Exhibit 10.5

 

EXECUTION COPY

 

TRANSITION SERVICES AGREEMENT

 

dated as of September 22, 2008

 

between

 

LEHMAN BROTHERS HOLDINGS INC.

 

and

 

BARCLAYS CAPITAL INC.

 

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TRANSITION SERVICES AGREEMENT

 

This Transition Services Agreement, dated September 22, 2008 (this “Agreement”),
is made by and between Barclays Capital Inc., a Connecticut corporation
(“BarCap”), and Lehman Brothers Holdings Inc., a Delaware corporation (“LBHI”).

 

RECITALS

 

WHEREAS, LBHI, Lehman Brothers Inc., LB 745 LLC and BarCap have entered into
that certain Asset Purchase Agreement, dated as of September 16, 2008 (as
amended and supplemented, the “Purchase Agreement”);

 

WHEREAS, it is contemplated by the Purchase Agreement that (a) BarCap shall
provide, or cause to be provided, to LBHI (and/or its Affiliates on the date
hereof including the IMD Entities, collectively hereinafter referred to as the
“LBHI Entities”) certain services, use of facilities and other assistance on a
transitional basis and in accordance with the terms and subject to the
conditions set forth herein and (b) LBHI shall provide, or cause to be provided,
to BarCap (and/or its Affiliates on the date hereof, collectively hereinafter
referred to as the “BarCap Entities”) certain services, use of facilities and
other assistance on a transitional basis and in accordance with the terms and
subject to the conditions set forth herein; and

 

WHEREAS, the Purchase Agreement contemplates execution and delivery of this
Agreement by BarCap and LBHI.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto hereby agree as
follows:

 

ARTICLE 1

DEFINITIONS

 

Section 1.01           Certain Defined Terms.  Unless otherwise defined herein,
any capitalized term used herein shall have the same meaning as in the Purchase
Agreement.

 

The following capitalized terms used in this Agreement shall have the meanings
set forth below:

 

“Affiliate” means, with respect to any Person, any other Person that, directly
or indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, such Person, and the term “control” (including
the terms “controlled by” and “under common control with”) means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through ownership of voting
securities, control by a general partner, by contract or otherwise; provided
that such other Person shall no longer be deemed an Affiliate once such control
ceases.

 

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“Benchmark Period” means the twelve-month period prior to the Closing Date.

 

“Force Majeure” means, with respect to a Person, an event beyond the control of
such Person (or any Person acting on its behalf), including acts of God, storms,
floods, riots, fires, sabotage, labor stoppage, civil commotion or civil unrest,
interference by civil or military authorities, acts of war (declared or
undeclared) or armed hostilities or other national or international calamity or
one or more acts of terrorism or failure of energy sources or of Internet or
telecommunications services.

 

“IMD Entities” means (i) the entities that, on the date hereof, conduct the
investment management business of LBHI and its Affiliates and (ii) in each case
solely to the extent permitted under Section 9.10, their successors and assigns
with respect to such business.

 

“Information Systems” means computing, telecommunications or other digital
operating or processing systems or environments, including computer programs,
data, databases, computers, computer libraries, communications equipment,
networks and systems.  When referenced in connection with the Services,
Information Systems shall mean the Information Systems accessed and/or used in
connection with the Services.

 

“Prime Rate” means the prime rate published in the Eastern Edition of The Wall
Street Journal or a comparable newspaper if The Wall Street Journal shall cease
to publish the prime rate.

 

“Provider” means the party hereto or its subsidiary or Affiliate providing a
Service or an Additional Service under this Agreement.

 

“Recipient” means a party hereto or its subsidiary or Affiliate to whom a
Service or any Additional Service is being provided under this Agreement.

 

“Representative” of a Person means any director, officer, employee, agent,
consultant, accountant, auditor, attorney or other representative of such
Person.

 

“Termination Charges” shall mean any portion of any fees or expenses payable to
any unaffiliated, third-party provider as a result of any early termination or
reduction of a Service that cannot reasonably be avoided by the Provider.

 

“Virus” shall mean any computer instructions (i) that adversely affect the
operation, security or integrity of a computing, telecommunications or other
digital operating or processing system or environment, including without
limitation, other programs, data, databases, computer libraries and computer and
communications equipment, by altering, destroying, disrupting or inhibiting such
operation, security or integrity; (ii) that without functional purpose,
self-replicate without manual intervention; and/or (iii) that purport to perform
a useful function but which actually perform either a destructive or harmful
function, or perform no useful function and utilize substantial computer,
telecommunications or memory resources.

 

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ARTICLE 2

SERVICES AND TERMS

 

Section 2.01           Services; Scope.

 

(a)           Subject to the terms and conditions set forth in this Agreement,
(i) BarCap shall provide, or cause to be provided, to the LBHI Entities those
services (the “BarCap Services”) that were being provided (x) by any Subsidiary
of LBHI that is acquired by BarCap or one of its Affiliates pursuant to the
Purchase Agreement or a vendor of such Subsidiary, or (y) by the LBHI Entities
or a vendor thereof through the use of the Purchased Assets or the Transferred
Employees, to the IMD Business and any other businesses of the LBHI Entities
prior to the Closing that were not acquired by BarCap under the Purchase
Agreement (each such business, a “Retained LBHI Business”), and (ii) LBHI shall
provide, or cause to be provided, to the BarCap Entities those services that
were being provided by an LBHI Entity or a vendor thereof prior to the Closing
to the businesses acquired by BarCap under the Purchase Agreement (the “LBHI
Services” and collectively with the BarCap Services, the “Services”).  If, for
any reason, BarCap is unable to provide any BarCap Service to the LBHI Entities
pursuant to the terms of this Agreement, BarCap shall provide to the applicable
LBHI Entity a substantially equivalent service (a “BarCap Substitute Service”)
in accordance with the terms of this Agreement, which such service shall be
considered a BarCap Service for purposes of this Agreement.  The scope of each
BarCap Service shall be substantially the same as the scope of such services
provided by the applicable LBHI Entity to the applicable Retained LBHI Business
in the ordinary course during the Benchmark Period (in each case, to the extent
such BarCap Service was provided using Purchased Assets or by Transferred
Employees), and the use of each BarCap Service by an LBHI Entity shall include
use by such LBHI Entity’s contractors in substantially the same manner as used
by such contractors in the ordinary course, during the Benchmark Period.  If,
for any reason, an LBHI Entity is unable to provide any LBHI Service to the
BarCap Entities pursuant to the terms of this Agreement, LBHI shall provide to
the applicable BarCap Entity a substantially equivalent service (an “LBHI
Substitute Service”) in accordance with the terms of this Agreement, which such
service shall be considered an LBHI Service for purposes of this Agreement.  The
scope of each LBHI Service shall be substantially the same as the scope of such
service provided by the applicable Retained LBHI Business to the applicable LBHI
Entity in the ordinary course during the Benchmark Period, and the use of each
LBHI Service by a BarCap Entity shall include use by such BarCap Entity’s
contractors in substantially the same manner as used by such contractors in the
ordinary course, during the Benchmark Period.  All Services shall be for the
sole use and benefit of the respective Recipient, including any of such
Recipient’s customers or clients of the type who received the use and benefit of
the equivalent services in the ordinary course during the Benchmark Period;
provided, however, that the Recipient agrees that it shall not re-market or act
as a service provider with respect to any of the Services hereunder to a third
party.

