Operational Risk Modelling Contract (UK)


SUPPLY OF SERVICES AGREEMENT

THIS AGREEMENT is made on the date of last signature below between:

Parties

  • (1) elanev Limited a company incorporated in England and Wales with registered number 10424418 whose registered office is at 13 Yorkersgate, Malton, North Yorkshire, YO17 7AA
    (Supplier);
  • (2) a company incorporated in England and Wales with registered number whose registered office is at
    (Customer).

AGREEMENT

Meanings

  1. In this Agreement, the following words are defined:

Agreement

this agreement for the provision of the Services (as defined below) including any schedules;

Confidential Information

in relation to either party, any information (whether or not stated to be confidential or marked as such) which that party discloses to the other, or which the other party obtains from any information disclosed to it by that party, either orally or in writing or by any other means, under or in connection with this Agreement;

Deliverables

all documents, items, plans, products, goods and materials supplied by the Supplier, including any methodologies, ideas, designs, computer programs, data, disks, tapes, and reports, in whatever form, which are developed, created, written, prepared, devised or discovered by the Supplier or its agents, sub-contractors, consultants and employees in relation to the Services;

Effective Date

the date on which the Agreement is signed by all parties;

Equipment

any equipment, systems, tools, cabling, items, materials or facilities requested or used directly or indirectly in the supply of the Services, by the Supplier or its sub-contractors;

Intellectual Property Rights

any invention, patent, utility model right, copyright and related right, registered design, unregistered design right, trade mark, trade name, internet domain name, design right, design, service mark, database rights, topography rights, rights in get-up, rights in goodwill or to sue for passing off and any other rights of a similar nature or other industrial or intellectual property rights owned or used by the Supplier in any part of the world whether or not any of the same is registered (or capable of registration), including applications and the right to apply for and be granted, extensions or renewals of, and rights to claim priority from, such rights and all equivalent or similar rights or protections which subsist now or will subsist in the future;

Services

the services which are set out and described in Schedule 1 of this Agreement, together with any other services which the Supplier provides or agrees to provide to the Customer through the change control procedure set out below (Change Control);

Service Charges

the charges for the Services, which are set out in Schedule 2 of this Agreement;

Specification

the description or specification for the Services as set out in Schedule 1 of this Agreement or as otherwise agreed between the parties through Change Control;

Working Day

any day other than a Saturday, Sunday or public holiday in England and Wales.

  1. In this Agreement, unless the context requires a different interpretation:
    1. the singular includes the plural and vice versa;
    2. references to sub-clauses, clauses, schedules or appendices are to sub-clauses, clauses, schedules or appendices of this Agreement;
    3. a reference to a person includes firms, companies, government entities, trusts and partnerships;
    4. “including” is understood to mean “including without limitation”;
    5. reference to any statutory provision includes any modification or amendment of it;
    6. the headings and sub-headings do not form part of this Agreement; and
    7. “writing” or “written” will include fax and e-mail unless otherwise stated.

Provision of Services

  1. The Supplier shall provide the Services to the Customer on the terms and conditions of this Agreement from the Effective Date and as set out in Schedule 1.
  2. The Services will be provided by the Supplier either:
    1. on an on-going basis; or
    2. in response to each request from the Main Contractor from time to time

 as specified in Schedule 1.

  1. The Agreement begins on the Effective Date and will continue for 12 months unless terminated earlier by either party under the clause below (Termination).
  2. The Supplier shall provide the Services (including any Deliverables) in accordance with the Specification in all material respects. Time is of the essence for any dates for delivery of the Services under this Agreement, unless specifically stated otherwise in any schedule.
  3. The Supplier shall perform the Services with reasonable care and skill, in accordance with:
    1. generally recognised commercial practices and standards in the applicable industry; and
    2. all laws and regulations applicable to the Services, including all laws and regulations related to (i) anti-bribery and corruption, and (ii) data protection.

