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GPS » Topics » 4. SERVICE LEVEL CREDITS

This excerpt taken from the GPS 10-K filed Mar 28, 2006.

4. SERVICE LEVEL CREDITS

In the event of a Service Level Default, Gap shall receive credits in the amounts set forth in Exhibit B.1 (Service Level Matrix) as to the applicable Critical Service Level.

 

  4.1 If more than one Service Level Default has occurred in a single reporting period, the sum of the corresponding Service Level Credits shall be credited to Gap, even if the multiple Service Level Defaults occur within the same Performance Category, provided, however, that a single performance failure shall not be double-counted as both a Floor Service Level Default and an Expected Service Level Default for that reporting period .

 

  4.2 In no event shall the amount of Service Level Credits credited to Gap with respect to all Service Level Defaults occurring in a single month exceed, in total, the *.

 

  4.3 Supplier shall notify Gap in writing if Gap becomes entitled to a Service Level Credit, which notice shall be included in the standard monthly reporting for Critical Service Levels and Service Level Objectives as described in Section 3 (Reporting). The monthly reports shall also describe any failure to meet Service Level Objectives for the month.

 

  4.4 Supplier acknowledges and agrees that the credits or other rights and remedies set forth in this Service Level Exhibit shall not be deemed or construed to be liquidated damages or a sole and exclusive remedy, and that all such credits and other rights and remedies are cumulative with all other rights and remedies of Gap.

 

* Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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GAP CONFIDENTIAL

 

  4.5 In the event of a Service Level Default, Supplier shall provide Gap credits as defined below:

Exhibit B.1 (Service Levels Matrix) sets forth the information required to calculate the credits that Supplier shall apply against Monthly Charges in the event of a Service Level Default (“Service Level Credit”). For each Service Level Default, Supplier shall pay to Gap, *, as applicable below, a Service Level Credit that will be computed in accordance with the following formula:

Service Level Credit = *

Where:

*

 

  4.6 The total amount of Service Level Credits that Supplier will be obligated to pay to Gap, with respect to Service Level Defaults occurring each month (*), shall be reflected on the invoice that contains charges for the month following the month in which the Service Level Default(s) giving rise to such credit(s) occurred. For example, the amount of Service Level Credits payable (*) with respect to Service Level Defaults occurring in August shall be set forth in the invoice for the

 

* Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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GAP CONFIDENTIAL

 

 

Monthly Charges (as set forth in Exhibit C (Fees and Resource Baseline) to the Agreement) issued in September. Although Service Level Credits shall be shown on each monthly invoice, the credits will be payable to Gap on a * as described in *.

 

  4.7 For Service Level Credits that are incurred for performance during *, such amounts as calculated above will be increased by applying *.

 

  4.8 Notwithstanding that Service Level Credits for Peak Period will be credited on a * basis, during Peak Period all corrective action steps, including those in Section 12 (Improvement Plan for Service Levels) of this Service Level Exhibit, and Section 7.3 of the Agreement (Root-Cause Analysis and Resolution) shall be initiated upon identification of the Service Level Default. During peak periods, Supplier shall initiate root cause analysis within *, providing preliminary problem assessments, emergency workarounds, and proposed alternatives for permanent fixes where they are available and reporting an updated status with each * report.

5. *

Except as to Service Level Credits for performance during the peak period, which Supplier shall not have * opportunities and will be deemed Unrelieved Service Level Credits, Supplier shall have * opportunities with respect to Service Level Credits as follows:

 

  5.1 Within * after each Contract Year, Supplier shall * to Gap that will include Supplier’s * in that *.

 

  5.2 If, during the preceding Contract Year, Supplier * in effect for such Critical Service Level for that Contract Year, Supplier shall be * any Service Level Credits assessed during the preceding Contract Year for such Critical Service Level.

 

  5.3 For each Contract Year, any Service Level Credits for which Supplier is * will be considered * for each Contract Year *. The monetary amounts associated with Unrelieved Service Level Credits shall be credited to Gap on the monthly invoice reflecting charges for the first month of the Contract Year immediately following the Contract Year in which such Unrelieved Service Level Credits occurred.

 

* Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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GAP CONFIDENTIAL

 

  5.4 If the Agreement is terminated prior to the end of the Term, the foregoing process shall be undertaken with respect to the portion of the Contract Year during which the Agreement was in effect.

 

  5.5 The amount of any credits that have accrued, but have not been issued, as of the expiration or termination of this Agreement shall be paid to Gap within thirty (30) days of the expiration or termination of this Agreement.
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