Exhibit 10.1

 

 

Amended and Restated Technology Services Agreement

by and among

Phoenix Life Insurance Company

and

Electronic Data Systems, LLC

 

 

 

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Table of Contents

 

1.     Background and Objectives    1   1.1     Background and Objectives    1  
1.2     Construction    3 2.     Definitions    3   2.1     Certain Definitions
   3   2.2     Inclusion of Affiliates in Definition of Phoenix and Vendor    16
  2.3     Other Defined Terms    17 3.     Services    17   3.1     General   
17   3.2     Implied Services    18   3.3     Services Evolution    18   3.4    
Services Variable in Scope and Volume    19   3.5     Post–Effective Date
Adjustments    19   3.6     Services Performed by Phoenix or Third Parties    19
  3.7     Overview of Services    20   3.8     Transition    20   3.9    
Transformation    21   3.10     Phoenix Standards    21   3.11     End Users of
the Services    22   3.12     Projects    22   3.13     Relocation of Services
   23   3.14     Services Impacted by Katz    24   3.15     Delivery and
Acceptance    24 4.     Term of Agreement    25   4.1     Term    25   4.2    
Extension of Term    25   4.3     Work Order Term    26 5.     Personnel    26  
5.1     Key Vendor Positions    26   5.2     Transitioned Personnel    27   5.3
    Qualifications, Retention and Removal of Vendor Personnel    28 6.    
Responsibility for Resources    29   6.1     Generally    29   6.2     Acquired
Equipment    30   6.3     Financial Responsibility for Equipment    30   6.4    
Equipment Access and Operational and Administrative Responsibility    31   6.5  
  Financial Responsibility for Software    32   6.6     Third-Party Service
Contracts    33   6.7     Required Consents    34   6.8     Straddle Agreements
   34   6.9     Allocation of Balloon, Roll-Over and Similar Payments    34  
6.10     Equipment Disposed of or Purchased or Leased by Phoenix between the
Effective Date and a Service Tower Commencement Date    35 7.     Software and
PropRietary Rights    35   7.1     Phoenix Software    35   7.2     Vendor
Software    36

 

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  7.3     Third-Party Software    37   7.4     Rights in Newly Developed
Software and Other Materials    38   7.5     Services Provided Pursuant to Work
Orders    41   7.6     Services Performed in India    44   7.7     Export    44
8.     Phoenix office space    45   8.1     Phoenix Obligations    45   8.2    
Vendor Obligations within Phoenix Office Space    46 9.     Service Levels    47
  9.1     General    47   9.2     Failure to Perform    47   9.3     Critical
Service Levels and Service Level Credits    47   9.4     Priority of Recovery
Following Interruption of Services    48   9.5     User Satisfaction    48   9.6
    Periodic Reviews    48   9.7     Measurement and Reporting    49 10.    
Project and Contract Management    49   10.1     Steering Committee    49   10.2
    Reports    49   10.3     Meetings    50   10.4     Procedures Manual    50  
10.5     Change Control    51   10.6     Subcontracting    54   10.7    
Technology Planning and Budgeting    55   10.8     Quality Assurance and
Improvement Programs    57   10.9     Coordination of Additional Marketing to
Phoenix    58   10.10     Releases Void    58 11.     Audits, Record Retention
   58   11.1     Financial Reporting    58   11.2     Audit Rights    58   11.3
    Vendor Internal Controls    61   11.4     Audit Follow-up    61   11.5    
Records Retention    62   11.6     Discovery of Overcharge of Phoenix    62 12.
    Phoenix Responsibilities    62   12.1     Responsibilities    62   12.2    
Savings Clause    63 13.     Charges    63   13.1     General    63   13.2    
Pass-Through Expenses    63   13.3     Incidental Expenses    64   13.4    
Taxes    64   13.5     Extraordinary Events    66   13.6     New Services    67
  13.7     Benchmarks for Cost of Services    68 14.     Invoicing and Payment
   70   14.1     Invoicing    70   14.2     Payment Due    71

 

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  14.3     Accountability    71   14.4     Proration    71   14.5     Prepaid
Amounts    71   14.6     Refunds and Credits    72   14.7     Deduction    72  
14.8     Disputed Charges    72 15.     Safeguarding of Data; Confidentiality   
72   15.1     General    72   15.2     Safeguarding Phoenix Data    73   15.3  
  Confidential Information    76   15.4     Corporate Information Risk Controls
   78 16.     Representations, Warranties and Covenants    80   16.1     General
   80   16.2     Work Standards    80   16.3     Maintenance    80   16.4    
Efficiency and Cost Effectiveness    81   16.5     Technology    81   16.6    
Non-Infringement    81   16.7     Authorization and Other Consents    81   16.8
    Inducements    82   16.9     Viruses    82   16.10     Disabling Code    82
  16.11     Deliverables    83   16.12     Software Ownership or Use    83  
16.13     Open Source    83   16.14     Other    84   16.15     Application   
85   16.16     Disclaimer    85 17.     Insurance    85   17.1     Insurance
Coverages    85   17.2     Insurance Provisions    86 18.     Indemnities    87
  18.1     Vendor Indemnities    87   18.2     Phoenix Indemnities    89   18.3
    Infringement    92   18.4     Indemnification Procedures    92 19.    
Liability    93   19.1     General Intent    93   19.2     Liability
Restrictions    94   19.3     Direct Damages    95   19.4     Duty to Mitigate
   95   19.5     Force Majeure    96 20.     Dispute Resolution    97   20.1    
Informal Dispute Resolution Process    97   20.2     Litigation    99   20.3    
Binding Arbitration for Certain Pricing Disputes and Work Product Ownership
Disputes    99   20.4     Continued Performance    100

 

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  20.5     Governing Law    100 21.     Termination    100   21.1    
Termination For Cause By Phoenix    100   21.2     Termination by Vendor    101
  21.3     Termination for Convenience by Phoenix    101   21.4     Termination
for Excessive Claims    103   21.5     Termination by Phoenix for Change of
Control    103   21.6     Termination Due To Force Majeure Event    104   21.7  
  Termination Due To Vendor’s Insolvency and Related Events    104   21.8    
Financial Filings and Notice of Change of Financial Condition    104   21.9    
Extension of Termination Effective Date    105   21.10    
Termination/Expiration Assistance    105   21.11     Bid Assistance    108  
21.12     Equitable Remedies    108   21.13     Charge Adjustment    108   21.14
    Reduction of Services    108 22.     Compliance with Laws    109   22.1    
Compliance with Laws and Regulations Generally    109   22.2     Equal
Employment Opportunity    110   22.3     Occupational Safety And Health Act   
110   22.4     Hazardous Products or Components    110   22.5     Fair Labor
Standards Act    111   22.6     Liens    111   22.7     Sarbanes-Oxley    112  
22.8     Privacy Laws    113 23.     General    115   23.1     Binding Nature
and Assignment    115   23.2     Mutually Negotiated    115   23.3     Notices
   116   23.4     Counterparts/Facsimile    116   23.5     Headings    117  
23.6     Relationship of Parties    117   23.7     Severability    117   23.8  
  Consents and Approvals    117   23.9     Waiver of Default    117   23.10    
Cumulative Remedies    117   23.11     Survival    118   23.12     Public
Disclosures    118   23.13     Use of Name    118   23.14     365(n)    118  
23.15     Third Party Beneficiaries    118   23.16     Covenant of Good Faith   
119   23.17     Entire Agreement; Amendment    119

 

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Table of Schedules

 

A    Statement of Work B    Service Levels C    Charges D    Transitioned
Personnel E    Equipment Refresh F    Systems Software and Third Party Services
Contracts G    Intentionally Omitted H    Intentionally Omitted I   
Intentionally Omitted I-1    Existing Applications Software J    Intentionally
Omitted K    Holidays L    Initial Transition Plan M    Business Associate
Agreement N    Approved Subcontractors O    Form Quit Claim Bill of Sale P   
Phoenix Competitors Q    Vendor Background Check Policies R    Monthly Reports S
   Key Vendor Positions T    Escrow Agreement U-1    Technical Change Control
Procedure U-2    Contractual Change Control Procedure V    Locations W   
Transformation Plan

 

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This AMENDED AND RESTATED TECHNOLOGY SERVICES AGREEMENT (the “Agreement”), made
and effective as of January 1, 2009 (the “Amended and Restated Effective Date”),
by and between Phoenix Life Insurance Company, a New York life insurance company
currently with offices at One American Row, Hartford, Connecticut 06102-5056
(“Phoenix”), Electronic Data Systems, LLC (“Vendor” or “EDS”), a Delaware
limited liability company with its principal place of business located at 5400
Legacy Drive Plano Texas 75024.

Whereas, Phoenix and EDS Information Services, L.L.C. and Electronic Data
Systems Corporation (collectively, the “Former EDS Entities”) entered into the
original Technology Services Agreement, effective as of July 29, 2004, with
regard to the provision of certain technology services as described in that
original agreement (the “Original Agreement”); and

Whereas, Phoenix and EDS (as successor in interest to the Former EDS Entities)
have agreed to a new solution of the original technology services and new
pricing and service levels for such services as well as adding additional
services for applications support and maintenance; and

Whereas, Phoenix and EDS want to restate the Original Agreement into this
Agreement so that this Agreement is in complete substitution and replacement of
the Original Agreement as of the Amended and Restated Effective Date; and

Whereas, Phoenix and EDS have jointly worked together to determine the
applicability of the schedules and exhibits under the Original Agreement and
have attempted to accurately update those schedules and exhibits for use from
and after the Amended and Restated Effective Date in this Agreement, but Phoenix
and EDS agree that they might need to refer to the prior exhibits and schedules
in the event the parties need to make some clarifications under this Agreement;
and

Whereas, Phoenix and EDS have jointly worked together to determine the accurate
applicability of the terms “Effective Date” and “Amended and Restated Effective
Date” for use under this Agreement, but Phoenix and EDS agree that they might
need to refer to the use of such terms in the event the parties need to make
some clarifications under this Agreement.

NOW, THEREFORE, in consideration of the agreements and obligations set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the Parties hereby agree as follows:

1. BACKGROUND AND OBJECTIVES

1.1 Background and Objectives.

This Agreement is being made and entered into with reference to the following
specific goals, background and objectives:

(a) Phoenix is a leading provider of wealth management products and services to
individuals and institutions. Currently Phoenix manages and operates its own
information technology environment.

 

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(b) Vendor is in the business of providing information technology (IT) services,
including outsourcing, management consulting, network design, and systems
integration.

(c) Phoenix’s current and future business is dependent upon IT solutions to
deliver its products to Phoenix’s customers. Phoenix desires to enter into an
outsourcing arrangement that will meet its business objectives, which include:

(i) recognizing substantial cost savings (by virtue of the performance of this
Agreement by the Parties) both initially and on an on-going basis;

(ii) transferring ownership of Phoenix’s IT assets to monetize such assets and
significantly reduce Phoenix administrative responsibilities;

(iii) restructuring and standardizing Phoenix’s IT infrastructure and
strengthening its IT governance model;

(iv) delivering to Phoenix world class, evolving services, including through the
provision of IT skills, methods, practices and standards;

(v) enabling Phoenix to focus on its core competencies and on those activities
which provide it with a competitive advantage, recognizing that Phoenix’s core
business is dependent on Phoenix being able to deliver information and related
services to its customers;

(vi) establishing a flexible framework within which to quickly respond to
evolving technologies, competitive conditions, and changing Phoenix business
needs;

(vii) treating fairly Phoenix personnel being hired by Vendor and also providing
such personnel with meaningful jobs and a package of total compensation and
benefits that is at least comparable to that received from Phoenix;

(viii) attaining transparency and variability of Vendor pricing permitting
Phoenix to fully understand Vendor’s charges and to implement a
consumption-based expense structure where actual demand for the services drives
actual charges;

(ix) identifying means to improve services and reduce costs to Phoenix and to
enable Phoenix to improve and expand its information/database operations;

(x) providing for an uninterrupted transition of responsibility for performing
the services from Phoenix and its contractors to Vendor;

 

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(xi) ensuring strong data security and disaster recovery capability; and

(xii) providing for an uninterrupted transition of responsibility for performing
the Services back to Phoenix or its designee(s) in connection with termination
or expiration of this Agreement;

(d) The Parties desire to promote a flexible business relationship between them
that allows for and encourages growth;

(e) The Parties desire to collaborate for the overall success of this Agreement
for both Parties; and

(f) The Parties desire to provide an agreement and pricing structure that, as of
the Amended and Restated Effective Date, is intended to allow Vendor to earn
what it considers to be a reasonable profit commensurate in the IT outsourcing
industry with a transaction of a similar size and complexity to this Agreement.

