Exhibit 10.71

MASTER SERVICES AGREEMENT

This MASTER SERVICES AGREEMENT (this “Agreement”), is made and effective as of
October 22, 2008 (the “Effective Date”), by and between Amgen Inc., a Delaware
corporation having a place of business at One Amgen Center Drive, Thousand Oaks,
CA 91320 (“Company”), and International Business Machines Corporation, a New
York corporation having a place of business at One New Orchard Road, Armonk, NY
10504 (“Supplier”) (each a “Party”, and collectively, the “Parties”).

RECITALS

WHEREAS, Company is engaged in the business of the research, development and
commercialization of human therapeutics;

WHEREAS, Supplier is in the business of, amongst other things, performing
outsourcing services with respect to management of information technology
systems; and

WHEREAS, pursuant to the terms of this Agreement, Company intends to establish a
framework within which Company may engage Supplier to provide services to
Company from time to time, which framework shall govern the relationship between
the Parties in respect of such services.

NOW THEREFORE, in consideration of the promises and mutual covenants set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE 1

DEFINITIONS

Section 1.1 Definitions.

Abandonment. “Abandonment” means the [*] by Supplier to (i) provide or perform
[*], or (ii) comply with [*] of Supplier hereunder, in each case, [*].

Accept or Acceptance. “Accept” or “Acceptance” means to accept a Deliverable in
accordance with the acceptance criteria and acceptance testing procedures
applicable to such Deliverable.

Affected Contractors. “Affected Contractors” means those individuals or entities
who are subject to Company Contractor Agreements and who are identified as
“affected contractors” in Exhibit 19 (Affected Personnel).

Affected Employees. “Affected Employees” means those Company employees
identified as “affected employees” in Exhibit 19 (Affected Personnel).

Affected Personnel. “Affected Personnel” means, collectively, Affected
Contractors and Affected Employees.

Affiliate. “Affiliate” means any entity Controlling, Controlled by or under
common Control with a Party, but only for so long as such Control continues,
where “Control” means: (i) the ownership of at least fifty percent (50%) of the
equity or beneficial interest of such entity, or the right to vote for or
appoint a majority of the board of directors or other governing body of such
entity; or (ii) the power to directly or indirectly direct or cause the
direction of the management and policies of such entity by any means whatsoever.

Applicable Laws. “Applicable Laws” means Company Laws with respect to Company,
and Supplier Laws and Legal Compliance Obligations with respect to Supplier.

 

Note: Redacted portions have been marked with [*]. The redacted portions are
subjects to a request for confidential treatment that has been submitted to the
Securities and Exchange Commission.

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ARD Countries. “ARD Countries” means those jurisdictions that have implemented
ARD Laws and in which Company or one of its Affiliates employs Affected
Employees.

ARD Laws. “ARD Laws” means (1) the European Community Council Directive
(77/187/EEC) of February 14, 1977 as consolidated by Council Directive
2001/23/EC of March 12, 2001, in each case as amended from time to time, and
legislation and Laws implementing such directives in any country in which a
Company Service Location or a Supplier Service Location is located or where
Transitioned Employees are employed; and (2) equivalent legislation and Laws
dealing with the same subject matter as such directives in each of Turkey and
Switzerland.

Assigned Contracts. “Assigned Contracts” means the third-party agreements that
are assigned, in whole or in part, to Supplier and identified as “Assigned
Contracts” in Exhibit 11 (Assigned and Managed Contracts).

Authorized User. “Authorized User” means any individual (e.g., an employee,
contractor, subcontractor, agent or representative of Company) who is designated
by Company to receive or use the Services.

Base Charges. “Base Charges” means the base Charges applicable to the Services
or to a Project as further defined in Exhibit 1 (Definitions) or the applicable
Order.

Charges. “Charges” means the costs and fees for Services as further defined in
Exhibit 4 (Pricing).

cGMP. “cGMP” means (i) the applicable regulatory requirements, as amended from
time to time, for current good manufacturing practices, including without
limitation those promulgated by the Food and Drug Administration under the
United States Federal Food, Drug and Cosmetic Act, 21 CFR § 210 et seq. or under
the Public Health Service Act, Biological Products, 21 CFR §§ 600-610, the
European Medicines Agency or Health Canada under the Food and Drugs Act
(Canada), R.S. 1985, CF-27 and its associated regulations; (ii) any applicable
guidance documents published by a Governmental Authority; and (iii) current
industry practice consistent and in accordance therewith.

Company Competitor. “Company Competitor” means those companies identified in
Exhibit 27 (Company Competitors).

Company Data. “Company Data” means all information entered in Software or
Equipment by or on behalf of Company, including information relating to
Company’s customers and vendors, and information derived from such information,
including as stored in or processed through the Equipment or Software.

Company Group. “Company Group” means Company and its Affiliates who are
receiving Services under this Agreement.

Company Laws. “Company Laws” means Laws to the extent applicable to the Services
that are (i) identified by Company or Supplier as being applicable to Company
and (ii) applicable to the collection, use, storage, or transfer of Company Data
including without limitation the Laws set forth in Exhibit 20 (Company Laws) (as
modified from time-to-time in accordance with Section 9.2).

Company Provided Equipment. “Company Provided Equipment” means Equipment owned
or leased by Company.

Company Provided Materials. “Company Provided Materials” means Company Provided
Equipment, Company Software, and all other materials provided by Company.

Company Service Location. “Company Service Location” means any facility or
location to which Supplier shall provide the Services, including the facilities
set forth in Exhibit 7 (Sites).

Company Software. “Company Software” means Software owned by Company.

 

Confidential   2   

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Compliance Requirements. “Compliance Requirements” means the requirements of the
Securities and Exchange Commission Act of 1934 and all amendments thereto,
including the Sarbanes-Oxley Act of 2002, Regulation AB, and any similar, future
SEC requirements, and any requirements and rules pertaining thereto established
by Law, including requirements imposed by auditing standards or reporting
requirements promulgated by the American Institute of Certified Public
Accountants, the Public Company Accounting Oversight Board or the Securities and
Exchange Commission.

Confidential Information. “Confidential Information” of a Party means all
information, unless specifically identified by such Party as non-confidential,
regardless of how communicated or stored, concerning the operations, affairs,
products and businesses of such Party, the financial affairs of such Party, and
the relations of such Party with its customers, employees and service providers,
including without limitation, confidential or proprietary information, trade
secrets, data, drafts, documents, communications, plans, know-how, formulas,
improvements, designs, estimates, calculations, test results, specimens,
schematics, drawings, tracings, studies, specifications, surveys, facilities,
photographs, documentation, software, equipment, processes, programs, reports,
orders, maps, models, agreements, ideas, methods, discoveries, inventions,
patents, concepts, research, development, business and financial information,
customer or client lists, account information, procedures, computer information
and databases, business plans, budget forecasts, business arrangements,
financial information and estimates, personnel data, and long-term plans and
goals. “Confidential Information” of Company shall include (i) all information
relating to the Services and Orders, including the terms and conditions of this
Agreement, (ii) the specifications, designs, documents, correspondence,
Software, documentation, data and other materials and work products produced by
or for Supplier in the course of performing the Services, (iii) Deliverables and
Company Data, and (iv) other Company information or data stored or otherwise or
communicated, and obtained, received, transmitted, processed, stored, archived,
maintained or derived by Supplier under this Agreement or in connection with the
Services. “Confidential Information” of Supplier shall include (i) all
information concerning the operations, affairs and businesses of Supplier, the
financial affairs of Supplier, and the relations of Supplier with its other
customers, employees and suppliers (including customer lists, customer (other
than Company) information, account information, and consumer markets), and
(ii) Software owned by Supplier and provided to Company by or through Supplier.

Control Objectives. “Control Objectives” means, collectively, as applicable to
the Services and Systems (1) those control objectives included in Exhibit 24
(Compliance Requirements and Control Objectives), (2) additional control
objectives established by Supplier (or Supplier Personnel) after the Effective
Date that are relevant to the Services; and (3) those control objectives
established by Company pursuant to Section 18.3(E) of this Agreement.

Core Software Deliverables. “Core Software Deliverables” means all Software
Deliverables that are (i) specifically identified as Core Software Deliverables
in an Order or (ii) designed to be used in Company’s core business of research,
development, manufacturing, or commercialization of human therapeutics.

Critical Affected Personnel. “Critical Affected Personnel” means Affected
Personnel who are identified as “critical affected personnel” in Exhibit 19
(Affected Personnel).

Direct Damages. “Direct Damages” means actual, direct damages incurred by the
claiming entity directly and naturally resulting from or arising out of a breach
of this Agreement. Direct Damages include, by way of example but without
limitation, the following: (i) costs of [*]; (ii) costs of replacing [*];
(iii) [*] incurred by Company [*]; (iv) the costs incurred by Company to correct
any [*], (v) the difference in the amounts to be [*], (vi) the [*], (vii) [*];
and (viii) the costs and expenses incurred by Company to [*]. A Party shall not
be precluded from establishing that a particular damage is a Direct Damage on
the basis that (i) [*], or (ii) the Parties [*].

Deliverables. “Deliverables” means any and all tangible work product, reports,
data, specifications, designs, documents, correspondence, Software,
documentation, and other materials, and other deliverables identified in an
Order, including Transition Deliverables, Transformation Deliverables, Software
Deliverables and Non-Software Deliverables.

 

Confidential   3   

Note: Redacted portions have been marked with [*]. The redacted portions are
subject to a request for confidential treatment that has been submitted to the
Securities and Exchange Commission.

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Equipment. “Equipment” means the computer, telecommunications and other
equipment (without regard to the entity owning or leasing such equipment) used
by Supplier to provide the Services. Equipment includes the following:
(1) computer equipment, including associated attachments, features, accessories,
peripheral devices and other computer equipment; and (2) telecommunications
equipment, including private branch exchanges, multiplexors, modems, CSUs/DSUs,
hubs, bridges, routers, switches and other telecommunications equipment.

Event of Deteriorating Supplier Condition. “Event of Deteriorating Supplier
Condition” means any of the following events: (i) Supplier or its Global
Technology Services division ceases to do business as a going concern, makes an
assignment of all or substantially all of its assets for the benefit of
creditors, is insolvent or the subject of receivership, or any substantial part
of Supplier’s property is or becomes subject to any levy, seizure, assignment or
sale for or by any creditor or governmental agency without being released or
satisfied within a reasonable time thereafter; (ii) Supplier’s auditors issue an
opinion expressing doubt as to whether Supplier can maintain itself as a “going
concern,” or Supplier’s credit is downgraded to a Moody rating of “Baa1” or
below; (iii) any judgment or tax lien is filed or issued against Supplier that
materially impacts Supplier’s ability to provide the Services to Company, and
such judgment or tax lien is not resolved or satisfied within a reasonable time
thereafter; (iv) voluntary bankruptcy proceedings or involuntary bankruptcy
proceedings that have not been dismissed within ninety (90) days of
commencement, are commenced by or against Supplier; (v) Supplier sells all or
substantially all of its assets, or a material portion of its assets related to
the Services except in connection with a Change of Control as permitted under
this Agreement; (vii) there is a material adverse change in the business,
financial condition or prospects of Supplier’s Global Technology Services
division that is reasonably likely to result in a delay in the performance of
Supplier’s obligations hereunder, or a reduction in the quality of such
performance; (viii) the [*]; (ix) Supplier fails to [*]; (x) Supplier’s [*] is
not approved by Company (acting in good faith); and (xi) within thirty (30) days
after Company’s delivery of written notice to Supplier, Supplier fails to [*].

Governmental Authorities. “Governmental Authorities” means any national, state
or local, U.S. or foreign, governmental, regulatory or judicial authority having
jurisdiction over Company, Supplier, this Agreement or any Services.

[*]

Intellectual Property. “Intellectual Property” means: (i) patents, patent
applications and statutory invention registrations (in the case of Non-Software
Deliverables, based on inventions embodied therein); (ii) copyrights, including
registrations and applications for registration thereof; (iii) trade secrets;
and (iv) any other rights similar to the foregoing.

Law(s). “Law(s)” means all federal, state, provincial, regional, territorial and
local laws, statutes, ordinances, regulations, rules, executive orders,
supervisory requirements, directives, circulars, opinions, interpretive letters
and other official releases of or by any government, or any authority,
department or agency thereof, including the United States Securities and
Exchange Commission and the Public Accounting Oversight Board. “Laws” shall
include Laws relating to data privacy trans-border data flow or data protection,
such as the implementing legislation and regulations of the European Union
member states under the European Union Directive 95/46/EC, and any and all of
Canada’s federal and provincial privacy laws. Laws shall include Company Laws
and Supplier Laws.

Legal Compliance Obligations. “Legal Compliance Obligations” means Supplier’s
obligations under Section 9.1 and Section 9.3.

Managed Contracts. “Managed Contracts” means the Third-Party agreements for
which Supplier assumes management responsibility that are identified as “Managed
Contracts” in Exhibit 11 (Assigned and Managed Contracts) or identified by
Company from time to time.

Non-Core Software Deliverables. “Non-Core Software Deliverables” means all
Software Deliverables other than Core Software Deliverables.

 

Confidential   4   

Note: Redacted portions have been marked with [*]. The redacted portions are
subject to a request for confidential treatment that has been submitted to the
Securities and Exchange Commission.

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Non-Software Deliverables. “Non-Software Deliverables” means literary works or
other works of authorship created for and required to be delivered to Company
under this Agreement, including the Transition Plan, Transformation Plan, Change
Request Authorizations, Orders, Policies and Procedures Manual, business
requirements documents, design documents, manuals, training materials and
documentation, but excluding Software.

Out-of-Pocket Expenses. “Out-of-Pocket Expenses” means reasonable, demonstrable
and actual invoiced expenses for Equipment, materials, supplies or Services
provided to or for Company as identified in this Agreement, but not including
Supplier’s overhead costs (or allocations thereof), internal administrative
expenses or other mark-ups, in each case, (A) that are due and payable to a
Third Party by Supplier and (B) (i) that are approved in advance by Company, or
(ii) for which Supplier is entitled to be reimbursed as a Pass-Through Expense
in accordance with Exhibit 4 (Pricing) of this Agreement. Out-of-Pocket Expenses
shall be calculated at Supplier’s actual incremental expense and shall be net of
all refunds, returns, rebates and allowances.

Pass-Through Expenses. “Pass-Through Expenses” has the meaning set forth in
Exhibit 4 (Pricing).

Personnel. “Personnel” of a Party means such Party’s directors, officers,
employees, Subcontractors (with respect to Supplier only), consultants,
representatives and agents, excluding the other Party, who contribute to the
performance of such Party’s obligations under this Agreement.

Pre-Existing Rights. “Pre-Existing Rights” means any and all Software and other
Intellectual Property rights (i) owned by or licensed to a Party and
incorporated in or required to operate any Deliverable, and (ii) that is
pre-existing on the Effective Date or the effective date of the applicable Order
governing the development of such Deliverable, as applicable.

SAS 70 Gap Period. “SAS 70 Gap Period” means the period of time between the
issuance of a SAS 70 Type 2 Report by the service auditor and the date of the
assessment by Company of the adequacy of Company’s controls pursuant to the
Compliance Requirements.

SAS 70 Type 2 Report. “SAS 70 Type 2 Report” means a written opinion of a
service auditor, issued in accordance with and subject to the requirements of
SAS 70, covering each Supplier facility where Services are performed and
addressing (1) whether Supplier’s description of its controls presents fairly,
in all material respects, the relevant aspects of Supplier’s controls that had
been placed in operation as of a specified date, (2) whether such controls were
suitably designed to achieve the Control Objectives, and (3) whether the
controls that were tested were operating with sufficient effectiveness to
provide reasonable, but not absolute, assurance that the Control Objectives were
achieved during the period specified; together with the service auditor’s
(a) description of the Control Objectives, (b) report on the operating
effectiveness of the controls, and (c) description of the tests of the operating
effectiveness of the controls that may be relevant to specified assertions in
Company’s financial statements, and the results of those tests. The SAS 70 Type
2 Report will contain any additional information that may be required under SAS
70 and will contain a paragraph stating that the SAS 70 Type 2 Report is
intended to be used by customers of Supplier and such customers’ independent
auditors.

Service Level Credit. “Service Level Credit” means the applicable credit against
the Charges payable by Supplier to Company hereunder for failure of Supplier to
meet a particular Service Level.

Service Level Default. “Service Level Default” means in respect of each Critical
Service Level or Key Measurement that (i) Supplier’s Service Level Performance
fails to [*]; or (ii) Supplier’s Service Level Performance fails to [*]; or
(iii) Measurement data for the [*]. All capitalized terms used in but not
defined in this definition or in the body of this Agreement are defined in
Exhibit 1 (Definitions).

Software. “Software” means the object code versions of any applications
programs, operating system software, computer software languages, utilities,
other computer programs and related documentation, in whatever form or media,
including the tangible media upon which such applications programs, operating

 

Confidential   5   

Note: Redacted portions have been marked with [*]. The redacted portions are
subject to a request for confidential treatment that has been submitted to the
Securities and Exchange Commission.

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system software, computer software languages, utilities, other computer programs
and related documentation are recorded or printed, together with all
corrections, improvements, updates and releases thereof.

Software Deliverables. “Software Deliverables” mean all Deliverables that
include Software that are required to be delivered to Company under this
Agreement or an Order, including Core Software Deliverables and Non-Core
Software Deliverables.

Subcontractor. “Subcontractor” means any individual or entity (other than
Supplier), including an Affiliate of Supplier, that performs Services under this
Agreement (including any Order).

Supplier Laws. “Supplier Laws” means all Laws applicable to Supplier in its
capacity as a provider of IT services and all Laws that are generally applicable
to Supplier, which Laws may include HIPAA, the Sarbanes-Oxley Act of 2002, the
Gramm-Leach-Bliley Act and well-known Laws governing privacy.

Supplier Proprietary Software. “Supplier Proprietary Software” means the
Software (which may include Tools) and related documentation (1) owned by
Supplier and (2) any enhancements, modifications or derivatives thereof owned by
Supplier, in each case, (a) that are used in connection with the Services, and
(b) excluding Core Software Deliverables. The Supplier Proprietary Software
includes the Software designated as “Supplier Proprietary Software” in
Exhibit 10 (Equipment and Software Lists).

Supplier Service Location. “Supplier Service Location” means each facility of
Supplier from which Supplier provides the Services, as set forth in Exhibit 17
(Supplier Service Locations).

Supplier Software. “Supplier Software” means, collectively, the Supplier
Proprietary Software and the Supplier Third Party Software.

Supplier Third Party Software. “Supplier Third Party Software” means the
Software (which may include Tools) and related documentation licensed or leased
by Supplier from a Third Party that are used (1) in connection with the Services
or (2) with any Supplier Proprietary Software. The Supplier Third Party Software
includes the Software designated as “Supplier Third Party Software” in
Exhibit 10 (Equipment and Software Lists).

System. “System” means the computing infrastructure, including Software, Tools
and Equipment, used by Supplier to provide the Services, and to access, process
or store any Company Data.

Third Party. “Third Party” means a legal entity, company or person that is not a
Party, or an Affiliate of a Party, to this Agreement. Personnel of a Party or
Subcontractors, or of an Affiliate of a Party, shall be considered “Third
Parties” hereunder.

Tools. “Tools” means any testing, monitoring or other tools or utilities and
related know-how, methodologies, processes, technologies, or algorithms.

Tower. “Tower” means a general grouping of related Services that are described
within Exhibit 2 (Statement of Work), namely “Cross-Functional”, “Messaging,
Directory, & Collaboration”, “Application Hosting”, “Managed Network”, or
“End-User”.

Transitioned Contractors. “Transitioned Contractors” means Affected Contractors
whose contractor agreements are either terminated or assigned pursuant to
Section 11.5(B).

Transitioned Employees. “Transitioned Employees” means Affected Employees who
either accept an offer of employment with Supplier or whose employment is
transitioned to Supplier pursuant to relevant ARD Laws (or the equivalent in
countries outside of the EU) and become employed by Supplier effective as of the
start of business on the Effective Date or such other date as to which the
Parties mutually agree.

 

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Transitioned Personnel. “Transitioned Personnel” means, collectively,
Transitioned Employees and Transitioned Contractors.

Use. “Use” means the right to load, execute, store, transmit, display, copy and
perform.

Wind-down Expenses. “Wind-down Expenses” means (1) Supplier’s actual
out-of-pocket reasonable costs and expenses related to the displacement of
assets [*] due to Company’s early termination, excluding overhead and general
expenses, markups and opportunity costs; and (2) Supplier’s then-current net
book value (using straight-line depreciation method) of Equipment, Software and
materials used in and procured specifically for the delivery of Services under
this Agreement, excluding costs and expenses for Transition and Transformation,
provided in each case, that Supplier shall have an obligation to mitigate the
foregoing, and that Wind-down Expenses shall be [*] and shall be subject to
audit by Company in accordance with this Agreement. In the event a Section of
this Agreement specifically provides for (i) the purchase of (or option to
purchase) Equipment or the assumption of leases by Company, and (ii) payment of
Wind-down Expenses, the provisions of such Section governing the purchase of (or
option to purchase) Equipment or the assumption of leases by Company shall
prevail over this definition.

Section 1.2 Other Defined Terms Used in this Agreement.

 

“ARD Affected Employees”    Section 11.5(D) “Agreement”    Preamble and Section
1.4(A) “Background Check Certification Form”    Section 11.1 “Benchmarked
Representative Sample”    Section 19.5(B) “Benchmark-Affected Employees”   
Section 19.5(D)(4) “Benchmarker”    Section 19.5(A) “Change Control Procedure”
   Section 17.4 “Change Request Authorization”    Section 17.5 “Change Request”
   Section 17.5 “Company”    Preamble “Company Contract Executive”    Section
16.1 “Company Contractor Agreements”    Section 11.5 “Company Facilities”   
Section 15.5 “Company Indemnified Parties”    Section 25.1 “Company Non-Software
Deliverables”    Section 14.4 “Company Policies”    Section 9.3 “Company
Required Consents”    Section 8.2 “Company Service Recipients”    Section 4.5
“Company Transition Manager”    Section 3.3(C) “Critical Affected Personnel”   
Section 11.5

 

Confidential   7   

Note: Redacted portions have been marked with [*]. The redacted portions are
subject to a request for confidential treatment that has been submitted to the
Securities and Exchange Commission.

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“Dispute Notice”    Section 28.1 “DRP”    Section 27.1(A) “Effective Date”   
Preamble “Employee Transfer Date”    Section 11.5(D) “Exhibit 4-Pre-Benchmark
Charges Schedule”    Section 19.5(D)(5) “Force Majeure Event”    Section 27.1
“HIPAA”    Section 21.3 “Initial Term”    Section 2.1 “IT”    Section 1.2 “Key
Supplier Personnel”    Section 11.2 “Legal Compliance Obligations”    Section
9.1 “Local Country Agreement”    Section 1.7 “Losses”    Section 25.1 “Monthly
Service Level Report”    Section 10.8 “New Service”    Section 17.5 “Notice of
Election”    Section 25.3 “Offshore Location”    Section 15.1 “Offshore Tax
Jurisdiction”    Section 19.4 “Order”    Section 6.2 “Parties”    Preamble
“Party”    Preamble “Pass-through Subcontracts”    Section 17.7(C) “Personally
Identifiable Information”    Section 21.3 “PHI”    Section 21.3 “Policies and
Procedures Manual”    Section 17.3 “Privacy Laws and Regulations”    Section
21.3 “Project”    Section 6.2 “Project Request”    Section 6.2 “Refresh
Schedule”    Section 13.4 “Renewal Term”    Section 2.2 “Required Consents”   
Section 8.2

 

Confidential   8   

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“Resources”    Section 4.1 “RTOs”    Section 27.1(A) “Qualifying Invoice”   
Section 19.4(D) “Service Levels”    Section 10.1 “Services”    Section 4.1
“Shared Subcontractors”    Section 17.7(A)(2) “Software Deliverables”    Section
14.3 “Staffing Action Plan”    Section 11.6 “Staffing Notice”    Section 11.6
“Steering Committee”    Section 17.1 “Supplier”    Preamble and Section
1.4(B)(5) “Supplier Data Connections”    Section 13.7 “Supplier Equipment”   
Section 13.2 “Supplier Indemnified Parties”    Section 25.2 “Supplier
Non-Software Deliverables”    Section 14.4 “Supplier Project Executive”   
Section 11.2 “Supplier Provided Items”    Section 25.1(I) “Supplier Required
Consents”    Section 8.1 “Supplier Transition Manager”    Section 3.3
“Technology Refresh Plan”    Section 17.1 “Term”    Section 2.1
“Termination/Expiration Assistance Period”    Section 29.7
“Termination/Expiration Assistance”    Section 29.7 “Third Party Claims”   
Section 25.1 “Third-Party Resources”    Section 4.1 “Third Party Vendor”   
Section 7.1 “Top Quartile Average Price”    Section 19.5(D) “Transformation”   
Section 5.1 “Transformation Deliverables”    Section 5.3 “Transformation
Milestone”    Section 5.3 “Transformation Milestone Credit”    Section 5.6

 

Confidential   9   

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“Transformation Objectives”    Section 5.1 “Transformation Plan”    Section 5.3
“Transformation Project”    Section 5.2 “Transition”    Section 3.1 “Transition
Deliverables”    Section 3.2 “Transition Milestone”    Section 3.2 “Transition
Milestone Credit”    Section 3.2 “Transition Period”    Section 3.1 “Transition
Plan”    Section 3.2

Section 1.3 Other Defined Terms Used in the Exhibits.

 

“Access Loop”    Exhibit 4 “Actual Foreign Exchange Rate”    Exhibit 4 “Actual
Inflation”    Exhibit 4 “Action Item”    Exhibit 1 “Actual Uptime”    Exhibit 1
“Add/Change”    Exhibit 4 “Additional Resource Charge (ARC)”    Exhibit 1 “ADM”
   Exhibit 1 “Allocation of Pool Percentage”    Exhibit 1 “Application
Server(s)”    Exhibit 1 “Applications”    Exhibit 1 “Applications Software”   
Exhibit 1 “Architecture”    Exhibit 1 “Asset Inventory and Management System”   
Exhibit 1 “Authorized User”    Exhibit 1 “At-Risk Amount”    Exhibit 1
“Availability”    Exhibit 1 “Availability Management”    Exhibit 1 “AVTS”   
Exhibit 4

 

Confidential   10   

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“Base Charge”    Exhibit 1 “Base Charges”    Exhibit 1 “Base Foreign Exchange
Rate”    Exhibit 4 “Base Year Index”    Exhibit 4 “BAU Resources or Business as
Usual Resources”    Exhibit 4 “Benchmarking”    Exhibit 1 “Business Continuity
(Services)”    Exhibit 1 “Business Continuity Lifecycle”    Exhibit 1 “Business
Continuity Management (BCM)”    Exhibit 1 “CAB/Emergency Committee”    Exhibit 1
“Cabling”    Exhibit 1 “Calls”    Exhibit 1 “Call Seat Center”    Exhibit 4
“Capacity Management”    Exhibit 1 “Capacity Management Database”    Exhibit 1
“Carrier”    Exhibit 1 “Cascade”    Exhibit 4 “Change”    Exhibit 1 “Change
Advisory Board (CAB)”    Exhibit 1 “Change Management”    Exhibit 1 “Change
Request Authorization(s)”    Exhibit 1 “CI Release”    Exhibit 1 “Collaborative
Applications”    Exhibit 1 “Commencement Date”    Exhibit 1 “Commercial Off The
Shelf (COTS)”    Exhibit 1 “Company Information”    Exhibit 1 “Company
Materials”    Exhibit 1 “Conferencing Network”    Exhibit 1 “Conferencing
Premise Equipment”    Exhibit 1 “Confidentiality”    Exhibit 1 “Configuration
Item (CI)”    Exhibit 1

 

Confidential   11   

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“Configuration Management”    Exhibit 1 “Configuration Management Database
(CMDB)”    Exhibit 1 “Connectivity”    Exhibit 1 “Contract Year”    Exhibit 1
“Control (and its derivatives)”    Exhibit 1 “Critical Deliverables”    Exhibit
1 “Critical Service Level”    Exhibit 1 “Critical Transition and Transformation
Credits”    Exhibit 1 “Cross-Functional Services”    Exhibit 1 “Currency Pairs”
   Exhibit 4 “Current Projects”    Exhibit 1 “Data Center”    Exhibit 1
“Deferred Countries”    Exhibit 1 “Definitive Hardware Store (DHS)”    Exhibit 1
“Definitive Software Library (DSL)”    Exhibit 1 “Deliverable Credits”   
Exhibit 1 “Desktop”    Exhibit 4 “Disaster Recovery Planning”    Exhibit 1
“Disaster Recovery (Services)”    Exhibit 1 “Downtime”    Exhibit 1 “Earnback”
   Exhibit 1 “Economic Change Adjustment”    Exhibit 4 “Email Account”   
Exhibit 4 “End-User Computing (EUC)”    Exhibit 1 “End-User Services”    Exhibit
1 “Expected Service Level”    Exhibit 1 “Expected Service Level Default”   
Exhibit 1 “Expiration Date”    Exhibit 1 “Extranet”    Exhibit 1 “Fees”   
Exhibit 1

 

Confidential   12   

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“Foreign Exchange Sensitivity”    Exhibit 4 “Forward Schedule of Changes”   
Exhibit 1 “FTE Criteria”    Exhibit 4 “FXRCA Deadband”    Exhibit 4 “Handheld
Device”    Exhibit 4 “Hard IMAC”    Exhibit 1 “High Availability (clusters)”   
Exhibit 1 “Hypercare”    Exhibit 1 “IMAC(s)”    Exhibit 1 “Impact”    Exhibit 1
“Incident”    Exhibit 1 “Incident Management”    Exhibit 1 “Incident Management
System”    Exhibit 1 “Incident Record”    Exhibit 1 “Inflation Index”    Exhibit
4 “Infrastructure”    Exhibit 1 “In-Scope”    Exhibit 1 “Install”    Exhibit 4
“Integrity”    Exhibit 1 “Inter-Office Channel (IOC)”    Exhibit 4 “Interconnect
Devices”    Exhibit 1 “Internet Network”    Exhibit 1 “IT Service Continuity
Management”    Exhibit 1 “ITIL”    Exhibit 1 “Key Measurements”    Exhibit 1
“Known Error”    Exhibit 1 “Known Error Database”    Exhibit 1 “LAN (Local Area
Network)”    Exhibit 1 “LAN Equipment”    Exhibit 1 “LAN Segment”    Exhibit 1
“LAN Systems”    Exhibit 1

