nature or acts of God; riots, civil disorders, rebellions or revolutions in any country; strikes, lockouts, or labor difficulties; any failure in equipment; unavailability of parts; or any other similar cause beyond the reasonable control of such Party. Any Party so delayed in its performance shall promptly notify the other by telephone, confirm in writing, and describe at a reasonable level of detail the circumstances causing such delay. Section 18.8 Cooperation. The Parties acknowledge that successful completion of the Services shall require their full and mutual good faith cooperation. Where agreement, approval, acceptance, consent or similar action by either Party is required by any provision of this Agreement, such action shall not be unreasonably delayed or withheld. 6835026v7 150 -23 - Section 18.9 Publicity. With Client's prior consent, Supplier may use Client's name and logo (in the form provided or made available to Supplier) in the Supplier client list, in media releases, public announcements and public disclosures, including promotional or marketing materials, customer lists, and business presentations and Client will act as a reference to prospective Supplier customers. Except as expressly provided herein, neither Party shall use the name or any trademark, trade name, service mark, logo or other mark of the other Party, its parent, subsidiaries or affiliates, or issue any press release or other public announcement relating to the other Party or this Agreement, without the other Party's prior written approval in each instance. Section 18.10 Third-Party Beneficiaries. Except as expressly specified in this Agreement, the parties do not intend, nor shall any clause be interpreted to create in any third-party, any obligations to, or right or benefit by, such third-party under this Agreement from either Supplier or Client. 6835026v7 151 -24- IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date just above written. City of Seward, Alaska By: Name: Title: UTIL-ASSIST INC. By: Name: Sabina Fjodorova Title: Chief Operating Officer (COO) 6835026v7 152 SCHEDULE A FORM OF STATEMENT OF WORK Util-Assist Managed Services MSA A- 1 153 SCHEDULE B INSURANCE COVERAGE (a) comprehensive commercial general liability insurance with a limit of thirty million dollars ($30,000,000) per occurrence for bodily injury, including death, property damage liability, personal injury (including invasion of privacy, libel, slander or discrimination), contractual liability and products and completed operations liability; (b) suitable comprehensive professional liability insurance with a limit of not less than ten million dollars ($10,000,000) per occurrence covering liability for financial loss suffered by Client due to any error, omission or negligence of Supplier, its employees, directors, officers, agents or subcontractors (including Subcontractors) in the performance of the Services; (c) cyber liability coverage (as part of professional liability insurance coverage) with a limit of loss of up to ten million dollars ($10,000,000) per occurrence; (d) crime shield insurance to include Supplier and its employees involved in the operation of the business or the provision of the Services and Deliverables in an amount not less than five million Dollars ($5,000,000); (e) commercial automobile liability insurance for owned, hired and non-owned motor vehicles with a limit of loss of up to twenty million dollars ($20,000,000) per occurrence;and (f) property insurance with a coverage limit of thirty million dollars ($30,000,000). Util-Assist Managed Services MSA B - 1 154