1.2 Construction.

This list of background, goals, and objectives is not intended to expand the
scope of the Parties’ obligations under this Agreement, to alter pricing under
this Agreement, or to alter the plain meaning of the terms and conditions of
this Agreement. However, to the extent the terms and conditions of this
Agreement do not address a particular circumstance or are otherwise unclear or
ambiguous, those terms and conditions are to be interpreted and construed so as
to give effect to this Agreement as a whole and this list of objectives.

2. DEFINITIONS

2.1 Certain Definitions.

As used in this Agreement:

(1) “Additional Transition” shall have the meaning provided in Section 3.8.

(2) “Additional Transition Plan” shall have the meaning provided in Section 3.8.

(3) “Adjustment” shall have the meaning provided in Section 11.2(e).

(4) “Acquired Equipment” shall have the meaning provided in Section 6.2(a).

(5) “Affected Employees” shall mean those employees of Phoenix set forth in
Exhibit D-1 to Schedule D (Transitioned Personnel).

(6) “Affiliate” shall mean, with respect to any entity, any other entity
Controlling, Controlled by, or under common Control with, such entity at the
time in question. At Phoenix’s option, (i) an entity shall be deemed to remain
an Affiliate of

 

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Phoenix for twenty four (24) months after the date it ceases to be Controlled by
Phoenix and (ii) the purchaser of all or substantially all the assets of any
line of business of Phoenix or its Affiliates shall be deemed an Affiliate of
Phoenix for twenty four (24) months after the date of purchase, but only with
respect to the business acquired. Phoenix shall be fully responsible for:
(i) causing each Affiliate and End User to comply with the provisions of this
Agreement to the extent that Vendor performs the Services for Affiliates and End
Users, and (ii) payment of all of Vendor’s Charges hereunder (including those
that may be invoiced to an Affiliate or any End User) and Vendor shall not be
required to look to any Affiliate or End User for payment of any invoice before
seeking payment from Phoenix.

(7) “Agreement” shall mean this Agreement, including its Schedules, exhibits,
and appendices, as the same may be amended by the Parties from time to time in
accordance with Section 23.17.

(8) “Amended and Restated Effective Date” shall have the meaning provided in the
preamble to this Agreement

(9) “Applicable Law” shall mean any United States and non-United States federal,
state or local law (including common law), statute, ordinance, rule, regulation
(including NASD rules, regulations and notices as well as any and all rules,
pronouncements and interpretations issued by self regulatory authorities),
order, decree writ, injunction, judgment, permit, governmental agreement, member
advisory bulletins or decree of a government entity applicable to a Party or
entity or any such Party’s or entity’s subsidiaries, parents, affiliates,
properties, assets, or to such Party’s officers, directors, managing directors,
employees or agents in their capacity as such and effective during the Term,
including as they are changed, amended, supplemented or newly added from time to
time.

(10) “Applications Software” or “Applications” shall mean those programs and
programming (including the supporting documentation, media, on-line help
facilities and tutorials) that perform specific user related data processing in
connection with the Services, (excluding Database Management Software only to
the extent reflected in Section 2.1(29)) including development tools specific to
a particular item of Applications Software that is provided by the licensor of
such Applications Software. Application Software includes the Software
identified as such in Schedule I-1 (Existing Applications Software) as of the
Amended and Restated Effective Date.

(11) “Approved Subcontractors” shall mean those subcontractors of Vendor:
(i) approved by Phoenix and identified in Schedule N (Approved Subcontractors);
(ii) any other subcontractor(s) approved by Phoenix in accordance with
Section 10.6, and (iii) Affiliates of Vendor, unless and until (in each case of
(i) and (ii)) approval of such subcontractor is rescinded by Phoenix in
accordance with Section 10.6.

(12) “Base Charges” shall have the meaning provided in Section 2.1(c) of
Schedule C (Charges).

(13) “Benchmarker” shall have the meaning provided in Section 13.7(b).

 

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(14) “Best Practices” shall have the meaning provided in Section 10.8.

(15) “Business Associate Agreement” shall mean the agreement, in the form
annexed hereto as Schedule M (Business Associate Agreement), entered into
between Phoenix and Vendor simultaneously with this Agreement.

(16) “Business Day” shall mean every day Monday through Friday based on U.S.
Eastern Time, other than those holidays set forth in Schedule K (Holidays). Such
Schedule K (Holidays) shall be updated by Phoenix at the beginning of each
Contract Year. In this Agreement references to days that do not specifically
refer to Business Days are references to calendar days and, unless otherwise
provided, a period of more than seven (7) days that expires on a day other than
a Business Day shall be automatically extended to the next following Business
Day.

(17) “Charges” shall have the meaning provided in Section 13.1.

(18) “Client Executive” shall mean the Vendor executive who interfaces with the
Steering Committee, manages the client relationship at a global level, drives
service excellence by collaborating across Vendor lines of business, and
responds to issues and requirements from the implementation manager and program
manager.

(19) “Commercially Available Software” shall mean software provided or licensed
to the public under standard terms and conditions, early release or beta test
versions of such software and any correction code applied to such software in
order to resume the proper operation of such software.

(20) “Commercially Reasonable Efforts” shall mean: (i) with respect to Vendor,
taking such steps and performing in such a manner as a well managed IT business
would undertake where such IT business was acting in a determined, prudent and
reasonable manner to achieve a particular desired result for its own benefit;
and (ii) with respect to Phoenix, taking such steps and performing in such a
manner as a well managed business would undertake where such business was acting
in a determined, prudent and reasonable manner to achieve a particular desired
result for its own benefit.

(21) “Confidential Information” shall have the meaning provided in
Section 15.3(a).

(22) “Contract Month” shall mean any calendar month within a Contract Year.

(23) “Contract Year” shall mean any twelve (12) month period commencing on the
Effective Date or any anniversary thereof. Notwithstanding the foregoing, as of
the Amended and Restated Effective Date, “Contract Year” shall mean any twelve
(12) month period commencing on the Amended and Restated Effective Date or any
anniversary thereof.

 

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(24) “Contractual Change Control” shall have the meaning provided in
Section 10.5(b).

(25) “Control” and its derivatives mean with regard to any entity the legal,
beneficial or equitable ownership, directly or indirectly, of: (i) fifty percent
(50%) or more of the capital stock (or other ownership interest, if not a stock
corporation) of such entity ordinarily having voting rights; or (ii)(A) twenty
percent (20%) or more of the capital stock (or other ownership interest, if not
a stock corporation) and (B) either (1) a greater percentage than any other
juridical person or (2) management control by agreement.

(26) “Critical Service Levels” shall have the meaning provided in Section 9.3.

(27) “Data Hard IMAC” shall mean an installation, move, add or change to the
data network connection for a printer, desktop, laptop, or similar
network-attached End User component that is performed on-site, including all
related software installation and configuration activities necessary to complete
such installation, move, add or change. Examples of a Data Hard IMAC include
installing and labeling an interconnect cable between a patch panel and a switch
port in a wiring closet, installing a cross-connect via punch-down in a wiring
closet, terminating a structured cabling run on a data jack, and terminating a
structured cabling run on a patch panel or 66 block. An order for more than 20
Data Hard IMACs shall be treated as a Project.

(28) “Data Soft IMAC” shall mean an installation, move, add or change to the
data network connection for a printer, desktop, laptop, or similar
network-attached End User component that is performed remotely. A Data Soft IMAC
does not include remote installation and configuration activities required to
complete a Data Hard IMAC. An example of a Data Soft IMAC includes identifying
and configuring/enabling a switch port for a printer, desktop, laptop, or
similar network-attached End User component. An order for more than 40 Data Soft
IMACs shall be treated as a Project.

(29) “Database Management Software” shall mean computer programs designed to
create and administer a database, and store, modify and extract structured data
from that database on behalf of numerous users. For the purposes of this
Agreement, the Parties respective roles and responsibilities with respect to
Database Management Software shall be as reflected in Section 5.2 of Schedule A
(Statement of Work). For all other purposes, Database Management Software will
be considered to be Applications Software.

(30) “Deliverables” means those items which are tangible and which are expressly
reflected in a Work Order to be developed and/or produced and delivered by
Vendor to Phoenix under such Work Order. Ownership of Deliverables is specified
in Section 7.5(a)(iii).

(31) “Deposit Materials” shall have the meaning provided in Section 7.2(c).

(32) “Desktop Hard IMAC” shall mean an installation, move, add or change to a
network-attached printer or desktop/laptop (including the system unit, monitor,

 

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keyboard, mouse, modem, docking station (for laptops), and directly attached
devices (including printers)) that is performed on-site, including all related
software installation and configuration activities necessary to complete such
installation, move, add or change. Desktop Hard IMACs shall include connecting
the device to the data jack. Examples of a Desktop Hard IMAC include the
configuration and implementation of a new PC or related peripheral component,
the relocation of a desktop, laptop, or related peripheral equipment, and
relocation of a network-attached printer. An order for more than 10 Desktop Hard
IMACs shall be treated as a Project.

(33) “Desktop Soft IMAC” shall mean an installation, move, add or change to a
network-attached printer or desktop/laptop (including the system unit, monitor,
keyboard, mouse, modem, docking station (for laptops), and directly attached
devices (including printers)), that is performed remotely. A Desktop Soft IMAC
does not include remote software installation and configuration activities
required to complete a Desktop Hard IMAC. Examples of a Desktop Soft IMAC
include the creation of a print queue on a server, creation or deletion of a
print queue on a desktop or laptop, movement of files to new local file/print
server, and the verification/modification of proper user and group access to all
data drives and printers. An order for more than 20 Desktop Soft IMACs shall be
treated as a Project.

(34) “Dispute Date” shall have the meaning provided in Section 20.1(a)(i).

(35) “DM” shall have the meaning provided in Section 20.1(b).

(36) “Effective Date” shall mean July 29, 2004.

(37) “Equipment” shall mean the computer and telecommunications equipment
(without regard to which entity owns or leases such equipment) used or managed
by Vendor to provide the Services. Equipment includes the following:
(i) computer equipment, including associated attachments, features, accessories,
peripheral devices, front end devices, and other computer equipment, and
(ii) telecommunications equipment, including private branch exchanges,
multiplexors, modems, CSUs/DSUs, hubs, bridges, routers, switches and other
telecommunications equipment. Within thirty (30) days of the Amended and
Restated Effective Date, Vendor shall provide to Phoenix a detailed inventory of
Equipment, which inventory shall be updated by Vendor within thirty (30) days
following the beginning of each Contract Year.

(38) “Equipment Capital Costs” shall have the meaning provided in
Section 6.3(a).

(39) “Equipment Operational Support Costs” shall have the meaning provided in
Section 6.3(a).

(40) “End Users” shall have the meaning provided in Section 3.11(a).

(41) “Existing Equipment” shall mean, collectively, the Existing Owned Equipment
and the Existing Leased Equipment.

 

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(42) “Existing Leased Equipment” shall mean Equipment leased by Phoenix or its
Affiliates that exists on the Effective Date and was being used by Phoenix or
its Affiliates immediately prior to the Effective Date in performing functions
that are part of the Services. As of the Amended and Restated Effective Date,
there is no Existing Leased Equipment that is leased by Phoenix (Vendor having
previously assumed such leases), but some of the Equipment that was Existing
Leased Equipment is being used by Vendor to perform functions that are part of
the Services, as such Equipment has been removed, modified and/or replaced as
further reflected in Vendor’s detailed inventory of Equipment described in
Section 2.1.

(43) “Existing Owned Equipment” shall mean Equipment owned by Phoenix or its
Affiliates that exists on the Effective Date and was being utilized by Phoenix
or its Affiliates immediately prior to the Effective Date in performing
functions that are part of the Services, as such Equipment has been removed,
modified and/or replaced as further reflected in Vendor’s detailed inventory of
Equipment described in Section 2.1(37).

(44) “Existing Third Party Systems Software” shall mean Third Party Systems
Software that exists on the Amended and Restated Effective Date. Existing Third
Party Systems Software includes all Existing Third Party Systems Software listed
in Schedule F (Systems Software and Third Party Service Contracts), and any
additional Existing Third Party Systems Software. At the beginning of each
Contract Year, Vendor shall provide to Phoenix an up-to-date version of Schedule
F.

(45) “Extraordinary Event” shall have the meaning provided in Section 13.5(a).

(46) “Force Majeure Event” shall have the meaning provided in Section 19.5(a).

(47) “Hard IMAC” shall mean, as the context requires, either a Desktop Hard
IMAC, Data Hard IMAC, or Voice Hard IMAC.

(48) “Healthcare Laws” means Applicable Laws regarding the provision of
healthcare services, including HIPAA Regulations, Applicable Laws enacted under
the Social Security Act and respecting the Health Care Financing Administration
(including to those respecting Medicare), and all Applicable Laws governing
medical confidentiality, including disclosure of AIDS or human immunodeficiency
virus-related information.

(49) “Help Desk” shall have the meaning set forth in Section 2.1 of Schedule A
(Statement of Work).