 

Confidential   13   

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“Laptop”    Exhibit 4 “Level 1 Support”    Exhibit 1 “Level 2 Support”   
Exhibit 1 “Level 3 Support”    Exhibit 1 “Logical Security”    Exhibit 1
“Long-Range IT Plan”    Exhibit 1 “Major Incident”    Exhibit 1 “Major Software
Release”    Exhibit 1 “Materials”    Exhibit 1 “Measurement Window”    Exhibit 1
“Messaging”    Exhibit 1 “Messaging Service”    Exhibit 1 “Minimum Performance
Default”    Exhibit 1 “Minimum Service Level(s)”    Exhibit 1 “Mobile Data
Communications Equipment”    Exhibit 1 “Mobile Data Communications Network”   
Exhibit 1 “Mobile Data Communications System”    Exhibit 1 “Mobile Short
Messaging Equipment (MSM Equipment)”    Exhibit 1 “Mobile Short Messaging
Network”    Exhibit 1 “Monthly Invoice Amount”    Exhibit 1 “N Release Level”   
Exhibit 1 “N-1 Release Level”    Exhibit 1 “N-2 Release Level”    Exhibit 1
“Network”    Exhibit 1 “Network Topology”    Exhibit 1 “Nine-Month Measurement
Period”    Exhibit 1 “One-Time Charges”    Exhibit 1 “Operating Software
(Operating System)”    Exhibit 1 “Operating System Instance (OS Instance)”   
Exhibit 1 “Operational Level Agreement”    Exhibit 1 “Other Peripheral Device”
   Exhibit 4

 

Confidential   14   

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“PBX Port” or “KTS Port”    Exhibit 4 “Performance Category”    Exhibit 1
“Performance Credit(s)”    Exhibit 1 “Planned Projects”    Exhibit 1 “Policies
and Procedures Manual”    Exhibit 1 “Pool Percentage Available for Allocation”
   Exhibit 1 “Portable Network Devices”    Exhibit 1 “Post Implementation Review
(Post Project Review)”    Exhibit 1 “Print Pages”    Exhibit 4 “Problem”   
Exhibit 1 “Problem Management”    Exhibit 1 “Problem Manager”    Exhibit 1
“Problem Tracking System”    Exhibit 1 “Procurement Catalog”    Exhibit 1
“Project FTE Day”    Exhibit 4 “Project IMAC”    Exhibit 1 “Qualified”   
Exhibit 1 “Reduced Resource Credit (RRC)”    Exhibit 1 “Refresh”    Exhibit 1
“Regulated”    Exhibit 1 “Release Management”    Exhibit 1 “Replacement”   
Exhibit 4 “Request for Change (RFC)”    Exhibit 1 “Request Management”   
Exhibit 1 “Resource Baseline(s)”    Exhibit 1 “Resource Capacity Management
(RCM)”    Exhibit 1 “Resource Unit(s)”    Exhibit 1 “Retained Employees”   
Exhibit 1 “Retained Expense(s)”    Exhibit 1 “Scheduled Downtime”    Exhibit 1
“Scheduled Uptime”    Exhibit 1

 

Confidential   15   

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“Security”    Exhibit 1 “Security Management”    Exhibit 1 “Security Manager”   
Exhibit 1 “Security Officer”    Exhibit 1 “Server”    Exhibit 1 “Service
Capacity Management”    Exhibit 1 “Service Catalog”    Exhibit 1 “Service Desk”
   Exhibit 1 “Service Level Credit Allocation Percentage”    Exhibit 1 “Service
Level Performance”    Exhibit 1 “Service Request”    Exhibit 1 “Severity Level”
   Exhibit 1 “Site(s)”    Exhibit 1 “Soft IMAC”    Exhibit 1 “Standard Change”
   Exhibit 1 “Standard Laptop”    Exhibit 4 “Standard Products”    Exhibit 1
“Standard Voice Network”    Exhibit 1 “Standard Voice Premise Equipment”   
Exhibit 1 “Standard Voice Premise Systems”    Exhibit 1 “Sub-Towers”    Exhibit
4 “Successor”    Exhibit 1 “Supplier Materials”    Exhibit 1 “Supplier Requested
Changes”    Exhibit 4 “System(s) Software”    Exhibit 1 “Termination Fees”   
Exhibit 1 “Third-Party Materials”    Exhibit 1 “Transport”    Exhibit 1
“Transport Facilities”    Exhibit 1 “Transport Services”    Exhibit 1 “Transport
Systems”    Exhibit 1

 

Confidential   16   

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“Transport Vendor(s)”    Exhibit 1 “Unix Workstation”    Exhibit 4 “Unrelieved
Service Level Credits”    Exhibit 1 “Unserviceable Equipment”    Exhibit 1
“Urgency”    Exhibit 1 “Utility Server(s)”    Exhibit 1 “Utility Server
Support & Infrastructure”    Exhibit 4 “Validated”    Exhibit 1 “Video
Conference Room”    Exhibit 4 “Voice IMAC”    Exhibit 4 “WAN (or Wide Area
Network)”    Exhibit 1 “WAN Equipment”    Exhibit 1 “Wiring”    Exhibit 1
“Yearly Performance Average”    Exhibit 1

Those terms, acronyms and phrases utilized in the biotechnology and
pharmaceutical industry, information technology (“IT”) services industry, or
other pertinent business context that are not otherwise defined in this
Agreement shall be interpreted in accordance with their generally understood
meaning in such industries or business contexts.

Section 1.4 Incorporation and References.

 

  (A) Incorporation of Exhibits, Schedules and Appendices

The Exhibits, Schedules and Appendices attached hereto are hereby incorporated
into this Agreement by reference and deemed part of this Agreement for all
purposes. All references to this “Agreement” shall include such Exhibits,
Schedules and Appendices.

 

  (B) References

 

  (1) References to any Law means references to such Law in changed or
supplemented form, or to a newly-adopted Law replacing a previous Law.

 

  (2) References to and the use of the word “include” and its derivatives (such
as “including” and “includes”) means “include without limitation.”

 

  (3) References to and the use of the word “days” means calendar days, unless
otherwise specified.

 

  (4) References to and the use of the word “hours” means hours as determined on
a 24x7 basis and not business hours, unless otherwise specified.

 

Confidential   17   

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  (5) References to “Supplier” include Supplier Personnel, Equipment providers,
Software providers and service providers, where such entities are performing the
Services or services related to the Services.

 

  (6) References to “Company” include Company and members of Company Group.

Section 1.5 Headings and Cross-References. The Article and Section headings and
the table of contents used in this Agreement are for reference and convenience
only and shall not enter into the interpretation of this Agreement. Any
reference herein to a particular Article or Section number or Exhibit, Schedule
or Appendix means that the reference is to the specified Article, Section,
Exhibit, Schedule or Appendix of this Agreement, except to the extent that the
cross-reference expressly refers to another document.

Section 1.6 Interpretation of Documents. In the event of a conflict or
inconsistency between the terms of this Agreement and the Exhibits, Schedules or
Appendices, the terms of this Agreement shall prevail.

Section 1.7 Local Country Agreements. The Parties acknowledge and agree that
this Agreement is intended to provide the framework for a global relationship.
As deemed appropriate by Supplier and Company taking into account the Services
and the country or region outside of the United States that is involved, the
Parties will enter into one or more local country agreements to this Agreement
between Supplier or corresponding Supplier Affiliates, and Company or Company
Affiliate for the purpose of memorializing the implementation of this Agreement
with respect to such entities and effecting the intent of the Parties under this
Agreement (each, a “Local Country Agreement”). All references herein to this
Agreement shall be deemed to include all Local Country Agreements. Supplier will
agree to perform or cause to be performed the performance obligations under this
Agreement, including the Local Country Agreements. Company and Supplier agree to
be and remain liable and responsible to the other for all obligations undertaken
by its Affiliates, respectively, under such Local Country Agreements, and that
the execution of any Local Country Agreement will in no way either enlarge or
reduce the obligations of either Company or Supplier under this Agreement,
including with respect to the provision of Services to any Company Affiliate,
except (i) provisions in a particular Local Country Agreement that are expressly
acknowledged to be an amendment to this Agreement for purposes of such Local
Country Agreement, which will include the listing of any provisions of
applicable local law in the country for which the Local Country Agreement is
entered identified by either Party as non-waivable, or (ii) terms for transition
of Affected Personnel located in the country for which the Local Country
Agreement is signed. No Local Country Agreement may be signed or, once signed,
be modified or amended, without the consent of each of Supplier and Company.

ARTICLE 2

TERM

Section 2.1 Term. The term of this Agreement (the “Initial Term”, together with
any Renewal Terms, and as extended pursuant to Section 29.6, the “Term”) shall
commence on the Effective Date and shall expire at midnight (Pacific Time) on
the fifth (5th) anniversary of January 18, 2009, unless this Agreement is
extended pursuant to Section 2.2 or earlier terminated in accordance with this
Agreement.

Section 2.2 Extension. On written notice to Supplier no less than one hundred
twenty (120) days prior to the expiration of the Initial Term or then-current
Renewal Term, Company shall have the right to extend the Term for one (1) year
extensions (each a “Renewal Term”) on the terms and conditions (including the
Charges) then in effect. Company shall have three (3) such extension options of
one (1) year each.

Section 2.3 Termination Charges. In the event that Company does not elect to
extend the Term after the Initial Term or any Renewal Term, or upon expiration
of the final Renewal Term, [*], which at the time of such expiration, is [*].
Section 29.2 (Termination for Convenience) sets forth the applicability of fees
associated with Company’s termination for convenience.

 

Confidential   18   

Note: Redacted portions have been marked with [*]. The redacted portions are
subject to a request for confidential treatment that has been submitted to the
Securities and Exchange Commission.

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

ARTICLE 3

TRANSITION

Section 3.1 General.

 

  (A) Commencing on the Effective Date and ending on completion of the
Transition Plan (the “Transition Period”), Supplier shall plan, prepare for and
conduct transition activities in accordance with the Transition Plan (the
“Transition”). Except with respect to those costs identified as Company’s
responsibility in Exhibit 4 (Pricing), Supplier’s responsibilities with respect
to the Transition shall include paying all costs associated with the Transition
and otherwise performing such tasks as are required to enable Supplier to
provide the Services, including following the Transition Completion Date.

 

  (B) During the Transition Period, Company shall perform those tasks that are
designated to be the responsibility of Company in the Transition Plan.

 

  (C) Except as otherwise provided in Exhibit 4 (Pricing) or required for
Company to complete those tasks which are designated to be the responsibility of
Company in the Transition Plan, Company shall not incur any charges, fees, costs
or expenses in connection with the Transition.

Section 3.2 Transition Plan.

 

  (A) General

The Transition shall be conducted in accordance with a written plan (the
“Transition Plan”) which, at a minimum, shall include:

 

  (1) a detailed description of the IT operations being transitioned to
Supplier;

 

  (2) a detailed description of the Transition activities and responsibilities
to be performed by Supplier in order for Supplier to properly complete the
Transition;

 

  (3) a detailed description of the deliverables (“Transition Deliverables”) and
milestones (“Transition Milestones”) to be completed by Supplier;

 

  (4) a detailed description of any tasks that Company is required to complete
in connection with the Transition;

 

  (5) a detailed description of the technology, methods, procedures, Supplier
Personnel and organization that Supplier shall use to perform the Transition;

 

  (6) a detailed schedule and workplan of all Transition activities to be
completed in connection with the Transition, including the dates on which each
such activity and any Transition Milestones and Transition Deliverables shall be
completed;

 

  (7) for certain Transition Milestones and Transition Deliverables, the
applicable Transition Milestone or Deliverable Credit (each a “Transition
Milestone Credit”) that shall be paid to Company if the Transition Milestone or
Transition Deliverable is not achieved by Supplier, other than for the reasons
set forth in Section 16.2 (Savings Clause), in accordance with the schedule set
forth in the Transition Plan, which Transition Milestone Credits available for
payment by Supplier to Company shall in the aggregate equal at least [*] and
Transition Milestone Credits payable by Supplier to Company shall in the
aggregate not exceed [*];

 

Confidential   19   

Note: Redacted portions have been marked with [*]. The redacted portions are
subject to a request for confidential treatment that has been submitted to the
Securities and Exchange Commission.

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

  (8) a detailed description of the potential risks associated with the
Transition and the risk mitigation strategies that shall be employed by Supplier
to eliminate or minimize such risks;

 

  (9) a process and set of standards and completion criteria acceptable to
Company to which Supplier shall adhere in the performance of the Transition and
that shall enable Company to determine whether Supplier has successfully
completed the Transition activities and Transition Deliverables associated with
each Transition Milestone; and

 

  (10) any other information and planning necessary to ensure that the
Transition takes place on schedule and without disruption to Company’s business
or IT operations.

 

  (B) Completion of the Transition Plan

Supplier shall be responsible for preparing the Transition Plan. The initial
draft of the Transition Plan as of the Effective Date is included in Exhibit 22
(Transition and Transformation). No later than thirty (30) days prior to the
Commencement Date, Supplier shall finalize the Transition Plan which Transition
Plan shall not be considered final until Accepted by Company. Supplier shall
cooperate and work closely with Company in finalizing the Transition Plan
(including incorporating Company’s reasonable comments) and the final Transition
Plan and any subsequent changes to the Transition Plan shall be subject to
Acceptance by Company in accordance with schedule set forth in Exhibit 22
(Transition and Transformation).

Section 3.3 Performance of the Transition.

 

  (A) General

Supplier shall perform the Transition in accordance with the Transition Plan and
in such a manner so as to not disrupt Company’s IT and business operations
(except to the extent that Supplier has provided Company with reasonable advance
written notice of such disruption and Company has agreed in writing that such
disruption is acceptable). Supplier shall provide all cooperation and assistance
reasonably required and requested by Company in connection with Company’s
evaluation and testing of the Transition Deliverables.

 

  (B) Transition Manager

Supplier shall, in accordance with Section 11.2(D), designate an individual to
manage the Transition (the “Supplier Transition Manager”) on a dedicated,
full-time basis during the Transition Period. The Supplier Transition Manager
shall (1) report to the Supplier Project Executive, (2) serve as the single
point of accountability for Supplier for the Transition and (3) have day-to-day
authority for ensuring that the Transition is completed in accordance with the
Transition Plan. The Supplier Transition Manager shall be one of the Key
Supplier Personnel.

 

  (C) Meeting and Reporting Requirements

The Supplier Transition Manager shall meet at least once each week with the
individual designated to manage the Transition for Company (the “Company
Transition Manager”) to report on Supplier’s progress in performing the
Transition and meeting the requirements of the Transition Plan. As part of each
weekly meeting, Supplier shall provide Company with a written status report that
shall include (1) an updated Gantt chart

 

Confidential   20   

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detailing the then-current status of all Transition activities, including the
Transition Deliverables, against the Transition Plan, (2) a list of Tools or
Software that shall be added (whether temporarily or permanently) to Company’s
IT environment during the forthcoming month and (3) any issues or problems that
Supplier is experiencing in connection with the Transition and any efforts or
remedial actions that Supplier is undertaking to resolve such issues or
problems. The Supplier Transition Manager shall also meet at least once each
week with the Company Transition Manager and the transition managers of
applicable Third Party Vendors to report on, lead and coordinate such Third
Party Vendors’ efforts in connection with the requirements of the Transition
Plan. The meetings described in this Section shall take place at the time and
place designated by Company, and with agendas specified by Company.

 

  (D) Company’s Right to Participate in the Transition

Company reserves the right to monitor, test and otherwise participate in the
Transition. Supplier shall immediately notify Company if such monitoring,
testing or participation has caused (or in Supplier’s reasonable opinion may
cause) a problem or delay in the Transition and work with Company to prevent or
circumvent such problem or delay.

Section 3.4 Completion of the Transition.

 

  (A) The Transition shall not be considered to be complete until all Transition
Deliverables have been Accepted by Company.

 

  (B) If any Transition Deliverable with an associated Transition Milestone
Credit is not Accepted by Company or any Transition Milestone with an associated
Transition Milestone Credit is not completed by Supplier on or before the
applicable Transition Milestone due to the fault of Supplier, Supplier shall pay
to Company the applicable Transition Milestone Credit, as set forth in
Exhibit 22 (Transition and Transformation), for each applicable period that the
Transition Deliverable is not Accepted by Company or such Transition Milestone
is not completed by Supplier.

 

  (C) If any Transition Deliverable with an associated Transition Milestone
Credit is not Accepted by Company or any Transition Milestone with an associated
Transition Milestone Credit is not completed by Supplier on or before the
applicable Transition Milestone due to the fault of Company, then for the period
of delay Company shall reimburse Supplier for any Out-of-Pocket Expenses
associated with such delay.

Section 3.5 [*].

ARTICLE 4

SERVICES

Section 4.1 Description of the Services.

 

  (A) General

Commencing on the Effective Date and continuing throughout the Term, Supplier
shall provide to Company the following services, functions and responsibilities,
as they may evolve or be supplemented, enhanced, modified or replaced
(collectively, the “Services”):

 

  (1)

the services, functions and responsibilities described in this Agreement,
including (a) the services, functions, responsibilities and Deliverables
described in Exhibit 2 (Statement of Work), (b) the services, functions and
responsibilities

 

Confidential   21   

Note: Redacted portions have been marked with [*]. The redacted portions are
subject to a request for confidential treatment that has been submitted to the
Securities and Exchange Commission.

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

 

relating to the Transition, including Transition Deliverables (and, if
applicable, the Transformation, including Transformation Deliverables), and
(c) the Termination/Expiration Assistance;

 

  (2) the services, functions and responsibilities described in any Order
approved in writing by Company;

 

  (3) the services, functions and responsibilities described in any Change
Request Authorization approved in writing by Company;

 

  (4) the IT infrastructure-related services, functions and responsibilities
forming part of the Services and performed in the ordinary course during the
twelve (12) month period preceding the Effective Date by Affected Personnel and
Third Party Vendors who were transitioned to Supplier or displaced, or whose
functions were displaced, in each case, as a result of this Agreement, even if
such IT-related services, functions and responsibilities are not specifically
described in this Agreement; and

 

  (5) the IT-related services, functions, projects and responsibilities
reflected in those categories of the Company Base Case that Supplier is assuming
pursuant to this Agreement, as set forth in Exhibit 4 (Pricing).

 

  (B) Implied Services

If any facilities, Equipment, Software, services, functions, responsibilities or
Deliverables not specifically described in this Agreement are required for the
proper performance and provision of the Services, such facilities, Equipment,
Software, services, functions, responsibilities or Deliverables shall be deemed
to be implied by and included within the scope of the Services (and delivered to
Company at no additional charge) to the same extent and in the same manner as if
expressly described in this Agreement.

 

  (C) Supplier Responsibility

 

  (1) Supplier shall be responsible for the provision of the Services in
accordance with the terms of this Agreement even if, by agreement of the
Parties, such Services are actually performed by persons other than Supplier
Personnel acting under the management and direction of Supplier, including
Company Personnel and Third Party Vendors, except to the extent that such
Company Personnel or Third Party Vendors other than Supplier fail to
satisfactorily follow the reasonable management and direction of Supplier and
such failure results in a deficiency in delivery of the Services, subject to
Section 16.2 (Savings Clause).

 

  (2) Except as otherwise expressly provided in this Agreement, Supplier shall
be responsible for providing the facilities, Personnel, Equipment, Software,
materials, technical knowledge, training, expertise and other resources
necessary for the proper performance of the Services.

 

  (3)

Supplier shall ensure that all Services, Equipment, networks, Software,
enhancements, upgrades, modifications, and other resources (collectively, the
“Resources”) utilized by Supplier or approved by Supplier for utilization by
Company in connection with the Services shall be integrated and interfaced as
necessary for performance of the Services in accordance with the Service Levels,
and shall be compatible with the services, systems, items, and other resources
that are being provided to, recommended to, or approved for use by, Company by
Third Party Vendors as of the Effective Date (collectively, the

 

Confidential   22   

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“Third-Party Resources”) to the extent Company provides Supplier with all
relevant information regarding these Third Party Resources prior to the
Effective Date.

 

  (4) Supplier shall ensure that none of the Services or other Resources
provided to Company by Supplier shall be adversely affected by, or shall
adversely affect, those of any such Third Party Resources identified by Company
pursuant to Section 4.1(C)(3), whether as to functionality, speed, service
levels, interconnectivity, reliability, availability, performance, security,
response times, or similar measures. To the extent that any interfaces need to
be developed or modified in order for the Resources to integrate successfully,
and be compatible, with the Third-Party Resources, Supplier shall develop or
modify such interfaces as part of the Services.

Section 4.2 Obligation to Evolve the Services and Keep Technology Current.

 

  (A) Supplier shall cause the Services and the methods, processes and
technologies being used to provide the Services, as approved by Company, to
evolve and to be reasonably modified, enhanced, supplemented and replaced as
necessary for the Services and the methods, processes and technologies being
used to provide the Services to keep pace with advances in the methods,
processes, technologies, Software and Equipment being used to deliver similar
services, where such advances are at the time pertinent and in general use
within the IT industry or among other customers of Supplier or Company’s
competitors. Any changes to the methods, processes, technologies, Software and
Equipment used to provide the Services in accordance with this Section shall be
deemed to be included within the scope of the Services to the same extent and in
the same manner as if expressly described in this Agreement. Without limiting
the foregoing, the Parties acknowledge and agree that any changes to the scope
of the Services (other than changes to the methods, processes, technologies,
Software and Equipment used to provide the Services) shall be implemented in
accordance with the Change Control Procedure.

 

  (B) Supplier shall meet with Company at least once during every sixty (60) day
period during the Term to inform Company of any new methods, processes,
technologies, Software or Equipment Supplier is developing or of which Supplier
is otherwise aware that could reasonably be expected to have an impact on
Company’s IT or business operations.

Section 4.3 Non-Exclusivity; Right to In-Source and Re-Source the Services.

 

  (A) Supplier acknowledges and agrees that this Agreement does not give
Supplier any exclusive rights with respect to the provision of any services,
including the Services, or products to Company.

 

  (B) At any time during the Term, Company has the right to perform itself, or
retain third parties to perform, any of the Services. To the extent Company
in-sources or re-sources any of the Services pursuant to this Section:
(1) Supplier shall cooperate with Company in accordance with Article 7 and
(2) the Charges shall be reduced in accordance with the process and methodology
described in Exhibit 4 (Pricing). At Company’s request, Supplier shall assist
Company in identifying qualified third-party service providers.

 

Confidential   23   

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Section 4.4 Support for Acquisitions and Divestitures.

 

  (A) Acquisition Support

 

  (1) With respect to a potential acquisition by Company, upon Company’s
request, Supplier shall provide acquisition support (including assessments of
any technology environments to be acquired, potential integration approaches,
and the impact of the acquisition on the Services, Service Levels, Charges and
other aspects of this Agreement) as reasonably necessary to assist with
Company’s assessment of the portion of the acquisition to which the Services
relate. Such support shall be provided within the timeframe reasonably requested
by Company or as required by the timing of the transaction.

 

  (2) As requested by Company and as it relates to the Services, Supplier shall
transition the IT environment of the acquired entity to Company’s environment.

 

  (3) As requested by Company, Supplier shall provide Supplier Personnel to
staff vacancies and to provide management for the information technology
functions needed to support an acquisition, including to the extent necessary,
on-site support at any location of the acquired entity.

 

  (4) Supplier shall provide acquisition support as described in this
Section 4.4(A) as part of the Services to the extent that such acquisition
support may be provided using applicable resources then primarily assigned to
the performance of the Services according to the Service Levels and baselines,
and without adversely impacting Supplier’s ability or costs to perform such
Services. If acquisition support will require the use of different or additional
resources beyond that which Supplier is then using to provide the Services in
accordance with the baselines and Service Levels, then such request for
acquisition support shall be subject to the Change Control Procedure.

 

  (B) Divestitures

 

  (1) In the event that Company divests an entity or business unit, Supplier
shall, at Company’s request, for a period of two (2) years from the effective
date of such divestiture (or such shorter time period as Company may require) or
until termination of expiration of this Agreement, whichever is earlier,
continue to provide the Services to such divested entity or business unit at the
Charges and on the terms and conditions then in effect. At Company’s request,
Supplier shall separately invoice such divested entity. To the extent
applicable, Services and Deliverables for Company and its divested entity shall
be combined for purposes of determining Charges. Supplier shall not unreasonably
withhold consent to novation of this Agreement in part as relates to the
divested entity or business unit in favor of the divested entity or business
unit or the acquirer thereof.

 

  (2) Services provided to divested entities under Section 4.4(B)(1) shall be
performed (A) until the termination or expiration of this Agreement, whichever
is earlier, (B) under the terms of this Agreement, and (C) in the event this
Agreement is not novated in favor of the divested entity or business unit or the
acquirer thereof, and the divested entity or the purchaser of the divested
entity is unable to provide adequate assurance of payment to the reasonable
satisfaction of Supplier, Company shall remain liable in all respects under this
Agreement, including the Charges. Supplier and Company shall address any
increases or decreases in the scope of Services that might result (e.g., the
need to create separate instances of technology for separate locations where
Services would be delivered/received) in accordance with the Change Control
Procedure.

 

Confidential   24   

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Section 4.5 Service Recipients. Supplier shall provide the Services to:
(A) Company and (B) such other entities as Company designates from time to time
(“Company Service Recipients”). For purposes of this Agreement, Services
provided to such entities shall be deemed to be Services provided to Company.

Section 4.6 Acceptance. All Deliverables provided by Supplier to Company as part
of the Services under this Agreement shall be subject to Company’s review and
acceptance (or rejection) in accordance with Exhibit 6 (Governance).

ARTICLE 5

TRANSFORMATION

Section 5.1 Transformation Objectives. Supplier shall be required to conduct
transformation activities to enable Company to achieve the transformation
objectives set forth in the Transformation Plan (collectively, the
“Transformation Objectives”), which objectives shall include performing all
Transformation activities necessary to provide the Services as set forth in
Exhibit 2 (Statement of Work) (“Transformation”).

Section 5.2 Transformation Projects. Supplier shall complete the Transformation
projects described in the Transformation Plan (each a “Transformation Project”)
to achieve the Transformation Objectives. Except as otherwise provided in
Exhibit 4 (Pricing) or required for Company to complete those tasks that are
designated to be the responsibility of Company in the Transformation Plan,
Company shall not be responsible for any charges, fees, costs or expenses
incurred in connection with the Transformation.

Section 5.3 Transformation Plan. The initial draft of the transformation plan
describing all Transformation Projects as of the Effective Date is included in
Exhibit 22 (Transition and Transformation) (the “Transformation Plan”). Within
sixty (60) days of the Effective Date, Supplier shall revise and finalize the
Transformation Plan for Company’s review, comment and approval. Supplier shall
cooperate and work closely with Company in finalizing the Transformation Plan
(including incorporating Company’s reasonable comments) and the final
Transformation Plan and any subsequent changes to the Transformation Plan shall
be subject to written approval by Company. The Transformation Plan shall
include:

 

  (A) a detailed description of how the Services and Company’s associated IT
environment, operations and business processes shall be transformed by Supplier
via the Transformation Projects to achieve the Transformation Objectives;

 

  (B) a detailed description of the Transformation Projects;

 

  (C) a detailed description of each deliverable (“Transformation Deliverables”)
and milestone (each a “Transformation Milestone”) to be completed by Supplier in
connection with each Transformation Project;

 

  (D) a detailed description of any tasks that Company is required to complete
in connection with each Transformation Project;

 

  (E) a detailed description of the methods and procedures, Personnel and
organization Supplier shall use to complete the Transformation Projects;

 

  (F) a detailed schedule and work plan of all Transformation Projects to be
completed in connection with the Transformation, including the date on which
each Transformation Project and each associated Transformation Deliverable and
Transformation Milestone shall be completed;

 

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  (G) a detailed description of the potential risks associated with the
Transformation and the risk mitigation strategies that shall be employed by
Supplier to eliminate or minimize such risks;

 

  (H) a process and set of standards acceptable to Company to which Supplier
shall adhere in the performance of the Transformation and shall enable Company
to determine whether Supplier has successfully completed the Transformation
Projects, Transformation Deliverables and Transformation Milestones; and

 

  (I) any other information and planning necessary to ensure that the
Transformation takes place on schedule and without disruption to Company’s
business or IT operations.

Section 5.4 Completion of the Transformation Projects.

 

  (A) Supplier shall complete the Transformation Projects in accordance with the
Transformation Plan in such a manner so as to not disrupt Company’s business and
IT operations (except to the extent that Supplier has provided Company with
reasonable advance written notice of such disruption and Company has agreed in
writing that such disruption is acceptable). Company shall reasonably cooperate
with Supplier in connection with the Transformation Projects and perform those
tasks identified as Company tasks in the Transformation Plan.

 

  (B) Supplier recognizes that its failure to meet the Transformation Milestones
may have a material adverse impact on the business and operations of Company.
Accordingly, if Supplier fails to meet a Transformation Milestone or
Transformation Deliverable for which there is an associated Transformation
Milestone Credit or Deliverable Credit, other than for the reasons set forth in
Section 16.2 (Savings Clause), then, in addition to any other remedies available
to Company under this Agreement, at Law or in equity, Company may elect to
recover the applicable Transformation Milestone Credits or Deliverable Credits,
which Transformation Milestone Credits and Deliverable Credits available for
payment by Supplier to Company shall in the aggregate equal at least [*] and
Transformation Milestone Credits and Deliverable Credits payable by Supplier to
Company shall in the aggregate not exceed [*].

Section 5.5 Company-Requested Delays. Company shall have the right to request
that Supplier delay any Transformation Projects for any reason at any time
during the Term. If Company elects to delay any part of the Transformation Plan
and such delay results in demonstrable increased costs to Supplier, Company
shall pay such increased costs to Supplier; provided, however, that Supplier has
used commercially reasonable efforts to mitigate such increased costs, Supplier
has notified Company in advance of such increased costs and Company has approved
in writing such increased costs. In addition, Company shall not incur any
increase in Supplier’s costs to the extent that Company’s decision to delay any
such Transformation activities is based on Supplier’s failure to perform its
obligations in accordance with the terms of this Agreement.