 

(b)           Each Service shall include, and the Service Charges reflect
charges for, such maintenance, support, error correction, updates and
enhancements normally and customarily provided by the relevant Provider to its
subsidiaries that receive such service.  Each Service shall include all
functions, responsibilities, activities and tasks, and the materials,
documentation, resources, rights and licenses to be used, granted or provided by
the relevant

 

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Provider that are not specifically described in this Agreement as a part of such
Service, but are incidental to, and would normally be considered an inherent
part of, or necessary subpart included within, such Service or are otherwise
necessary for such Provider to provide, or the Recipient to receive, such
Service.

 

(c)           Throughout the term of this Agreement, (i) each Provider and each
Recipient of any Service shall cooperate with one another and use their good
faith and commercially reasonable efforts to effect the efficient, timely and
seamless provision and receipt of such Service and (ii) the Recipient shall use
its good faith and commercially reasonable efforts to transition away and wind
down its use of the Services.

 

(d)           This Agreement shall not assign any rights to Technology or
Intellectual Property between the parties hereto.

 

(e)           Notwithstanding anything to the contrary herein, for the avoidance
of doubt, Lehman Brothers Holdings plc, Lehman Brothers Limited, LB UK RE
Holdings Limited and Lehman Brothers International (Europe) shall not be deemed
LBHI Entities hereunder.

 

Section 2.02           Conversion Services.

 

(a)           During the term of this Agreement, the parties shall provide, or
cause to be provided, the following information and support to the other party,
as applicable, which support shall be included within the Services described
herein or in the Schedules hereto:

 

(i)           current and reasonably available historical data owned by the
Provider and related to the Services and predecessor services thereto as
reasonably required by the relevant Recipient in connection with the conduct of
the Business (in the case of BarCap) or the Retained LBHI Business (in the case
of the LBHI Entities) or for litigation or regulatory purposes, in a manner and
within a time period as mutually agreed by the parties; and

 

(ii)          on commercially reasonable terms, which will be added to the
Service Charges, the services of the employees and contractors of the relevant
Provider whose assistance, expertise or presence is necessary to assist the
Recipient’s transition team in establishing a fully functioning stand-alone
environment (it being understood that the services of employees and contractors
pursuant to this clause (ii) are not intended to be a substitute for the
services of its own employees and third party consultants and advisors to be
engaged by the relevant Recipient in connection with such transition or similar
services, but instead to facilitate coordination with such individuals).

 

Section 2.03           Transition Services Managers.

 

(a)           BarCap shall appoint an individual, by giving written notice
thereof to LBHI within three Business Days following the date hereof, to act as
its initial services manager (the “BarCap Services Manager”), who will be
directly responsible for coordinating and managing the delivery of the BarCap
Services and have authority to act on BarCap’s behalf with respect to matters
relating to this Agreement.  The BarCap Services Manager will work with the
personnel of BarCap to periodically address issues and matters raised by LBHI
relating to this Agreement.  Notwithstanding the requirements of Section 9.05,
all communications from LBHI

 

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to BarCap pursuant to this Agreement regarding routine matters involving the
BarCap Services shall be made through the BarCap Services Manager, or such other
individual as specified by the BarCap Services Manager in writing and delivered
to LBHI by email or facsimile transmission with receipt confirmed.  BarCap shall
reasonably promptly notify LBHI of the appointment of a different BarCap
Services Manager, if necessary, in accordance with Section 9.05.

 

(b)           LBHI shall appoint an individual, by giving written notice thereof
to BarCap within three Business Days following the date hereof, to act as its
initial services manager (the “LBHI Services Manager”), who will be directly
responsible for coordinating and managing the delivery of the LBHI Services and
have authority to act on LBHI’s behalf with respect to matters relating to this
Agreement.  The LBHI Services Manager will work with the personnel of LBHI to
periodically address issues and matters raised by BarCap relating to this
Agreement.  Notwithstanding the requirements of Section 9.05, all communications
from BarCap to LBHI pursuant to this Agreement regarding routine matters
involving the Services shall be made through the LBHI Services Manager, or such
other individual as specified by the LBHI Services Manager in writing and
delivered to BarCap by email or facsimile transmission with receipt confirmed. 
LBHI shall reasonably promptly notify BarCap of the appointment of a different
LBHI Services Manager, if necessary, in accordance with Section 9.05.

 

Section 2.04           Personnel; Authorized Signatories.  The Provider will
have the right, in its sole discretion, to (i) designate which personnel or
third party service providers it will assign to perform Services, and
(ii) remove and replace such personnel or third party service providers at any
time.

 

Section 2.05           Performance and Receipt of Services.  The following
provisions shall apply to the Services:

 

(a)           Security and Privacy.  Each Provider and Recipient shall at all
times comply with its own then in-force security guidelines and policies
applicable to the performance, access and/or use of the Services and Information
Systems.  Where a Provider or Recipient receives access to the other party’s
Information Systems, then it shall also comply with such other party’s security
guidelines and policies.  The parties acknowledge that historically the Services
governed by this Agreement have been rendered within a single group of related
entities and a shared security environment, and that in order for Services to be
rendered among and between the BarCap Entities and the LBHI Entities as
unrelated entities additional systems, procedures, guidelines and policies may
need to be established to render the Services in compliance with Law,
regulation, and applicable privacy and security policies.  Each of the LBHI
Entities and the BarCap Entities shall use its reasonable efforts to establish
such additional systems, procedures, guidelines and policies in a manner that
will not disrupt the rendering of Services or the LBHI Retained Businesses or
the Business, respectively.  Recipient shall bear all of its own costs and
expenses in connection with such an effort; Provider’s costs and expenses in
connection with such an effort will be included in the Service Charges to the
extent directly related to providing the Services.

 

(b)           No Viruses.  Each of LBHI and BarCap shall take commercially
reasonable measures to ensure that no Viruses or similar items are coded or
introduced into the Services or Information Systems.  If a Virus is found to
have been introduced into the Services or

 

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Information Systems, the parties hereto shall use their commercially reasonable
efforts to cooperate and to diligently work together to eliminate the effects of
such Virus.

 

(c)           Reasonable Care.  Each Provider and Recipient shall exercise
reasonable care in providing and receiving the Services to (i) prevent access to
the Services or Information Systems by unauthorized Persons and (ii) not damage,
disrupt or interrupt the Services or Information Systems.

 

Section 2.06           Termination Services.  Each Provider shall reasonably
cooperate with the Recipient of each Service, upon request and on commercially
reasonable terms (which will be added to the Service Charges), to facilitate
such Recipient’s transition to provision of such services by a replacement
provider or by its own employees.

 

Section 2.07           Superseding Provisions.  Notwithstanding anything to the
contrary contained in this Agreement:

 

(a)           no Provider shall be required hereunder to take any action
(including by providing any Services) that would constitute, or that the
Provider reasonably believes would constitute, (i) a violation of applicable
Law, including any requirement of any Governmental Body, (ii) a breach of such
Provider’s contractual obligations or (iii) any other violation of a third
party’s rights; provided that in each of the foregoing circumstances the
Provider shall use reasonable efforts to work around the impediment and endeavor
to provide Services in a manner that does not violate Law, contractual
obligations or third party rights;

 

(b)           no Provider shall be required hereunder to fund the Services or
otherwise provide financial support, benefits or other consideration on the
Recipient’s behalf to third parties, or to take custody of, settle, clear or
handle securities, in connection with the Services, and the obligation to
perform any Service involving funds shall be subject to the Recipient having
previously made such funds available to the Provider specifically for such
purpose;

 

(c)           any obligation to provide Services or otherwise undertake
activities hereunder shall be limited to the party’s use of good faith and
commercially reasonable efforts; and

 

(d)           the Provider shall not be responsible for any failure to provide
Services hereunder to the extent arising from (i) the Recipient’s operations or
systems or otherwise by the acts or omissions of the Recipient or individuals
acting on its behalf or (ii) a third party’s failure to provide such Services or
(iii) the failure of Recipient or its Affiliates to provide Services to
Provider.

