Exhibit 1.4 - General Provisions.docx

Exhibit 1.4 (General Provisions)

Exhibit 1.4 (General Provisions)

State of South Carolina State Fiscal Accountability Authority (SFAA)

Request for Proposal Exhibit 1.4 General Provisions

RFP Solicitation No. 5400021069

Table of Contents

Exhibit 1.4 (General Provisions)

Exhibit 1.4 (General Provisions)

RFP Solicitation No. 5400021069 Page i of ii

RFP Solicitation No. 5400021069 Page 1 of ii

SERVICES

Overview.

Services. Commencing on the Commencement Date, the Service Provider shall provide the Services to State, and, upon State's request, to Authorized Users. The Services shall consist of any or all of the following, as they may evolve during the Term or be supplemented, enhanced, modified or replaced, in each case in accordance with and within the scope of this Contract:

The services, functions and responsibilities described in this Contract and its Exhibits and Attachments and the following:

the Transition Services, as further described in Section 1.2 Transition Services, below and the approved Transition Plan as described in Exhibit 3.1 (Service Level Matrix);

(1) the services, functions and responsibilities described in Exhibit 1.0 (Operating Model), Exhibit 2.0 (Service Model), Exhibit 3.0 (Performance Model), Exhibit 4.0 (Business Model), and all attached Exhibits;

(2) any New Services, upon State's authorization of such New Services in accordance with the terms of this Contract; and

(3) Termination Assistance Services, as further described in Exhibit 2.2 (Termination Assistance Services).

Included Services. If any services, functions, or responsibilities not specifically described in this Contract are an inherent, necessary, or customary part of the Services or are required for proper performance or provision of the Services in accordance with this Contract, such services, functions, or responsibilities are deemed to be included within the scope of the Services to be delivered for the Charges, as if such services, functions, or responsibilities were specifically described in this Contract Pre Commencement Services. State and Service Provider may agree that performance of certain Services by Service Provider prior to the Commencement Date is necessary to avoid adverse impact on activities, operations, facilities, processes, or systems of State. In such event, the Parties shall mutually agree to the scope of Services, roles and responsibilities of the Parties, deliverables and deliverable acceptance criteria associated with the Services, charges, and the timeframe for performance of the Services. Service Provider shall invoice State after the Commencement Date for any Services provided prior to the Commencement Date.

Service Notices.

1. Notification of Problems. Service Provider shall provide to State written notice of any acts or omissions (whether by State, a State Service Provider, State Contractor, Service Provider, or any third party), any failure to perform any of each such party's obligations under the Contract and any other events that may affect Service Provider 's performance of Service Provider 's obligations under the Contract. Service Provider shall provide such written notice promptly after Service Provider first knew or should have known of such acts, omissions, or failures or other events. Such written notice shall describe in reasonable detail such acts, omissions, failures, or other events and the manner in which the foregoing may affect Service Provider 's performance.

1. Notification of Defaults. State and Service Provider shall promptly inform the other Party in writing of any breach of, misuse, or fraud in connection with any Third Party Contract, Equipment Lease, or Third Party Materials license used in connection with the Services of which it becomes aware and shall cooperate with the other Party to prevent or stay any such breach, misuse, or fraud.

1. Notice of Adverse Impact. If Service Provider becomes aware of any failure of Service Provider to comply with its obligations under this Contract or any other situation (a) that has impacted or reasonably could impact the maintenance of the State’ financial integrity or internal controls, the accuracy of State's financial, accounting or other records and reports, or compliance with State Rules, State Standards or applicable Laws, or (b) that has had or reasonably could have any other material adverse impact on the Services in question or the impacted operations of the State, then, Service Provider shall immediately inform the State in writing of such situation and the impact or expected impact and Service Provider and State shall meet to formulate an action plan to minimize or eliminate the impact of such situation.

Transition Services.

1. Transition. The Service Provider shall perform the Transition Services, including provision of the deliverables described in the Transition Plan. Unless otherwise agreed, State shall not incur any charges, fees, or expenses payable to Service Provider or any third party engaged by the Service Provider in connection with the Transition Services, other than those charges, fees and expenses specified in Exhibit 4.0 (Business Model).

Transition Plan. The preliminary Transition Plan is incorporated by reference to the Service Provider’s preliminary Response. The Service Provider shall complete, and submit to State for review, a final Transition Plan on or before the date set forth in Exhibit 3.1 (Service Level Matrix). State will review the submitted Transition Plan according to the procedures and criteria set forth in Exhibit 2.1.2 Payment Services Statement of Work, Exhibit 2.1.3 (SC.gov Services Statement of Work) and Exhibit 3.1 (Service Level Matrix). If a Transition Plan submitted by the Service Provider is not acceptable to State, Service Provider shall address and resolve any questions or concerns State may have and promptly incorporate any modifications, additions, or deletions requested by State. The Service Provider shall revise and resubmit the Transition Plan until Accepted by State. Upon State's Acceptance, the Transition Plan shall automatically be incorporated into this Contract by reference and shall supersede and replace all prior Transition Plans.