Section 5.6 [*].

ARTICLE 6

PROJECTS

Section 6.1 General. To the extent that any Projects include activities or
components that otherwise fall within the scope of the Services, such activities
and components shall be provided by Supplier within the Base Charges.

Section 6.2 Project Requests. Company may initiate a request for Supplier to
perform a particular Project, as such term is defined in Exhibit 4 (Pricing), by
providing such request in writing (each such

 

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Note: Redacted portions have been marked with [*]. The redacted portions are
subject to a request for confidential treatment that has been submitted to the
Securities and Exchange Commission.

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request, a “Project Request”) to Supplier in accordance with the procedures set
forth in the Policies and Procedures Manual. In engaging Supplier to perform a
Project, Company shall enter into one or more written Orders (each an “Order”)
pursuant to which such particular Project shall be performed. Supplier shall,
within a reasonable timeframe specified in such Project Request, prepare and
deliver to Company a proposed Order as described in Section 6.3.

Section 6.3 Orders. Each Order prepared by Supplier for Company’s consideration
shall be in the form presented in the Policies and Procedures Manual contained
in Exhibit 6.2 of Exhibit 6 (Governance) attached hereto and shall, at a
minimum, contain the following information:

 

  (A) a detailed description of the scope of work to be performed by Supplier to
complete and implement the Project, including any required Deliverables;

 

  (B) any specific performance standards that shall apply to the completion and
implementation of such Project, including Supplier’s agreement to meet
applicable Service Levels;

 

  (C) an anticipated schedule for completing and implementing the Project and
any related Deliverables, including milestones and credits for failing to
achieve milestone deadlines;

 

  (D) the types of Supplier Personnel, or the specific Supplier Personnel, if
known, who shall be assigned to each activity specified in the Order, including
the location of such Personnel;

 

  (E) Supplier’s proposed productivity measures for the activities specified in
the Order;

 

  (F) a description of the acceptance criteria and acceptance testing procedures
to be used by Company in connection with any acceptance testing of such Project
and any related Deliverables;

 

  (G) the estimated number of person-hours needed to complete the Project, or
the fixed charge for the Project, as applicable;

 

  (H) To the extent that any activities associated with the Project do not fall
within the scope of the Services, a description of such activities, an
explanation of why such activities are not included in the Services and the
estimated number of person-hours associated with such activities (to the extent
relevant to the pricing of the Project);

 

  (I) any increase or decrease in the Base Charges on an ongoing basis caused by
such Project (which adjustments shall be made in accordance with the mechanism
therefore in Exhibit 4 (Pricing)), the date any such Base Charges adjustments
would go into effect, and the reasons for such adjustments; and

 

  (J) any adjustment in the Service Levels on an ongoing basis caused by such
Project, the date any such Service Level adjustments would go into effect, and
the reasons for such adjustments.

Each Party shall bear its own costs in connection with preparation of any
Project Requests and Orders. Supplier shall not commence performing any Services
in connection with a Project, and Company shall not be responsible for any
Charges applicable to such Project, until the Company Contract Executive has
provided Supplier with written approval of the Order. Any change to an Order
shall be made pursuant to a Change Request approved in writing by Company
pursuant to Section 17.5.

Section 6.4 In-Flight Projects. Supplier shall provide the services, functions
and responsibilities necessary to complete and implement the in-flight projects
described in Exhibit 9 (Current and Planned Projects). Such in-flight projects,
including all activities associated with the management thereof, shall be
performed by Supplier within the Base Charges.

 

Confidential   27   

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ARTICLE 7

MULTI-VENDOR ENVIRONMENT; COOPERATION WITH THIRD PARTIES

Section 7.1 General.

 

  (A) Supplier acknowledges that it is performing the Services in a multi-vendor
environment and agrees that its responsibilities shall include leading and
coordinating the efforts of any third-party vendors providing services or
products to Company (collectively, “Third Party Vendors”), which leadership and
coordination efforts shall include proactively communicating with Third Party
Vendors regarding Services issues and coordination issues, acting as the single
point of intake and resolution for Third Party Vendors’ questions and issues,
scheduling meetings for the discussion and exchange of information as
appropriate, and providing guidance to Third Party Vendors with respect to
Supplier’s and Company’s IT environment as it relates to the Services. Supplier
further agrees to cooperate with Company and Third Party Vendors so as to allow
such Third Party Vendors to provide any services (including services similar to
the Services) or products in an integrated and seamless manner without
disruption to Company’s business or IT operations.

 

  (B) Supplier’s cooperation with Company and any Third Party Vendors shall
include:

 

  (1) providing access to the facilities being used by Supplier to provide the
Services (as necessary for Company or a Third Party Vendor to perform its work);

 

  (2) providing access to Company’s technical environment and the Equipment and
Software being used by Supplier to provide the Services (to the extent permitted
under any underlying agreements with third parties and as necessary for Company
or a Third Party Vendor to perform its work);

 

  (3) providing to Third Party Vendors copies of such reports as are provided to
Company pursuant to this Agreement, and providing such information, data
(including performance data) and cooperation as are necessary for Third Party
Vendors to create reports for Company’s use;

 

  (4) cooperating with Company and Third Party Vendors (including by providing
any performance information or data obtained by Supplier in the conduct of its
own root cause analysis pursuant to Section 10.2) in performing root cause
analysis of problems with the Services or Company’s IT environments, whether the
ultimate responsibility for performing such root cause analysis lies with
Supplier or with any such Third Party Vendor; and

 

  (5) providing Company and Third Party Vendors such information and data
regarding the Equipment, Software, Tools and operating environment, System
constraints, processes and other operating parameters as a person with
reasonable commercial skills and expertise would find reasonably necessary for
Company or a Third Party Vendor to perform its work.

Section 7.2 Compliance with Supplier’s Policies. To the extent that any Third
Party Vendors retained by Company (other than pursuant to Managed Contracts)
require any access as described in this Section, Company shall cause such Third
Party Vendors to comply with Supplier’s reasonable security and confidentiality
requirements and with Supplier’s reasonable work standards, methodologies and
procedures, as these have been provided by Supplier to Company and such Third
Party Vendors. Supplier shall use reasonable efforts to cause Third Party
Vendors under Managed Contracts to comply with such requirements, standards,
methodologies and procedures.

 

Confidential   28   

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Section 7.3 Problems and Delays. Supplier shall immediately notify Company if an
act or omission of a Third Party Vendor may cause a problem or delay in
providing the Services and shall work with Company to prevent or circumvent such
problem or delay.

ARTICLE 8

REQUIRED CONSENTS

Section 8.1 Supplier Required Consents. Supplier, with the cooperation of
Company, shall obtain and maintain any licenses, consents, authorizations or
approvals that are necessary or required for Supplier to provide the Services
(collectively, the “Supplier Required Consents”), including those consents set
forth in the Transition Plan or Exhibit 11 (Assigned and Managed Contracts) and
those consents that are necessary to allow:

 

  (A) Supplier to (1) grant any licenses or rights of use to Supplier
Proprietary Software or (2) assign any of its interests in the Software
Deliverables or Non-Software Deliverables, in each case, as described in Article
14;

 

  (B) Company to use any Supplier Equipment;

 

  (C) Company to take an assignment to any Equipment leases pursuant to
Section 29.7(B)(3); and

 

  (D) Supplier to take an assignment to any Assigned Contracts pursuant to
Section 12.2.

Section 8.2 Company Required Consents. Company, with the cooperation of
Supplier, shall obtain and maintain those consents set forth in the Transition
Plan or Exhibit 11 (Assigned and Managed Contracts) and the following licenses,
consents, authorizations or approvals (collectively, the “Company Required
Consents”, and together with the Supplier Required Consents, the “Required
Consents”) that are necessary to allow:

 

  (A) Company to grant any of the licenses or rights described in Article 14;
and

 

  (B) Supplier to use any of the Company Provided Equipment as permitted in this
Agreement.

Section 8.3 Compliance with Required Consents. Supplier and Company shall comply
with the requirements of each of the Required Consents.

Section 8.4 Costs and Fees. Each Party shall pay any costs, expenses and fees
(including license, re-licensing, transfer or upgrade fees or termination
charges) as may be required to obtain the Parties’ respective Required Consents.

Section 8.5 Alternative Approaches. If either Party is unable to obtain a
Required Consent, then, unless and until such Required Consent is obtained,
Supplier and Company shall determine and adopt, subject to Company’s prior
approval, such alternative approaches as are necessary and sufficient to provide
the Services without such Required Consent. If such alternative approaches are
required for a period longer than sixty (60) days following the Effective Date,
the Parties shall utilize the Change Control Procedure to increase or decrease
the Charges to reflect any increase in the costs and expenses of one Party due
to the other Party’s failure to obtain a Required Consent. If Supplier fails to
obtain a Supplier Required Consent within sixty (60) days of the Effective Date
and such failure has a material adverse impact on Company’s receipt of the
Services, [*] The failure to obtain any Supplier Required Consent shall not
relieve Supplier of its obligations under this Agreement and Supplier shall not
be entitled to any additional compensation or reimbursement of any amounts in
connection with obtaining or failing to obtain any Supplier Required Consent or
implementing any alternative approach required by such failure.

 

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Note: Redacted portions have been marked with [*]. The redacted portions are
subject to a request for confidential treatment that has been submitted to the
Securities and Exchange Commission.

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ARTICLE 9

COMPLIANCE WITH LAWS AND COMPANY POLICIES

Section 9.1 Compliance with Laws. In performing under this Agreement, Supplier
shall

 

  (A) comply with all Supplier Laws;

 

  (B) Monitor the issuance of and notify Company of new Laws applicable to the
performance of the Services [*];

 

  (C) upon becoming aware of new Laws applicable to the performance of the
Services [*], either due to notification by Company, Supplier’s own awareness of
such, or from a third-party source, provide Company with Supplier’s
recommendations, and the basis for such recommendations, for changes in the
Services or proposals that no changes in the Services are required to comply
with such new Laws or changes in Law;

 

  (D) exercise its expertise to assist Company in identifying Laws that may
apply to [*] the Services, and suggest to Company approaches that Supplier may
take with respect to the Services so as to comply with such Laws;

 

  (E) perform changes to the Services to comply with new or changed Laws to the
extent such changes have been authorized in accordance with the Change Control
Procedure;

 

  (F) upon Company’s approval of such approaches, develop the means to implement
the approaches within the Services procedures and techniques to comply with such
Laws, and implement such procedures and techniques in accordance with the Change
Control Procedure; and

 

  (G) comply with Company’s instructions or requirements in this Agreement; or,
in accordance with the Change Control Procedure, as otherwise specified by
Company in writing or required by Law; or assist Company in complying with
Company Laws as specified in this Agreement or as otherwise specified by Company
in writing or required by Law.

Supplier shall have no responsibility to Company for the accuracy of Company’s
interpretation of Company Laws. In meeting its obligations under this
Section 9.1, Supplier shall not be deemed to be providing legal advice to
Company.

Section 9.2 Changes in Applicable Laws. Each Party shall promptly notify the
other Party of any changes in Applicable Laws of which it becomes aware that may
impact Supplier’s delivery of [*]. Supplier shall comply with additional or new
Legal Compliance Obligations applicable to Company or to the Services upon
becoming aware thereof, provided that, (i) such compliance shall be implemented
in accordance with Change Control Procedure, and (ii) if such compliance will
require the use of different or additional resources beyond that which Supplier
is then using to provide the Services in accordance with the Service Levels,
then the Charges shall be modified accordingly in accordance with the Change
Control Procedure. Supplier shall provide reasonable cooperation to Company in
Company’s efforts to comply with Company Laws. Supplier shall remain fully
informed of changes to Supplier Laws.

Section 9.3 Compliance with Company Policies. Company shall be solely
responsible for reviewing, approving, modifying and granting waivers with
respect to policies governing (A) Company’s standards, practices, processes,
procedures and controls, including those policies set forth in Exhibit 23
(Company Policies), (B) the Services and any activities, including the use of
Deliverables, affecting Company’s compliance with Applicable Laws, and
(C) associated technologies, architectures and standards,

 

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Note: Redacted portions have been marked with [*]. The redacted portions are
subject to a request for confidential treatment that has been submitted to the
Securities and Exchange Commission.

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methodologies and procedures to be used by Supplier in providing the Services to
Company that support Company’s regulatory compliance programs (collectively,
“Company Policies”). The Company Policies include those policies, procedures and
practices relating to regulatory compliance and regulated Systems, as set forth
in Exhibit 2 (Statement of Work) and Exhibit 24 (Compliance Requirements and
Control Objectives). Company shall make available to Supplier in writing any
Company Policies in existence as of the Effective Date and any new or revised
Company Policies created or revised by Company during the Term provided that if
such created or revised policies shall require a change in scope of the
Services, such change shall be implemented through the Change Control Procedure.
Supplier shall implement all Company Policies applicable to its delivery of the
Services, including those created or revised following the Effective Date, and
shall deliver the Services in accordance with the Company Policies. The Company
Policies applicable to Supplier’s delivery of the Services shall be deemed
included as part of the Policies and Procedures Manual as of the time they are
made available to Supplier and shall be added by Supplier to the Policies and
Procedures Manual upon its next revision, provided, however, that to the extent
that modifications to the Services are required to adapt to any new or revised
Company Policies, then such revised Company Policies shall become applicable to
Supplier’s delivery of the Services as set forth in the Change Request
authorizing the modification to the Services.

Section 9.4 Obligation to Perform. Supplier shall perform the Services
regardless of changes in Applicable Laws unless performance of such Services
would be unlawful. If changes in Applicable Laws prevent Supplier from
performing its obligations under this Agreement, Supplier shall develop and,
upon Company’s approval in accordance with the Change Control Procedure,
implement a suitable workaround until such time as Supplier can perform its
obligations under this Agreement without such workaround. In the event such
workaround is required due to a change in Supplier Laws, the cost of such change
shall be borne by Supplier. In the event such workaround is required due to a
change in Company Laws or Company Policies, and such change results in a
material increase in the costs to Supplier in delivering the Services, then
Supplier shall be entitled to an equitable increase in the applicable Charges
under the Change Control Procedure.

Section 9.5 Notification of Failure. If Supplier (i) becomes aware of any
material failure to comply with any Applicable Laws, any of the Company
Policies, or any of Supplier’s obligations under this Agreement or (ii) becomes
aware of any other situation that may reasonably be expected to lead to, has
had, or should have been expected to have, any material adverse impact on the
Services, or Supplier’s ability to perform its obligations hereunder, then
Supplier shall immediately inform Company in writing of such failure or
situation and the impact or expected impact and recommend means for addressing
such, and Supplier and Company shall meet to discuss Supplier’s recommended
means and to formulate an action plan to minimize or eliminate the impact of
such failure or situation.

Section 9.6 Evidence of Compliance. Supplier shall furnish any evidence Company
reasonably requests in writing that is related to Supplier’s compliance with
Applicable Laws or with Company Policies at any time during the Term and, to the
extent related to obligations that survive the Term, the period of such
survival. The substance, form and timing of such evidence shall be subject to
Company’s reasonable satisfaction.

Section 9.7 Licenses. Supplier shall obtain and maintain all applicable
authorizations, permits, certificates and licenses required of Supplier in
connection with its obligations under this Agreement.

Section 9.8 Remote Computing Service. The Parties agree that in performing the
Services contemplated under this Agreement, the parties intend for (i) Supplier
to be a “remote computing service” as defined in the Stored Communications Act,
18 U.S.C. §2711, and (ii) Company to be the “subscriber” of the Services for
purposes of 18 U.S.C. §2702.

ARTICLE 10

SERVICE LEVELS AND CUSTOMER SATISFACTION

Section 10.1 General. Supplier shall perform the Services at least (i) at the
same level and with at least the same degree of accuracy, quality, completeness,
timeliness, responsiveness, security and

 

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efficiency as was provided prior to the Effective Date by or for Company, and
(ii) at the level of the quantitative performance standards for required
availability, response times, or other performance standards for the Services
(“Service Levels”) set forth in Exhibit 3 (Service Level Management). At all
times Supplier’s level of performance shall be at least equal to the Service
Levels and to standards satisfied by well-managed operations performing services
similar to the Services.

Section 10.2 Failure to Perform.

 

  (A) If Supplier fails to meet a Service Level, Supplier shall immediately
(1) investigate, assemble and preserve pertinent information with respect to,
and report on the causes of, the problem, including performing a root cause
analysis of the problem; (2) advise Company, as and to the extent requested by
Company, of the status of remedial efforts being undertaken with respect to such
problem; (3) minimize the impact of and correct the problem and begin meeting
the Service Level; and (4) take appropriate preventive measures so that the
problem does not recur.

 

  (B) Supplier recognizes that its failure to meet certain Service Levels may
have a material adverse impact on the business and operations of Company. In the
event that Supplier fails to meet such Service Levels for reasons other than
those that are excused pursuant to Section 10.4, then in addition to any other
remedies available to Company under this Agreement, at law or in equity, Company
may elect to recover the applicable Service Level Credit for such failure to
meet such Service Level.

Section 10.3 Cooperation with Third Parties. In order for Supplier to provide
the Services in accordance with the Service Levels, Supplier may be required to
coordinate its efforts with Third Party Vendors. With respect to Service Level
failures caused by Third Party Vendors: (A) Supplier shall provide a single
point of contact for the management of the prompt resolution of such Service
Level failures; and (B) except as set forth in Section 10.4, Supplier’s failure
to meet such Service Levels shall not be excused and Supplier shall remain
responsible for the performance of the Services in accordance with the Service
Levels.

Section 10.4 Excused Performance. To the extent Supplier demonstrates to
Company’s reasonable satisfaction that any Service Level Default or any failure
to achieve a milestone or Deliverable deadline (e.g., Transition, Transformation
or pursuant to an Order) is directly attributable to: (A) a Force Majeure Event;
(B) a breach of this Agreement by Company that prevents Supplier from meeting
the applicable Service Level or milestone or Deliverable; or (C) acts or
omissions of Company or a Third Party Vendor, provided that (1) Supplier was
unable to alert Company of the consequences of such acts or omissions or
(2) Company disregarded any such alert by Supplier as to the consequences of
such acts or omissions or fails to take necessary corrective actions requested
of Company in writing and within the control of Company, (3) Supplier complied
with the requirements of the DRP, and (4) Supplier was unable to take other
reasonable steps to avert such consequences, then such Service Level shall be
measured excluding the time (or other appropriate unit of measure) that the
foregoing was in effect or such milestone or Deliverable deadline shall be
extended in respect of the time that the foregoing was in effect.

Section 10.5 Periodic Reviews. At least annually and as more fully described in
Exhibit 3 (Service Level Management), Company and Supplier shall review the
Service Levels and shall make adjustments to them as appropriate to reflect
improved performance capabilities associated with advances in the technology and
methods used to perform the Services. The Parties expect and understand that the
Service Levels shall be improved over time as further described in Exhibit 3
(Service Level Management).

Section 10.6 Measurement and Monitoring Tools. Supplier shall, with respect to
each Service Level, prior to the date that such Service Level takes effect,
implement and test measurement and monitoring Tools and procedures acceptable to
Company to measure and report Supplier’s performance of the Services against the
applicable Service Levels. Such measurement and monitoring Tools and procedures
shall permit reporting at a level of detail sufficient to verify Supplier’s
compliance with the Service Levels. Supplier shall also provide Company with
(i) on-line, real time access to the data used by

 

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Supplier to calculate its performance against the Service Levels and
(ii) documentation relating to the measurement and monitoring tools and
procedures utilized by Supplier to generate such data. Given the nature of
Company’s multi-vendor environment, any such data may be shared by Company with
Third Party Vendors, provided that such Third Party Vendors have executed
appropriate non-disclosure agreements or are otherwise bound by confidentiality
obligations. The use of any such data by the Third Party Vendors shall be
limited to managing the provision and delivery of services, products and
resources to Company and resolving any issues or problems relating to the
provision and delivery of any such services, products or resources. Company
shall not be required to pay any amount in addition to the Charges for (A) such
measurement and monitoring Tools or (B) any resources utilized in connection
with such measurement and monitoring Tools.

Section 10.7 Third Party Vendor Performance Data. Supplier acknowledges and
agrees that it may receive performance data from Third Party Vendors and such
performance data shall be Confidential Information of Company. Supplier further
agrees that it shall use such performance data only for managing the provision
and delivery of services, products and resources and resolving any problems or
issues that relate to such services, products and resources. Supplier shall not
use any such performance data for any other purpose, except as otherwise agreed
by Company.

Section 10.8 Service Level Reporting. No later than the tenth (10th) business
day of each month during the Term, Supplier shall provide Company with a monthly
performance report describing Supplier’s performance of the Services in the
preceding month, which report shall be made available to Company in an online,
electronic form (the “Monthly Service Level Report”). The Monthly Service Level
Report shall:

 

  (A) for each area of the Services, assess the degree to which Supplier has
attained or failed to attain the Service Levels;

 

  (B) explain any Service Level Defaults and include a plan for corrective
action where appropriate;

 

  (C) describe any Service Level Credits that have been incurred by Supplier due
to any Service Level Defaults;

 

  (D) identify any problems or issues that are being caused by the acts or
omissions of any Third Party Vendors and the steps being taken to resolve any
such problems or issues; and

 

  (E) include such documentation and other information as Company may reasonably
request to verify compliance with the Service Levels.

Any failure by Supplier to report on Supplier’s success or failure to meet any
Service Level, including if such failure results from Supplier’s failure to
implement, or delay in implementing, appropriate measurement and monitoring
Tools pursuant to Section 10.6, shall be deemed to be a Service Level Default
with respect to the applicable Service Level.

Section 10.9 Quarterly Reporting. No later than ten (10) days after the end of
each calendar quarter during the Term, Supplier shall provide Company with a
quarterly analysis and report identifying and analyzing service trends and
providing observations and suggestions for the continuous improvement of the
Services.

Section 10.10 Customer Satisfaction Surveys.

 

  (A)

As set forth in Exhibit 13 (Customer Satisfaction Surveys), Supplier shall, on a
periodic basis throughout the Term, survey a representative sample of Authorized
Users to ascertain their level of satisfaction with Supplier’s management and
provision of the

 

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Services. The representative sample, survey format and questions shall be as
described in Exhibit 13 (Customer Satisfaction Surveys) and shall be subject to
Company’s review and approval.

 

  (B) Supplier shall, within thirty (30) days of the completion of the
applicable customer satisfaction survey, (1) conduct a root cause analysis as to
the cause of any dissatisfaction; (2) develop an action plan to address and
improve the level of satisfaction; (3) present such plan to Company for its
review, comment and approval; and (4) take action in accordance with the
approved plan and as necessary to improve the level of satisfaction. Supplier’s
action plan developed hereunder shall set forth the specific measures to be
taken by Supplier and the dates by which each such measure shall be completed.
Following implementation of such action plan, Supplier shall conduct a follow-up
survey with the affected management to confirm that the cause of any
dissatisfaction has been addressed and that the level of satisfaction has
improved.

ARTICLE 11

PERSONNEL

Section 11.1 Qualifications, Retention and Replacement of Supplier Personnel.

 

  (A) Supplier shall assign an adequate number of Supplier Personnel to perform
the Services. Supplier Personnel shall be properly educated, trained and fully
qualified with respect to the Systems and the Services they are to perform.
Supplier acknowledges and agrees that it shall be the responsibility of Supplier
to ensure that it provides adequate levels of training and education so that the
Supplier Personnel remain current as to industry and technology developments and
changes in the Systems. Company shall not be required to pay any amounts in
addition to the Charges to train or educate any Supplier Personnel.

 

  (B) Supplier shall be solely responsible for compliance with immigration and
visa Laws and requirements in respect of the Supplier Personnel. Supplier
represents and warrants that all non-United States citizens who are assigned by
Supplier to perform the Services within the United States (1) shall hold
appropriate and valid visas or other work authorizations, each of which shall be
valid for a period at least equal to the anticipated duration of such employee’s
assignment to Company’s account, and (2) shall not be provided by Supplier with
any technology or information in violation of any U.S. export Laws.

 

  (C) In the event that Company determines in good faith that the continued
assignment to Company’s account of one of the Supplier Personnel is not in the
best interests of Company, then Company shall give Supplier written notice to
that effect. After receipt of such notice, Supplier shall promptly remove such
individual from the Company account and shall replace that person with another
person of suitable ability and qualifications.

 

  (D)

Supplier shall comply with its physical and information security and access
policies and procedures. In addition to that, no Supplier Personnel shall
(1) receive access badges from Company, (2) drive Company-owned or leased
vehicles, or transport Company Personnel or (3) have access to (i.e. ability to
read, write or modify) Company Data or Company Confidential Information
(including electronic mail, voicemail, networks, internet access and the Company
web), without Supplier first providing to Company’s security department the
background check certification form (“Background Check Certification Form”)
included in Exhibit 21 (Background Check Certification Form) for the applicable
Supplier Personnel. Notwithstanding the foregoing, if Supplier Laws prohibit the
performance of background checks on Supplier’s Personnel when required pursuant
to this Section 11.1(D), Supplier shall comply with, and shall cause its
Subcontractors to comply with, reasonable alternative background check
requirements imposed by

 

Confidential   34   

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Company for such Personnel, provided that such requirements (as the same may be
subsequently revised) comply with Supplier Laws. Supplier Personnel and
Subcontractors’ Personnel who drive Company-owned or leased vehicles, or
transport Company Personnel must meet all other obligations to do so, including
proper licensure, insurance and insurability. Supplier shall perform, or shall
use an outside agency to perform, the background check and all legally required
notifications to Supplier Personnel and Subcontractor Personnel set forth in the
Background Check Certification Form or alternative background check
requirements, as applicable. Supplier shall return the appropriate Background
Check Certification Form or alternative background check requirements, as
applicable, for Supplier Personnel and Subcontractor Personnel to Company’s
security department, Mailstop 10-1-A, ATTN: Security Director, One Amgen Center
Drive, Thousand Oaks, CA 91320-1799. Company may, by written notice to Supplier,
change the recipient of such certifications.

 

  (1) Supplier shall provide monthly reports to Company regarding Supplier’s
compliance with this Section 11.1(D).

 

  (2) Supplier’s failure or refusal to provide the requisite Background Check
Certification Form which failure or refusal [*].

 

  (3) In the event at any time during the Term the [*] Company may [*].

 

  (4) In the event Company suffers damages due to Supplier’s failure to comply
with Section 11.1(D)(2), without prejudice to any other rights or remedies
Company may have, Company may recover any and all of such damages from Supplier,
subject to the limitations set forth in Article 26(Liability).

 

  (5) Company shall immediately notify Supplier in writing upon Company becoming
aware of Supplier’s failure to meet the obligations of this Section 11.1(D)).
Supplier shall immediately notify Company in writing upon Supplier becoming
aware of a failure to meet the obligations of this Section 11.1(D). Such notice
from Supplier shall be sent to the notice recipients specified in Section 30.3
and the following:

Amgen Inc.

Security Department, Mailstop 10-1-A

Attn: Security Director

One Amgen Center Drive

Thousand Oaks, CA 91320-1799

Within five (5) days of Supplier becoming aware of a failure to meet the
obligations of this Section 11.1(D), Supplier shall have completed an
investigation of the events that led to the failure and shall provide Company
with a written investigation report. Such written investigation report shall
include, at a minimum, a description of the obligations that were not met, the
role of the personnel for which the obligations of this Section 11.1(D) were not
met, the access that such personnel had, and the corrective actions to be taken
or taken to ensure that Supplier meets the obligations under this
Section 11.1(D).

Section 11.2 Key Supplier Personnel.

 

  (A)

Company and Supplier may designate certain employees of Supplier as key
employees (“Key Supplier Personnel”), which Key Supplier Personnel shall be
named in Exhibit 18 (Supplier Personnel) or the relevant Order, if known.
Supplier shall cause each of the Supplier Personnel serving as Key Supplier
Personnel to devote substantially full time

 

Confidential   35   

Note: Redacted portions have been marked with [*]. The redacted portions are
subject to a request for confidential treatment that has been submitted to the
Securities and Exchange Commission.

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

 

and effort to the provision of the Services for at least twenty-four (24) months
from the date that each such individual is assigned to fill a Key Supplier
Personnel position, unless (i) a different period is specified in Exhibit 18
(Supplier Personnel) or the relevant Order, (ii) Company consents to
reassignment or replacement of the Supplier Personnel filling such Key Supplier
Personnel position; or (iii) Supplier Personnel filling such Key Supplier
Personnel position (a) voluntarily resigns from Supplier; (b) is dismissed by
Supplier for cause; (c) fails to perform his or her duties or responsibilities;
or (d) dies or is unable to work due to his or her disability. The Supplier
Personnel approved as of the Effective Date to serve as the Key Supplier
Personnel are listed in Exhibit 18 (Supplier Personnel).

 

  (B) Company may from time to time change the positions designated as Key
Supplier Personnel positions under this Agreement, provided that without
Supplier’s consent, the number of Key Supplier Personnel shall not exceed the
number then currently specified in Exhibit 18 (Supplier Personnel). If Company
designates a new Key Supplier Personnel position pursuant to this
Section 11.2(B) above, the reassignment restrictions set forth in
Section 11.2(A), Section 11.2(B), and Section 11.2(D) shall not apply to the
individuals assigned to such positions for a period of three (3) months
following the date that Company notifies Supplier of such designation, unless
and to the extent Supplier agrees that such Sections shall apply.

 

  (C) Supplier shall, in accordance with Section 11.2(D), designate an
individual to serve as the project executive under this Agreement (the “Supplier
Project Executive”). The Supplier Project Executive shall be one of the Key
Supplier Personnel. The Supplier Project Executive shall (a) serve as the single
point of accountability for Supplier for the Services; and (b) have day-to-day
authority for undertaking to ensure customer satisfaction. The Supplier Project
Executive shall be located at Company’s corporate headquarters or any other
Company Service Location designated by Company.