 

ARTICLE 3

ADDITIONAL AGREEMENTS AND ARRANGEMENTS

 

Section 3.01           Computer-Based Resources.  Commencing on the Closing
Date, and for ninety (90) days thereafter, each party (the “Accessing Party”)
shall continue to have access to the Information Systems of the other party (the
“Providing Party”), to the extent such access to such Information Systems was
available to the Accessing Party immediately prior to

 

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the Closing and remains necessary for the Accessing Party to operate its
business; provided, that (a) the BarCap Entities may take reasonable measures to
restrict access by the LBHI Entities to any systems or data unrelated to the
Retained LBHI Business to which the LBHI Entities are not entitled to access,
(b) the LBHI Entities may take reasonable measures to restrict access by the
BarCap Entities, to any systems or data unrelated to the Business to which the
BarCap Entities are not entitled to access, and (c) such continued access shall
be subject to the Accessing Party complying with all reasonable security
measures implemented by the Providing Party as deemed necessary by such
Providing Party to protect its Information Systems.  Commencing no later than
ten Business Days after the Closing Date, representatives of BarCap and LBHI
with authority in the area of Information Systems (the “IT Committee”) shall
meet at such reasonable time, place and manner as they may agree, to develop a
plan for migrating from the Information System infrastructure as deployed as of
the Closing Date, to a final Information Systems infrastructure satisfactory to
both BarCap and LBHI (the “IT Migration Plan”).  The parties shall use
reasonable efforts to enter into an IT Migration Plan no later than one month
after the Closing Date and shall include, among other provisions, a time line
for completing the migration of Information Services and a final migration
deadline after which  neither BarCap nor any LBHI Entity shall have access to
all or any part of the Information Systems of the other party, except to the
extent reasonably necessary for the receipt of the Services (subject to the
accessing party complying with all reasonable security measures implemented by
the providing party as deemed necessary by such providing party to protect its
Information Systems), or as otherwise agreed in a separate agreement.  When
finalized in writing and executed by the authorized representatives of BarCap
and the LBHI Entities, the IT Migration Plan shall be deemed to be incorporated
into this Agreement as an amendment and addition hereto.

 

Section 3.02           Termination of Support.  BarCap shall provide the IMD
Entities with notice a reasonable period in advance of ceasing to support any
material software contained within the Purchased Assets that directly supports
the IMD Business.  Following receipt of such notice, if the IMD Entities so
elect in writing, BarCap shall use reasonable efforts provide the IMD Entities
with a copy of such software in source code and object code form and any
associated documentation for their use pursuant to Section 8.9 of the Purchase
Agreement; provided, however, that following such receipt, the IMD Entities
shall endeavor to support their own services through the use of such software
and if the IMD Entities are successful in doing so, then BarCap shall no longer
be obligated to provide the Service to the extent previously supported by such
software.

 

Section 3.03           Point System.  Until the earlier of the first anniversary
of the Closing Date and the date on which BarCap and the relevant IMD Entity
enter into an arms length agreement on mutually agreeable terms, the IMD
Entities will have the option to become “enterprise level” clients at prevailing
market rates of the Point System application/service.

 

Section 3.04           Access.  BarCap or LBHI, as the case may be, will allow
the relevant Provider and its Representatives reasonable access to the
facilities and personnel of the relevant Recipient, and shall provide such other
reasonable cooperation and assistance, at the Recipient’s cost, necessary for
the performance of the Services for the Provider to fulfill its obligations
under this Agreement.

 

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Section 3.05                                Schedules.  The parties acknowledge
and agree that the Services contemplated to be provided hereunder are not
enumerated, defined or described in detail.  For purposes of illustration, the
Services may include (or include aspects of) operational, financial, corporate,
human resources, information technology and other services.  The parties shall
cooperate in good faith to create Schedules to this Agreement, within thirty
days following the Closing Date, that will contain a specific list of certain of
the Services to be provided pursuant hereto, including, with respect to the IMD
Business, potential additional specificity on the pricing model.  For the
avoidance of doubt, but subject to Section 3.07, none of the Services shall
require the relevant Provider to provide the legal services of any attorney to
the Recipient in connection with any such Service (unless otherwise agreed in
writing by the parties hereto).

 

Section 3.06                                Assignment of Shared Purchased
Contracts. With respect to Purchased Contracts that relate both to (i) the
business acquired by BarCap under the Purchase Agreement and (ii) Retained LBHI
Businesses (“Shared Purchased Contracts”):

 

(a)                                  where BarCap has the contractual right to
assign the portion of its rights under such agreements that relate to any of the
Retained LBHI Businesses (while retaining the portion of such rights that relate
to the Business), with no additional payment to the counterparty thereof, it
shall exercise such right. If BarCap has the contractual right to make such
partial assignment but only upon payment to the counterparty thereof, it shall
notify LBHI of the amount of the required payment and shall exercise such right
upon receipt of payment by LBHI of the amount required to be paid to the
counterparty; and

 

(b)                                 where BarCap does not have the contractual
right to assign the portion of its rights under such agreements, BarCap shall
cooperate in good faith with LBHI in LBHI’s efforts to enter into a replacement
agreement on comparable terms; provided that BarCap shall have no obligation to
pay anything of value  with respect to such cooperation; and

 

(c)                                  the recipient of such partial assignment or
counterparty to such replacement agreement shall be, as applicable, LBHI or the
assignee of the relevant Retained LBHI Business.

 

Section 3.07                                Further Access.

 

(a)                                  For a period of two years after the Closing
Date, the BarCap Entities shall provide, or use reasonable efforts to cause to
be provided to, the LBHI Entities at no charge (other than BarCap’s
out-of-pocket costs and expenses including contractor fees) with reasonable
access to all individuals who were employees or contractors of the LBHI Entities
prior to the Closing Date (and are employees or contractors of the BarCap
Entities at the time of requested access), and who have material knowledge about
the Retained LBHI Businesses or the Excluded Liabilities, and BarCap shall use
reasonable efforts to provide such individuals’ cooperation therewith. As part
of the foregoing, for a period of ninety (90) days after the Closing, (i) such
employees shall provide reasonably necessary assistance to the LBHI Entities in
the unwinding of the Retained LBHI Business and (ii) such employees that are
attorneys shall provide reasonably necessary legal services in the unwinding of
the Retained LBHI Business, provided that such assistance in (i) and (ii) shall
be deemed Services as to which the Service Charges

 

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apply and in all instances shall be subject to any confidentiality, professional
or ethical obligations or restrictions (including without limitation any
potential conflicts).

 

(b)                                 For a period of two years after the Closing
Date, the LBHI Entities shall provide, or use reasonable efforts to cause to be
provided to, the BarCap Entities at no charge (other than LBHI’s out-of-pocket
costs and expenses including contractor fees) with reasonable access to all
individuals who were employees or contractors of the LBHI Entities prior to the
Closing Date (and are employees or contractors of the LBHI Entities at the time
of requested access), and who have material knowledge about the Business or the
Services to be provided by the BarCap Entities, and LBHI shall use reasonable
efforts to provide such individuals’ cooperation therewith.

