Exhibit 10.1

 

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[***] indicates the omission of confidential portions for which confidential
treatment has been requested. Such confidential information has been filed
separately with the Securities and Exchange Commission.

 

PROCESSING SERVICES AGREEMENT

 

BETWEEN

 

CAPITAL ONE SERVICES, INC.

 

AND

 

TOTAL SYSTEM SERVICES, INC.

 

Dated

 

August 4, 2005

 

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TABLE OF CONTENTS

 

1

  

BACKGROUND AND OBJECTIVES

   1

1.1

  

BACKGROUND

   1

1.2

  

GOALS AND OBJECTIVES

   1

1.3

  

COLLATERAL AGREEMENTS

   2

2

  

DEFINITIONS

   3

2.1

  

CERTAIN DEFINITIONS

   3

2.2

  

OTHER TERMS

   13

2.3

  

INCLUSION OF AFFILIATES IN DEFINITION OF CAPITAL ONE AND TSYS; MEANING OF
“PARTY”

   14

2.4

  

RULES OF INTERPRETATION

   14

3

  

SERVICES

   15

3.1

  

PROVISION OF SERVICES

   15

3.2

  

SERVICES PERFORMED BY CAPITAL ONE OR THIRD PARTIES

   16

3.3

  

PERMITTED USERS AND CAPITAL ONE ACCOUNTS

   16

3.4

  

RESPONSIBILITY FOR RESOURCES

   18

3.5

  

FACILITIES

   18

3.6

  

TRANSITION OF FUNCTIONS/CAPABILITIES TO [***] TS2

   18

3.7

  

SPECIAL TERMS AND CONDITIONS FOR [***] AND [***]

   18

3.8

  

OSFI ACCESS TO DATA AND INFORMATION

   19

4

  

TERM

   20

4.1

  

INITIAL TERM

   20

4.2

  

RENEWAL

   20

5

  

TSYS PERSONNEL

   20

5.1

  

KEY TSYS POSITIONS

   20

5.2

  

TSYS SERVICES MANAGER

   21

5.3

  

RESOURCE POOL

   22

5.4

  

QUALIFICATIONS AND RETENTION OF TSYS PERSONNEL

   23

5.5

  

REMOVAL OF TSYS PERSONNEL

   23

5.6

  

COMPLIANCE WITH EACH PARTY’S REGULATIONS AND POLICIES

   23

5.7

  

USE OF SUBCONTRACTORS AND OTHER SUPPORT

   25

5.8

  

OVERSIGHT CONTROLS

   26

6

  

COMPLIANCE WITH LAWS

   26

6.1

  

COMPLIANCE WITH LAWS

   26

6.2

  

GRAMM-LEACH-BLILEY ACT, AND SIMILAR LAWS

   27

6.3

  

BANK BRIBERY ACT AND FOREIGN CORRUPT PRACTICES ACT

   27

6.4

  

CONSUMER CREDIT PROTECTION LAWS

   28

6.5

  

OFFICE OF FOREIGN ASSETS CONTROL REGULATIONS

   28

6.6

  

USA PATRIOT ACT AND PROCEEDS OF CRIME (MONEY LAUNDERING) AND TERRORIST FINANCING
ACT IN CANADA

   28

7

  

SERVICE LEVELS

   28

8

  

PROPRIETARY RIGHTS

   28

8.1

  

CAPITAL ONE MATERIALS

   29

8.2

  

DEVELOPED MATERIALS

   29

8.3

  

PROCESS FOR [***] THE LISTS

   31

8.4

  

TSYS MATERIALS

   32

8.5

  

THIRD PARTY MATERIALS

   32

8.6

  

WHOLLY NEW DEVELOPED MATERIALS

   33

 

- i -

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8.7

  

WORKS MADE FOR HIRE

   34

8.8

  

PATENT RIGHTS

   34

8.9

  

[***] OF TSYS PATENTS

   35

8.10

  

BANKRUPTCY CODE SECTION 365(N)

   35

8.11

  

RESIDUAL KNOWLEDGE AND FURTHER RIGHTS

   35

8.12

  

EXPORT

   36

8.13

  

TS2 LICENSE OPTION

   36

9

  

PROJECT AND CONTRACT MANAGEMENT

   37

9.1

  

STEERING COMMITTEE

   37

9.2

  

REPORTS AND MEETINGS

   37

9.3

  

PROCEDURES MANUAL

   38

9.4

  

CHANGE CONTROL

   39

9.5

  

TECHNOLOGY PLANNING

   40

9.6

  

TS2 DEVELOPMENT PRIORITIES

   40

9.7

  

QUALITY ASSURANCE AND IMPROVEMENT PROGRAMS

   40

9.8

  

COORDINATION OF ADDITIONAL MARKETING TO CAPITAL ONE

   40

9.9

  

NO AMENDMENT AND ORDER OF PRECEDENCE

   41

10

  

CAPITAL ONE RESPONSIBILITIES

   41

10.1

  

RESPONSIBILITIES

   41

10.2

  

SAVINGS CLAUSE

   42

11

  

CHARGES AND PAYMENT TERMS

   42

12

  

AUDITS

   43

12.1

  

GENERALLY

   43

12.2

  

SAS 70 AUDITS

   43

12.3

  

REGULATORY AUDITS

   44

12.4

  

CAPITAL ONE AUDITS

   44

12.5

  

AUDIT FOLLOW-UP AND NOTIFICATION

   47

12.6

  

RECORDS RETENTION

   47

12.7

  

OVERCHARGES

   48

13

  

SAFEGUARDING OF DATA; CONFIDENTIALITY

   48

13.1

  

SAFEGUARDING CAPITAL ONE DATA

   48

13.2

  

GLB COMPLIANCE

   49

13.3

  

CONFIDENTIALITY

   50

13.4

  

DISCLOSURES REQUIRED BY LAW

   54

13.5

  

NO IMPLIED RIGHTS

   54

13.6

  

RETURN OF CONFIDENTIAL INFORMATION

   54

13.7

  

CORPORATE RISK CONTROLS AND INFORMATION SECURITY REVIEW

   55

14

  

REPRESENTATIONS AND WARRANTIES

   56

14.1

  

SYSTEM QUALITY AND COMPLIANCE

   56

14.2

  

[***] PERFORMANCE

   56

14.3

  

WORK STANDARDS

   56

14.4

  

EFFICIENCY AND COST EFFECTIVENESS

   57

14.5

  

TECHNOLOGY

   57

14.6

  

OPEN SOURCE SOFTWARE

   57

14.7

  

NON-INFRINGEMENT

   57

14.8

  

OWNERSHIP OR AUTHORIZATION TO USE

   57

14.9

  

AUTHORIZATION AND OTHER CONTRACTS

   58

14.10

  

INDUCEMENTS

   58

14.11

  

USER DOCUMENTATION

   58

14.12

  

VIRUSES

   58

 

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14.13

  

DISABLING CODE

   58

14.14

  

DELIVERABLES

   59

14.15

  

DISCLAIMER

   59

15

  

INSURANCE

   59

15.1

  

INSURANCE COVERAGE

   59

15.2

  

INSURANCE PROVISIONS

   60

15.3

  

RISK OF LOSS

   61

16

  

INDEMNITIES

   61

16.1

  

INDEMNITY BY TSYS

   61

16.2

  

INDEMNITY BY CAPITAL ONE

   62

16.3

  

ADDITIONAL INDEMNITIES

   63

16.4

  

INFRINGEMENT

   63

16.5

  

INDEMNIFICATION PROCEDURES

   65

16.6

  

SUBROGATION

   66

17

  

LIABILITY AND FORCE MAJEURE

   66

17.1

  

GENERAL INTENT

   66

17.2

  

LIABILITY RESTRICTIONS

   67

17.3

  

FORCE MAJEURE

   68

17.4

  

LIMITATION OF ACTIONS

   69

18

  

DISPUTE RESOLUTION

   69

18.1

  

INFORMAL DISPUTE RESOLUTION

   69

18.2

  

ARBITRATION

   70

18.3

  

CONTINUED PERFORMANCE

   71

18.4

  

INJUNCTIVE RELIEF; SPECIFIC PERFORMANCE

   71

18.5

  

GOVERNING LAW

   71

18.6

  

EXPEDITED DISPUTE RESOLUTION

   72

18.7

  

BINARY ARBITRATION

   72

19

  

TERMINATION

   73

19.1

  

TERMINATION FOR CAUSE

   73

19.2

  

TERMINATION FOR CONVENIENCE

   74

19.3

  

TERMINATION DUE TO ELECTION OF LICENSE OPTION

   74

19.4

  

TERMINATION DUE TO FORCE MAJEURE EVENT

   74

19.5

  

TERMINATION DUE TO [***] CONSTRAINTS

   75

19.6

  

TERMINATION DUE TO TSYS’ FINANCIAL INABILITY TO PERFORM

   75

19.7

  

EXTENSION OF TERMINATION/EXPIRATION EFFECTIVE DATE

   75

19.8

  

TERMINATION/EXPIRATION ASSISTANCE

   76

20

  

GENERAL

   77

20.1

  

BINDING NATURE AND ASSIGNMENT

   77

20.2

  

NO COLLATERAL DOCUMENTS

   77

20.3

  

MUTUALLY NEGOTIATED

   78

20.4

  

NOTICES

   78

20.5

  

COUNTERPARTS

   79

20.6

  

RELATIONSHIP OF PARTIES

   80

20.7

  

SEVERABILITY

   80

20.8

  

CONSENTS AND APPROVAL

   80

20.9

  

WAIVER OF DEFAULT; CUMULATIVE REMEDIES

   80

20.10

  

SURVIVAL

   81

20.11

  

PUBLIC DISCLOSURES

   81

20.12

  

SERVICE MARKS

   81

 

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20.13   

THIRD PARTY BENEFICIARIES

   81 20.14   

NONSOLICITATION OF EMPLOYEES

   81 20.15   

COVENANT OF GOOD FAITH AND FAIR DEALING

   82 20.16   

ENTIRE AGREEMENT; AMENDMENT

   82

 

- iv -

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SCHEDULES

 

Schedule A:

  

Services

Schedule B:

  

Service Levels

Schedule C:

  

Charges

Schedule D:

  

Key TSYS Positions

Schedule E:

  

[***] List

Schedule F:

  

Capital One Competitors

Schedule G:

  

Permitted Subcontractors

Schedule H:

  

Form of TS2 License Agreement

Schedule I:

  

Form of Non-Disclosure/[***] Agreements

Schedule J:

  

Initial List of TSYS Personnel with Access to [***] Capital One

    

[***]

Schedule K:

  

Third Party Materials

Schedule L:

  

Initial Specifications for the TSYS System

Schedule M:

  

Form of Commencement Date Acknowledgement

Schedule N:

  

Capital One Initial Conversion Requirements

Schedule O:

  

Disclosure Schedule

Schedule P:

  

Form of [***]

Schedule Q:

  

Form of [***] Escrow Agreement

Schedule R:

  

Reports and Meetings

Schedule S:

  

Form of COF Guarantee

Schedule T:

  

Form of [***] Addendum

Schedule U:

  

Travel and Expense Guidelines

Schedule V:

  

Screening Requirements

Schedule W:

  

TSYS Facilities

Schedule X:

  

List of [***] Capital One

Schedule Y:

  

Procedures Manual Table of Contents

 

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PROCESSING SERVICES AGREEMENT

 

PROCESSING SERVICES AGREEMENT made and effective as of August 4, 2005 (the
“Effective Date”), by and between CAPITAL ONE SERVICES, INC. (“Capital One”), a
Delaware corporation having offices at 1680 Capital One Drive, McLean, Virginia
22102-3491, and TOTAL SYSTEM SERVICES, INC. (“TSYS”), a Georgia corporation
having offices at 1600 First Avenue, Columbus, Georgia 31901-1804.

 

1 BACKGROUND AND OBJECTIVES

 

  1.1 Background

 

  This Agreement is being made and entered into with reference to the following:

 

(a) Capital One is (directly or indirectly) a subsidiary of Capital One
Financial Corporation (“COF”), which through its banking subsidiaries is one of
North America’s largest consumer finance businesses, with large portfolios of
credit cards and other consumer and small business finance accounts. Capital One
currently performs the necessary data processing of such accounts through its
own proprietary computer systems;

 

(b) TSYS is one of North America’s largest providers of account processing
services for consumer finance companies, and provides such services through a
number of computer systems, including its newest system known as TS2;

 

(c) Capital One desires that certain transaction and account processing,
software development, and related activities be provided and managed by an
experienced and capable vendor skilled in the performance of these functions;

 

(d) Capital One has also licensed TSYS’ [***] system pursuant to a [***]
agreement; and

 

(e) TSYS wishes to perform the services provided for herein for Capital One.

 

  1.2 Goals and Objectives

 

The goals and objectives set forth in this Section 1.2 are intended to be a
general introduction to this Agreement and are not intended to expand the scope
of the parties’ obligations under this Agreement or to alter the plain meaning
of the terms and conditions of this Agreement. Moreover, the parties acknowledge
that such goals and objectives are not necessarily obligations of either party,
and neither party shall be liable for failing to achieve any such goals or
objectives except to the extent otherwise provided in other provisions of this
Agreement, including to the extent a goal or objective is made an obligation of
a party under other provisions of this Agreement. For purposes of the informal
dispute resolution process under Section 18.1, the parties shall use the
following goals and objectives as a guide. However, for purposes of any formal
dispute resolution process under any other provision of Section 18, such goals
and objectives shall be considered only to the extent the terms and conditions
of this Agreement are unclear or ambiguous, and in such case such terms and
conditions are to be interpreted and construed in light of the following goals
and objectives.

 

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Subject to the foregoing, Capital One and TSYS have agreed upon the following
specific goals and objectives for the relationship resulting in this Agreement:

 

(a) providing Capital One access to and use of a market competitive card
transaction and account processing platform on a basis that does not enable
Capital One to become a competitor to TSYS in the third party account processing
business;

 

(b) establishing and maintaining a joint development pool (of TSYS and Capital
One resources) to implement changes to [***] TS2, including (if requested by
Capital One) new functionality developed by TSYS for its then-existing TS2
Processing Platform, custom enhancements and changes required to meet regulatory
and Association requirements, so that Capital One resources develop and retain
an understanding of [***] TS2;

 

(c) providing Capital One a reliable processing platform and environment in
which the Services are performed primarily on [***] to Capital One;

 

(d) establishing a relationship in which TSYS has responsibility for providing,
maintaining, and supporting the Services, and recognizes the [***] impact of
Service disruptions on Capital One;

 

(e) providing a pricing structure that is designed to: (i) provide Capital One
competitive pricing in comparison to other appropriately comparable TSYS
customers; (ii) motivate TSYS to disclose and provide to Capital One the benefit
of any lower pricing provided to such TSYS customers without action on the part
of Capital One; and (iii) provide a reasonable overall profit to TSYS;

 

(f) forming a relationship that is designed to enable Capital One to achieve
faster time to market and more flexibility than it could achieve on its own;

 

(g) achieving a contractual arrangement that is responsive to the changing
demands of Capital One’s businesses and Capital One’s requests to implement new
TSYS products and enhancements within [***] TS2, while also accommodating
material changes in volumes;

 

(h) ensuring that Capital One is [***] additional functionality and products
provided or made available by TSYS to its other [***] TS2, [***], and [***]
customers;

 

(i) creating incentive arrangements to encourage superior performance while
providing Capital One the flexibility to change service vendors or resume
internal operations;

 

(j) providing Capital One the right to license the software used by TSYS to
provide the Services; and

 

(k) protecting the parties’ respective intellectual property.

 

  1.3 Collateral Agreements

 

Simultaneously with the execution and delivery of this Agreement, the parties or
their respective Affiliates have executed and delivered the TS2 License
Agreement, the [***] Agreement, the COF Guarantee, and the [***] Addendum. In
addition, the parties shall use Commercially Reasonable Efforts to cause the
third party escrow agent to execute the [***] Escrow Agreement within [***] days
of the Effective Date. The parties have agreed to the terms of the [***] Escrow
Agreement included in Schedule Q and shall be reasonable in accommodating
changes thereto that are required by the third party escrow agent.

 

- 2 -

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2 DEFINITIONS

 

  2.1 Certain Definitions

 

As used in this Agreement:

 

(a) “AAA” shall mean the American Arbitration Association and its successors.

 

(b) “Account” shall mean a unique representation of the data and current
financial status of a customer account relationship for a credit, debit, private
label, small business, line of credit, stored value or closed end account issued
to a person who either currently has or at the time of origination had a United
States or Canadian mailing address, and such other accounts as the parties may
agree to from time to time.

 

(c) “Actual Migration Completion Date” shall have the meaning given in
Section 13.4(b) of Schedule A.

 

(d) “Affiliate” shall mean, with respect to any entity, any other entity
Controlling, Controlled by, or under common Control with, such entity at the
time in question.

 

(e) “Agreement” shall mean this Processing Services Agreement, including the
Main Body of the Agreement and all schedules, exhibits, and attachments hereto
(other than the TS2 License Agreement, the [***] Agreement, and the [***] Escrow
Agreement), as may be amended by the parties in accordance with Section 20.16.

 

(f) “Applicable Laws” shall mean:

 

(i) any law, statute, regulation, ordinance, or subordinate legislation in force
from time to time to which a party or its Affiliates is subject;

 

(ii) the common law as applicable to the parties from time to time;

 

(iii) any court order, judgement, or decree that is binding on a party or its
Affiliates; and

 

(iv) any directive, policy, rule, or order that is binding on a party or its
Affiliates and that is made or given by any Association, Regulator, or other
government or government agency, of, in the case of items (i) through
(iv) above, any (x) country, or other national, federal, commonwealth, state,
provincial, or local jurisdiction, (y) Association, or (z) exchange or
association whose regulations are binding on either party pursuant to a
self-regulating mechanism approved by a governmental entity.

 

(g) “Applications Software” or “Application” shall mean Software (including the
supporting documentation, media, on-line help facilities, and tutorials) that
performs specific user related data processing and telecommunications tasks in
connection with the Services. The Software portions of TS2, [***], and [***] are
each Applications Software.

 

(h) “Association(s)” shall mean Visa and MasterCard and any other card
associations with which any of the Capital One Accounts receiving the Services
may be associated from time to time, including American Express and Discover
Card.

 

(i) “Bankruptcy Code” shall have the meaning given in Section 8.10.

 

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(j) “BIN/ISO” shall mean a bank identification number or prefix used to identify
Association member transactions and groups of Accounts.

 

(k) “Business Day” shall mean every day Monday through Friday other than those
holidays when Capital One’s corporate headquarters is not scheduled to be open
for business. References in this Agreement to “days” that do not specifically
refer to Business Days are references to calendar days.

 

(l) “Canadian Privacy Legislation” shall mean the Personal Information and
Electronics Documents Act, S.C. 2001, c-5, the Act Respecting the Protection of
Personal Information in the Private Sector, R.S.Q. c. P-39.1, the Personal
Information Protection Act, S.B.C. 2003, c-63, the Personal information
Protection Act, R.S.A., c. P-65, and any similar legislation applicable in
Canada.

 

(m) “Capital One Account” shall have the meaning given in Section 3.3(b).

 

(n) “Capital One Audit” shall have the meaning given in Section 12.4.

 

(o) “Capital One Auditors” shall have the meaning given in Section 12.1.

 

(p) “Capital One Competitor” shall mean each of the entities listed in Schedule
F and their respective Affiliates, as such Schedule may be updated from time to
time by Capital One in its sole discretion, provided the list may not contain
[***] entities any [***].

 

(q) “Capital One Confidential Information” shall have the meaning given in
Section 13.3(a).

 

(r) “Capital One Contract Manager” shall have the meaning given in
Section 10.1(a).

 

(s) “Capital One Data” shall mean information of Capital One entered into the
TSYS System (and/or, to the extent [***] stores data separately from the TSYS
System and TSYS is providing hosting services, [***]) by or on behalf of Capital
One and information derived from such information, including as stored in or
processed through the TSYS System (or [***], as the case may be).

 

(t) “Capital One Designee” shall have the meaning given in Section 19.8.

 

(u) “Capital One Developed Materials” shall mean the following:

 

(i) Developed Materials that (A) are modifications to, or derivative works,
upgrades, or enhancements of, Capital One Materials and (B) do not incorporate
any TSYS Materials and are not modifications to, or derivative works, upgrades
or enhancements of, TSYS Materials; and

 

(ii) Non-Software Developed Materials that are predominantly comprised of
pre-existing Capital One Materials. For example, pre-existing Capital One
training materials, documentation, business plans, and similar non-Software
materials that are modified within the scope of this Agreement using TSYS
Materials would be Capital One Developed Materials.

 

(v) “Capital One Directions” shall have the meaning given in Section 6.1(b).

 

(w) “Capital One Initial Conversion Requirements” shall mean the functionality,
scalability, and business requirements attached as Schedule N.

 

- 4 -

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(x) “Capital One [***]” shall have the meaning given in Section 13.3(e).

 

(y) “Capital One Materials” shall mean the following:

 

(i) all Software and non-Software materials, such as business plans, credit risk
models, optimization models, authorization models, marketing and product
strategies, Capital One process and procedure descriptions, manuals, and
training materials, owned or developed by Capital One or a Capital One
Affiliate;

 

(ii) Third Party Materials licensed to Capital One or any Capital One Affiliate
and used by, or made available to, TSYS in connection with this Agreement; and

 

(iii) Capital One Developed Materials.

 

(z) “Capital One Legal Requirements” shall have the meaning given in
Section 6.1.

 

(aa) “Capital One Operating Environment” shall mean the information technology
software, equipment, systems, processes, and procedures used by any of Capital
One and Capital One Affiliates, and their respective suppliers, to interface
with the TSYS System, [***], and [***] and to access and utilize the Services.
The Capital One Operating Environment shall not include any portion of the TSYS
System or, so long as TSYS is providing hosting services in connection
therewith, the portions of [***] for which TSYS is providing hosting services.

 

(bb) “[***] TS2” shall mean the [***]version of TS2 that TSYS uses (along with
[***]) to provide Services to Capital One under this Agreement. At the
Commencement Date, [***] TS2 shall be a [***] of TS2 that has been [***] for in
the Initial Conversion Plan. Thereafter, [***] TS2 shall be [***] for [***]
during the Term as provided in this Agreement.

 

(cc) “[***] Failure” shall mean a failure of [***] of the TSYS System and, as a
result of [***], the [***], to be available for use for Capital One Accounts for
a [***].

 

(dd) “Change Control Procedure” shall have the meaning given in Section 9.4.

 

(ee) “Charges” shall have the meaning given in Section 1.1 of Schedule C.

 

(ff) “COF” shall have the meaning given in Section 1.1(a).

 

(gg) “COF Guarantee” shall mean the agreement between TSYS and COF in the form
of Schedule S.

 

(hh) “Commencement Date” shall mean the date on which the final Conversion event
identified in the Initial Conversion Plan is completed. Within [***] days after
such date, the parties shall execute an acknowledgement thereof in the form of
Schedule M.

 

(ii) “Commercially Reasonable Efforts” shall mean taking such steps and
performing in such a manner as a well managed business would when such business
is acting in a determined, prudent, and reasonable manner to achieve a
particular desired result for its own benefit.

 

(jj) “Compliance Enhancement” shall have the meaning given in Section 6.1(e).

 

(kk) “Confidential Information” shall have the meaning given in Section 13.3(a).

 

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(ll) “Control” and its derivatives mean with regard to any entity the legal,
beneficial or equitable ownership, directly or indirectly, of more than [***]
percent ([***]%) of the capital stock (or other ownership interest if not a
stock corporation) of such entity ordinarily having voting rights.

 

(mm) “Conversion” and its derivatives (such as “Converted”) shall mean:

 

(i) the transfer of data relating to Capital One Accounts from the processing
system(s) in which that data currently resides and is processed to the TSYS
System (and, as applicable, [***]);

 

(ii) the migration from the current processing system(s) to the TSYS System
(and, as applicable, [***]) for the performance of the various processing
functions;

 

(iii) implementation of all functionality contained in the applicable
Specifications and completion of the activities in the applicable Conversion
Plan; and

 

(iv) all activities necessary to complete the activities described in items (i),
(ii), and (iii) above.

 

(nn) “Conversion Plan” shall have the meaning given in Section 3.1 of Schedule
A.

 

(oo) “Customer Information” shall have the meaning given in Section 13.2.

 

(pp) “Default Rate” shall have the meaning given in Section 8.5(c) of Schedule
C.

 

(qq) “Deliverables” shall mean each of the Software, documentation, and other
deliverables TSYS is required to deliver under this Agreement (including the
Conversion Plans) and any other deliverables agreed upon by the parties in
writing.

 

(rr) “Developed Materials” shall mean all [***] that are developed by TSYS
and/or the Development Pool within the scope of this Agreement, which includes
all of the development described in the Initial Conversion Plan. Developed
Materials will [***] (i) any materials developed by or on behalf of either party
outside of the scope of this Agreement; (ii) any Wholly New Developed Materials;
[***] (iii) any modifications to the [***].

 

(ss) “Development Pool” shall have the meaning given in Section 4.1 of Schedule
C.

 

(tt) “Development Methodology” shall mean the TSYS development methodology set
forth in the Procedures Manual applicable to TS2.

 

(uu) “Dispute Date” shall have the meaning given in Section 18.1(a).

 

(vv) “[***] Account” shall have the meaning given in Section 3.3(e).

 

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(ww) “Documentation” shall mean TSYS documentation that:

 

(i) instructs or assists users, operators, and system personnel in the operation
and use of the TSYS System, [***] (as applicable), and the Services; and/or

 

(ii) describes the features, functions, and operation of the TSYS System, [***],
and the Services, as such documentation exists on the Effective Date and is
updated from time to time, including the Procedures Manual.

 

(xx) “Effective Date” shall have the meaning given in the preamble of this
Agreement.

 

(yy) “Equipment” shall mean the computer and telecommunications equipment
(without regard to the entity owning or leasing such equipment) used by TSYS to
provide the Services. Equipment includes any of the following that are used by
TSYS to provide the Services: (i) computer equipment, including associated
attachments, features, accessories, peripheral devices, and other computer
equipment; (ii) telecommunications equipment, including private branch
exchanges, multiplexors, modems, CSUs/DSUs, hubs, bridges, routers, switches,
and other telecommunications equipment; and (iii) related services (e.g.,
maintenance and support services, upgrades, subscription services) provided by
third parties (e.g., manufacturer and lessor) in the same contract covering the
provision of such Equipment.

 

(zz) “[***]” shall mean the third party software used to [***] that Capital One
licenses pursuant to a separate agreement with [***].

 

(aaa) “Force Majeure Event” shall have the meaning given in Section 17.3.

 

(bbb) “GLB Act” shall mean the Gramm-Leach-Bliley Act, 15 USC §6801 et seq., and
the implementing regulations and regulatory interpretations thereto, as amended
from time to time.

 

(ccc) “GLB Regulations” shall have the meaning given in Section 13.2.

 

(ddd) “Intellectual Property Rights” shall mean, collectively, Patent Rights and
Non-Patent Intellectual Property Rights.

 

(eee) “[***] List” shall mean the list of functionalities set forth in the
attached Schedule E as of the Effective Date and any other functionalities [***]
such list pursuant to Section 8.3.

 

(fff) “[***] List Materials” shall mean TSYS Developed Materials that are
developed to provide functionalities on the [***] List.

 

(ggg) “Initial Conversion” shall have the meaning given in Section 3.4 of
Schedule A.

 

(hhh) “Initial Conversion Plan” shall have the meaning given in Section 3.4 of
Schedule A.

 

(iii) “Initial Term” shall have the meaning given in Section 4.1.