Customer’s Obligations

  1. No amendment shall be made to Schedule 1 except on terms agreed in writing by the Parties in accordance with the clause below Change Control.
  2. The Customer must:
    1. co-operate with the Supplier in all matters relating to the Services;
    2. provide, in a timely manner, any Equipment, materials and any information as the Supplier may reasonably require; in the case of Equipment, the Customer shall ensure that it is in good working order and suitable for the purposes for which it is used, and in the case of information, the Customer shall ensure that it is accurate in all material respects;
    3. obtain and maintain all necessary licences and consents and comply with all relevant legislation in relation to the Services before the date on which the Services are to start;

Defective Services

  1. The Supplier shall promptly notify the Customer of:
    1. any delays or problems from time to time in the provision of the Services of which the Supplier becomes aware;
    2. any circumstances from time to time which may prevent the Supplier from providing the Services in accordance with this Agreement together with (where practicable) recommendations as to how such circumstances can be avoided; and
    3. any complaint (whether written or not) or other matter which comes to its attention and which it reasonably believes may give rise to any loss by or claim against the Customer or which may result in any adverse publicity for the Customer.
  2. The Customer shall, without limiting any right or remedy of the Customer, promptly report to the Supplier any defects in the Supplier’s performance of the Services as soon as reasonably practicable after any such defect comes to the attention of the Customer.
  3. Where any defect in the provision of the Services is reported to the Supplier by the Customer or otherwise comes to the attention of the Supplier, the Supplier shall, without limiting any other right or remedy of the Customer, use its reasonable endeavours to provide such further services as are necessary in order to rectify the default as soon as is reasonably practicable.

Charges, Payment And Time Records

  1. In consideration of the provision of the Services by the Supplier, the Customer shall pay the Service Charges as set out in Schedule 2 which specifies whether the charges are on a time and materials basis, a fixed price basis or a combination of both. Time is of the essence for the payment of the Service Charges.
  2. All charges quoted to the Customer are exclusive of VAT, which the Supplier shall add to its invoices at the appropriate rate.
  3. Where Services are provided on a time and materials basis:
    1. the charges payable for the Services shall be calculated in accordance with the Supplier’s standard daily fee rates for each individual person and are calculated on the basis of an eight-hour day, worked between 9 am and 5 pm on Working Days and otherwise by arrangement between the parties;
    2. the Supplier will ensure that every individual whom it engages in relation to the Services completes time sheets recording time spent on the Services or Deliverables; and
    3. the Supplier will invoice the Customer monthly in arrears for its charges for time, expenses and materials (together with VAT where appropriate) for the month concerned, accompanied by any relevant receipts for any Equipment, materials and expenses as incurred in accordance with the clause below.
  4. Where Services are provided for a fixed price, the total price for the Services is set out in Schedule 2. Upon completion of the Services or when an agreed instalment is due, the Supplier shall invoice the Customer for the charges that are then payable, together with any Equipment, materials and expenses, which have not been expressly included in the fixed price and VAT.
  5. Expenses incurred by the Supplier may include: the cost of hotel, subsistence, travelling and any other expenses reasonably incurred by the individuals whom the Supplier engages in connection with the Services, the cost of any materials and the cost of services reasonably and properly provided by third parties and required by the Supplier for the supply of the Services. Any expenses in excess of £1000 must be pre-approved by the Customer in writing. Such expenses, materials and third party services must be invoiced by the Supplier at cost, together with VAT, which the Supplier will add to its invoices at the appropriate rate.
  6. The Customer shall pay each invoice submitted to it by the Supplier, in full and in cleared funds, within 30 days of receipt (which shall be determined in accordance with the section below (Notices)) to a bank account nominated in writing by the Sub-contractor (the Due Date).
  7. Without prejudice to any other right or remedy that it may have, if the Customer fails to pay the Supplier on the Due Date:
    1. the Customer shall pay interest on the overdue amount at the rate of 4% per annum above the Bank of England base rate at the relevant time. Such interest will accrue on a daily basis from the due date until actual payment of the overdue amount, whether before or after judgment. The Supplier may choose to charge statutory interest due. The Customer shall pay the interest together with the overdue amount; and
    2. the Supplier may suspend all Services until payment has been made in full.
  8. All sums payable to the Supplier under this Agreement shall become due immediately on its termination, despite any other provision.
  9. The Supplier and the Customer shall pay all amounts due under this Agreement in full without any deduction except as required by law and neither party shall be entitled to assert any credit, set-off or counterclaim against the other in order to justify withholding payment of any amount due, in whole or in part.