 

  (D) Before assigning an individual to a Key Supplier Personnel position,
whether as an initial assignment or a subsequent assignment, Supplier shall
notify Company of the proposed assignment and provide Company with a résumé and
other information about the individual reasonably requested by Company,
consistent with Supplier’s applicable policies and Applicable Laws. If Company
in good faith objects to the proposed assignment, the Parties shall attempt to
resolve Company’s concerns to the reasonable satisfaction of Company. If the
Parties have not been able to resolve Company’s concerns within five
(5) business days, Supplier shall (1) not assign the individual to that position
and (2) propose to Company the assignment of another individual of suitable
ability and qualifications. Individuals serving as Key Supplier Personnel may
not be transferred or reassigned until a suitable replacement has been approved
by Company, and no such transfer shall occur at a time or in a manner that would
have a material adverse impact on delivery of the Services. In no event shall
Supplier transfer or reassign more than two (2) Key Supplier Personnel from the
Company account in any six (6) month period, and in no event shall such Key
Supplier Personnel include both the Supplier Project Executive and the Supplier
Delivery Project Executive. Supplier shall establish and maintain an up-to-date
succession plan for all individuals serving as Key Supplier Personnel, and such
succession plan shall be made available to Company for review and subject to
Company’s approval. Upon Company’s request, Supplier shall provide Company with
a list of all the Supplier Personnel primarily assigned to the Company account.

 

  (E)

Supplier shall not assign an individual filling a Key Supplier Personnel
position to the account of any Company Competitor without Company’s prior
written consent (1) while such individual is assigned to Company’s account, and
(2) for a period of twelve (12) months following the date that such individual
is removed from or ceases to provide services in connection with Company’s
account. Should this Section 11.2(E) be declared unenforceable or invalid by a
court with jurisdiction on the basis that it exceeds statutorily

 

Confidential   36   

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required territorial or time limits on extensions of obligation not to compete,
such a declaration will render this provision invalid only as it relates to the
excess over what is allowed under Supplier Laws or Company Laws. The provision
will be deemed amended to comply with statutorily required limits.

Section 11.3 Conduct of Supplier Personnel. While at Company Facilities,
Supplier shall ensure that the Supplier Personnel (A) comply with the requests,
standard rules and regulations of Company regarding safety and health, personal
and professional conduct (including non-discrimination and anti-harassment
policies, the wearing of an identification badge or personal protective
equipment and adhering to facility regulations and general safety practices or
procedures, and including any drug testing policies applicable to Company
employees) generally applicable to such Company Facilities, including all
obligations set forth in Exhibit 16 (Safety and Security Requirements) and
(B) otherwise conduct themselves in a professional and businesslike manner. In
the event that Company determines that any of the Supplier Personnel are not
conducting themselves in accordance with this Section, Company may notify
Supplier of such conduct. After receipt of such notice, Supplier shall promptly
remove such individual from Company’s account and shall replace that person with
another person of suitable ability and qualifications.

Section 11.4 Performance of Supplier Personnel. Supplier shall ensure that all
Supplier Personnel are performing their tasks, responsibilities and functions in
accordance with the terms of this Agreement and in a productive and professional
manner.

Section 11.5 Transitioned Personnel.

 

  (A) Affected Employees

Supplier shall have offered employment to the appropriate number of Affected
Employees who are not in ARD countries in accordance with the timing specified
in Exhibit 5 (Human Resources) (including without limitation Attachment 5.A).
The terms for such offers of employment and for employment of the Affected
Employees are set forth in Exhibit 5 (Human Resources). Supplier shall treat the
Transitioned Employees as its employees for all purposes, including tax
reporting and employee benefits, and Supplier shall obtain from each
Transitioned Employee a signed statement in a form acceptable to Company
indicating that the Transitioned Employee understands that he or she is not a
Company employee and is not entitled to any Company employee benefits, and that
if it ever is determined that he or she actually was a Company employee, he or
she shall disclaim all such benefits. Supplier shall supervise, pay, evaluate,
discipline and set the hours of work of the Transitioned Employees, provide the
Transitioned Employees with all necessary tools, supplies, offices and
equipment, and provide training to the Transitioned Employees on how to perform
their services.

 

  (B) Affected Contractors

Company shall terminate or allow to expire the Company contractor agreements
identified in Exhibit 2 (Statement of Work) (the “Company Contractor
Agreements”) or, subject to obtaining Required Consents as set forth in
Section 12.2, assign such Company Contractor Agreements to Supplier. The action
of termination, expiration or assignment for particular Company Contractor
Agreements shall be in accordance with a plan prepared by Supplier and approved
by Company. Supplier shall be responsible for the costs, charges and fees
associated with such assignment actions and Company shall be responsible for the
costs, charges and fees associated with termination actions. Supplier shall use
commercially reasonable efforts to continue to use those Personnel of Affected
Contractors identified in Exhibit 19 (Affected Personnel) as “Key Company
Contractor Personnel” to perform the Services for the period specified therein.

 

Confidential   37   

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  (C) Critical Affected Personnel

Supplier acknowledges that certain of the Affected Personnel are Affected
Personnel who Company believes are critical to Supplier in providing the
Services (“Critical Affected Personnel”). The Critical Affected Personnel are
identified in Exhibit 19 (Affected Personnel). During the first [*] following
the Effective Date, Supplier shall use the Critical Affected Personnel to
provide Services and shall not, without Company’s prior written approval:
(1) terminate, except for cause, the employment of any Critical Affected
Personnel who become employees of Supplier or (2) transfer or reassign any
Critical Affected Personnel from performing the Services. In the event Supplier
intends to terminate for cause any Critical Affected Personnel who are
Transitioned Employees during the initial [*] following the Effective Date,
Supplier will (A) provide timely notice to Company of such termination and
(B) give due consideration to Company’s concerns with respect to the impact of
terminating such Critical Affected Personnel prior to so terminating any such
person. Without Company’s prior written consent, Supplier and its Subcontractors
shall not assign Critical Affected Personnel to the account of any Company
Competitor without Company’s prior written consent (1) while such individual is
assigned to Company’s account, and (2) for a period of [*] following the date
that such individual is removed from or ceases to provide services in connection
with the Company’s account.

 

  (D) Acquired Rights Directive

 

  (1) In accordance with its obligations under local legislation implementing
ARD Laws, any relevant collective agreements and other Supplier Laws or Company
Laws, respectively, the Parties shall work together to obtain and deliver all
information as is necessary so as to enable both Parties to be in compliance
with ARD Laws, and any other Supplier Laws or Company Laws, respectively. It is
the Parties’ understanding that ARD Laws may require that certain Affected
Employees in ARD Countries receive offers of employment from Supplier (“ARD
Affected Employees”), that the time of transfer under ARD Laws be the date(s)
that such ARD Affected Employees actually transition to Supplier (“Employee
Transfer Date”), and that the contract of employment between Company and each of
the ARD Affected Employees shall have effect on and from the Employee Transfer
Date. Each Party shall comply with ARD Laws (and other Applicable Laws) with
respect to the ARD Affected Employees before, on and after the Effective Date.
To the extent that any entitlement under a ARD Affected Employee’s contract of
employment or ancillary employment rights is not automatically transferred to
Supplier under ARD Laws (e.g., certain occupational pension rights in the United
Kingdom), then Supplier shall nonetheless provide to the relevant ARD Affected
Employee actually hired by Supplier, either on an individual or collective
basis, entitlement to rights that are equivalent and no less favorable than the
existing Company position, except for entitlement to pension rights.

 

  (2) Supplier may not transfer the employment of the Transitioned Employees to
any Third Party who is not performing any of the Services and shall during the
Term remain the employer of the Transitioned Employees except only to the
extent: (1) that ARD Laws shall apply to transfer the employment of any
Transitioned Employees to any Third Party or subcontractor which, subject to the
terms of this Agreement, Supplier engages to perform any of the Services; or
(2) that Supplier shall terminate the employment of any Transitioned Employees
for misconduct, non-performance, or economic reasons.

 

  (3)

For the avoidance of doubt, Supplier shall be obligated to make offers to and
hire only such Affected Employees required by ARD Laws to receive such transfer

 

Confidential   38   

Note: Redacted portions have been marked with [*]. The redacted portions are
subject to a request for confidential treatment that has been submitted to the
Securities and Exchange Commission.

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

 

offers. If ARD Laws do not operate to mandate the transfer to Supplier of any
Affected Employee who is working in an ARD Country, Supplier may nonetheless
make to such Affected Employees an offer of employment at Supplier’s sole
discretion, provided, however, that such offer shall remain open for a period of
twenty-eight (28) days.

Section 11.6 Staffing Issues. Company and Supplier agree that it is in their
best interests to keep the attrition rate of Supplier Personnel to a reasonably
low level. If Company believes that Supplier’s attrition rate may be excessive
and so notifies Supplier, Supplier shall provide data concerning its attrition
rate and meet with Company to discuss the reasons for, and impact of, the
attrition rate. In any event, Supplier shall use commercially reasonable efforts
to keep the attrition rate to a reasonably low level. Notwithstanding transfer,
attrition or other turnover of Supplier Personnel, Supplier remains obligated to
perform the Services without degradation (in accordance with the Service Levels)
and in accordance with the terms of this Agreement. Without limiting the
foregoing, Supplier shall promptly give written notice to Company (a “Staffing
Notice”) upon the occurrence of either of the following: [*] No later than ten
(10) days after the time Supplier is required to provide Company with a Staffing
Notice, Supplier shall develop and submit to Company for Company’s approval an
action plan (a “Staffing Action Plan”) pursuant to which Supplier shall retain a
sufficient number of new employees, or otherwise assign employees from other
divisions or Affiliates of Supplier, to perform Services for the Project to
cause the Services to be completed in a timely manner and consistent with the
requirements of this Agreement (taking into account the then-current scope and
volumes of the Services, and productivity and technology improvements in the
delivery of the Services). Upon Company’s approval of a Staffing Action Plan,
Supplier shall promptly and diligently implement such Company-approved Staffing
Action Plan. Upon Company’s request and otherwise on a monthly basis after
Company’s approval of a Staffing Action Plan, Supplier shall provide Company
with a written report describing any changes in Supplier’s staffing of an Order
and any other facts and circumstances which may impact Supplier’s ability to
provide adequate staffing to timely perform the Services in a manner consistent
with the requirements of this Agreement.

ARTICLE 12

THIRD PARTY CONTRACTS

Section 12.1 General. Supplier shall structure its arrangements with Third Party
Vendors of services (e.g., maintenance agreements) that shall be primarily
dedicated to the performance of the Services so that the relevant contracts may
be assigned to Company upon the termination, in whole or in applicable part, or
expiration of this Agreement and so that the ongoing fees under those
arrangements payable by Company after such assignment are consistent with and no
higher than the fees payable by Supplier prior to such assignment. If Supplier
is not able to accomplish the foregoing after using commercially reasonable
efforts, Supplier shall notify Company and discuss with Company the consequences
(including any impact on the Services and Service Levels) of Supplier not being
able to use the services from the provider who shall not allow the assignment
sought by Company. If, following that discussion, Company directs Supplier to
not use such services, and Supplier is not able to find a suitable work-around,
Supplier shall be relieved of its obligations under this Agreement to the extent
its ability to perform is adversely impacted by the inability to use such
third-party services.

Section 12.2 Assigned Contracts. Effective as of the Effective Date and subject
to Supplier having obtained any applicable Required Consents, Company shall
assign to Supplier, and Supplier shall assume from Company, the Assigned
Contracts. Supplier shall pay directly, or reimburse Company if Company has
paid, the charges and other amounts under the Assigned Contracts, where such
charges are attributable to the periods on or after the Effective Date. Supplier
shall comply with the duties imposed on Company under such contracts.

 

Confidential   39   

Note: Redacted portions have been marked with [*]. The redacted portions are
subject to a request for confidential treatment that has been submitted to the
Securities and Exchange Commission.

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

Section 12.3 Managed Contracts.

 

  (A) General

Effective as of the Effective Date and subject to Supplier and Company having
obtained any applicable Required Consents, Supplier shall manage, administer and
maintain the Managed Contracts. Supplier shall provide Company with no less than
ninety (90) days notice of any renewal, termination or cancellation dates and
fees with respect to the Managed Contracts. Supplier shall not renew, modify,
terminate or cancel, or request or grant any consents or waivers under any
Managed Contracts without the consent of Company. Any fees or charges or other
liabilities or obligations imposed upon Company in connection with any such
renewal, modification, termination or cancellation of, or consent or waiver
under, the Managed Contracts that is obtained or given without Company’s consent
shall be paid or discharged, as applicable, by Supplier.

 

  (B) Managed Contract Invoices

Supplier shall (1) receive all Managed Contract invoices, (2) review and correct
any errors in any such Managed Contract invoice in a timely manner, and
(3) submit such Managed Contract invoices to Company within a reasonable period
of time prior to the due date or the date on which Company may pay such Managed
Contract invoice with a discount. Company shall be responsible for payment of
Managed Contract invoices received and approved by Supplier. Company shall only
be responsible for payment of Managed Contract invoices and shall not be
responsible to Supplier for any management, administration or maintenance fees
of Supplier in connection with the Managed Contract invoices beyond those
included in the Base Charges. Company shall be responsible for any late fees in
respect of the Managed Contract invoices, provided that Supplier submitted the
applicable Managed Contract invoices for payment within a reasonable period of
time prior to the date any such Managed Contract is due, but in no event later
than twenty (20) days prior to the date upon which payment is due (provided that
Supplier receives such invoice at least thirty (30) days prior to the date upon
which payment is due). If Supplier fails to submit a Managed Contract invoice to
Company for payment in accordance with the preceding sentence, Supplier shall be
responsible for any discount not received or any late fees in respect of such
Managed Contract invoice not to exceed the amount of the applicable discount or
late fee that would have applied if Company had paid such Managed Contract
invoice a number of business days after the applicable payment due date that is
equal to the actual number of business days that Supplier was late in submitting
the Managed Contract invoice to Company for payment.

 

  (C) Performance Under Managed Contracts

Supplier shall promptly notify Company of any breach of, or misuse or fraud in
connection with, any Managed Contracts of which Supplier becomes aware or
receives written notification, and shall cooperate with Company to prevent or
stay any such breach, misuse or fraud. Supplier shall pay all amounts due for
any penalties or charges (including amounts due to a Third Party as a result of
Supplier’s failure to promptly notify Company pursuant to the preceding
sentence), associated taxes, legal expenses and other incidental expenses
incurred by Company as a result of Supplier’s non-performance of its obligation
under this Agreement with respect to the Managed Contracts.

ARTICLE 13

EQUIPMENT AND CONNECTIVITY

Section 13.1 Company Provided Equipment. Company shall retain the Company
Provided Equipment and provide Supplier with access to such Company Provided
Equipment on an “as is, where is” basis for

 

Confidential   40   

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use by Supplier in delivering the Services. Company’s and Supplier’s respective
responsibilities with respect to the upgrade, replacement and refresh of Company
Provided Equipment may vary by Equipment type and shall be as set forth in
Exhibit 4 (Pricing). Company shall be responsible for procuring any upgrades
with respect to such Company Provided Equipment. Unless otherwise set forth in
Exhibit 2 (Statement of Work) or Exhibit 4 (Pricing), Supplier shall manage and
maintain all of the Company Provided Equipment in accordance with the
maintenance schedules recommended by the applicable Equipment manufacturer.

Section 13.2 Supplier Equipment. Supplier shall be responsible for providing any
Equipment other than the Company Provided Equipment that is necessary to provide
the Services (collectively, the “Supplier Equipment”). Supplier shall install,
operate, manage and maintain all of the Supplier Equipment as required to
provide the Services in accordance with the Service Levels. Notwithstanding the
location of Supplier Equipment at a Company Service Location, all right, title
and interest in and to any such Supplier Equipment shall be and remain in
Supplier, and Company shall not have any title or ownership interest in the
Supplier Equipment.

Section 13.3 New Equipment. Supplier shall acquire new Equipment in addition to
existing Supplier Equipment and Company Provided Equipment that is (A) necessary
or appropriate to provide the Services in accordance with the Service Levels and
(B) in the case of upgrading or replacing Company Provided Equipment, in
accordance with the provisions of Section 13.4. Unless otherwise set forth in
Exhibit 4 (Pricing), such new Equipment shall be purchased or leased in the name
of Supplier, except for purchases or leases of upgrades for Company Provided
Equipment, which shall be purchased or leased in the name of Company.

Section 13.4 Technology Refresh. Exhibit 2 (Statement of Work), Exhibit 4
(Pricing), and Exhibit 8 (Technical Architecture and Product Standards) set
forth the strategy and schedule pursuant to which particular items or types of
Equipment and Software shall be replaced or upgraded during the Term (the
“Refresh Schedule”). With respect to each item of Equipment and Software,
Supplier shall procure and install the required upgrade or replacement in
accordance with the Technology Refresh Plan, but no later than the date upon
which the applicable item of Equipment or Software has been in service for the
period of time set forth on the Refresh Schedule. Company shall direct Supplier,
in accordance with the Change Control Procedure, as to any changes to the
strategy or schedule pursuant to which particular items or types of Equipment
and Software shall be replaced or upgraded during any Renewal Term.

Section 13.5 Procurement Responsibilities. With respect to Equipment procured by
Supplier pursuant to the provisions of this Article 13, Supplier’s
responsibilities shall include: (A) evaluating the Equipment and the
qualifications of the Equipment vendor; (B) negotiating commercially reasonable
pricing and terms; (C) ordering, receiving, configuring, installing, testing,
maintaining and distributing all new Equipment; (D) performing tracking and
asset management for all such Equipment; and (E) tracking license counts,
informing Company of any discrepancies with applicable license count
restrictions, and assisting Company in restoring compliance with applicable
license count restrictions. With respect to any new Equipment leased by Supplier
that may be assumed by Company upon termination of this Agreement, (i) Supplier
shall structure its leasing arrangements so that the applicable leases may be
assigned to Company upon the termination or expiration of this Agreement and so
that any ongoing payments under those leases payable by Company after such
assignment are consistent with, and no higher than, the payments payable by
Supplier prior to such assignment, and (ii) such leases shall be subject to
prior review and approval by Company.

Section 13.6 Equipment Disposal. Unless otherwise set forth in Exhibit 4
(Pricing), Supplier shall be responsible for the disposal of Supplier Equipment
and Company Provided Equipment that are no longer required by Supplier for the
provision of the Services. Supplier shall dispose of all such Equipment in a
manner consistent with the requirements of Law and Company’s IT and information
security and privacy standards, including those set forth in this Agreement, and
including any Company Policies applicable to the destruction of stored
information and charitable donations (in the case of Company Provided
Equipment). Supplier shall be responsible for all costs, charges or fees
associated with the disposal of Supplier Equipment and Company Provided
Equipment.

 

Confidential   41   

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Section 13.7 Supplier Data Connections. Supplier shall provide data connections
among the Supplier Service Locations and between Company-designated points of
access to the Company data network and secure firewalls to be provided by
Supplier and located at Supplier Service Locations (the “Supplier Data
Connections”), all as necessary to provide the Services in accordance with the
Service Levels. Supplier shall use the Supplier Data Connections to and between
the Company data network only for the purpose of delivering the Services.
Supplier shall be responsible for procuring any upgrades and replacements with
respect to the Supplier Data Connections as necessary to provide the Services in
accordance with the Service Levels. Supplier shall be responsible for managing
and maintaining (A) the Supplier Data Connections, (B) the firewalls at its end
of the Supplier Data Connections and (C) all of Supplier’s networks and
Equipment beyond such firewall Equipment.

Section 13.8 Data Connection Security. Supplier shall ensure that all Supplier
Data Connections conform to the data and network security requirements contained
in Exhibit 16 (Safety and Security Requirements).

Section 13.9 Equipment and Software Verification. Within thirty (30) days after
the Effective Date, Supplier shall verify that all Software and Equipment that
shall be used by Supplier to provide the Services, and all Supplier Data
Connections, operate in accordance with their specifications and intended
functions in a reliable manner. In the event that during verification Supplier
finds any nonconformities, Supplier shall provide to Company by the end of such
30-day period an action plan to eliminate such nonconformities within ninety
(90) days after the Effective Date. Prior to using any other software or
equipment to provide the Services or creating new connections with Company
systems and networks, Supplier shall verify that such software, equipment and
connection operates in accordance with applicable specifications and intended
functions in a reliable manner. Prior to testing any such software, equipment
and connections, Supplier shall document the testing protocols to be used and
submit such testing protocols to Company to obtain written approval thereof.

ARTICLE 14

SOFTWARE AND INTELLECTUAL PROPERTY RIGHTS

Section 14.1 Company Software. As between Company and Supplier, and except as
expressly set forth in this Section, all right, title and interest in and to the
Company Software shall remain the exclusive property of Company. Company hereby
grants to Supplier (to the extent permitted under and subject to the
restrictions set forth in applicable third-party agreements) a non-exclusive,
non-transferable, limited right to access and use, solely for the purposes of
providing the Services, the Company Software; provided that the rights granted
to Supplier hereunder shall automatically expire effective as of the date upon
which Supplier ceases, for any reason, to provide the Services.

Section 14.2 Supplier Software.

 

  (A) General

As of the Effective Date, Supplier shall be responsible in all respects for the
Supplier Software. Supplier shall install, operate and maintain at its expense
any Supplier Software needed to provide the Services. Before using any Supplier
Software on Company’s production or development systems infrastructure or any
Company Equipment, Supplier shall notify Company of its intent to use such
Supplier Software and obtain Company’s advance, written approval of such use.
Upon Company’s request, Supplier shall provide Company with a list of all
Supplier Software being used in connection with the Services on Company’s
production or development systems infrastructure or any Company Equipment as of
the date of such request. In addition to the foregoing Supplier shall notify
Company in the event that it shall install, operate or maintain any Software
within Supplier’s systems that could have a material impact on the Services.

 

Confidential   42   

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  (B) Supplier Proprietary Software

All right, title and interest in and to the Supplier Proprietary Software shall
remain the exclusive property of Supplier, except as expressly set forth in this
Section. Any modifications or enhancements owned by Supplier that are made to
Supplier Proprietary Software in the course of the Services shall be deemed
Supplier Proprietary Software. To the extent necessary to receive the Services,
Supplier hereby grants to Company a non-exclusive, royalty free license to Use
(and to allow third parties to Use solely for the benefit of Company) the
Supplier Proprietary Software.

 

  (C) Supplier Third Party Software

 

  (1) Rights of Use During Term

As between Supplier and Company, and except as expressly set forth in this
Section 14.2(C)(1), all right, title and interest in and to the Supplier Third
Party Software shall remain the exclusive property of Supplier. To the extent
necessary to receive the Services, Supplier hereby grants to Company (to the
extent permitted under and subject to the restrictions set forth in applicable
third-party agreements) a non-exclusive, non-transferable, limited right to Use
(and to allow third parties to Use solely for the benefit of Company) during the
Term the Supplier Third Party Software.

 

  (2) Post-Termination and Expiration Rights

Effective as of the date upon which Supplier ceases, for any reason, to provide
the Services to Company, and to the extent necessary to continue to receive
services similar to the Services, Supplier shall either (i) assign the license
for such Supplier Third Party Software to Company upon Company’s payment to
Supplier in an amount equal to the remaining unamortized initial license or
purchase charges for such Supplier Third Party Software, if any, and subject to
the terms and conditions of the license for such Supplier Third Party Software,
or (ii) if Supplier is unable to assign the license for any such Supplier Third
Party Software, provide reasonable assistance to Company for Company to obtain a
license for such Supplier Third Party Software; provided that, in the case of
Supplier Third Party Software assigned pursuant to clause (i), Company shall be
solely responsible for the procurement of post-expiration or post-termination
support and maintenance services with respect to such Supplier Third Party
Software. To the extent that third-party restrictions prevent Company from
obtaining such a license, Supplier shall recommend, and subject to the written
consent of Company, obtain functionally-equivalent alternative Software or
Tools; provided that Company shall be solely responsible for the procurement of
post-expiration or post-termination support and maintenance services with
respect to such functionally-equivalent Software or Tools.

Section 14.3 Software Deliverables.

 

  (A) Incorporated Supplier Software

To the extent any Supplier Software is incorporated into a Software Deliverable,
Supplier grants to Company a non-exclusive, perpetual, irrevocable, worldwide,
fully paid up, royalty-free license to Use (and to allow third parties to Use
solely for the benefit of Company) such Supplier Software in its incorporated
form and solely to the extent necessary to use the Software Deliverable.

 

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  (B) Software Deliverables

Company shall own all worldwide right, title and interest in all Core Software
Deliverables, including all Intellectual Property rights therein. Company shall
own all worldwide right, title and interest in copyrights in Non-Core Software
Deliverables. To the extent that applicable rights in any Software Deliverables
are not deemed owned by Company by operation of law, Supplier hereby irrevocably
assigns, and shall cause Supplier Personnel to assign, to Company without
further consideration, all right, title and interest in all (i) Intellectual
Property rights in Core Software Deliverables, and (ii) all copyrights in
Non-Core Software Deliverables. Supplier shall execute any documents and take
any other actions as may reasonably be necessary, or as Company may reasonably
request, to perfect Company’s ownership of rights in Software Deliverables and
applicable Intellectual Property rights herein. At any time, Company may request
and Supplier shall promptly provide Company with copies on industry standard
media of all executable code, object code, source code and documentation for any
and all Software Deliverables, whether completed or works-in-progress. Supplier
hereby grants to Company a global, fully paid-up, perpetual, irrevocable,
nonexclusive license under all Intellectual Property rights owned by Supplier,
whether now existing or hereinafter developed, to Use and modify the Non-Core
Software Deliverables in connection with the business of Company.

Section 14.4 Non-Software Deliverables. Non-Software Deliverables shall be owned
by (i) Supplier in the case of Non-Software Deliverables that are customarily
prepared by a Supplier that is providing services similar to the Services with
the expectation that such Non-Software Deliverables or derivative works thereof
will be used at multiple customers and provided that such Non-Software
Deliverable shall not contain any Company Confidential Information (“Supplier
Non-Software Deliverables”), and (ii) Company in the case of all other
Non-Software Deliverables including the Policies and Procedures Manual
(collectively, “Company Non-Software Deliverables”). Company shall own all
right, title and interest in all Company Non-Software Deliverables, including
all Intellectual Property rights therein. To the extent that any Company
Non-Software Deliverables are not deemed owned by Company by operation of Law,
Supplier hereby irrevocably assigns, and shall cause Supplier Personnel to
assign, to Company without further consideration all right, title and interest
in such Company Non-Software Deliverables, including all Intellectual Property
rights therein. Supplier shall execute, and shall cause Supplier Personnel to
execute, any documents or take any other actions as may reasonably be necessary,
or as Company may reasonably request, to perfect Company’s ownership of
Non-Software Deliverables. Company hereby grants to Supplier, solely to provide
the Services, a non-exclusive, non-transferable, limited right to have access to
and Use, modify, maintain, enhance and create derivative works of Company
Non-Software Deliverables. Supplier may sublicense to Subcontractors that are to
provide any of the Services the right to have access to and Use, modify,
maintain, enhance and create derivative works of Non-Software Deliverables
solely to provide those Services that Supplier and Subcontractors are
responsible for providing and as may otherwise be agreed to by the Parties.
Notwithstanding anything to the contrary in this Section 14.4, as between
Supplier and Company, all of Pre-Existing Rights of Supplier shall remain owned
by Supplier and Supplier hereby grants to Company a non-exclusive limited
license thereunder to use and exploit the Non-Software Deliverables as permitted
hereunder.

Section 14.5 License to Supplier Non-Software Deliverables. Supplier hereby
grants to Company a global, fully paid-up, perpetual, irrevocable, nonexclusive
license to (a) Use the Supplier Non-Software Deliverables to receive the benefit
of the Services during the Term and (b) Use, modify, maintain, enhance and
create derivative works (and to engage third parties to do the foregoing on
behalf of Company) of such Supplier Non-Software Deliverables for use in
providing services that are similar to the Services to Company and Company
Service Recipients after the Term. Company may sublicense any of the foregoing
rights to third parties for their use in providing services to Company that are
similar to the Services.

 

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Section 14.6 Residual Knowledge. Supplier will be free to use “Residuals”
resulting from access to or work with Confidential Information of Company, and
Company will be free to use “Residuals” resulting from access to or work with
Confidential Information of Supplier, provided: (i) in no case will the Supplier
disclose Company Data or the source of Residuals; and (ii) this section does not
grant either Party a license under the other Party’s copyrights or patents. The
term “Residuals” means information in intangible form (e.g., ideas, concepts,
know-how, techniques, etc.), which is unintentionally retained in the unaided
memory by persons who had rightful access to Confidential Information or
Supplier’s Information, as the case may be.

Section 14.7 Export.

 

  (A) The Parties acknowledge that certain Systems, Deliverables and associated
technical data to be provided under this Agreement and certain transactions
under this Agreement may be subject to export controls under the Laws of the
United States and other countries. Neither Party shall export or re-export any
such items or any direct product thereof or undertake any transaction in
violation of any such Laws. To the extent within Supplier’s control, Supplier
shall be responsible for, and shall coordinate and oversee, compliance with such
export Laws in respect of the System, Deliverables or other items provided by
Supplier under this Agreement. In the event Supplier determines that it needs to
export, with Company approval, any material supplied by Company, then upon
request of Supplier, Company shall provide all information in its possession
that is necessary to determine the ECCN or equivalent classification and
reasonably to assist Supplier with making any required filings and obtaining
necessary export authorizations.

 

  (B) If, in the course of performing the Services, Supplier requires, with
Company approval, a change in the use, export, release, or transfer of a
material supplied by Company not otherwise specified in or contemplated by this
Agreement, then upon request by Supplier Company shall provide all information
in its possession that is necessary to determine export authorizations and
licenses, including the ECCN and subheadings or munitions list category number
(if known to Company), and reasonably to assist Supplier with making any
required filings and obtaining necessary export authorizations. Company is
responsible for ensuring that any information knowingly provided to Supplier for
submission to such agencies with respect to such material supplied by Company is
accurate.

ARTICLE 15

FACILITIES

Section 15.1 Service Locations. The Services shall be provided (A) to the
Company Service Locations and (B) from the Supplier Service Locations and
Company Facilities. The provision of the Services from any other location must
be approved by Company, which approval shall not be unreasonably withheld, in
accordance with the Change Control Procedure. Any incremental expenses incurred
by Company or Supplier as a result of a relocation to, or use of, any other
location at the request of Company shall be paid by Company or reimbursed to
Supplier by Company. Any incremental expenses incurred by Company or Supplier as
a result of a relocation to, or use of, any other location at the request of
Supplier shall be paid by Supplier or reimbursed to Company by Supplier.