(50) “HIPAA Regulations” shall have the meaning given in Section 22.8(b).

(51) “Including” and its derivatives (such as “include” and “includes”) means
“including, without limitation.” This term is as defined, whether or not
capitalized in this Agreement.

 

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(52) “IMAC” shall mean, as the context requires, either a Hard IMAC or a Soft
IMAC. Notwithstanding anything to the contrary set forth herein, an IMAC shall
not include: (1) any installation, move, add or change performed pursuant to
Problem management activities; (2) any related infrastructure activities
required to perform an IMAC, such as any modifications to capacity and any
installations, moves, adds or changes relating to infrastructure equipment
(including servers, PBXs, mainframes, routers, and switches); (3) any
installation, move, add or change performed for Vendor personnel (including
subcontractors) and not requested by Phoenix; or (4) Vendor’s refresh
obligations set forth in Schedule E (Equipment Refresh).

(53) “Initial Transition” shall have the meaning provided in Section 3.8.

(54) “Initial Transition Fee” shall have the meaning provided in Section 6.6(a)
of Schedule C (Charges).

(55) “Initial Transition Plan” shall have the meaning provided in Section 3.8.

(56) “Insurance Regulations” means Applicable Laws regarding Phoenix’s insurance
operations.

(57) “Intellectual Property Rights” shall have the meaning provided in
Section 7.4(a)(ii).

(58) “Interim Period” shall have the meaning provided in Section 6.10.

(59) “Interim Agreement” shall mean that certain letter agreement entered into
between Phoenix and Vendor and dated as of June 1, 2004.

(60) “IT Laws” means Applicable Laws, other than Healthcare Laws, applicable to
the provision of data processing and information technology services.

(61) “Key Vendor Positions” shall have the meaning provided in Section 5.1(a).

(62) “Key Transitioned Employees” shall have the meaning provided in
Section 5.2(b).

(63) “Local Area Networks” or “LANs” shall mean the equipment, software,
telecommunications facilities, lines, wireless technology, interconnect devices
(e.g., bridges, routers, hubs, switches, gateways), wiring, cabling, and fiber
that are used to create, connect, and transmit data, voice, and video signals
within and among Phoenix’s network segments (e.g., Ethernet, token ring). LANs
commence with the interface to a Network interconnect device (e.g., router) and
end with and include the LAN interface points (e.g., network interface cards
(“NICs”)) that are in LAN-connected equipment (e.g., desktop equipment,
servers).

(64) “Location(s)” shall mean the site(s) listed in Schedule V (Locations), as
such Schedule may be updated by Phoenix from time to time, subject to the
various change control provisions in Section 10.5. Locations include Campus
Locations and Non-Campus Locations (as designated on Schedule V (Locations)).

 

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(65) “Losses” shall mean all losses, fines, punitive awards, monetary sanctions,
restitution, liabilities, damages and claims, payable to unaffiliated third
parties and/or governmental or regulatory agencies, and all related third-party
costs and expenses including reasonable legal fees and disbursements and costs
of investigation, litigation, settlement, judgment, interest and penalties.

(66) “Monthly Performance Report” shall have the meaning provided in
Section 10.2(b).

(67) “New Services” shall have the meaning provided in Section 13.6.

(68) “Network” shall mean the equipment, software, telecommunications
facilities, lines, interconnect devices, wiring, cabling and fiber that are used
to create, connect and transmit data, voice and video signals between and
within: (i) Phoenix’s LANs; (ii) Locations, and non-Phoenix locations that do
business with Phoenix and for which Vendor is responsible for providing
connectivity. For the purposes of this Agreement, the Parties agree and
acknowledge that Vendor’s scope of Services relating to the Network shall be set
forth in Schedule A (Statement of Work).

(69) “Non-Software Materials” shall have the meaning provided in Section 7.4(b).

(70) “Notice of Election” shall have the meaning provided in Section 18.4(a).

(71) “Out-of-Pocket Expenses” shall mean reasonable, demonstrable and actual
out-of-pocket expenses incurred by Vendor for labor, equipment, materials,
supplies or services provided to or for Phoenix or its Affiliates as identified
in this Agreement or otherwise incurred in connection with performing the
Services, but not including Vendor’s overhead costs (or allocations thereof),
administrative expenses or other mark-ups. Where relevant in determining
Vendor’s costs, Vendor’s incremental costs shall be used and all charges shall
be net of any discounts, and allowances received by Vendor. The time and
materials rates set forth in Exhibit C-5 to Schedule C (Charges) shall be used
to calculate the portion of Vendor’s Out-of-Pocket Expenses attributable to
labor performed by Vendor Personnel.

(72) “Party” shall mean either Phoenix or Vendor and “Parties” shall mean both
Phoenix and Vendor.

(73) “Pass-Through Expenses” shall have the meaning provided in Section 13.2(a).

(74) “Personally Identifiable Information” shall mean any personally
identifiable information or any nonpublic personal information, as those terms
are defined under any Applicable Law, or any similar information whether or not
defined under any Applicable Law.

 

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(75) “Phoenix” shall have the meaning provided in the preamble to this
Agreement, subject to Section 2.2(a).

(76) “Phoenix Competitor” shall mean those entities engaged in the insurance or
asset management business as competitors of Phoenix as listed on Schedule P
(Phoenix Competitors) as such Schedule may be updated by Phoenix from time to
time in its good faith reasonable discretion.

(77) “Phoenix Confidential Information” shall have the meaning provided in
Section 15.3(a).

(78) “Phoenix Contract Executive” shall have the meaning provided in
Section 12.1(a).

(79) “Phoenix Contractor Agreements” shall have the meaning provided in
Section 5.2(c).

(80) “Phoenix Contractor Personnel” shall have the meaning provided in
Section 5.2(c).

(81) “Phoenix Data” shall mean any and all data and information of Phoenix, End
Users, Phoenix customers or of an entity within the Control of Phoenix in any
form, whether or not Confidential Information, which is made available directly
or indirectly to Vendor in connection with the performance of the Services, or
obtained, collected, copied, developed, produced, processed, transferred or
otherwise used by or on behalf of Vendor in connection with the Services,
including Personally Identifiable Information, customer and employee data,
Phoenix trade secrets or Phoenix corporate proprietary information of any kind
whatsoever. For the purposes of this definition, the portion of Phoenix Data
that is operational data shall be Phoenix Data but Vendor shall have access to
and use of such operational data for its operational database.

(82) “Phoenix Indemnitees” shall have the meaning provided in Section 18.1.

(83) “Phoenix Office Space” shall have the meaning provided in Section 8.1(a).

(84) “Phoenix Risk Control Requirements” shall have the meaning provided in
Section 15.4(a).

(85) “Phoenix Software” shall mean Software owned by Phoenix or its Affiliates.

(86) “Privacy Laws” shall mean (a) all international privacy, security and data
protection laws, rules and regulations, including all Applicable Laws set forth
in Section 22.8, as well as applicable security breach and identity theft
notification laws of any applicable jurisdiction (including the U.S., India, and
the European Union), and all then-current industry standards, guidelines and
practices with respect to privacy, security and data protection including the
collection, processing, storage, protection, use and disclosure of Phoenix Data,
forensic imaging and, electronic server and system data extraction; and
(b) Phoenix’s policies and procedures applicable to any of the foregoing which
are provided to Vendor in written form from time to time.

 

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(87) “Privacy Rule” shall have the meaning provided in Section 22.8(b).

(88) “Problem” or “Incident” means any unplanned event that adversely affects
Equipment, Software, or data or services used, provided or made available by
Vendor in connection with the Services.

(89) “Procedures Manual” shall mean the standards and procedures manual
described in Section10.4(a).

(90) “Project” shall have the meaning provided in Section 7.1 of Schedule C
(Charges).

(91) “Project Plan” shall have the meaning provided in Section 7.2 of Schedule C
(Charges).

(92) “Required Consents” shall mean such consents as may be required or
desirable for the assignment to Vendor, or the grant to Vendor of rights of use,
of resources otherwise provided for in this Agreement.

(93) “Resource Volume Baseline” shall have the meaning given in Section 3.1(a)
of Schedule C (Charges).

(94) “Retained Phoenix Equipment” shall mean the Existing Equipment other than
the Acquired Equipment.

(95) “Schedule” shall mean any of the schedules attached to this Agreement as
the same may be amended by the Parties from time to time in accordance with
Section 23.17.

(96) “Security Plan” shall have the meaning provided in Section 15.2(b).

(97) “Services” shall have the meaning provided in Section 3.1.

(98) “Service Levels” shall have the meaning provided in Section 9.1.

(99) “Service Level Credits” shall have the meaning provided in Section 9.3.

(100) “Service Tower” shall have the meaning provided in the preamble of
Schedule A (Statement of Work).

(101) “Service Tower Commencement Date” shall mean the date on which EDS is
scheduled to commence the provision of Services with respect to an applicable
Service Tower (set forth in the Initial Transition Plan), or such other date(s)
as mutually agreed by the parties. The Service Tower Commencement Date may be
different for each Service Tower. Notwithstanding the foregoing, as to all Work
Order Services which are added after the Amended and Restated Effective Date,
such Services shall commence as of the respective Work Order Commencement Date.

 

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(102) “Soft IMAC” shall mean, as the context requires, either a Desktop Soft
IMAC, Data Soft IMAC, or Voice Soft IMAC.

(103) “Software” shall (unless a more specific reference is provided) mean
Applications Software and Systems Software.

(104) “Software Capital Costs” shall have the meaning provided in
Section 6.5(a).

(105) “Software Operational Support Costs” shall have the meaning provided in
Section 6.5(a).

(106) “Steering Committee” shall have the meaning provided in Section 10.1.

(107) “Straddle Agreements” shall mean Third Party Service Contracts, leases of
Equipment, and licenses for Third Party Software existing on the Effective Date,
including enterprise agreements, which relate both to the Services and to assets
and activities retained by Phoenix and its Affiliates that do not form a part of
the Services.

(108) “Systems Software” shall mean those programs and programming (including
the supporting documentation, media, on-line help facilities and tutorials), if
any, that perform (i) tasks basic to the functioning of the Equipment and which
are required to operate the Applications Software; or (ii) tasks, other than as
performed by Applications Software, otherwise supporting the provision of the
Services by Vendor. Programs and programming supporting the Services that are
not Applications Software shall be deemed to be Systems Software. As of the
Amended and Restated Effective Date, Systems Software includes the software
listed in Schedule F (Systems Software and Third Party Service Contracts ) and
any other mainframe and midrange operating systems, server operating systems,
network operating systems, systems utilities (including measuring and monitoring
tools), data security software, middleware, development tools (other than
development tools specific to a particular item of Applications Software which
is provided by the licensor of such Applications Software) and
telecommunications monitors. Unless otherwise agreed to by the Parties, the list
of Systems Software shall be updated by Vendor within thirty (30) days following
the beginning of each Contract Year.

(109) “Technical Change Control Procedure” shall have the meaning provided in
Section 10.5(a)(iii).

(110) “Technology Plan” shall have the meaning provided in Section 10.7(a).

(111) “Term” shall have the meaning specified in Section 4.1.

(112) “Termination/Expiration Assistance” shall have the meaning provided in
Section 21.10(a).

 

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(113) “Third Party Service Contracts” shall mean those agreements pursuant to
which a third party was, immediately prior to the Amended and Restated Effective
Date or Work Order Effective Date, as applicable, furnishing or providing
services to Phoenix or its Affiliates similar to the Services, including Phoenix
contracts for the services of non-employee personnel to provide services similar
to the Service prior to the Effective Date. As of the Amended and Restated
Effective Date, Third Party Service Contracts include all Third Party Service
Contracts identified in Schedule F (Systems Software and Third Party Service
Contracts), and any additional Third Party Service Contracts. Notwithstanding
the foregoing, Third Party Service Contracts do not include licenses, leases and
other agreements under the Software and Proprietary Rights section of this
Agreement. Unless otherwise agreed to by the Parties, the list of Third Party
Service Contracts shall be updated by Vendor within thirty (30) days following
the beginning of each Contract Year.

(114) “Third Party Applications Software” shall mean Third Party Software that
is Applications Software.

(115) “Third Party Software” shall mean Software that is not Vendor Software or
Phoenix Software.

(116) “Third Party Systems Software” shall mean Third Party Software that is
Systems Software.

(117) “Transition” shall mean, as the context requires, the Initial Transition
or the applicable Additional Transition.

(118) “Transition Plan” shall mean, as the context requires, the Initial
Transition Plan or the applicable Additional Transition Plan.

(119) “Transitioned Employees” shall have the meaning provided in
Section 5.2(a).

(120) “Use” shall mean to use, copy, maintain, modify, enhance, or create
derivative works.

(121) “Vendor” shall have the meaning provided in the preamble to this
Agreement, subject to Section 2.2(b).