Change control

  1. The Customer may at any time during the term of this Agreement request an increase or decrease in the volume of the Services, a change in the Specification, or the addition of new Services (Change Request) by notifying the Supplier in writing of its requirements.
  2. The Supplier shall give due consideration to any Change Request from Customer and shall, within 7 Working Days of receiving a Change Request from the Customer:
    1. confirm its acceptance of the Change Request, without any further variation to the terms of the Agreement, in which case the parties shall execute a variation to the Agreement as soon as reasonably practicable and the Supplier shall implement the Change Request accordingly; or
    2. provide a written proposal for accepting the Change Request, subject to any variation that it reasonably considers necessary to the Services, the Specification or the Service Charges, including any new Services (Change Proposal) agreement date; or
    3. if the Supplier believes it is not reasonably practicable to accept the Change Request, with or without any such variation, provide the Customer with a written statement of its reasons for doing so.
  3. Any Change Proposal provided by the Supplier under the above clause shall be based on the Service Charges or, if this is not appropriate, shall be a fair and reasonable quotation for the Change Request.
  4. The Customer shall give due consideration to the Supplier’s Change Proposal under the clause above and shall within 30 Working Days after receipt of the Change Proposal either give the Supplier a written notice accepting the Change Proposal (subject to or without further negotiation) or rejecting the Change Proposal. If the Customer accepts the Change Proposal, the parties shall as soon as reasonably practicable execute a variation to the Agreement and the Supplier shall implement the agreed variation.
  5. The Supplier shall have the right to make any changes to the Services which are necessary to comply with any applicable law or safety requirement, provided that the Supplier gives the Customer reasonable notice of such changes and that such changes do not materially affect the nature/scope of the Services or the Service Charges.

Indemnity

  1. The Supplier shall indemnify the Customer against any claim by any other person that the provision of the Services to the Customer in accordance with this Agreement infringes any Intellectual Property Rights of that other person.

Liability and Insurance

  1. If the Supplier’s performance of its obligations under this Agreement is prevented or delayed by any act or omission of the Customer, its agents, sub-contractors, consultants or employees, the Supplier shall not be liable for any costs, charges or losses sustained or incurred by the Customer that arise directly or indirectly from such prevention or delay.
  2. Nothing in this Agreement limits or excludes either party’s liability for:
    1. death or personal injury caused by its negligence;
    2. fraud or fraudulent misrepresentation; or
    3. breach of the terms implied by section 2 of the Supply of Goods and Services Act 1982 (title and quiet possession); or
    4. any other liability which cannot be limited or excluded by applicable law.
  3. Subject to the above clause and the clause above (Indemnity), neither party shall have any liability to the other party, whether in contract, tort (including negligence), for breach of statutory duty, or otherwise, arising under or in connection with this Agreement for:
    1. loss of profits;
    2. loss of sales or business;
    3. loss of agreements or contracts;
    4. loss of anticipated savings;
    5. loss of or damage to goodwill;
    6. loss of use or corruption of software, data or information;
    7. any indirect or consequential loss.
  4. Subject to the two proceeding clauses and the clause above (Indemnity), the total liability of either party for any other loss of the other party in respect of any one event or series of connected events shall not exceed £1,200.
  5. The terms implied by sections 3 to 5 of the Supply of Goods and Services Act 1982 are, to the fullest extent permitted by law, excluded from this Agreement.
  6. During this Agreement, the Supplier and the Customer shall each maintain in force with a reputable insurance company, insurance sufficient to indemnify risks for which they may be responsible, including for their respective sub-contractors, agents and employees, in connection with the Services and shall, on either parties’ request, produce both the insurance certificate giving details of cover and the receipt for the current year’s premium.