Section 15.2 Offshore Resources. Prior to providing any component of the
Services from a location not located in the country to which such Services are
being provided (each, an “Offshore Location”), except where otherwise previously
approved in writing by Company, Supplier shall obtain Company’s written
approval, such approval not to be unreasonably withheld. Before providing any
Services from an Offshore Location not set forth in this Agreement or otherwise
previously approved in writing by Company, Supplier shall provide Company with
(1) at least ninety (90) days’ prior written notice specifying the components of
the Services affected, the city and country from where the Services shall be
provided, (2) a description of the facility (including the address) from where
the Services shall be provided, (3) a description of how Company Data and
intellectual property shall be protected, including a description of

 

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the logical and physical data safeguards that Supplier shall use to protect the
Company Data, (4) a report that fully examines and evaluates the impact of such
relocation on the delivery and receipt of the Services, including any
operational, technical, security and regulatory impacts, (5) a copy of the
transition plan that details how and when the relocation to the new Offshore
Location shall occur, and (6) any other information requested by Company
relating to the offshoring of such Services. All Supplier subcontracts involving
Offshore Locations shall be subject to Section 17.7(A)(1).

Section 15.3 Safety and Security Requirements.

 

  (A) Safety and Security Procedures

Supplier shall maintain and enforce at the Supplier Service Locations (and any
Company Facilities under Supplier’s control) safety and security procedures
including: (1) the procedures applicable to Supplier Service Locations that
shall be at least equal to industry standards for locations similar to the
Supplier Service Locations; (2) the procedures applicable to the Company
Facilities, including as such may be updated by Company from time to time during
the Term, provided that, subject to the Change Control Procedure, Company shall
be responsible for any additional costs incurred by Supplier in complying with
the updated procedures; and (3) the procedures set forth in Exhibit 16 (Safety &
Security Requirements); and (4) any higher standard otherwise agreed upon by the
Parties. Supplier shall comply with the safety and security procedures that are
applicable to the Company Service Locations, including the safety and security
procedures set forth in Exhibit 16 (Safety & Security Requirements), as well as
the business practices, hours, working conditions, and Company Policies related
to the Company Facilities and Supplier’s performance under this Agreement.
Supplier shall be responsible to inquire, inspect and acquaint itself with all
conditions as required to perform the Services at Company Facilities. In the
performance of its obligations under this Agreement, Supplier shall at all
times: (a) ensure the presence of competent supervisory Personnel, when
appropriate; (b) keep the Company Facilities clean and safe, including keeping
the at Company Facilities free from debris and hazards; (c) be responsible for
the safe and orderly performance of such obligations in accordance with all
Applicable Laws; and (d) upon completion of such performance, remove all of
Supplier Equipment and unused material from Company Facilities, thoroughly clean
up all refuse and debris, and leave the at Company Facilities neat, orderly and
in good condition.

 

  (B) Access to Company Service Locations

Any Supplier Personnel who require access to Company Service Locations may be
required to complete forms relevant to security and confidentiality, and shall
adhere to all security requirements of Company’s security manager. Such Supplier
Personnel may also have restricted access to Company Service Locations for
business purposes only from 8:30 a.m. to 5:30 p.m. Monday through Friday, unless
otherwise pre-approved by Company. Supplier shall (and shall cause Supplier
Personnel to) return all badges to Company’s Security Department promptly upon
the completion of such individuals’ assignment at Company Service Locations or
their resignation or termination.

 

  (C) Physical Security Requirements

The physical portion of the Supplier Service Locations that shall be used by
Supplier to provide the Services shall be physically segregated from the
remainder of such facilities. Access to facilities used by Supplier to provide
the Services, including applicable portions of the Supplier Service Locations,
shall be controlled by swipe card access or other security controls that are at
least consistent with industry best practices. Access to such facilities shall
be restricted to Supplier Personnel (and other Supplier employees and
contractors or third parties shall not be permitted to access such facilities).
Supplier shall not provide any Services to Company from a site or facility of
any Company Competitor

 

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without Company’s prior written consent. If Supplier is to provide Company with
Services from a Supplier Service Location that has a shared storage environment
or that is otherwise shared with a Company Competitor, Supplier shall develop a
process, subject to Company’s approval, to restrict access in any such shared
storage environment so that such Company Competitor, and any other Third Party,
shall have no access to Confidential Information of Company.

Section 15.4 Right of Access to the Company IT Environment. Subject to the terms
and conditions of this Agreement, including the security requirements of
Section 15.1 and Article 21, and the security procedures set forth in Exhibit 16
(Safety and Security Requirements), Supplier shall have the right to access the
Company IT environment to the limited extent necessary to perform the Services.

Section 15.5 Company Obligations With Respect to Facilities.

 

  (A) Company shall provide to Supplier during the Term, for Supplier’s use in
providing the Services, the space, Equipment, furnishings and fixtures as
specified in Exhibit 7 (Sites), or comparable facilities designated by Company
(collectively, the “Company Facilities”). The Company Facilities shall include,
for Supplier Personnel working at Company Service Locations, the provision of
phone and network resources and office services support (e.g., copy and fax) at
the same levels offered to Company employees in such location. Supplier shall be
responsible for providing all other facilities and support it needs to provide
the Services. Company shall retain the costs of applicable facilities leases and
related leasehold improvements with respect to the Company Facilities. The
Company Facilities shall be made available to Supplier on an “as is, where is”
basis, with no warranties whatsoever. If any Supplier Personnel require access
to any Company Facilities outside of normal working hours (or otherwise outside
the access permitted under this Agreement), Supplier shall request permission
for such access from Company.

 

  (B) Company shall inform Supplier of any plans or determination to relocate
Company Service Locations and Company Facilities so that Supplier shall have a
reasonable amount of time to prepare for and implement such change or relocation
as it impacts Supplier, with Company reimbursing Supplier for Supplier’s
Out-of-Pocket Expenses incurred in such relocation.

Section 15.6 Supplier Obligations With Respect to Facilities.

 

  (A) Supplier shall use the Company Facilities for the sole and exclusive
purpose of providing the Services, subject to Company’s approval in its
discretion of another use. Company grants Supplier a license for all such
approved use of the Company Facilities. The use of Company Facilities by
Supplier does not constitute a leasehold or other property interest in favor of
Supplier.

 

  (B) Supplier shall use the Company Facilities in an efficient manner and in a
manner that is coordinated, and does not interfere, with Company’s IT or
business operations. To the extent that Supplier operates the space in a manner
that unnecessarily increases facility or other costs incurred by Company,
Company reserves the right to deduct such excess costs pursuant to Section 20.7.
Supplier shall be responsible for any damage to the Company Facilities resulting
from the abuse, misuse, neglect or negligence of Supplier or other failure to
comply with its obligations respecting the Company Facilities.

 

  (C) Supplier shall keep the Company Facilities in good order, not commit or
permit waste or damage to Company Facilities or use Company Facilities for any
unlawful purpose or act, and shall comply with Company’s standard policies and
procedures and applicable leases as these are made available to Supplier
regarding access to and use of the Company Facilities, including procedures for
the physical security of the Company Facilities.

 

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  (D) Supplier shall permit Company Personnel and representatives to enter into
those portions of the Company Facilities occupied by Supplier Personnel at any
time.

 

  (E) Supplier shall not make improvements or changes involving structural,
mechanical or electrical alterations to the Company Facilities without Company’s
prior written approval. Any improvements to the Company Facilities shall become
the property of Company.

 

  (F) When the Company Facilities are no longer required for performance of the
Services, Supplier shall return them to Company in substantially the same
condition as when Supplier began use of them, subject to reasonable wear and
tear.

ARTICLE 16

COMPANY RESPONSIBILITIES

Section 16.1 Responsibilities. In addition to Company’s responsibilities as
expressly set forth elsewhere in this Agreement, Company shall be responsible
for the following:

 

  (A) Company shall designate one individual to whom Supplier operational
communications concerning this Agreement may be addressed (the “Company Contract
Executive”).

 

  (B) Company shall cooperate with Supplier, including by making available
management decisions, information, approvals and acceptances, as reasonably
requested by Supplier so that Supplier may accomplish its obligations and
responsibilities under this Agreement. The Company Contract Executive or his
designee shall be the principal point of contact for obtaining such decisions,
information and approvals.

Section 16.2 Savings Clause. Company’s failure to perform its responsibilities
set forth in this Agreement (other than as provided in Section 29.1(B).) shall
not be deemed to be grounds for termination by Supplier. Supplier’s
nonperformance of its obligations under this Agreement shall be excused if and
to the extent (A) such Supplier nonperformance results from Company’s acts,
omissions or failure to perform any responsibilities of Company that are set
forth in this Agreement; and (B) Supplier provides Company with reasonable
notice of such acts, omissions or nonperformance and uses commercially
reasonable efforts to perform notwithstanding Company’s acts, omissions or
failure to perform (with Company reimbursing Supplier for its additional
Out-of-Pocket Expenses incurred in connection with such efforts).

ARTICLE 17

MANAGEMENT AND CONTROL

Section 17.1 Governance Organizations.

 

  (A) Steering Committee

Within thirty (30) days of the Effective Date, the Company Contract Executive
and the Supplier Project Executive shall appoint an equal number of
representatives to serve on a steering committee (the “Steering Committee”).
Company shall designate one of its representatives on the Steering Committee to
act as the chairperson. The Steering Committee shall be authorized and
responsible for (1) advising with respect to Company’s strategic and tactical
decisions regarding the establishment, budgeting and implementation of Company’s
priorities and plans for the Services, and (2) monitoring and resolving
disagreements regarding the provision of the Services and the Service Levels. A
Party may change any of its representatives on the Steering Committee upon
notice to the other Party. Subject to approval of Company, the Steering
Committee may include representatives from Third Party Vendors.

 

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  (B) Other Governance Bodies

In addition to the Steering Committee, Company and Supplier shall establish the
governance organizations (e.g., committees and positions) as set forth in
Exhibit 6 (Governance) in accordance with the time frames set forth in Exhibit 6
(Governance).

 

  (C) Governance Procedures and Processes

In addition to the processes and procedures specifically identified in this
Agreement, Company and Supplier shall establish the governance processes and
procedures described in Exhibit 6 (Governance) in accordance with the time
frames set forth in Exhibit 6 (Governance).

 

  (D) Technology Planning

Supplier shall participate, at Company’s request, in Company’s annual financial,
operational and technology planning process, as further set forth in Exhibit 8
(Technical Architecture and Product Standards). Such technology planning process
shall include (1) the identification of the least cost/highest benefit methods
to implement technology changes and improvements in architecture, platforms,
processes and methodologies, and (2) the creation of a comprehensive,
integrated, technology refresh and total lifecycle management plan for each
Tower, platform, Software type, Equipment type and technology, on each of a
one-year, three-year and five-year planning horizon (“Technology Refresh Plan”),
which plan shall meet the minimum requirements specified in Exhibit 8 (Technical
Architecture and Product Standards). In addition, such plan shall address any
technology requirements associated with any expansion of or changes in Company
Service Locations and/or facility requirements of Company.

Section 17.2 Reports, Meetings and Site Visits.

 

  (A) Reports

In addition to the Monthly Service Level Report, Supplier shall provide the
reports described in Exhibit 12 (Reports). Such reports shall (1) be no less
comprehensive than the reporting provided to Company prior to the Effective Date
and (2) be issued at the frequency specified in the applicable Exhibit.

 

  (B) Meetings

Supplier shall participate in the meetings described in Exhibit 6 (Governance)
and any other meetings requested by Company in connection with this Agreement.
Supplier shall prepare and circulate an agenda sufficiently in advance of each
such meeting to give participants an opportunity to prepare for the meeting.
Supplier shall incorporate into such agenda items that Company desires to
discuss. At Company’s request, Supplier shall prepare and circulate minutes
promptly after a meeting.

 

  (C) Site Visits

In addition to Company’s rights under Article 18, Company may at any time during
the Term, at Company’s expense and upon reasonable notice to Supplier, visit
Supplier Service Locations, and Supplier shall make available specialists, as
reasonably requested or designated by Company, to discuss the Services and to
provide requested information, as needed.

 

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Section 17.3 Policies and Procedures Manual.

 

  (A) Supplier shall be responsible for developing and maintaining a policies
and procedures manual (the “Policies and Procedures Manual”) that describes how
Supplier shall perform and deliver the Services under this Agreement, the
Equipment and Software being used, and the documentation (e.g., operations
manuals, user guides, specifications) which provide further details of such
activities. The Policies and Procedures Manual shall describe the activities
Supplier proposes to undertake in order to provide the Services, including the
direction, supervision, monitoring, staffing, reporting, planning and oversight
activities normally undertaken to provide services of the type Supplier is to
provide under this Agreement. The Policies and Procedures Manual also shall
include descriptions of the acceptance testing and quality assurance procedures
approved by Company, Supplier’s problem management and escalation procedures,
and the other standards and procedures of Supplier pertinent to Company’s
interaction with Supplier in obtaining the Services. The Policies and Procedures
Manual shall be suitable for use by Company to understand the Services.

 

  (B) In accordance with the Transition Plan, Supplier shall deliver an initial
draft Policies and Procedures Manual to Company for Company’s review, comment
and approval. Company shall provide its approval or comments and suggestions in
accordance with the timeframes set forth in the Transition Plan. Within thirty
(30) days of receiving Company’s comments or suggestions, Supplier shall
incorporate such comments or suggestions and re-submit the Policies and
Procedures Manual for Company’s approval. Throughout the Term, Supplier shall be
responsible for updating the Policies and Procedures Manual to ensure that it
remains current and reflects any changes to the Services, Company’s IT
environment, operations and business processes, and any changes or updates to
the Policies and Procedures Manual shall be provided to Company for review,
comment and approval.

 

  (C) Supplier shall perform the Services in accordance with the Policies and
Procedures Manual; provided, however, that until such time as the Policies and
Procedures Manual is approved by Company pursuant to Section 17.3(B), Supplier
shall provide the Services in accordance with the policies and procedures being
followed by Company immediately prior to the Effective Date.

 

  (D) In the event of a conflict between the provisions of this Agreement and
the Policies and Procedures Manual, the provisions of this Agreement shall
control.

Section 17.4 Change Control Procedure. As part of the Policies and Procedures
Manual, Supplier shall prepare and provide to Company a change control procedure
(the “Change Control Procedure”) detailing how Supplier shall comply with,
manage and implement: (A) the requirements set forth in Section 17.5 with
respect to change control, (B) the requirements set forth in Section 17.6 and
Exhibit 2 (Statement of Work) with respect to change management, (C) the
requirements set forth in Exhibit 6 (Governance), and (D) any other requirements
under this Agreement (or pursuant to Applicable Laws) dealing with changes to
Systems or the Services. The Change Control Procedure shall not be used to amend
the terms of this Agreement. The Change Control Procedure shall be provided to
Company for review, comment and approval (reasonable comments or suggestions of
Company shall be incorporated into the Change Control Procedure). All changes to
the Services shall be made in accordance with the Change Control Procedure.

 

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Section 17.5 Change Control. Company may from time to time during the Term
request that Supplier remove or change a Service or perform a new service (a
“New Service”) (each, a “Change Request”). Change Requests shall be addressed
and implemented in accordance with the provisions of this Article, the Change
Control Procedure and, where applicable, Company’s change management
requirements.

 

  (A) Upon receipt of a Change Request from Company, Supplier shall (within ten
(10) days, or such other period of time agreed by Company) provide Company with
a written response to the Change Request (each, a “Change Request
Authorization”), containing the following information:

 

  (1) a written description of any changes in the services, functions,
responsibilities and Deliverables of Supplier in connection with the Change
Request and any Service Levels or other performance standards, or changes in any
Service Levels or other performance standards, that shall apply in connection
with the Change Request;

 

  (2) a schedule for commencing and completing the Change Request;

 

  (3) when appropriate, a list and description of any existing and new Software
or Equipment to be used or provided by Supplier in connection with the Change
Request;

 

  (4) a written description of the Supplier Personnel necessary to complete and
implement the Change Request, including the location of such Personnel;

 

  (5) when appropriate, acceptance test criteria and procedures for any Software
or any products or services to be provided to Company in connection with the
Change Request;

 

  (6) any changes or amendments to the Transition Plan (or, if applicable, the
Transformation Plan) relating to the New Services requested in the Change
Request or any effects that any such New Services or any other aspect of the
Change Request would have on the Transition Plan and the Transformation Plan;

 

  (7) if the Change Request would require Supplier to expend or commit material
additional resources, or permit Supplier to expend materially fewer resources, a
quotation for any increase or decrease in the Charges, as applicable, to
implement or perform the Change Request. In the event of a quotation for
increased Charges, such quotation shall be no more than the charge Supplier
provides to customers similar to Company for similar services under similar
circumstances. Such quote shall be reduced, as applicable, to take into account
resources and expenses of Supplier for then-existing Services that would no
longer be required as a result of the Change Request.

 

  (B) No Change Request Authorization shall be effective until approved in
writing by an authorized representative of Company’s Global Sourcing Services
(GSS) department. Upon Company’s written approval of any such proposed Change
Request Authorization, Supplier shall implement and perform the Change Request
Authorization in accordance with its terms, the Charges under this Agreement
shall be adjusted as agreed upon in the Change Request Authorization, the
Services shall be considered changed as set forth therein, and any New Services
agreed upon therein shall thereafter be deemed “Services” and shall be subject
to the provisions of this Agreement. Supplier shall not unreasonably withhold
consent to any Change Request proposed by Company.

 

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  (C) Each Party shall bear its own costs in connection with preparation of any
Change Requests and Change Request Authorizations. Supplier shall not commence
performing any services, functions or responsibilities under a Change Request
Authorization until the Company Contract Executive has provided Supplier with
written approval of the Change Request Authorization.

 

  (D) Supplier acknowledges that Supplier is expected to provide the Services on
the terms and conditions agreed by Supplier, including the costs agreed to by
Supplier, and that Company is under no obligation to agree to any Change Request
Authorization requested by Supplier.

 

  (E) Changes to the Services necessary for Supplier to comply with changes to
the IT architecture, standards and strategic direction as specified by Company
during the Term shall be implemented as a Change Request.

Section 17.6 Change Management.

 

  (A) In addition to Company’s requirements with respect to change management as
set forth in Exhibit 2 (Statement of Work), Supplier shall comply with the
following change control requirements:

 

  (1) Prior to using any new Software or new Equipment to provide the Services,
Supplier shall have verified that the item is consistent with the IT
architecture, standards and strategic direction specified by Company, has been
properly installed, is operating in accordance with its specifications and is
performing its intended functions in a reliable manner.

 

  (2) Supplier shall not make the following changes, including implementing a
change in technology, without first obtaining Company’s approval, which approval
Company may withhold in its discretion: (a) a change adversely affecting the
function or performance of, or decreasing to any significant degree the resource
efficiency of, the Services; (b) a change increasing the Charges or other costs
to Company; (c) a change affecting Company that is inconsistent with the IT
architecture, standards or strategic direction specified by Company; or (d) a
change impacting the way in which Company conducts its business or operations
that Company considers to be adverse.

 

  (3) Supplier shall assist Company in moving programs from development and test
environments to production environments in a controlled and documented manner,
so that no changes are introduced into the programs by Supplier during such
activity.

Section 17.7 Use of Subcontractors.

 

  (A) Subcontractors

 

  (1)

Company shall have the right to approve or reject the subcontracting of
Supplier’s performance under this Agreement at any time during the Term.
Furthermore, Company shall have the right to specify the use by Supplier of
certain Subcontractors. Such approval or specification by Company shall not
create any liability for Company to any Subcontractors or privity of contract
between Company and any such Subcontractors. Furthermore, such approval or
specification shall not relieve Supplier of its obligations under this Agreement
or constitute a representation or endorsement by Company that such Subcontractor
is qualified or capable to perform. Supplier shall not substitute or replace any

 

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Subcontractor approved or specified by Company if Company objects to such
substitution or replacement. Subcontractors approved or specified as of the
Effective Date, including Affiliates of Supplier, are set forth in Exhibit 28
(Approved Supplier Subcontractors).

 

  (2) Notwithstanding the provisions of Section 17.7(A)(1) above, Supplier may,
in the ordinary course of business without the approval of Company, enter into
subcontracts (A) for Third Party products that are used by Supplier to perform
its internal functions, or (B) with a total estimated value of less than [*] per
year for (i) for Third Party services that are not exclusively dedicated to
Company and that do not include regular direct contact with Company Personnel or
the performance of Services at Company Facilities, (ii) with temporary personnel
firms for the provision of temporary contract labor, or (iii) product vendor
specialists who Supplier engages on a temporary basis to address urgent problems
(collectively, “Shared Subcontractors”); provided that such Shared
Subcontractors (i) shall not have access to Company Facilities, (ii) possess the
training and experience, competence and skill to perform the work in a skilled
and professional manner, (iii) do not have access to Company Data, and (iv) do
not perform, in the aggregate, a material portion of the Services in any Tower.

 

  (3) Any performance by approved Subcontractors in connection with this
Agreement shall be pursuant to an appropriate written agreement between Supplier
and such Subcontractors and shall contain a provision requiring that such
performance be in accordance with the applicable requirements of this Agreement
and identify Company as an intended third-party beneficiary that may enforce any
applicable warranty and similar rights under such agreement. At a minimum, each
subcontract shall require the Subcontractors, at no cost to Company, to correct
such Subcontractors’ performance not meeting the requirements of this Agreement,
shall require such Subcontractors to comply with the obligations and
restrictions applicable to Supplier under this Agreement, shall contain
applicable obligations and restrictions substantially similar to the following:
Article 7, Article 9, Section 11.3, Article 14, Section 15.1, Section 15.5,
Section 15.6, Article 18, Article 21, Article 22, Section 23.1, Section 23.10,
Section 23.11 and Section 23.12, and shall be submitted to Company (in redacted
form necessary to verify compliance with the foregoing requirements), together
with such other relevant information necessary to verify compliance with the
foregoing requirements as Company may request prior to commencement of the
Subcontractor’s performance. In no event shall Supplier be required to disclose
its costs for services performed by Subcontractor except to the extent that such
services are charged to Company on a pass-through or cost-plus basis. Company
shall have the right, at any time, to negotiate and contract directly with any
Subcontractors for any goods or services, including those to be provided under
this Agreement. No agreement between Supplier and any Subcontractor shall
relieve Supplier from any of its obligations or liabilities under this
Agreement. Nothing in this Agreement or any subcontract shall create any
contractual relationship, with the exception of the above-mentioned third-party
beneficiary, between Company and any Subcontractor including any obligation on
Company’s part to pay, or be responsible for the payment of, any sums to any
Subcontractor.

 

  (4) Supplier shall properly direct and control Subcontractor and inspect
Subcontractor’s performance for defects and deficiencies. Supplier shall be
responsible for (a) all conduct, actions and omissions of Subcontractor;
(b) compliance by each Subcontractor with the requirements of this Agreement to
at least the extent that Supplier would be responsible if it were performing
directly; and (c) management and coordination of the performance of all such
Subcontractors.

 

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Note: Redacted portions have been marked with [*]. The redacted portions are
subject to a request for confidential treatment that has been submitted to the
Securities and Exchange Commission.

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  (B) Affiliates

Supplier shall give Company written notice regarding any subcontracting of any
portion of the Services to Supplier’s Affiliates prior to entering into any
agreement with such Affiliate for such Services. Any agreement with an Affiliate
of Supplier for performance of Services shall be subject to Company’s prior
written consent. Any subcontract or supply agreement with an Affiliate shall not
exceed market prices. Company may elect, in its sole discretion, to cause any
subcontract or supply agreement which Supplier proposes to award to an Affiliate
to be competitively bid to a minimum of three qualified bidders which are not
Supplier’s Affiliates.

 

  (C) Payments to Subcontractors

Supplier shall promptly pay each Subcontractor the amount to which such
Subcontractor is entitled no later than the due date for payment under the
applicable subcontract unless Supplier has a good faith dispute regarding the
Charges of such Subcontractor and the terms of the subcontract between Supplier
and such Subcontractor permit Supplier to withhold payment in the event of a
good faith dispute. With respect to subcontract Services for which the costs for
such Services are invoiced by Supplier to Company on a Pass-Through Expense
basis (“Pass-through Subcontracts”), upon request, Supplier shall submit to
Company copies of all checks and payments to Subcontractors in connection with
such Pass-through Subcontracts. With respect to other subcontracts, Supplier
shall provide Company with reasonable evidence of payment to the applicable
Subcontractor on the request of Company. Should Supplier neglect or refuse to
cause to be paid promptly any bill or charge legitimately incurred by Supplier
in support of the Services, Company shall have the right, but not the
obligation, to pay such bill or charge directly, and Supplier shall immediately
reimburse Company for the same. If Supplier does not so reimburse Company,
Company may offset the amount of such bill or charge pursuant to
Section 20.8(B).

 

  (D) Notice of Subcontractor Breach

Supplier shall provide Company with prompt written notice of all actual or
potential disputes with Subcontractor that have or are likely to have a material
adverse impact on the Services, including, without limitation, breaches,
defaults, insolvencies, defects in Subcontractor’s goods or services, and work
stoppages. Such notice shall include the reasons and circumstances giving rise
to such disputes in such detail so as to enable Company, in its sole discretion,
to exercise any of its rights or remedies against such Subcontractor.
Notwithstanding the foregoing, neither the provisions of this Section nor the
exercise by Company of any of its rights or remedies shall relieve Supplier of
any of its obligations or liabilities under this Agreement.

Section 17.8 Quality Assurance and Improvement Programs. Supplier, as part of
its total quality management process, shall provide continuous quality assurance
and quality improvement through: (A) the identification and application of
proven techniques and Tools from other installations within its operations
(i.e., “best practices”); and (B) the implementation of concrete programs,
practices and measures designed to improve Service Levels. Such procedures shall
include checkpoint reviews, testing, acceptance, and other procedures for
Company to confirm the quality of Supplier’s performance, and shall be included
in the Policies and Procedures Manual. Supplier shall utilize project management
Tools, including productivity aids and project management Systems, as
appropriate, in performing the Services. All documentation and certifications
pertaining to such procedures and programs, including reports and data related
to performance and quality testing, shall be provided to Company upon request at
no additional cost.

 

Confidential   54   

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ARTICLE 18

AUDITS AND RECORDS RETENTION

Section 18.1 Audit Rights.

 

  (A) Supplier shall maintain a complete audit trail of all financial
transactions and non-financial activities resulting from this Agreement
sufficient to document its performance of the Services and the fees paid or
payable by Company under this Agreement. Supplier shall provide to Company, its
auditors (including internal audit staff and external auditors), inspectors,
regulators and other representatives as Company may from time to time designate
in writing (who are neither competitors of Supplier or hired on a
contingency-fee basis), access at all reasonable times (and in the case of
regulators at any time required by such regulators) to any facility or part of a
facility at which either Supplier or any Supplier Personnel is providing the
Services, to Supplier Personnel, and to data and records relating to the
Services for the purpose of performing audits and inspections of either Supplier
or any Supplier Personnel during the Term and for the period Supplier is
required to maintain records under this Agreement to:

 

  (1) verify the accuracy of Charges and invoices;

 

  (2) verify the integrity of Company Data and examine the Systems that process,
store, secure, support and transmit that data;

 

  (3) examine Supplier’s performance of the Services and conformance to the
terms of this Agreement including, to the extent applicable to the Services and
to the Charges therefor, performing audits: (a) of practices and procedures;
(b) of Systems, Equipment and Software; (c) of supporting information and
calculations regarding compliance with Service Levels; (d) of general controls
and security practices and procedures; (e) of disaster recovery and back-up
procedures; (f) of the efficiency and costs of Supplier in performing the
Services (but only to the extent affecting “time-and-materials” or “cost-plus”
Charges for, or timing of, Services); and (g) as necessary to enable Company to
meet, or to confirm that Supplier is meeting, applicable requirements of Law,
including Company’s compliance with the Sarbanes-Oxley Act of 2002. Except as
expressly set forth herein, in no event shall Supplier be required to provide
information relating to its costs or other customers; and

 

  (4) verify the net book value of Equipment to be purchased by Company under
this Agreement.

 

  (B) Supplier shall provide to such auditors, inspectors, regulators and other
representatives (1) such assistance as they require, including installing and
operating audit Software and (2) on Supplier’s premises (or, if the audit is
being performed of a Supplier Personnel, such Supplier Personnel’s or agent’s
premises if necessary), space, office furnishings (including lockable cabinets),
telephone and facsimile services, utilities and office-related Equipment and
duplicating services as such auditors, inspectors, regulators and other
representatives may reasonably require to perform the audits described in this
Article. Supplier shall cooperate fully with Company or its designees in
connection with audit functions and with regard to examinations by regulatory
authorities. Company’s auditors and other representatives shall comply with
Supplier’s reasonable security requirements.

 

  (C) Supplier shall conduct audits of or pertaining to the Services in such
manner and at such times as is consistent with the audit practices of
well-managed operations performing services similar to the Services.

 

Confidential   55   

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  (D) Supplier shall perform a security audit at least annually in accordance
with the security audit requirements set forth in Exhibit 16 (Safety and
Security Requirements), including Company’s right to participate in testing.

Section 18.2 Audit Follow-up.

 

  (A) Following an audit or examination, Company shall conduct, or request its
external auditors or examiners to conduct, an exit conference with Supplier to
obtain factual concurrence with issues identified in the review. If any review
or audit of Supplier’s operating practices and procedures relating to the
Services conducted by Supplier or its Affiliates (including by internal audit
staff or external auditors), or by inspectors, regulators or other
representatives (including internal and external auditors) reveals a risk to the
Services or Company, or nonconformance with the terms of this Agreement,
Supplier shall promptly review such issues with Company.

 

  (B) Supplier and Company shall meet to review each audit report promptly after
the issuance thereof and agree upon the appropriate manner, if any, in which to
respond to the changes suggested by the audit report. Company and Supplier agree
to develop operating procedures for the sharing of audit and regulatory findings
and reports related to Supplier’s operating practices and procedures produced by
auditors or regulators of either Party.