(122) “Vendor Applications Software Operational Support Services” shall consist
of the following activities with respect to Applications Software: As directed
by Phoenix, (i) installing all such Software, including updates, upgrades,
patches, etc., as provided to Vendor by Phoenix and (ii) ensuring that such
Software operates within the IT environment managed by Phoenix in connection
with the provision of the Services.

(123) “Vendor Business Processes” shall have the meaning provided in 7.4(b).

 

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(124) “Vendor Account Executive” shall have the meaning provided in
Section 5.1(b).

(125) “Vendor Competitor(s)” shall mean those entities engaged in the
information technology services business as competitors of Vendor, with such
entities being listed below. Such listing may be updated by Vendor from time to
time in its good faith reasonable discretion. As of the Effective Date, Vendor
Competitors are: International Business Machines Corporation, Accenture, Ltd.,
Computer Sciences Corporation, Affiliated Computer Services, Inc., Cap Gemini
Ernst & Young, Perot Systems Corp., CGI Group, Inc. and Siemens AG.

(126) “Vendor Indemnitees” shall have the meaning provided in Section 18.2.

(127) “Vendor Personnel” shall mean employees of Vendor and its subcontractors
assigned to perform the Services pursuant to this Agreement.

(128) “Vendor Software” shall mean the Software that is owned or exclusively
distributed by Vendor or its Affiliates and that is used in provision of the
Services.

(129) “Virus” shall mean (i) program code, programming instruction or set of
instructions intentionally constructed with the ability to damage, interfere
with or otherwise adversely affect computer programs, data files or operations,
whether or not technically known as a “virus” (e.g., worms, Trojan horses, trap
doors, etc.); or (ii) other code typically designated as a virus.

(130) “Voice Hard IMAC” shall mean an installation, move, add or change to a
telephone, a telephone’s associated station wiring, fax machine, or a voice
cross-connect that is performed on-site, including all related software
installation and configuration activities necessary to complete such
installation, move, add or change. Voice Hard IMACs shall include connecting the
device to the voice jack. Examples of a Voice Hard IMAC include installing or
moving a telephone or turret phone, installing a cross-connect via punch-down in
a wiring closet, and installing a cross-connect from a PBX to a LEC point of
entry or station site. An order for more than 10 Voice Hard IMACs shall be
treated as a Project.

(131) “Voice Soft IMAC” shall mean an installation, move, add or change to a
component of the voice network that is performed remotely. A Voice Soft IMAC
does not include remote software installation and configuration activities
required to complete a Voice Hard IMAC. Examples of a Voice Soft IMAC include
setting up a call pick-up group, configuring a new voice mailbox for one End
User, assigning and activating a new telephone extension for one End User,
adding feature capabilities to a single telephone, and adding, modifying, or
removing PBX system features. An order for more than 30 Voice Soft IMACs shall
be treated as a Project.

(132) “Voice Premise Network” means the equipment, software, transmission
facilities, interconnect devices and wiring that are used to create, connect,
and transmit voice communications between the public switched telephone network
and telephone handsets at each Phoenix network location. For the purposes of
this Agreement, the Parties agree and acknowledge that Vendor’s scope of
Services relating to the Voice Premise Network shall be set forth in Schedule A
(Statement of Work).

 

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(133) “Wide Area Network” or “WAN” means the equipment, software, transmission
facilities, interconnect devices, cabling and wireless technology that are used
to create, connect and transmit data, voice and video signals between and among
Phoenix POPs. For the purposes of this Agreement, the Parties agree and
acknowledge that Vendor’s scope of Services relating to the WAN shall be set
forth in Schedule A (Statement of Work).

(134) “Work Order” means a work order executed by the Parties pursuant to which
Phoenix or its Affiliates has ordered and Vendor shall provide Work Order
Services.

(135) “Work Order Charges” shall have the meaning provided in Section 2.1(r) of
Schedule C (Charges).

(136) “Work Order Commencement Date” means the date on which EDS is scheduled to
commence the provision of Work Order Services (set forth in the applicable
Transition Plan) or such other date(s) as mutually agreed by the parties.

(137) “Work Order Effective Date” means the effective date of an executed Work
Order.

(138) “Work Order Services” means general consulting services and those services
under the Application Development and Maintenance Service Tower.

2.2 Inclusion of Affiliates in Definition of Phoenix and Vendor.

(a) References to “Phoenix” in this Agreement include Affiliates of Phoenix in
accordance with the following: (i) a reference includes Affiliates of Phoenix
where expressly so provided; (ii) except as expressly provided references to
Phoenix in the following definitions include Affiliates of Phoenix: Phoenix
Data, Phoenix Software, Existing Equipment, Existing Third Party Systems
Software, Straddle Agreements and Third Party Service Contracts;
(iii) references to sale, assignment, grant or the like by Phoenix means Phoenix
shall perform the act for itself or cause Affiliates of Phoenix to perform the
act for themselves; references to assets being in the name of Phoenix include
Affiliates of Phoenix; and (iv) references to the business, operations,
policies, procedures and the like of Phoenix include Affiliates of Phoenix to
the extent such Affiliates are receiving the Services. Subject to the foregoing,
references to Phoenix shall include Affiliates of Phoenix as Phoenix reasonably
designates.

(b) References to “Vendor” in this Agreement include Affiliates of Vendor in
accordance with the following: (i) a reference includes Affiliates of Vendor
where expressly so provided; and (ii) where Services are to be provided through
an Affiliate of Vendor, references to Vendor include such Affiliate.

 

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2.3 Other Defined Terms.

Other terms used in this Agreement are defined where they are used and have the
meanings there indicated. Those terms, acronyms, and phrases utilized in the IT
services industry or other pertinent business context which are not otherwise
defined herein shall be interpreted in accordance with their then-generally
understood meaning in such industry or business context.

3. SERVICES

3.1 General.

(a) Subject to Section 3.1(b), beginning on the Effective Date (if required
pursuant to the Initial Transition Plan) and thereafter on each applicable
Service Tower Commencement Date, Vendor shall provide the following services,
functions and responsibilities, as they may evolve during the Term and as they
may be supplemented, enhanced, modified or replaced (“Services”):

(i) The services, functions and responsibilities described in this Agreement and
its Schedules; and

(ii) The information technology services, functions and responsibilities that
are reasonably related to the services, functions and responsibilities described
in the Agreement, to the extent performed on a consistent or routine basis
during the twelve (12) months preceding the Effective Date by Affected Employees
and Phoenix Contractor Personnel who are (i) transitioned to Vendor, or
(ii) displaced or whose functions were displaced as a result of this Agreement,
even if the service, function or responsibility so performed is not specifically
described in this Agreement. The applicability of this Section 3.1(a)(ii) shall
not override the Resource Units volumes and associated Charges in Exhibit C-2 to
Schedule C (Charges).

(iii) The Parties acknowledge that, pursuant to the Interim Agreement, Vendor
has provided some of the Services prior to the Effective Date. The Interim
Agreement is terminated as of the Effective Date and the provision of any
Services provided under such Interim Agreement shall be governed by the terms
and conditions of this Agreement. Charges for services rendered to Phoenix under
the Interim Agreement shall be credited as an offset to the Initial Transition
Fee, as set forth in Section 6.6 of Schedule C (Charges).

(b) The Parties intend to enter into separate Work Orders for Work Order
Services. Each Work Order shall be attached to this Agreement as Work Order
No. 1, Work Order No. 2, et seq., and shall be deemed to be incorporated by
reference into this Agreement. Each Work Order shall describe, at a minimum, the
applicable Work Order Effective Date, Work Order Commencement Date, Work Order
Services, Work Order Charges, the general physical location (city and country)
as reflected in Exhibit A-2 from which the Work Order Services will be provided
for each Work Order, the initial Additional Transition Plan (which will reflect,
if applicable, the personnel to be transitioned) for such Work Order Services,
and any additional terms applicable to such

 

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Work Order or required by this Agreement to be included such Work Order. Each
Work Order shall become effective only upon its execution by a duly authorized
representative of each Party. Beginning on the Work Order Effective Date (if
required pursuant to the applicable Transition Plan) and thereafter on the Work
Order Commencement Date, Vendor shall provide the applicable Work Order
Services. For avoidance of doubt, “Services” shall include all Work Order
Services as of the respective Work Order Commencement Dates.

3.2 Implied Services.

If any services, functions, or responsibilities are required for the proper
performance and provision of the Services, regardless of whether they are
specifically described in this Agreement, they shall be deemed to be implied by
and included within the scope of the Services to be provided by Vendor to the
same extent and in the same manner as if specifically described in this
Agreement. Notwithstanding the foregoing, services, functions, or
responsibilities that are specifically excluded from the scope of Services under
this Agreement (such as responsibilities retained by Phoenix) shall not be
deemed to be within the scope of the Services.

3.3 Services Evolution.

Vendor shall cause the Services to evolve and to be modified, enhanced,
supplemented and replaced as necessary for the Services to keep pace with
technological advances and advances in the methods of delivering services, where
such advances are at the time pertinent in general use within the IT services
industry or among Phoenix’s competitors, including as practices evolve to comply
with new or modified Applicable Laws. Such evolution shall, at a minimum, be
made so as to conform with the requirements for continuous improvement of
Service Levels as set forth in Schedule B (Service Levels). As an example,
Services evolution shall include the addition of functionality by Vendor as is
made possible with new Equipment and Software utilized by Vendor during the
Term. Adjustments in 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. Notwithstanding anything to
the contrary in this Section 3.3, the foregoing statement is not intended to
enlarge Vendor’s obligations where evolutions in technology are specified in
this Agreement (e.g., Equipment refresh, standards, configurations and Service
Levels). For further clarification, the Parties acknowledge that, from time to
time, Vendor may make modifications to its shared services centers for the
benefit of a number of customers including Phoenix as a part of Vendor’s normal
course of business, including modifications that are necessary to comply with
new or modified Applicable Laws. As such modifications are made by Vendor,
although Phoenix would enjoy the benefit of the specific modifications at no
additional charge, there may be some planning and testing that needs to occur
for the Phoenix information technology environment which may result in some
additional internal costs to Phoenix. Vendor will give Phoenix thirty (30) days
advance written notice if Vendor intends to make such modifications and shall
advise Phoenix in such notice what internal planning and testing it believes
Phoenix will have to perform in connection with EDS’s implementation of such
modifications. If Phoenix believes that the internal costs to

 

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Phoenix are unreasonably large under the circumstances, the Parties will discuss
the proposed modification prior to its implementation to determine how and when
the modification should be made. Any such proposed modification shall be subject
to the Technical Change Control Procedure.

3.4 Services Variable in Scope and Volume.

The Services are variable in scope and volume. Such variations shall be provided
for in the pricing mechanisms set forth in this Agreement. Vendor shall not be
entitled to receive an adjustment to the Charges except as set forth this
Agreement.

3.5 Post–Effective Date Adjustments.

The Parties acknowledge that they have used reasonable efforts to develop
complete lists of all Existing Third Party Systems Software and Third Party
Service Contracts. However, the Parties acknowledge that certain items which
would constitute Existing Third Party Systems Software or Third Party Service
Contracts may have been inadvertently omitted from those Schedules, or that the
Parties may not have discovered Straddle Agreements that Vendor requires to
provide the Services. Accordingly, the Parties agree that to the extent any
obligations of this Agreement apply to any such omitted Existing Third Party
Systems Software, Straddle Agreements, and Third Party Service Contracts, such
obligations shall still apply as if the Existing Third Party Systems Software,
Straddle Agreements, and Third Party Service Contracts were fully identified in
the applicable Schedule, and the Parties shall amend the relevant Schedule as
appropriate. With respect to any such omitted items that were not known (nor
with the exercise of reasonable diligence should have been known) to Vendor
personnel prior to the Effective Date, if Vendor notifies Phoenix within one
hundred-twenty (120) days from the Effective Date (time being of the essence)
providing sufficient detail, to the extent (but only to the extent) the
aggregate total annual expense to be assumed by Vendor (without any imputed cost
of capital and with one-time expenses being treated as amortized over a four
(4) year period beginning from the Effective Date) (i) in Contract Year 1, 2 or
3 is greater than one hundred thousand dollars ($100,000) in any such Contract
Year and (ii) in Contract Years 4, 5, 6 and 7 is greater than fifty thousand
dollars ($50,000) in any such Contract Year, then, at Phoenix’s option, either
(A) the Base Charges shall be increased to cover such excess amount or
(B) Phoenix may treat the excess amount of such expenses as Phoenix retained
responsibility expenses.

3.6 Services Performed by Phoenix or Third Parties.

(a) Subject to Sections 13.5 and 21.3, Phoenix retains the right to perform
itself, or retain third parties to perform, any of the Services; provided
however that for each of the first two Contract Years following the Effective
Date, Phoenix will not withdraw Services under this Section that results in a
reduction of revenues that exceed 5% of the total projected annual Base Charges
for each such Contract Year. Phoenix shall provide Vendor with at least ninety
(90) days notice prior to withdrawing any substantial portion of the Services
from the scope of Services under this Agreement.