Performance. The Service Provider shall perform the Transition Services in accordance with the timetable set forth in the Transition Plan. Service Provider shall assist State in connection with the State’s evaluation or testing of the deliverables set forth in the Transition Plan. Except as otherwise expressly stipulated in the Transition Plan (which will appropriately acknowledge that some element of disruption may be inevitable as in any such transition, but shall in all events be minimized), Service Provider shall perform the Transition Services in a manner that shall not (A) disrupt or have an unnecessary adverse impact on the activities or operations of the State, (B) degrade the Services then being received by the State or (C) disrupt or interfere with the ability of the State to obtain the full benefit of the Services. Without limiting its obligations or responsibilities, prior to undertaking any transition activity, Service Provider shall discuss with the State all known State -specific material risks and shall not proceed with such activity until the State is reasonably satisfied with the plans with regard to such risks (provided that, neither Service Provider's disclosure of any such risks to the State, nor the State's acquiescence in Service Provider’s plans, shall operate or be construed as limiting Service Provider’s responsibility under this Contract).

Notification of Problems. Service Provider shall provide to the State written notice of any acts or omissions (whether by State, a Service Component Provider, State Contractor, Service Provider or any third party), any failure to perform any of each such party's obligations under the Contract and any other events that may affect Service Provider’s performance of the Transition Services. Service Provider shall provide such written notice within thirty (30) days after Service Provider first knew or should have known of such acts, omissions, or failures or other events. Such written notice shall describe in reasonable detail such acts, omissions, failures or other events and the manner in which the foregoing may affect Service Provider’s performance.

Remedies for Transition Failures. In the event that Service Provider fails to identify and resolve any problems that may impede or delay the timely completion of each task in the Transition Plan, without prejudice to the State's other rights and remedies under the Contract or at law or equity, (i) Service Provider will provide, at its sole cost and expense, all such additional resources as are necessary to identify and resolve any problems that may impede or delay the timely completion of each task in the Transition Plan, and (ii) State may equitably reduce the Charges set forth in Exhibit 4.0 (Business Model) in an amount reasonably estimated by the State to account for the Services that the State is not receiving or did not receive. Service Provider represents and warrants to the State that, as of the Commencement Date, it is ready to commence performing the Services in accordance with the terms of this Contract, including with respect to pricing, applicable Service Levels and other performance obligations. In the event that such representation and warranty is not true and correct, Service Provider will reimburse the State for any costs or expenses incurred by the State as a result of the failure of such representation and warranty to be true and correct. In the event that Service Provider is required to perform any Transition activities following the Effective Date, Service Provider will complete such activities at its own cost and expense and in such a manner so as to not materially disrupt or cause any material adverse impact on the State's operations or activities.

REQUIRED CONSENTS

Service Provider Responsibility.

At no additional cost to the State, Service Provider shall undertake all administrative activities necessary to obtain all Required Consents. At Service Provider’s request, State shall cooperate with Service Provider in obtaining the Required Consents by executing appropriate State approved written communications and other documents prepared or provided by Service Provider. The Parties shall cooperate in minimizing or eliminating any costs associated with obtaining Required Consents.

Financial Responsibility.

Except to the extent expressly provided otherwise in Exhibit 4.2 (Financial Responsibility Matrix), Service Provider shall pay all transfer, re-licensing, termination charges and other costs or expenses associated with obtaining any Required Consents or terminating any licenses or agreements as to which Service Provider is unable to obtain such Required Consents.

Contingent Arrangements.

If, despite using commercially reasonable efforts, Service Provider is unable to obtain a Required Consent, then with respect to State licensed Third Party Materials, Service Provider shall implement a work-around, reasonably satisfactory to the State that may include:

1. replace the State license for such Third Party Materials with a Service Provider license;

1. replace such Third Party Materials with other Materials offering equivalent features and functionality; or

1. Otherwise arrange to rightfully manage the State licensed Third Party Materials on behalf of the State.

Termination.

If Service Provider fails to obtain any Required Consent within ninety (90) days of the Commencement Date or to implement adequate contingent arrangements in accordance with Section 2.3 Contingent Arrangements. and such failure has a material adverse impact on the use or enjoyment of the Services, then the State may, upon notice to Service Provider, terminate this Contract for cause in its entirety or in part with respect to, or any affected portions of, the Services, as of the termination date specified in the notice.