Section 18.3 SAS 70 Type II Report.

 

  (A) Each year during the Term (and the Termination/Expiration Assistance
Period) or on the request of Company from time-to-time such that there is no gap
in coverage, commencing no earlier than six (6) months after the completion of
the Transition, Supplier shall obtain a SAS 70 Type 2 Report. Supplier shall
provide Company with a copy of the SAS 70 Type 2 Report within fifteen (15) days
of Supplier’s receipt thereof from the service auditor. Supplier shall bear all
costs and expenses associated with obtaining and delivering each SAS 70 Type 2
Report.

 

  (B) If any Services are provided or related Systems are operated by a Supplier
Personnel, and if such Services or Systems (or any controls or other aspects of
such Services or Systems) would fall within the scope of the SAS 70 Type 2
Report had such Services or Systems been provided directly by Supplier, then
Supplier shall cause each such Supplier Personnel to comply with the
requirements of Section 18.3(A) and, if applicable, Section 18.3(C).

 

  (C) As requested by Company, Supplier shall either (1) certify to Company in
writing that during the applicable SAS 70 Gap Period no changes have been made
to the Services or the Systems, the manner in which the Services or Systems are
provided or operated, applicable controls, or the Control Objectives that could
reasonably be expected to have any impact on the contents of, or opinions set
forth in, the applicable SAS 70 Type 2 Report; or (2) provide Company with a
written description of any such changes.

 

  (D) The SAS 70 Type 2 Report shall be Confidential Information of Supplier (or
the applicable Supplier Personnel); provided, however, that notwithstanding the
foregoing or the confidentiality provisions of this Agreement, Company (and
Company’s independent auditors) shall be permitted to disclose the SAS 70 Type 2
Report (or any of the content thereof) to any person, entity or Governmental
Authority as necessary for Company to comply with the Sarbanes-Oxley Act of 2002
or any other Applicable Laws.

 

Confidential   56   

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  (E) As of the Effective Date, the Control Objectives include those set forth
in Exhibit 24 (Compliance Requirements and Control Objectives). Company may
update the Control Objectives set forth in Exhibit 24 (Compliance Requirements
and Control Objectives) at any time during the Term (or the
Termination/Expiration Assistance Period) provided that, subject to the Change
Control Procedure, Company shall be responsible for any additional costs
incurred by Supplier in complying with the updated Control Objectives to the
extent that such updated Control Objectives apply only to Company and not to any
other customer of Supplier. To the extent that such updated Control Objectives
apply to other customers of Supplier, then the costs associated with compliance
with such updated Control Objectives shall be, subject to the Change Control
Procedure, equitably allocated among Company and such customers.

Section 18.4 Sarbanes-Oxley Requirements. Supplier recognizes that Company shall
be subject to the Sarbanes-Oxley Act of 2002. In addition to those requirements
set forth in Exhibit 2 (Statement of Work) and Exhibit 24 (Compliance
Requirements and Control Objectives), Supplier shall provide whatever assistance
is necessary to enable Company to comply with such requirements with respect to
its outsourced information technology functions. Supplier’s performance of the
Services and other obligations under this Agreement shall comply with Company’s
financial reporting and control processes as set forth in the Policies and
Procedures Manual (and as such processes are revised from time to time by
Company) and provide Company with copies of all related records, reports and
data as necessary for Company to satisfy the Sarbanes-Oxley Act of 2002.
Supplier shall recommend and, subject to Company approval, implement compliance
measures to satisfy the Sarbanes-Oxley Act of 2002.

Section 18.5 Records Retention. Until the later of (A) seven years after
expiration or termination of this Agreement; (B) all pending matters relating to
this Agreement (e.g., disputes) are closed; or (C) the information is no longer
required to meet Company’s records retention policy as disclosed by Company to
Supplier and as such policy may be adjusted from time to time, Supplier shall
maintain and provide access upon request to the records, documents and other
information required to meet Company’s audit rights under this Agreement. Before
destroying or otherwise disposing of such information, Supplier shall provide
Company with ninety (90) days prior notice and offer Company the opportunity to
recover such information or to request Supplier to deliver such information to
Company, with Company paying Supplier’s Out-of-Pocket Expenses associated with
such delivery.

Section 18.6 Inspections and Government Contact. To the extent that Supplier is,
or becomes, aware of meetings with or inspections by Governmental Authorities
regarding Supplier’s obligations under this Agreement, Supplier shall notify
Company within one business day of becoming aware of any such meeting or
inspection with any such Governmental Authority. Company shall have the right to
be present at all such meetings and inspections that are (A) of general nature;
or (B) specific to Supplier’s performance of the Services. Supplier shall
provide Company with an opportunity to comment on drafts of documents Supplier
is required to submit to Governmental Authorities. Supplier shall submit to
Company copies of documents to be submitted to Governmental Authorities or
insurance companies relating to Supplier’s obligations under this Agreement,
including reports of accidents or injuries occurring at Company Service
Locations. Notwithstanding anything contained in this Agreement to the contrary,
Supplier shall not initiate or participate in any communications with any
Governmental Authorities concerning the subject matter hereof unless required by
Applicable Laws or requested to do so by Company and, then, only upon prior
consultation with Company.

ARTICLE 19

PAYMENT

Section 19.1 General. All Charges for the Services are set forth in this Article
or in Exhibit 4 (Pricing). Company shall not be required to pay Supplier any
amounts for the Services in addition to those that are payable to Supplier
pursuant to Exhibit 4 (Pricing).

Section 19.2 Efforts to Reduce Costs and Charges. From time to time during the
Term, Company may request that Supplier (with Company’s cooperation) identify
ways to achieve reductions in the cost of

 

Confidential   57   

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providing the Services and corresponding reductions in the applicable Charges,
including by modifying or reducing the nature or scope of the Services to be
performed by Supplier, the applicable Service Levels or other contract
requirements. If requested by Company, Supplier shall promptly prepare a
proposal at such a level of detail as Company may reasonably request identifying
all viable means of achieving the desired reductions without adversely impacting
Company’s IT or business operations. In preparing such a proposal, Supplier
shall give due consideration to any means of achieving such reductions proposed
by Company, negotiate in good faith with Company about each requested reduction
in Charges and identify for Company if, and to what extent, the Charges for the
Services may be reduced by implementing various changes in the contract
requirements. Company shall not be obligated to accept or implement any
proposal, and Supplier shall not be obligated to implement any change that
affects the terms of this Agreement unless and until such change is agreed upon
pursuant to the Change Control Procedure.

Section 19.3 Pass-Through Expenses.

 

  (A) All Pass-Through Expenses are listed in Exhibit 4 (Pricing). Supplier
shall arrange for delivery by third parties to Supplier of invoices for
Pass-Through Expenses, and Supplier promptly shall review such invoices and
provide Company with the original invoice together with a statement identifying
which Charges are proper and valid and should be paid by Company.

 

  (B) Supplier shall use commercially reasonable efforts to minimize the amount
of Pass-Through Expenses. With respect to services or materials paid for on a
Pass-Through Expenses basis, Company reserves the right to: (1) obtain such
services or materials directly from a Third Party; (2) designate the third-party
source for such services or materials; (3) designate the particular services or
materials (e.g., Equipment make and model) Supplier shall obtain, provided that
if Supplier demonstrates to Company that such designation shall have an adverse
impact on Supplier’s ability to provide the Services in accordance with the
Service Levels or on Supplier’s costs for providing the Services, such
designation shall be subject to Supplier’s approval; (4) designate the terms for
obtaining such services or materials (e.g., purchase or lease and lump sum
payment or payment over time); (5) require Supplier to identify and consider
multiple sources for such services or materials or to conduct a competitive
procurement; and (6) review and approve the applicable Pass-Through Expenses
before entering into a contract for particular services or materials.

Section 19.4 Taxes. The Parties’ respective responsibilities for taxes arising
under or in connection with this Agreement shall be as follows:

 

  (A) Each Party shall be responsible for any personal property taxes on
property it owns or leases, for franchise and privilege taxes on its business,
and for taxes based on its net income or gross receipts.

 

  (B) Supplier shall be responsible for any sales, use, excise, value-added,
services, consumption and other taxes and duties payable by Supplier that is
assessed on or in connection with the purchase of goods and services used by
Supplier in the provision of the Services as a whole, or on any particular
Service.

 

  (C) Company shall be responsible for any sales, use, excise, value-added,
services, consumption or other tax, whether existing as of the Effective Date or
increased or becoming applicable during the Term, that is assessed on or in
connection with the consumption of the Services as a whole, or on any particular
Service; provided, however, that with respect to Services performed from any
Offshore Locations (each an “Offshore Tax Jurisdiction”), the applicable local
tax Laws will determine which Party shall be responsible for the fulfillment of
any sales, use, excise, value-added, services, consumption, withholding or other
tax, whether existing as of the Effective Date or increased or becoming
applicable during the Term, that is assessed on or in connection with the
provision of such Services from such Offshore Tax Jurisdiction.

 

Confidential   58   

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  (D) In the event that a sales, use, excise, value added, services, consumption
or other tax is assessed on the provision of any of the Services, the Parties
shall work together to segregate the payments under this Agreement into three
payment streams:

 

  (1) those for taxable Services;

 

  (2) those for which Supplier functions merely as a payment agent for Company
in receiving goods, supplies, or services (including leasing and licensing
arrangements); and

 

  (3) those for other nontaxable Services.

Supplier is obligated to issue and provide to Company invoices that, if
applicable, at all occasions qualify for a valued added tax reimbursement for
Company (each a “Qualifying Invoice”). If necessary, Supplier shall issue
multiple Qualifying Invoices to meet its obligations

 

  (E) The Parties agree to cooperate with each other to enable each to more
accurately determine its own tax liability and to minimize such liability to the
extent legally permissible. Such cooperation shall include Supplier’s provision
of reports, asset lists and similar information requested by Company (e.g.,
lists of Equipment leased by Company (or in Company’s name) and managed by
Supplier). Supplier’s invoices (which shall comply with all requirements of Law
and the requirements of this Section) shall separately state the amounts of any
sales, use, excise, value added, services, consumption or other taxes Supplier
is collecting from Company, and Supplier shall remit such taxes to the
appropriate authorities. Supplier’s invoices shall be sufficiently detailed and
documented so as to enable Company to, where applicable, deduct input VAT. Each
Party shall provide and make available to the other any resale certificates,
information regarding out-of-state or out-of-country sales or use of Equipment,
materials or services, and other exemption certificates or information
reasonably requested by the other Party.

 

  (F) Supplier shall promptly notify Company of any claim for taxes asserted by
applicable taxing authorities for which Company is responsible hereunder. It
being understood that with respect to any claim arising out of a form or return
signed by a Party to this Agreement, such Party shall have the responsibility to
elect to control the response to and settlement of the claim, but the other
Party shall have the right to review and comment on the responses and
settlements to the extent such responses or settlements would have an adverse
impact on such other Party’s potential responsibilities or liabilities and the
input provided through such review and comment shall be considered in good faith
by the Party responding to and settling the claim. If Company requests Supplier
to challenge the imposition of any tax which imposition is new or a material
change to a previous position, interpretation, or application of such tax to the
Services, Supplier shall cooperate with Company and so challenge such tax.
Company shall reimburse Supplier for the reasonable legal fees and expenses
Supplier incurs with respect to such challenge and Company may elect to control
such challenge. Company shall be entitled to any tax refunds or rebates granted
to the extent such refunds or rebates are of taxes that were paid by Company.

 

Confidential   59   

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Section 19.5 Benchmarks. Company shall have the right during the Term, [*] to
benchmark the Charges and quality for the Services of one or more of the
Sub-Towers, provided that benchmarking of Charges for each Sub-Tower cannot be
undertaken more than [*] during the Term. The purpose of any benchmarking
exercise is to verify that Company is receiving competitive market pricing and
service level quality with respect to the management, delivery and receipt of
the Services.

 

  (A) A benchmarking under this Section shall be conducted by an independent
industry-recognized benchmarking service provider designated by Company and
approved by Supplier (the “Benchmarker”). Supplier agrees that Gartner and
Nautilus are acceptable as a Benchmarker as of the Effective Date. The
Benchmarker shall be engaged by Company on a non-contingent fee basis. The fees
and costs of the Benchmarker shall be paid by Company. The Parties shall
cooperate with the Benchmarker, including, as appropriate, making available
knowledgeable personnel and pertinent documents and records, subject to the
Benchmarker’s execution of a confidentiality agreement with Company and Supplier
(or separate confidentiality agreements if the Parties so agree) containing
obligations of confidentiality approved by the Parties, which approval shall not
be unreasonably withheld. All information provided to or obtained from the
Benchmarker will be provided to both Parties. Supplier shall not be required to
make available cost data or data with respect to Supplier’s other customers.

 

  (B) The Benchmarker shall perform the benchmarking in accordance with
Benchmarker’s documented procedures which shall be provided to and subject to
review by the Parties prior to the start of the benchmarking process. The
Benchmarker shall compare the Charges [*] under this Agreement for the Services
of the Sub-Tower being benchmarked to the costs [*] being incurred in a
representative sample of IT operations for other entities (the “Benchmarked
Representative Sample”). The Benchmarker shall select the Benchmarked
Representative Sample from entities (1) identified and approved by the
Benchmarker, and (2) identified by a Party and approved by the Benchmarker,
which approval shall not be unreasonably withheld. The following conditions
apply to the Benchmarked Representative Sample: (a) it shall include only
entities that have outsourced similar services, (b) it may include entities that
are outsourcing customers of Supplier, and [*] If the Benchmarker-proposed
Benchmarked Representative Sample consists of [*], such selection shall be
subject to the Parties’ approval, which shall not be unreasonably withheld. If
the Benchmarker-proposed Benchmarked Representative Sample consists of [*].

 

  (C) The Benchmarker shall commence the benchmarking exercise within thirty
(30) days of receipt of Company’s request and issue its initial report to the
Parties within one-hundred-and-twenty (120) days of receipt of Company’s
request. In conducting the benchmarking, the Benchmarker shall normalize the
data used to perform the benchmarking to accommodate, as appropriate,
differences in volume of services, scope of services, quality of services,
including the service levels, financing or payment streams, and other pertinent
factors. If the Benchmarked Representative Sample consists of [*]. Each Party
shall be provided a reasonable opportunity (but no more than thirty (30) days)
to review, comment on and request changes in the Benchmarker’s proposed
findings. Within ten (10) days of receiving any comments from the Parties, the
Benchmarker shall issue a final report of its findings and conclusions.

 

  (D) If in the Benchmarker’s final report the aggregate of the then-applicable
Charges under this Agreement for a benchmarked Sub-Tower are [*], then no
adjustments to Charges hereunder for such Sub-Tower shall be made as a result of
the Benchmark. However, if in the final report of the Benchmarker, the aggregate
of the then-applicable Charges under this Agreement for a benchmarked Sub-Tower
are [*] the following shall apply:

 

  (1) If in the Benchmarker’s final report the aggregate of the then-applicable
Charges under this Agreement for the benchmarked Sub-Tower are [*]

 

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Note: Redacted portions have been marked with [*]. The redacted portions are
subject to a request for confidential treatment that has been submitted to the
Securities and Exchange Commission.

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  (2) If in the Benchmarker’s final report the aggregate of the then-applicable
Charges under this Agreement for the benchmarked Sub-Tower are [*]

 

  (3) [*] Supplier shall, within 30 days after issuance of the Benchmarker’s
final report, [*] If Supplier does not [*], Company may [*]

 

  (4) For each benchmarked Sub-Tower, if (A) Supplier fails to [*] (B) fails to
[*], or (C) Company does not [*], then Company may [*] Provided, however, that
in the event of [*], Company shall [*] In the case of termination by Company of
Services in accordance with this Section, the Charges payable under this
Agreement for the continuing Services shall be equitably adjusted to reflect the
services that are terminated.

 

  (5) Attachment 4-A to Exhibit 4 (Pricing) sets forth the Charges for each of
the Sub-Towers for each year of the Term [*]. The Attachment 4-A to Exhibit 4
(Pricing) included as part of this Agreement at the commencement of each
benchmarking exercise shall be referred to as “Exhibit 4-Pre-Benchmark Charges
Schedule”. After a reduction in Charges pursuant to Section 19.5(D)(1) or
Section 19.5(D)(2), such reduced Charges for the Sub-Tower shall remain in
effect and apply, and such Sub-Tower shall not be subject to subsequent
benchmarking, [*] The foregoing shall have no effect on adjustments to the
Charges because of ARCs and RRCs.

ARTICLE 20

INVOICING

Section 20.1 Invoicing.

 

  (A) Supplier shall act in good faith in its issuance of invoices hereunder and
invoice Company pursuant to the terms of this Agreement. Supplier shall invoice
Company for Charges due and owing for the Monthly Base Charges and Transition
Charges for each month at any time prior to the fifteenth (15th) day of such
month. ARCs/RRCs and any other variable charges shall be invoiced in arrears at
any time after the beginning of a month for Charges due and owing for the prior
month.

 

  (B) Invoicing and payment will be by and between the Parties in the United
States in U.S. dollars except where material services are performed by Supplier
and used by Company in a country outside of the United States.

 

  (C) Supplier shall have the right upon notice to Company to render either a
single consolidated invoice for each month’s Charges or an invoice for each
Tower, in each case in the form specified by Company, including in electronic
format. The approved form as of the Effective Date is attached to Exhibit 4
(Pricing). Each invoice shall (1) meet all requirements of Applicable Laws,
including tax requirements, (2) contain all information necessary to enable
Company to deduct input value added taxes when applicable, (3) include all tax
information required by Section 19.4(E) (including any GST or VAT on-charged to
Company), and (4) contain information specified by Company to satisfy Company’s
internal accounting requirements. Supplier shall maintain appropriate
documentation, measurement and reporting Systems as necessary to satisfy such
Company internal accounting requirements.

 

  (D) All Out-of-Pocket Expenses shall be invoiced pursuant to the requirements
for invoicing under this Agreement, accompanied by documentation in form and
detail sufficient for Company to recognize such expenses for Company’s tax
reporting purposes.

 

Confidential   61   

Note: Redacted portions have been marked with [*]. The redacted portions are
subject to a request for confidential treatment that has been submitted to the
Securities and Exchange Commission.

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

  (E) All amounts listed in an invoice shall specify the amounts actually
incurred in the currency in which such amounts were incurred. Company may
require additional information for any amounts stated on an invoice, including
without limitation evidence that all parties furnishing labor or materials to
Supplier in connection with the performance of Supplier’s obligations under this
Agreement that are related to Pass-Through Expenses that have been paid.
Supplier shall respond to Company’s reasonable request for additional
information in connection with an invoice promptly, but in no event any later
than two (2) business days after delivery of Company’s request, provided,
however, if Supplier reasonably requires additional time to respond to Company’s
request for information, Supplier may request Company to agree to an extension
of the above deadline.

 

  (F) Company may request that Supplier submit at times other than those
specified herein an invoice for portions of Charges that have not yet been
invoiced but represent amounts payable for actual performance of Supplier’s
obligations under this Agreement. When Company makes such a request, Supplier
shall deliver to Company a complete invoice reflecting such portions of Charges,
if any, believed by Supplier to be payable. Supplier shall deliver such invoice
by the deadline identified in Company’s request therefore and, if no deadline is
specified in Company’s request, then no later than thirty (30) days following
the date of Company’s request.

 

  (G) To the extent a credit may be due Company pursuant to this Agreement,
Supplier shall provide Company with an appropriate credit against amounts then
due and owing; if no further payments are due to Supplier, Supplier shall pay
such amounts to Company within thirty (30) days.

Section 20.2 Payment Due. Subject to the other provisions of this Article,
invoices provided for under Section 20.1 and properly submitted to Company
pursuant to this Agreement shall be due and payable by Company within [*] after
receipt thereof. Any amount due under this Agreement for which a time for
payment is not otherwise specified shall be due and payable within [*] after
receipt of a proper invoice for such amount. All payments shall be made by
electronic funds transfer.

Section 20.3 [*]. Subject to Company’s right to withhold amounts pursuant to
Section 20.8, in the event that Company [*]

Section 20.4 Accounting. Supplier shall maintain complete and accurate records
of and supporting documentation for the amounts billable to and payments made by
Company under this Agreement in accordance with generally accepted accounting
principles applied on a consistent basis. Supplier agrees to provide Company
with documentation and other information with respect to each invoice as may be
reasonably requested by Company to verify accuracy and compliance with the
provisions of this Agreement.

Section 20.5 Proration. Periodic Charges under this Agreement are to be computed
on a calendar month basis, and shall be prorated for any partial month.

Section 20.6 Refundable Items.

 

  (A) Prepaid Amounts

Where Company has prepaid for a service or function for which Supplier is
assuming financial responsibility under this Agreement, Supplier shall refund to
Company, upon either Party identifying the prepayment, that portion of such
prepaid expense that is attributable to periods on and after the Effective Date.

 

Confidential   62   

Note: Redacted portions have been marked with [*]. The redacted portions are
subject to a request for confidential treatment that has been submitted to the
Securities and Exchange Commission.

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

  (B) Refunds and Credits

If Supplier should receive a refund, credit or other rebate for goods or
services previously paid for by Company, Supplier shall promptly notify Company
of such refund, credit or rebate and shall promptly pay the full amount of such
refund, credit or rebate, as the case may be, to Company.

Section 20.7 Deductions. With respect to any amount to be paid by Company under
this Agreement, Company may deduct from such amount any amount that Supplier is
obligated to pay Company under this Agreement.

Section 20.8 Disputed Charges.

 

  (A) Disputes Regarding Invoices

If Company disputes in good faith an amount stated in an invoice, Company shall
notify Supplier in writing of the dispute promptly upon becoming aware of the
dispute, but no later than the day before the due date, and the basis therefore.
Upon receipt of such notification, Supplier shall submit a revised invoice
stating only undisputed amounts. Upon receipt of a revised invoice stating only
undisputed amounts, Company shall pay such invoice by the later of (i) the due
date for the original invoice, or (ii) five (5) business days following receipt
of the revised invoice. Upon resolution of disputed amounts, Supplier shall
submit an invoice pursuant to this Article for the amounts that the Parties
mutually agree are no longer in dispute. In the event Company in good faith
disputes an invoice submitted by Supplier, Company may, at its option, withhold
payment of the disputed amount and (1) Company shall continue to pay all
undisputed amounts in accordance with the terms hereof, and (2) Supplier shall
continue to perform its obligations under this Agreement. In the event of a
dispute regarding any amount on any invoice, the Parties shall resolve the
dispute pursuant to Article 28. Both Parties shall provide full supporting
documentation concerning any disputed amount or invoice within thirty (30) days
after written notification of the dispute. [*]. If the amount disputed by
Company exceeds an aggregate amount at any point in time greater than [*], then
Company shall [*].

 

  (B) Withholding Payment

Notwithstanding Section 20.8(A), if, through subsequently discovered evidence or
subsequent observations, Company becomes aware that it could have withheld
approval and payment (but did not) of an amount previously invoiced by Supplier
and paid by Company, Company reserves the right, subject to Section 20.8, to
deduct the applicable disputed amount from later invoices or request a credit
from Supplier for the applicable amount. The provisions of this Section shall
not lessen or diminish, but shall be in addition to, the right or duty of
Company to withhold payments under the provisions of this Agreement and Laws
respecting the withholding of sums due to Supplier.

 

  (C) Invoice Dispute Escalation

If the Parties are not able to resolve a dispute regarding Charges within thirty
(30) days of Company’s notice of a disputed amount, the Parties shall attempt to
resolve their dispute informally pursuant to Section 28.1 (Informal Dispute
Resolution).

 

Confidential   63   

Note: Redacted portions have been marked with [*]. The redacted portions are
subject to a request for confidential treatment that has been submitted to the
Securities and Exchange Commission.

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

ARTICLE 21

PROTECTION OF COMPANY DATA

Section 21.1 Company Data.

 

  (A) Company Data shall be and remain, as between the Parties, the property of
Company. Supplier shall not possess or assert any lien or other right against or
to Company Data. No Company Data, or any part thereof, shall be sold, assigned,
leased or otherwise disposed of or disclosed to third parties by Supplier or
commercially exploited by or on behalf of Supplier.

 

  (B) Upon Company’s request, the termination or expiration of this Agreement
for any reason (including termination for cause) or, with respect to any
particular Company Data, on such earlier date that the same shall be no longer
required by Supplier in order to render the Services, such Company Data
(including copies thereof) shall be promptly returned to Company by Supplier in
a form reasonably requested by Company or, if Company so elects, shall be
destroyed by Supplier, all at no additional charge to Company.

 

  (C) Company Data shall not be utilized by Supplier for any purpose other than
that of rendering the Services under this Agreement.

 

  (D) Supplier shall use commercially reasonable efforts to correct any errors
occurring in any Company Data and restore any losses of any Company Data to the
extent that such errors or losses result from Supplier’s failure to comply with
the terms of this Agreement.

 

  (E) Regardless of whether Company approves the provision of certain Services
from an Offshore Location, except as expressly provided in Exhibit 28 (Approved
Supplier Subcontractors), in no event shall Supplier physically install Software
owned or licensed by Company (or electronically install such Software, if the
media is in electronic form) on any server or other Equipment located at an
Offshore Location or store any Company Data on any server or other Equipment
located at an Offshore Location.

Section 21.2 Protection of Company Data.

 

  (A) Supplier shall establish and maintain safeguards against the disclosure,
destruction, loss or alteration of Company Data in the possession or control of
Supplier that are no less rigorous than those maintained by Company as of the
Effective Date. During the Term, Supplier shall make recommendations to Company
on additional safeguards that may be implemented, including recommendations
based on the safeguards maintained by Supplier for its own information of a
similar nature. Company shall have the right to establish backup security for
Company Data and to keep backup Company Data and Company Data files in its
possession if it chooses.

 

  (B) Without limiting the generality of Section 21.2(A):

 

  (1) Supplier Personnel shall not attempt to access, or allow access to, any
Company Data which they are not permitted to access under this Agreement. If
such access is attained, Supplier shall immediately report such incident to
Company, describe in detail the accessed Company Data and return to Company any
copied or removed Company Data.

 

  (2)

Supplier shall utilize commercially reasonable efforts, including through
Systems security measures, to guard against the unauthorized access, disclosure,
loss, alteration or destruction of Software and Company Data. Such measures
shall include the installation of Software that: (a) requires all users to enter
a user

 

Confidential   64   

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

 

identification and password prior to gaining access to the information Systems;
(b) controls and tracks the addition and deletion of Authorized Users; and
(c) controls and tracks user access to areas and features of the information
Systems.

 

  (3) Supplier shall at all times protect such Company Systems through
procedures and Tools deemed satisfactory by Company. Such procedures and Tools
in connection with remote access to Company Systems shall include:

 

  (a) a mechanism to determine and immediately report to Company possible
security breaches;

 

  (b) controls to ensure the return or destruction, at Company’s direction, of
information transmitted through Company Systems;

 

  (c) a process for maintaining the confidentiality, integrity and availability
of information transmitted through Company Systems; and

 

  (d) methods for controlling access to Company Systems, which shall include
(i) permitted access methods; (ii) an authorization process for users’ access
and privileges; and (iii) maintenance of a list of authorized users.

 

  (4) Prior to Supplier remotely accessing Company Systems, in order for Company
to determine its satisfaction with the procedures and Tools required by this
Section, Supplier shall submit to Company:

 

  (a) a list of established connections that Supplier has with the electronic
information systems of third parties from Supplier systems that will also be
used to remotely access Company Systems in order for Company to evaluate
security issues associated with such connection and Company Systems;

 

  (b) a copy of Supplier’s security policies applicable to electronic
information systems; and

 

  (c) a copy of Supplier’s most recent external penetration test or network
audit of its electronic information systems that will be used to remotely access
Company Systems.

 

  (5) All Supplier interconnectivity to Company Systems and all attempts at such
interconnectivity shall be only through Company’s security gateways and
firewalls. Supplier shall not access, and shall not permit unauthorized persons
or entities to access, Company Systems without Company’s express written
authorization, and any such actual or attempted access shall be consistent with
any such authorization.

 

  (6) Without limiting any rights and remedies set forth elsewhere in this
Agreement, Company shall have the right to audit and monitor the procedures and
Tools required pursuant to this Section to ensure Supplier’s compliance with
such requirements. Company shall have the right to revoke or limit Supplier’s
access to Company Systems at any time, including in the event Supplier is deemed
by Company, in its sole discretion, to have failed to comply with the
requirements of this Article.

 

Confidential   65   

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

  (C) In the event of an attack or threatened or suspected intrusion or other
breach of security against any Systems, Equipment and/or Software, Supplier
shall, at its expense, and without limiting the Service Level obligations under
this Agreement, take whatever steps are necessary to immediately protect such
Systems, Equipment and/or Software and prevent any further breaches, including:
(1) preventing further access to the Systems, Equipment and Software from the
source of the attack, (2) immediately backing up the affected Systems,
Equipment, Software and Company Data, (3) enhancing defensive systems to prevent
any similar breaches in the future, (4) contacting the ISP where the threat or
attack originated and relevant law enforcement authorities, (5) investigating
the extent of the damage, if any, (6) producing an incident report detailing
Supplier’s findings and providing such report to Company, (7) providing
supplemental monitor traffic from the attack source until risk of further
attacks is deemed to be eliminated, and (8) temporarily disabling affected
components of the Services, if warranted by the circumstances and with prior
approval of Company, provided that such Services are reinstated as soon as the
risk of further breaches is deemed to have been eliminated or adequate
additional security measures have been implemented. Supplier shall immediately
contact Company upon discovering such an attack or threatened or suspected
intrusion or breach of security and provide to Company all information
reasonably requested, and the Parties shall mutually agree on appropriate
measures to be taken with respect thereto.

Section 21.3 Privacy Requirements.