 

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(b) In the case of Phoenix’s withdrawal of Services under this Section 3.6, the
Charges for the remaining Services shall be as reflected in Exhibit C-2 to
Schedule C (Charges) or if not addressed in Exhibit C-2 to Schedule C (Charges),
the Charges shall be equitably adjusted to reflect those Services that are no
longer required. If, within thirty (30) days following Phoenix’s notice, the
Parties have not agreed on the charges for the remaining Services, then the
pricing will be determined (i) initially as provided under Section 20.1(a) and,
if not resolved thereunder after ten (10) Business Days, (ii) by binding
arbitration conducted pursuant to Section 20.3.

(c) To the extent Phoenix performs any of the Services itself, or retains third
parties to do so, Vendor shall cooperate with Phoenix or such third parties at
no additional charge. Such cooperation shall include:

(i) subject to Vendor’s standard security and confidentiality policies
applicable to Vendor’s facilities, making any facilities being used by Vendor to
provide the Services available (as necessary or desirable for Phoenix or a third
party to perform its work);

(ii) making the Equipment and Software available;

(iii) assisting Phoenix in obtaining any required third party consents; and

(iv) providing such information regarding the operating environment, system
constraints and other operating parameters as a person with reasonable
commercial skills and expertise would find reasonably necessary for Phoenix or a
third party to perform its work, provided, however, that if any of such
information is to be disclosed to such a third party, such third party must
first execute a reasonable confidentiality agreement with Vendor prior to
receiving such information.

3.7 Overview of Services.

As part of the Services, Vendor shall provide data center Mainframe, Midrange,
Web hosting, and disaster recovery, desktop computer/LAN/Server support, data
and voice network, problem management and help desk services, print, and the
other services, functions and responsibilities, each as described in Schedule A
(Statement of Work).

3.8 Transition.

Vendor will perform all functions and services necessary to accomplish the
transition of Phoenix’s IT operations (the “Initial Transition”) in accordance
with the initial, high level, transition plan (the “Initial Transition Plan”)
attached as Schedule L (Initial Transition Plan). Within thirty (30) days of the
Effective Date, the parties shall mutually agree on a more detailed plan, which,
upon such mutual agreement, shall supercede and replace Schedule L (Initial
Transition Plan). For any New Services to be added and performed under this
Agreement or for any Services to be provided under a Work Order, EDS will
prepare an initial, high level transition plan (each, an

 

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“Additional Transition Plan”) which describes those functions and services that
each Party will perform to accomplish the transition of such Services (each, an
“Additional Transition”) to Vendor. Each such Additional Transition Plan shall
be (a) with respect to Services to be provided pursuant to a Work Order, in an
attachment to such Work Order; and (b) with respect to New Services, documented
in an appropriate amendment to this Agreement. Within thirty (30) days of the
effective date of the particular Work Order or amendment, the parties shall
mutually agree on a more detailed plan which, upon mutual agreement of the
parties, shall supercede and replace the initial Additional Transition Plan.
Vendor will perform the Transition without causing a disruption to Phoenix
(other than immaterial disruptions). No functionality of the operations being
Transitioned shall be disabled until Vendor demonstrates to Phoenix’s
satisfaction that it has fully tested and implemented equivalent capabilities
for such functionality at its new location. Phoenix may monitor, test and
otherwise participate in the Transition.

3.9 Transformation

Vendor shall transform certain portions of the Services (the “Transformation”).
The Transformation will be performed in accordance with the initial, high level,
transformation plan (the “Transformation Plan”) attached as Schedule W
(Transformation Plan), which shall, among other things, indicate which Services
are to be subject to the Transformation. Within thirty (30) days of the Amended
and Restated Effective Date, the parties shall mutually agree on a more detailed
plan, which, upon such mutual agreement, shall supercede and replace Schedule W
(Transformation Plan). The Transformation Plan will contain the respective roles
and responsibilities of the parties that are necessary in order for the
Transformation to occur and the various milestones and estimated dates. The
parties will perform the Transformation without causing a disruption to Phoenix
or the Services (other than immaterial disruptions). No functionality of the
operations subject to the Transformation shall be disabled until Vendor
demonstrates to Phoenix’s satisfaction that it has fully tested and implemented
equivalent capabilities for such functionality at its new location. Phoenix may
monitor, test and otherwise participate in the Transformation

3.10 Phoenix Standards.

As requested by Phoenix from time to time, Vendor shall assist Phoenix in
defining Phoenix’s information technology architectures and standards applicable
to the Services on an ongoing basis (collectively, the “Phoenix Standards”).
Phoenix will retain primary responsibility for determining the Phoenix
Standards. The assistance to be provided by Vendor shall include:

(a) active participation with Phoenix representatives on permanent and ad-hoc
committees and working groups addressing such issues;

(b) assessments of the then-current Phoenix Standards at a level of detail
sufficient to permit Phoenix to make informed business decisions;

 

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(c) analyses of the appropriate direction for such Phoenix Standards in light of
business priorities, business strategies, competitive market forces, and changes
in technology;

(d) the provision of information to Phoenix regarding Vendor’s information
technology strategies for its own business to the extent not considered
proprietary to Vendor’s business;

(e) recommendations regarding then current and available information technology
architectures and platforms, software and hardware products, information
technology strategies, standards and directions, and other enabling technologies
(which may or may not be reflected in the Technology Plans); and

(f) recommend then current and available appropriate information technology
services (including platforms comprised of various hardware and software
combinations) that support service level requirements, exploit industry trends
in production capabilities and provide potential price performance improvement
opportunities.

Without limiting the foregoing, Phoenix Standards shall include the then-current
Phoenix technical architecture and product standards, as such standards may be
modified by Phoenix from time to time.

3.11 End Users of the Services.

(a) Subject to Section 3.11(b) hereof, the Services may be used by Phoenix and,
as directed by Phoenix, (i) its Affiliates and those third parties (such as
suppliers, service providers and joint venturers) with whom, at any point during
the Term, Phoenix or any Affiliate has a commercial relationship; and (ii) those
persons and entities that, as determined by Phoenix, access Phoenix’s or any of
its Affiliates’ IT infrastructure (for example, these who are
registered/authorized users of Phoenix’s website and who are made known to
Vendor) at any time during the Term through standard operating procedures
(collectively, “End Users”). Vendor acknowledges that such access is on-going as
of the Effective Date. Services provided to End Users shall be deemed to be
Services provided to Phoenix.

(b) In accordance with Schedule A (Statement of Work), Vendor shall provide the
Services to End Users at the Locations. If Phoenix requests that Vendor provide
Services to End Users in or from a new location that is not located within 50
miles of a Location, then Vendor shall provide such Services as New Services.
Vendor shall charge Phoenix for such New Services at a mutually agreed charge
but Vendor will attempt to use the then current pricing scheme (inclusive of
ARCs and RRCs) to the extent reasonably possible to assist in determining such
charge.

3.12 Projects.

At Phoenix’s request, Vendor shall perform Projects. Charges for such Projects
shall be determined in accordance with Section 7.1 of Schedule C (Charges).
Projects shall be proposed and implemented in accordance with Section 7.2 of
Schedule C (Charges).

 

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3.13 Relocation of Services.

(a) For those relocations of Services or portions of Services that deal with
either the movement of: (i) Equipment, (ii) any client facing portion of the
Services, or (iii) the Help Desk Service Tower (even if such move is within a
particular city), Vendor shall not initiate such relocations to another location
(including from those locations set forth in Exhibit A-2 to Schedule A
(Statement of Work)) without Phoenix’s prior written consent, which consent
should not be unreasonably withheld. Any request by Vendor for approval of such
relocation shall designate (a) the Services and Vendor Personnel involved;
(b) the reasons for such relocation; (c) the address (city and country except
for Help Desk Service Tower, which must specify the street address) of the
proposed new location; (d) the impact of the proposed relocation on the quality
and delivery of the Services (both during relocation to the proposed
locations(s) and after such relocation is complete); and (e) Vendor’s plan for
transitioning the Services to the proposed location (including the dates on
which such proposed transition would begin and be completed) (collectively, the
“Relocation Information”). For the purposes of this Section 3.13, “client
facing” shall mean any portion of the Services in which Vendor Personnel have
direct contact and communication on a regular and consistent basis with Phoenix
personnel or Phoenix End Users. Any moves other than those described in (i),
(ii) or (iii) above may be performed by Vendor with notice to Phoenix (such
notice to be given as soon as reasonably practical after Vendor has knowledge of
such move), but such moves shall not require Phoenix’s approval. For such moves,
Vendor will provide the Relocation Information to Phoenix, although the Parties
agree that the provision of the Relocation Information does not have to occur
prior to such move by Vendor. In no event will Vendor’s change in location
(either with Phoenix approval or by giving notice to Phoenix) result in (A) any
increase in the Charges to Phoenix or (B) any decrease or degradation in (x) the
provision of the Services, (y) Service Levels, or (z) Vendor’s compliance with
its security obligations hereunder or with Vendor Applicable Laws. In addition,
in no event will Phoenix be the first Vendor client into a new Vendor site.
Vendor shall demonstrate to Phoenix the safeguards established by Vendor at the
proposed new location for the physical, organizational, technical and
infrastructure safeguards to protect Phoenix Data and Confidential Information,
representations regarding availability and competency of Vendor Personnel at
such location, disaster recovery and business continuity plans applicable to
such location, and that Phoenix’s Intellectual Property Rights will not be
jeopardized and can be protected under local laws. If a request for relocation
of the Services is approved by Phoenix for (i), (ii) or (iii) above where
Phoenix’s approval is required, the Parties shall work together in good faith to
agree the additional obligations of each Party arising from applicable local
laws in the new location.

(b) If Phoenix approves the relocation of the Services to a new location under
this Section 3.13(a) and (b), Vendor shall remain responsible for compliance
with all of its obligations under this Agreement with respect to the relocated
Services and maintenance of the Service Levels set forth in this Agreement. If
initiated by Vendor, any such approved relocation shall be at Vendor’s sole
expense, and Phoenix shall not be responsible for any such expenses incurred and
in no event shall Phoenix be

 

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responsible for increases in Charges based upon any such relocation. Vendor
shall be responsible for complying with all Vendor Applicable Laws, including
United States export laws and import laws of the new location, with respect to
its relocation effort and the provision of Services from the site to which such
Services are relocated.

(c) In the event Phoenix desires to initiate a relocation of the Services by
Vendor, such relocations shall be subject to the change control provisions of
Section 10.5.

3.14 Services Impacted by Katz.

Notwithstanding any other provision of this Agreement, including Section 3.3,
Vendor shall not be obligated to provide any Services, or enhance the Services
in such a way, that, in Vendor’s sole discretion, may give rise to a claim
asserted by Ronald A. Katz, Ronald A. Katz Technology Licensing L.P., A2D L.P.,
or any successors or assigns of such entities for infringement arising out of,
under or in connection with the provision of help desk services, call centers,
or automated attendant services involving computer telephony integration.

3.15 Delivery and Acceptance.

(a) General. Deliverables provided under a Work Order shall be accepted by
Phoenix in accordance with the acceptance testing procedures set forth, as
applicable, in the respective Work Orders. If the applicable Work Order does not
contain acceptance testing procedures as to any Deliverable provided under a
Work Order, then the default procedures set forth in this Section 3.15 shall
govern.

(b) Delivery and User Acceptance Testing Period. Upon Vendor’s determination
that a Deliverable provided under a Work Order materially conforms to all
specifications and requirements set forth in Schedule A (Statement of Work),
such Work Order and any other requirements agreed to in writing by the Parties
(collectively, the “Specifications”), Vendor shall deliver such Deliverable to
Phoenix for acceptance testing. Phoenix shall thereafter have thirty (30) days,
or such time as otherwise expressly set forth in the applicable Work Order (the
“User Acceptance Testing Period”), to review and test the Deliverable for
compliance with the Specifications. Phoenix may perform such additional testing
(including without limitation performance and integration testing) as may be set
forth in the applicable Work Order in order to determine if the Deliverable
materially conforms to the Specifications (the “Additional Tests”) within the
time frames set forth therein.