FACILITIES, MATERIALS, EQUIPMENT AND CONTRACTS

Service Facilities

1. Service Facilities. The Services shall be provided at or from (i) State Facilities, (ii) Service Provider Facilities, or (iii) any other service location requested by Service Provider and approved in advance by the State. In connection with the delivery of the Services, Service Provider will not provide or otherwise utilize any support services situated outside of the United States and any staff necessary to provide the Services (e.g., operate the hosting facility, support center, and any other operational support) shall reside within the geographical boundaries of the United States. Service Provider shall obtain the State's prior approval for any proposed relocation of the performance of any Service from a new or different service location. Failure to obtain such approval will result in a breach of this Contract. Service Provider shall be financially responsible for all additional costs, taxes, or expenses related to or resulting from any Service Provider-initiated relocation to a new or different Service Provider Facility, including any costs or expenses incurred by the State as a result of such relocation. Service Provider acknowledges and agrees, that unless otherwise expressly agreed by State in writing, that any key personnel and services necessary to provide the Services (e.g., operate the support center, and any other operational support), shall provide such Services Monday through Friday during normal business hours within the geographical boundaries of the Columbia, South Carolina metropolitan area.

State Facilities. State shall provide Service Provider with the use of and access to the space in the State Sites for the periods of time specified in the Statement of Work, or otherwise as agreed to by Service Provider and State. Service Provider shall ensure that any Managed Third Parties and Subcontractors use State Sites in compliance with applicable Laws and State Rules and, upon request by the State shall demonstrate to the State’s reasonable satisfaction Service Provider’s compliance with the foregoing. All OTIS-owned or leased assets provided for the use of Service Provider under this Contract, except for any laptops (or other portable hardware devices) issued by State to Service Provider Personnel, shall remain in State Sites unless State otherwise agrees in advance in writing. In addition, all improvements or modifications to State Sites requested by Service Provider shall be (i) subject to review and approval in advance by State in its sole discretion, (ii) in strict compliance with State Rules, and (iii) performed by and through State at Service Provider’s expense. Service Provider acknowledges and agrees that the State Sites are sufficient for performing the Services and for satisfying Service Provider’s responsibilities under this Contract. THE STATE SITES ARE PROVIDED BY STATE TO SERVICE PROVIDER ON AN “AS-IS”, “WHERE-IS”, AND WITH ALL FAULTS BASIS. STATE EXPRESSLY DISCLAIMS ANY WARRANTIES, EXPRESS OR IMPLIED, AS TO THE STATE SITES, INCLUDING WARRANTIES OF HABITABILITY, FITNESS FOR PARTICULAR PURPOSE, OR THEIR CONDITION OR SUITABILITY FOR USE BY SERVICE PROVIDER.

Furniture, Fixtures and Equipment. Service Provider may use the office furniture and fixtures located in the portions of the State Sites that Service Provider is entitled to access and use pursuant to Section 3.1 (b) State Facilities. Service Provider Personnel using the State Sites shall be provided with reasonable access to the communications wiring in such facilities (for example, fiber and copper wiring, wall jacks, and wireless access points, subject to Section 3.1 (d) Responsibilities Regarding State's Network) and the use of certain shared office equipment and services; provided, however, that such access and usage shall be solely for and in connection with the provision of Services by such Service Provider Personnel.

Responsibilities Regarding State's Network. To the extent any Equipment provided or used by Service Provider or Service Provider Personnel is connected directly to the network(s) of the State, such Equipment (and all Software installed thereon) shall be (i) subject to review and approval in advance by the State in the manner determined by the State (Service Provider shall cooperate with the State in the testing, evaluation and approval of such Equipment) and (ii) in strict compliance with State Rules and State Standards. Service Provider shall not install or permit the installation of any other software on such Equipment without State's prior approval. Service Provider shall immediately (but not more than one (1) Business Day from the time in which Service Provider first becomes aware of any such situation) investigate any security breach of State's networks or Systems associated with Service Provider Personnel or the performance of the Services of which it becomes aware. Service Provider shall notify the State of each such security breach and permit the State to participate in the planning and conducting of any audit or investigation of any such security breach. Service Provider shall promptly (A) report the findings of any such audit or investigation to the State, (B) provide the State with a copy of any final written report prepared in connection therewith, and (C) to the extent in Service Provider’s areas of responsibility and control, prepare and, following State's approval, implement a remediation plan to remediate the effects of the security breach and prevent its recurrence. Service Provider acknowledges and agrees that, to the extent permitted by applicable Law, State has the right to monitor, record and investigate all uses of State's networks by Service Provider, including all email or other communications sent to, from, or through State's networks, regardless of the content of such communications, and Service Provider hereby consents to such monitoring, recording and investigating. Service Provider acknowledges and agrees that it does not have any expectation of privacy with respect to any information or communications made by or to it through State's networks and shall not assert or claim any privacy right thereto.