 

  (A) Privacy Laws and Regulations

 

  (1) Supplier expressly understands and acknowledges that Confidential
Information of Company may include information that can be used to identify a
specific individual and/or is subject to applicable privacy Laws (collectively,
“Personally Identifiable Information”), and agrees to comply with all such
Applicable Laws, including the Federal Gramm-Leach-Bliley Act and any state
statutes adopted to comply therewith, the FTC regulations promulgated pursuant
thereto (including 16 CFR § 313, 16 CFR § 314, 12 CFR § 332 and 12 CFR § 364),
and any state regulations promulgated under state privacy statutes or in
compliance with the Gramm-Leach-Bliley Act; the Health Insurance Portability and
Accountability Act of 1996 (45 CFR parts 160 and 164) and regulations, including
Laws and regulations related to medical records and patient privacy,
confidentiality, and consumer protection; and the European Union’s Directive
95/46/EC on the Protection of Individuals with Regard to the Processing of
Personal Data and on the Free Movement of Such Data and implementing legislation
of EU Member States, and similar legislation of other countries, including
Canada, Australia, New Zealand and Switzerland (collectively, the “Privacy Laws
and Regulations”). Supplier acknowledges and agrees that, as part of the
Personally Identifiable Information, it shall receive “non-public personal
information” regarding Company’s customers, employees, vendors and other
individuals, as that information is defined in Title V of the Federal
Gramm-Leach-Bliley Act, “protected health information,” regarding Company’s
employees and other agents, and their beneficiaries and other individuals, as
that term is defined in 45 CFR § 164.501, and “personal data” and “sensitive
personal data” regarding Company’s employees and other agents, as that term is
defined under the European Union’s Directive 95/46/EC on the Protection of
Individuals with Regard to the Processing of Personal Data and on the Free
Movement of Such Data and implementing legislation of EU Member States, and
similar legislation of other countries to which Services are provided under this
Agreement.

 

  (2)

Without limiting the generality of part (1) of this Section, in accordance with
Supplier shall adhere to all current and future Applicable Laws pertaining to
privacy or confidentiality of patient information, including without limitation,
the

 

Confidential   66   

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

 

Health Insurance Portability and Accountability Act of 1996 (45 CFR parts 160
and 164) (“HIPAA”), including Applicable Laws related to medical records and
patient privacy, confidentiality, and consumer protection. Supplier shall not
provide or otherwise disclose to Company any information that could be used to
identify individual patients, including “protected health information” (“PHI”)
as defined by HIPAA. Supplier shall properly screen and de-identify PHI in any
and all documents, material, or other information prior to delivering or making
them available to Company to ensure that Company does not receive PHI or
individually identifiable health information.

 

  (B) Data Controller/Data Processor

Company, in its capacity as a data controller, hereby appoints Supplier as a
data processor in each case where Supplier needs to process the Personally
Identifiable Information.

 

  (C) Compliance with Data Protection Laws

Notwithstanding any other term of this Agreement, Company and Supplier shall
each be responsible for complying with their respective obligations under the
applicable Privacy Laws and Regulations with respect to the Personally
Identifiable Information. Company remains solely responsible for determining the
purposes of Supplier’s processing of Personally Identifiable Information under
this Agreement, and Supplier confirms that it shall act only on Company’s
instructions in relation to its processing of any Personally Identifiable
Information; provided, however, that nothing in this Agreement shall prevent
Supplier or Company from doing what it reasonably considers necessary to comply
with all applicable Privacy Laws and Regulations. Supplier shall not subcontract
its processing of Personally Identifiable Information without Company’s prior
approval. Where any subcontract is entered into by Supplier, Supplier shall
ensure that it is in accordance with all applicable Privacy Laws and
Regulations.

 

  (D) Transborder Data Flows

Supplier shall not transfer any Personally Identifiable Information originating
in the European Economic Area to outside the European Economic Area unless
Supplier obtains Company’s prior consent and Supplier implements such
arrangements as are necessary to ensure that such transfers of Personally
Identifiable Information are made in accordance with all Privacy Laws and
Regulations and as may be requested by Company.

 

  (E) Information

If under Applicable Laws, Company is required to provide information to an
individual regarding Personally Identifiable Information, Supplier shall
reasonably cooperate with Company in providing such information. Upon Company’s
reasonable written request, Supplier shall provide Company with such information
that it has regarding Personally Identifiable Information and the processing of
such data that is necessary to enable Company to comply with its obligations
under this Section and all applicable Privacy Laws and Regulations.

 

Confidential   67   

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

  (F) Supplier Obligations

Supplier understands and acknowledges the following:

 

  (1) Without exception, Supplier shall not use any Personally Identifiable
Information it receives for purposes other than carrying out the Services and
shall not disclose any Personally Identifiable Information to any Third Party
(including any Affiliates of Supplier) without Company’s prior written consent
and subject to all applicable Privacy Laws and Regulations.

 

  (2) Supplier shall implement and maintain technical, physical and
administrative safeguards for the Personally Identifiable Information it
receives consistent with the Company’s requirements as they relate to all
applicable Privacy Laws and Regulations, including as set forth at 45 CFR §
164.500 et seq., in order to: (a) ensure the security and confidentiality of the
Personally Identifiable Information; (b) protect against anticipated threats or
hazards to the security or integrity of such information; and (c) protect
against unauthorized access to or use of such information.

 

  (3) In the event Supplier breaches any Applicable Laws governing Personally
Identifiable Information, Supplier shall: (a) give Company prompt notice of such
a violation, including all notices required by Law; and (b) take all remedial or
other actions required by Law and as reasonably requested by Company, including
notifying all affected individuals and entities.

ARTICLE 22

PROTECTION OF CONFIDENTIAL INFORMATION

Section 22.1 Confidentiality. Each Party shall maintain in confidence all
Confidential Information of the other Party, and shall not disclose such
Confidential Information to any Third Party except to those of its Personnel as
are necessary in connection with such Party’s activities as contemplated by this
Agreement. In maintaining the confidentiality of Confidential Information, each
Party shall exercise the same degree of care that it exercises with its own
confidential information, and in no event less than a reasonable degree of care.
Supplier shall ensure that each of the Supplier Personnel holds in confidence
and makes no use of the Confidential Information of Company for any purpose
other than those permitted under this Agreement or otherwise required by law.
Supplier shall clearly and completely convey the requirements of this Article 22
to all Supplier Personnel to ensure such requirements are understood and
followed. If requested by Company, Supplier shall secure written commitments
from Supplier’s Personnel to comply with the confidentiality requirements of
this Agreement.

Section 22.2 Obligations.

 

  (A) As requested by the other Party during the Term and upon expiration or any
termination of this Agreement and completion of Supplier’s obligations under
this Agreement, each party shall return or destroy, as the other Party may
direct, all material in any medium that contains, refers to, or relates to
Confidential Information of such Party, and retain no copies.

 

  (B) In the event of any disclosure or loss of, or inability to account for,
any Confidential Information of the furnishing Party, the receiving Party
promptly shall (1) notify the furnishing Party upon becoming aware thereof;
(2) take such actions as may be necessary or reasonably requested by the
furnishing Party to minimize the violation; and (3) cooperate in all reasonable
respects with the furnishing Party to minimize the violation and any damage
resulting therefrom.

 

Confidential   68   

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  (C) The Parties’ obligations respecting Confidential Information shall survive
any expiration or termination of this Agreement [*].

Section 22.3 Exclusions. Section 22.2 shall not apply to any particular
information that Supplier or Company can demonstrate: (A) was, at the time of
disclosure to it, in the public domain; (B) after disclosure to it, is published
or otherwise becomes part of the public domain through no fault of the receiving
Party; (C) was in the possession of the receiving Party without any obligation
of confidentiality at the time of disclosure to it; (D) 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 (E) was independently developed by the receiving Party without
reference to Confidential Information of the furnishing Party. The foregoing
exclusions shall in no event apply to Personally Identifiable Information or
PHI, which shall always be deemed to be Confidential Information of Company. In
addition, a Party shall not be considered to have breached its obligations by
disclosing Confidential Information of the other Party as required to satisfy
any legal requirement of a competent government body to the minimum extent
necessary as advised by counsel; provided that, immediately upon receiving any
such request and to the extent that it may legally do so, such Party promptly
advises the other Party of the request and 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, or take
such other action as it deems appropriate to protect the Confidential
Information.

Section 22.4 Disclosure of Confidential Information Based on Governmental
Request. In the event that Supplier receives a request from a Third Party,
pursuant to a valid subpoena, legally valid governmental authority request, or
other valid legal request, that requires it to disclose Company’s Confidential
Information, Supplier shall (i) give Company prompt (but in no event later than
twenty-four (24) hours after receipt of the request) prior written notice of the
requested disclosure which notice shall include a copy of such subpoena or
request, (ii) use reasonable efforts to resist disclosing the Confidential
Information, (iii) cooperate with Company on request to obtain a protective
order or otherwise limit the disclosure of the Confidential Information,
(iv) consent to an injunction or protective order and not oppose Company’s
request to intervene, and (v) prior to such disclosure, provide a letter from
its counsel confirming that the Confidential Information is, in fact, required
to be disclosed. A disclosure of Confidential Information in accordance with
this Section 22.4 shall not be deemed a breach of the confidentiality
obligations hereunder.

Section 22.5 No Implied Rights. Subject to the provisions of Article 14, each
Party’s Confidential Information shall remain the property of that Party.
Nothing contained in this Section 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.

Section 22.6 Unauthorized Disclosure. Each Party acknowledges and confirms that
the Confidential Information of the other Party constitutes proprietary
information or trade secrets valuable to the other Party, and that the
unauthorized use, loss or outside disclosure of such Confidential Information
shall be presumed to cause irreparable injury to the other Party. Each Party
acknowledges that monetary damages may not be a sufficient remedy for
unauthorized disclosure of Confidential Information of the other Party and that
the other Party may be entitled, without waiving other rights or remedies, to
such injunctive or equitable relief as may be deemed proper by a court of
competent jurisdiction. If a court of competent jurisdiction should find that a
Party’s acts or omissions have, or could, lead to an unauthorized use, loss or
outside disclosure of the other Party’s Confidential Information, then each
Party agrees that, without any additional findings of irreparable injury or
other conditions precedent to injunctive relief, it shall not oppose the entry
of an order restraining it from any further acts or omissions which have or
could have lead to an unauthorized use, loss or outside disclosure of the other
Party’s Confidential Information.

 

Confidential   69   

Note: Redacted portions have been marked with [*]. The redacted portions are
subject to a request for confidential treatment that has been submitted to the
Securities and Exchange Commission.

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

ARTICLE 23

REPRESENTATIONS AND WARRANTIES

Section 23.1 Work Standards. Supplier represents, warrants and covenants that
the Services shall be rendered with promptness and diligence and shall be
executed in a workmanlike manner, in accordance with the practices and high
professional standards used in well-managed operations performing services
similar to the Services. Supplier represents, warrants and covenants that it
shall use adequate numbers of qualified individuals with suitable training,
education, experience and skill to perform the Services.

Section 23.2 Maintenance. Supplier represents, warrants and covenants that it
shall maintain the Systems, Supplier Equipment and Supplier Software so that
they operate in accordance with their specifications, including (A) maintaining
Supplier Equipment in good operating condition, subject to normal wear and tear;
(B) undertaking repairs and preventive maintenance on Supplier Equipment in
accordance with the applicable Equipment manufacturer’s recommendations; and
(C) performing Software maintenance in accordance with the applicable Software
provider’s documentation and recommendations.

Section 23.3 Efficiency and Cost Effectiveness. Supplier represents, warrants
and covenants that it shall use commercially reasonable efforts to use
efficiently the resources or services necessary to provide the Services.
Supplier represents and warrants that it shall use commercially reasonable
efforts to perform the Services in the most cost-effective manner consistent
with the required level of quality and performance.

Section 23.4 Technology and Equipment.

 

  (A) Supplier represents, warrants and covenants that it shall provide the
Services using proven, current technology, Equipment and Software that shall
enable Company to take advantage of technological advancements in their
industry, subject to the Change Control Procedure, and support Company’s efforts
to maintain competitiveness in the markets in which it competes.

 

  (B) Supplier represents, warrants and covenants that (1) all Equipment
provided by Supplier pursuant to Supplier’s technology refresh obligations under
this Agreement shall be new, not refurbished or reconditioned, except to the
extent agreed to by Company in writing and (2) Supplier is either the owner of,
or authorized to use, the Equipment provided by Supplier pursuant to this
Agreement.

 

  (C) Supplier shall ensure that if Company is to, or it is foreseeable under
this Agreement that Company will, hold title or a license to any of the
Equipment or Software, either during or after the Term, Supplier shall
(i) obtain warranties for such Equipment and Software corresponding to the
Refresh lifecycle applicable to such Equipment or Software as set forth in this
Agreement, or if such Equipment or Software is not covered under the Refresh
lifecycle then it shall obtain such warranties as are commercially reasonable,
and (ii) ensure that such warranties may be passed through or assigned to
Company upon the granting or transfer of title or license to Company. Supplier
warrants that it shall perform its obligations in such manner so as to preserve
any such third-party warranties. Supplier shall use its commercially reasonable
efforts to assist Company in enforcing such third-party warranties. If this
Agreement obligates Supplier to obtain the warranties and Supplier fails to do
so without the written agreement of Company, then, without additional cost to
Company and without waiving any other rights or remedies available to Company,
Supplier shall either perform, or cause another to perform, the warranty
obligations that Supplier should have obtained or secure a warranty to cover
such all for the benefit of Company.

Section 23.5 Non-Infringement. Each Party represents, warrants and covenants
that it shall perform its responsibilities under this Agreement in a manner that
does not infringe, or constitute an infringement or misappropriation of, any
patent, copyright, trademark, trade secret or other proprietary rights of any
Third Party.

 

Confidential   70   

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Section 23.6 Software Ownership or Use. Supplier represents and warrants that it
is either the owner of, or authorized to Use, the Supplier Software.

Section 23.7 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

 

  (C) The execution, delivery and performance of this Agreement and the
consummation of this Agreement shall not constitute a material default under any
material contract by which it or any of its material assets is bound; or an
event that would, with notice or lapse of time, or both, constitute such a
default.

Section 23.8 Inducements. Supplier represents and warrants to Company that
neither Supplier nor any employee, agent or representative of Supplier has
knowingly violated any Applicable Laws or any Company Policies regarding the
offering of unlawful inducements in connection with this Agreement.

Section 23.9 Ethics and Conflict of Interest. In its performance of its
obligations under this Agreement, Supplier shall adhere to business practices
that meet and are in the spirit of Applicable Laws and ethical principles,
including the following:

 

  (A) All transactions undertaken in connection with Supplier’s obligations
under this Agreement shall be accurately reflected in Supplier’s records;

 

  (B) Supplier shall perform its obligations under this Agreement and conduct
itself with respect to Supplier Personnel and third parties so as to avoid loss
or embarrassment to Company, including loss or embarrassment due to any real or
apparent conflict of interest; and

 

  (C) Supplier shall not enter into any other agreement, whether written or
oral, that would conflict with the performance of Supplier’s obligations under
this Agreement.

Section 23.10 No Debarment. Supplier represents and warrants that neither
Supplier nor any Supplier Personnel rendering Services is presently: (A) the
subject of a debarment action or is debarred pursuant to the Generic Drug
Enforcement Act of 1992, (B) the subject of a disqualification proceeding or is
disqualified as a clinical investigator pursuant to 21 CFR §312.70, (C) the
subject of an exclusion proceeding or excluded from participation in any federal
health care program under 42 CFR Part 1001 et seq., or (D) listed on the United
States Department of Health & Human Services, Office of Research Integrity’s
Administrative Actions Listing. Supplier shall notify Company immediately upon
any inquiry concerning, or the commencement of any such proceeding concerning,
Supplier or any Supplier Personnel.

Section 23.11 Viruses. Supplier represents, warrants and covenants that it shall
use commercially reasonable efforts so that no Viruses are coded or introduced
into the Systems or Software Deliverables. Supplier agrees that, in the event a
Virus is found to have been introduced into the Systems or Software
Deliverables, Supplier shall use commercially reasonable efforts at no
additional charge to assist Company in reducing the effects of the Virus and, if
the Virus causes a loss of operational efficiency or loss of data, to assist
Company to the same extent to mitigate and restore such losses.

 

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Section 23.12 Disabling Code. Supplier represents, warrants and covenants that,
without the prior written consent of Company, Supplier shall not knowingly
insert into the Systems or Software Deliverables any code that would have the
effect of disabling or otherwise shutting down all or any portion of Systems,
Software Deliverables or the Services, other than code that is inserted into
commercially available products to ensure that the purchaser or licensee uses
the product in accordance with the applicable license. Supplier further
represents and warrants that, with respect to any disabling code that may be
part of the Systems or Software Deliverables, Supplier shall not knowingly
invoke such disabling code at any time resulting in a material impact on the
business of Company, including upon expiration or termination of this Agreement
for any reason, without Company’s prior written consent.

Section 23.13 Deliverables. Supplier represents, warrants and covenants that,
for a period of one (1) year after (i) in the case of Transition or
Transformation Deliverables used by Supplier to perform the Services, the
expiration or termination of this Agreement, whichever is earlier, or (ii) in
the case of all other Deliverables, final acceptance of such Deliverable by
Company, each such Deliverable (1) shall conform to the Acceptance Criteria for
such Deliverable and shall not deviate from the specifications and requirements
for such Deliverable agreed upon by the Parties, including as set forth or
referred to in Exhibit 2 (Statement of Work), and (2) shall comply with cGMP, as
applicable. Supplier further represents, warrants and covenants that the use of
each Deliverable by Company shall not infringe, or constitute an infringement or
misappropriation of, any patent, copyright, trademark, trade secret or other
proprietary rights of any Third Party provided, however, this representation,
warranty and covenant shall not apply to the extent the infringement results
from (a) a modification of or to, or the misuse of, such Supplier Provided Items
other than according to or in compliance with the specifications or designs of
the applicable Deliverable, or (b) the combination, operation or use of such
Supplier Provided Items with Software or Equipment not furnished or approved by
Supplier or not contemplated by the specifications of documentation for such
Supplier Provided Items.

Section 23.14 Compliance with Laws and Regulations.

 

  (A) Supplier represents, warrants and covenants that (1) it has a high level
of expertise and significant experience in providing services of the kind
contemplated by this Agreement, and (2) it is familiar with Applicable Laws,
including, but not limited to, HIPAA, [*] and the regulations promulgated
pursuant thereto, and current good clinical practices and current good
laboratory practices (each as defined under Applicable Laws).

 

  (B) Supplier represents, warrants and covenants that (1) it is as of the
Effective Date and will at all times be fully and properly licensed, qualified,
experienced, equipped, organized and financed to perform its obligations under
this Agreement, (2) it is as of the Effective Date and will at all times be in
compliance with all Applicable Laws, and (3) all Services and Deliverables
provided under this Agreement will be in material compliance with all Applicable
Laws.

 

  (C) To the extent Supplier creates, uses or modifies Software or Systems,
Supplier represents, warrants and covenants that all such Software and Systems
(1) shall be maintained in accordance with this Agreement and (2) shall comply
with, through electronic and/or manual (e.g., paper copies, personnel access
controls), the standards contained in this Agreement that are related to all
applicable U.S. and international regulations governing software or information
systems relating to the conduct of clinical trials, including, but not limited
to, Title 21 of the United States Code of Federal Regulations Part 11
(electronic document and data management).

Section 23.15 Solvency. Supplier represents and warrants that Supplier is
financially solvent, able to pay its debts as they mature, and possesses
sufficient working capital to complete its obligations hereunder.

Section 23.16 Disability Claims. Company represents that as of the date of their
hiring by Supplier, none of the Transitioned Employees are receiving or are due
to receive payments under any disability or

 

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subject to a request for confidential treatment that has been submitted to the
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permanent health or any similar insurance scheme and to Company’s knowledge
there are no claims pending or threatened which may give rise to such a claim by
any of the Transitioned Employees against Company in respect of any accident,
injury, disability or ill-health.

Section 23.17 Disclaimer. OTHER THAN AS PROVIDED IN THIS AGREEMENT, THERE ARE NO
EXPRESS OR IMPLIED WARRANTIES MADE BY EITHER PARTY, INCLUDING IMPLIED WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

ARTICLE 24

INSURANCE

Supplier shall during the Term have and maintain in force at least the insurance
coverage set forth in Exhibit 25 (Insurance Requirements), in accordance with
the terms and conditions set forth in such Exhibit.

ARTICLE 25

INDEMNITIES

Section 25.1 Supplier Indemnification. Supplier shall defend, indemnify and hold
harmless Company, its Affiliates, and their respective officers, directors and
Personnel (the “Company Indemnified Parties”) from and against any and all
(i) damages, liabilities, losses, costs, fees, penalties, and fines awarded to a
Third Party by a court, in arbitration, by any judicial, regulatory or
governmental authority or agreed to in a settlement approved by Supplier, and
(ii) expenses (including without limitation reasonable attorneys’ fees and
expenses (both in-house and outside attorneys), and costs of investigation,
litigation, settlement, and judgment associated therewith ((i) and
(ii) collectively, “Losses”) in connection with Third Party suits, actions,
legal or administrative proceedings, claims, liens or demands (“Third Party
Claims”) arising out of or related to:

 

  (A) Breach of Supplier’s representations, warranties and covenants [*] of this
Agreement;

 

  (B) Supplier’s misappropriation of Confidential Information of Company;

 

  (C) any breach of Supplier’s obligations under this Agreement that results in
a [*]; provided, however, that (i) [*];

 

  (D) Any and all acts or omissions of Supplier or its Personnel resulting in
any death, bodily injury or damage to real or tangible personal property in
connection with the Services [*];

 

  (E) Any and all breaches by Supplier of its obligations to its Subcontractors
providing the Services;

 

  (F) Any and all breaches by Supplier of Supplier Laws provided that [*];

 

  (G) Any and all breaches by Supplier of its obligations under [*];

 

  (H) Relating to Supplier’s failure to observe or perform any duties or
obligations to be observed or performed on or after the Effective Date by
Supplier under any contracts, including Software licenses, Equipment leases,
Assigned Contracts and Managed Contracts, in each case, that are assigned to
Supplier or for which Supplier has assumed financial, administrative or
operational responsibility;

 

  (I)

Claims that the performance or use of the Services, or that the Deliverables,
Supplier Software, Supplier Equipment, any other enhancements or modifications
to any Company Software or other works prepared or provided by Supplier or any
other resources or items provided to Company by Supplier (collectively,
“Supplier Provided

 

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Items”) infringe the patent, copyright, trademark, service mark, trade name or
other similar proprietary rights of such Third Party, [*]. Further, Supplier and
its subsidiaries shall not be liable to Company or indemnify Company for any
claims of patent infringement, including contributory infringement or inducement
to infringe, of any patents owned or licensable now or hereafter by Ronald A.
Katz or Ronald A. Katz Technology Licensing, L.P. or by his or its successors or
assigns, but only if and to the extent any such claim of infringement is based
on the fact that the Services are not being provided from facilities owned or
leased by Supplier or that Supplier is not providing substantially all automated
call processing and updating all databases associated with the Services;

 

  (J) Any claims for Supplier’s tax liabilities arising out of provision of
Services, as set forth in Section 19.4;

 

  (K) Any claim by [*] against any Company Indemnified Party alleging [*]
Notwithstanding any other language in this Article 25, Supplier shall defend,
indemnify and hold any Company Indemnified Parties harmless with respect to all
[*];

 

  (L) Any claim or action by, on behalf of, or related to, Affected Personnel
arising on or after the Effective Date, including claims relating to employment
or engagement, termination of employment or engagement, occupational health and
safety, worker’s compensation, ERISA or arising under other Applicable Laws, and
any representations, oral or written, made by Supplier to Company’s employees
[*];

 

  (M) Any claims relating to any Transitioned Personnel arising before, on or
after the Effective Date arising from the acts or omissions of Supplier, or one
of its Affiliates or in connection with a failure by Supplier to comply with ARD
Laws or other Laws [*];

 

  (N) Any claim by or on behalf of any Personnel of Supplier engaged in the
provision of Services by Supplier or any Supplier Personnel relating to the
employment by Supplier or a claim of co-employment by Company [*];

 

  (O) Failure by Supplier to [*].

Section 25.2 Company Indemnification. Company shall defend, indemnify and hold
harmless Supplier, its Affiliates, and their respective officers, directors and
Personnel (the “Supplier Indemnified Parties”) from and against any and all
Losses in connection with Third Party Claims arising out of or related to:

 

  (A) Breach of Company’s representations, warranties and covenants set forth in
Article 23;

 

  (B) The acts or omissions of Company or its Personnel resulting in any death,
bodily injury or damage to real or tangible personal property in connection with
this Agreement [*];

 

  (C) Claims that the use of the Company Provided Materials in connection with
the Services infringes the Intellectual Property or other proprietary rights of
such Third Party, except as may have been caused by (i) a modification or misuse
of such Company Software other than according to or in compliance with the
specifications or designs thereof, or (ii) the combination, operation or use of
such Company Software with Software or Equipment not furnished or approved by
Company or not contemplated by the documentation for or expected use of such
Company Software;

 

  (D) Any claim or action by, or on behalf of, or related to the Transitioned
Personnel arising from the acts or omissions of the Company, or one of its
Affiliates, prior to the Effective Date, including claims relating to employment
or engagement, occupational health and safety, worker’s compensation, ERISA or
arising under other Applicable Laws[*];

 

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  (E) Any claim or action relating to Company’s failure to observe or perform
any duties or obligations to be observed or performed prior to the Effective
Date by Company under any of the contracts, including Software licenses,
Equipment leases, Assigned Contracts and Managed Contracts;

 

  (F) Any claim or action commenced against Supplier by a Company Service
Recipient that directly and solely arises out of the Services under this
Agreement, provided, however, that (i) Company shall not be obligated to defend,
indemnify or hold harmless Supplier under this Section 25.1(F) if such Company
Services Recipient has a direct contractual relationship with Supplier or one of
its Affiliates for the provision of the Services that are the subject of the
Losses, and (ii) indemnification hereunder shall not limit any rights Company
may have against Supplier based on the events giving rise to the claim by
Company Service Recipient; and

 

  (G) Any claim or action by an Affected Employee or Affected Contractor arising
before, on or after the Effective Date to the extent arising out of or in
connection with a failure by a Company Indemnified Party to comply with ARD Law.

Section 25.3 Infringement. If any Supplier Provided Item becomes, or in
Supplier’s reasonable opinion is likely to become, the subject of an
infringement, including misappropriation, claim or proceeding, Supplier shall,
in addition to indemnifying Company as provided in this Article and to the other
rights Company may have under this Agreement, (A) promptly at Supplier’s expense
secure the right to continue using the Supplier Provided Item, or (B) if this
cannot be accomplished with commercially reasonable efforts, then at Supplier’s
expense, replace or modify the Supplier Provided Item to make it non-infringing,
provided that any such replacement or modification shall not degrade the
performance or quality of the Supplier Provided Item or any affected component
of the Services, or (C) if neither of the foregoing can be accomplished by
Supplier with commercially reasonable efforts, and only in such event, then
remove the Supplier Provided Item from the Services, in which case the Charges
shall be equitably adjusted to reflect such removal.

Section 25.4 Indemnification Procedures. With respect to third-party claims for
which a Party is seeking indemnification hereunder, the following procedures
shall apply:

 

  (A) Promptly after receipt by any entity entitled to indemnification under
Section 25.1 and Section 25.2 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 shall 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 actual damages attributable to such
failure. Within fifteen (15) days following receipt of written notice from the
indemnitee relating to any claim, but no later than 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 acknowledges its
indemnification obligation and elects to assume control of the defense and
settlement of that claim (a “Notice of Election”).

 

  (B)

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; provided that (1) 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 (2) the
indemnitor shall obtain the prior written approval of the indemnitee before
entering into any settlement of such claim or ceasing to defend against such
claim. After the indemnitor has delivered a Notice of Election relating to any
claim in accordance with the preceding paragraph, the indemnitor shall not be
liable to the indemnitee for any legal or other expenses incurred by the
indemnitee in connection with the defense of that claim. In addition, the
indemnitor shall not be required to

 

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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 without the written consent of the
indemnitor. The indemnitee and the indemnitor shall [*].

 

  (C) If the indemnitor does not deliver a Notice of Election relating to a
claim, or otherwise fails to acknowledge its indemnification obligation or to
assume the defense of a claim, within the required notice period, the indemnitee
shall have the right to defend the claim in such manner as it may deem
appropriate, at the cost and expense of the indemnitor, including payment of any
judgment or award and the costs of settlement or compromise of the claim. The
indemnitor shall promptly reimburse the indemnitee for all such costs and
expenses, including payment of any judgment or award and the costs of settlement
or compromise of the claim.

 

  (D) [*].

Section 25.5 Subrogation. In the event that an indemnitor shall be obligated to
indemnify an indemnitee pursuant to this Article, 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.

ARTICLE 26

LIABILITY

Section 26.1 General Intent. Subject to the specific provisions of this Article,
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.

Section 26.2 Liability Restrictions.

 

  (A) SUBJECT TO SECTION 26.2(D) AND SECTION 26.2(E), IN NO EVENT, WHETHER IN
CONTRACT OR IN TORT (INCLUDING BREACH OF WARRANTY, NEGLIGENCE AND STRICT
LIABILITY IN TORT), SHALL A PARTY BE LIABLE FOR INDIRECT OR CONSEQUENTIAL,
EXEMPLARY, PUNITIVE OR SPECIAL DAMAGES EVEN IF SUCH PARTY HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES IN ADVANCE.

 

  (B) Subject to Section 26.2(C), each Party’s total liability to the other for
Direct Damages, whether in contract or in tort (including breach of warranty,
negligence and strict liability in tort) shall be limited in the aggregate for
all claims and causes of action to an amount equal to the total Charges payable
to Supplier pursuant to this Agreement for proper performance of the Services
for the [*] prior to the month in which the most recent event giving rise to
liability occurred; provided that if such event giving rise to liability occurs
during the first [*] after the Effective Date, liability shall be the limited to
an amount equal to the greater of (i) the total Charges that would be payable to
Supplier pursuant to this Agreement for proper performance for the Services
during such [*] period, and (ii) the total Charges payable to Supplier pursuant
to this Agreement for proper performance of the Services since the Effective
Date. The following do not count against and do not reduce the amounts available
under the foregoing limitations: (i) Service Level Credits; (ii) payments of
taxes; and (iii) [*].