(c) Failure and Correction. Phoenix shall accept the Deliverable at such time as
(i) Phoenix, in its reasonable discretion, determines that the Deliverable
materially conforms to the applicable Specifications and passes the Additional
Tests (if any), and (ii) Phoenix confirms to Vendor its acceptance of such
Deliverable in writing. No Deliverable will be deemed accepted by Phoenix unless
Phoenix notifies Vendor of such acceptance in writing. Should Phoenix determine
that any Deliverable fails to materially conform to all Specifications (a
“Failure”), it shall notify Vendor of such Failure within ten (10) Business Days
of the expiration of the respective testing period (or such longer time period
as may be expressly set forth in the applicable Work Order (the “Notification

 

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Deadline”), and Vendor shall, at no cost to Phoenix, correct so as to materially
conform to the applicable Specifications and redeliver such Deliverable to
Phoenix within five (5) Business Days of such notice (or such longer time period
as may be expressly set forth in the applicable Work Order) (in either case, the
“Correction Period”). If Vendor has not received notice from Phoenix by the
Notification Deadline specifying either Phoenix’s acceptance of the Deliverable
or Failures related to such Deliverable then (A) such Deliverable shall be
assumed to have been rejected by Phoenix; and (B) Vendor shall notify Phoenix
that it has not received such written notice from Phoenix. Upon receipt of such
notice, Phoenix shall have five (5) Business Days (or such longer time period as
may be expressly set forth in the applicable Work Order) to either accept such
Deliverable in writing or notify Vendor of a Failure. If Phoenix does not accept
the Deliverable or Services or provide notice of a Failure within the time
period set forth in the immediately preceding sentence, then the Deliverable
will be deemed accepted by Phoenix. If Vendor receives a Failure notice, but is
unable to correct and redeliver such Deliverable within the applicable
Correction Period so as to materially conform to the applicable Specifications,
it shall notify Phoenix of such in writing and include in such notice a good
faith estimate of the number of Business Days required for Vendor to correct and
redeliver such Deliverable. Vendor shall correct and redeliver such Deliverable
within such time period so as to make the Deliverable materially conform to the
applicable Specifications. In the event Vendor is unable to correct the
Deliverable so as to make it materially conform to the Specifications, in
addition to Phoenix’s other remedies under this Agreement, at law or in equity,
may terminate the applicable Work Order or part thereof, upon which (i) Phoenix
shall return the relevant Deliverable to Vendor; and (ii) Vendor shall promptly
provide Phoenix a full refund of the fees and expenses paid by Phoenix for the
relevant Deliverable which does not so comply, and for all related Deliverables
which Phoenix would not be able to use for their respective intended purposes
because of the failed Deliverable.

4. TERM OF AGREEMENT

4.1 Term.

The term (“Term”) of this Agreement shall begin on the Amended and Restated
Effective Date and shall expire on the seventh anniversary of the Amended and
Restated Effective Date, unless terminated earlier or extended in accordance
with this Agreement.

4.2 Extension of Term.

Vendor shall provide Phoenix written notice not less than nine (9) months prior
to the then-existing expiration date of this Agreement of such upcoming
expiration. No less than six (6) months prior to such upcoming expiration,
Phoenix shall have the right to extend the Term of this Agreement for up to one
(1) year (but for no less than 6 months) on the terms and conditions then in
effect. With regard to such extension period, the Parties may adjust the refresh
schedule and any other terms and conditions of this Agreement. Phoenix shall
have three (3) such extension options.

 

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4.3 Work Order Term.

Each Work Order will contain, in addition to the Work Order Commencement Date,
the term for such Work Order.

5. PERSONNEL

5.1 Key Vendor Positions.

(a) “Key Vendor Positions” shall be the positions set forth as such in Schedule
S (Key Vendor Positions). Vendor shall cause each of the Vendor Personnel
filling the Key Vendor Positions to devote substantially full time and effort to
the provision of Services to Phoenix. Except with respect to the Vendor
Implementation Manager(s) (as that term is defined in the Transition Plan or the
Transformation Plan, as applicable), once assigned to a Key Vendor Position, the
specific individuals which are noted in Schedule S shall remain on the Phoenix
account in such position for at least eighteen (18) consecutive months so long
as they remain employed by Vendor. If an employee of an Approved Subcontractor
is assigned to a Key Vendor Position, Vendor shall obtain commitments from that
Approved Subcontractor to comply with the requirements of this Section 5.1 with
respect to such position. Phoenix may from time to time change the positions
designated as Key Vendor Positions as long as the total number of such Key
Vendor Positions does not increase. The requirements of this Section 5.1(a)
shall not apply to an individual filling a position that Phoenix changes from a
Key Vendor Position to a non-Key Vendor Position.

(b) Vendor shall designate an individual to serve as “Vendor Account Executive”.
The Vendor Account Executive shall:

(i) be one of the Key Vendor Positions;

(ii) serve as the single point of accountability for Vendor for the Services;

(iii) have day-to-day authority for undertaking to ensure customer satisfaction;
and

(iv) be located at Phoenix’s corporate headquarters in Hartford, Connecticut or
other location reasonably designated by Phoenix from time to time.

(c) Before assigning an individual to a Key Vendor Position, whether as an
initial assignment or a subsequent assignment, Vendor shall advise Phoenix of
the proposed assignment and introduce the individual to the appropriate Phoenix
representatives. Phoenix shall have the right to:

(i) interview and approve any personnel proposed by Vendor to fill a Key Vendor
Position; and

 

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(ii) require Vendor to remove and replace such personnel at any time, in its
sole discretion, provided that Phoenix does not request the removal of any
personnel for reasons prohibited by law, and provided that reasonable notice
(which may be immediate, depending on the circumstances surrounding the removal)
is given.

(d) If Phoenix objects in good faith to the proposed Key Vendor Position
assignment, the Parties shall attempt to resolve Phoenix’s concerns on a
mutually agreeable basis. If the Parties have not been able to resolve Phoenix’s
concerns within five (5) working days, Vendor shall not assign the individual to
that position and shall propose to Phoenix the assignment of another individual
of suitable ability and qualifications. Except with Phoenix’s consent,
individuals filling Key Vendor Positions may not be transferred or re-assigned
to other positions with Vendor or its Affiliates until a suitable replacement
has been approved by Phoenix, and no such transfer shall occur at a time or in a
manner that would have an adverse impact on delivery of the Services. Vendor
shall establish and maintain an up-to-date succession plan for the replacement
of individuals serving in Key Vendor Positions that shall be reviewed with
Phoenix on a regular basis.

(e) Except with respect to the Vendor Implementation Manager, so long as an
individual is assigned to a Key Vendor Position, and for twelve (12) months,
thereafter, Vendor shall not assign such individual to perform services for the
benefit of any Phoenix Competitor, unless such assignment is approved by
Phoenix, in advance and in writing.

5.2 Transitioned Personnel.

(a) Within sixty (60) days of the Effective Date, Vendor shall offer employment
to certain Affected Employees as set forth in Exhibit D-1 to Schedule D
(Transitioned Personnel). “Transitioned Employees” shall mean those Affected
Employees who receive and accept such offers and become employed by Vendor
effective as of such Service Tower Commencement Date or such other date as to
which the Parties agree. The provisions of Schedule D (Transitioned Personnel)
shall apply to offers of employment to Affected Employees and for employment of
Transitioned Employees.

(b) Certain of the Transitioned Employees, as identified in Schedule D
(Transitioned Personnel), are employees who Phoenix believes are critical to
Vendor in providing the Services (“Key Transitioned Employees”). During the
twenty-four (24) months following the earliest Transitioned Employee Hiring Date
(or such other period designated in Schedule D (Transitioned Personnel) without
Phoenix’s prior written approval Vendor may not transfer or re-assign a Key
Transitioned Employee from performing the Services for Phoenix so long as they
remain employed by Vendor. If, within the period that is twenty-four (24) months
from the earliest Transitioned Employee Hiring Date, Vendor either
(i) terminates a Key Transitioned Employee without cause, or (ii) reassigns any
such Key Transitioned Employee to any account for work other than the Phoenix
account, then Vendor shall pay to Phoenix an amount on a per event basis as
described in the following two sentences. If either of such events occurs within
the first twelve (12) months of the earliest Transitioned Employee Hiring Date,

 

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such amount will be the then current annual current base salary of such Key
Transitioned Employee in his/her employment with Vendor. If either of such
events occurs within the period from the thirteenth (13th) month up to, and
including, the twenty-fourth (24th) month from the earliest Transitioned
Employee Hiring Date, such amount will be equal to one-half of the then current
annual current base salary of such Key Transitioned Employee in his/her
employment with Vendor. Any such amount(s) will be credited to Phoenix on the
next month’s invoice following the occurrence of such event.

(c) Phoenix has contracted for the services of non-employee personnel who
immediately prior to the Effective Date were performing services similar to the
Services (“Phoenix Contractor Personnel”). With regard to the agreements for
Phoenix Contractor Personnel (“Phoenix Contractor Agreements”), such Phoenix
Contractor Agreements shall be terminated or, subject to obtaining Required
Consents in the manner provided in Section 6.7, assigned to Vendor. The action
of termination or assignment for particular Phoenix Contractor Agreements shall
be in accordance with a plan prepared by Vendor and approved by Phoenix. Vendor
shall be responsible for the costs, charges and fees associated with such
actions.

5.3 Qualifications, Retention and Removal of Vendor Personnel.

(a) Vendor shall assign an adequate number of Vendor Personnel to perform the
Services. Vendor Personnel shall be properly educated, trained and fully
qualified for the Services they are to perform. If any portion of the Services
of Vendor Personnel are a separately chargeable resource, Vendor shall not
charge Phoenix for the costs of training Vendor Personnel, including the time
necessary for such Vendor Personnel to become familiar with Phoenix’s account or
business.

(b) Phoenix and Vendor agree that it is in their best interests to keep the
turnover rate of Vendor Personnel to a low level. Vendor shall provide Phoenix
with a semi-annual turnover report regarding Vendor’s turnover rate for those
Vendor personnel who are either on site at Phoenix Locations or are totally
dedicated to providing the Services to Phoenix during the applicable period in a
form reasonably acceptable to Phoenix, and Vendor shall meet with Phoenix
promptly after the provision of each such report to discuss the reasons for, and
impact of, such turnover rate. If appropriate, Vendor shall submit to Phoenix
its proposals for reducing the turnover rate, and the Parties shall mutually
agree on a program to bring the turnover rate down to an acceptable level. In
any event, Vendor shall keep the turnover rate to a low level, and
notwithstanding transfer or turnover of Vendor Personnel, Vendor remains
obligated to perform the Services without degradation and in accordance with
this Agreement.

(c) While at Phoenix’s premises (or the premises of others receiving the
Services under this Agreement), Vendor Personnel shall (i) comply with all
reasonable requests, and all rules and regulations, regarding personal and
professional conduct (including the wearing of an identification badge and
adhering to regulations and general safety, dress, behavior, and security
practices or procedures) generally applicable to such premises; and
(ii) otherwise conduct themselves in a businesslike and professional manner.

 

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(d) If Phoenix determines in good faith that the continued assignment to
Phoenix’s account of one or more of Vendor Personnel is not in the best
interests of Phoenix, then, upon reasonable notice from Phoenix, Vendor shall
replace that person with another person of equal or superior ability and
qualifications. Vendor shall ensure that such replacement has received
sufficient and necessary information to accomplish a satisfactory knowledge
transfer from the Vendor Personnel being replaced and is sufficiently trained so
as to assure continuity of the Services without adverse impact. Notwithstanding
the foregoing, where Phoenix notifies Vendor that Phoenix has determined that
the concern is of such a nature that such Vendor Personnel should be removed
immediately (albeit possibly temporarily) from Phoenix’s account, Vendor shall
immediately remove such individual(s) from Phoenix’s account. In any event, any
request by Phoenix to remove an individual from Phoenix’s account shall not be
deemed to constitute a termination of such individual’s employment by Vendor and
in no event shall Phoenix be deemed an employer of any such person.
Notwithstanding the above or any other provision in this Agreement to the
contrary, the rights of Phoenix in this Section 5.3(d) shall be restricted to
those Vendor personnel that either (i) are located at a Phoenix facility, or
(ii) have direct contact with Phoenix or a End User (including any Phoenix
clients).

(e) Where allowed by applicable laws, Vendor shall conduct background checks and
drug screening of all Vendor Personnel involved in performing the Services in
compliance with Vendor’s standard policies regarding same, prior to assigning
such Vendor Personnel to perform Services under this Agreement. Notwithstanding
the foregoing, Phoenix reserves the right to have Vendor conduct an additional
background check on all Vendor Personnel who are involved in performing the
Services in the event Phoenix has a reasonable suspicion or cause to perform
such a background check on any such Vendor Personnel, with such additional
background check being at Phoenix’s cost and expense. The background checks
performed by Vendor shall comply with the Vendor policies reflected in Schedule
Q for the particular countries for the Vendor Personnel in the various locations
reflected in Exhibit A-2 to Schedule A (Statement of Work).