Residual Responsibility. Except as provided in Sections 3.1(a) Service Facilities, (b) State Facilities, and (c) Furniture, Fixtures and Equipment, and Section 3.4 Materials, Equipment, and Third Party Contracts, Service Provider shall be financially and operationally responsible for providing all furniture, fixtures, equipment, connectivity, space, and other facilities required to perform the Services and all upgrades, improvements, replacements, and additions to such furniture, fixtures, equipment, connectivity, space and facilities. Without limiting the foregoing, Service Provider shall provide (i) all maintenance, site management, site administration and similar services for the Service Provider Sites, (ii) uninterrupted power supply services for the Service Provider Sites, and (iii) telecommunications transport (voice and data) between Service Provider Sites and the State Sites.

Physical Security. State is responsible for the physical security of the State Sites; provided, however, that Service Provider shall (i) be responsible for the acts and omissions of Service Provider Personnel with respect to the safety and physical access and control of the areas that Service Provider is using in performing the Services and (ii) not permit any person to have access to, or control of, any such area in a State Site unless approved by the State. Service Provider shall be solely responsible for compliance by Service Provider Personnel with such control procedures, including obtaining advance approval to the extent required.

Use of State Sites.

1. Service Provider shall use the State Sites, and the office furniture, Equipment and fixtures provided or made available by the State therein, only for the purpose of providing the Services.

State reserves the right to, upon thirty (30) days’ written notice to Service Provider, (A) relocate any State Site from which the Services are then-being provided to another geographic location from which the Services will be provided, and (B) direct Service Provider to cease using all or part of the space in any State Site from which the Services are then-being provided.

In cases described in subsection (ii) above, Service Provider shall be relieved of responsibility for providing the Services, and State shall be relieved of all obligation to pay fees otherwise owed to Service Provider for the provision of such Services, during the relocation for the period of time agreed to in advance by State if and to the extent Service Provider is unable to provide the Services in accordance with the Service Levels during the actual relocation of Service Provider’s operations; provided that such relocation is not expressly contemplated in this Contract as of the Effective Date, that the relocation period does not exceed fifteen (15) Business Days, and that Service Provider (A) notifies State in advance of its inability to perform during such relocation, (B) gives State a reasonable opportunity to address Service Provider’s concerns and thereby avoid such Service Provider non-performance, (C) identifies and pursues commercially reasonable means to avoid or mitigate the impact of such relocation, and (D) uses commercially reasonable efforts to perform notwithstanding such relocation.

Conditions for Return. When the State Sites are no longer to be used by Service Provider as contemplated by this Section 3.1 or are otherwise no longer required for performance of the Services, Service Provider shall notify State as soon as practicable and shall vacate and return such State Sites (including any improvements to such facilities made by or at the request of Service Provider) to State in substantially the same condition as when such facilities were first provided to Service Provider, subject to reasonable wear and tear.

No Violation of Laws. Service Provider shall treat, use and maintain the State Sites in a reasonable manner. Service Provider shall not commit, and shall use all reasonable efforts to ensure that no business visitor or invitee of Service Provider commits, any act (i) in violation of any applicable Laws or (ii) in breach of any applicable State insurance policies or in breach of State's obligations under the applicable real estate leases for such State Sites (to the extent Service Provider has received notice of such insurance policies or real estate leases or should reasonably be expected to know of such obligations or limitations).

Use of Service Provider Facilities

1. Service Provider Facilities. Service Provider shall provide to State at no additional charge (i) reasonable access to and use of Service Provider Facilities and (ii) access to reasonable work/conference space at Service Provider Facilities for use in connection with State's performance and exercise of rights under this Contract.

State Rules/Employee Safety.

1. State Rules and Compliance. In performing the Services and using the State Facilities, Service Provider shall observe and comply with all State policies, rules, and regulations applicable at or to State Facilities or the provision of the Services which have been communicated to Service Provider or Service Provider Personnel in advance in writing (which may include email communications and notices of information contained on web sites or conspicuously posted at State Facilities to the extent consistent with the way in which State disseminate such information to their own employees) or by such means as are generally used by State to disseminate such information to its employees or contractors and those applicable to specific State Facilities (collectively, "State Rules"). The Parties acknowledge and agree that, as of the Commencement Date the Service Provider is fully informed as to the State Rules that have been communicated to it consistent with the foregoing. Service Provider shall be responsible for the promulgation and distribution of State Rules to Service Provider Personnel as and to the extent necessary and appropriate. Additions or modifications to the State Rules may be (i) disclosed to Service Provider and Service Provider Personnel in writing (which may include email communications and notices of information contained on web sites to the extent consistent with the way in which State disseminate such information to their own employees), (ii) conspicuously posted at a State Facility, (iii) electronically posted or (iv) communicated to Service Provider or Service Provider Personnel by means generally used by State to disseminate such information to its employees or contractors (including oral communications in immediately applicable or emergency situations). Service Provider and Service Provider Personnel shall observe and comply with such additional or modified State Rules.