 

(jjj) “[***]” shall mean the [***] held by [***] (and their successors and
assigns) listed in Schedule X and any additional [***] which Capital One [***]
from either or both of them after the Effective Date.

 

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(kkk) “Key TSYS Positions” shall have the meaning given in Section 5.1.

 

(lll) “Licensed Materials” shall have the meaning given in the TS2 License
Agreement.

 

(mmm) “List” shall mean the [***] List or the [***] List.

 

(nnn) “Losses” shall mean all losses, liabilities, damages, and claims, and all
related costs and expenses (including reasonable legal fees and disbursements
and costs of investigation, litigation, settlement, judgment, interest, and
penalties).

 

(ooo) “Main Body of the Agreement” shall mean, collectively, the preamble and
Sections 1 through 20 of this Agreement.

 

(ppp) “MasterCard” shall mean, individually or collectively, as appropriate,
MasterCard® International Incorporated and its Affiliates and their respective
successors and assigns.

 

(qqq) “Migration” shall have the meaning given in Section 13.1 of Schedule A.

 

(rrr) “Migration Plan” shall have the meaning given in Section 13.1 of Schedule
A.

 

(sss) “[***]” shall have the meaning given in Section 3.6(a) of Schedule C.

 

(ttt) “Monthly Performance Report” shall have the meaning given in
Section 9.2(a).

 

(uuu) “New Additional Services” shall have the meaning given in Section 5.2 of
Schedule C.

 

(vvv) “Non-Patent Intellectual Property Rights” shall mean, on a worldwide
basis, any and all:

 

(i) rights associated with works of authorship and literary property, including
copyrights, moral rights of an author of a copyrightable work (including any
right to be identified as the author of the work or to object to derogatory
treatment of the work), and mask-work rights;

 

(ii) trade marks, service marks, logos, trade dress, trade names, whether or not
registered, and the goodwill associated therewith;

 

(iii) rights relating to know-how or trade secrets, including ideas, concepts,
methods, techniques, inventions (whether or not developed or reduced to
practice);

 

(iv) rights in domain names, universal resource locator addresses, telephone
numbers (including toll free numbers), and similar identifiers;

 

(v) other intellectual and industrial property rights (other than Patent Rights)
of every kind and nature, however designated, whether arising by operation of
law, contract, license or otherwise; and

 

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(vi) registrations, initial applications (including intent to use applications),
renewals, extensions, continuations, divisions, or reissues thereof now or
hereafter in force (including any rights in any of the foregoing).

 

(www) “Notice of Election” shall have the meaning given in Section 16.5.

 

(xxx) “Object Code” shall mean computer programming code (including microcode,
as applicable) in binary form. Object Code is directly executable by a computer
after processing, but without compilation or assembly.

 

(yyy) “[***] List” shall mean a [***] number of [***] designated by Capital One
that Capital One desires to [***] after the Commencement Date, that are [***] to
give Capital One a [***], that at the time of [***] Capital One [***] the
Development Pool [***], and that at the time of [***] TSYS’ Development Pipeline
or [***] in the [***]. Additionally, if any [***] on the [***] List is not [***]
by the Commencement Date it shall be automatically [***] on the [***] List.

 

(zzz) “Out-of-Pocket Expenses” shall mean reasonable, demonstrable, and actual
out-of-pocket expenses that are incurred by TSYS in connection with providing
the Services, but not including TSYS’ overhead costs (or allocations thereof),
administrative expenses, or other mark-ups. Out-of-Pocket Expenses shall be
calculated at TSYS’ actual incremental expense and shall be net of all rebates
and allowances received by TSYS or its Affiliates. Where TSYS incurs an
Out-of-Pocket Expense from an Affiliate of TSYS, the amount charged to Capital
One shall be no greater than would have been paid to such Affiliate in an arm’s
length transaction between unaffiliated companies at fair market value. Pass
Through Expenses are not Out-of-Pocket Expenses.

 

(aaaa) “Pass-Through Expenses” shall have the meaning given in Section 8.1 of
Schedule C.

 

(bbbb) “Patent Rights” shall mean rights in patents and patentable subject
matter, and patent registrations, initial applications, renewals, extensions,
continuations, divisions, or reissues thereof now or hereafter in force
(including any rights in any of the foregoing).

 

(cccc) “Permitted Subcontractors” shall mean those subcontractors of TSYS:

 

(i) identified in Schedule G;

 

(ii) whose approval by Capital One is not required pursuant to Section 5.7; and

 

(iii) any other subcontractor(s) approved by Capital One pursuant to
Section 5.7,

 

unless and until (in each case of (i), (ii), and (iii)) approval of such
subcontractor is rescinded by Capital One in accordance with Section 5.7.

 

(dddd) “Permitted Users” shall have the meaning given in Section 3.3(a).

 

(eeee) “Personally Identifiable Information” shall mean any information that
(i) is defined as “personal information” under the GLB Act or Canadian Privacy
Legislation or (ii),

 

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alone or in combination with other information, relates to a specific,
identifiable individual person. Personally Identifiable Information includes
individual names, social security numbers, telephone numbers, home address,
driver’s license number, account number, email address, and vehicle registration
number. Any information that can be associated with Personally Identifiable
Information shall also be Personally Identifiable Information. For example, an
individual’s age alone is not Personally Identifiable Information, but if such
age were capable of being associated with one or more specific, identifiable,
individuals then such age would be deemed Personally Identifiable Information.

 

(ffff) “[***]” shall mean the strategy management system that TSYS sublicenses
to Capital One pursuant to the [***] Addendum.

 

(gggg) “[***] Addendum” shall mean the addendum to this Agreement attached as
Schedule T, which has been executed by the parties simultaneously with the
execution and delivery of this Agreement.

 

(hhhh) “Portfolio” shall mean an aggregation of Accounts, as designated by
Capital One.

 

(iiii) “Procedures Manual” shall have the meaning given in Section 9.3.

 

(jjjj) “Processing Year” shall mean each consecutive twelve (12) month period
measured from (i) the Commencement Date if the Commencement Date is on the first
day of a month or the first day of the month following the Commencement Date if
the Commencement Date is not on the first day of a month, or (ii) an anniversary
of the first day of the first Processing Year. For example, if the first
Processing Year (Processing Year 1) began on June 1, 2007, it would end on
May 31, 2008 and Processing Year 2 would begin on June 1, 2008 and end on
May 31, 2009. If the final Processing Year is less than twelve (12) months,
non-specific references to amounts for such Processing Year shall be
appropriately and equitably pro-rated.

 

(kkkk) “[***]” shall mean the web-based process management system licensed
[***]pursuant to the [***] Agreement.

 

(llll) “[***] Agreement” shall mean the agreement entered into between Capital
One and TSYS in the form of Schedule P.

 

(mmmm) “Regulator” shall mean a governmental authority, or a non-governmental
entity such as the National Association of Securities Dealers (NASD) or New York
Stock Exchange (NYSE), that is charged with monitoring or overseeing the
business practices of the respective parties or their Affiliates, including (as
applicable) the Federal Financial Institutions Examination Council (FFIEC), the
Board of Governors of the Federal Reserve System (FRB), the Federal Deposit
Insurance Corporation (FDIC), the National Credit Union Administration (NCUA),
the US Office of the Comptroller of the Currency (OCC), the US Office of Thrift
Supervision (OTS), the Canadian Office of the Superintendent of Financial
Institutions (OSFI), and the Financial Consumer Agency of Canada (FCAC) or any
successor bodies that regulate consumer finance companies and/or financial
service providers.

 

(nnnn) “Renewal Term” shall have the meaning given in Section 4.2.

 

(oooo) “Resource Pool” shall have the meaning given in Section 5.3.

 

(pppp) “SAS 70” shall have the meaning given in Section 12.2.

 

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(qqqq) “SAS 70 Auditor” shall have the meaning given in Section 12.2.

 

(rrrr) “[***] TS2” shall mean the [***] platform used by TSYS to perform
Services not performed using [***] TS2, [***], or [***];

 

(ssss) “Services” shall have the meaning given in Section 3.1.

 

(tttt) “Service Levels” shall have the meaning given in Section 7.

 

(uuuu) “Software” shall mean (unless a more specific reference is provided)
software programs and programming (including the supporting documentation,
media, on-line help facilities, and tutorials) as those terms are generally
understood in the information technology industry.

 

(vvvv) “Source Code” shall mean computer programming code (including microcode,
as applicable) other than Object Code, including:

 

(i) code that may be displayed in a form readable and understandable by a
programmer of ordinary skill, as well as any enhancements, corrections, and
documentation related thereto; and

 

(ii) all related Source Code level system documentation, comments, procedural
code (such as job control language), and explanatory materials.

 

(wwww) “[***] Escrow Agreement” shall mean the agreement among TSYS, Capital
One, and the third party escrow agent designated therein, in the form of
Schedule Q. The parties acknowledge that the [***] to [***] is owned by an
unaffiliated third party and will not be deposited under the [***] Escrow
Agreement.

 

(xxxx) “Specifications” shall mean the written materials (including the relevant
Documentation) that describe the functions and features of the TSYS System,
[***], or other Deliverables, and any of their component parts. The
Specifications for the Initial Conversion consist of:

 

(i) the TS2, [***], and [***] Documentation;

 

(ii) the mutually agreed list of [***] TSYS shall [***] during the Initial
Conversion to [***] TS2, [***], and [***] to meet the Capital One Initial
Conversion Requirements (the “[***] List”);

 

(iii) the mutually agreed list of [***] necessary for Permitted Users to Access
and Use the Services (“[***] List”);

 

(iv) the list of [***] TSYS has committed to [***] for TS2 prior to the
Commencement Date (“[***] List”); and

 

(v) the Initial Capital One [***] Requirements designated as “[***]
Requirements”.

 

The [***] List, [***] List, [***] List, and the [***] Requirements as they exist
on the Effective Date are attached as Schedule L.

 

(yyyy) “Steering Committee” shall have the meaning given in Section 9.1.

 

(zzzz) “Systems Software” shall mean those programs and programming (including
the supporting documentation, media, on-line help facilities and tutorials) that

 

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perform (i) tasks basic to the functioning of the Equipment and which are
required to operate the Applications Software; or (ii) tasks, other than as
performed by Applications Software, otherwise supporting the provision of the
Services by TSYS. Software supporting the Services that are not Applications
Software shall be deemed to be Systems Software. Systems Software includes
mainframe and mid-range operating systems, server operating systems, network
operating systems, systems utilities (including measuring and monitoring tools),
data security software, middleware, database management systems, development
tools (other than development tools specific to a particular item of
Applications Software which is provided by the licensor of such Applications
Software) and telecommunications monitors.

 

(aaaaa) “Technology Subcommittee” shall have the meaning given in
Section 9.5(a).

 

(bbbbb) “Term” shall mean the Initial Term and any Renewal Terms.

 

(ccccc) “Termination/Expiration Assistance” shall have the meaning given in
Section 19.8.

 

(ddddd) “Third Party Materials” shall mean all Software and non-Software
materials, such as business plans, process and procedure descriptions, manuals,
and training materials owned by a third party and licensed to either Capital One
or TSYS for use in connection with this Agreement.

 

(eeeee) “[***]” shall mean the systems for processing and managing incentive
rewards point calculations operated by TSYS through [***].

 

(fffff) “TS2 License Agreement” shall mean the agreement entered into between
TSYS and Capital One in the form of Schedule H.

 

(ggggg) “TS2 Processing Platform” or “TS2” shall mean the TOTAL SYSTEM II
processing system, including all subsystems thereto and all related development
and testing facilities, processes, procedures, and software, as the same may be
enhanced, modified, and updated from time to time during the Term.

 

(hhhhh) “TSYS Confidential Information” shall have the meaning given in
Section 13.3(a).

 

(iiiii) “TSYS Developed Materials” shall mean all Developed Materials that are
not Capital One Developed Materials.

 

(jjjjj) “TSYS’ Development Pipeline” shall mean the written list of product
development projects and ideas that TSYS is [***]within the following [***] year
period as reflected in the [***] by TSYS in the ordinary course of business, as
the same is updated from time to time.

 

(kkkkk) “TSYS Facilities” shall have the meaning given in Section 3.5(a).

 

(lllll) “TSYS Materials” shall mean:

 

(i) all Software and non-Software materials, such as business plans, process and
procedure descriptions, manuals, and training materials, that are not Developed
Materials or Wholly New Developed Materials and that are owned or developed by
TSYS or any of its Affiliates;

 

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(ii) Third Party Materials licensed to TSYS or any Affiliate of TSYS; and

 

(iii) TSYS Developed Materials.

 

(mmmmm) “TSYS Personnel” shall mean employees and individual independent
contractors of TSYS and its Permitted Subcontractors assigned to perform the
Services.

 

(nnnnn) “TSYS Services Manager” shall have the meaning given in Section 5.2.

 

(ooooo) “TSYS System” shall mean all Equipment, Software, systems, interfaces,
processes, and procedures used or necessary for use by TSYS to perform the
Services. The TSYS System includes:

 

(i) [***] TS2;

 

(ii) [***] TS2;

 

(iii) [***];

 

(iv) [***];

 

(v) so long as Capital One is acquiring hosting services with respect to [***],
or other system used to perform the Services, then all Equipment, Software,
systems, interfaces, processes, and procedures used or necessary for use to
perform such hosting; and

 

(vi) all Documentation relating to the TSYS System as a whole or the individual
components making up the TSYS System.

 

(ppppp) “[***] Materials” shall have the meaning given in Section [***].

 

(qqqqq) “Use” shall mean, in the context of Intellectual Property Rights, to
use, copy, maintain, modify, enhance, or create derivative works.

 

(rrrrr) “Virus” shall mean:

 

(i) program code or programming instruction or set of instructions intentionally
designed to disrupt, disable, harm, interfere with or otherwise adversely affect
computer programs, data files or operations; or

 

(ii) other code typically described as a virus or by similar terms, including
Trojan horse, worm or backdoor.

 

(sssss) “VISA” shall mean, individually or collectively, as appropriate, VISA®
U.S.A., Inc. or VISA® International and their respective Affiliates, and their
respective successors and assigns.

 

(ttttt) “Wholly New Developed Materials” shall mean all Software and
non-Software materials that are developed by TSYS and/or the Development Pool
and that are not [***] of, Capital One Materials or TSYS Materials.

 

  2.2 Other Terms

 

Other capitalized terms used in this Agreement are defined where they are used
and have the meanings there indicated. Those terms, acronyms, and phrases that
are not defined in this

 

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Agreement but that are utilized in the information technology services or credit
card processing industry or other pertinent business context shall be
interpreted in accordance with their generally understood meaning in such
industry or business context.

 

  2.3 Inclusion of Affiliates in Definition of Capital One and TSYS; Meaning of
“party”

 

(a) As used in this Agreement, references to “Capital One” include Affiliates of
Capital One in accordance with the following:

 

(i) a reference includes Affiliates of Capital One where expressly so provided;

 

(ii) references to Capital One in the following definitions include Affiliates
of Capital One (unless expressly provided to the contrary): Capital One Data,
Capital One Confidential Information, Capital One [***], Customer Information,
and Capital One Materials;

 

(iii) references to sale, assignment, grant or the like by Capital One means
Capital One will perform the act for itself or cause Affiliates of Capital One
to perform the act themselves;

 

(iv) references to assets being in the name of Capital One include Affiliates of
Capital One; and

 

(v) references to the business, operations, policies, procedures and the like of
Capital One include Affiliates of Capital One to the extent such Affiliates are
receiving the Services.

 

(b) As used in this Agreement, references to “TSYS” include Affiliates of TSYS
where expressly so provided. References to TSYS in the definitions of TSYS
Confidential Information and TSYS Materials include Affiliates of TSYS (unless
expressly provided to the contrary).

 

(c) References to a “party” means Capital One, on the one hand, and TSYS, on the
other hand. References to “the parties” means Capital One and TSYS. References
to third parties means individuals or entities other than Capital One, TSYS,
Permitted Subcontractors, and any of their Affiliates. References to an entity
include any branches of such entity in jurisdictions other than the jurisdiction
of its incorporation.

 

  2.4 Rules of Interpretation

 

(a) Unless the context otherwise requires, words importing the singular include
the plural and vice-versa, and words importing gender include both genders.
Unless the context otherwise requires, references to “persons” includes
individual natural persons and juridical legal entities.

 

(b) References to articles, sections, and paragraphs shall be references to
articles, sections, and paragraphs of the document in which they are contained
(i.e., the Main Body of this Agreement, a Schedule, or an Exhibit), unless
otherwise specifically stated.

 

(c) The section headings in this Agreement are intended to be for reference
purposes only and shall not be construed to modify or restrict any of the terms
or provisions of this Agreement.

 

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(d) Where there is similar, but not identical, construction of phrases,
sentences, or clauses of this Agreement no implication is made that a difference
is intended or not intended, and each shall be construed separately, in
accordance with its plain meaning.

 

(e) The words “include”, “includes”, “including”, and “e.g.” when following a
general statement or term, are not to be construed as limiting the general
statement or term to any specific item or matter set forth or to similar items
or matters, but rather as permitting the general statement or term to refer also
to all other items or matters that could reasonably fall within its broadest
scope.

 

(f) The word “may” (unless followed by “not”) shall be construed as meaning
“shall have the right, but not the obligation, to”.

 

(g) Any reference to a foreign, federal, state, local, or other statute or law
shall be deemed to also refer to all rules and regulations promulgated
thereunder, unless the context otherwise requires.

 

(h) To the extent the same capitalized terms are defined differently in this
Agreement, the [***] Agreement, and the TS2 License Agreement, those differences
are intentional.

 

3 SERVICES

 

  3.1 Provision of Services

 

(a) General. TSYS shall provide the services, functions, and responsibilities
described in this Agreement (including Schedule A), as such services, functions,
and responsibilities may be supplemented, enhanced, modified, or replaced
pursuant to this Agreement (collectively, the “Services”). The Services shall be
limited to Capital One Accounts. No “Other Offered Service” listed in Schedule C
shall be considered a Service until Capital One has elected to receive the
service and a charge therefor has been established pursuant to Section 5.2 of
Schedule C.

 

(b) Implied Services. Except for Capital One’s express obligations under this
Agreement, if any services, functions, or responsibilities are required for the
performance and provision of the Services by TSYS in accordance with this
Agreement, regardless of whether they are specifically described herein, they
shall be deemed to be implied by and included within the scope of the Services
to be provided by TSYS to the same extent and in the same manner as if
specifically described in this Agreement.

 

(c) Technology Currency. TSYS will [***] the TSYS System so that Capital One
will receive the benefits of [***] during the Term. Subject to Section [***],
TSYS shall make the [***] to the Equipment and Systems Software elements of
[***] TS2 as it [***] TS2.

 

(d) Services Variable In Scope. The process for implementing variations in scope
of the Services and the pricing impact of such variations are provided for in
Schedules A and C. TSYS shall be responsible for adjusting the resources used to
provide the Services to accommodate such variations in such a manner as to
comply with all provisions of this Agreement. TSYS shall not be entitled to
receive an adjustment to the Charges resulting from such variations except as
set forth in Schedule C.

 

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  3.2 Services Performed by Capital One or Third Parties

 

(a) No Exclusivity. This Agreement is non-exclusive and shall not be deemed to
be a requirements contract. Subject to Section 3.6 of Schedule C, Capital One
shall be free without obligation to TSYS to perform itself (or through an
Affiliate) or acquire from third parties services similar or identical to the
Services provided under this Agreement. Capital One may undertake or award other
contracts for additional work to be performed in connection with, or that is
operationally related to, the Services. In each case, TSYS shall cooperate with
Capital One, such Affiliates, and its or their third party contractors as is
reasonably necessary for Capital One, such Affiliates, and such third party
contractors to interface such alternate services and additional work with the
Services provided by TSYS. The Charges, if any, for such cooperation shall be
determined in accordance with Section 5.2 of Schedule C. This cooperation will
include:

 

(i) providing information regarding the Services, TSYS [***], and other
operating parameters (subject to Section 13);

 

(ii) coordinating the Services with such other activities and work to resolve
differences that may arise, so that all work may be promptly and properly
performed; and

 

(iii) working in good faith to integrate into [***] TS2 components and systems
developed independently by Capital One, its Affiliates, or third parties. The
parties shall also work in good faith to address any compatibility, security,
and Service Level issues arising from such integration. TSYS may withhold its
approval of the integration of such components and systems only if such
compatibility and security issues have not been adequately resolved. Moreover,
if such Service Level issues have not been adequately resolved, TSYS shall be
excused for its failure to comply with the Service Level as and to the extent
such failure is caused by such integrated components or systems. Without
limiting the prior sentences in this Section 3.2(a)(iii), Capital One may elect
to obtain the equivalent functionality of [***], and [***] from third parties
and TSYS shall allow these third party applications to run on [***] TS2 and
provide the assistance described in this Section 3.2(a).

 

(b) Third Party Compliance. Third parties retained by Capital One and
interfacing with TSYS under Section 3.2(a) above shall comply with TSYS’
reasonable security and confidentiality requirements and with TSYS’ reasonable
work standards, methodologies, and procedures provided by TSYS. TSYS shall
promptly notify Capital One if TSYS anticipates that an act or omission of such
a third party is likely to cause a problem or delay in providing the Services
and shall work with Capital One to prevent or circumvent such problem or delay.

 

  3.3 Permitted Users and Capital One Accounts

 

(a) Permitted Users. The Services may be used with respect to Capital One
Accounts by (i) Capital One, (ii) (as directed by Capital One) Capital One
Affiliates, and (iii) any third party (such as a customer or service provider)
permitted by Capital One who must have access to all or the portion of the
Services designated by Capital One in order for the full functionality of such
portions of the Services to be available with respect to the Capital One
Accounts (collectively, those permitted by (i), (ii), and (iii), “Permitted
Users”). Services provided to Permitted Users shall be deemed to be Services
provided to Capital One. Capital One shall be responsible to TSYS for any breach
of this Agreement caused by a Permitted User authorized by Capital One to use
the Services under this Agreement.

 

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(b) Definition of Capital One Accounts. “Capital One Accounts” are those
Accounts which are:

 

(i) identified by the BIN/ISOs provided in Exhibit A-1 to Schedule A; and/or

 

(ii) designated by Capital One that fall within one or more of the following
categories:

 

(A) any Account [***] of Capital One or a Capital One Affiliate;

 

(B) any Account that [***] by Capital One or a Capital One Affiliate;

 

(C) any Account [***] Capital One or a Capital One Affiliate;

 

(D) any Account for which Capital One or a Capital One Affiliate [***] related
to at least [***] of the following three activities: (1) account origination;
(2) portfolio management (e.g., retention programs, fee planning and
administration, interest rate, and line of credit adjustments); and
(3) collections;

 

(E) subject to Section 3.3(d), any Account acquired by Capital One or a Capital
One Affiliate during the Term; and/or

 

(F) any other Account designated by Capital One for which TSYS agrees to provide
the Services.

 

(c) Confirmation Procedure. Prior to requesting that TSYS provide Services with
respect to Accounts of any of the kinds described in Section 3.3(b)(ii)(D),
Capital One shall provide to TSYS such information as is reasonably necessary to
demonstrate that such Accounts qualify as Capital One Accounts. If TSYS believes
an Account for which Capital One requests Services does not qualify as a Capital
One Account pursuant to Section 3.3(b), (i) TSYS shall notify Capital One of its
objection within [***] Business Days of Capital One’s written request for such
Services and (ii) upon receipt of such notice, Capital One may seek Expedited
Dispute Resolution pursuant to Section 18.6. Time is of the essence with respect
to such [***] Business Day period. Therefore, if TSYS does not object to Capital
One’s request for Services for a particular Account within [***] Business Days
after receiving the request, the Account shall be deemed a Capital One Account
for the Term of this Agreement.

 

(d) [***]. If Capital One or a Capital One Affiliate [***] or a [***], and in
connection therewith Capital One or such Capital One Affiliate has [***] to (or
[***] by), [***] the obligations under, or [***] with [***] (an “[***]
Agreement”), then the [***] Agreement shall remain in effect until [***] (and
any [***] provided for therein [***]), and at [***]:

 

(i) TSYS shall continue to provide services for such Accounts under the terms
(including pricing) of the [***] Agreement; and/or

 

(ii) provided such Accounts otherwise qualify as Capital One Accounts under
Section 3.3(b) above, Capital One [***] of this Agreement. In such case [***]
and shall pay any [***] or [***] provided for in the [***] Agreement until the
[***] Agreement is terminated in accordance with its terms; provided that [***]
this [***] with respect to any such accounts that [***] of this Agreement shall
be [***] any [***] under the [***] Agreement.

 

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(e) [***]. If Capital One or a Capital One Affiliate [***] of Capital One
Accounts ([***]) (each, a “[***] Account”), then:

 

(i) if the [***] Account is [***], and [***], or is [***], to [***] the [***]
Account from the TSYS System used to provide Services to Capital One [***], the
parties shall [***] of such [***] Accounts to TSYS’ processing system for such
other TSYS customer; and

 

(ii) if the [***] Account is [***] that is [***] or by a [***], and is [***], to
[***] Account from the TSYS System used to provide Services to Capital One, TSYS
shall [***] Account under this Agreement [***] TSYS to perform such Services
under this Agreement, [***] such entity [***] or [***] Account from the TSYS
System used to provide Services to Capital One (in which case the provisions of
Section [***] shall apply).

 

  3.4 Responsibility for Resources

 

Except for Capital One’s express obligations under this Agreement, TSYS shall be
responsible for providing all resources (including Equipment and Software)
necessary for TSYS to provide the Services and will only recover the costs
related thereto through the Charges provided in Schedule C and in the other
express payment provisions of this Agreement.

 

  3.5 Facilities

 

(a) Schedule W lists the TSYS facilities (the “TSYS Facilities”) from which TSYS
shall perform the Services.

 

(b) TSYS shall obtain Capital One’s written approval prior to performing the
Services from any locations other than the TSYS Facilities. If the proposed
location is outside of the United States, Capital One may withhold approval in
its sole discretion, and if the proposed location is within the United States
Capital One may not unreasonably withhold approval. It shall not be unreasonable
for Capital One to withhold its approval if the relocation will result in an
increase in Capital One’s on-going costs. Notwithstanding the foregoing, in
connection with the [***] relocation of TSYS’ disaster recovery facility as
contemplated by Section 7.5(h)(v) of Schedule A, [***] shall be responsible for
[***] one-time out-of-pocket costs (such as expenses for [***], but only with
respect to [***]), but [***] shall be responsible for any one-time costs
associated with [***] of [***] and all increased [***] costs (such as increased
[***] expense). In addition, any use of or reliance on any resources other than
facilities (e.g., personnel) outside of the United States by TSYS shall require
Capital One’s specific prior written approval, which approval [***] in Capital
One’s [***], and which approval Capital One hereby grants in the case of
(i) programming personnel located in Canada and (ii) during the Initial
Conversion and with respect to the [***] Software only, personnel located in
[***] performing [***], that have satisfied the Screening Requirements provided
in Section 5.6(c).

 

  3.6 Transition of Functions/Capabilities to [***] TS2

 

At Capital One’s expense (both one time and on-going) and request at any time
during the Term, TSYS shall on a mutually agreed schedule transfer
functions/capabilities then provided from the [***] TS2, such as [***], to [***]
TS2.