Confidentiality

  1. Each party will only use Confidential Information to perform its obligations under the Agreement and will not cause or allow the information to be disclosed except:
    1. where required by law, court order or any governmental or regulatory body;
    2. to any of its employees, officers, sub-contractors, representatives or advisers who need to know the information in order to discharge its obligations under the Agreement and agree only to use the information for that purpose and not to cause or allow disclosure of that information;
    3. where the information has become generally available to the public (other than as a result of disclosure in breach of the Agreement by the party or any of its employees, officers, sub-contractors, representatives or advisers);
    4. where the information was available or known to it on a non-confidential basis before being disclosed under the Agreement; or
    5. where the information was developed by or for it independently of the Agreement and is received by persons who are not the disclosing party.

Intellectual Property

  1. Subject to the clause below, the Supplier reserves all Intellectual Property Rights (if any) which may subsist in any Deliverables, or in connection with, the provision of the Services. The Supplier reserves the right to take such action as may be appropriate to restrain or prevent the infringement of such Intellectual Property Rights.
  2. The Supplier licenses all such rights to the Customer free of charge and on a non-exclusive, worldwide basis to such extent as is necessary to enable the Customer to make reasonable use of the Deliverables and the Services.
  3. If this Agreement is terminated, this licence will automatically terminate.

Data Protection

  1. Each party warrants and represents that it has made, and undertakes that at all times during the term of this Agreement it will maintain, any notification and registration required under the Data Protection Act 1998 (DPA) that relate to the performance of its obligations under this Agreement.
  2. Each party undertakes that in the performance of this Agreement it will comply with the DPA, and in particular the Data Protection Principles set out in the DPA, and with any guidance issued from time to time by the Information Commissioner.

Anti-Bribery

  1. The Supplier and its agents, sub-contractors, consultants or employees shall:
    1. comply with all applicable laws, regulations, statutes, and codes relating to anti-bribery and anti-corruption including but not limited to the Bribery Act 2010 (Bribery Laws);
    2. not commit an offence under sections 1, 2 or 6 of the Bribery Act 2010;
    3. comply with any relevant industry code related to Anti-Bribery (Bribery Policies);
    4. shall have, maintain, and enforce throughout the term of this Agreement its own policies and procedures, to ensure compliance with the Bribery Laws and the Bribery Policies; and
    5. promptly report to the Customer any request or demand for any undue financial or other advantage of any kind received by the Supplier in connection with the performance of this Agreement.

Non-Solicitation

  1. The Customer shall not, without the prior written consent of the Supplier, at any time from the date of this Agreement to the expiry of 6 months after the last date of supply of the Services or termination of this Agreement (whichever is the latest), solicit or entice away from the Supplier or employ or attempt to employ any person who is, or has been, engaged as an employee, consultant or sub-contractor of the Supplier in the provision of the Services.

Circumstances beyond the control of either party

  1. Neither party shall be liable for any failure or delay in performing their obligations where such failure or delay results from any cause that is beyond the reasonable control of that party.
  2. Such causes include, but are not limited to: power failure, Internet Service Provider failure, acts of God, epidemic, pandemic, civil unrest, fire, flood, droughts, storms, earthquakes, collapse of buildings, explosion or accident, acts of terrorism, acts of war, governmental action, any law or any action taken by a government or public authority, including without limitation imposing an export or import restriction, quota or prohibition, or any other event that is beyond the control of the party in question.
  3. The party affected by a circumstance beyond its control shall use all reasonable endeavours to mitigate the effect of the force majeure upon the performance of its obligations.
  4. The corresponding obligations of the other party will be suspended to the same extent as those of the party affected by a force majeure event.
  5. If the delay continues for a period of 90 days, either party may terminate or cancel the Services to be carried out under this Agreement.