Safety and Health Compliance. Service Provider and Service Provider Personnel shall familiarize themselves with the premises and operations at each State Facility at, to or from which Services are rendered and the State Rules applicable to each such facility. Service Provider and Service Provider Personnel also shall observe and comply with all State Rules with respect to safety, health, security and the environment and shall take commercially reasonable precautions to avoid injury, property damage, spills or emissions of hazardous substances, materials or waste, and other dangers to persons, property or the environment. To the extent required by State, Service Provider Personnel shall receive prescribed training prior to entering certain State Facilities.

Materials, Equipment, and Third Party Contracts

1. Financial Responsibility. Each Party shall be financially responsible for any third party fees or expenses incurred on or after the Commencement Date associated with Materials, Equipment, Equipment Leases and Third Party Contracts for which such Party is financially responsible under Exhibit 4.2 (Financial Responsibility Matrix) (excluding Third Party Contracts administered by Service Provider on a Pass-Through basis, which are addressed in Exhibit 4.0 (Business Model). Unless otherwise expressly provided, each Party also shall be financially responsible for any third party fees or expenses on or after the Commencement Date associated with new, substitute or replacement Materials, Equipment, Equipment Leases or Third Party Contracts (including Upgrades, enhancements, new versions or new releases of Software or Equipment) for which such Party is financially responsible under Exhibit 4.2 (Financial Responsibility Matrix). With respect to Third Party Material licenses, Equipment Leases and Third Party Contracts that are assigned to Service Provider by State for which Service Provider otherwise assumes financial responsibility under this Contract, Service Provider shall:

1. pay all amounts becoming due under such licenses, leases or contracts, and all related expenses, for periods on or after the Commencement Date;

1. rebate to State any payment of such amounts in accordance with Exhibit 4.2 (Financial Responsibility Matrix);

1. pay all modification, termination, cancellation, late payment, renewal or other fees, penalties, charges, interest or other expenses attributable to periods on or after the Commencement Date (except to the extent that such fees, penalties, charges, interest or other expenses directly result from the wrongful acts or omissions of State, prior to assignment to Service Provider);

1. pay all costs associated with the transfer of such licenses, leases and contracts to Service Provider, including all taxes associated with such transfer; and

1. be responsible for curing any defaults in Service Provider 's performance under such licenses, leases and contracts on or after the Commencement Date (except to the extent that such fees, penalties, charges, interest or other expenses directly result from the wrongful acts or omissions of State, prior to assignment to Service Provider).

1. Operational Responsibility. With respect to Materials, Equipment, Equipment Leases and Third Party Contracts for which Service Provider is operationally responsible under Exhibit 4.2 (Financial Responsibility Matrix), Service Provider shall be responsible for:

1. the evaluation, procurement, testing, installation, rollout, use, support, management, administration, operation and maintenance of such Materials, Equipment, Equipment Leases and Third Party Contracts;

1. the evaluation, procurement, testing, installation, rollout, use, support, management, administration, operation and maintenance of new, substitute or replacement Materials, Equipment, Equipment Leases and Third Party Contracts (including Upgrades, enhancements, new versions or new releases of such Software);

1. the performance, availability, reliability, compatibility and interoperability of such Materials, Equipment and Third Party Contracts each in accordance with this Contract, including the Service Levels and Change Control Procedures;

1. the compliance with and performance of all operational, administrative and contractual obligations specified in the applicable licenses, leases and contracts;

1. the observance of and compliance with all Laws applicable to such licenses, leases, and contracts (without limiting the obligation of the Parties under Contract Clauses of the Contract and Clauses in Attachment I (Proposed Contract Terms);

1. the administration and exercise as appropriate of all rights available under such licenses, leases, and contracts; and

1. the payment of any fees, penalties, charges, interest, or other expenses due and owing under or with respect to such licenses, leases and contracts that are incurred or caused by, or result from Service Provider 's failure to comply with or perform its obligations under this Section 3.4 (b) Operational Responsibility (except to the extent that such fees, penalties, charges, interest or other expenses directly result from the wrongful acts or omissions of State, prior to assumption of financial responsibility by Service Provider).