 

(c)                                  The parties recognize and understand that
there will be substantial efforts in the period following the Closing Date in
the integration of the Transferred Employees and the Purchased Assets into
BarCap’s operations and the operation of the Business, and the continuing
efforts of LBHI to divest the remaining assets and wind down the Retained LBHI
Business while maintaining the continuity thereof.  As such, the parties will
work together to reasonably accommodate each other in such efforts while
balancing BarCap’s needs for integration and operation with LBHI’s needs for
information and support.

 

Section 3.08                                Data Centers.  To the extent BarCap
is assuming material data center contracts as part of the Purchased Assets, the
parties will negotiate in good faith a post-Closing data center strategy to
reasonably address such issues as part of this Agreement.

 

Section 3.09                                IMD Employees.  During the
thirty-day period following the Closing Date, the parties shall cooperate in
good faith to develop a reasonable procedure (a) pursuant to which BarCap will
endeavor to provide notice to LBHI prior to terminating the employment of any
Transferred Employees during the six months following the Closing Date who are
dedicated (or primarily dedicated) to the IMD Business, to the extent permitted
under applicable confidentiality and privacy obligations and (b) to identify any
Transferred Employees whose functions prior to the Closing Date were unrelated
to the Business (if any).

 

Section 3.10                                Notices.  If any of the LBHI
Entities receive any notices related to the Business it shall promptly forward
them to BarCap and if any of the BarCap Entities receive any notices related to
the Retained LBHI Businesses it shall promptly forward them to LBHI.

 

Section 3.11                                Software.  For a period of ninety
days following the Closing Date, upon the request of LBHI, the parties will
cooperate in good faith to identify any software included in the Purchased
Assets for which there is no third party vendor or service provider that can
reasonably provide comparable software and the absence of which would cause a
material adverse effect on the value of the relevant underlying business
operations or assets of the Retained LBHI Businesses.  The BarCap Entities will
use reasonable efforts to provide a copy of such software to LBHI (in source
code and object form and associated documents, to the extent in their reasonable
possession); provided that such software shall be governed by the scope of the
license in Section 8.9(b) of the Purchase Agreement.

 

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Section 3.12.                             Access to Books and Records.  (a) The
BarCap Entities shall provide the LBHI Entities reasonable access to books and
records acquired as part of the Purchased Assets that are related and material
to the Retained LBHI Business (to the extent such books and records are in a
BarCap Entity’s possession at the time of requested access); and (b) the LBHI
Entities shall provide  the BarCap Entities reasonable access to books and
records that are related and material to the Business (to the extent such books
and records are in an LBHI Entity’s possession at the time of requested access).

 

ARTICLE 4

COSTS AND DISBURSEMENTS; PAYMENTS

 

Section 4.01                                Costs and Disbursements; Payments.

 

(a)                                  Any Service to be provided by any Provider
hereunder shall be charged to the Recipient thereof as follows (such charges,
the “Service Charges”):

 

(i)                                     until the date that is nine (9) months
after the Closing Date, at a cost equal to the Provider’s fully-loaded costs and
expenses for providing such Service (including in such fully-loaded costs and
expenses (x) an allocation for overhead costs to the extent directly related to
providing the Services, (y) the amount of the actual payments made by the
Provider to third-party providers for providing Services, and (z) associated
overhead costs relating to the Services provided by such third-party providers)
(“Provider’s Cost”), but without any markup for profit margin; and

 

(ii)                                  on and after the date that is nine
(9) months after the Closing Date (including during any extension of the term of
this Agreement), at a cost equal to Provider’s Cost plus 15% of Provider’s Cost.

 

Service Charges shall include value-added taxes and all other taxes payable in
respect of the provision of the Services other than taxes imposed on the net
income of the Provider.  If LBHI or BarCap (as applicable) is required, by Law
or to otherwise avoid legal penalties under Law, to pay, directly or indirectly,
to an Affiliate any transfer pricing markup or equivalent cost in order to
deliver a Service, then such transfer pricing markup or cost shall be included
in the relevant Service Charges, unless such mark-up or cost is subsequently
recoverable by LBHI or BarCap (as applicable).

 

For the avoidance of doubt, Service Charges shall not include any amounts owed
by a party (whether to third parties or Affiliates) prior to the Closing Date.

 

For the avoidance of doubt, Service Charges may increase or decrease, including,
as a result of (i) an increase or decrease in the amount of such Services being
provided to the Recipient (as compared to the amount of the Services underlying
the determination of a Service Charge), (ii) an increase or decrease in the
rates or charges imposed by any third-party provider that is providing goods or
services used by the Provider in providing the Services (as compared to the
rates or charges underlying a Service Charge), (iii) an increase or decrease in
the payroll or benefits for any employees used by the Provider in providing the
Services, or (iv) any increase or decrease in costs relating to any changes
requested by the Recipient in the nature of the Services

 

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provided (including relating to newly installed products or equipment or any
upgrades to existing products or equipment).

 

(b)                                 The Provider shall deliver an invoice to the
Recipient on a monthly basis (or, at the option of the Provider, at such other
frequency as is consistent with the basis on which the Service Charges are
determined and, if applicable, charged to Affiliates of the Provider) in arrears
for the Service Charges due to the Provider under this Agreement.  The Recipient
shall pay the amount of such invoice by wire transfer or check to the Provider
within thirty (30) days of the date of such invoice as instructed by the
Provider; provided that to the extent consistent with past practice with respect
to Services rendered outside the United States, payments may be made in local
currency.  If the Recipient fails to pay such amount by such date, the Recipient
shall be obligated to pay to the Provider, in addition to the amount due,
interest at an interest rate of 1-1/2% per month over the Prime Rate, compounded
monthly, accruing from the date the payment was due through the date of actual
payment.  As soon as practicable after receipt of any reasonable written request
by the Recipient, the Provider shall provide the Recipient with data and
documentation reasonably satisfactory to the Recipient supporting the
calculation of a particular Service Charge for the purpose of verifying the
accuracy of such calculation.  If, after reviewing such data and documentation,
the Recipient disputes the Provider’s calculation of any amount due to the
Provider, then the dispute shall be resolved pursuant to Section 7.01.

 

Section 4.02                                No Right to Set-Off.  The Recipient
shall pay the full amount of costs and disbursements incurred under this
Agreement, and shall not set-off, counterclaim or otherwise withhold any other
amount owed to the Provider on account of any obligation owed by the Provider to
the Recipient.

 

ARTICLE 5

STANDARD FOR SERVICE; COMPLIANCE WITH LAWS

 

Section 5.01                                Standard for Service.  Subject to
the terms and conditions of this Agreement, the Provider agrees to perform the
Services such that the nature, quality, standard of care and the service levels
at which such Services are performed are no less than the nature, quality,
standard of care and service levels at which the substantially same services
were performed by or on behalf of the Provider prior to the Closing Date in the
ordinary course of business during the Benchmark Period; provided, however, that
notwithstanding the foregoing, the Provider shall have no liability hereunder
for any Losses incurred by the Recipient except to the extent arising from
Provider’s gross negligence or willful misconduct (and in any case subject to
the limitations set forth in Article 6).