6. RESPONSIBILITY FOR RESOURCES

6.1 Generally.

Except to the extent specifically provided elsewhere in this Agreement, Vendor
shall be responsible for providing all resources (including Equipment, Software,
facilities and personnel) necessary or desirable to provide the Services, and
all Equipment Capital Costs, Equipment Operational Support Costs, Software
Capital Costs, and Software Operational Support Costs (each as defined below in
Sections 6.3 and 6.5) relating to those resources, and shall only recover such
costs through the corresponding charges specified in this Agreement. Vendor
shall permit Phoenix, or any third-party provider of services to Phoenix, to
establish and maintain uninterrupted remote access to the Applications Software
and any software running on Equipment and used to provide the Services, and,
upon request and subject to Vendor’s standard security and confidentiality
policies within its sites, on site access to any Vendor facility at which
Services are performed; provided, however, that if Phoenix requests that a
Vendor Competitor have site access, such Vendor Competitor will be subject to
Vendor’s standard security policies.

 

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6.2 Acquired Equipment.

(a) On the Effective Date, Vendor purchased and Phoenix conveyed to Vendor, any
and all of Phoenix’s right, title and interest in and to the Existing Owned
Equipment pursuant to the Form Quit Claim Bill of Sale (the “Acquired
Equipment”) attached as Schedule O (Form Quit Claim Bill of Sale).

(b) Vendor shall lease back to Phoenix the Acquired Equipment, without
additional consideration, for a lease term commencing on the Effective Date and
ending immediately prior to the applicable Service Tower Commencement Date.
During the lease term, Phoenix will maintain and use the Acquired Equipment in a
manner consistent with maintenance and use prior to the lease term. As of the
applicable Service Tower Commencement Date, Phoenix will turn over the Acquired
Equipment to Vendor in as good order and condition as of the Effective Date,
reasonable wear and tear excepted.

(c) Following the Effective Date, the Parties may agree in writing that Phoenix
may lease or sublease to Vendor certain real property for the provision of the
Services. In such an instance, the terms of any such arrangement will be set
forth in a separate schedule hereto.

(d) In consideration of the transfer of title of the Acquired Equipment, on the
Effective Date Vendor shall pay to Phoenix the consideration set forth in
Section 10.1 of Schedule C (Charges) by wire transfer of immediately available
federal funds. If, following the Effective Date, it emerges that there is a
discrepancy between the list of Acquired Equipment and the Equipment that is
actually transferred to Vendor, the Parties shall meet to discuss an appropriate
adjustment to such consideration.

(e) Phoenix shall (without additional consideration) execute such additional
documents and take such additional actions as are reasonably necessary to convey
title in Vendor to the Acquired Equipment.

6.3 Financial Responsibility for Equipment.

(a) As of the Amended and Restated Effective Date, financial responsibility for
the Acquired Equipment and Retained Phoenix Equipment shall be as follows:
(A) Vendor shall have responsibility for (i) the acquisition and ownership costs
for Acquired Equipment, including current and future Equipment, upgrades,
enhancements, growth and technology refreshments (“Equipment Capital Costs”) and
(ii) all costs and expenses related to operational support, including
installation, support, hardware maintenance, disaster recovery, service levels,
and moves, adds and changes (“Equipment Operational Support Costs”) with respect
to the Acquired Equipment and Retained Phoenix Equipment; and (B) Phoenix shall
be responsible for the Equipment Capital Costs for the Retained Phoenix
Equipment. The respective financial obligations with respect to the Equipment
shall be reflected in the financial responsibility matrix (the “FRM”)

 

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attached as Exhibit C-14 to Schedule C (Statement of Work). In the event there
is a conflict between the provisions of this Agreement and the FRM as to such
financial responsibilities of the Parties, the FRM will control and govern.

(b) Equipment Refresh. Vendor shall refresh the Equipment in accordance with
Schedule E (Equipment Refresh).

6.4 Equipment Access and Operational and Administrative Responsibility.

(a) Access. Phoenix shall grant Vendor the same rights of access and use that
Phoenix has to Equipment used by Phoenix immediately prior to the Effective Date
to provide services to itself or others (subject to the Parties having obtained
any Required Consents therefore and solely to the extent necessary to provide
the Services). Access and use of the Equipment by Vendor shall be subject to
compliance with the security provisions set forth in Schedule A (Statement of
Work).

(b) No Warranties. All Equipment transferred, provided or made available to
Vendor and Approved Subcontractors under this Agreement by Phoenix is provided
or made available on an “AS IS, WHERE IS” basis, with no warranties whatsoever;
provided however that, to the extent assignable, Phoenix hereby assigns to
Vendor, and Vendor shall have and be entitled to, the benefits of any
manufacturers” warranties and indemnities issued with the Acquired Equipment.
Notwithstanding anything to the contrary contained in this Agreement, Phoenix
and its Affiliates shall not be responsible for any breach of any of such
manufacturers’ warranties and indemnities, and no breach thereof shall affect
the limitation on liabilities, rights and obligations of the Parties set forth
in this Agreement.

(c) Pass-Through Equipment. With respect to Equipment where the Parties agree
that Vendor’s or its Affiliates’ financial responsibility is to be on a
Pass-Through Expense basis, if any, such Equipment shall be purchased or leased
in the name of Phoenix (or its designated Affiliate) unless Phoenix expressly
designates otherwise. If such Equipment is leased, Vendor shall comply with the
operational and confidentiality requirements imposed on Phoenix (or, if
applicable, on Phoenix’s Affiliates) under the leases approved by Phoenix for
such Equipment. The method of acquisition by Phoenix shall not alter the
Parties’ allocation of responsibility for Equipment Capital Costs and Equipment
Operational Support Costs under Sections 6.3 and 6.4.

(d) Disposal of Equipment Owned or Leased by Phoenix. As directed by Phoenix,
Vendor shall dispose of Equipment owned (legally or beneficially) or leased (in
accordance with the applicable requirements of the lease) by Phoenix and no
longer needed for the provision of the Services. Prior to disposal of Equipment,
Vendor shall ensure that all hard drives are repartitioned and reformatted to
ensure the erasure of all Phoenix Data. Vendor shall pay to Phoenix the positive
difference, if any, between the value received by Vendor for such Equipment and
the costs reasonably incurred by Vendor in disposing of such Equipment.

(e) Disposal of Equipment Not Owned by Phoenix. Vendor shall be responsible for
the disposal of Equipment provided by Vendor or its subcontractors (including

 

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equipment transferred to Vendor) and no longer required for the provision of the
Services. Prior to disposal of Equipment, Vendor shall ensure that all hard
drives are repartitioned and reformatted to ensure the erasure of all Phoenix
Data. Vendor shall be responsible for all costs, charges or fees associated with
the disposal of such Equipment.

6.5 Financial Responsibility for Software.

(a) All current licenses to Software shall be retained in the name of Phoenix as
licensee. As of the Amended and Restated Effective Date, subject to Section
6.5(c), financial, administrative and operational responsibility for Software,
including (i) all costs for current and future packages, new releases, expanded
license rights, growth and technology refreshment (“Software Capital Costs”) and
(ii) all costs and expenses related to operational support, including
installation, support, software maintenance, and achieving Service Levels
(“Software Operational Support Costs”) shall be allocated between the Parties as
provided in Schedule F (Systems Software and Third Party Contracts). In
addition, Vendor shall be responsible for all of the costs described in (a)(i)
and (ii) above relating to the Software listed in Schedule F ) (Systems Software
and Third Party Contracts) (excluding any Software listed on Schedule I-1
(Existing Applications Software)). For that Software for which Vendor has
financial responsibility, Vendor shall pay directly, or promptly reimburse
Phoenix if Phoenix (or any of its Affiliates) has paid, all such costs that are
attributable to periods from and after the assumption of such responsibility.
The FRM will also reflect the respective financial obligations with respect to
the Software and in the event there is a conflict between the provisions of this
Agreement, Schedule F and the FRM as to such financial responsibilities of the
Parties, the FRM will control and govern. The Parties acknowledge that the FRM
addresses tools to be used in the provision of the Services in a general manner,
both as to current and any future tools. As to such tools for which it has
financial responsibility, Vendor will have discretion as to which tools Vendor
will use in the provision of the Services as long as they comply with the
requirements of this Agreement as to meeting Phoenix policies, etc. In the event
the FRM shows that Vendor has financial responsibility as to a tool, but Phoenix
requests a certain tool for use in the provision of the Services or New Services
which would have been within Vendor’s discretion as stated above, then,
notwithstanding the FRM, Phoenix shall bear full financial responsibility for
such requested tool(s).

(b) Licenses.

(i) Vendor shall obtain all licenses for any new Systems Software acquired
during the Term and for any modifications, upgrades, and enhancements of
Existing Third Party Systems Software, in Phoenix’s name, except for the
following Software which may be licensed in Vendor’s name but which in all
events must be “Commercially Available Software”: (A) Software used on Equipment
owned by Vendor where the third-party licensor requires the owner of the
Equipment to be the licensee for such Software; (B) Software used on behalf of
Vendor customers in addition to Phoenix in shared services centers (unless such
Software is being used for the sole purpose of providing the Services to
Phoenix) (“Shared Software”) and (C) Software licensed by Vendor under a Vendor
enterprise agreement.

 

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(ii) Notwithstanding the foregoing requirement that Phoenix shall be the
licensee for Systems Software, if Vendor can demonstrate to Phoenix’s
satisfaction an economic advantage from Vendor, a Vendor Affiliate, or an
Approved Subcontractor being the licensee of any particular Systems Software,
then Vendor, such Vendor Affiliate, or such Approved Subcontractor may (after
obtaining Phoenix’s approval) be the licensee if Vendor provides Phoenix and its
Affiliates with a perpetual license (with commercially reasonable maintenance
terms) for such Systems Software which shall become effective upon the
expiration or termination of this Agreement (or the portion of this Agreement to
which such Systems Software relates). If Vendor is unable to obtain such
perpetual license right but there is still a demonstrable economic advantage to
Phoenix from Vendor (or an Vendor Affiliate or Approved Subcontractor) being the
licensee of the Systems Software, Vendor shall notify Phoenix in writing of its
inability to obtain for Phoenix such a perpetual license and of any available
alternative licensing terms along with a description of other software which
might be used to accomplish the same purpose, which could be licensed as desired
by Phoenix and the financial/operational impact of choosing such alternate
software; with Phoenix’s prior approval, Vendor (or an Vendor Affiliate or
Approved Subcontractor) may license such software directly for use in providing
the Services.

(c) Applications Software. Except as set forth in this Section 6.5 or unless
otherwise set forth in a Work Order, Vendor’s financial responsibility for
Software Capital Costs shall not extend to Applications Software.
Notwithstanding the foregoing, (i) Vendor shall be responsible for providing
Vendor Applications Software Operational Support Services with respect to all
Application Software; and (ii) if Vendor elects to operate any Applications
Software on a shared platform, and such election results in any incremental
increase in the Software Capital Costs or Software Operational Support Costs in
relation to such Applications Software, Vendor shall be responsible for such
incremental costs.

6.6 Third-Party Service Contracts.

As of the Amended and Restated Effective Date or Work Order Effective Date, as
applicable, financial, administrative and operational responsibility for
Phoenix’s and its Affiliates’ Third Party Service Contracts shall be allocated
as set forth on Schedule F (Systems Software and Third Party Contracts) or the
applicable Work Order, as applicable. For those Third Party Service Contracts
for which Vendor has financial responsibility, Vendor shall pay directly, or
promptly reimburse Phoenix if Phoenix (or any of its Affiliates) has paid, all
such costs that are attributable to periods from and after the assumption of
such responsibility. Vendor and its Affiliates shall comply with the duties
imposed on Phoenix and its Affiliates by such Third Party Service Contracts. In
the event there is a conflict between Schedule F (Systems Software and Third
Party Contracts), a Work Order and/or the FRM as to such financial
responsibilities of the Parties with regard to Third Party Service Contracts,
the order of precedence shall be first, the Work Order; second the FRM; and
third, Schedule F (Systems Software and Third Party Contracts).

 

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6.7 Required Consents.

Vendor and its Affiliates shall be responsible, with Phoenix’s and its
Affiliates’ reasonable co-operation and subject to the provisions of
Section 6.6, for performing all administrative activities necessary for
obtaining the Required Consents for Software, Equipment and Third Party Service
Contracts as necessary to perform the Services upon mutually acceptable terms
and conditions, and Phoenix shall be responsible for any and all fees (including
transfer or upgrade fees, additional licenses, sublicenses, and maintenance
fees) required to obtain such Required Consents. The Parties shall cooperate
with each other so as to minimize such costs and ensure that mutual agreement
exists as to acceptable terms and conditions for the provision of any such
Required Consent. As and to the extent consent is obtained for Vendor and its
Affiliates to manage and utilize the Software or a contract but the relevant
license or such contract remains in Phoenix’s or an Affiliate’s name, Phoenix
and its Affiliates shall exercise permissible termination, extension, and other
rights thereunder as Vendor, after consultation with Phoenix, reasonably
directs. If a Required Consent is not obtained, then, unless and until such
Required Consent is obtained, Vendor shall determine and promptly adopt, subject
to Phoenix’s prior written approval, such alternative approaches as are
necessary and sufficient to provide the Services without such Required Consents
(including, without limitation, modifications to the applicable Transition Plan)
and, subject to consultation with and agreement by Phoenix, an applicable
Service Tower Commencement Date or Work Order Commencement Date affected by such
unavailable Required Consents shall be adjusted accordingly.