Termination

  1. A party may terminate the Agreement immediately by giving written notice to the other party if that other party:
    1. does not pay any sum due to it under the Agreement within 30 days of the due date for payment;
    2. commits a material breach of the Agreement which, if capable of remedy, it fails to remedy within 30 days after being given written notice specifying full particulars of the breach and requiring it to be remedied);
    3. persistently breaches any term of the Agreement;
    4. is dissolved, ceases to conduct substantially all of its business or becomes unable to pay its debts as they fall due;
    5. is a company over any of whose assets or property a receiver is appointed;
    6. makes any voluntary arrangement with its creditors or (if a company) becomes subject to an administration order (within the meaning of the Insolvency Act 1986);
    7. (if an individual or firm) has a bankruptcy order made against it or (if a company) goes into liquidation;
    8. undergoes a change of control (within the meaning of section 1124 of the Corporation Tax Act 2010); or
    9. (if an individual) dies or as a result of illness or incapacity becomes incapable of managing his or her own affairs.

Consequences of Termination

  1. On termination or expiry of this Agreement:
    1. the Customer shall immediately pay to the Supplier all of the Supplier’s outstanding unpaid invoices and interest and, in respect of Services supplied but for which no invoice has been submitted, the Supplier may submit an invoice, which shall be payable immediately on receipt;
    2. the Customer shall, within a reasonable time, return all of the Supplier’s Equipment and any relevant Deliverables remaining the property of the Supplier. If the Customer fails to do so, then the Supplier may enter the Premises and take possession of them. Until they have been returned or repossessed, the Customer shall be solely responsible for their safe keeping.
  2. Termination or expiry of the Agreement shall not affect any rights, remedies, obligations or liabilities of the parties that have accrued up to the date of termination or expiry, including the right to claim damages in respect of any breach of the agreement which existed at or before the date of termination or expiry.
  3. Other than as set out in the Agreement, neither party shall have any further obligation to the other under the Agreement after its termination.

General

  1. This Agreement contains the whole agreement between the parties relating to its subject matter and supersedes all prior discussions, arrangements or agreements that might have taken place in relation to the Agreement. Nothing in this clause limits or excludes any liability for fraud or fraudulent misrepresentation.
  2. No party may assign, transfer or sub-contract to any third party the benefit and/or burden of the Agreement without the prior written consent (not to be unreasonably withheld) of the other party.
  3. No variation of the Agreement will be valid or binding unless it is recorded in writing and signed by or on behalf of both parties.
  4. The Contracts (Rights of Third Parties) Act 1999 does not apply to the Agreement and no third party has any right to enforce or rely on any provision of the Agreement.
  5. Unless otherwise agreed, no delay, act or omission by a party in exercising any right or remedy will be deemed a waiver of that, or any other, right or remedy.
  6. A provision which by its intent or terms is meant to survive the termination of the Agreement will do so.
  7. If any court or competent authority finds that any provision (or part) of the Agreement is invalid, illegal or unenforceable, that provision or part-provision will, to the extent required, be deemed to be deleted, and the validity and enforceability of the other provisions of the Agreement will not be affected.
  8. Unless specifically provided by the parties, nothing in the Agreement will establish any employment relationship, partnership or joint venture between the parties, or mean that one party becomes the agent of the other party, nor does the Agreement authorise any party to enter into any commitments for or on behalf of the other party.
  9. Any notice (other than in legal proceedings) to be delivered under the Agreement must be in writing and delivered by pre-paid first class post to or left by hand delivery at the other party’s registered address or place of business, or sent by email to the other party’s main business email address as notified to the sending party. Notices:
    1. sent by post will be deemed to have been received, where posted from and to addresses in the United Kingdom, on the second Working Day and, where posted from or to addresses outside the United Kingdom, on the tenth Working Day following the date of posting;
    2. delivered by hand will be deemed to have been received at the time the notice is left at the proper address; and
    3. sent by email will be deemed to have been received on the next Working Day after sending.