 

Section 5.02                                Disclaimer of Warranties.  Except as
expressly set forth herein, the parties hereto acknowledge and agree that the
Services are provided as-is, that the applicable Recipient assumes all risks and
liabilities arising from or relating to its use of and reliance upon the
Services and each Provider makes no representation or warranty with respect
thereto.  EXCEPT AS EXPRESSLY SET FORTH HEREIN, THE PROVIDERS HEREBY EXPRESSLY
DISCLAIM ALL REPRESENTATIONS AND WARRANTIES REGARDING THE SERVICES, WHETHER
EXPRESS OR IMPLIED, INCLUDING ANY REPRESENTATION OR WARRANTY IN REGARD TO
QUALITY, PERFORMANCE,

 

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NONINFRINGEMENT, COMMERCIAL UTILITY, MERCHANTABILITY OR FITNESS OF THE SERVICES
FOR A PARTICULAR PURPOSE.

 

ARTICLE 6

INDEMNIFICATION; LIMITATION ON LIABILITY

 

Section 6.01                                Indemnification of Each Provider by
the Relevant Recipient.  Subject to the limitations set forth in this
Article VI, each Recipient shall indemnify and hold harmless each relevant
Provider and its Affiliates and Representatives (each, a “Provider Indemnified
Party”) from and against any and all loss, liability, claim, damage or expense
(including legal fees and expenses) (“Losses”) to the extent owed to third
parties, and reimburse each relevant Provider Indemnified Party for all expenses
as they are incurred, whether or not in connection with pending litigation and
whether or not any Provider Indemnified Party is a party, arising out of any
claim by a third party to the extent caused by, resulting from or in connection
with any of the Services rendered or to be rendered by or on behalf of such
Provider pursuant to this Agreement, the transactions contemplated by this
Agreement or such Provider’s actions or inactions in connection with any such
Services or transactions; provided that such Recipient shall not be responsible
for any Losses of such Provider Indemnified Party to the extent that such Loss
is caused by, results from, or arises out of or in connection with a Provider
Indemnified Party’s gross negligence or willful misconduct in connection with
any such Services or transactions, actions or inactions related thereto.

 

Section 6.02                                Limited Liability of a Provider. 
Notwithstanding Article V or anything else to the contrary contained herein, no
Provider Indemnified Party shall have any liability in contract, tort or
otherwise, for or in connection with any Services rendered or to be rendered by
any Provider Indemnified Party pursuant to this Agreement, the transactions
contemplated by this Agreement or any Provider Indemnified Party’s actions or
inactions in connection with any such Services or transactions, to any Recipient
Indemnified Party, except  to the extent that any such Recipient Indemnified
Party suffers a Loss that results from such Provider Indemnified Party’s gross
negligence or willful misconduct in connection with any such Services or
transactions, actions or inactions related thereto.

 

Section 6.03                                Limited Liability of a Recipient. 
Notwithstanding Article V or anything else to the contrary contained herein, no
Recipient shall have any liability in contract, tort or otherwise, for or in
connection with the transactions contemplated by this Agreement or such
Recipient’s actions or inactions in connection with any Services or
transactions, to any Provider, except (a) to the extent that any such Provider
suffers a Loss that results from such Recipient’s gross negligence or willful
misconduct in connection with any such transactions, actions or inactions
related thereto or (b) to the extent owed pursuant to Recipient’s
indemnification obligations in Section 6.01.

 

Section 6.04                                Additional Limitation on Liability.

 

(a)                                  Notwithstanding any other provision
contained in this Agreement, no Provider Indemnified Party shall be liable for
any exemplary, special, indirect, punitive,

 

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incidental or consequential losses, damages or expenses, including any damages
due to business interruption or loss of profits.

 

(b)                                 Except for the indemnification obligations
set forth in Section 6.01, the aggregate liability and indemnification of each
of BarCap and LBHI (or their respective assignees in accordance with
Section 9.10) with respect to this Agreement shall not exceed, in the aggregate,
the aggregate amount of Service Charges paid hereunder to BarCap or LBHI (or
such respective assignees), as the case may be.

 

Section 6.05                                Liability for Payment Obligations. 
Nothing in this Article VI shall be deemed to eliminate or limit, in any
respect, a party’s express obligation in this Agreement to pay or reimburse, as
applicable, for (i) Termination Charges, (ii) Service Charges for Services
rendered in accordance with this Agreement, (iii) amounts in respect of
conversion services provided pursuant to Section 2.02, or (iv) other costs and
expenses to the extent expressly provided herein.

 

Section 6.06                                Obligations Several and Not Joint. 
As between a Recipient and a permitted third-party assignee of the Recipient,
the obligations of each such party under this Agreement shall be several and not
joint.

 

Section 6.07                                THE DISCLAIMER OF WARRANTY,
LIMITATION OF LIABILITY AND OVERALL ALLOCATION OF RISK BETWEEN THE PARTIES ARE
FUNDAMENTAL ELEMENTS OF THE BASIS OF THE BARGAIN BETWEEN THE PARTIES.  THE
PROVIDER WOULD NOT BE ABLE OR WILLING TO PROVIDE THE SERVICES WITHOUT THE
PROTECTIONS PROVIDED TO PROVIDER PURSUANT TO SUCH PROVISIONS.  IF ANY APPLICABLE
COURT HOLDS ANY DISCLAIMER, LIMITATION OF LIABILITY OR ALLOCATION OF RISK
CONTAINED IN THIS SECTION TO BE UNENFORCEABLE, THEN A PARTY’S LABILITY WILL BE
LIMITED TO THE FULLEST POSSIBLE EXTENT PERMITTED BY APPLICABLE LAW.

 

ARTICLE 7

DISPUTE RESOLUTION

 

Section 7.01                                Dispute Resolution.

 

(a)                                  In the event of any dispute, controversy or
claim arising out of or relating to the transactions contemplated by this
Agreement, or the validity, interpretation, breach or termination of any
provision of this Agreement, or calculation or allocation of the costs of any
Service, including claims seeking redress or asserting rights under any Law
(each, a “Dispute”), the parties hereto agree that the BarCap Services Manager
and LBHI Services Manager (or such other Persons as BarCap and LBHI may
designate) shall negotiate in good faith in an attempt to resolve such Dispute
amicably.  If such Dispute has not been resolved to the mutual satisfaction of
BarCap and LBHI within sixty (60) days after the initial notice of the Dispute
(or such longer period as such parties may agree), then, a senior executive on
behalf of BarCap and a senior executive on behalf of LBHI shall negotiate in
good faith in an attempt to resolve such Dispute amicably for an additional
twenty (20) days (or such longer period as such parties may agree).  If

 

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such Dispute has not been finally resolved at the end of such twenty-day period,
then either party may pursue remedies in accordance with Section 9.11. 
Notwithstanding the foregoing, a Provider shall have no obligation to comply
with this Section 7.01(a) before exercising any rights or remedies it may have
under this Agreement.

 

(b)                                 In any Dispute regarding the amount of a
Service Charge, if after such Dispute is finally adjudicated pursuant to the
dispute resolution and/or judicial process set forth in Section 7.01(a) or
Section 9.11, it is determined that the Service Charge that the Provider has
invoiced the Recipient, and that the Recipient has paid to the Provider, is
greater or less than the amount that the Service Charge should have been, then
(i) if it is determined that the Recipient has overpaid the Service Charge, the
Provider shall within five (5) Business Days after such determination reimburse
the Recipient an amount of cash equal to such overpayment, plus 1-1/2% per month
over the Prime Rate, compounded monthly, accruing from the date of payment by
the Recipient to the time of reimbursement by the Provider and (ii) if it is
determined that the Recipient has underpaid the Service Charge, the Recipient
shall within five (5) Business Days after such determination reimburse the
Provider an amount of cash equal to such underpayment, plus 1-1/2% per month
over the Prime Rate, compounded monthly, accruing from the date such payment
originally should have been made by the Recipient to the time of reimbursement
by the Recipient.