 

  3.7 Special Terms and Conditions for [***] and [***]

 

(a) If it is established through the dispute resolution process in Section 18.6
that (1) TSYS materially misrepresented the [***] of [***], [***], or [***] or
materially

 

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misrepresented the [***] required in [***], or [***] to meet the Capital One
Initial Conversion Requirements or (2) TSYS cannot prior to [***] either
(x) complete the development required in order for [***], and [***] to meet the
Specifications for the Initial Conversion and to function in an integrated
manner within the TSYS System or (y) with respect to [***], meet the Acceptance
Criteria provided in Section 3.5(b)(ii) of Schedule A (which determination in
any of the above cases the parties acknowledge may be made before [***]), then
TSYS shall either ([***] subject to Section 3.7(c) below):

 

(i) (A) allow Capital One to terminate the [***] Agreement, the [***] Addendum
and Service, or the [***] Service under this Agreement, as applicable, without
payment of a termination charge or other liability; (B) negotiate [***] Target
Conversion Date for the Initial Conversion reasonably acceptable to both parties
that allows Capital One time to obtain and implement a solution to replace the
[***], or [***], as applicable; and (C) [***] for (1) all one-time [***] by
[***] in obtaining the [***] that [***], or[***] (but not any additional [***])
and (2) any [***] by Capital One during the Term of this Agreement to [***] (but
not any additional [***]) and that are above the [***] by Capital One under the
[***] Agreement and Schedule C of this Agreement for the original [***]; or

 

(ii) allow Capital One to terminate this Agreement, the [***] Addendum and
Service, the [***] Service, and/or the [***] Agreement, each in whole, without
payment of a termination charge or other liability.

 

(b) If TSYS elects to offer the remedy in Section 3.7(a)(i) above to Capital
One, Capital One shall use Commercially Reasonable Efforts to pursue an
arrangement on competitive market terms with a third party for [***] to replace
[***], or [***], as applicable.

 

(c) If TSYS elects to offer the remedy in Section 3.7(a)(i) above and
(i) following a good faith negotiation the parties are unable to agree upon a
new Target Conversion Date for the Initial Conversion and (ii) the last date
proposed by TSYS during such negotiation is later than the date proposed by
Capital One, then Capital One may elect to pursue the remedy in either 3.7(a)(i)
(and agree to the last date proposed by TSYS) or 3.7(a)(ii) above.

 

(d) If Capital One elects to pursue the remedy in either 3.7(a)(i) or 3.7(a)(ii)
above, such remedy shall be Capital One’s sole and exclusive remedy with respect
to the events giving rise to such remedy under Section 3.7(a). As an alternative
to pursuing such remedies, Capital One may elect to continue with the Initial
Conversion, and if the conditions provided in Section 2.2 of Schedule C are met,
to [***] specified in such Section.

 

  3.8 OSFI Access to Data and Information

 

With respect to Capital One Accounts for Canadians, except if Capital One has
given Capital One Directions to the contrary, in order to enable Capital One and
Capital One Affiliates to comply with the Section 597(1)(c) of the Canadian Bank
Act, S.C. 1991, c. 46, (i) each day TSYS shall transmit to Capital One
sufficient records for Capital One to maintain in Canada records showing for
each such Capital One Account particulars of the transactions with that account
holder and the balance owing to or by Capital One’s branch (or the Capital One
Affiliate in Canada, as the case may be) in respect of such account holder and
(ii) TSYS shall maintain the capability to isolate the information of Capital
One’s Canadian branch (or the Capital One Affiliate in Canada, as the case may
be) without undue difficulty.

 

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4 TERM

 

  4.1 Initial Term

 

The term of this Agreement shall begin on the Effective Date and shall continue
for five (5) years from the Commencement Date, unless terminated earlier or
extended in accordance with the provisions of this Agreement (the “Initial
Term”).

 

  4.2 Renewal

 

Upon expiration of the Initial Term, this Agreement shall automatically renew
for [***] number of successive [***] year periods (each, a “Renewal Term”)
unless Capital One notifies TSYS in writing at least [***] days prior to the
expiration of the Initial Term or the then-current Renewal Term of Capital One’s
desire to terminate this Agreement. This Section 4.2 does not provide TSYS with
the right to terminate (or object to the renewal of) this Agreement at the end
of the Initial Term or any Renewal Term. TSYS’ only rights to terminate are as
provided in Section 19.1(b).

 

5 TSYS PERSONNEL

 

  5.1 Key TSYS Positions

 

(a) General. Schedule D lists certain TSYS positions (the “Key TSYS Positions”)
and (to the extent determined as of the Effective Date) the individuals filling
such positions as of the Effective Date. TSYS shall cause each individual
filling a Key TSYS Position to devote substantially full time and effort to the
provision of the Services for at least twelve (12) months from the date she or
he is assigned to the Key TSYS Position unless such individual:

 

(i) leaves TSYS’ employment;

 

(ii) undertakes a long term leave of absence; or

 

(iii) without encouragement from TSYS notifies TSYS that he or she is unwilling
to continue in TSYS’ employment unless removed from the Capital One Account.

 

(b) Changes In Designation. After consultation with TSYS, Capital One may from
time to time change the positions that are designated as Key TSYS Positions.
Without TSYS’ consent, the number of Key TSYS Positions may not exceed the
number of positions initially specified in Schedule D as of the Effective Date.

 

(c) Review. Before assigning an individual to a Key TSYS Position, whether as an
initial assignment or a subsequent assignment, TSYS shall:

 

(i) notify Capital One of the proposed assignment;

 

(ii) introduce the individual to appropriate Capital One representatives;

 

(iii) provide such representatives upon request with the opportunity to
interview the individual; and

 

(iv) provide Capital One with a resume and other information about the
individual reasonably requested by Capital One.

 

If Capital One objects in good faith, and for reasons which do not impermissibly
relate to any individual’s status as a member of a “protected class” under
applicable employment law, to the

 

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proposed assignment, the parties shall attempt to resolve Capital One’s concerns
on a mutually agreeable basis. If the parties have not been able to resolve
Capital One’s concerns within [***] Business Days, TSYS shall not assign the
individual to that position and shall propose to Capital One the assignment of a
different individual of suitable ability and qualifications. Except with Capital
One’s prior written consent (which may be arbitrarily withheld) (or the
condition in Section 5.1(a)(iii) applies) individuals filling Key TSYS Positions
may not be transferred or re-assigned by TSYS to other positions with TSYS or
its Affiliates until (A) suitable replacements have been approved by Capital One
and (B) the replacements have been trained to perform substantially all of their
respective responsibilities in such Key TSYS Positions, and no such transfer
shall occur at a time or in a manner that would have an adverse impact on
delivery of the Services (other than an insubstantial impact).

 

  5.2 TSYS Services Manager

 

(a) General. One of the Key TSYS Positions shall be for an individual whose
responsibility is to serve as the TSYS services manager for the Capital One
account (“TSYS Services Manager”). Unless agreed by Capital One, the TSYS
Services Manager will never be more than [***] organizational reporting levels
removed from TSYS’ [***] with overall responsibility for performance of the
Services.

 

(b) Responsibilities. The TSYS Services Manager (in conjunction with the
applicable TSYS Conversion personnel during a Conversion) shall:

 

(i) on a regular basis (and at least weekly prior to and during each Conversion)
report to the Capital One Contract Manager as to whether the work is proceeding
in accordance with the requirements of this Agreement and the applicable
Conversion Plan, and if not, what steps are being taken (or should be taken) by
either TSYS or Capital One to restore the Conversion or other work to such
status as soon as possible;

 

(ii) serve as the TSYS principal point of contact regarding the Services for
Capital One and otherwise be responsible for all Services-related communications
on behalf of TSYS;

 

(iii) oversee the management of performance of TSYS’ obligations under this
Agreement;

 

(iv) meet with the Capital One Contract Manager regularly, and at the Capital
One Contract Manager’s reasonable request on an ad hoc basis, over the course of
the Term to discuss the status and quality of the Services;

 

(v) oversee the day-to-day activities of any Services staff dedicated to Capital
One;

 

(vi) serve as the point of escalation for any issues or questions related to the
Services;

 

(vii) ensure Capital One is briefed in accordance with Section 9.2(a)(ii)(A)
about each anticipated material change to the technology or functionality
contained in TS2, [***], or other components of the TSYS System;

 

(viii) monitor status of all development projects; and

 

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(ix) monitor status of all issues and monitor the other support provided to
Capital One under this Agreement.

 

(c) [***]. The TSYS [***] shall include the opportunity to [***] that are [***]
based [***] on [***] the [***] under this Agreement and the [***] Agreement.

 

(d) Location.

 

(i) The TSYS Services Manager shall be located in the Columbus, Georgia area but
he or she shall travel to Capital One’s offices in the Richmond, Virginia area
on Capital One’s reasonable request for meetings and the like.

 

(ii) If the parties agree to [***] any of the TSYS Personnel in the Development
Pool [***], and such personnel are [***], TSYS shall [***] Capital One for
incremental [***] TSYS may [***] as a result of [***] up to [***] ([***]) such
TSYS Personnel [***].

 

  5.3 Resource Pool

 

(a) Subject to the adjustment provided in Section 5.3(b), TSYS shall provide a
pool of at least [***] TSYS Personnel dedicated to provide Services to Capital
One for the Non-Development Pool and [***] TSYS Personnel dedicated to Capital
One for the Development Pool (the Non-Development Pool and the Development Pool
are collectively the “Resource Pool”). Except as permitted by Section 5.3(b)
below, Section 3.6(c) of Schedule C, and Section 4.5 of Schedule A, TSYS may not
[***] of TSYS Personnel in the Resource Pool without Capital One’s prior written
consent, which Capital One may withhold in its sole discretion. Except for [***]
under Section [***] and Section [***] of Schedule C, if Capital One agrees to
have the Resource Pool [***] the parties shall agree upon an equitable [***] the
Charges to reflect the [***] will derive from the [***] personnel.

 

(b) The Non-Development Pool shall be increased or decreased every calendar
quarter beginning in the calendar quarter [***] after the Commencement Date
based upon the [***] number of Active Accounts in the prior calendar quarter in
accordance with the following table (and no adjustment to the Development Pool
shall be required if an adjustment in the Non-Development Pool pursuant to this
Section 5.3(b) causes the total number of TSYS Personnel in the Resource Pool to
be less than [***]):

 

        Monthly Active Accounts        

--------------------------------------------------------------------------------

  

        Dedicated Support Staff (FTE)        

--------------------------------------------------------------------------------

Less than [***]

  

[***]

[***] or greater

  

[***]

[***] or greater

  

[***]

[***] or greater

  

[***]

[***] or greater

  

[***]

[***] or greater

  

[***]

[***] or greater

  

[***]

[***] or greater

  

[***]

[***] or greater

  

[***]

[***] or greater

  

[***]

[***] or greater

  

[***]

 

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  5.4 Qualifications and Retention of TSYS Personnel

 

(a) TSYS shall assign an adequate number of TSYS Personnel to perform the
Services. TSYS Personnel shall be properly educated, trained, and qualified for
the Services they are to perform. Unless otherwise approved, at least [***] of
the TSYS members of the Resource Pool shall have either:

 

(i) except as provided otherwise in Exhibit A-7 for Development Pool Personnel,
a [***] year college degree or equivalent bankcard business experience; or

 

(ii) at least [***] or more years of appropriate experience as a TSYS employee.

 

(b) TSYS shall provide TSYS Personnel continuing education and training
throughout the Term at least comparable to the continuing education and training
provided to TSYS employees performing similar duties for TSYS. TSYS [***] TSYS
Personnel to become familiar with Capital One’s account, business, or
requirements.

 

(c) The parties agree that it is in their best interests to keep the turnover
rate of TSYS Personnel assigned to Capital One’s account (or otherwise providing
the Services) to a reasonably low level. Accordingly, if Capital One believes
that TSYS’ turnover rate has been excessive and so notifies TSYS, TSYS shall
provide data concerning its turnover rate and meet with Capital One to discuss
the reasons for, and impact of, the turnover rate. TSYS shall use Commercially
Reasonable Efforts to keep the turnover rate to a reasonably low level.
Notwithstanding transfer or turnover of TSYS Personnel, TSYS remains obligated
to perform the Services in accordance with this Agreement.

 

  5.5 Removal of TSYS Personnel

 

If Capital One determines in good faith, and for reasons which do not
impermissibly relate to any individual’s status as a member of a “protected
class” under applicable employment law, that the continued assignment to Capital
One’s account of one or more of the TSYS Personnel is not in the best interests
of Capital One, then Capital One may give TSYS notice to that effect. After
receipt of such notice, TSYS shall have a reasonable period of time in which to
discuss Capital One’s concerns with Capital One. If following such period
Capital One continues to request replacement of any such person, TSYS shall
replace that person with another person of suitable ability and qualifications.
However, where Capital One initially notifies TSYS that Capital One has
determined that the nature of the concern is such that such TSYS Personnel
should be removed immediately (albeit temporarily) from Capital One’s account,
TSYS shall immediately remove such individual(s) from Capital One’s account. Any
request by Capital One to remove an individual from Capital One’s account shall
not be deemed to constitute a termination of such individual’s employment by
TSYS and in no event shall Capital One be deemed an employer of any such person.
This provision shall not operate or be construed to limit TSYS’ responsibility
for the acts or omissions of TSYS Personnel.

 

  5.6 Compliance with Each Party’s Regulations and Policies

 

(a) General Compliance. While on the premises of the other party, each party’s
personnel shall comply with the other party’s directions, policies, rules, and
regulations that have been provided to the other party in writing regarding:

 

(i) personal and professional conduct (including the wearing of an
identification badge and adhering to regulations and general safety, dress,
behavior, and security practices or procedures) generally applicable to such
premises;

 

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(ii) protection of Confidential Information;

 

(iii) security and network access; and

 

(iv) all other rules and regulations generally applicable to the other party’s
employees, contractors, and invitees on such premises.

 

(b) Communication of Obligations. Each party shall regularly brief all its
applicable personnel on the scope of restrictions on it and its personnel
concerning the safeguarding of Confidential Information. In addition, TSYS shall
make TSYS Personnel aware of Applicable Laws against improper disclosure or use
of Customer Information.

 

(c) Personnel Screening.

 

(i) TSYS shall apply [***] and [***] screening requirements (“Screening
Requirements”) to all TSYS Personnel to whom TSYS grants access to (A) Customer
Information, (B) systems that they could use to modify, change, or manipulate
Customer Information, or (C) Capital One’s premises. The Screening Requirements
existing as of the Effective Date are set forth in Schedule V of this Agreement.
The parties may revise the Screening Requirements from time to time during the
Term as provided in Section 5.6(c)(iii).

 

(ii) Capital One shall have the right to validate TSYS’ compliance with the
Screening Requirements on an [***] by requiring TSYS to make available to
Capital One at TSYS’ premises the following information for all TSYS Personnel
whom TSYS is required to screen using the Screening Criteria: (A) employee
identification numbers, (B) the results of any background checks required by the
Screening Requirements, (C) a list of criteria used by TSYS to assess background
checks that are found to contain [***], which is set forth in Schedule V of this
Agreement, and (D) any other information reasonably necessary for Capital One to
validate that all TSYS Personnel whom TSYS is required to screen using the
Screening Criteria were screened in compliance with the Screening Requirements.
In addition, Capital One may conduct follow-up validations at TSYS’ premises as
is reasonably necessary to ensure any issues or problems identified during the
[***] validation are corrected.

 

(iii) If, during the Term, Capital One revises its [***] and [***] screening
requirements for Capital One employees or third party service providers in order
to be in compliance with any changes in Applicable Laws effected after the
Effective Date or to remain current with common practice in the card processing
industry, then Capital One shall provide written notice to TSYS of such changes,
which notice shall be accompanied by documentation evidencing the changes in
Applicable Law or in the card processing industry that have necessitated Capital
One’s changes to its internal personnel background and security screening
requirements. Provided TSYS is able to validate that Capital One was [***], to
implement such changes, or that such changes are [***] the card processing
industry, TSYS shall revise the Screening Requirements accordingly and shall
thereafter comply (to the extent it may legally and practically do so) with the
Screening Requirements as revised at [***] Capital One. If Capital One [***] and
[***] screening requirements for reasons not governed by the foregoing, TSYS
shall consider in good faith [***] the Screening Requirements to [***], and any
Out-of-Pocket Expenses associated with TSYS’ [***] shall be [***].

 

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(iv) Capital One may, at its own expense, [***] and conduct [***] screening of
TSYS Personnel, to the extent permitted by Applicable Law and required under
policies and procedures generally applicable to Capital One employees or third
party service providers. Such screening is in addition to, and not a substitute
for, the screening TSYS is required to perform under this Section 5.6(c).
Capital One may not obtain [***] of TSYS Personnel unless the Federal Bureau of
Investigation or other third party has agreed to perform background checks for
Capital One using [***].

 

  5.7 Use of Subcontractors and Other Support

 

(a) TSYS shall remain responsible for obligations, services, and functions
performed by its subcontractors to the same extent as if such obligations,
services, and functions were to be performed by TSYS and for purposes of this
Agreement such work shall be deemed work performed by TSYS’ own employees. TSYS
shall be Capital One’s sole point of contact regarding the Services, including
with respect to payment. TSYS shall not disclose Capital One Confidential
Information to a subcontractor unless and until such subcontractor has agreed in
writing to protect the confidentiality of such Confidential Information in a
manner substantially equivalent to that required of TSYS under this Agreement.

 

(b) Subject to Section 5.7(c), except as and to the extent Capital One may agree
otherwise in writing, TSYS may subcontract performance of the Services only in
accordance with the following:

 

(i) The TSYS Affiliates and other subcontractors listed on Schedule G are hereby
approved for the scope of the efforts described.

 

(ii) Prior to entering into any subcontract with a potential subcontractor
(including a TSYS Affiliate) not listed on Schedule G or for additional scope
beyond that described in Schedule G, TSYS shall give Capital One reasonable
prior notice specifying (A) the components of the Services affected, (B) the
[***] of the proposed subcontract, (C) Capital One’s audit rights with respect
to such subcontractor, (D) the amount and type of insurance carried by the
subcontractor, and (E) the [***] and [***] of the proposed subcontractor. At
Capital One’s request, TSYS shall forward to Capital One a description of the
[***] and material terms (other than [***], except if it directly affects the
[***]) of the subcontract or proposed subcontract. [***].

 

(iii) Capital One may revoke its approval of a subcontractor and direct TSYS to
replace such subcontractor if (A) the subcontractor’s performance is materially
deficient; (B) good faith doubts exist concerning the subcontractor’s ability to
render future performance because of changes in the subcontractor’s ownership,
management, financial condition, or otherwise; (C) the subcontractor violates
any of the terms and conditions of this Agreement; (D) [***] that [***] of the
[***] or [***] the [***] to [***]; or (E) there have been material
misrepresentations by or concerning the subcontractor. Approval of a
subcontractor that at the time of approval is an Affiliate of TSYS shall be
automatically revoked if such subcontractor ceases to be such an Affiliate.
However, if Capital One removes the subcontractor providing a New Additional
Service for any of the reasons provided in the first sentence above and such
subcontractor was designated by Capital One, then such New Additional Service
shall not be included for purposes of [***] under Schedule C, Capital One shall
bear the cost of replacing the subcontractor, TSYS shall not be obligated to
provide the New Additional Service

 

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until the subcontractor is replaced, and TSYS shall not be liable for any [***]
from the disruption caused by the replacement.

 

(c) TSYS may in the ordinary course of business subcontract for third party
services or products that are not dedicated to Capital One, that are not
material to a particular function constituting a part of the Services, and that
do not result in a material change in the way TSYS conducts its business,
provided such subcontract does not adversely affect Capital One, whether in
performance of or Charges for the Services or otherwise. If Capital One
expresses concerns to TSYS about a subcontract covered by this Section 5.7(c),
TSYS shall discuss such concerns with Capital One and work in good faith to
resolve Capital One’s concerns on a mutually acceptable basis.

 

  5.8 Oversight Controls

 

TSYS shall implement oversight and monitoring procedures reasonably designed to
detect, prevent, investigate, and report to Capital One any misuse or
misappropriation of Capital One assets, systems, funds, or information by TSYS
Personnel. TSYS shall promptly report to Capital One any such misuse or
misappropriation identified or reasonably suspected.

 

6 COMPLIANCE WITH LAWS

 

  6.1 Compliance with Laws

 

(a) Mutual Responsibilities. Each party will comply with all Applicable Laws
that apply to such party (including, in the case of TSYS, those applicable to it
as a third party provider of processing service and other services similar to
the Services), including identifying and procuring required permits,
certificates, approvals and inspections. If a party receives formal notice from
the government or written notice from any other entity of a charge of
non-compliance of that party with any Applicable Law in any way related to its
performance of this Agreement, that party will promptly notify the other party
of such charge in writing.

 

(b) Capital One Legal Requirements and Directions.

 

(i) Subject to the provisions of this Section 6, and without limiting TSYS’
obligations under Section 13, Capital One shall be responsible for compliance
with all Applicable Laws applicable to the Accounts authorized by Capital One to
receive the Services (the “Capital One Legal Requirements”).

 

(ii) Capital One shall be responsible for selecting the parameter settings and
programming features and options within the TSYS System that will apply to the
Accounts receiving the Services and, subject to TSYS’ compliance with its
obligations under this Section 6.1, for determining that such selections are
consistent with the Capital One Legal Requirements and with the terms and
conditions of the various agreements between Capital One and its
customers/cardholders. In making such determinations, Capital One may rely on
the accuracy and completeness of the descriptions of such settings, features,
and options provided by TSYS, as well as TSYS’ compliance with and performance
of its obligations under this Section 6. TSYS shall review with and explain to
Capital One the TSYS System parameter settings, features, functionality, and
options and shall provide clarification on such as is requested by Capital One.

 

(iii) Capital One shall from time to time provide directions to TSYS, either in
writing or by such methodology as is provided by the Procedures Manual or the

 

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Documentation (e.g., by email or on-line database and parameter updates), based
on Capital One’s interpretation of the Capital One Legal Requirements and
Capital One’s selection of parameter settings and programming features and
options (the “Capital One Directions”).

 

(c) TSYS Compliance. TSYS shall:

 

(i) perform the Services in a manner that complies with the Capital One
Directions; and

 

(ii) not make any changes which would cause the Services to be performed other
than in accordance with the Capital One Directions; provided that in the event
of conflicts among Capital One Directions, the more recent Capital One
Directions govern.

 

(d) TSYS Obligation To Inform Capital One. Notwithstanding that Capital One is
responsible for ensuring that the Capital One Directions are sufficient to
enable Capital One to be [***], TSYS shall promptly notify Capital One if at any
time TSYS believes in good faith that based on the actual knowledge (without
duty of inquiry) of the involved individuals that the Capital One Directions may
[***]. TSYS shall also inform Capital One, and seek clarification from Capital
One, if the Capital One Directions are [***]. TSYS shall have no obligation to
detect or inform Capital One of conflicts among Capital One Directions. Whenever
relevant information is known by TSYS, subject to TSYS’ confidentiality
obligations to third parties, TSYS shall share with Capital One and its
Affiliates information concerning the various regulatory compliance practices
and interpretive positions taken by TSYS with respect to the services TSYS
provides to its customers generally related to or in connection with the use of
the Services and any functionality available on [***] TS2.

 

(e) Compliance Enhancements. TSYS shall maintain the TSYS System so that it
enables TSYS to comply with the Capital One Directions, as they may change from
time to time during the Term, including by adding functionality and making the
necessary modifications and enhancements to the TSYS System (collectively,
“Compliance Enhancements”). Such Compliance Enhancements shall be implemented in
accordance with the Development Methodology. The Charges, if any, for such
Compliance Enhancements are set forth in Schedule C.

 

(f) Quality Checks. TSYS will monitor its compliance with the requirements of
this Section 6 and shall notify Capital One if it [***] of this Section 6.

 

  6.2 Gramm-Leach-Bliley Act, and Similar Laws

 

Each party shall comply with all Applicable Laws that apply to it protecting the
confidential material and privacy rights of the parties, their Affiliates,
and/or their customers and consumers, including Title V, Subtitle A of the GLB
Act, the U.S. Economic Espionage Act (18 USC §1831 et seq.), and Canadian
Privacy Legislation and the Canadian Security Information Act (R.S. 1985, c.
O-5).

 

  6.3 Bank Bribery Act and Foreign Corrupt Practices Act

 

Each party shall comply with the (a) Federal Bank Bribery Act of 1984 (12 USC
§215) and (b) Foreign Corrupt Practices Act of 1977 (15 USC §§ 78dd-1, et seq.),
to the extent applicable to that party.

 

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  6.4 Consumer Credit Protection Laws

 

Each party shall comply with Applicable Laws that apply to it governing
collection of debt and consumer credit reporting, including the Fair Debt
Collection Practices Act (FDCPA) (16 USC §1601 et seq.), the Fair Credit
Reporting Act (FCRA) (15 USC §1681 et seq.), the Equal Credit Opportunity Act
(16 USC §1691 et seq.), the Telephone Consumer Protection Act, (47 USC §227 et
seq.), the Telephone Sales Rule (16 CFR §310.1 et seq.), the Canadian Financial
Consumer Agency of Canada Act (S.C. 2001), c.9), Section 52.1 of the Canadian
Competition Act (R.S. 1985, c. C-34), applicable telemarketing rules established
by the Canadian Radio-Television and Telecommunications Commission, the Truth in
Lending Act (Pub. L. 90-321, Title I, May 29, 1968, 82 Stat. 146)1) (“TILA”) and
any federal, provincial, state, or local equivalents of the foregoing.

 

  6.5 Office of Foreign Assets Control Regulations

 

Each party shall comply, to the extent applicable to it, with the economic and
trade sanctions administered by the Office of Foreign Assets Control (“OFAC”) of
the U.S. Department of the Treasury and OSFI, including all Executive Orders and
implementing regulations. In the case of TSYS, this obligation includes not
engaging to perform the Services any persons or businesses on (a) OFAC’s
Specifically Designated Nationals and Blocked Persons List or (b) OSFI’s
Consolidated List, to perform the Services.

 

  6.6 USA PATRIOT Act and Proceeds of Crime (Money Laundering) and Terrorist
Financing Act in Canada

 

Each party shall comply, to the extent applicable to it, with the anti-money
laundering requirements and other Applicable Laws designed to combat terrorist
financing, including those requirements contained in the Bank Secrecy Act and
the USA PATRIOT Act of 2001 (Pub L. 107-56) in the United States and the
Proceeds of Crime (Money Laundering) and Terrorist Financing Act in Canada, and
all implementing regulations. TSYS will ensure all appropriate personnel are
adequately trained on anti-money laundering procedures, with refresher training
conducted no less than annually. TSYS will additionally ensure that it has
appropriately identified and verified those persons performing Services such
that it has a sufficiently reasonable belief as to the identity of those persons
to be in compliance with such requirements.

 

7 SERVICE LEVELS

 

In performing the Services TSYS shall meet or exceed the [***] service levels
provided in Schedule B (“Service Levels”). Schedule B also describes the tools
and processes TSYS shall use to measure and report on its performance against
the Service Levels, and provides a methodology for [***] by [***] for [***] meet
certain Service Levels designated therein. If Capital One elects to [***] a
[***] in respect of a Service Level [***] and does not revoke such election
within [***] days as required by Section 4.3(c) of Schedule B, such [***] shall
be Capital One’s [***] for such [***]. To the extent such [***] is a breach of
this Agreement Capital One shall retain the rights provided in Section 19.1(a)
with respect to such breach regardless of whether or not it elects to receive a
corresponding [***]. If Capital One revokes its election pursuant to the prior
sentence, it shall [***] the [***] to TSYS.

 

8 PROPRIETARY RIGHTS

 

This Section addresses the parties’ respective rights in Capital One Materials,
TSYS Materials, and Developed Materials.

 

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  8.1 Capital One Materials

 

(a) General. As between the parties, subject to Section 8.1(b), Capital One
retains all right, title, and interest in and to Capital One Materials.