1. General Rights. With respect to all Third Party Materials licenses, Equipment Leases and Third Party Contracts for which Service Provider is financially responsible under Exhibit 4.2 (Financial Responsibility Matrix), Service Provider shall:

1. obtain for State, Entities that qualify as State and their designee(s) the license, sublicense, assignment and other rights specified in Sections 2 Termination Assistance Services and 6 Ongoing State Rights in Exhibit 2.2 (Termination Assistance);

1. ensure that the granting of such license, sublicense, assignment and other rights is not subject to subsequent third party approval or the payment by State, Entities that qualify as State or their designee(s) of license, assignment or transfer fees;

1. ensure that the terms, conditions and prices applicable to State, Entities that qualify as State and their designee(s) are no less favorable than those otherwise applicable to Service Provider, and at least sufficient for the continuation of the activities comprising the services of the nature of the Services;

1. provide a copy of the entire and complete Third Party Contract(s), regardless of whether Service Provider’s other customers utilize or benefit from such Third Party Contract(s), allowing State to disclose such contracts in future procurements; and

1. ensure that neither any Assistance Event nor the assignment of the license, lease or contract shall trigger less favorable terms, conditions or pricing.

1. Evaluation of Third Party Materials, Equipment. In addition to its obligations under Section 3.4 (a) Financial Responsibility and Section 3.4 (b) Operational Responsibility and in order to facilitate State's control of architecture, standards and plans pursuant to Section 6.5 Change Control., Service Provider shall evaluate any Third Party Materials consisting of Software and Equipment selected by or for State to determine whether such Software and Equipment shall adversely affect State's environment, ability to interface with and use the Software, Equipment, and Systems and/or Service Provider's ability to provide the Services. Service Provider shall complete and report the results of such evaluation to State within thirty (30) days of its receipt of State's request; provided, that Service Provider shall respond more quickly in the case of a pressing need or an emergency situation.

PERFORMANCE MANAGEMENT

General.

1. General Performance Standards.

Beginning on the Commencement Date, Service Provider shall perform the Services at levels of accuracy, quality, completeness, timeliness, responsiveness, and resource efficiency that are at least equal to those received by State prior to such date. In addition, Service Provider shall perform the Services at levels of accuracy, quality, completeness, timeliness, responsiveness, resource efficiency, and productivity that are at least equal to accepted industry standards of first tier providers of services that are the same as or similar to the Services. The foregoing provisions of this Subsection shall not be deemed to supersede the Service Levels.

Service Level Performance Standards.

Beginning on the Commencement Date, Service Provider shall perform the Services so as to meet or exceed the Service Levels set forth in or otherwise in accordance with Exhibit 3.0 (Performance Model).

Service Level Credits.

Service Provider recognizes that State is paying Service Provider to deliver the Services at specified Service Levels. If Service Provider fails to meet such Service Levels, then, in addition to other remedies available to State, Service Provider shall pay or credit to State the Service Level Credits specified in Exhibit 3.0 (Performance Model) in recognition of the diminished value of the Services resulting from Service Provider’s failure to meet the agreed upon level of performance, and not as a penalty. Under no circumstances shall the imposition of Service Level Credits be construed as State's sole or exclusive remedy for any failure to meet the Service Levels Service Level Credits are not counted toward and are not subject to the overall cap on Service Provider’s liability Deliverable Credits.

Service Provider recognizes that State is paying Service Provider to provide certain Critical Deliverables by the time and in the manner agreed by the Parties. If Service Provider fails to meet its obligations with respect to such Critical Deliverables, then, in addition to other remedies available to State, Service Provider shall pay or credit to State the amounts specified in Exhibit 3.1 (Service Level Matrix) as applicable, or established by State as part of the Project approval process on a case by case basis in recognition of the diminished value of the Services resulting from Service Provider’s failure to meet the agreed upon level of performance, and not as a penalty (the "Deliverable Credits"). If State recovers monetary damages from Service Provider as a result of Service Provider’s failure to meet its obligations with respect to one (1) or more Critical Deliverables, Service Provider shall be entitled to set-off against such damages any Deliverable Credits paid for the failures giving rise to such recovery. Deliverable Credits are distinct from Service Level Credits and shall not be counted toward or subject to the overall cap on Service Provider’s liability.

SERVICE PROVIDER PERSONNEL

Key Personnel.