 

ARTICLE 8

TERMINATION

 

Section 8.01                                Termination.

 

(a)                                  This Agreement shall commence immediately
upon the Closing Date and shall terminate as to any particular Service upon the
earliest to occur of (i) the first date on which the applicable party has no
further need to have such Service provided by the applicable Provider or
(ii) the mutual written agreement of the parties to terminate this Agreement in
its entirety or (iii) as further set out below.  All Services shall terminate no
later than the earliest of (x) eighteen (18) months following the Closing Date
and (y) twelve (12) months from the closing date of the sale of the Retained
LBHI Business or portion of the Business, as applicable, to which such Service
relates or from which the Service is provided and (z) such date as Recipient has
developed an alternative source of such Services; provided, that if there is no
third party vendor or service provider that can reasonably provide a comparable
Service, and the absence of such Service would cause a material adverse effect
on the value of the relevant underlying business operations or assets, then,
upon written notice from Recipient at least sixty (60) days prior to the twelve
month anniversary of the Closing Date, such services shall be extended until the
earliest of: (1) thirty (30) months following the Closing Date; (2) twenty-four
(24) months from the closing date of the sale of the Retained LBHI Business or
portion of the Business, as applicable, to which such Service relates or from
which the Service is provided and (3) such date as Recipient has developed an
alternative source of such Services.  This Agreement shall terminate once the
provision of Services hereunder has terminated, and, for the avoidance of doubt,
this Agreement shall terminate at the end of the time periods set forth above.

 

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(b)                                 The Retained LBHI Businesses will use
reasonable efforts to alter their operations to minimize or eliminate the need
for BarCap Services (including by obtaining replacement services from a third
party provider) as promptly as reasonably practicable as they wind down their
operations or dispose of them to a third party. In addition, (i) a Recipient may
from time to time terminate this Agreement with respect to any particular
Service, in whole but not in part (1) for any reason or no reason upon providing
at least thirty (30) days prior written notice to the Provider of such
termination, subject to the obligation to pay Termination Charges, as provided
for under Section 8.02, (2) if the Provider of such Service has failed to
perform any of its material obligations under this Agreement with respect to
such Service, and such failure shall continue to exist thirty (30) days after
receipt by the Provider of written notice of such failure from the Recipient, or
(3) immediately upon mutual written agreement of the parties hereto, and (ii) a
Provider may terminate this Agreement with respect to one or more Services, in
whole but not in part, at any time upon prior written notice to the Recipient if
the Recipient has failed to perform any of its material obligations under this
Agreement relating to such Service or Services, and such failure shall be
continued uncured for a period of thirty (30) days after receipt by the
Recipient of a written notice of such failure from the Provider.  In the event
that the effective date of the termination of any particular Service is a day
other than at the end of a billing period, the Service Charge associated with
such Service shall be pro-rated appropriately.

 

(c)                                  A Recipient may from time to time request a
reduction in part of the scope or amount of any particular Service.  If
requested to do so by Recipient, the Provider agrees to discuss in good faith
appropriate reductions to the relevant Service Charges in light of all relevant
factors including the costs and benefits to the Provider of any such
reductions.  In the event that any particular Service is reduced other than at
the end of a billing period, the Service Charge associated with such Service for
the billing period in which such Service is reduced shall be pro-rated
appropriately. Without limiting Section 8.01(a), the IMD Entities may request
termination of any particular Service with respect to them upon six (6) months’
prior written notice in which case such Service will be terminated and charges
for such Service will cease accruing at the end of such six (6) month period.

 

(d)                                 The Recipient may terminate this Agreement
upon the occurrence of a Force Majeure event pursuant to Section 8.04 below that
materially disrupts the provision of Services, and Provider’s failure to fully
restore such Services within 90 days, and the Provider’s further failure to
fully restore such Services 30 days after its receipt of written notice of
Recipient’s intention to so terminate pursuant to this Section 8.01(c) sent
after the expiration of the initial 90-day period.

 

(e)                                  The parties agree to discuss in good faith
implementing reasonable measures to address situations that may arise after the
date of this Agreement in which Recipient requires an extension of the provision
of one or more Services beyond the term provided for herein or Provider requires
relief from the provision of one or more Services because such Services are
unduly burdensome or inconsistent with the strategic and operational objectives
of Provider.

 

(f)                                    The BarCap Entities may suspend the
Services to an LBHI Entity (but no other LBHI Entity) that materially defaults
in its obligation to perform or provide Services to any BarCap Entity hereunder,
for so long as such default continues.  Without limiting the forgoing,

 

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such a default shall be deemed to exist where, had such Services been provided
by or been obligated to be provided by LBHI to the BarCap Entities, the failure
to perform or provide such Services would constitute a default by LBHI.

 

Section 8.02                                Effect of Termination.  Upon
termination of any particular Service pursuant to this Agreement, the Provider
of the terminated Service will have no further obligation to provide the
terminated Service, and the relevant Recipient will have no obligation to pay
any future Service Charges relating to any such Service; provided, however, that
the Recipient shall remain obligated to the relevant Provider for (i) the
Service Charges owed and payable in respect of Services provided prior to the
effective date of termination and (ii) any Termination Charges.  Upon
termination of any particular Service pursuant to this Agreement, the relevant
Provider shall reduce for the next billing period the amount of the Service
Charge for the category of Services in which the terminated Service was included
(such reduction to reflect the elimination of all costs incurred in connection
with the terminated service to the extent the same are not required to provide
other Services to the Recipient), and, upon request of the Recipient, the
Provider shall provide the Recipient with documentation and/or information
regarding the calculation of the amount of the reduction.

 

Section 8.03                                Survival.  In connection with
termination of any Service, the provisions of this Agreement not relating solely
to such terminated Service shall survive any such termination, and in connection
with a termination of this Agreement, Article I, Article VI (including liability
in respect of any indemnifiable Losses under this Agreement arising or occurring
on or prior to the date of termination), Article VII, Article VIII, Article IX,
all confidentiality obligations under this Agreement and liability for all due
and unpaid Service Charges and Termination Charges shall continue to survive
indefinitely.

 

Section 8.04                                Force Majeure.  No party hereto (nor
any Person acting on its behalf) shall have any liability or responsibility for
failure to fulfill any obligation (other than a payment obligation) under this
Agreement so long as and to the extent to which the fulfillment of such
obligation is prevented, frustrated, hindered or delayed as a consequence of
circumstances of Force Majeure; provided that (i) such party (or such Person)
shall have exercised commercially reasonable efforts to minimize the effect of
Force Majeure on its obligations and (ii) the nature, quality and standard of
care that the Provider shall provide in delivering a Service after a Force
Majeure shall be substantially the same  as the nature, quality and standard of
care that the Provider provides to its Affiliates and its other business
components with respect to such Service.  In the event of an occurrence of a
Force Majeure, the party hereto whose performance is affected thereby shall give
notice of suspension as soon as reasonably practicable to the other stating the
date and extent of such suspension and the cause thereof, and such party shall
resume the performance of such obligations as soon as reasonably practicable
after the removal of the cause.

 

ARTICLE 9

GENERAL PROVISIONS

 

Section 9.01                                Independent Contractors.  In
providing the Services hereunder, the Provider shall act solely as independent
contractor and nothing in this Agreement shall constitute

 

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or be construed to be or create a partnership, joint venture, or principal/agent
relationship between the Provider, on the one hand, and the Recipient, on the
other. All Persons employed by the Provider in the performance of its
obligations under this Agreement shall be the sole responsibility of the
Provider.