 

(b) Grant of Rights. Capital One grants to TSYS a [***] license to Use (and to
allow its Permitted Subcontractors to Use) Capital One Materials and other
Capital One Confidential Information during the Term solely to the extent
necessary for performing the Services. Capital One Materials will be made
available to TSYS in such form and on such media as exists on the Effective Date
or as is later obtained by Capital One, together with available documentation
and any other related materials.

 

(c) Use Restrictions and Compliance. TSYS may not Use Capital One Materials for
the benefit of any entities other than Capital One and its Affiliates without
the prior written consent of Capital One, which may be withheld at Capital One’s
discretion. TSYS shall comply with any written directions furnished by Capital
One regarding restrictions on the Use or disclosure of Capital One Materials
that consist of Third Party Materials, as may be necessary to comply with
Capital One’s contractual obligations with respect to such Third Party
Materials.

 

(d) Cessation of Use Upon Expiration or Termination of this Agreement. Except as
otherwise requested or approved by Capital One, TSYS shall cease all use of
Capital One Materials upon expiration or termination of this Agreement except to
the extent such materials are required to provide Termination/Expiration
Assistance.

 

  8.2 Developed Materials

 

(a) Use Restrictions and Compliance.

 

(i) Subject to Section 8.2(a)(ii) and 8.2(a)(iii) below, TSYS may not Use [***]
List Materials or any other [***] for the benefit of [***] Capital One and its
Affiliates without [***], which [***].

 

(ii) TSYS may Use for itself or other customers TSYS Developed Materials that
are:

 

(A) not [***] List Materials;

 

(B) developed [***] or [***] the [***] of the Development Methodology; and

 

(C) either developed [***], or developed [***] the Commencement Date and
documented in Schedule L (which shall be updated by the parties to document any
such [***] that are [***] the parties before [***] and that are not listed on
Schedule L at the Effective Date) between the [***] the TSYS System as of the
Effective Date and the [***] by Capital One,

 

(TSYS Developed Materials that meet [***] of the criteria in (A), (B), and (C),
are referred to as “[***] Materials”).

 

(iii) TSYS may Use TSYS Developed Materials that are part of the [***] without
restriction other than as provided in Sections 8.2(c), 8.11(b), and 8.11(c)
below.

 

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(iv) This Agreement does not restrict TSYS from Using for itself and/or other
customers any TSYS Materials developed by or on behalf of TSYS or any of its
Affiliates outside the scope of this Agreement (including [***] materials that
[***] or [***] the [***] for [***] List Materials).

 

(b) Cessation of Use Upon Expiration or Termination of this Agreement. Except as
otherwise requested or approved by Capital One, TSYS shall cease all Use of
[***], other than the [***] Date Materials, upon expiration or termination of
this Agreement except to the extent such materials are required to provide
Termination/Expiration Assistance.

 

(c) Exclusivity. The following limitations on TSYS’ development of certain [***]
are in addition to the restrictions on use of TSYS Developed Materials provided
above:

 

(i) Pre-Commencement Date.

 

(A) Subject to Section 8.2(c)(i)(B) below, for [***] months after the
Commencement Date, TSYS and its [***] to an item on the [***] List [***] TSYS or
its Affiliates.

 

(B) During the period provided in Section 8.2(c)(i)(A), TSYS may [***] (or, in
the case of a [***] that is part of the [***], [***]) [***] an item on the [***]
List [***] ([***] by TSYS [***]), regardless of the format of the [***];
provided that (1) if TSYS provides [***], TSYS may follow its normal practice of
generally [***] to suggest [***] and (2) TSYS [***] any Restricted Employees
(defined below) to [***] until the [***] of (x) if the Restricted Employee is
not [***] the Development Pool, [***] months after the Commencement Date and
(y) if the Restricted Employee is [***] the Development Pool, [***] months after
the date such individual is [***] the Development Pool. “Restricted Employee”
shall mean (a) any of an aggregate of [***] TSYS Personnel that Capital One may
[***] (none of which may be [***] level or higher and no more than [***] of
which may be [***]) and (b) any TSYS Personnel selected by TSYS to be [***] the
Development Pool, in each case who were involved in the [***] of the [***] the
applicable item on the [***] List.

 

(C) After the period provided in Section 8.2(c)(i)(A), this Agreement shall not
restrict TSYS from [***] (and [***] and/or [***]) [***] an item on the [***]
List provided it complies with its obligations in Section 13.

 

(ii) Post-Commencement Date.

 

(A) Subject to Section 8.2(c)(ii)(B) below, for [***] months after the [***] is
first [***] for [***], TSYS and its Affiliates [***] an item on the [***] List
for any other customer of TSYS or its Affiliates.

 

(B) During the period provided in Section 8.2(c)(ii)(A), TSYS may [***] (or, in
the case of a [***] that is part of the [***], [***]) [***] an item on the [***]
List [***] a [***] ([***] by TSYS [***] to [***]), regardless of the format of
the [***]; provided that (1) if TSYS provides [***], TSYS may follow its normal
practice of generally [***] to suggest [***] and (2) TSYS [***] any individual
involved in the [***] of such [***] for Capital One to [***] such [***] until
after such individual [***] the Development Pool.

 

(C) After the period provided in Section 8.2(c)(ii)(A), this Agreement shall not
restrict TSYS from [***] (and [***] and/or [***]) [***] an item on the [***]
List provided it complies with its obligations in Section 13.

 

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(iii) Information Bulletins. If pursuant to Section 8.2(c)(i)(B) or
8.2(c)(ii)(B) TSYS is permitted to [***] on the [***] List or [***] List for
[***], then TSYS may (A) list the [***] in a standard TS2 information bulletin,
(B) respond to [***], and [***] the [***], any [***] such information bulletin
and ([***] by TSYS) [***] such [***] such [***], and (C) [***] the [***] for any
[***] that [***]. TSYS may not otherwise [***] or [***] the [***] to or for
[***] during the [***] month periods referenced above.

 

(d) Access to [***]. Notwithstanding any [***] TSYS has with [***], if Capital
One requests [***] contained in [***] that TSYS [***] for [***], TSYS shall
[***] that [***] to Capital One [***] (other than [***] pursuant to Schedule
[***] for any [***] that may be required to integrate such [***] with [***]
TS2).

 

(e) Incorporation of Capital One Confidential Information in TSYS Developed
Materials. TSYS shall create and maintain a written record of the TSYS Developed
Materials that contain Capital One Confidential Information. The record shall be
sufficiently detailed to enable TSYS to identify and remove all Capital One
Confidential Information prior to using such TSYS Developed Materials (if and to
the extent permitted by this Section 8) for a purpose other than providing
Services to Capital One and Capital One’s Affiliates.

 

  8.3 Process For [***] the Lists

 

(a) The parties recognize that all key [***] Capital One may desire to be [***]
to the Commencement Date that [***] the [***] provided by the TSYS System and
the [***] by Capital One [***] as of the Effective Date. Accordingly, Capital
One may [***], prior to the Commencement Date, up to [***] that in Capital One’s
reasonable judgment should [***] the [***] the [***] on the [***] List, provided
such [***] are: (i) reasonably expected to give Capital One a [***]; (ii) not
generally [***] or [***] in the [***]; and (iii) not at the time [***] (other
than due to TSYS’ [***] for Capital One). Such [***] shall be [***] the [***]
List in accordance with the procedure specified in Section 8.3(b) and the
restrictions applicable to the related [***] List Materials shall apply. The
parties acknowledge that items such as Capital One’s [***] would be considered a
[***] “[***]” for purposes of this Section. The parties acknowledge that items
such as Capital One’s “[***]” would be considered [***] “[***]” for purposes of
this Section.

 

(b) Within [***] days after Capital One notifies TSYS that it desires to [***]
an [***] to a List (time being of the essence), TSYS may notify Capital One
either (i) that Capital One’s designation is [***] for TSYS to [***] (TSYS shall
not have [***] for items it is [***] for Capital One) or (ii) that the [***]
does not meet the [***] for [***] on the [***] List provided in Section 8.3(a)
or in the definition of [***] List, as applicable. If TSYS does not so notify
Capital One, the item shall be automatically [***] to the [***] List. If TSYS
objects on the basis specified in clause (i) or (ii) of the first sentence of
this paragraph, TSYS shall, within a reasonable period of time following
delivery of the notice to Capital One, reasonably document the basis for [***].
The parties shall meet to discuss TSYS’ [***] within [***] Business Days
following delivery of such documentation to Capital One, and if they cannot
resolve the dispute, the dispute may be submitted by either party to Expedited
Dispute Resolution under Section 18.6.

 

(c) TSYS shall provide a copy of its then current [***] every [***] months (or
earlier, within [***] days of request, as Capital One may reasonably request).
Any objection by TSYS to an [***] on a List on the grounds that it is already
[***] shall only be valid if such

 

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[***] was on the last list provided by TSYS or TSYS can demonstrate by business
records maintained in the ordinary course was [***] after the last list was
prepared but prior to the date of Capital One’s request.

 

  8.4 TSYS Materials

 

(a) General. As between the parties, TSYS retains all right, title, and interest
in and to TSYS Materials, subject to Section 8.4(b), the TS2 License Agreement,
and the [***] Agreement.

 

(b) Grant of Rights.

 

(i) TSYS grants to Capital One, during the Term, and for any period during which
Capital One receives Termination/Expiration Assistance and the Development Pool
is providing development services, a right to allow Development Pool Personnel
to Use the TSYS System and TSYS Materials, including all [***], Documentation,
other materials necessary for the Use thereof, to [***] TS2. For the avoidance
of doubt, except where authorized by TSYS, personnel who are not members of the
Development Pool shall not be permitted [***] the [***] of the TSYS System.

 

(ii) TSYS grants Capital One a [***] worldwide license to Use any non-Software
TSYS Materials incorporated in Capital One Developed Materials, subject to
Capital One’s obligations of confidentiality with respect to any TSYS
Confidential Information that TSYS identifies prior to incorporation into such
Capital One Developed Materials.

 

(c) Licensed Materials and [***] Software. For purposes of the TS2 [***]
Agreement, the TSYS Developed Materials relating to [***] TS2 shall be deemed
part of the Licensed Materials. For purposes of the [***] Agreement, the TSYS
Developed Materials relating to the [***] Software shall be deemed part of the
[***] Software [***].

 

  8.5 Third Party Materials

 

(a) Representation and Warranty. TSYS represents and warrants, as of the
Effective Date, as follows:

 

(i) Section 1 of Schedule K lists all Third Party Materials that are
incorporated into the TSYS System (as amended from time to time, the “TPM
Required to Provide Services”) and Section 2 of Schedule K lists all other Third
Party Materials required for Capital One and the Permitted Users to receive the
Services in the manner contemplated by this Agreement (as amended from time to
time, the “TPM Required to Receive Services” and, together with the TPM Required
to Provide Services, the “Schedule K Materials”); and

 

(ii) all Third Party Materials listed in Schedule K are commercially available
to the general public.

 

(b) Allocation of Responsibility for Schedule K Materials.

 

(i) Subject to Section 8.5(b)(vii), TSYS may change and add to the Schedule K
Materials at any time without Capital One’s consent. TSYS shall give Capital One
written notice of each such change and addition prior to the effective date of
such change or addition (each, a “Schedule K Change Notice”).

 

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(ii) If TSYS [***] the TPM Required to Receive Services without [***], and such
[***] and [***] in connection with the TPM Required to Receive Services, then
TSYS will [***] for such [***].

 

(iii) Except as expressly provided in Section 8.5(b)(iv), Capital One is solely
responsible for obtaining, at Capital One’s sole expense, all of the TPM
Required to Provide Services that Capital One may require if Capital One
exercises the License Option. Capital One acknowledges that TSYS recommended
that Capital One make arrangements prior to the Effective Date with the vendors
of all TPM Required to Provide Services listed on Schedule K at the Effective
Date so that such TPM Required to Provide Services can be obtained by Capital
One on terms acceptable to Capital One if Capital One exercises the License
Option.

 

(iv) If TSYS changes or adds to any of the TPM Required to Provide Services, and
the changed or additional item is not a new version of an item of the TPM
Required to Provide Services and is not commercially available, then in the
applicable Schedule K Change Notice TSYS will so advise Capital One and will
recommend one or more commercially available alternatives. Capital One shall be
solely responsible for obtaining, at Capital One’s sole expense, any such
alternative that Capital One may require if it exercises the License Option. If
Capital One exercise the License Option, TSYS shall, at TSYS’ sole expense, make
such modifications to the Licensed Materials as may be necessary so that the
Licensed Materials are compatible with the alternative that was recommended by
TSYS (as it exists at the time of the recommendation) and that was selected by
Capital One.

 

(v) During the Term, TSYS shall license and maintain, at TSYS’ sole expense, the
TPM Required to Provide Services and any additional Third Party Materials that
are (A) part of the TSYS System or (B) required to operate the TSYS System or
otherwise perform the Services.

 

(vi) During the Term, Capital One shall license and maintain, at Capital One’s
sole expense except as provided in Section 8.5(b)(ii), the TPM Required to
Receive Services.

 

(vii) TSYS shall not [***] any TSYS [***] that is part of the Licensed Materials
with [***] without Capital One’s consent, which Capital One may withhold in its
sole discretion.

 

(viii) If pursuant to Section 3.2(a) Third Party Software is added to the TSYS
System at the request of Capital One (regardless of whether such Third Party
Software is Application Software or Systems Software), unless TSYS was otherwise
responsible to provide the required functionality and failed to do so, Capital
One shall be responsible for the charges imposed by the relevant third party.
None of such Third Party Software shall be included in the Licensed Materials.

 

  8.6 Wholly New Developed Materials

 

Wholly New Developed Materials are outside the scope of this Agreement. Neither
TSYS nor the Development Pool shall develop any Wholly New Developed Materials
except pursuant to a separate written agreement entered into by the parties.

 

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  8.7 Works Made for Hire

 

(a) Capital One Developed Materials shall be deemed “Works Made For Hire” for
Capital One for purposes of copyright law. If, and to the extent, any of the
Capital One Developed Materials is not deemed a “Work Made For Hire” under
relevant law, TSYS hereby irrevocably assigns, transfers and conveys to Capital
One without further consideration all of its Non-Patent Intellectual Property
rights, title and interest in such Capital One Developed Materials (excluding
any pre-existing TSYS Materials incorporated in such Capital One Developed
Materials). Capital One and its assigns may obtain and hold in their own name
all such Non-Patent Intellectual Property Rights in and to such Capital One
Developed Materials. TSYS agrees to (and shall cause its employees and
subcontractors to) execute any documents or take any other actions as may
reasonably be necessary, or as Capital One may reasonably request, to perfect
Capital One’s ownership of such Non-Patent Intellectual Property Rights, without
additional consideration and regardless of whether during or after the Term.
TSYS shall maintain appropriate proprietary rights agreements with employees,
subcontractors, and third parties sufficient to grant and transfer to Capital
One all of the rights granted hereunder.

 

(b) Capital One hereby irrevocably assigns, transfers and conveys to TSYS
without further consideration all of its Non-Patent Intellectual Property
rights, title and interest in the TSYS Developed Materials (excluding any
pre-existing Capital One Materials incorporated in such TSYS Developed
Materials). TSYS and its assigns may obtain and hold in their own name all such
Non-Patent Intellectual Property Rights in and to such materials. Capital One
agrees to (and shall cause its employees and subcontractors to) execute any
documents or take any other actions as may reasonably be necessary, or as TSYS
may reasonably request, to perfect TSYS’ ownership of such TSYS Developed
Materials, without additional consideration and regardless of whether during or
after the Term. Capital One shall maintain appropriate proprietary rights
agreements with employees, subcontractors, and third parties sufficient to grant
and transfer to TSYS all of the rights granted hereunder.

 

  8.8 Patent Rights

 

(a) Patent Rights shall be owned by the party who was the employer of (or
contracting party with) the inventor(s) of the patentable subject matter;
provided that (i) Patent Rights in any new patentable subject matter that is
invented (A) by the [***] or (B) by TSYS Personnel, [***] TSYS Personnel, on
[***] the Initial Conversion Plan shall be owned by TSYS and (ii) [***] TSYS
[***] will be considered a “contracting party with” an employee or contractor
[***]. Capital One shall have a [***], non-exclusive license (with right to
sublicense to entities providing services to Capital One and its Affiliates) to
practice (including the right to make and have made) under any of such patents
for the purpose of providing services to Capital One and its Affiliates without
further action being necessary for the term of any such patents.

 

(b) If TSYS does not [***] with the [***] and [***] for a [***] by [***] (A) or
(B) of Section 8.8(a) within [***] months after the date such [***] is [***] by
the parties (e.g., in [***] or [***]), then as between the parties, Capital One
will have the [***] to [***] and [***] a [***] with respect to such [***], at
Capital One’s sole cost and expense, and Capital One will [***] and [***] any
[***] that may [***] of [***]. TSYS shall have a [***], non exclusive license
(with the right to sublicense to entities receiving services or software from
TSYS and its Affiliates) to practice (including the right to make and have made)
under any patents Capital One obtains in such patentable invention for the
purpose of providing services or software to TSYS

 

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and its Affiliates, and their respective customers and licensees, without
further action being necessary for the term of any such patents.

 

(c) Except as expressly provided in this Section 8, nothing in this Agreement is
intended to grant, and no grant shall be implied of, any right, title, or other
interest in any Patent Right of one party to the other party.

 

  8.9 [***] of TSYS Patents

 

At no time will TSYS or its Affiliates [***] Capital One or any Capital One
Affiliate or any of their service providers or vendors (solely to the extent
that such service providers or vendors are providing services to Capital One or
a Capital One Affiliate), any Covered Patent [***] (a) [***] such Covered Patent
and of the portion of [***] TS2 to [***], which may be given during the Term and
(b) [***] the effective date of termination of this Agreement. “Covered Patent”
shall mean any patent that relates to the Services provided to Capital One under
this Agreement and that is in existence or applied for as of the date of
termination of this Agreement or within the two year period thereafter. This
Section 8.9 shall not apply to U.S. Patent 6,817,008, issued November 9, 2004.

 

  8.10 Bankruptcy Code Section 365(n)

 

All rights and licenses to Developed Materials, TSYS Materials, and Capital One
Materials granted under or pursuant to this Agreement will be deemed to be, for
the purposes of Section 365(n) of the United States Bankruptcy Code (the
“Bankruptcy Code”), licenses to rights in “intellectual property” as defined
under the Bankruptcy Code. Accordingly, the licensee of such rights shall retain
and may fully exercise all of its rights and elections under the Bankruptcy
Code. In the event of the commencement of bankruptcy proceedings by or against
either party under the Bankruptcy Code, the other party shall be entitled to
retain all of its rights in such Developed Works, TSYS Materials, and Capital
One Materials under this Agreement.

 

  8.11 Residual Knowledge and Further Rights

 

(a) Nothing contained in this Agreement shall restrict a party from the use of
any general ideas, concepts, know-how, methodologies, processes, technologies,
algorithms, or techniques relating to the Services that are retained in the
unaided mental impressions of such party’s personnel, which either party,
individually or jointly, develops or discloses under this Agreement, provided
that in doing so such party does not [***] under Section 13 or otherwise
infringe the Intellectual Property Rights of the other party or third parties
who have licensed or provided materials to the other party. For the avoidance of
doubt, this Section 8.11(a) is not intended to restrict TSYS’ right to use TSYS
Personnel that may have access to Capital One Confidential Information from
working for other TSYS customers, provided (i) use of such personnel is not
otherwise prohibited under this Agreement and (ii) in doing so TSYS does not
[***] under Section 13 or otherwise infringe the Intellectual Property Rights of
Capital One.

 

(b) TSYS’ rights of use in this Section 8 are in all cases subject to Capital
One Patent Rights (i.e., TSYS may not infringe upon any Capital One patent even
if use of a material or functionality is permitted in this Section 8).

 

(c) TSYS Developed Materials and information pertaining thereto that TSYS has a
right to use under this Section 8 for a purpose other than providing Services
for Capital One or that are derivative of Capital One Confidential Information
shall have all Capital One

 

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Confidential Information removed by TSYS prior to TSYS using or disclosing such
TSYS Developed Materials for any purpose other than providing Services for
Capital One.

 

(d) Except for the license rights contained in this Section 8, the TS2 License
Agreement, and the [***] Agreement, neither this Agreement nor any disclosure
made under this Agreement grants any license to either party in the Intellectual
Property Rights of the other party. This Section 8.11 shall survive
termination/expiration of this Agreement.

 

  8.12 Export

 

Certain goods and technology to be provided under this Agreement, including
certain software and technical data, as well as certain transactions under this
Agreement may be subject to export controls under Applicable Laws. The parties
shall ensure that all exports and re-exports of all goods and technology or any
direct product thereof are made consistent with Applicable Laws, including all
applicable export controls. Neither party shall undertake any transaction in
violation of any such laws or regulations. To the extent within a party’s
control, that party shall be responsible for, and shall coordinate and oversee,
compliance with such export laws in respect of such items exported or imported
under this Agreement.

 

  8.13 TS2 License Option

 

(a) Pursuant to the terms of the TS2 License Agreement, TSYS has licensed the
Licensed Materials to Capital One (“TS2 License”). At any time following either
(i) completion of the Processing Year [***] (except if the Agreement is being
terminated by TSYS pursuant to Section 19.1(b)); or (ii) the date this Agreement
is terminated by either party (except where such termination is (A) by Capital
One for convenience pursuant to Section 19.2 effective prior to the end of
Processing Year [***]; (B) by TSYS pursuant to Section 19.1(b); or (C) by either
party prior to the Commencement Date), Capital One may exercise an option to
activate the TS2 License (the “License Option”).

 

(b) If Capital One exercises the License Option the parties shall cooperate to
transition the Capital One Accounts from TSYS’ to Capital One’s (or its
designee’s) facility in accordance with the appropriate portions of Schedule A,
applicable portions of Section 19.8, if any, and the TS2 License Agreement.

 

(c) If Capital One exercises the License Option, this Agreement will terminate
on the Actual Migration Completion Date.

 

(d) If Capital One exercises the License Option, and the effective date of
termination of this Agreement pursuant to Section 8.13(c) is during the [***] or
[***] Processing Years, then Capital One will pay the applicable Termination
Charge specified in Section 6 of Schedule C.

 

(e) On the date Capital One exercises the License Option, it shall elect whether
or not to include [***] in the Licensed Materials. Capital One may not elect to
include [***] in the Licensed Materials if Capital One did not [***] to include
[***] in the scope of Services under this Agreement as of the Commencement Date,
or did so elect but subsequently removed [***] from the scope of Services under
this Agreement, unless the parties reach agreement on new financial terms for
the inclusion of [***] in the Licensed Materials. The parties acknowledge that
the [***] in the TS2 License Agreement with [***] included are based on the
assumption that [***] will be [***] the Services provided by TSYS throughout the
Term.

 

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(f) At any time prior to the Actual Migration Completion Date, Capital One may
rescind the exercise of the License Option and continue receiving Services under
this Agreement as if the License Option had not been exercised. Without
modifying the parties’ obligations under Section 7.4 of Schedule C, Capital One
shall [***] TSYS for its [***] in [***] for the [***] (and any [***] to [***] to
[***] to [***] the Services under this Agreement), such as [***] to [***] which
had been [***]) unless the reason for the [***] is TSYS’ [***] to [***] with its
[***] under the [***].

 

(g) Subject to the exceptions in Section 8.13(a), the right for Capital One to
exercise the License Option will survive for [***] days following the effective
date of termination or expiration of this Agreement.

 

9 PROJECT AND CONTRACT MANAGEMENT

 

  9.1 Steering Committee

 

The parties shall form a steering committee to facilitate communications between
them (the “Steering Committee”). The Steering Committee initially shall be
composed of the persons set forth in Schedule R. Each party shall be entitled to
half the seats. Either party may substitute other individuals, either
temporarily due to the unavailability of a designated individual or permanently;
provided that a proposed permanent substitution by TSYS shall require the prior
approval of Capital One where such proposed substitution has a less senior
position in the TSYS organization than the prior Steering Committee member.

 

  9.2 Reports and Meetings

 

(a) Reports. Schedule R contains a list of reports that TSYS will issue to
Capital One. TSYS shall issue such reports at the frequency and in the format
specified in Schedule R.

 

(i) As one such report, TSYS shall provide a monthly performance report, which
shall be delivered to Capital One within [***] Business Days after the end of
each month, describing TSYS’ performance of the Services in the prior month (the
“Monthly Performance Report”). Such Monthly Performance Report shall:

 

(A) separately address TSYS’ performance in each area of the Services,
including, as applicable, conversion, development activities, and hosting and
processing Services;

 

(B) for each area of the Services, assess the degree to which TSYS has attained
or failed to attain the pertinent objectives in that area, including with
respect to the Service Levels;

 

(C) include the information required by Section 3.3(b) of Schedule B;

 

(D) describe the status of problem resolution efforts, ongoing projects
(including Conversion and development projects), and other initiatives;

 

(E) set forth a record of the material Equipment, Software and personnel changes
that pertain to the Services and describe planned changes during the upcoming
month that may affect the Services; and

 

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(F) set forth the number of Active Accounts and the utilization of capacity for
the month and report on Account and utilization trends and statistics.

 

(ii) As another such report, TSYS shall provide to Capital One regular
information bulletins (no later than provided to any other TSYS customer)
concerning the operation and development projects related to the [***] TS2 and
other components of TSYS’ standard TS2 Processing Platform. These information
bulletins shall:

 

(A) provide advance notice regarding upcoming enhancements to the [***] TS2; and

 

(B) provide implementation dates, features, and specific directions on where to
locate more detailed information.

 

(b) Meetings. Schedule R contains a list of meetings that shall be held between
representatives of Capital One and TSYS. Either party may prepare and circulate
an agenda in advance of each such meeting to give participants an opportunity to
prepare for the meeting. The parties shall establish procedures for preparing
and circulating minutes promptly after each meeting, although the party not
preparing the minutes shall not be bound thereto or obligated to correct or
object to any errors therein. As of the Effective Date, such meetings shall
include the following:

 

(i) an operations call [***] to discuss the operation and performance of the
Services since the last such call;

 

(ii) a [***] meeting of the Capital One Contract Manager and the TSYS Services
Manager to discuss the status of any on-going Conversion, day-to-day operations
during the Term, and such other matters as appropriate;

 

(iii) a [***] meeting among operational personnel representing Capital One and
TSYS to discuss the Monthly Performance Report, daily performance, planned or
anticipated activities and changes that might adversely affect performance, and
otherwise to address, review and discuss matters specific to Capital One;

 

(iv) a [***] management meeting of the Steering Committee to review the reports
for the quarter, review TSYS’ overall performance under the Agreement, review
progress on the resolution of issues, provide a strategic outlook for new TS2
developments and discuss how they can be incorporated into [***] TS2, and
discuss such other matters as appropriate;

 

(v) a [***] meeting by the parties to review relevant contract and performance
issues; and

 

(vi) such other meetings between Capital One representatives and TSYS Personnel,
including meetings between Capital One and TSYS’ Chief Executive Officer and
Chief Operating Officer, reasonably requested by either party as necessary to
address performance of the Services.

 

  9.3 Procedures Manual

 

(a) On the Effective Date, the parties have approved the version of the
procedures manual for this Agreement (the “Procedures Manual”) by signing the
acknowledgement page thereof. The table of contents for the Procedures Manual as
of the Effective Date is provided in Schedule Y.

 

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(b) If the Procedures Manual is inconsistent with the requirements provided in
the Main Body of the Agreement or Schedule A, then the applicable provisions of
the Main Body of the Agreement or Schedule A, as applicable, shall control. The
Procedures Manual may be amended as mutually agreed by the parties.