1. Approval of Key Personnel. The positions designated by OTIS to be filled by Key Personnel and the Key Personnel that have been selected and approved by OTIS as of the Effective Date are identified in Exhibit 2.4 (Key Personnel). At least thirty (30) days prior to assigning an individual to act as one (1) of the Key Personnel, whether as an initial assignment or a subsequent assignment, Service Provider shall notify OTIS of the proposed assignment, shall introduce the individual to appropriate OTIS representatives, shall provide reasonable opportunity for OTIS representatives to interview the individual and shall provide OTIS with a resume and such other information about the individual as may be reasonably requested by OTIS. If OTIS in good faith objects to the proposed assignment, the Parties shall attempt to resolve OTIS's concerns on a mutually agreeable basis. If the Parties have not been able to resolve OTIS's concerns within five (5) Business Days of OTIS communicating its concerns, Service Provider shall not assign the individual to that position and shall propose to OTIS the assignment of another individual of suitable ability and qualifications. OTIS may add, delete, or otherwise change the positions to be filled by Key Personnel under this Contract.

Continuity of Key Personnel. Service Provider shall cause each of the Key Personnel initially assigned at execution to devote full time effort to the provision of Services under this Contract for, at a minimum, twenty-four (24) months post-Commencement unless otherwise stated in Exhibit 2.4 (Key Personnel). Service Provider shall cause each subsequent assignment of Key Personnel to devote full time effort to the provision of Services for, at a minimum, the applicable period specified by the Service Provider at the time of subsequent assignment, from the date he or she assumes the position in question (provided that, in the case of Key Personnel assigned prior to the Commencement Date, the minimum period shall be measured from the Commencement Date). Service Provider shall not transfer, reassign, or remove any of the Key Personnel (except as a result of voluntary resignation, involuntary termination for cause, illness, disability, or death) or announce its intention to do so during the minimum period without OTIS's prior approval, which OTIS may withhold in its reasonable discretion based on its own self-interest. In the event of the voluntary resignation, involuntary termination for cause, illness, disability or death of one (1) of its Key Personnel during or after the specified period, Service Provider shall (i) give OTIS as much notice as reasonably possible of such development and (ii) expeditiously identify and obtain OTIS's approval of a suitable replacement. In addition, even after the initial twenty-four (24) month assignment period, Service Provider shall transfer, reassign, or remove one (1) of its Key Personnel only after (1) giving OTIS at least thirty (30) days prior notice of such action (except to the extent such removal involves termination due to "cause" or "performance" as defined below), (2) identifying and obtaining OTIS's approval of a suitable replacement at least thirty (30) days prior to such transfer, reassignment or removal, (3) providing OTIS with a plan describing the steps and training (including knowledge transfer) that Service Provider shall perform to transition responsibility to the replacement, and (4) demonstrating to OTIS's reasonable satisfaction that such action shall not have an adverse impact on Service Provider’s performance of its obligations under this Contract. Unless otherwise agreed, Service Provider shall not transfer, reassign, or remove more than one (1) of the Key Personnel in any six (6) month period; provided, however, the foregoing shall not prevent Service Provider from terminating a Key Personnel for "cause" or "performance" as defined below. For purposes of this Section “cause” means disregard of Service Provider’s rules, insubordination, or misconduct (as defined in Service Provider’s human resource policies), or criminal conduct, and "performance" means that the individual's job performance is at a level that would justify dismissal under Service Provider’s human resources policies.

Retention and Succession. Service Provider shall implement and maintain a retention strategy designed to retain Key Personnel on OTIS's ' accounts for the prescribed period, such as retention bonuses. Service Provider shall also maintain active succession plans for each of the Key Personnel positions.

Service Provider Account Director.

Service Provider shall designate a "Service Provider Account Director" who, unless otherwise agreed by OTIS, shall maintain his or her office in Columbia, South Carolina. The Service Provider Account Director shall (a) be one (1) of the Key Personnel, (b) be a full time employee of the Service Provider, (c) devote his or her full time and effort to managing the Services, (d) remain in this position for a minimum period of two (2) years from the initial assignment (except as a result of voluntary resignation, involuntary termination for cause, illness, disability, or death), (e) serve as the single point of accountability for the Services, (f) be the single point of contact to whom all OTIS communications concerning this Contract may be addressed, (g) have authority to act on behalf of Service Provider in all day-to-day matters pertaining to this Contract, (h) have day-to-day responsibility for service delivery, billing and relationship management, and (i) have day-to-day responsibility for ensuring customer satisfaction and attainment of all Service Levels.

Service Provider Personnel Are Not State or STATE Employees.