 

Section 9.02           Subcontractors. Any Provider may hire or engage one or
more subcontractors to perform any or all of its obligations under this
Agreement; provided that such Provider shall in all cases remain responsible for
all its obligations under this Agreement. Under no circumstances shall any
Recipient be responsible for making any payments directly to any subcontractor
engaged by a Provider.

 

Section 9.03           Books and Records. All books, records and data maintained
by a Provider for a Recipient with respect to the provision of a Service to such
Recipient shall be the exclusive property of such Recipient. The Recipient, at
its sole cost and expense, shall have the right to inspect, and make copies of,
any such books, records and data during regular business hours upon reasonable
advance notice to the Provider. At the sole cost and expense of the Recipient,
upon termination of the provision of any Service, the relevant books, records
and data relating to such terminated Service shall be delivered by the Provider
to the Recipient in a mutually agreed upon format to the address of the
Recipient set forth in Section 9.05 or any other mutually agreed upon location;
provided, however, that the Provider shall be entitled to retain one copy of all
such books, records and data relating to such terminated Service for archival
purposes and for purposes of responding to any dispute that may arise with
respect thereto.

 

Section 9.04           Treatment of Confidential Information.

 

(a)           The parties hereto shall not, and shall cause all other Persons
providing Services or having access to information of the other party that is
known to such Person as confidential or proprietary (“Confidential Information”)
not to, disclose to any other Person or use, except for purposes of this
Agreement, any Confidential Information of the other party; provided, however,
that each party may disclose Confidential Information of the other party, to the
extent permitted by applicable Law (i) to its Representatives on a need-to-know
basis in connection with the performance of such party’s obligations under this
Agreement, (ii) in any report, statement, testimony or other submission required
to be made to any Governmental Body having jurisdiction over the disclosing
party, or (iii) in order to comply with applicable Law, or in response to any
summons, subpoena or other legal process or formal or informal investigative
demand issued to the disclosing party in the course of any litigation,
investigation or administrative proceeding. In the event that a party hereto
becomes legally compelled (based on advice of counsel) by deposition,
interrogatory, request for documents subpoena, civil investigative demand or
similar judicial or administrative process to disclose any Confidential
Information of the other party, such disclosing party shall provide the other
party with prompt prior written notice of such requirement, and, to the extent
reasonably practicable, cooperate with the other party (at such other party’s
expense) to obtain a protective order or similar remedy to cause such
Confidential Information not to be disclosed, including interposing all
available objections thereto, such as objections based on settlement privilege.
In the event that such protective order or other similar remedy is not obtained,
the disclosing party shall furnish only that portion of the Confidential
Information that has been legally compelled, and shall exercise

 

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its reasonable best efforts (at such other party’s expense) to obtain assurance
that confidential treatment will be accorded such Confidential Information.

 

(b)           Each party hereto shall, and shall cause its Representatives to
protect the Confidential Information of the other parties by using the same
degree of care to prevent the unauthorized disclosure of such as the party uses
to protect its own confidential information of a like nature.

 

(c)           Each party shall comply with all applicable state, federal and
foreign privacy and data protection Laws that are or that may in the future be
applicable to the provision of the Services hereunder.

 

Section 9.05           Notices. Except with respect to routine communications by
the BarCap Services Manager and LBHI Services Manager under Section 2.03, all
notices, requests, claims, demands and other communications under this Agreement
shall be in writing and shall be given or made (and shall be deemed to have been
duly given or made upon receipt) by delivery in person, by overnight courier
service, by facsimile with receipt confirmed (followed by delivery of an
original via overnight courier service) or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section 9.05):

 

(a)                                  if to BarCap:

 

Barclays Capital Inc.

200 Park Avenue

New York, NY 10166

Attention:  Jonathan Hughes, Esq.

Facsimile:  (212) 412-7519

 

with a copy to:

 

Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza

New York, NY 10006

Attention: Duane McLaughlin

Facsimile:  (212) 225-3999

 

(b)                                 if to LBHI:

 

Lehman Brothers Holdings Inc.

745 Seventh Avenue

New York, NY 10019

Attention:  Steven Berkenfeld, Esq.

Facsimile:  (646) 758-4226

 

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with a copy to:

 

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, NY 10153

Attention:  Jeffrey Osterman

Facsimile:  (212) 310-8007

 

Section 9.06           Regulatory Approval and Compliance. Each party hereto
shall be responsible for its own compliance with any and all Laws applicable to
its performance under this Agreement; provided, however, that each of BarCap and
LBHI shall, subject to reimbursement of out-of-pocket expenses by the requesting
party, cooperate and provide one another with all reasonably requested
assistance (including the execution of documents and the provision of relevant
information) required by the requesting party to ensure compliance with all
applicable Laws in connection with any regulatory action, requirement, inquiry
or examination related to this Agreement or the Services.

 

Section 9.07           Further Assurances. Each party hereto covenants and
agrees that, without any additional consideration, it shall execute and deliver
any further legal instruments and perform any acts that are or may become
reasonably necessary to effectuate this Agreement.

 

Section 9.08           Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced under any Law or as
a matter of public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated by this Agreement is not
affected in any manner materially adverse to any party hereto. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of such parties as closely as
possible in a mutually acceptable manner in order that the transactions
contemplated by this Agreement can be consummated as originally contemplated to
the greatest extent possible.

 

Section 9.09           Entire Agreement. Except as otherwise expressly provided
in this Agreement, the Purchase Agreement and this Agreement constitute the
entire agreement of the parties hereto with respect to the subject matter of
this Agreement and supersede all prior agreements and undertakings, both written
and oral, between or on behalf of the parties hereto with respect to the subject
matter of this Agreement.

 

Section 9.10           Assignment; Third-Party Beneficiaries.

 

(a)           This Agreement shall not be assigned or sublicensed by operation
of Law or otherwise without the prior written consent of the parties hereto;
provided, however, that, subject to Section 9.10(b):

 

(i)            the LBHI Entities shall have a right to assign their rights and
obligations hereunder, in whole or in part, (A) with respect to the IMD Entities
(as of the date hereof) to one or more related purchasers (in a single
transaction or a series of related

 

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transactions) of (x) any or all of the IMD Business or (y) any or all of the
assets of, or entities that conduct, the IMD Business, and (B) with respect to
any other acquirors of the Retained LBHI Business, if the absence of such
Service would cause a material adverse effect on the value of the underlying
business operations or assets, and

 

(ii)           the BarCap Entities may assign their rights and obligations
hereunder, in whole or in part, (A) with respect to any acquirors of the
Business, if the absence of such Service would cause a material adverse effect
on the value of the underlying business operations or assets, and (B) to a
single purchaser (in a single transaction or a series of related transactions)
of (x) any or all of the Business or (y) any or all of the assets of, or
entities that conduct, the Business.

 

(b)           Notwithstanding anything to the contrary, the total number of
parties to which each of the LBHI Entities, on one hand, and the BarCap
Entities, on the other hand, may assign their rights and obligations pursuant to
Section 9.10(a) shall not exceed six (i.e., up to six separate assignments for
each party to this Agreement); provided that the LBHI Entities shall have the
right to assign their rights and obligations hereunder up to two additional
parties provided that, notwithstanding Section 8.01(a), in the case of such two
additional parties, the Services pursuant to those assigned rights shall
terminate one (1) year after the Closing Date. With respect to the sale of the
following businesses – the IMD Business; the LBHI Entity private equity
business; and the businesses conducted by the LBHI Entities in each of India,
Asia and Europe - if there is an assignment hereunder to a single buyer of more
than one of the foregoing businesses, then, solely for the purposes of this
Section 9.10(b), such assignment shall count as separate assignment for each of
such businesses. For illustrative purposes, if there is an assignment hereunder
to a single buyer for the India and Asian businesses, then it shall count as two
assignments towards the total of 6. The parties agree to negotiate in good faith
if either party requests the right to make additional assignments hereunder to a
buyer of a part of such party’s business to which this Agreement relates if the
absence of such Service would cause a material adverse effect to the underlying
business operations or asset being sold.