 

(c) TSYS shall periodically (including prior to the Commencement Date) update
the Procedures Manual to reflect changes in the operations or procedures
described therein, subject to the following: (i) all updates of the Procedures
Manual shall be provided to Capital One for review and comment and (ii) all
updates of the issues resolution methodology, Change Control Procedure, and
Development Methodology shall require Capital One’s approval prior to becoming
effective. TSYS shall perform the Services in accordance with the Procedures
Manual, to the extent applicable.

 

  9.4 Change Control

 

TSYS shall comply with the following change control requirements when making any
changes to the TSYS System:

 

(a) prior to implementing or changing any technology or functionality, in the
TSYS System, or using any new Software or new Equipment to provide the Services,
TSYS shall have complied with all applicable provisions of the Development
Methodology and of the Change Control Procedure in the Procedures Manual (the
“Change Control Procedure”);

 

(b) TSYS shall schedule, and shall use Commercially Reasonable Efforts to
perform, all development work under this Agreement and all changes described in
Section 9.4(a) so as not to have an adverse impact on the Services;

 

(c) TSYS shall not make the following changes, including implementing or
changing any technology or functionality in the applicable components of the
TSYS System, without first obtaining Capital One’s approval pursuant to the
applicable provisions of the Development Methodology and/or the Change Control
Procedure:

 

(i) a change adversely affecting the function or performance of, or decreasing
to any significant degree the resource efficiency of, the [***] or the [***] in
more than insubstantial ways;

 

(ii) a change materially reducing the functionality, parameters, capabilities,
or processing speed of the [***] TS2; or

 

(iii) a [***] which has the effect of increasing Capital One’s [***] under this
Agreement or other [***] or [***] of Capital One.

 

However, TSYS may make temporary changes required by an emergency if it has been
unable to contact an appropriate Capital One representative to obtain such
approval after making reasonable efforts. TSYS shall document and promptly
report such emergency changes to Capital One, which changes shall then be
subject to Capital One’s approval under this Agreement.

 

(d) TSYS shall perform Conversion activities and move enhancements and programs
from development and test environments to production environments in accordance
with the Development Methodology and the Change Control Procedure.

 

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  9.5 Technology Planning

 

(a) Each party will designate an equal number of individuals to serve on a
subcommittee of the Steering Committee (the “Technology Subcommittee”) to review
and assess the performance of [***] TS2, other components of the TSYS System,
and [***] and to develop plans for enhancing [***] TS2, other components of the
TSYS System, [***], and the Services over time. Such plans may include:

 

(i) the identification of new developments and enhancements to improve the
quality of [***] TS2;

 

(ii) a description of the types and volumes of personnel skills and abilities
needed to respond to any recommended changes or upgrades in technology and to
changes, increases and decreases in Capital One’s demand;

 

(iii) general plans for improving Service Level performance through improvements
in [***] TS2, other components of the TSYS System, and [***]; and

 

(iv) a general plan and a projected time schedule for developing and achieving
the recommended elements in accordance with the Development Methodology.

 

(b) The Technology Subcommittee shall meet on a [***] basis or more frequently
if recommended by the Steering Committee to support Capital One’s business
planning cycles or to address changes in the business of Capital One that
materially impact [***] TS2, [***], and other information technology systems.

 

  9.6 TS2 Development Priorities

 

Capital One will be provided significant input into TSYS’ development priorities
for the [***] TS2 Processing Platform and related technologies, including ‘a
seat at the table’ for all user group and similar meetings. Capital One will
have at least the same opportunity to beta test new developments on the [***]
TS2 Processing Platform as is provided to any other TSYS customer who has a
dedicated version of a system that evolved from TS2.

 

  9.7 Quality Assurance and Improvement Programs

 

As part of its total quality management process, TSYS shall provide quality
assurance and quality improvement through: (a) the identification and
application of proven techniques and tools from [***]; and (b) the
implementation of programs, practices and measures designed to improve
compliance with the Service Levels. Such procedures shall include [***], and
other procedures for Capital One to confirm the quality of TSYS’ performance.
TSYS shall utilize project management tools, including productivity aids and
project management systems, as appropriate in performing the Services.

 

  9.8 Coordination of Additional Marketing to Capital One

 

TSYS shall coordinate all of its and its Affiliates marketing efforts with, and
comply with the rules of marketing engagement provided from time to time by, the
Capital One Contract Manager.

 

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  9.9 No Amendment and Order of Precedence

 

Operational documentation (including the Documentation, Change Control Procedure
and other parts of the Procedures Manual) shall not be used to, and shall not,
amend this Agreement. Except to the extent otherwise provided in this Agreement,
if there is a conflict between the provisions of this Agreement and such
documentation, the provisions of this Agreement shall control.

 

10 CAPITAL ONE RESPONSIBILITIES

 

  10.1 Responsibilities

 

In addition to Capital One’s responsibilities as expressly set forth elsewhere
in this Agreement, Capital One shall be responsible for the following:

 

(a) Capital One Contract Manager. Capital One shall designate one (1) individual
to whom TSYS may address operational communications concerning this Agreement
(the “Capital One Contract Manager”). The Capital One Contract Manager’s
responsibilities will include:

 

(i) serving as Capital One’s principal point of contact regarding the Services
and otherwise being responsible for all Services-related communications on
behalf of Capital One;

 

(ii) overseeing and managing the performance of Capital One’s obligations under
this Agreement; and

 

(iii) providing any necessary input and making required decisions in a timely
manner.

 

(b) Capital One Cooperation. Capital One shall cooperate with TSYS, including by
making available management decisions, information, approvals, and acceptances,
as reasonably requested by TSYS so that TSYS may accomplish its obligations and
responsibilities under this Agreement. In providing the Services, TSYS shall be
entitled to rely on Capital One Data, information, and instructions provided by
Capital One or its Affiliates to TSYS.

 

(c) Capital One Quality Control Notification. Capital One shall check
information produced by TSYS, including, as applicable, information used to
produce periodic Capital One Account statements, embossed cards and reports, to
determine if such information is correct. Capital One shall notify TSYS if
Capital One determines as a result of such checking there has been a
non-insubstantial error in the Services. TSYS shall not be liable to Capital One
with respect to any damages arising from an error in the Services during a
period when (i) TSYS is not and should not reasonably be aware of the error and
(ii) a Capital One representative at the appropriate level is or reasonably
should be aware of the error for more than [***] Business Days without notifying
TSYS. The prior sentence shall only relieve TSYS of damages arising from the
error during the period covered by items (i) and (ii) and shall not relieve TSYS
of responsibility to correct the error once identified or of damages arising
before or after the period covered by items (i) and (ii). For example, if
Capital One discovers an inaccuracy in the TSYS System and waits [***] Business
Days to report it to TSYS, then, as long as TSYS is not and should not
reasonably be aware of the error, TSYS shall be relieved of damages arising from
the

 

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error during the period beginning on the [***] Business Day and ending on the
[***] Business Day when the error is reported.

 

(d) Telecommunications Access to TSYS Data Center(s). Capital One shall be
responsible for providing the Capital One Telecom Infrastructure described in
Section 6.12 of Schedule A. Capital One shall ensure that all telecommunications
equipment used by it conform to operational interface specifications that are
mutually agreed from time to time. TSYS shall not unreasonably withhold its
approval to changes in such equipment proposed by Capital One, and Capital One
[***] TSYS for any of its [***] and [***] resulting from such changes [***] and
until TSYS [***] for any of its [***].

 

(e) Equipment. Capital One shall provide and maintain the Equipment in the
Capital One Operating Environment. TSYS shall not change the configuration of
[***] TS2 in a manner which shifts the processing burden to Equipment required
to be provided by Capital One in the Capital One Operating Environment without
Capital One’s prior written consent (which may be withheld in Capital One’s
discretion) and an appropriate adjustment of the charges to reflect the
reallocation of responsibility.

 

(f) Security. Capital One shall use Commercially Reasonable Efforts to implement
security procedures designed to prevent unauthorized access to the TSYS System
through the Capital One Operating Environment.

 

(g) Compliance With TSYS Rules. Capital One will use Commercially Reasonable
Efforts to cause its personnel assigned to the Development Pool to comply with
TSYS’ reasonable operational practices and procedures applicable to the
Development Pool.

 

(h) Contractor Personnel in Development Pool. Capital One shall be responsible
for the obligations, services, and functions performed by personnel of third
party contractors designated by Capital One who are Development Pool Personnel
to the same extent as if such obligations, services, and functions were
performed by Capital One. Capital One shall not disclose TSYS Confidential
Information to a subcontractor unless and until such subcontractor agress in
writing to comply with obligations substantially similar to those in
Section 13.3.

 

  10.2 Savings Clause

 

(a) Due to the material adverse impact termination of this Agreement or
suspension of performance of the Services would have on Capital One’s business,
[***].

 

(b) TSYS ACKNOWLEDGES THAT CAPITAL ONE WOULD NOT BE WILLING TO ENTER INTO THIS
AGREEMENT WITHOUT ASSURANCE THAT THIS AGREEMENT [***] AND THAT TSYS [***], AND
ONLY TO THE EXTENT, EXPLICITLY PROVIDED HEREIN.

 

(c) Without limiting any provisions hereof that expressly excuse TSYS from
performance (including provisions relating to a Force Majeure Event), TSYS’
nonperformance of its obligations under this Agreement [***]: (i) [***] the
extent [***]; and (ii) TSYS provides Capital One with [***]. If requested by
Capital One, TSYS shall use [***] Capital One’s, its Affiliates’ (or such third
party’s) [***] (with Capital One being responsible to [***]).

 

11 CHARGES AND PAYMENT TERMS

 

ALL AMOUNTS TSYS MAY CHARGE FOR THE SERVICES ARE SET FORTH IN SCHEDULE C OR IN
OTHER EXPRESS PAYMENT PROVISIONS OF THIS AGREEMENT. [***] HAVE THE RIGHT TO
[***],

 

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AND [***] SHALL NOT BE REQUIRED TO [***], [***] AMOUNTS FOR THE SERVICES OTHER
THAN OR IN ADDITION TO THOSE PAYABLE TO TSYS UNDER SCHEDULE C AND UNDER THE
OTHER EXPRESS PAYMENT PROVISIONS OF THIS AGREEMENT. SCHEDULE C ALSO CONTAINS THE
INVOICING AND PAYMENT TERMS APPLICABLE TO THE CHARGES.

 

12 AUDITS

 

  12.1 Generally

 

TSYS shall allow Capital One and Capital One Affiliates, and their respective
internal and external auditors and Regulators (collectively, “Capital One
Auditors”) reasonable access to TSYS Personnel and TSYS facilities, Equipment,
Software, and Documentation used in providing Services to Capital One, and to
the Capital One Data and Capital One-related records held by or under the
control of TSYS at no additional charge and subject to the conditions set out in
this Section 12, for the purpose of performing the audits described in this
Agreement, including Section 6 and this Section 12. Capital One shall make good
faith efforts to coordinate audits requested under this Section 12 so as to
minimize the number of audits of the same subject matter performed separately by
Capital One and the various Capital One Affiliates.

 

  12.2 SAS 70 Audits

 

(a) General. Annually during the Term, TSYS shall retain a third party auditor
(the “SAS 70 Auditor”) to perform an audit or series of audits, each of which
audit(s) shall conform to the American Institute of Certified Public Accountants
Statements of Auditing Standards No. 70 Type II (collectively, “SAS 70” audits)
or any successor or substitute statement adopted by the American Institute of
Certified Public Accountants, of the control activities and processes maintained
by TSYS to provide the Services.

 

(b) Scope of Audit. The scope of the SAS 70 audit(s) shall at a minimum include
TSYS’ [***], [***] TS2, [***], ([***] only), and other elements of the TSYS
System and [***] used to provide the Services to Capital One and shall be
sufficient to satisfy audit requirements generally applicable to financial and
card processing institutions under Applicable Laws. At least [***] days prior to
the initiation of each SAS 70 audit, TSYS shall provide in writing the proposed
objectives and scope of the SAS 70 audit to Capital One. To the extent Capital
One has any comments relative to such scope, it shall provide its comments in
writing to TSYS at least [***] days prior to the SAS 70 audit being performed,
and if in such comments Capital One in good faith identifies [***] or [***]
issues (other than an increase in the [***] covered by the SAS 70 audit that is
not required by Applicable Law) that the parties agree require a reasonable
addition or change to the scope of the SAS 70 audit, then TSYS shall revise the
scope of the SAS 70 audit as necessary to address such issues without additional
charge to Capital One. If Capital One requests additions or changes to the scope
of the SAS 70 audit that the parties do not agree to make pursuant to the
previous sentence (including an increase in the [***] covered by the SAS 70
audit that is not required by Applicable Law), then (i) TSYS shall make such
additions or changes and (ii) Capital One shall reimburse TSYS for any
incremental Out-of-Pocket Expenses it incurs in making such additions or
changes. Promptly after TSYS’ receipt of each such SAS 70 audit (but no later
than [***] weeks), TSYS shall provide Capital One with a copy of the SAS 70
audit report, except such [***] week period shall be extended to [***] days if
requested by TSYS and approved by Capital One, which approval shall not be
unreasonably withheld.

 

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(c) Addressing Capital One Questions and Concerns. Capital One may ask questions
of TSYS concerning the SAS 70 audits and the SAS 70 reports, which TSYS shall
promptly answer. If in Capital One’s opinion TSYS’ response does not
satisfactorily answer Capital One’s questions, or if TSYS fails to respond
promptly, then at Capital One’s request TSYS shall request the involvement of
the SAS 70 Auditor to answer Capital One’s questions.

 

(d) Deficiencies. TSYS shall, as soon as reasonably practicable, remedy any
material weakness noted in the SAS 70 audit, and regularly report on its
progress in remedying such weaknesses (such reports shall be provided no less
frequently than [***], but if material deficiencies are noted or Capital One
otherwise requests TSYS shall report [***]). If the scope of the weakness
requires efforts by TSYS beyond those that it is otherwise required to make in
order to provide the Services, the effort to correct the same may be a New
Additional Service in which event the charges therefor shall be established in
accordance with Schedule C. Within [***] weeks following correction of the
weakness TSYS: (i) will have the SAS 70 Auditor verify that the weakness has
been corrected in a manner that meets SAS 70 requirements; and (ii) provide
Capital One with a copy of the verification report.

 

(e) Change of Auditor. Upon any TSYS change of independent auditor acting as SAS
70 Auditor, TSYS shall provide Capital One written notice of such change as soon
as it may legally do so. Any replacement SAS 70 Auditor shall be a nationally
(United States) recognized auditing firm.

 

  12.3 Regulatory Audits

 

(a) If any Association or Regulator requires that it be permitted to review or
audit the Services or information concerning such Services held by TSYS under
this Agreement, TSYS upon reasonable advance notice from Capital One (to the
extent Capital One is able or permitted to provide such notice) shall at Capital
One’s expense to the extent the amount of effort required is greater than that
experienced by TSYS in regulatory audits for its other customers and the reason
for such greater effort is caused by factors peculiar to Capital One, not to
those involving TSYS, allow such Association or Regulator to conduct the
required audit. At no time shall TSYS deny any such Association or Regulator
access to facilities, records, Services, or materials necessary for it to
perform a required audit.

 

(b) The Parties acknowledge that performance of the Services in or for Capital
One Accounts in Canada is subject to examination by Canadian regulatory
agencies, including the Office of the Superintendent of Financial Institutions
(“OSFI”), and that each party is and shall be authorized to submit or furnish to
any such regulatory agency reports, information or other data as may be required
or requested by them under Applicable Laws to otherwise permit access by such
agencies to information and data relevant to the Services. TSYS, to the extent
legally permissible, shall promptly notify Capital One of, and provide details
with respect to, any Capital One Confidential Information it provides to OSFI.
TSYS also agrees to execute undertakings in favor of OSFI regarding the
inspection of such data or information by OSFI, the undertakings to be in such
form and contain such terms as the OSFI may reasonably require for that purpose
from time to time.

 

  12.4 Capital One Audits

 

(a) Capital One may conduct one (1) Capital One Audit (as defined below) on an
annual basis for any reason. Additionally, if at any time, including during a
disaster situation,

 

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Capital One has reasonable material concerns or a reasonable basis for
requesting information, Capital One shall first address such concerns or request
such information from TSYS’ management, and to the extent its reasonable
material concerns or reasonable basis for requesting information remain
unsatisfied after such discussions and the other audits permitted hereunder,
then Capital One shall have the right to [***] Capital One Audits. Each “Capital
One Audit” may consist of an audit of:

 

(i) general controls and security practices and procedures used to protect
Capital One Confidential Information;

 

(ii) the TSYS System and [***] Software and the integrity of Capital One Data
processed, stored, supported and transmitted by the TSYS System or [***]
Software;

 

(iii) books and records of TSYS which relate to the Services, including all
supporting financial records and invoices upon which the Charges are based;
provided that: (A) Capital One shall not be entitled to see any [***] of TSYS
except to the extent such [***] is required to support a Charge for a [***]
Expense, [***] Expense, or any Service for which this Agreement expressly
provides that the Charge is to be computed by reference to [***]; and (B) in the
case of [***] of the type described in the exception to item (A) that TSYS may
not disclose to Capital One because of its obligations of confidentiality to
third parties even after using Commercially Reasonable Efforts to obtain the
right to disclose such information to Capital One, in lieu of disclosing such
information to Capital One TSYS shall [***] an [***] to [***] to Capital One
that the Charges based on such [***] are accurate);

 

(iv) supporting information and calculations regarding compliance with Service
Levels;

 

(v) disaster recovery and back-up procedures;

 

(vi) information regarding the [***] and [***] of TSYS in performing the
Services to the extent directly affecting Charges for, or timing of, Services,
provided that (A) Capital One shall not be entitled to see any [***] information
of TSYS except to the extent such [***] information is required to support a
Charge for a [***] Expense, [***] Expense, or any Service for which this
Agreement expressly provides that the Charge is to be computed by reference
to[***]); and (B) in the case of [***] of the type described in the exception to
item (A) that TSYS may not disclose to Capital One because of its obligations of
confidentiality to third parties even after using Commercially Reasonable
Efforts to obtain the right to disclose such information to Capital One, in lieu
of disclosing such information to Capital One TSYS shall [***] an [***] to [***]
to Capital One that the Charges based on such [***] are accurate); and

 

(vii) subject to Section 12.3, any other information or materials reasonably
necessary to enable Capital One to meet, or to confirm that TSYS is meeting its
obligations and responsibilities under Section 6.

 

(b) Each Capital One Audit shall be subject to the following conditions:

 

(i) Notice and Consent. Capital One will give TSYS not less than [***] days’
prior written notice of the date(s) on which Capital One proposes to conduct a
Capital One Audit (this restriction shall not apply to Associations and
Regulators). TSYS shall not unreasonably withhold its consent to Capital One’s
conduct of a Capital One Audit on date(s) proposed by Capital One, but reserves
the right to withhold its consent as to date(s) on which: (A) the relevant TSYS
Personnel are not reasonably available due to their other work-related

 

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duties (but TSYS shall maintain sufficient staff that this shall not be a
material impediment or persistently cause undue delay); or (B) other audits or
regulatory examinations are being conducted on the same date(s) and the conduct
of the Capital One Audit on such date(s) would unreasonably burden the TSYS
Personnel and materially interfere with TSYS’ business activities. If TSYS
reasonably withholds its consent, TSYS shall work in good faith to schedule the
Capital One Audit as soon as is reasonably practicable. This will include TSYS
promptly proposing different date(s) for the Capital One Audit, which shall be
no more than [***] days after the date of Capital One’s original desired date.

 

(ii) [***]. The notice referenced in Section 12.4(b)(i) will be accompanied by a
copy of Capital One’s proposed objective and scope of the Capital One Audit.
Prior to Capital One Auditors arriving on-site, Capital One and representatives
of TSYS will discuss and agree upon reasonable rules and administrative
procedures applicable to Capital One’s proposed [***] and the logistics of
conducting the Capital One Audit. The Capital One Audit must be conducted
substantially in accordance with such agreement. Notwithstanding such agreement,
Capital One shall be entitled to change the [***] and [***] of the Capital One
Audit if at any time before or during such audit Capital One finds or receives
information which reasonably raises additional concerns for Capital One,
provided if Capital One changes the [***] or [***] of a Capital One Audit in a
material way and TSYS is unable to accommodate the changed [***] or [***] on the
scheduled audit dates, then TSYS may require Capital One to provide notice and
obtain consent pursuant to Section 12.4(b)(i) prior to conducting the changed
portion of the Capital One Audit. This requirement shall not apply to
Associations and Regulators.

 

(iii) Minimize On-Site Presence. No more than [***] Capital One Auditors may be
on-site at TSYS’ facilities at any time, and no more than [***] of the [***]
Capital One Auditors may be external auditors unless they are Capital One’s
official outside auditors or are performing what would otherwise be internal
audit functions. This requirement shall not apply to Associations and
Regulators.

 

(iv) Minimize Disruption. Capital One will conduct the Capital One Audit in such
a way as to minimize unnecessary disruption of TSYS’ business activities, and
the right of Capital One to review TSYS’ systems will be limited to the specific
access necessary to perform the Capital One Audit. Capital One shall use
reasonable efforts to minimize the number of Capital One Auditors required to
conduct the Capital One Audit in an efficient and timely manner. This
requirement shall not apply to Associations and Regulators. Capital One may not
install, add or execute Software, or install, add or attach hardware, on any
TSYS system in connection with any Capital One audit; provided, however, that
Capital One may [***] and [***] of TSYS’ information technology infrastructure
in accordance with Section [***] of this Agreement.

 

(v) Record Removal Restrictions. The Capital One Audit shall be conducted on
site at TSYS’ premises under the observation of TSYS, and Capital One will not
remove original copies of TSYS records from TSYS’ premises, although Capital One
may remove its audit notes and, with TSYS’ consent (which consent TSYS shall not
unreasonably withhold), copies of such records, and such copies shall constitute
TSYS Confidential Information. This requirement shall not apply to Associations
and Regulators.

 

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(vi) TSYS Security. At all times while on site at TSYS’ premises, Capital One
will comply with TSYS’ standard written security policies and procedures
applicable to its general customer population of which Capital One is given
prior written notice. This requirement shall not apply to Associations and
Regulators.

 

(vii) Costs. Each of Capital One and TSYS will bear its own costs associated
with any Capital One Audit. There shall be [***] to Capital One by TSYS in
connection with TSYS’ compliance with any of the audit provisions in this
Section 12 unless Capital One spends more than [***] Business Days during the
first Processing Year or [***] Business Days during any subsequent Processing
Year, on all Capital One audits during that year. If Capital One spends more
Business Days than are permitted above during any Processing Year on all Capital
One audits during that year, then Capital One will pay reasonable costs
associated with data reports, handler costs, and other audit related expenses,
including the cost of TSYS Personnel occupied with supervising and facilitating
the Capital One Audit.

 

  12.5 Audit Follow-up and Notification

 

(a) Following an audit or examination performed in connection with this
Agreement, Capital One or the Capital One Auditors may conduct an exit
conference with TSYS to obtain factual concurrence with issues identified in the
review.

 

(b) At Capital One’s request, TSYS and Capital One shall promptly meet to review
each Capital One Audit report after its issuance and to mutually agree upon the
appropriate manner, if any, in which to respond to the changes suggested by the
audit report.

 

(c) If TSYS or its Affiliates become aware (through internal or external audits
or otherwise) of any deficiency in its operating practices or procedures that
may be reasonably expected to have a material and adverse impact on the Services
or Capital One, then: (i) TSYS shall provide Capital One with prompt formal
notice thereof; (ii) TSYS executive management shall promptly meet with Capital
One’s designated personnel to discuss the situation (to the extent legally
permissible) and the steps TSYS will take to promptly remediate such deficiency;
and (iii) TSYS shall perform such steps discussed by the parties and frequently
report on the status of such efforts until the deficiency has been corrected.

 

(d) TSYS shall provide Capital One with prompt notice of any audit of TSYS
operations conducted by a Regulator, excluding health and safety audits.

 

  12.6 Records Retention

 

(a) TSYS shall maintain and provide, during each Capital One Audit, access upon
request to the following records, documents, and other information, and any
other records, documents, and other information reasonably requested by Capital
One, required to meet Capital One’s audit rights under this Agreement:

 

(i) letters of intent;

 

(ii) Specifications;

 

(iii) project documentation;

 

(iv) copies of audits performed by or for TSYS under Section 12.2 and relevant
audit information arising out of TSYS’ reporting obligation under
Section 12.5(c);

 

(v) insurance policies;

 

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(vi) invoices and supporting documentation;

 

(vii) non-disclosure and [***] agreements that TSYS is required to obtain
pursuant to Section 13.3(f); and

 

(viii) Procedures Manual and related updates.

 

(b) TSYS shall maintain such records until the latest of:

 

(i) [***] after the date the record was created (except with respect to audit
reports which shall be retained for [***] after creation and TSYS Personnel
agreements and contracts, safety and health procedures, and insurance policies
which shall be retained for [***] after the date they are last in effect);

 

(ii) the information is no longer required to comply with Capital One
Directions; and

 

(iii) the information is no longer required for TSYS to comply with Applicable
Laws applicable to TSYS.

 

provided, however, that when such records pertain to a pending matter relating
to this Agreement (e.g., a dispute) they shall be retained until the matter is
closed.

 

  12.7 Overcharges

 

(a) If as a result of an audit or otherwise it is determined that TSYS has
overcharged Capital One, TSYS shall credit Capital One’s account an amount equal
to the overcharge plus [***] at the [***] calculated from the date of payment by
Capital One to TSYS; provided that if TSYS discloses such overcharges to Capital
One and offers to refund such overcharges in full prior to Capital One’s
indication of the intention to audit and such overcharge was not the result of
an intentional act to conceal such overcharges from Capital One, no interest
shall be charged thereon if the amount of the overcharge does not exceed [***]
percent ([***]%) of the Charges during the period audited.

 

(b) If the audit discloses that TSYS’ overcharges exceeded [***] percent
([***]%) of the Charges during the prior [***] months, then TSYS shall also
reimburse Capital One for the reasonable cost of the portion of the audit
related to such overcharges.

 

13 SAFEGUARDING OF DATA; CONFIDENTIALITY

 

  13.1 Safeguarding Capital One Data

 

(a) Capital One Data shall be and remain, as between the parties, the property
of Capital One. TSYS shall not: (i) use Capital One Data for any purpose other
than in connection with providing the Services; (ii) sell, assign, lease or
otherwise dispose of Capital One Data to third parties; (iii) possess or assert
any lien or other right against Capital One Data; or (iv) commercially exploit
Capital One Data.

 

(b) TSYS shall establish and maintain safeguards against the destruction, loss
or alteration of Capital One Data in the possession or control of TSYS which are
no less rigorous than those maintained by TSYS for its other customers’
information of a similar nature.

 

(c) Without limiting the generality of Section 13.1(a):

 

(i) If TSYS Personnel gain, or if TSYS believes the TSYS Personnel might have
gained, access to Capital One Data that they are not permitted to access under
this

 

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Agreement, TSYS shall promptly report such incident to Capital One, describe in
detail the accessed Capital One Data, and if requested return to Capital One any
such Capital One Data.

 

(ii) TSYS shall utilize Commercially Reasonable Efforts, including systems
security measures, to guard against the unauthorized access, alteration, or
destruction of Capital One Data. Such measures shall include the use of Software
which:

 

(A) requires all users to enter a user identification and password prior to
gaining access to the information systems;

 

(B) controls and tracks the addition and deletion of users authorized to access
Capital One Data; and

 

(C) controls and tracks user access to areas and features of the information
systems.