The Parties intend to create an independent contractor relationship and nothing in this Contract shall operate or be construed as making the State, State, any Service Provider partners, joint venturers, principals, joint employers, agents or employees of or with the other. No officer, Director, employee, agent, affiliate, contractor or subcontractor retained by Service Provider to perform work hereunder shall be deemed to be an officer, Director, employee, agent, affiliate, contractor or subcontractor of the State or State for any purpose. Service Provider, not the State or State, has the right, power, authority and duty to supervise and direct the activities of the Service Provider Personnel and to compensate such Service Provider Personnel for any work performed by them hereunder. Service Provider, and not the State nor State shall be responsible and therefore solely liable for all acts and omissions of Service Provider Personnel associated or related in any manner with this Contract, the Services, State Facilities, Service Provider Facilities, State Confidential Information, or Equipment, including acts and omissions constituting negligence, gross negligence, willful misconduct and/or fraud.

Responsibility for Service Provider Personnel.

1. Service Provider’s employees, agents or Subcontractors shall be paid exclusively by Service Provider for all Services performed. Service Provider is responsible for and must comply with all requirements and obligations related to such employees, agents or Subcontractors under local, State or Federal law, including minimum wage, social security, unemployment insurance, State and Federal income tax and workers' compensation obligations.

Service Provider assumes sole and full responsibility for its acts and the acts of its employees, agents and Subcontractors relating to the performance of this Contract.

Service Provider agrees that any claim on behalf of any person arising out of employment, alleged employment, agency or subcontracts (including, but not limited to, claims of discrimination against Service Provider, its officers, or its agents or its Subcontractors) are the sole responsibility of Service Provider and are not the responsibility of State, and that Service Provider will indemnify and hold harmless State from any and all such claims asserted against the State. Service Provider understands that any person who alleges a claim arising out of employment, alleged employment, agency, or Subcontract by Service Provider (including, but not limited to, claims of discrimination against Service Provider, its officers, or its agents or its Subcontractors) will not be entitled to any compensation, rights, or benefits from State (including, but not limited to, tenure rights, medical and hospital care, sick and annual/vacation leave, severance pay, or retirement benefits).

Replacement, Qualifications, and Retention of Service Provider Personnel.

1. Sufficiency and Suitability of Personnel. As a material obligation hereunder, Service Provider shall assign (or cause to be assigned) sufficient numbers of Service Provider Personnel to perform the Services in accordance with this Contract (including applicable Service Levels), and such Service Provider Personnel shall possess suitable competence, ability and qualifications and shall be properly educated and trained for the Services they are to perform. Service Provider will maintain the organizational and administrative capacity and capabilities to carry out all Service Provider duties and responsibilities, including providing and supporting the Services, under this Contract. Notwithstanding transfer or turnover of its personnel, or of its agents' or Subcontractors' personnel, Service Provider remains obligated to perform all duties and responsibilities, including providing and supporting the Services, without degradation and in accordance with the terms of this Contract.

Responsibility for Service Provider Personnel. Service Provider agrees that anyone used by Service Provider to fulfill the terms of this Contract is an employee, agent or Subcontractor of Service Provider and remains under Service Provider’s sole direction and control. In addition, Service Provider hereby agrees to be responsible for the following with respect to its employees, agents or Subcontractors: (i) damages incurred by Service Provider Personnel or Subcontractors within the scope of their duties under this Contract; and (ii) determination of the hours to be worked and the duties to be performed by Service Provider Personnel or Subcontractors. Service Provider agrees and will inform its employees, agents, and Subcontractors that there is no right of action against State for any duty owed by Service Provider pursuant to this Contract. Service Provider expressly agrees that State assumes no liability for the actions of, or judgments rendered against, the Service Provider, its employees, agents, or Subcontractors.

Requested Replacement. In the event that OTIS determines lawfully and in good faith that the continued assignment of any individual Service Provider Personnel (including Key Personnel) to the performance of the Services is not in the best interests of State, then OTIS may give Service Provider notice to that effect requesting that such Service Provider Personnel be replaced. Service Provider shall have ten (10) Business Days following OTIS's request for removal of such Service Provider Personnel in which to investigate the matters forming the basis of such request, correct any deficient performance, and provide OTIS with assurances that such deficient performance shall not recur (provided that, if requested to do so by OTIS, Service Provider shall immediately remove (or cause to be removed) the individual in question from all State Facilities pending completion of Service Provider’s investigation and discussions with OTIS). If, following such ten (10) Business Day period, OTIS is not reasonably satisfied with the results of Service Provider’s efforts to correct the deficient performance and/or to prevent its recurrence, Service Provider shall, as soon as possible, remove and replace such Service Provider Personnel with an individual of suitable ability and qualifications, at no additional cost to State. Nothing in this provision shall operate or be construed to limit Service Provider’s responsibility for the acts or omissions of Service Provider Personnel or be construed as joint employment of the Service Provider Personnel.

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