 

(c)           Any permitted assignee in accordance with this Section 9.10 shall
be required to execute a counterpart to this Agreement, agreeing to be bound by
the terms and conditions set forth herein. Further, permitted assignees
hereunder shall not themselves be permitted to assign any part of the rights or
obligations assigned to them without the prior written consent of the
non-assigning party. Each party shall require any assignee or purchaser of any
business or asset that had been providing (or had been used to provide) Services
hereunder, the absence of which would cause a material adverse effect to the
Recipient, to continue to provide Services to the Recipient pursuant to the
terms and conditions of this Agreement as a condition to such assignment or
purchase. For the avoidance of doubt, a change of control of an entity shall be
deemed an assignment hereunder.

 

(d)           Except as provided in Article 6 with respect to Provider
Indemnified Parties, this Agreement is for the sole benefit of the parties
hereto and their permitted successors and assigns and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other Person any
legal or equitable right, benefit or remedy of any nature whatsoever, including
any rights of employment for any specified period, under or by reason of this
Agreement.

 

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Section 9.11           Governing Law; Submission to Jurisdiction. (a) This
Agreement (and any claims or disputes arising out of or related hereto or to the
transactions contemplated hereby or to the inducement of any party to enter
herein, whether for breach of contract, tortious conduct or otherwise, and
whether predicated on common law, statute or otherwise) shall in all respects be
governed by, and construed in accordance with, the Laws of the State of New
York, including all matters of construction, validity and performance, in each
case without reference to any conflict of Law principles that might lead to the
application of the Laws of any other jurisdiction.

 

(b)           Without limiting any party’s right to appeal any order of the
Bankruptcy Court, (i) the Bankruptcy Court shall retain exclusive jurisdiction
to enforce the terms of this Agreement and to decide any claims or disputes
which may arise or result from, or be connected with, this Agreement, any breach
or default hereunder, or the transactions contemplated hereby, and (ii) any and
all proceedings related to the foregoing shall be filed and maintained only in
the Bankruptcy Court, and the parties hereby consent to and submit to the
jurisdiction and venue of the Bankruptcy Court and shall receive notices at such
locations as indicated in Section 9.05 hereof; provided, however, that if the
Bankruptcy Case has closed, the parties agree to unconditionally and irrevocably
submit to the exclusive jurisdiction of the United States District Court for the
Southern District of New York sitting in New York County or the Commercial
Division, Civil Branch of the Supreme Court of the State of New York sitting in
New York County and any appellate court from any thereof, for the resolution of
any such claim or dispute. The parties hereby irrevocably waive, to the fullest
extent permitted by applicable law, any objection which they may now or
hereafter have to the laying of venue of any such dispute brought in such court
or any defense of inconvenient forum for the maintenance of such dispute. Each
of the parties hereto agrees that a judgment in any such dispute may be enforced
in other jurisdictions by suit on the judgment or in any other manner provided
by law.

 

(c)           Each of the parties hereto hereby consents to process being served
by any party to this Agreement in any suit, action or proceeding by delivery of
a copy thereof in accordance with the provisions of Section 9.05.

 

Section 9.12           Amendment. No provision of this Agreement, including any
Schedule hereto, may be amended, supplemented or modified except by a written
instrument making specific reference hereto or thereto signed by all the parties
to this Agreement. No waiver by any party of any provision hereof shall be
effective unless explicitly set forth in writing and executed by the party so
waiving. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any other subsequent
breach.

 

Section 9.13           Rules of Construction. Interpretation of this Agreement
shall be governed by the following rules of construction (a) words in the
singular shall be held to include the plural and vice versa and words of one
gender shall be held to include the other gender as the context requires,
(b) references to the terms Article, Section, paragraph and Schedule are
references to the Articles, Sections, paragraphs and Schedules of this Agreement
unless otherwise specified, (c) the terms “hereof,” “herein,” “hereby,”
“hereto,” “hereunder” and derivative or similar words refer to this entire
Agreement, including the Schedules hereto, (d) references to “$” shall mean U.S.
dollars, (e) the word “including” and words of similar

 

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import when used in this Agreement shall mean “including, without limitation,”
unless otherwise specified, (f) the word “or” shall not be exclusive,
(g) references to “written” or “in writing” include in electronic form,
(h) provisions shall apply, when appropriate, to successive events and
transactions, (i) the headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement, (j) BarCap and LBHI have each participated in the negotiation
and drafting of this Agreement and if an ambiguity or question of interpretation
should arise, this Agreement shall be construed as if drafted jointly by the
parties hereto and no presumption or burden of proof shall arise favoring or
burdening any such party by virtue of the authorship of any of the provisions in
any of this Agreement, (k) a reference to any Person includes such Person’s
successors and permitted assigns, (l) any reference to “days” means calendar
days unless Business Days are expressly specified, and (m) when calculating the
period of time before which, within which or following which any act is to be
done or step taken pursuant to this Agreement, the date that is the reference
date in calculating such period shall be excluded, if the last day of such
period is not a Business Day, the period shall end on the next succeeding
Business Day.

 

Section 9.14           Counterparts. This Agreement may be executed in two or
more counterparts, and by each party in separate counterparts, each of which
when executed shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement. Delivery of an executed counterpart
of a signature page to this Agreement by facsimile shall be as effective as
delivery of a manually executed counterpart of this Agreement.

 

Section 9.15           Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH SUCH PARTY (I) CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTIES WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND
THE OTHER TRANSACTION AGREEMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 9.15.

 

Section 9.16           Enforcement. The parties agree that irreparable damage
may result, and that the parties may not have any adequate remedy at Law, if any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached or threatened to be breached. It is
accordingly agreed that, notwithstanding the penultimate sentence of
Section 7.01(a), if either party breaches its obligation to consummate the
transactions contemplated by this Agreement, the non-breaching party shall be
entitled to seek equitable relief, in addition to all other remedies available
to the parties at Law or in equity as a remedy for any such breach or threatened
breach. Such equitable remedies may be sought in any court referred to in
Section 9.11(b).

 

Section 9.17           Non-Recourse. No past, present or future director,
officer, employee, incorporator, member, partner, stockholder, Affiliate, agent,
attorney or representative

 

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of either BarCap or LBHI or their respective Affiliates shall have any liability
for any obligations or liabilities of BarCap or LBHI, respectively, under this
Agreement of or for any claim based on, in respect of, or by reason of, the
transactions contemplated hereby.

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the
date first written above by their respective duly authorized officers.

 

 

LEHMAN BROTHERS HOLDINGS INC.

 

 

 

 

 

By:

    /s/ Steven Berkenfeld

 

 

Name: Steven Berkenfeld

 

 

Title: Vice President

 

 

 

 

 

BARCLAYS CAPITAL INC.

 

 

 

 

 

By:

    /s/ Gerard LaRocca

 

 

Name: Gerard LaRocca

 

 

Title: Chief Executive Officer

 

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