 

  13.2 GLB Compliance

 

(a) TSYS acknowledges that Capital One is subject to Title V of the GLB Act and
the Interagency Guidelines Establishing Standards for Safeguarding Customer
Information adopted by federal bank regulatory agencies, including the OTS and
Board of Governors of the Federal Reserve System, as each may be amended from
time to time (collectively, the “GLB Regulations”) and may be subject to
Canadian Privacy Legislation pursuant to which Capital One is required to comply
with certain regulations and implement certain procedures and processes with
respect the privacy, use and protection of Personally Identifiable Information
of Capital One’s customers or prospective customers, and, as a result of
engaging TSYS to perform the Services is required to obtain certain undertakings
from TSYS with regard to the privacy, use and protection of Personally
Identifiable Information of Capital One’s customers or prospective customers.
Therefore, notwithstanding anything to the contrary contained in this Agreement,
and in addition to (and not in substitution for) TSYS’ other obligations under
this Agreement, TSYS shall, in accordance with the GLB Act and the GLB
Regulations, for so long as it retains Customer Information:

 

(i) protect and keep confidential all Personally Identifiable Information about
or pertaining to Capital One’s customers, prospective customers or other
individuals about whom Capital One has collected Personally Identifiable
Information that is disclosed by Capital One or otherwise obtained by TSYS in
the performance of its duties under this Agreement (collectively, the “Customer
Information”). Customer Information includes all data considered “nonpublic
personal information” as defined in Title V of the GLB Act and applicable
regulations promulgated thereunder. During the Term, TSYS shall collect and use
Customer Information only to the extent necessary to exercise its rights or
perform its obligations under this Agreement for which such Customer Information
was disclosed to TSYS or as otherwise directed by Capital One;

 

(ii) implement process and procedures designed to ensure that TSYS Personnel
shall not attempt to access, or allow access to, any Customer Information that
they are not permitted to access under this Agreement;

 

(iii) have administrative, technical, and physical safeguards to:

 

(A) ensure the security and confidentiality of such Customer Information;

 

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(B) protect against any anticipated threats or hazards to the security or
integrity of such Customer Information;

 

(C) protect against unauthorized access to or use of such Customer Information;
and

 

(D) without limiting the generality of items (A) through (C) preceding, meet the
objectives of the GLB Act and the GLB Regulations.

 

Such safeguards shall include using systems and controls that: (1) requires all
users to enter a user identification and password prior to gaining access to
Customer Information; (2) controls and tracks the addition and deletion of users
authorized to access Customer Information; and (3) controls and tracks user
access to Customer Information;

 

(iv) implement and maintain, at TSYS’ own expense, a [***] compliance with this
Section 13.2 and appropriate mitigation strategies to address issues identified
as a result of such [***]; and

 

(v) notify Capital One if TSYS discovers there has been a material breach of, or
a serious attempt to breach, its security safeguards required by this
Section 13.2 such that the security of Customer Information has been, or TSYS
has a reasonable basis to believe may have been, compromised (including
unauthorized access to and unauthorized attempts to access Customer
Information). TSYS shall provide such notice promptly, and in all cases within
[***] hours, after discovery of the breach or attempted breach. TSYS shall take
appropriate actions to address incidents of unauthorized access to or use of
Customer Information. Capital One may take all reasonable and appropriate steps
to protect Customer Information in such event, including investigating TSYS’
security safeguards required under this Section 13.2.

 

(b) TSYS shall not retain Customer Information unless it is required to do so to
perform the Services or by applicable law.

 

(c) Upon reasonable notice to TSYS, Capital One and its representatives may (at
Capital One’s option) review either TSYS’ information technology infrastructure
security or an independent audit provided by TSYS in order to monitor TSYS’
compliance with the terms of this Section 13.2. TSYS shall implement, and
maintain, at TSYS’ own expense, appropriate mitigation strategies to address
issues identified as a result of these reviews.

 

(d) The obligations set forth in this Section 13.2 are material for purposes of
determining a breach of the Agreement, and they shall survive termination of
this Agreement.

 

  13.3 Confidentiality

 

(a) Confidential Information. TSYS and Capital One each acknowledge that they
may be furnished with, receive or otherwise have access to information of or
concerning the other party that such party considers to be confidential, a trade
secret or otherwise restricted. “Confidential Information” shall mean all
information, in any form, furnished or made available directly or indirectly by
one party to the other that is marked confidential, restricted, or with a
similar designation. Confidential Information furnished or made available by
Capital One is “Capital One Confidential Information”. Confidential Information
furnished or made available by TSYS is “TSYS Confidential Information”. The
terms and conditions of this Agreement shall be deemed Confidential Information
of each party.

 

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(b) Capital One Confidential Information. Capital One Confidential Information
also shall include, whether or not designated “Confidential Information”:

 

(i) Capital One Data and Customer Information;

 

(ii) Capital One Materials, including credit risk models, optimization models,
authorization models, and marketing and product strategies;

 

(iii) the specifications, designs, documents, correspondence, software,
documentation, data and other materials and work products furnished by Capital
One to TSYS for use in the course of performing the Services;

 

(iv) all information concerning the operations, affairs and businesses of
Capital One, the financial affairs of Capital One, and the relations of Capital
One with its customers, employees and service providers (including customer
lists, customer information, account information and consumer markets); and

 

(v) any other information reasonably designated as Capital One Confidential
Information in this Agreement.

 

(c) TSYS Confidential Information. TSYS Confidential Information also shall
include, whether or not designated “Confidential Information”:

 

(i) Third Party Materials licensed to TSYS;

 

(ii) the TSYS System;

 

(iii) the specifications, designs, documents, software, documentation, data and
other materials and work products disclosed by TSYS or its Affiliates to Capital
One within the Development Pool;

 

(iv) the specifications, designs, documents, software, documentation, data and
other materials and work products disclosed by TSYS or its Affiliates to Capital
One before Conversion that (A) was either covered by the Confidentiality
Agreement between the parties dated May 27, 2004 or (B) a reasonably prudent
business person would have considered to be of a confidential nature;

 

(v) all information concerning (A) TSYS employees and individual subcontractor
personnel that a reasonably prudent employer would treat as confidential and/or
(B) the relations of TSYS and its Affiliates with their service providers; and

 

(vi) any other information reasonably designated as TSYS Confidential
Information in this Agreement.

 

(d) General Obligations.

 

(i) Neither party shall use the Confidential Information of the other party for
any purpose other than in connection with providing or receiving, as applicable,
the Services in accordance with this Agreement.

 

(ii) Each party shall use at least the same degree of care as it employs to
avoid unauthorized disclosure of its own information, but in any event no less
than Commercially Reasonable Efforts, to prevent disclosing to unauthorized
persons the Confidential Information of the other party, provided that TSYS may
disclose such information to properly authorized entities as and to the extent
necessary for performance of the Services, and Capital

 

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One may disclose such information to its Affiliates and to third parties as and
to the extent necessary for Permitted Users’ receipt of the Services, where in
each such case, the receiving entity first agrees in writing to comply with
obligations substantially similar to those provided in this Section 13.3.

 

(iii) In addition, if a party to this Agreement requires the other party to use
or exchange information with a third party in a manner contemplated by this
Agreement, and the third party requires such other party to execute a
non-disclosure agreement, then such other party shall not unreasonably refuse to
agree to execute the form of non-disclosure agreement required by such a third
party if such other party’s obligations under the provisions thereof, taken as a
whole, are not substantially greater than the party’s obligations hereunder.

 

(iv) In the event of any actual or suspected misuse, disclosure or loss of, or
inability to account for, any Confidential Information of the furnishing party,
the receiving party shall:

 

(A) notify the furnishing party promptly after becoming aware thereof;

 

(B) furnish to the other party full details of the unauthorized possession, use,
or knowledge, or attempt thereof, and use reasonable efforts to assist the other
party in investigating or preventing the reoccurrence of any unauthorized
possession, use, or knowledge, or attempt thereof; and

 

(C) promptly take such actions as may be necessary or reasonably requested by
the furnishing party to minimize the violation and any damage resulting
therefrom.

 

(v) Neither party shall commence any legal action or proceeding against a third
party with respect of any unauthorized possession, use, or knowledge, or attempt
thereof, of Confidential Information by any person or entity which action or
proceeding identifies the other party or the other party’s Confidential
Information without the other party’s prior written consent.

 

(vi) The parties’ obligations respecting Confidential Information shall continue
for a period of [***] years following expiration or termination of this
Agreement, provided that the obligation with respect to Capital One Data,
Customer Information, and the TSYS System shall continue in perpetuity, without
limitation.

 

(e) Additional Obligations with Regard to Capital One [***]. This
Section 13.3(e) provides certain additional confidentiality obligations that
apply to “Capital One [***]”. Capital One [***] shall mean any [***] of Capital
One [***] based on the [***], including [***] (e.g., [***]), [***] (e.g., [***]
and [***]), [***] and [***], and [***].

 

(i) Prior to the Commencement Date, TSYS shall provide (and update Schedule J to
include) a complete list of the TSYS Personnel that the parties believe require
access to Capital One [***] to perform the Services. The parties will update
such list during the Term as necessary to maintain a complete list of the TSYS
Personnel who have had or who are expected to require access to Capital One
[***], and will cooperate to minimize the number of TSYS Personnel requiring
access to Capital One [***] in performance of the Services. Without each party’s
consent such list shall not exceed [***] individuals.

 

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(ii) TSYS shall:

 

(A) use Commercially Reasonable Efforts to cause TSYS Personnel with access to
Capital One [***] to not disclose such information to other TSYS Personnel not
listed on Schedule J (or the current list mutually maintained), and TSYS shall
promptly (and in all cases within [***] hours) notify Capital One of any
unauthorized disclosure of which TSYS has actual knowledge; and

 

(B) inform Capital One in writing, upon Capital One’s request, of the [***] of
other [***] of TSYS for whom each such individual is [***] during the [***]
months following his or her last access to Capital One [***].

 

(f) Non-Disclosure Agreements.

 

(i) TSYS shall require that (A) all TSYS Personnel who have access to Capital
One [***] execute the [***] agreement attached as “Form A” in Schedule I; and
(B) subject to the last sentence of this Section 13.3(f)(i), all TSYS Personnel
who are authorized to have access to Capital One Data or Capital One
Confidential Information execute the non-disclosure agreement attached as “Form
B” in Schedule I (Form A and Form B collectively, “Non-Disclosure Agreements”).
TSYS shall provide the Capital One Contract Manager with copies of all
Non-Disclosure Agreements executed by TSYS Personnel prior to the date such TSYS
Personnel begin work on the Capital One account. In the case of TSYS Personnel
who are not TSYS employees, another form may be used lieu of Form B so long as
it provides substantially equivalent protection to Capital One and TSYS complies
with its other obligations under Section 5.7.

 

(ii) TSYS shall [***] TSYS Personnel. If TSYS changes any of its standard
non-disclosure agreements (i.e., form agreements used generally for other TSYS
accounts) in order to address changes in Applicable Laws, TSYS shall inform
Capital One of the changes it is making and the rationale for such changes and
will not unreasonably refuse to consent to any changes to the Non-Disclosure
Agreements desired by Capital One to comply with changes in Applicable Law.

 

(iii) If the requirement to have individuals who are to have access to Capital
One [***] execute Form A causes TSYS [***] to [***] to [***] the Services in
accordance with this Agreement, TSYS shall inform Capital One and the parties
shall attempt to ameliorate the situation. Until such situation is ameliorated
TSYS shall be [***] any [***] to [***] the Services to the [***] is [***] by
such requirement.

 

(iv) Capital One may change the list of companies in Attachment A to Form A at
any time to conform to the Capital One Competitor list, effective only as to
individuals who have not yet at that time executed the Form A. If an individual
who has executed Form A and has left (or is about to leave) the employ of TSYS
notifies TSYS that he or she has [***], TSYS shall promptly provide Capital One
a copy of the notice. If the TSYS [***] or other TSYS [***] have actual
knowledge of circumstances that indicate that an individual who has executed
Form A and/or Form B is in breach of his or her obligations thereunder TSYS
shall promptly notify Capital One. If an individual who has executed Form A
gives notice pursuant to Section 2(b) of Form A that he or she intends to [***]
by Section 2(a) of Form A, and Capital One indicates that it desires that TSYS
[***] pursuant to Section [***], TSYS shall [***] by Section [***] and [***] to
[***] on [***] (including the [***] of any [***] on TSYS).

 

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(v) Subject to the last sentence of this Section 13.3(f)(v), Capital One shall
[***] execute the non-disclosure agreement attached as “Form C” in Schedule I.
Capital One shall provide TSYS with [***]. In the case of [***], another form
may be used in lieu of Form C so long as it provides substantially equivalent
protection to [***].

 

(g) Exclusions. Section 13.3(d) shall not apply to any particular information
(other than Capital One Data and any Customer Information) which TSYS or Capital
One can demonstrate:

 

(i) was, at the time of disclosure to it, in the public knowledge;

 

(ii) after disclosure to it, is published or otherwise becomes part of the
public knowledge through no fault of the receiving party;

 

(iii) was lawfully in the possession of the receiving party at the time of
disclosure to it without obligation of confidentiality;

 

(iv) was received after disclosure to it from a third party who had a lawful
right to disclose such information to it without any obligation to restrict its
further use or disclosure; or

 

(v) was independently developed by the receiving party without reference to
Confidential Information of the furnishing party.

 

  13.4 Disclosures Required by Law

 

A party shall not be considered to have breached its obligations by disclosing
Confidential Information (including Capital One Data and Customer Information)
of the other party as required to satisfy any Applicable Laws, provided that,
promptly upon receiving any request or demand therefor (to the extent that it
may legally do so) such party advises the other party of the request prior to
making such disclosure in order that the other party may interpose an objection
to such disclosure, take action to assure confidential handling of the
Confidential Information, and take such other action as it deems appropriate to
protect the Confidential Information. A party receiving legal process (such as
subpoenas, civil investigative demands, etc.) from a third party related to a
claim against or investigation of the other party, shall be entitled to be
reimbursed by the other party for all reasonable Out-of-Pocket Expenses incurred
in connection with responding thereto, including reasonable attorneys’ fees.

 

  13.5 No Implied Rights

 

Nothing contained in this Section 13 shall be construed as obligating a party to
disclose its Confidential Information to the other party, or as granting to or
conferring on a party, expressly or impliedly, any rights or license to the
Confidential Information of the other party, and any such obligation or grant
shall only be as provided by other provisions of this Agreement.

 

  13.6 Return of Confidential Information

 

(a) As requested by Capital One, TSYS shall return or destroy, as Capital One
may direct, all material in any medium that contains, refers to, or relates to
Capital One Confidential Information, including Capital One Confidential
Information contained in TSYS Developed Materials and retain no copies (other
than archival data files which shall not be used for any purpose and shall be
destroyed in the ordinary course of TSYS’ computer file backup

 

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procedures and, provided that TSYS so notifies Capital One, one (1) copy may be
retained by internal or external legal counsel for the purpose of evidentiary
preservation).

 

(b) Each party shall, upon termination or expiration of this Agreement and
completion of TSYS’ Termination/Expiration Assistance obligations, return or
destroy the Confidential Information of the other party that is in its
possession or under its control; provided, however, that (i) each party may
retain a reasonable number of copies of this Agreement, and such other
Confidential Information of the other party (other than Personally Identifiable
Information) as is mutually agreed, or is required for such party to comply with
Applicable Laws; (ii) Capital One shall not be required to return any Software,
Documentation, or other materials to which it has received a license that
survives termination or expiration of this Agreement; and (iii) each party’s
obligation under this paragraph with respect to non-critical Confidential
Information shall be limited to using Commercially Reasonable Efforts to return
or destroy such information.

 

  13.7 Corporate Risk Controls and Information Security Review

 

(a) TSYS shall work in good faith to achieve compliance with all information
[***] provided in [***] and, once achieved, to maintain such compliance at all
times during the Term.

 

(b) Upon reasonable advance notice to TSYS, Capital One and its representatives
may meet at TSYS’ offices in Columbus, Georgia, or other TSYS facilities used to
provide the Services during normal business hours with TSYS Personnel
responsible for information security and business continuity matters within
TSYS’ audit department for purposes of:

 

(i) reviewing TSYS’ information security and business continuity policies,
procedures and related documentation;

 

(ii) physically inspecting the TSYS facilities and information technology and
business continuity infrastructure used to provide the Services, provided
(A) TSYS Personnel shall accompany Capital One at all times during such
inspections and (B) such inspections may not adversely impact, or compromise the
confidentiality of, the operations of another customer of TSYS; and

 

(iii) making inquiries of such personnel with regard to such items, as they
relate to providing Services to Capital One, (collectively, a “Capital One
Security Review”).

 

(c) TSYS shall develop, implement, and maintain, at [***], mitigation strategies
to address any deficiencies identified as a result of the Capital One Security
Reviews that the parties agree may be reasonably expected to have a material and
adverse impact on the Services or Capital One. If TSYS does not agree that a
deficiency identified during a Capital One Security Review exists or may be
reasonably expected to have a material and adverse impact on the Services, then
at Capital One’s request, TSYS shall: (A) engage a third party to review the
deficiency in accordance with the process described below in Section 13.7(d);
(B) add a review of the deficiency to the scope of the next SAS 70 audit to be
provided pursuant to Section 12.2; or (C) require TSYS promptly to take action
specified by Capital One to address the deficiency and [***] for the [***] TSYS
[***].

 

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(d) Capital One shall not have the right to perform [***] and [***] reviews of
TSYS’ IT infrastructure except in accordance with this Section 13.7 and as
permitted under Section 12.4. If Capital One has reasonable material concerns
that a deficiency exists in TSYS’ IT infrastructure that may be reasonably
expected to have a material and adverse impact on the Services or Capital One,
and such concerns are not addressed to Capital One’s reasonable satisfaction in
the SAS 70 audit provided pursuant to Section 12.2 or through the process
described above in Section 13.7(b), then at Capital One’s written request (but
no more than once in any calendar year unless an event of unauthorized access to
Capital One Information through TSYS’ IT infrastructure has occurred in which
case Capital One may request such [***] immediately following any such event),
TSYS will engage, on [***] and [***], TSYS’ independent auditor (which must be a
nationally (United States) recognized auditing firm) to conduct [***] of TSYS’
IT infrastructure in accordance with mutually agreed upon procedures, and,
subject to TSYS’ [***] to its other customers, [***]. Upon completion of its
report for any such [***], the independent auditor will provide copies to [***]
TSYS and [***]. TSYS shall develop, implement, and maintain, at TSYS’ expense,
appropriate mitigation strategies to address any deficiencies identified as a
result of these [***] that may be reasonably expected to have a material and
adverse impact on the Services or Capital One.

 

(e) If Capital One spends more than [***] Business Days at a TSYS facility
during any Processing Year on all [***] conducted pursuant to this Section 13.7
during that year, then Capital One will pay reasonable costs associated with
data reports, handler costs, and other review related expenses of TSYS,
including the cost of TSYS Personnel occupied with supervising and facilitating
the [***]. The [***] Business Day threshold in the prior sentence shall exclude
time spent performing (i) inspections of third party facilities and materials
pursuant to a separate agreement and (ii) initial inspections of new facilities
for which TSYS is required to obtain Capital One approval pursuant to
Section 3.5

 

14 REPRESENTATIONS AND WARRANTIES

 

  14.1 System Quality and Compliance

 

TSYS represents and warrants that:

 

(a) as of the Effective Date, the TSYS System and [***] conform to the
Documentation in all material respects;

 

(b) as of the Commencement Date, the TSYS System and [***] will conform to the
[***] for the Initial Conversion; and

 

(c) as of the Effective Date there are, and as of the Commencement Date there
will be, no known errors in the TSYS System or [***] that will have a material
adverse effect on Capital One’s use of the Services in accordance with the
Documentation.

 

  14.2 [***]Performance

 

TSYS represents and warrants that it has achieved the levels of performance
[***] using the TSYS System [***] and [***] shown in Schedule O.

 

  14.3 Work Standards

 

(a) TSYS represents, warrants, and covenants that the Services shall be rendered
with promptness and diligence and shall be executed in a workmanlike manner, in

 

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accordance with the practices and professional standards used in well-managed
operations performing services similar to the Services.

 

(b) For all aspects of the Services as to which there is no specific Service
Level provided herein, TSYS will promptly re-perform any such Services that do
not comply with the foregoing warranty or, upon its failure to do so, will, at
Capital One’s option, [***] for [***] Services. If Capital One elects to [***] a
[***] in respect of [***] Services and does not revoke such election within
[***] days, such refund shall be Capital One’s [***] for such failure, although
to the extent such failure is a breach of this Agreement Capital One shall
retain the rights provided in Section 19.1(a) with respect to such breach.

 

  14.4 Efficiency and Cost Effectiveness

 

TSYS represents, warrants, and covenants that to the extent affecting the
Charges or Capital One’s retained costs it shall use Commercially Reasonable
Efforts to (i) use efficiently the resources or services necessary to provide
development Services and (ii) perform the development Services in a
cost-effective manner consistent with the required level of quality and
performance.

 

  14.5 Technology

 

TSYS represents, warrants, and covenants that it shall provide the Services
using proven technology that is kept current in a manner consistent with the
Change Control Procedure.

 

  14.6 Open Source Software

 

TSYS represents, warrants, and covenants that no “open source” Source Code is
included in the Licensed Materials as of the Effective Date, or will be included
in the Licensed Materials during the Term, that TSYS is required to license or
distribute for free or for a limited charge to the public.

 

  14.7 Non-Infringement

 

(a) TSYS represents that, as of the Effective Date, it does not have any actual
knowledge (without any duty of inquiry beyond asking those employees responsible
for intellectual property rights management whether they have actual knowledge
of any such claims) of any infringement or misappropriation claim or potential
claim that [***] TS2 or other component of the TSYS System infringes, or
constitutes an infringement or misappropriation of, any Intellectual Property
Right of any third party.

 

(b) Capital One represents that, as of the Effective Date, it does not have any
actual knowledge (without any duty of inquiry beyond asking those employees
responsible for intellectual property rights management whether they have actual
knowledge of any such claims) of any infringement or misappropriation claim or
potential claim that the Capital One Materials infringe, or constitute an
infringement or misappropriation of, any Intellectual Property Right of any
third party.

 

  14.8 Ownership or Authorization to Use

 

TSYS represents and warrants that it is either the owner of, or authorized to
Use as provided in this Agreement, the TSYS System, TSYS Materials,
Documentation, Deliverables, and other materials provided by TSYS under this
Agreement.

 

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  14.9 Authorization and Other Contracts

 

Each party represents and warrants to the other that:

 

(a) it has the requisite corporate power and authority to enter into this
Agreement and to carry out the transactions contemplated by this Agreement;

 

(b) the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated by this Agreement have been duly
authorized by the requisite corporate action on the part of such party and will
not constitute a violation of any judgment, order, or decree binding on such
party or its assets;

 

(c) the execution, delivery, and performance of this Agreement and the
consummation of the transactions contemplated by this Agreement will not
constitute a material default under any material contract by which it or any of
its material assets are bound, or an event that would, with notice or lapse of
time or both, constitute such a default; and

 

(d) there is no proceeding to which it is a party, or, to the knowledge of the
party, that is threatened, that challenges or may have a material adverse affect
on this Agreement or the transactions contemplated by this Agreement.

 

  14.10  Inducements

 

TSYS represents and warrants to Capital One that it has not violated any
Applicable Laws regarding the offering of unlawful inducements in connection
with this Agreement.

 

  14.11  User Documentation

 

TSYS represents, warrants, and covenants that all Documentation delivered to
Capital One in connection with the Services will accurately describe the
functions, features and, if any, [***] on the use of the Services and the
procedures for an end-user exercising such functions and features, except for
the [***] on [***] provided in Schedule O.

 

  14.12  Viruses

 

Each party represents, warrants, and covenants that it shall use Commercially
Reasonable Efforts so that no Viruses are coded or introduced into the TSYS
System. If a Virus is found to have been introduced into the TSYS System, TSYS
shall use Commercially Reasonable Efforts at no additional charge to reduce the
effects of the Virus on the TSYS System; provided that if the Virus is found to
have been introduced by Capital One, Capital One shall be responsible for TSYS’
expenses in complying with the foregoing.

 

  14.13  Disabling Code

 

TSYS represents, warrants, and covenants that:

 

(a) without the prior written consent of Capital One, which Capital One may
withhold in its sole discretion, TSYS shall not intentionally insert into the
Software resident on Capital One’s computers or other resources any code that
would have the effect of disabling or otherwise shutting down or limiting any
portion of the Services (“Disabling Code”); and

 

(b) with respect to any Disabling Code that may be part of the Software resident
on Capital One’s computers or other resources, TSYS shall not intentionally
invoke such Disabling Code at any time for any reason, including upon expiration
or termination of this Agreement for any reason. If any Disabling Code is
invoked, TSYS shall use its Commercially

 

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Reasonable Efforts to remediate the effects of such Disabling Code. With respect
to matters not specifically addressed by the Disaster Recovery Plan, such
Commercially Reasonable Efforts shall include TSYS acting to restore the full
functionality of the Services in the same manner that it would act if it were
the owner of both its business and the affected Capital One business.

 

Because of the irreparable injury such actions would have on Capital One’s
business, Capital One shall be entitled to seek and obtain (and TSYS irrevocably
consents to Capital One obtaining) injunctive relief with respect to any breach
of this Section 14.13. In doing so, Capital One may proceed on an ex parte basis
and shall not be required to post bond or prove damages. Such right is
non-exclusive and shall not constitute an election of remedies.

 

  14.14  Deliverables

 

TSYS represents, warrants, and covenants that each Deliverable provided to
Capital One shall not, after final acceptance of the Deliverable by Capital One,
materially deviate from the applicable Specifications.

 

  14.15  Disclaimer

 

THE WARRANTEES SET FORTH IN THIS AGREEMENT ARE EXCLUSIVE. OTHER THAN AS PROVIDED
IN THIS AGREEMENT, THERE ARE NO EXPRESS WARRANTIES AND THERE ARE NO IMPLIED
WARRANTIES, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR
A PARTICULAR PURPOSE.