 

Governing law and jurisdiction

  1. This Agreement shall be governed by and interpreted according to the law of England and Wales and all disputes arising under the Agreement (including non-contractual disputes or claims) shall be subject to the exclusive jurisdiction of the English and Welsh courts.

The parties have signed this Agreement on the date(s) below:

 

Signed:

   

 

John Willoughby for and on behalf of elanev Limited

Dated:

Signed:

 

  for and on behalf of

Dated:

 

SCHEDULE 1 SPECIFICATION OF SERVICES

The service will be provided remotely via email until a future online facility is made available.

  • The supplier will provide the customer with the standard output of their Operational Risk model based on the completion of the proposed Excel template.
  • The supplier will issue an emailed output report to the customer based on the parameters entered into the template.
  • The supplier commits to processing each template and returning the output report to the customer within 24 hours if supplied Monday -Thursday or within 72 hours if supplied on a Friday.
  • The contract will allow for unlimited model runs up to the end of the term (8 months from signature).

The quantitative estimates within the elanev approach are used to parameterize a frequency and a severity distribution for each key risk scenario. The distributions used and the methods for parameterising them are based on techniques common to these models. Similarly, the use of Monte-Carlo simulation to combine the frequency and severity distributions to identify a loss profile for each of the key risks are also commonly used techniques.

The model outputs include:

  • An undiversified loss which is calculated from the fully correlated individual loss profiles.
  • A fully diversified loss calculated from fully independent individual loss profiles.
  • A diversified loss calculated from correlated individual loss profiles.

The diversified loss utilises user specified correlations between the key risk scenarios and industry standard copula models. A confidence level can be selected over a one-year time horizon to which undiversified losses, diversified losses and fully diversified losses can be calculated.

The following distributions will be offered:

  • Poisson and Bernoulli distributions to model loss frequency
  • Lognormal and Pareto distributions to model loss severity
  • Multivariate Gaussian and Student’s t-distributions for copula modelling

The frequency distribution is parameterized using the business expert-based estimate of the expected loss frequency for each scenario. The severity distribution is parameterized using scenario-based estimates of the severity of loss at two frequency values. There is an additional option to specify one of these two points as the median, mode or mean of the severity distribution.

The copula model is parameterised using the correlations identified between the risk scenarios. Each output report will be based on the following structure;

  • Scenarios, Simulations, Confidence and Currency
  • Frequency distribution
  • Severity distribution
  • Correlation and copula modelling
  • Model outputs

 

 

 

SCHEDULE 2 CHARGES

The customer has agreed to pay the supplier the lump sum of £17,000 for eight months service following the date of signature. 

Payment terms are 30 days from the date of signature.

 The model can be run as many times as required during the live period.

The fee for access to the model is £17,000 plus VAT, regardless of how frequently the model is run during this period.

During this live period the customer may repeat the analysis as many times as required.

This commercial arrangement assumes that the customer is willing to provide a credential for the services of the supplier.

 

 

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Signed by Steven Preston
Signed On: January 31, 2018

elanev® UK https://elanev.co.uk
Signature Certificate
Document name: Operational Risk Modelling Contract (UK)
Unique Document ID: 9a620906daa2602eb8c9678c47447e32e407a1b4
Timestamp Audit
February 1, 2017 6:30 am ESTOperational Risk Modelling Contract (UK) Uploaded by Steven Preston - 1un2e5111@elanev.com IP 81.133.209.21