 

  (C) The limitations set forth in Section 26.2(B) shall not apply with respect
to:

 

  (1) Company’s payment obligations under this Agreement;

 

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  (2) the failure of Supplier to issue credits or otherwise make payments due to
Company under this Agreement;

 

  (3) claims based on the acts or omissions of Company or its Personnel
resulting in any death, bodily injury or damage to real or tangible personal
property to the extent arising out of or related to Company’s or its Personnel’s
breach of this Agreement, negligence, or willful misconduct;

 

  (4) claims based on the acts or omissions of Supplier resulting in any death,
bodily injury or damage to real or tangible personal property to the extent
arising out of or related to Supplier’s breach of this Agreement, negligence, or
willful misconduct;

 

  (5) misappropriation by Supplier of Company’s Confidential Information;

 

  (6) misappropriation by Company of Supplier’s Confidential Information;

 

  (7) breach of Supplier’s obligations under this Agreement that results in a
[*];

 

  (8) damages occasioned by the [*] of a Party;

 

  (9) damages occasioned by the [*] of a Party, for which each Party’s total
liability to the other for Direct Damages shall be limited in the aggregate to
an amount equal to the total Charges payable to Supplier pursuant to this
Agreement for proper performance of the Services for the [*] prior to the month
in which the most recent event giving rise to liability occurred; provided that
if such event giving rise to liability occurs during the first [*] after the
Effective Date, liability shall be the limited to an amount equal to the greater
of (i) the total Charges that would be payable to Supplier pursuant to this
Agreement for proper performance for the Services during [*] period, and
(ii) the total Charges payable to Supplier pursuant to this Agreement for proper
performance of the Services [*];

 

  (10) for clarity, Losses that are the subject of indemnification hereunder;
and

 

  (11) [*].

 

  (D) The limitations set forth in Section 26.2(A) shall not apply with respect
to:

 

  (1) Company’s payment obligations under this Agreement;

 

  (2) the failure of Supplier to issue credits or otherwise make payments due to
Company under this Agreement;

 

  (3) misappropriation by Supplier of Company’s Confidential Information;

 

  (4) misappropriation by Company of Supplier’s Confidential Information; and

 

  (5) Losses that are the subject of indemnification hereunder, subject to any
limitations contained therein and in Section 26.2(E)(3) and Section 26.2(E)(4).

 

  (E) The limitations set forth in Section 26.2(A) shall not apply with respect
to the following, provided that Supplier’s and, as the case may be, Company’s
liability for indirect, consequential, exemplary, punitive or special damages
for the items listed in this Section 26.2(E) shall not exceed the following
amounts:

 

  (1) [*], for breach of Supplier’s obligations under this Agreement that
results in [*] a total liability limited in the aggregate to an amount equal to
[*]; provided, however, to the extent that [*];

 

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  (2) provided that Company has met its payment obligations under this
Agreement, for damages occasioned by [*], in each case, that [*], Supplier’s
total liability shall be limited in the aggregate to an amount equal to [*];

 

  (3) for damages occasioned by the [*], (i) a total liability limited in the
aggregate to an amount equal to [*]; (ii) except, [*]; and

 

  (4) for damages occasioned by the [*], (i) a total liability limited in the
aggregate to an amount equal to [*]; (ii) except, [*].

 

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

 

  (G) Recovery of amounts under Section 26.2(C)(9) (Direct Damages occasioned by
[*]) and amounts under Section 26.2(E)(3) (indirect or consequential, exemplary,
punitive or special damages occasioned by [*]) that are in excess of [*], the
Direct Damages liability cap in Section 26.2(B).

ARTICLE 27

CONTINUED PROVISION OF SERVICES

Section 27.1 Force Majeure.

 

  (A) No Party shall be liable for any default or delay in the performance of
its obligations under this Agreement (1) 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, civil disorders, or any other cause beyond the
reasonable control of such Party, (2) provided the non-performing Party is
without fault in causing such default or delay, and such default or delay could
not have been prevented by reasonable precautions and 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 Supplier by Supplier
meeting its obligations for performing disaster recovery services as described
in this Agreement) (a “Force Majeure Event”). In the event of the occurrence of
an event covered by the DRP, the terms of the DRP shall prevail, and this
Section 27.1 shall be of no effect as to the performance of Services covered by
the DRP.

 

  (B) In the case of a Force Majeure Event, the non-performing Party shall be
excused from further performance or observance of the obligation(s) so affected
for as long as such circumstances prevail and such Party continues to use
commercially reasonable efforts to recommence performance or observance whenever
and to whatever extent possible without delay. Any Party so delayed in its
performance shall immediately notify the Party to whom performance is due by
telephone (to be confirmed in writing within two (2) days of the inception of
such delay) and describe at a reasonable level of detail the circumstances
causing such delay.

 

  (C) If any event under Section 27.1(A) substantially prevents, hinders or
delays performance of (1) the Services necessary for the performance of
functions reasonably identified by Company as critical for the lesser of (i) the
applicable RTO set forth in the DRP or (ii) seventy two (72) consecutive hours,
or (2) any other Services for more than the lesser of the applicable RTO or ten
(10) consecutive days, then at Company’s option:

 

  (1) Company may procure such Services from an alternate source, and Supplier
shall be liable for payment of the reasonable fees for such Services from the
alternate source for the lesser of (i) so long as the delay in performance shall
continue, or (ii) one hundred eighty (180) days;

 

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  (2) Company may, thirty (30) calendar days after [*]; or

 

  (3) Company may, thirty (30) calendar days after [*].

 

  (D) Supplier shall not have the right to any additional payments from Company
for costs or expenses incurred by Supplier as a result of any Force Majeure
Event.

Section 27.2 Disaster Recovery.

 

  (A) Disaster Recovery Plan. Supplier shall, in accordance with the schedule
set forth in the Transition Plan:

 

  (1) develop, submit to Company for Company’s review, and implement a disaster
recovery plan (“DRP”) Accepted by Company, which DRP shall contain recovery time
objectives (“RTOs”) after the occurrence of any disaster during which the
Services shall be fully restored in accordance with the Service Levels which
RTOs shall be in accordance with the Service Levels and other requirements set
forth in this Agreement, consistent with industry best practices for Company’s
industry and the Services, and no longer in duration or less protective of
Company than those established by Company as of the Effective Date;

 

  (2) update and test (with Company’s cooperation, at Company’s option, allow
Company to participate in such updates and tests) every six (6) months the
operability of the DRP to ensure that the DRP is fully operational;

 

  (3) certify to Company at least once during every six (6) month period during
the Term and the Termination/Expiration Assistance Period that the DRP is fully
operational; and

 

  (4) implement the DRP upon the occurrence of a disaster.

Prior to implementation of the DRP, Supplier shall implement Company’s existing
DRP.

 

  (B) Disaster Recovery Testing. Supplier shall cooperate with Company in joint
disaster recovery planning and testing activities, subject to the Parties’
respective safety and security policies and procedures. Supplier shall provide
to Company a copy of the results of all disaster recovery tests conducted by or
for Supplier to the extent relevant to the Services.

 

  (C) Disaster Occurrence. In the event of a disaster covered by the DRP,
Supplier shall reinstate the Services within the applicable RTOs. In the event
the applicable Services are not reinstated within the applicable RTOs or the
Services are not returned to their state of delivery prior to the subject
disaster within the time specified in the DRP, then at its option:

 

  (1) Unless Supplier has notified Company that Supplier has already done so,
Company may procure the affected Services from an alternate source, and Supplier
shall be liable for payment of the reasonable fees for such Services from the
alternate source until the Services are restored;

 

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  (2) Company may, after [*]; or

 

  (3) Company may, after [*].

Supplier shall not have the right to any additional payments from Company for
costs or expenses incurred by Supplier as a result of a disaster covered by the
DRP, and Supplier shall be liable for the actual Direct Damages of Company
resulting from the failure of Supplier to meet the requirements of the DRP,
including, but not limited to (i) engaging an alternate source of Services, and
(ii) transitioning the Services to a new service provider or insourcing the
Services.

 

  (D) In the event of a disaster in which Supplier is required under this
Agreement, including but not limited to the DRP, to implement an interim
workaround to restore the Services to the Service Levels, Supplier shall
implement the interim workaround to the extent it satisfies the requirements set
forth in the DRP and shall eliminate the interim workaround and return the
Services to their state of delivery prior to the subject disaster within (i) the
applicable RTO for such restoration, if any, or (ii) if no such RTO exists,
within thirty (30) days of restoration of the Services to within the Service
Levels.

ARTICLE 28

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 Supplier or Company, shall be resolved as
provided in this Article.

Section 28.1 Informal Dispute Resolution. Subject to Section 28.4, the Parties
initially shall attempt to resolve their dispute informally, in accordance with
the following:

 

  (A) Upon the written request by a Party (“Dispute Notice”), 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 shall be to meet
for the purpose of endeavoring to resolve such dispute.

 

  (B) 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.

 

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

Section 28.2 Litigation. Litigation of a dispute may be commenced by either
Party upon the earliest to occur of any of the following:

 

  (A) the designated representatives conclude in good faith that amicable
resolution through continued negotiation of the matter does not appear likely;

 

  (B) thirty-five (35) days have elapsed from the date of the Dispute Notice
(this period shall be deemed to run notwithstanding any claim that the process
described in this Section was not followed or completed); or

 

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  (C) commencement of litigation is appropriate to avoid the expiration of an
applicable limitations period or to preserve a superior position with respect to
other creditors, or a Party makes a good faith determination, including as
provided in Section 28.4 with respect to Company, that a breach of this
Agreement by the other Party is such that a temporary restraining order or other
injunctive relief is necessary.

Section 28.3 Governing Law, Jurisdiction and Venue. This Agreement and
performance under it shall be governed by and construed in accordance with the
Laws of the State of California without regard to its choice of law principles.
For all actions that may arise with respect to this Agreement, the Parties
irrevocably and unconditionally submit (A) to the non-exclusive jurisdiction and
venue (and waive any claim of forum non conveniens) of the United States
District Court for the Central District of California or (B) if such court does
not have jurisdiction, to the Superior Court of the State of California, Ventura
County. The Parties further consent to the jurisdiction of any court located
within a district which encompasses assets of a Party against which a judgment
has been rendered for the enforcement of such judgment or award against the
assets of such Party. NOTWITHSTANDING THE FOREGOING AND ONLY WITH RESPECT TO
[*].

Section 28.4 Specific Performance. In the event a court determines that Supplier
has or is reasonably likely to have (i) [*], or (ii) breached Supplier’s
obligations to [*].

Section 28.5 Continued Performance. Subject to Company continuing to comply with
its obligations under Article 19 and Article 20 (including Section 20.8), each
Party agrees to continue performing its obligations under this Agreement while a
dispute is being resolved except 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 Article 29.

ARTICLE 29

TERMINATION

Section 29.1 Termination for Cause.

 

  (A) In the event that Supplier:

 

  (1) commits a material breach of this Agreement, which breach is capable of
being cured within thirty (30) days after notice of breach from Company to
Supplier, but is not cured in such 30-day period;

 

  (2) commits a material breach of this Agreement that is not capable of being
cured within thirty (30) days but is capable of being cured within sixty
(60) days and fails to (a) proceed promptly and diligently to correct the
breach, (b) develop within thirty (30) days following written notice of breach
from Company a complete plan for curing the breach, and (c) cure the breach
within sixty (60) days of notice thereof;

 

  (3) commits a material breach of this Agreement that is not subject to cure
with due diligence within sixty (60) days of written notice thereof; or

 

  (4) commits numerous breaches of its duties or obligations which collectively
constitute a material breach of this Agreement;

then Company may, by giving written notice to Supplier, terminate this
Agreement, in whole or in part, as of a date specified in the notice of
termination. If Company chooses to terminate this Agreement in part, the Charges
payable under this Agreement shall be equitably adjusted to reflect those
services that are terminated. Termination under this section shall be without
penalty and without the payment of any termination fees or Wind-down Expenses.

 

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Without limiting the rights of Company to terminate this Agreement for cause
based on other acts or omissions of Supplier hereunder, [*].

 

  (B) [*]

Any notice required or permitted hereunder shall be in writing and shall be
deemed given as of the date it is (i) delivered by hand; or (ii) received by
registered or certified mail, postage prepaid, return receipt requested; or
(iii) confirmed as received if by facsimile; or (iv) received by nationally
recognized, overnight courier, and addressed to the party to receive such notice
at the address set forth below, and such other address as is identified in
Section 30.3 in writing:

Vice President, Information Systems Infrastructure

Amgen Inc.

Mailstop: 81-1-B

One Amgen Center Drive

Thousand Oaks, CA 91320-1799

Fax Number: [*]

And

Executive Director, Information Systems Infrastructure, Sourcing Management

and Governance

Amgen Inc.

Mailstop: 35-2-A

One Amgen Center Drive

Thousand Oaks, CA 91320-1799

Fax Number: [*]

Section 29.2 Termination for Convenience. Company may terminate this Agreement
for convenience and without cause at any time after the first anniversary of
Effective Date by giving Supplier at least six (6) months prior written notice
designating the termination date [*]. In the event that a purported termination
for cause by Company under Section 29.1(A) is determined by a competent
authority not to be properly a termination for cause, then such termination by
Company shall be deemed to be a termination for convenience under this Section.

Section 29.3 [*].

Section 29.4 Termination Upon Change of Control. Subject to the following
sentence, in the event (A) another entity, directly or indirectly, in a single
transaction or series of related transactions, acquires either Control of
Supplier or all or substantially all of the assets of Supplier, or (B) Supplier
is merged with or into another entity to form a new entity, Company shall have
the right to terminate this Agreement on written notice to Supplier and payment
of the applicable termination fee set forth in Exhibit 4 (Pricing). [*].

Section 29.5 [*].

Section 29.6 Extension of Termination/Expiration Effective Date. Company may
extend the effective date of the termination or expiration of this Agreement one
or more times as it elects, at its discretion, by notice to Supplier at least
sixty (60) days prior to the then-current effective date of termination or
expiration, provided that the total of all such extensions shall not exceed one
hundred and eighty (180) days following the original effective date of
termination or expiration.

 

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Section 29.7 Termination/Expiration Assistance.

 

  (A) Commencing six (6) months prior to expiration of this Agreement or on such
earlier date as Company may reasonably request, or commencing upon a notice of
termination (including notice based upon default by Company) or of non-renewal
of this Agreement, and continuing for a period of twelve (12) months following
the effective date of termination or expiration of this Agreement (the
“Termination/Expiration Assistance Period”) (as such effective date may be
extended pursuant to Section 29.5), Supplier shall continue to provide to
Company, or at Company’s request to one or more Company designees, the Services
that were provided prior thereto and any reasonable cooperation requested by
Company that may be required from Supplier to facilitate the transfer of the
affected Services to Company or a third-party service Supplier, as applicable,
or Company’s designee (“Termination/Expiration Assistance”). The quality and
level of performance during the Termination/Expiration Assistance Period shall
not be degraded. After the expiration of the Termination/Expiration Assistance
Period, Supplier shall (1) use commercially reasonable efforts to answer
questions from Company regarding the Services on an “as needed” basis on a
time-and-materials basis and (2) deliver to Company any remaining Company-owned
reports and documentation still in Supplier’s possession.

Charges for Termination/Expiration Assistance by Supplier shall be at the rates
specified in Exhibit 4 (Pricing). Without limiting the foregoing, Supplier
agrees there shall be no additional charges for Termination/Expiration
Assistance to the extent that Supplier can perform Termination/Expiration
Assistance using its then-existing resources dedicated to providing the Services
under this Agreement. If Termination/Expiration Assistance will require the use
of different or additional services or resources beyond that which Supplier is
then using to provide the Services in accordance with Exhibit 4-D (Resource
Units) and Service Levels, then such request for Termination/Expiration
Assistance shall be considered a New Service and shall be subject to the Change
Control Procedure. If Supplier terminates this Agreement for Company’s material
breach, Supplier may require that Company pays for such Termination/Expiration
Assistance in advance.

 

  (B) “Termination/Expiration Assistance” shall include the obligation to
continue to provide the Services, the assistance described in Exhibit 26
(Termination/Expiration Assistance) and the following:

 

  (1) Company or its designee shall be permitted to undertake, without
interference from Supplier, to hire any Supplier Personnel primarily performing
the Services as of the date Supplier receives notice of termination, or, in the
case of expiration, within the six (6) month period (or longer period requested
by Company) prior to expiration. Supplier shall waive, and shall use
commercially reasonable efforts to cause its Supplier Personnel to waive, their
rights, if any, under contracts with such Personnel restricting the ability of
such Personnel to be recruited or hired by Company or its designee. Company or
its designees shall have reasonable access to such Personnel for interviews and
recruitment. Unless otherwise agreed, the hire date for any such Supplier
Personnel hired by Company or Company’s designee under this Section shall be
after the expiration of the Termination/Expiration Assistance.

 

  (2) If Company is entitled pursuant to this Agreement to a sublicense or other
right to Use any Software owned or licensed by Supplier, Supplier shall provide
such sublicense or other right.

 

  (3)

At Company’s request and expense for any related consent or assignment fees,
Supplier shall (a) obtain any Required Consents from third parties and
thereafter assign to Company or its designees leases for some or all of the
Equipment that

 

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was necessary as of the date of termination/expiration of this Agreement
primarily for providing the Services, and Company shall assume the obligations
under such leases that relate to periods after such date; and (b) sell to
Company or its designees Supplier’s then-current net book value (using
straight-line depreciation method), some or all of the Equipment owned by
Supplier that was necessary as of the date of termination/expiration of this
Agreement primarily for providing the Services. Supplier shall also provide all
user’s manuals and other documentation relevant to such Equipment that is in
Supplier’s possession. Upon Company’s review and approval of any maintenance
agreements for such Equipment, Company shall assume responsibility under any
such maintenance agreements to the extent such responsibilities relate to
periods after the date of termination/expiration of this Agreement.

 

  (4) Supplier shall use commercially reasonable efforts to obtain any necessary
rights and thereafter make available to Company or its designee, pursuant to
reasonable terms and conditions, any third-party services then being utilized by
Supplier primarily in the performance of the Services including services being
provided through third-party service or maintenance contracts on Equipment and
Software. Supplier shall be entitled to retain the right to utilize any such
third-party services in connection with the performance of services for any
other Supplier customer.

 

  (5) Supplier shall provide reasonable training to Company’s or its designee’s
personnel for the purpose of transferring Supplier’s know-how used to perform
the Services. Such knowledge transfer shall be sufficient to enable Company or
its designee to perform the services using qualified Personnel following the
effective date of termination of this Agreement.

 

  (6) To the extent that Supplier has incorporated Company’s network into a
Supplier-proprietary network, Supplier shall provide up to two years of
continued network services at the then-current contract rates for such service,
in order to permit Company to establish its own network in an orderly manner.

 

  (C) During the Termination/Expiration Assistance Period Supplier shall
continue to provide, at Company’s request, Termination/Expiration Assistance.
Actions by Supplier under this Section shall be subject to the other provisions
of this Agreement.

 

  (D) In the process of evaluating whether to undertake or allow termination,
expiration or renewal of this Agreement, Company may consider obtaining, or
determine to obtain, offers for performance of services similar to the Services
following termination or expiration of this Agreement. As and when reasonably
requested by Company for use in this process, Supplier shall provide to Company
such information and other cooperation regarding performance of the Services as
would be reasonably necessary for a Third Party to prepare an informed,
non-qualified offer for such services, and for a Third Party not to be
unreasonably disadvantaged compared to Supplier if Supplier were to be invited
by Company to submit a proposal. The types of information and level of
cooperation to be provided by Supplier pursuant to this Section shall be no less
than those initially provided by Company to Supplier prior to commencement of
this Agreement. Supplier’s support in this respect shall include providing
information regarding Equipment, Software, staffing and other matters described
in Exhibit 26 (Termination/Expiration Assistance) as applicable to this Section.
In no event shall Supplier be required to provide information relating to its
costs or other customers.

 

  (E)

Supplier acknowledges that, in the event it breaches (or attempts or threatens
to breach) its obligations provided in this Section 29.7, Company may be
irreparably harmed. In such a circumstance, Company may proceed directly to
court. If a court of competent

 

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jurisdiction should find that Supplier has breached any such obligations,
Supplier agrees that, without any additional findings of irreparable injury or
other conditions to injunctive relief, it shall not oppose the entry of an order
compelling specific performance by Supplier and restraining it from any further
breaches.

Section 29.8 Immediate Obligations of Supplier Upon Termination. Upon receipt of
Company’s notice of termination, Supplier shall (1) immediately discontinue the
Services on the date and to the extent specified in the notice; (2) incur no
further obligations, including placement of orders for material, services or
facilities, with respect to the terminated Services; (3) protect and maintain
any materials and supplies utilized in providing the Services and any work
completed or in progress; (4) mitigate costs associated with such termination;
and (5) take such other actions as Company may direct.

Section 29.9 Suspension by Company. Company may, at any time, by notice to
Supplier, suspend all or any portion of the Services. Within thirty (30) days of
any such suspension designated representatives of Company and Supplier shall
meet to discuss the suspension and an equitable adjustment to the schedule of
Services and the associated Charges as necessary. Unless otherwise agreed,
during such discussions the then-current Charges for the Services proposed to be
suspended shall remain in effect.

Section 29.10 Notice of Deteriorating Financial Condition. In the event of the
occurrence of an Event of Deteriorating Supplier Condition, Supplier shall
immediately provide notification of such event to Company and Supplier shall use
its commercially reasonable efforts to (i) at the expense of Company, cooperate
with Company and any third-party service providers selected by Company, to
establish a contingency plan to avoid disruption of Services in the event that
Supplier is unable to meet its obligations under this Agreement, which
contingency plan may provide for securing from all relevant third parties,
including equipment providers and service providers, all rights reasonably
required for Company to continue to receive the Services, and (ii) in the event
Company has a good faith belief that the delivery of Services may be impacted by
the Event of Deteriorating Supplier Condition, implement such contingency plan.
In the event that Company becomes aware of an Event of Deteriorating Supplier
Condition for which Supplier has not provided such notification to Company,
Company shall have the immediate right, subject to the terms of this Agreement,
to take all reasonable actions to ensure continued availability of the Services,
either by Supplier, Company or its third-party designee. Supplier acknowledges
that (a) interruption of the Services will have a material adverse impact on the
operation of the business of Company, and (b) implementation of the contingency
plan may result in reduction of performance of Services by Supplier and
duplicative charges to Company. Supplier shall fully cooperate with Company in
minimizing the impact of an Event of Deteriorating Supplier Condition on the
business Company and in mitigating applicable Charges associated with
implementing the contingency plan.

Section 29.11 Upon Termination. Subject to any rights hereunder to withhold
payment, upon expiration or termination of this Agreement, Company shall remain
obligated to pay Supplier amounts due and owing hereunder for Supplier’s
performance of Services pursuant to the terms of this Agreement prior to the
date of expiration or the effective date of termination, including for Services
under Section 29.7.

ARTICLE 30

GENERAL

Section 30.1 Binding Nature and Assignment. This Agreement shall be binding on
the Parties hereto and their respective successors and assigns. Company has
specifically contracted with Supplier because of its unique experience,
expertise and qualifications; and, therefore, Supplier may not assign or
delegate Supplier’s obligations under this Agreement, either in whole or in
part, without the prior written consent of Company. Any attempt by Supplier to
assign or delegate this Agreement, in whole or in part, and any assignment of
Supplier’s obligations under this Agreement by operation of law, order of any
court, or pursuant to any plan of merger, spin-off, consolidation or
liquidation, in either case without Company’s prior written consent, shall be
deemed a default under this Agreement and such assignment or delegation shall be
void. Company may assign this Agreement at any time without the consent of
Supplier.

 

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Section 30.2 Entire Agreement; Amendment. This Agreement, including any 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 hereof and supersedes all prior agreements, whether
written or oral, with respect to the subject matter contained in this Agreement.
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.

Section 30.3 Notices. Any notice required or permitted hereunder shall be in
writing and shall be deemed given as of the date it is (i) delivered by hand; or
(ii) received by registered or certified mail, postage prepaid, return receipt
requested; or (iii) confirmed as received if by facsimile; or (iv) received by
nationally recognized, overnight courier, and addressed to the party to receive
such notice at the address set forth below, or such other address as is
subsequently specified in writing:

 

If to Company:   If to Supplier:

Vice President, Global Strategic Sourcing

Amgen Inc.

Mailstop: 91-2-C

One Amgen Center Drive

Thousand Oaks, CA 91320-1799

Fax Number: [*]

 

International Business Machines Corporation

Attention: Vice President, Healthcare and Life

Sciences Industry

MD4202, Route 100

Somers, NY 10589

With a copy to:   With a copy to:

General Counsel

Attn: Operations Group

Amgen Inc.

Mailstop: 28-1-A

One Amgen Center Drive

Thousand Oaks, CA 91320-1799

Fax Number: [*]

 

International Business Machines Corporation

Office of Associate General Counsel

MD4202, Route 100

Somers, NY 10589

Section 30.4 Counterparts. This Agreement may be executed in several
counterparts, all of which taken together shall constitute one single agreement
between the Parties.

Section 30.5 Relationship of Parties. Supplier is engaged in an independent
business and not as an agent, employee, partner or joint employer of Company.
Supplier represents and warrants that it is an employer subject to, and shall
comply with, all Supplier Laws, including without limitation applicable wage and
hour statutes, unemployment compensation statutes and occupational safety and
health statutes, and shall be responsible for withholding and payment of any and
all payroll taxes and contributions, including without limitation federal,
state, provincial, commonwealth and local income taxes; Federal Insurance
Contributions Act, Federal Unemployment Tax Act and state unemployment
contributions; and workers’ compensation and disability insurance payments. Each
Party shall be responsible for the acts, errors, omissions and conduct of any of
its Personnel. Supplier acknowledges and agrees that Company shall have no
responsibility or liability for treating Supplier Personnel as employees of
Company for any purpose. Neither Supplier nor any Supplier Personnel shall be
eligible for coverage or to receive any benefit under any Company-provided
workers’ compensation, employee plans or programs or employee compensation
arrangement, including without limitation any and all medical and dental plans,
bonus or incentive plans, retirement benefit plans, stock plans, disability
benefit plans, life insurance and any and all other such plans or benefits.
Supplier shall have no authority to contract for or to bind Company in any
manner and shall not represent itself as an agent of Company or as otherwise
authorized to act for or on behalf of Company, except as expressly authorized in
this Agreement.

Section 30.6 Severability. In the event that 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 Laws. The remainder of this Agreement shall
remain in full force and effect.

 

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Securities and Exchange Commission.

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Section 30.7 Consents and Approval. Except where expressly provided as being in
the discretion of a Party, where agreement, approval, 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. Each Party shall, at
the request of the other Party, perform those actions, including executing
additional documents and instruments, reasonably necessary to give full effect
to the terms of this Agreement.

Section 30.8 Waiver of Default; Cumulative Remedies.

 

  (A) 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. Without limiting
the generality of the foregoing, upon the occurrence of an event or series of
events giving rise to (i) termination hereunder under more than one provision
hereof, (ii) a right of indemnification under more than one provision hereof, or
(iii) one or more rights to seek greater liability for Direct Damages, indirect
or consequential, exemplary, punitive or special damages, the affected Party
shall have the right to termination, indemnification, or to seek greater
liability, as the case may be, under any or all such provisions.

Section 30.9 Survival. The provisions of this Agreement that by their very
nature survive termination or expiration of this Agreement shall so survive.
Without limiting the generality of the foregoing sentence, Section 2.3,
Section 3.5, Section 5.6, Section 8.5, Section 9.6, Section 11.5(D),
Section 12.2 (last sentence), Section 13.6, Section 14.1, Section 14.2(C)(2),
Section 14.3 through Section 14.6, Section 14.7(A) (first two sentences),
Section 17.7(D), Section 19.4, and Section 29.1 through Section 29.8, and
Article 18, Article 20, Article 21, Article 22, Article 25, Article 26, Article
27, Article 28 and Article 30 shall also survive termination of this Agreement.

Section 30.10 Public Disclosures. 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 meet legal or regulatory requirements beyond the
reasonable control of the disclosing Party, shall be coordinated with and
approved by the other Party prior to release.

Section 30.11 Trademarks. Supplier agrees that, except for the purposes of
performance under this Agreement, it shall not use or allow Supplier Personnel
to use, without Company’s prior written consent, Company’s name (or the names of
Company’s subsidiaries or parent (if any), or any derivatives thereof), or any
service marks or trademarks of Company. This prohibition of use shall include
use in any publicity or advertising, including media releases, public
announcements, or public disclosures. Supplier shall immediately provide notice
to Company in the event it becomes aware of any violation of this prohibition
and, at Supplier’s sole expense, take such steps necessary to cease and cure
such violation to Company’s satisfaction.

 

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Section 30.12 Third Party Beneficiaries.

 

  (A) This Agreement is entered into solely between, and except as provided
below, may be enforced only by, Company and Supplier. The Parties do not intend
to create any third party beneficiary rights for any person or entity other than
each member of Company Group, each of which shall be a third party beneficiary
under this Agreement for all purposes.

 

  (B) [*]

Section 30.13 Non-Solicitation of Employees. Subject to Section 11.5 and
Section 29.7(B)(1), from the Effective Date until [*] a Party shall not directly
or indirectly solicit or seek to procure (other than by general advertising),
without the prior written consent of the other Party, the employment of (A) [*]

Section 30.14 Covenant of Good Faith. Each Party agrees that, in its respective
dealings with the other Party under or in connection with this Agreement, it
shall act in good faith.

Section 30.15 Freedom of Action. Supplier may enter into similar agreements with
others and develop and provide hardware, software, or services that are similar
to or competitive with the hardware, software, and Services provided under this
Agreement, except to the extent that such hardware, software, or services
infringe Company’s patent rights or copyrights under Applicable Laws.

[Remainder of Page Intentionally Left Blank; Signature Page Follows]

 

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subject to a request for confidential treatment that has been submitted to the
Securities and Exchange Commission.

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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
representatives to execute this Agreement.

 

AMGEN INC.    

INTERNATIONAL BUSINESS MACHINES

CORPORATION

/s/ Tom Flanagan

   

/s/ Chris Nicoletti

(signature)

   

(signature)

By:   Tom Flanagan     By:   Chris Nicoletti Title:  

Senior Vice President and Chief

Information Officer

    Title:  

Vice President, Healthcare and Life

Sciences Industry