 

15 INSURANCE

 

  15.1 Insurance Coverage

 

TSYS represents that as of the Effective Date it has, and agrees that during the
Term it shall maintain in force, at least the following insurance coverages:

 

(a) Worker’s Compensation Insurance and other similar social insurance in
accordance with the laws of the country, state or territory exercising
jurisdiction over the employee with minimum limits required by law;

 

(b) Employer’s Liability Insurance (Primary and Umbrella/Excess), including
coverage for occupational injury, illness and disease, with minimum limits per
employee and per event of [***] Dollars ($[***]) and a minimum aggregate limit
of [***] Dollars ($[***]) or the minimum limits required by law, whichever
limits are greater;

 

(c) Commercial General Liability Insurance, including Products Liability,
Completed Operations, Premises Operations, Personal Injury, and Contractual and
Broad Form Property Damage Liability coverages (Primary and Umbrella/Excess), on
an occurrence basis, with a minimum per occurrence combined single limit of
[***] Dollars ($[***]) and a minimum aggregate combined single limit of [***]
Dollars ($[***]). This coverage shall be endorsed to name Capital One and its
Affiliates as additional insureds;

 

(d) Comprehensive Automotive Liability Insurance covering use of all owned,
non-owned and hired automobiles used to perform the Services or on Capital One’s
property for purposes related to the Services for bodily injury, property
damage, uninsured motorist and underinsured motorist liability with a minimum
combined single limit per accident of [***]

 

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Dollars ($[***]) or the minimum limit required by law, whichever limit is
greater. This coverage shall be endorsed to name Capital One and its Affiliates
as additional insureds;

 

(e) Commercial Crime Insurance, including blanket coverage for Employee
Dishonesty and Computer Fraud, for loss or damage arising out of or in
connection with any fraudulent or dishonest acts, including wrongful conversion
of: (i) Capital One’s, or any of its Affiliates’ or Users’, property; (ii) the
property of any customers or patrons of such persons; or (iii) the property of
others in TSYS’ possession, care, custody or control, committed by TSYS’
employees, agents or subcontractors, acting alone or in collusion with others,
with a minimum limit per event of [***] Dollars ($[***]). This coverage shall be
endorsed to name Capital One and its Affiliates as loss payees;

 

(f) Professional Liability Insurance for Errors and Omissions covering liability
for loss or damage due to an act, error, omission, or negligence, with a minimum
limit per event of [***] Dollars ($[***]);

 

(g) Electronic Data Processing Insurance providing coverage for all risks of
loss or damage to equipment, data, media and valuable papers that are in the
possession, care, custody or control of TSYS pursuant to this Agreement. Such
insurance shall include Extra Expense and Business Income coverage and have a
minimum limit adequate to cover such risks on a replacement costs basis. This
coverage shall be endorsed to name Capital One and its Affiliates as loss
payees;

 

(h) Property Insurance, including Extra Expense and Business Income coverage,
for all risks of physical loss of or damage to buildings, business personal
property or other property that is in the possession, care, custody or control
of TSYS pursuant to this Agreement. Such insurance shall have a minimum limit
adequate to cover risks on a replacement costs basis. This coverage shall be
endorsed to name Capital One and its Affiliates as loss payees; and

 

(i) Excess or Umbrella Liability Insurance with a minimum limit of [***] Dollars
($[***]) in excess of the insurance coverage described in Sections 15.1(b),
15.1(c), and 15.1(d) above.

 

  15.2 Insurance Provisions

 

(a) To the extent allowed by the individual insurers and policies, TSYS shall
cause its insurers to [***], and [***], and [***] and [***] regarding Capital
One.

 

(b) The amounts of insurance required in Section 15.1 may be satisfied by TSYS
purchasing primary coverage in the amounts specified or by TSYS buying a
separate Excess or Umbrella Liability policy together with lower limit primary
underlying coverage. The structure of the coverage is at TSYS’ option, so long
as the total amount of insurance meets the requirements in 15.1.

 

(c) With regard to the Services performed under this Agreement, the coverages
TSYS is required to carry under Section 15.1 shall be [***], and all coverage
shall be [***] with respect to any other insurance or self-insurance that may be
maintained by Capital One. The insurance coverage under Sections 15.1(a),
15.1(b), 15.1(c), 15.1(d), and 15.1(i) shall be written on an occurrence form
basis. If any other coverage is written on a claims-made basis, it shall have a
retroactive date no later than the Effective Date and, notwithstanding the
termination of this Agreement, either directly or through ‘tail’ coverage shall
be maintained for a period of at

 

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least [***] following completion of the Term, or it shall allow for reporting of
claims until the later of [***] after the end of the Term or the period of the
applicable [***] has expired.

 

(d) TSYS shall cause its insurers to [***], and [***], and [***], and [***] on
the insurance coverages under Sections 15.1(c), 15.1(d), and 15.1(i).

 

(e) TSYS shall cause its insurers to issue certificates of insurance evidencing
that the coverages and policy endorsements required under this Agreement are
maintained in force. TSYS shall [***] Capital One not less than [***] days’
written notice prior to any adverse modification, cancellation, or non-renewal
of the policies. The insurers selected by TSYS shall be of good standing and
authorized to conduct business in the jurisdictions in which Services are to be
performed. When the policy is issued each such insurer shall have at least an
A.M. Best rating of at least A-IX or with such other companies as may be
approved in advance by Capital One.

 

(f) In the case of loss or damage or other event that requires notice or other
action under the terms of any insurance coverage specified in this Section 15,
TSYS shall be solely responsible to take such action. TSYS shall provide Capital
One with contemporaneous notice and with such other information as Capital One
may request regarding the event.

 

(g) TSYS’ obligation to maintain insurance coverage shall be in addition to, and
not in substitution for, TSYS’ other obligations under this Agreement and TSYS’
liability to Capital One for any breach of an obligation under this Agreement
that is subject to insurance under this Agreement shall not be limited to the
amount of coverage required under this Agreement.

 

  15.3 Risk of Loss

 

Each party will be responsible for the risk of loss of, and damage to, any
Equipment, Software, or other resources or materials in transit from such party
to the other party until such resources or materials have been received by the
other party (i.e., the sending party is responsible for in-transit risk of
loss).

 

If there is a conflict between this Section 15 and the insurance requirements in
any of the Schedules or Exhibits to this Agreement, this Section 15 shall
control.

 

16 INDEMNITIES

 

  16.1 Indemnity by TSYS

 

TSYS shall indemnify, defend, and hold harmless Capital One and its Affiliates
and their respective officers, directors, employees, agents, successors, and
assigns from and against any and all Losses arising from, in connection with, or
based on allegations of, any of the following:

 

(a) any claim or action by subcontractors arising out of TSYS’ breach or
violation of TSYS’ subcontracting arrangements;

 

(b) TSYS’ intentional or criminal misconduct or conduct that evinces reckless
disregard for the rights of others;

 

(c) TSYS’ breach of Section 13;

 

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(d) TSYS’ repudiation of this Agreement, including a failure to perform during a
dispute and any improper or wrongful termination or abandonment of the work
under this Agreement by TSYS;

 

(e) failure of TSYS to comply with or perform its obligations under Section 6;

 

(f) any claim or action arising out of:

 

(i) a violation of Applicable Laws for the protection of persons or members of a
protected class or category of persons by TSYS or its employees, subcontractors
or agents;

 

(ii) sexual, racial, age, gender or other prohibited discrimination or
harassment by TSYS, its employees, subcontractors or agents; or

 

(iii) work-related injury or death caused by TSYS, its employees,
subcontractors, or agents (except to the extent covered by Capital One’s workers
compensation coverage);

 

(g) any claim or action by any employee or contractor of TSYS or its Affiliates
or subcontractors that Capital One is liable to such person as the employer or
joint employer of such person, including and any claim for employee benefits as
a result thereof; and

 

(h) any and all liens, encumbrances, security interests, or other lien rights of
any kind asserted by any of TSYS’ subcontractors or suppliers, or by
subcontractors or suppliers of TSYS’ subcontractors, which in whole or in part,
are based on any work, Services, material, or equipment to be provided under
this Agreement.

 

  16.2 Indemnity by Capital One

 

Capital One shall indemnify, defend, and hold harmless TSYS and its Affiliates
and their respective officers, directors, employees, agents, successors, and
assigns from any and all Losses arising from, in connection with, or based on
allegations of, any of the following:

 

(a) Capital One’s intentional or criminal misconduct or conduct that evinces
reckless disregard for the rights of others;

 

(b) Capital One’s breach of Section 13;

 

(c) failure of Capital One to comply with or perform its obligations under
Section 6;

 

(d) any claim or action arising out of:

 

(i) a violation of Applicable Laws for the protection of persons or members of a
protected class or category of persons by Capital One or its employees, third
party contractors or agents;

 

(ii) sexual, racial, age, gender or other prohibited discrimination or
harassment by Capital One, its employees, third party contractors or agents; or

 

(iii) work-related injury or death caused by Capital One, its employees, third
party contractors (other than TSYS and its Affiliates and contractors), or
agents (except to the extent covered by TSYS’ workers compensation coverage);
and

 

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(e) any claim or action by any employee or contractor of Capital One or its
Affiliates that TSYS is liable to such person as the employer or joint employer
of such person, including and any claim for employee benefits as a result
thereof.

 

  16.3 Additional Indemnities

 

Each party (indemnitor) agrees to indemnify, defend, and hold harmless the
other, and its Affiliates, officers, directors, employees, agents, successors,
and assigns (collectively, the indemnitee), from any and all Losses arising
from, in connection with, or based on allegations of, any of the following:

 

(a) the death or bodily injury of any agent, employee (other than an employee of
the indemnitor), customer, business invitee, or business visitor or other person
caused by the tortious conduct of the indemnitor;

 

(b) the damage, loss or destruction of any real or tangible personal property
caused by the tortious conduct of the indemnitor; and

 

(c) any claim, demand, charge, action, cause of action, or other proceeding
asserted against the indemnitee but resulting from an act or omission of the
indemnitor in its capacity as an employer of a person.

 

  16.4 Infringement

 

(a) TSYS Indemnity. TSYS shall indemnify, defend, and hold harmless Capital One
and its Affiliates and their respective officers, directors, employees, agents,
successors, and assigns from and against any and all Losses arising from, in
connection with, or based on any third party claims of infringement or
misappropriation of any Patent Right (other than a [***]) related to a patent
issued by the United States or Canada or any Non-Patent Intellectual Property
Right, alleged to have occurred because of the TSYS System, TSYS Materials,
Documentation, Deliverables or other materials provided by TSYS under this
Agreement, or based upon performance of the Services by TSYS or a TSYS
Affiliate; provided that the indemnity in this Section 16.4(a) shall not apply
(and TSYS shall not be obligated to indemnify Capital One and its Affiliates) to
the extent an infringement or misappropriation is caused by:

 

(i) specifications provided by or on behalf of Capital One for [***] TS2 or
other Deliverable;

 

(ii) Capital One business processes, methods, business plans, and procedures
that Capital One requires TSYS to use or follow;

 

(iii) Capital One’s failure to permit TSYS or the Development Pool to implement
a change to [***] TS2 if TSYS: (A) notifies Capital One that the change is
necessary to cure an infringement or misappropriation and (B) allows Capital One
a reasonable amount of time to authorize TSYS or the Development Pool to
implement the change;

 

(iv) combinations by Capital One with items, including Third Party Materials and
the Capital One Operating Environment, that were not (A) provided or approved by
TSYS or (B) required in order for Capital One to receive the Services;

 

(v) Capital One’s use of the TSYS System in a manner not permitted by this
Agreement (unless permitted by the Documentation); or

 

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(vi) TSYS’ use of Capital One Materials as contemplated in this Agreement.

 

(b) Capital One Indemnity. Capital One shall indemnify, defend, and hold
harmless TSYS and its Affiliates and their respective officers, directors,
employees, agents, successors, and assigns from and against any and all Losses
arising from, in connection with, or based on third party claims of infringement
or misappropriation of any Patent Right (other than any [***] by [***] (and
their successors and assigns) which are not within the definition of a [***]
hereunder) related to a patent issued by the United States or Canada or
Non-Patent Intellectual Property Right, alleged to have occurred in connection
with TSYS’ provision of the Services to Capital One, Capital One Affiliates, or
any Permitted Users where such infringement occurred because of the Capital One
Materials or specifications provided by Capital One under this Agreement (and
such infringement would not have otherwise occurred absent such Materials or
specifications); provided, the indemnity in this Section 16.4(b) shall not apply
(and Capital One shall not be obligated to indemnify TSYS and its Affiliates) to
the extent an infringement or misappropriation is caused by:

 

(i) TSYS’ failure to implement a change in Capital One Materials or
specifications used by TSYS to perform the Services if Capital One (A) notifies
TSYS that the change is necessary to cure an infringement or misappropriation;
and (B) authorizes TSYS to implement the change;

 

(ii) combinations of Capital One Materials or specifications by TSYS with items
that were not (A) provided or approved by Capital One or (B) required in order
for TSYS to provide the Services;

 

(iii) TSYS’ failure to comply with an obligation to a third party relating to
the Capital One Materials that was disclosed in writing by Capital One; or

 

(iv) TSYS’ use of Capital One Materials or specifications in a manner not
permitted by this Agreement.

 

For the avoidance of doubt, to the extent this Agreement authorizes TSYS to use
any items (including Capital One Materials) for its own benefit or to provide
products or services to any third party, TSYS does so at its own risk and
Capital One shall not be liable to TSYS, its Affiliates, or any third party
claiming under or through them for infringement or misappropriation of any
Intellectual Property Rights resulting from uses other than providing the
Services to Capital One.

 

(c) Remedy for TSYS Infringement. If any item used by TSYS to provide the
Services or embedded in the TSYS System becomes, or in TSYS’ reasonable opinion
is likely to become, the subject of an infringement or misappropriation claim or
proceeding (other than a claim or proceeding against which TSYS is not required
to indemnify Capital One pursuant to Section 16.4(a)), in addition to
indemnifying Capital One as provided in Section 16.4(a), TSYS shall:

 

(i) use Commercially Reasonable Efforts to promptly secure the right at TSYS’
expense to continue using the item; or

 

(ii) if this cannot be accomplished with Commercially Reasonable Efforts, then
at TSYS’ expense, replace or modify the item to make it non-infringing or
without

 

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misappropriation, provided that any such replacement or modification will not
degrade the performance or quality of the affected component of the Services; or

 

(iii) if neither of the foregoing can be accomplished by TSYS with Commercially
Reasonable Efforts, and only in such event, then remove the item from the
Services, in which case:

 

(A) the Charges shall be equitably reduced to reflect such removal;

 

(B) TSYS shall refund any Charges paid by Capital One to develop or license the
[***] and any other items or materials that are no longer functional without the
[***]; and

 

(C) if such removal either (x) relates to a [***] or (y) is otherwise [***] to
the remaining Services (taken as a whole), Capital One may terminate such
portion of the affected Services or the entire Agreement without liability by
giving TSYS notice designating the termination date.

 

(d) Remedy for Capital One Infringement. If any item used by TSYS to provide the
Services or embedded in the TSYS System becomes, or in Capital One’s reasonable
opinion is likely to become, the subject of an infringement or misappropriation
claim or proceeding against which Capital One is required to indemnify TSYS
pursuant to Section 16.4(b), in addition to indemnifying TSYS as provided in
Section 16.4(b):

 

(i) TSYS shall after consultation with Capital One cease using such item and if
so instructed by Capital One (and at Capital One’s expense) substitute any
suitable replacement item available which does not infringe; and

 

(ii) TSYS shall be excused for its failure to perform its obligations under this
Agreement to the extent such failure is caused by TSYS’ ceasing to use such item
and until such a suitable replacement item is substituted.

 

(e) Sole and Exclusive Remedy. Except in the event of a breach of Section 14.7,
this Section 16.4 provides each party’s sole and exclusive remedy with respect
to infringement and misappropriation claims that are subject to indemnification
under this Section 16.4.

 

  16.5 Indemnification Procedures

 

With respect to third-party claims the following procedures shall apply:

 

(a) Notice. Within ten (10) Business Days after receipt by any entity entitled
to indemnification under this Section 16 of notice of the assertion or the
commencement of any action, proceeding or other claim by a third party in
respect of which the indemnitee will seek indemnification pursuant to any such
Section, the indemnitee shall notify the indemnitor of such claim in writing. No
failure to so notify an indemnitor shall relieve it of its obligations under
this Agreement except to the extent that it can demonstrate damages attributable
to such failure. Within fifteen (15) days after receipt of notice from the
indemnitee relating to any claim, but at least ten (10) days before the date on
which any response to a complaint or summons is due, the indemnitor shall notify
the indemnitee in writing if the indemnitor elects to assume control of the
defense and settlement of that claim (a “Notice of Election”).

 

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(b) Procedure Following Notice of Election. If the indemnitor delivers a Notice
of Election relating to any claim within the required notice period, the
indemnitor shall be entitled to have sole control over the defense and
settlement of such claim, which it shall defend actively and with all reasonable
diligence; provided that (i) the indemnitee shall be entitled to participate in
the defense of such claim and to employ counsel at its own expense to assist in
the handling of such claim; and (ii) the indemnitor shall obtain the prior
written approval of the indemnitee (not to be unreasonably withheld or delayed)
before entering into any settlement of such claim or ceasing to defend against
such claim except that such approval shall not be required if the indemnitor
acknowledges in writing its responsibility for payments and other liabilities
under the settlement and the settlement does not provide for an equitable remedy
against the indemnitee, make the indemnitor responsible for any damages, or
include an admission of the indemnitee. After the indemnitor has delivered a
Notice of Election relating to any claim in accordance with the preceding
paragraph (and, in fact, diligently defends the claim), the indemnitor shall not
be liable to the indemnitee for any legal expenses incurred by the indemnitee in
connection with the defense of that claim. In addition, the indemnitor shall not
be required to indemnify the indemnitee for any amount paid or payable by the
indemnitee in the settlement of any claim for which the indemnitor has delivered
a timely Notice of Election if such amount was agreed to by the indemnitee
without the prior written consent of the indemnitor.

 

(c) Procedure Where No Notice of Election Is Delivered Or The Claim Is Not
Otherwise Defended. If the indemnitor does not deliver a Notice of Election
relating to a claim, or otherwise fails to assume the defense of a claim, within
the required notice period or fails to diligently defend the claim, the
indemnitee may defend the claim in such manner as it may deem appropriate
(without any obligation to consult with or obtain any consent from the
indemnitor). If it is determined that the indemnitor failed to defend a claim
for which it was liable, the indemnitor shall not be entitled to challenge the
amount of any settlement or compromise paid by the indemnitee.

 

  16.6 Subrogation

 

If an indemnitor shall be obligated to indemnify an indemnitee pursuant to this
Section 16, the indemnitor shall, upon fulfillment of its obligations with
respect to indemnification, including payment in full of all amounts due
pursuant to its indemnification obligations, be subrogated to the rights of the
indemnitee with respect to the claims to which such indemnification relates.

 

Nothing in this Section 16 shall limit a party’s rights or obligations under
Section 15 and nothing under Section 15 shall limit a party’s rights or
obligations under this Section 16.

 

17 LIABILITY AND FORCE MAJEURE

 

  17.1 General Intent

 

Subject to the specific provisions of this Section 17, it is the intent of the
parties that each party shall be liable to the other party for any actual
damages incurred by the non-breaching party as a result of the breaching party’s
failure to perform its obligations in the manner required by this Agreement.

 

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  17.2 Liability Restrictions

 

(a) SUBJECT TO SECTIONS 17.2(c) AND 17.2(f), IN NO EVENT, WHETHER IN CONTRACT,
IN TORT (INCLUDING BREACH OF WARRANTY, NEGLIGENCE AND STRICT LIABILITY IN TORT),
OR OTHERWISE, SHALL A PARTY BE LIABLE TO THE OTHER PARTY (OR ANYONE CLAIMING
UNDER OR THROUGH THE OTHER PARTY) FOR INDIRECT OR CONSEQUENTIAL, EXEMPLARY,
PUNITIVE OR SPECIAL DAMAGES ARISING OUT OF, RESULTING FROM, OR IN ANY WAY
CONNECTED WITH THE PERFORMANCE OR BREACH OF THIS AGREEMENT, EVEN IF SUCH PARTY
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES IN ADVANCE.

 

(b) Subject to Sections 17.2(c), 17.2(d), and 17.2(e) each party’s total
cumulative liability to the other, whether in contract, in tort (including
breach of warranty, negligence and strict liability in tort), or otherwise
arising out of, resulting from, or in any way connected with, the performance
and all breaches of this Agreement shall be limited in the aggregate to an
amount equal to [***] to TSYS pursuant to this Agreement for proper performance
of the Services for the [***] months prior to the month in which the most recent
event giving rise to liability occurred; provided that if such most recent event
giving rise to liability occurs (i) prior to [***] days after the Commencement
Date, such aggregate amount shall be equal to $[***]; and (ii) after [***] days
after the Commencement Date but prior to the end of Processing Year [***], such
aggregate amount shall be equal to $[***]. [***], and amounts recoverable under
Sections 17.2(c), 17.2(d), and 17.2(e) shall not count against and shall not
reduce the amounts available under the foregoing limitations. This
Section 17.2(b) does not limit Capital One’s obligation to pay the Charges for
the Services. Any amounts paid under Section 17.2(f) shall count against and
reduce the aggregate amount available under this Section 17.2(b). In order to
avoid a double recovery by Capital One, if a cause of action accrued prior to
[***] after the Commencement Date and Capital One has recovered damages under
the [***] Agreement, the limitation of liability hereunder shall be reduced by
the amount recovered under the [***] Agreement (but not, in any event, below the
amount of the limitation of liability which would have been provided hereunder
without consideration of charges under the [***] Agreement).

 

(c) The limitations set forth in Sections 17.2(a) and 17.2(b) shall not apply
with respect to:

 

(i) claims that are the subject of indemnification pursuant to either Section
[***] or [***];

 

(ii) a claim that is subject to indemnification pursuant to either Section [***]
or Section [***] if, as to such claim, (x) the indemnifying party has breached
its representation in Section [***], or (y) the indemnifying party has [***] the
[***] of [***] (that is, the indemnifying party had [***] ([***] of [***]) that
[***] and [***] to [***] the [***] specified in Section [***] or [***], as
applicable);

 

(iii) damages occasioned by a party’s breach of its obligations under Section
[***]; and/or

 

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(iv) damages occasioned by TSYS’ repudiation of this Agreement, including a
failure to perform during a dispute, any improper or wrongful termination, or
abandonment of the work under this Agreement by TSYS.

 

(d) The limitations in Section 17.2(b) shall not apply with respect to [***]
claims that are the subject of indemnification pursuant to:

 

(i) Section [***];

 

(ii) Section [***];

 

(iii) Section [***];

 

(iv) Section [***];

 

(v) Section [***];

 

(vi) Section [***]; and/or

 

(vii) Section [***].

 

(e) The limitations in Section 17.2(b) shall not apply with respect to [***]
claims occasioned by:

 

(i) any [***]; and/or

 

(ii) a party’s breach of Section [***].

 

(f) The limitations in Section 17.2(a) shall not apply to damages incurred by
Capital One and its Affiliates which in the aggregate exceed [***] Dollars
($[***]) (i.e., such amount is a deductible, not a threshold) but which do not
in the aggregate exceed [***] Dollars ($[***]) with respect to:

 

(i) damages occasioned by any [***]; and/or

 

(ii) damages occasioned by a party’s breach of Section [***].

 

(g) Each party shall have a duty to mitigate damages for which the other party
is responsible.

 

(h) If more than one of the exclusions above applies, the exclusion that
provides the greatest relief to the aggrieved party shall apply.

 

  17.3 Force Majeure

 

(a) Neither party shall be liable for any default or delay in the performance of
its obligations under this Agreement (other than the obligation to pay amounts
due under this Agreement): (i) 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, pestilence, civil disorders, governmental orders under
the Defense Production Act, or any other cause beyond the reasonable control of
such party, (ii) provided the non-performing party is without fault in causing
such default or delay, and such default or delay could not reasonably be
circumvented by the non-performing party through the use of alternate sources,
workaround plans or other means (including, with respect to TSYS, by TSYS
meeting its obligations for performing disaster recovery services as provided in
this Agreement) (each such event, a “Force Majeure Event”).

 

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(b) In such event the non-performing party shall be excused from further
performance or observance of the obligations so affected for as long as such
circumstances prevail and such party continues to use Commercially Reasonable
Efforts to recommence performance or observance promptly. In the case of TSYS,
with respect to matters not specifically addressed by the [***], Commercially
Reasonable Efforts shall include TSYS acting to [***] the [***] of the Services
in the same manner that it would act if it were the owner of both its business
and the [***]. The party so delayed in its performance shall immediately notify
the party to whom performance is due by telephone (to be confirmed in writing
within [***] hours of the inception of such delay) and describe at a reasonable
level of detail the circumstances causing such delay.

 

(c) If any Force Majeure Event substantially prevents, hinders or delays
performance of any Services, Capital One may at its option immediately procure
such Services from an alternate source, and Capital One shall be liable for
payment for the cost of such Services from the alternate source for so long as
the delay in performance shall continue.

 

(d) If any Force Majeure Event substantially prevents, hinders or delays
performance of any Services for [***] hours, then at Capital One’s option:

 

(i) Capital One may terminate any portion of this Agreement so affected without
liability as of a date specified by Capital One in a notice of termination to
TSYS and the Charges payable under this Agreement shall be equitably adjusted to
reflect those terminated Services. Capital One shall provide such notice within
[***] days after the right to so terminate arises; or

 

(ii) Capital One may terminate this Agreement without liability on either
party’s part as of a date specified by Capital One in a notice of termination to
TSYS. Capital One shall provide such notice within [***] days after the right to
so terminate arises.

 

(e) TSYS shall not have the right to any additional payments from Capital One
for costs or expenses incurred by TSYS as a result of any Force Majeure Event.

 

  17.4 Limitation of Actions

 

No action under this Agreement may be brought by either party more than [***]
years after the right, claim, or cause of action accrues. If the prior sentence
is not enforceable under Applicable Law with respect to a particular action
under this Agreement, the two year period shall be extended for such action to
the shortest period for which the prior sentence is enforceable under Applicable
Law with respect to that action. Actions relating to third party claims shall be
deemed to accrue at the time the third party claim is made.

 

18 DISPUTE RESOLUTION

 

Any dispute between the parties arising out of or relating to this Agreement,
including with respect to the interpretation of any provision of this Agreement
and with respect to the performance by TSYS or Capital One, shall be resolved as
provided in this Section 18.

 

  18.1 Informal Dispute Resolution

 

(a) Subject to Sections 18.1(b), 18.1(c), and 18.4, the parties initially shall
attempt to resolve their dispute informally, in accordance with the following:

 

(i) Upon the notice by a party to the other party of a dispute (“Dispute Date”)
which the Capital One Contract Manager and the TSYS Services Manager have been
unable to resolve, each party shall appoint a designated representative who does
not devote substantially all of his or her time to performance under this
Agreement, whose task it will be to meet for the purpose of endeavoring to
resolve such dispute.

 

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(ii) The designated representatives shall meet as often as the parties
reasonably deem necessary in order to gather and furnish to the other all
information with respect to the matter in issue which the parties believe to be
appropriate and germane in connection with its resolution. The representatives
shall discuss the problem and attempt to resolve the dispute without the
necessity of any formal proceeding.

 

(iii) During the course of discussion, all reasonable requests made by a party
to the other for non-legally privileged information reasonably related to the
subject matter of the dispute shall be honored in order that a party may be
fully advised of the other’s position.

 

(iv) The specific format for the discussions shall be left to the discretion of
the designated representatives.

 

(b) After [***] days following the Dispute Date and prior to commencement of any
arbitration as permitted under Section 18.1(c), either party may initiate
mediation of the dispute by submitting to the AAA (the “DM”) and to the other
party a written request for mediation, setting forth the subject of the dispute
and the relief requested. The parties shall cooperate with DM and each other in
the mediation process. The mediation shall be conducted in accordance with the
applicable practices and procedures of DM. Upon commencement of arbitration as
permitted under Section 18.1(c), either party, upon notice to DM and to the
other party, may terminate the mediation process. Each party shall bear its own
expenses in the mediation process and shall share equally the charges of DM.

 

(c) Arbitration of a dispute may be commenced by either party upon the earlier
to occur of any of the following:

 

(i) the designated representatives mutually conclude that amicable resolution
through continued negotiation of the matter does not appear likely; and

 

(ii) [***] days have elapsed from the Dispute Date if neither party has
requested mediation under Section 18.1(b), or [***] days have elapsed from the
Dispute Date if either party has requested mediation within the required time
frame (these periods shall be deemed to run notwithstanding any claim that the
process described in this Section 18.1 was not followed or completed).

 

  18.2 Arbitration

 

(a) Except as set forth in Section 18.4, any dispute, claim or controversy
arising out of or relating to this Agreement or the breach, termination,
enforcement, interpretation, or validity of this Agreement, including the
determination of the scope or applicability of this Agreement to arbitrate,
shall be determined by arbitration in New York, New York before three
(3) arbitrator(s). The arbitration shall be administered by AAA pursuant to its
Commercial Arbitration Rules and Procedures then in effect. Judgment on the
award may be entered in any court having jurisdiction. This clause shall not
preclude parties from seeking provisional remedies in aid of arbitration from a
court of appropriate jurisdiction.

 

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(b) Each party shall bear its own arbitration costs and expenses and all other
costs and expenses of the arbitration shall be divided equally between the
parties; provided however, that the arbitrator may, in the award, allocate all
or part of the costs of the arbitration, including the fees of the arbitrator
and the reasonable attorneys’ fees of the prevailing party.

 

(c) This Section 18.2 shall not limit either party’s right to obtain injunctive
relief pursuant to Section 18.4. The institution and maintenance of an action
for injunctive relief pursuant to Section 18.4 shall not constitute a waiver of
the right of either party to submit the dispute, claim, or controversy to
arbitration.

 

  18.3 Continued Performance

 

EXCEPT AS OTHERWISE DIRECTED BY THE OTHER PARTY WITH RESPECT TO THE SUBJECT
MATTER OF THE DISPUTE, EACH PARTY SHALL CONTINUE PERFORMING ITS OBLIGATIONS
UNDER THIS AGREEMENT WHILE A DISPUTE IS BEING RESOLVED EXCEPT (AND THEN ONLY) TO
THE EXTENT THE ISSUE IN DISPUTE PRECLUDES PERFORMANCE (DISPUTE OVER PAYMENT
SHALL NOT BE DEEMED TO PRECLUDE PERFORMANCE) AND WITHOUT LIMITING EITHER PARTY’S
RIGHT TO TERMINATE THIS AGREEMENT AS PROVIDED IN SECTION 19.

 

  18.4 Injunctive Relief; Specific Performance

 

(a) Each of the parties acknowledges that the non-breaching party would be
irreparably harmed and the total amount of monetary damages for any injury to
such party will be extremely difficult to calculate with specificity and
therefore an inadequate remedy, and accordingly, the non-breaching party shall
be entitled to seek temporary and permanent injunctive relief without posting
bond or proving damages, against the breaching party and its employees,
officers, directors, agents, representatives or independent contractors and to
enforce specifically this Agreement and the terms and provisions thereof, if:

 

(i) any of the provisions of Section 8, 12, or 13 were not performed in
accordance with their specific terms or were otherwise breached;

 

(ii) a party did not [***]; or

 

(iii) [***].

 

(b) In such a circumstance, the non-breaching party may without delay institute
an action in any court of the United States or any state or jurisdiction having
subject matter jurisdiction, in addition to any remedy to which such party may
be entitled, at law or in equity. If such court should find that one of the
events set forth in paragraphs (i) through (iii) has occurred, the alleged
breaching party agrees that, without any additional findings of irreparable
injury or other conditions to injunctive relief (including the posting of bond),
it shall not oppose the entry of an appropriate order compelling performance by
the breaching party and restraining it from any further breaches.

 

  18.5 Governing Law

 

(a) This Agreement and performance under it shall be governed by and construed
in accordance with the law of the State of New York without regard to any
portion of its choice of law principles that might provide for application of a
different jurisdiction’s law. The parties expressly intend to avail themselves
of the benefit of Section 5-1401 of the New York General Obligations Law.

 

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(b) To the maximum extent permitted under Applicable Law, no portion of this
Agreement will be subject to the Uniform Computer Information Transactions Act
(“UCITA”) or Article 2 of the Uniform Commercial Code (each prepared by the
National Conference of Commissioners on Uniform State Laws) as currently enacted
or as may be codified or amended from time to time by any jurisdiction. To the
extent that any aspect of this Agreement or any license granted under this
Agreement is unclear or disputed by the parties and UCITA, if applied, would
clarify the license or resolve the dispute, the parties agree to clarify the
license or resolve the dispute independently of UCITA by applying the intent of
the parties at the time they entered into this Agreement.

 

  18.6 Expedited Dispute Resolution

 

Where expressly permitted in this Agreement, a party may submit a dispute for
expedited dispute resolution in accordance with the following process
(“Expedited Dispute Resolution”):

 

(a) The party initiating the Expedited Dispute Resolution will: (i) provide the
other party with notice of the dispute and its intent to initiate the Expedited
Dispute Resolution process (“Expedited Dispute Notice”); and (ii) initiate
binding arbitration with AAA.

 

(b) The arbitration shall be administered using the AAA’s Streamlined
Arbitration Rules and Procedures, modified as follows:

 

(i) Each party will have five (5) Business Days following the issuance of the
Expedited Dispute Notice to provide AAA with a written brief explaining its
position on the dispute.

 

(ii) The AAA arbitrator shall have ten (10) days to arbitrate the dispute and
make an initial determination. Thereafter, each party will have three (3) days
to file reply briefs. The AAA arbitrator will then issue a final, binding
decision within two (2) days of receiving the parties’ reply briefs.

 

(iii) The parties will each pay fifty percent (50%) of the fees payable to AAA
for the Expedited Dispute Resolution.

 

  18.7 Binary Arbitration

 

Where expressly permitted in this Agreement, a party may submit a dispute for
resolution by binary arbitration. In such case, the parties shall follow the
Expedited Dispute Resolution set forth above, except that the AAA arbitrator
shall be required to decide which party’s proposed resolution of the issue is
more appropriate in the context of this Agreement. The arbitrator shall not have
the option of deciding upon a resolution that reflects a compromise between (or
is outside of) the parties’ respective proposed resolutions. For example, if the
annual charge for a New Additional Service is to be the subject of binary
arbitration, and Capital One has proposed annual charges of one million dollars
($1,000,000) while TSYS has proposed annual charges of one million five hundred
thousand dollars ($1,500,000), the AAA arbitrator shall determine which of the
two proposals is more appropriate and may not select an amount somewhere between
(or outside of) the two proposals. The AAA arbitrator’s decision shall be
binding on the parties.

 

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19 TERMINATION

 

  19.1 Termination for Cause

 

(a) If TSYS:

 

(i) [***] of this Agreement that is curable within [***] days and does not cure
the breach within [***] days after receiving written notice of the breach from
Capital One;

 

(ii) [***] of this Agreement that is not curable within [***] days but is
curable within [***] days and following written notice of the breach from
Capital One fails to:

 

(A) proceed promptly and diligently to correct the breach;

 

(B) develop within [***] days after such notice a complete plan for curing the
breach; and

 

(C) cure the breach within [***] days after such notice;

 

(iii) [***] of this Agreement that is not curable within [***] days;

 

(iv) within the [***] period prior to giving notice as provided below, commits
[***] breaches of its duties or obligations (whether or not [***]) which [***]
of this Agreement;

 

(v) ceases to be qualified by any Association to process Capital One
transactions;

 

(vi) incurs a [***]; or

 

(vii) pursuant to Section 2.2(c) of Schedule C Capital One has the right to
terminate this Agreement, has notified TSYS of its election to so terminate and
any dispute has been resolved pursuant to Section 18,

 

then Capital One may, by giving notice to TSYS (within [***] days of the
expiration of the cure period, if any, provided above, or, in the case of items
(v) through (vii), within [***] days after the right to terminate arises),
terminate this Agreement (in whole but not in part) as of a date specified in
the notice of termination. Any termination by Capital One for breach shall not
constitute an election of remedies and shall be without prejudice as to Capital
One’s other rights resulting therefrom.

 

(b) If:

 

(i) Capital One fails to pay TSYS when due undisputed Charges that in the
aggregate equal at least [***] months of total Charges under this Agreement, and
fails to make such payment within [***] days after receiving notice from TSYS of
the failure to make such payment;

 

(ii) pursuant to the dispute resolution process described in Section 18, it is
finally determined that Capital One has committed a [***] and [***] breach of
its obligations under Section 13 in a manner that poses a serious threat to
material TSYS Intellectual Property Rights, and Capital One fails to cure such
breach within [***] days after such determination is made; or

 

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(iii) pursuant to Sections 2.2(d) and 2.2(e) of Schedule C TSYS has the right to
terminate this Agreement, has notified Capital One of its election to so
terminate and any dispute has been resolved pursuant to Section 18,

 

then TSYS may, by giving notice to Capital One (within [***] days of the
expiration of the cure period, if any, provided above), [***] as of a date
specified in the notice of [***] that is at least [***] days thereafter. For the
avoidance of doubt, [***] that are in violation of [***] and [***] with Section
[***] shall not be deemed a breach giving rise to a TSYS right of termination.
WITHOUT LIMITING SECTION 10.2(C), THIS SECTION PROVIDES THE ONLY CIRCUMSTANCES
UNDER WHICH TSYS MAY TERMINATE THIS AGREEMENT. A MATERIAL FACTOR IN CAPITAL
ONE’S DECISION TO CHOOSE TSYS TO PERFORM THE SERVICES IS TSYS’ AGREEMENT THAT IT
WILL NOT TERMINATE UNDER ANY OTHER CIRCUMSTANCE. Any termination by TSYS for
breach shall not constitute an election of remedies and shall be without
prejudice to TSYS’ other rights resulting therefrom.

 

  19.2 Termination for Convenience

 

(a) Until the Commencement Date, Capital One may terminate this Agreement for
convenience and without cause at any time by giving TSYS notice, and the
termination shall be effective on the receipt of such notice. In such event
Capital One shall pay to TSYS on the effective date of termination the
applicable Termination Charge specified in Section 6.1 of Schedule C.

 

(b) After the Commencement Date but during the Initial Term, Capital One may
terminate this Agreement for convenience and without cause by giving [***],
which may not be [***] after the notice is given. In such event, Capital One
shall pay to TSYS on the effective date of termination the applicable
Termination Charge specified in Section 6.1 of Schedule C, [***].

 

(c) During any Renewal Term, Capital One may terminate this Agreement for
convenience and without cause by giving TSYS notice designating the termination
date, which may not be earlier than [***] months after the notice is given. In
such event Capital One shall not be liable to pay TSYS any termination charge.

 

(d) If a purported [***] by Capital One under Section 19.1 is ultimately
determined not to have been [***].

 

(e) Capital One’s payment of the applicable Termination Charges (if any)
provided in Section 6.1 of Schedule C shall result in full and complete
satisfaction of all of TSYS’ and its Affiliates’ claims against Capital One
arising on account of a termination for convenience and is in consideration of
TSYS’ and its Affiliates’ waiver of all existing or thereafter arising, known or
unknown, claims against Capital One arising on account of such termination, but
shall not limit or constitute satisfaction or waiver of any other claims TSYS
and its Affiliates may have.

 

  19.3 Termination Due To Election of License Option

 

This Agreement may also be terminated as provided in Section 8.13.

 

  19.4 Termination Due To Force Majeure Event

 

This Agreement may also be terminated in whole or part as provided in
Section 17.3(c).

 

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  19.5 Termination Due To [***] Constraints

 

If a [***] requires in writing that Capital One stop receiving Services from
TSYS, and such requirement is based on an act or omission of TSYS, then Capital
One may by giving notice to TSYS terminate this Agreement as of a date specified
in the notice of termination. To the extent [***] the [***], Capital One will
provide written notice to TSYS at the time the Capital One Contract Manager or
other Capital One senior executive personnel become aware of any significant
concerns or reservations of the [***] as to Capital One’s ability to [***] with
[***], the manner in which the Services are being provided, or the risk that an
order from a [***] may be issued. Capital One will reasonably cooperate with
TSYS (at TSYS’ cost) with respect to any reasonable actions TSYS elects to take
to address the issue raised by the [***] following receipt of such notice. If
Capital One terminates this Agreement under this Section 19.5, it will [***]
TSYS for [***] pursuant to 6.1(a)(i) of Schedule C but will not be responsible
for payment of the [***].

 

  19.6 Termination Due To TSYS’ Financial Inability To Perform

 

If either Moody’s Investors Service or Standard & Poors rates TSYS’ credit at
below investment grade or TSYS or any entity that at the time Controls TSYS:

 

(a) files a petition in bankruptcy;

 

(b) has an involuntary petition in bankruptcy filed against it which is not
challenged within [***] days and dismissed within [***] days;

 

(c) becomes insolvent;

 

(d) makes a general assignment for the benefit of creditors;

 

(e) fails to pay its debts as they mature or admits in writing its inability to
pay its debts as they mature;

 

(f) has a receiver appointed for its assets;

 

(g) has any significant portion of its assets attached;

 

(h) receives a “going concern” notification or similar qualification in any
opinion from its auditor in connection with any audited financial statements
filed with the Securities and Exchange Commission or delivered to its investors
or to potential investors; or

 

(i) is de-listed from any national stock exchange pursuant to an order of the
SEC at the request of the exchange made because the exchange deems it necessary
for the protection of investors,

 

then Capital One may by giving notice to TSYS terminate this Agreement for
default as of the date specified in such notice of termination.

 

  19.7 Extension of Termination/Expiration Effective Date

 

Regardless of the basis for termination (including a termination for cause by
TSYS), Capital One may extend the effective date of termination/expiration [***]
or more times as it elects in its discretion, provided that the total of all
such extensions shall not exceed [***] months after the effective date of
termination/expiration in place immediately prior to the initial extension under
this Section and, if termination is pursuant to Section 19.1(b), if required by
TSYS, Capital One (at Capital One’s option) either (a) pre-pays the estimated
monthly Charges

 

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at least [***] days prior to each month or (b) posts an irrevocable letter of
credit (or performance bond) in sufficient amount to meet the next [***] months
of on-going Charges to be incurred and pays all new Charges for Services when
due. For any notice or notices of such extensions provided to TSYS less than
[***] days before the then-scheduled date of termination/expiration, Capital One
shall also reimburse TSYS for additional Out-of-Pocket Expenses caused by such
notices.

 

  19.8 Termination/Expiration Assistance

 

Beginning twelve (12) months prior to expiration of this Agreement, on such
earlier date as Capital One may request, or commencing upon (1) a notice of
termination (including notice of termination based upon default by Capital One)
or of non-renewal of this Agreement, and continuing through the effective date
of expiration or, if applicable, of termination of this Agreement (as such
effective date may be extended pursuant to Section 19.7) or (2) notice from
Capital One that one or more Portfolios will be deconverted from the TSYS
System, and continuing through the effective date of deconversion of such
Portfolios, TSYS shall provide to Capital One, or at Capital One’s request to
Capital One’s designee (including a competitor of TSYS) (“Capital One
Designee”), the reasonable termination/expiration assistance requested by
Capital One to allow the Services to continue in accordance with this Agreement
and to facilitate the orderly transfer of the Capital One Accounts and Services,
as applicable, to Capital One or the Capital One Designee
(“Termination/Expiration Assistance”). Capital One’s request may be in the
context of Capital One’s [***], reduction, or removal of a portion of the
Services or Capital One Accounts, as applicable, in accordance with Section 3.2,
although this Agreement is not itself being terminated. Termination/Expiration
Assistance shall include the Migration and Deconversion assistance described in
Schedule A and the following:

 

(a) General. As requested by Capital One, TSYS shall provide the Services and
Termination/Expiration Assistance until all applicable Capital One Accounts are
deconverted or the Licensed Materials are migrated to Capital One. Actions by
TSYS under this Section 19.8(a) shall be subject to the other provisions of this
Agreement, including all applicable Service Levels. Charges for such activities
by TSYS are provided in Section 6.2 of Schedule C.

 

(b) TSYS [***]. If Capital One exercises the License Option, Capital One or a
Capital One Designee shall be permitted to undertake, pursuant to a mutually
agreed process that reasonably limits the number of [***], to [***] any TSYS
[***] that [***] on the [***] months during the [***] month period prior to the
date Capital One exercises the License Option. In such event the following shall
apply:

 

(i) TSYS shall waive its rights, if any, under agreements with such TSYS [***]
the [***] of such TSYS [***] to [***] or [***] Capital One or a Capital One
Designee;

 

(ii) Capital One or a Capital One Designee shall have [***] to such [***] for
[***] and [***]; and

 

(iii) taken together, Capital One and all Capital One Designees may not [***]
more than [***] ([***]) TSYS [***].

 

(c) Information. TSYS shall provide Capital One and the Capital One Designee
with information concerning the Services reasonably necessary for the timely
transition

 

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of the Services from TSYS to Capital One or the Capital One Designee, including
the data TSYS possesses regarding Portfolios in such form as Capital One may
reasonably request, together with instructions concerning the format and means
of accessing such data.

 

(d) Bid Assistance. As part of evaluating whether to undertake or allow
termination/expiration or renewal of this Agreement, Capital One may consider
obtaining, or determine to obtain, offers for performance of services similar to
the Services following termination/expiration of this Agreement. As and when
reasonably requested by Capital One for use in such a process, TSYS shall
reasonably cooperate with Capital One and shall not frustrate the process,
including by [***] Capital One develops in connection with such process. In
connection therewith Capital One shall be permitted, without obligation of
confidentiality to TSYS to provide information about Capital One’s Accounts, the
information covered by Section 19.8(c), and [***] to Capital One, although it
may not provide the [***] reports provided by TSYS.

 

(e) Capital One may seek Expedited Dispute Resolution pursuant to Section 18.6
in the event of a dispute related to this Section 19.8.

 

20 GENERAL

 

  20.1 Binding Nature and Assignment

 

This Agreement shall be binding on the parties hereto and their respective
successors and assigns. Neither party may, or shall have the power to, assign
this Agreement without the prior written consent of the other, except that
Capital One may assign its rights and obligations under this Agreement without
the approval of TSYS to:

 

(a) an entity which acquires all or substantially all of the assets of Capital
One;

 

(b) an entity which acquires all or substantially all of the Capital One
Accounts receiving Services under this Agreement; or

 

(c) to the successor in a merger or acquisition of Capital One;

 

provided that in no event shall such assignment relieve Capital One of its
obligations under this Agreement.

 

Any other assignment by operation of law, order of any court, or pursuant to any
plan of merger, consolidation or liquidation, shall be deemed an assignment for
which prior consent is required and any assignment made without any such consent
shall be void and of no effect as between the parties.

 

  20.2 No Collateral Documents

 

It is the intent of the parties that this Agreement and the documents referenced
herein shall provide all the terms of the relationship between them and that
(except as specifically provided to the contrary herein) no representative of
Capital One shall be required to enter into any additional contractual
obligation (either personally or on behalf of Capital One). Without limiting the
generality of the foregoing if either party’s or its Affiliates’ (or its
representatives’) personnel are requested or required by the other party or its
Affiliates (or, in the case of TSYS, any subcontractor) to execute any releases
or waivers to obtain access to such party’s or its Affiliates’ (or, in the case
of TSYS, its subcontractors’) premises they shall be void and

 

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unenforceable and shall not be pleaded or introduced in any action. Such
individuals are [***] to be [***] of this [***] and [***].

 

  20.3 Mutually Negotiated

 

Each party acknowledges that the limitations and exclusions contained in this
Agreement have been the subject of active and complete negotiation between the
parties and represent the parties’ agreement based upon the level of risk to
Capital One and TSYS associated with their respective obligations under this
Agreement and the payments to be made to TSYS and services to be obtained by
Capital One pursuant to this Agreement. The terms and conditions of this
Agreement (including any perceived ambiguity herein) shall not be construed in
favor of, or against, either party by reason of the extent to which any party or
its professional advisors participated in the preparation of the original or any
further drafts of this Agreement as each party is a sophisticated business
entity and has fully negotiated this Agreement with the full participation of
counsel and other advisors and it represents their mutual efforts and their
mutual intent.

 

  20.4 Notices

 

All notices, requests, demands and determinations under this Agreement (other
than routine operational communications), shall be in writing and shall be
deemed duly given:

 

(i) when delivered personally (against a signed receipt);

 

(ii) on the designated day of delivery (other than a weekend or Federal holiday)
after being timely given to an express overnight courier with a reliable system
for tracking delivery;

 

(iii) on the next Business Day when sent by electronic mail with a copy sent by
another means specified in this Section 20.4; or

 

(iv) four (4) Business Days after the day of mailing, when mailed by United
States mail, registered or certified mail, return receipt requested and postage
prepaid and addressed as follows:

 

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In the case of Capital One:

 

    

with copies to:

      

Capital One Services, Inc.

15000 Capital One Drive

Mail Stop 12073-0360

Richmond, VA 23238

Attention: Group Manager, SCM IT Services

  

Capital One Services, Inc.

1680 Capital One Drive

McLean, VA 22102

Attention: Associate General Counsel,

Transactions

    

and

    

Capital One Services Inc.

15000 Capital One Drive

Mail Stop 12076-0360

Richmond, VA 23238

Attention: Director, Helix Program

Management

    

and, in the case of notices of renewal, default, or termination:

    

Pillsbury Winthrop Shaw Pittman LLP

2300 N Street, NW

Washington, DC 20037

Attention: James L. Alberg

 

In the case of TSYS:

 

    

with a copy to:

Total System Services, Inc.

Building B-4

1600 First Avenue

Columbus, Georgia 31901-1804

Attention: President

  

Total System Services, Inc

Building C-3

1600 First Avenue

Columbus, Georgia 31901-1804

Attention: General Counsel

 

Either party may from time to time change its address or designee for
notification purposes by giving the other prior notice of the new address or
designee and the date upon which it will become effective.

 

  20.5 Counterparts

 

This Agreement may be executed in several counterparts, each of which shall be
considered an original but all of which taken together shall constitute but one
and the same agreement.

 

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  20.6 Relationship of Parties

 

In furnishing the Services, TSYS is acting as an independent contractor, and
(subject to the express provisions of this Agreement) TSYS has the sole right
and obligation to supervise, manage, contract, direct, procure, perform or cause
to be performed, all work to be performed by TSYS under this Agreement. No
contract of agency and no joint venture is intended to be created hereby. TSYS
is not an agent of Capital One and has no authority to represent Capital One as
to any matters, except as expressly authorized in this Agreement. Neither
party’s employees shall be deemed employees of the other party and the actual
employer shall be responsible for reporting and payment of all wages,
unemployment, social security and other payroll taxes, including contributions
from them when required by law. Capital One does not and shall not have actual,
potential, or any other control over TSYS or its employees.

 

  20.7 Severability

 

If any provision of this Agreement conflicts with the law under which this
Agreement is to be construed or if any such provision is held invalid by a
competent authority, such provision shall be deemed to be restated to reflect as
nearly as possible the original intentions of the parties in accordance with
Applicable Law. The remainder of this Agreement shall remain in full force and
effect.

 

  20.8 Consents and Approval

 

Except where expressly provided that consent may be arbitrarily withheld by or
an act is in the discretion of a party, where approval, acceptance, consent, or
similar action by either party is required under this Agreement, such action
shall not be unreasonably delayed or withheld. An approval or consent given by a
party under this Agreement shall not relieve the other party from responsibility
for complying with the requirements of this Agreement, nor shall it be construed
as a waiver of any rights under this Agreement, except as and to the extent
otherwise expressly provided in such approval or consent. Except as otherwise
expressly provided herein, a party’s failure to insist in any one or more
instances upon strict performance of any provision of the Agreement, or failure
or delay to take advantage of any of its rights or remedies under this
Agreement, or failure to notify the other party of any breach, violation, or
default, shall not be construed as a waiver or construction of any such
performance, provision, rights, breach, violation, or default either then or in
the future or the relinquishment of any of its rights and remedies.

 

  20.9 Waiver of Default; Cumulative Remedies

 

(a) Except as otherwise expressly provided herein, a delay or omission by either
party to exercise any right or power under this Agreement shall not be construed
to be a waiver thereof. A waiver by either of the parties of any of the
covenants to be performed by the other or any breach thereof shall not be
construed to be a waiver of any succeeding breach thereof or of any other
covenant herein contained.

 

(b) Except as otherwise expressly provided herein, all remedies provided for in
this Agreement shall be cumulative and in addition to and not in lieu of any
other remedies available to either party at law or in equity.

 

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  20.10  Survival

 

Any provision of this Agreement that contemplates performance or observance
subsequent to termination or expiration of this Agreement shall survive
termination or expiration of this Agreement and continue in full force and
effect.

 

  20.11  Public Disclosures

 

(a) All media releases, public announcements and public disclosures by either
party relating to this Agreement or the subject matter of this Agreement,
including promotional or marketing material, but not including announcements
intended solely for internal distribution or disclosures to the extent required
to comply with Applicable Law beyond the reasonable control of the disclosing
party, shall be coordinated with and approved by the other party prior to
release.

 

(b) If a party determines that disclosure is required to comply with Applicable
Law it shall promptly inform the other party and coordinate such disclosure with
the other party. The disclosing party shall limit disclosure to that which is
necessary and shall give due consideration to comments the other party and its
counsel provide regarding the nature of the disclosure.

 

(c) Notwithstanding the foregoing, in proposals and other limited distribution
marketing materials TSYS may list Capital One as a customer and describe in
general terms the services provided by TSYS under this Agreement.

 

  20.12  Service Marks

 

Without limiting disclosures permitted by Section 20.11, without prior written
consent (which may be arbitrarily withheld and if granted revoked), neither
party shall use the name, service marks, or trademarks of the other.

 

  20.13  Third Party Beneficiaries

 

Except as provided in Sections [***] and [***], this Agreement is entered into
solely between, and may be enforced only by, Capital One and TSYS, and this
Agreement shall not be deemed to create any rights in third parties, including
suppliers and customers of a party, or to create any obligations of a party to
any such third parties.

 

  20.14  Nonsolicitation of Employees

 

Subject to Section [***], from the Effective Date until [***] months after
termination of this Agreement neither party shall directly or indirectly solicit
or seek to procure, without the prior written consent of the other party: (i) in
the case of Capital One, the employment of TSYS’ employees engaged in the
provision of the Services during the period they are so engaged and for [***]
months thereafter; and (ii) in the case of TSYS, Capital One’s employees engaged
in the provision of its information systems during the period they are so
engaged and for [***] months thereafter, except neither party shall be precluded
from hiring any such employee who (A) initiates discussions regarding such
employment without any direct or indirect solicitation by it; (B) responds to
any public advertisement placed by it; or (C) has been terminated by the other
party prior to commencement of employment discussions between it and such
employee.

 

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  20.15  Covenant of Good Faith and Fair Dealing

 

Each party, in its respective dealings with the other party under or in
connection with this Agreement, shall act in good faith and with fair dealing.

 

  20.16  Entire Agreement; Amendment

 

This Agreement, including any Schedules and Exhibits referred to herein and
attached hereto, each of which is incorporated herein for all purposes,
constitutes the entire agreement between the parties with respect to the subject
matter contained in this Agreement and supersedes all prior agreements, whether
written or oral, with respect to such subject matter, including the
Confidentiality Agreement dated May 27, 2004 and Letter of Intent dated
October 19, 2004. Neither the course of dealings between the parties nor trade
practices shall act to modify, vary, supplement, explain, or amend this
Agreement. If either party issues any purchase order, terms or conditions, or
other form, it shall be deemed solely for the administrative convenience of that
party and not binding on the other party, even if acknowledged or acted upon. No
change, waiver, or discharge hereof shall be valid unless in writing and signed
by an authorized representative of the party against which such change, waiver
or discharge is sought to be enforced. There are no promises, representations,
warrantees, or other commitments relied upon by either party that are not
expressly set forth herein.

 

IN WITNESS WHEREOF, the parties have each caused this Agreement to be signed and
delivered by its duly authorized officer, each as of the Effective Date.

 

TOTAL SYSTEM SERVICES, INC.

     

CAPITAL ONE SERVICES, INC.

By:

 

/s/ Philip Tomlinson

     

By:

 

/s/ Robert M. Alexander

Name:

 

Philip Tomlinson

     

Name:

 

Robert M. Alexander

Title:

 

Chief Executive Officer

     

Title:

 

Senior Vice President, Marketing and Analysis

 

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