6.8 Straddle Agreements.

If a Straddle Agreement is discovered by the Parties after the Effective Date or
the Work Order Effective Date, as applicable, within ninety (90) days of the
date of discovery the Parties shall undertake to establish the following:
(i) the most appropriate, including the most cost effective, method of
leveraging such Straddle Agreement for the benefit of both Parties; (ii) whether
the Straddle Agreement should be assigned to Vendor; (iii) whether or to what
extent Vendor should assume financial responsibility for the Straddle Agreement;
and (iv) adjustments to make, if any, to Vendor’s Charges. Such agreements of
the Parties shall be retroactively effective from the applicable Service Tower
Commencement Date or Work Order Commencement Date, as applicable. If the Parties
do not agree on the foregoing matters with respect to a particular Straddle
Agreement, subject to Section 3.5, Vendor shall remain responsible, without use
or benefit of the Straddle Agreement, for performing the Services.

6.9 Allocation of Balloon, Roll-Over and Similar Payments

Where any cost has been apportioned between the Parties for contracts entered
into by Phoenix commencing before the applicable Service Tower Commencement Date
or Work Order Commencement Date, as applicable, for Equipment, Software, or
Third Party Service Contracts, and such contracts include an obligation to make
payment for any roll-over of costs for periods prior to the applicable Service
Tower Commencement Date or Work Order Commencement Date, as applicable, Phoenix

 

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shall be solely responsible for such costs associated with any remaining
obligation for such prior period. Additionally, if lease, license, maintenance,
service charges or other periodic payments increase under any such contract
after the applicable Service Tower Commencement Date or Work Order Commencement
Date, as applicable (other than to account for cost of living or similar
increases), including balloon or similar payments, all such payments shall be
recalculated so that, as between the Parties, the entire cost shall be amortized
evenly over the entire Term. Vendor shall be responsible only for those
recalculated costs that are attributable to periods after the applicable Service
Tower Commencement Date or Work Order Commencement Date, as applicable, and
Phoenix shall be responsible for all other payments. Phoenix shall, at Vendor’s
option, either pay directly or reimburse Vendor for any roll-over costs and
recalculated costs which relate to periods prior to the applicable Service Tower
Commencement Date or Work Order Commencement Date, as applicable. Provided that
Phoenix has given Vendor all necessary information and documentation, within one
hundred twenty (120) days after the applicable Service Tower Commencement Date
or Work Order Commencement Date, as applicable, the Parties shall agree on
whether there are any contracts that fall within the provisions of this
Section 6.9 and schedule the allocation of any costs.

6.10 Equipment Disposed of or Purchased or Leased by Phoenix between the
Effective Date and a Service Tower Commencement Date.

The following procedures shall govern Phoenix’s disposal of Existing Equipment,
and purchase or lease of new Equipment, during a period between the Effective
Date and the applicable Service Tower Commencement Date (the “Interim Period”):
If Phoenix desires to purchase or dispose of any Equipment outside of the
ordinary course of its normal business activities during the Interim Period,
Phoenix shall notify Vendor of such desire and the Parties shall agree upon
whether a credit or adjustment to the charges set forth in Section 6.5 of
Schedule C (Charges) is required to account for such activity.

7. SOFTWARE AND PROPRIETARY RIGHTS

7.1 Phoenix Software.

(a) Subject to Section 7.4, Phoenix retains all right, title and interest in and
to Phoenix Software, including all modifications, enhancements, and derivative
works relating thereto. Phoenix grants to Vendor (and its Approved
Subcontractors if and to the extent required to provide the Services) a
worldwide, fully paid-up, nonexclusive license during the Term to use Phoenix
Software solely to the extent necessary for performing the Services for the
benefit of Phoenix, Phoenix’s Affiliates, and other End Users. Phoenix Software
shall be made available to Vendor in such form and on such media as exists on
the Effective Date or as is later obtained by Phoenix, together with available
documentation and any other related materials.

(b) Vendor shall not: modify, reverse engineer, reverse assemble or reverse
compile any Phoenix Software; distribute, rent, lease, sublicense or transfer
any Phoenix Software to any third party; use the Phoenix Software in a service
bureau or time-sharing

 

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arrangement, or otherwise allow direct or indirect use of any Phoenix Software
by any third party without the prior written consent of Phoenix, which may be
withheld at Phoenix’s sole discretion. Vendor shall not use Phoenix Software for
the benefit of any entities other than Phoenix, Phoenix’s Affiliates, and other
End Users, without the prior written consent of Phoenix, which may be withheld
at Phoenix’s sole discretion. Except as otherwise requested or approved by
Phoenix, Vendor shall cease all use of Phoenix Software upon expiration or
termination of this Agreement and deliver to Phoenix, or, at Phoenix’s written
request, destroy any copies of, such Phoenix Software.

7.2 Vendor Software.

(a) Subject to Section 7.4, Vendor retains all right, title and interest in and
to Vendor Software, including all modifications, enhancements, and derivative
works relating thereto. In providing the Services, Vendor shall not introduce
any Vendor Software without Phoenix’s prior written approval, which approval
Phoenix may withhold in its sole discretion; provided, however that Vendor may
introduce any Vendor Software to be used as Shared Software without approval
from Phoenix. Vendor shall be responsible for installing, operating and
maintaining Vendor Software at its own expense.

(b) As and to the extent necessary for Phoenix to perform work as permitted
under this Agreement for the benefit of Phoenix, Vendor grants to Phoenix a
worldwide, fully paid-up, nonexclusive license during the Term to use Vendor
Software as it exists from time to time during the Term to perform such work
during the Term. Subject to the execution of reasonable confidentiality
agreements with the third party, Vendor also grants to Phoenix the right to
sublicense Vendor Software to a third party for such third party to perform work
as permitted under Sections 3.6 and 21.10 of this Agreement for the benefit of
Phoenix.

(c) As mutually agreed by the Parties, Vendor shall deposit a copy of the source
code and object code of the Vendor Software, along with programmer interfaces,
available documentation, manuals and other materials necessary for the Use
thereof (collectively, the “Deposit Materials”) with a third party escrow agent
designated by Phoenix pursuant to an escrow agreement entered into by and among
the Parties and such escrow agent, which escrow agreement shall be substantially
in the form of Schedule T (Escrow Agreement) which the Parties acknowledge
having executed on the Effective Date. Any and all costs of the escrow
arrangement shall be borne by Phoenix. For no additional consideration, Vendor
grants to Phoenix, for the purpose of providing services similar to the Services
to Phoenix (but in no event shall Phoenix have the right to commercially exploit
such license or Vendor Software), a perpetual, worldwide, fully paid-up,
nonexclusive license to Use Vendor Software (including the Deposit Materials),
provided, however, that Phoenix shall not exercise the licenses granted to it in
this Section 7.2(c) until the earlier of: (i) the expiration or termination of
this Agreement; or (ii) the occurrence of any of the events listed in
Section 21.7 of this Agreement; or (iii) the failure to meet its obligations
with respect to Vendor Software under Sections 3.6 or 21.10 of this Agreement.
Phoenix’s confidentiality obligations with respect to such Vendor Software shall
survive and continue to apply to this license. Phoenix also has the right,
subject to the execution of reasonable confidentiality agreements with the

 

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third party, to sublicense such Vendor Software to a third party to perform
services similar to the Services for the benefit of Phoenix, and through Phoenix
to Phoenix’s Affiliates, and other End Users in a manner similar to that
permitted during the Term of this Agreement. The Parties shall mutually agree on
applicable terms for Vendor’s support (including new releases and updates) of
such Software after expiration or termination of this Agreement; provided that
such terms shall be generally the same as those terms offered by Vendor to any
other third party. Phoenix shall not be obligated to purchase support, and
Vendor shall not be obligated to provide support, for such Vendor Software if
the Parties are unable to agree upon the applicable terms for such support.
Vendor’s obligations under this Section 7.2(c) also apply to Vendor Software
that is distributed (but not owned) by Vendor, to the extent Vendor has, without
payment of additional consideration to a third-party (unless Phoenix agrees to
reimburse Vendor for such consideration), the applicable rights.

(d) As of the Effective Date, the Parties do not intend for Vendor to use any
Vendor Application Software other than for Vendor’s own internal or
administrative use. If during the Term the Parties agree that the scope of the
Services should be expanded such that Vendor should use Vendor Application
Software, they shall enter into a separate written license agreement governing
such use. Absent such separate written license agreement, Phoenix shall have no
express or implied right to use Vendor Application Software. Notwithstanding the
foregoing in this Section 7.2 (d), if the provision of the Services under a
particular Work Order would require a license of Vendor Application Software
from Vendor to Phoenix in order for Phoenix to be able to receive and use such
Services, such license will be granted by Vendor in the manner reflected in
Section 7.5.

7.3 Third-Party Software.

(a) Grant of Rights. With respect to the Third Party Software licensed by
Phoenix, subject to the Parties having obtained any Required Consents for such
Third Party Software, Phoenix grants to Vendor to the extent necessary for
performing the Services, the rights of use of such Software that Phoenix has as
of the Effective Date or later obtains with respect to such Software. Vendor
shall comply with the duties, including use and non-disclosure restrictions
imposed on Phoenix by the licenses for such Third Party Software, and Vendor
shall not seek to modify or otherwise revoke the terms of such licenses without
Phoenix’s prior written consent. Except as otherwise requested or approved by
Phoenix, or with respect to operating system Software that (i) is licensed for
use on Equipment that Phoenix does not elect to purchase or assume the lease
pursuant to Section 21.10 and (ii) may not be transferred to Phoenix for use on
other Equipment, Vendor shall cease all use of such Software upon expiration or
termination of this Agreement.

(b) Third Party Applications Software. Unless otherwise specified in a Work
Order, Vendor shall not introduce any Third Party Applications Software in
providing the Services without Phoenix’s prior written approval, which Phoenix
may withhold in its discretion.

 

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(c) Third Party Systems Software Acquired During the Term. With respect to any
Third Party Systems Software acquisitions that are made in Vendor’s name, prior
to the introduction of such Software, Vendor shall comply with the following:

(i) Vendor shall use Commercially Reasonable Efforts to obtain for Phoenix,
Phoenix Affiliates and End Users a perpetual, non-exclusive license to Use such
Software at the expiration or termination of this Agreement and at no additional
charge to Phoenix (and Vendor shall use Commercially Reasonable Efforts to
include in such licenses appropriate source code escrow terms to ensure that
Phoenix, Phoenix Affiliates, and End Users can exercise the foregoing license);
or

(ii) If Vendor is unable to obtain such license, Vendor shall notify Phoenix of
its inability to obtain such a license and of the cost and viability of any
other software that can perform the requisite functions and with respect to
which Vendor has the ability to obtain such a license. Such notice shall contain
the proposed third-party vendor’s then current terms and conditions, if any, for
licensing the software to Phoenix in accordance with 7.3(c)(i). With Phoenix’s
prior approval, Vendor may introduce such software in providing the Services;
provided, however that Vendor may introduce any Third Party Systems Software to
be used as Shared Software without approval from Phoenix provided such Shared
Software is Commercially Available Software. Moreover, if Vendor desires to
introduce Software, the rights to which have been acquired by Vendor as part of
an enterprise agreement, then Vendor shall notify Phoenix of the relevant terms
of such agreement and, unless such Software is Shared Software, shall obtain
Phoenix’s written consent prior to using such Software to provide the Services.

(d) Pass-Through Expenses. With respect to certain Third Party Systems Software
that is identified as such in Exhibit C-7 to Schedule C (Charges) to this
Agreement, if any, license costs shall be treated as a Pass-Through Expense, and
such Third Party Systems Software shall be licensed in the name of Phoenix
unless Phoenix expressly designates otherwise.

(e) Exercise of Rights. To the extent Vendor has financial responsibility for
licenses for Third Party Systems Software, but such licenses remain in Phoenix’s
name, Phoenix shall exercise termination or extension rights thereunder as
Vendor, after consultation with Phoenix, reasonably directs with respect to such
Software; provided that Vendor shall be responsible for the costs, charges, and
fees associated with the exercise of such rights. If Phoenix exercises
termination or extension rights thereunder that Vendor does not direct or
approve, Phoenix shall be responsible for the costs, charges, and fees
associated with the exercise of such rights.

7.4 Rights in Newly Developed Software and Other Materials.

(a) Newly Developed Software.

(i) “Newly Developed Software” shall mean the following Software developed
pursuant to this Agreement by Vendor or its employees, agents or contractors or
other third parties (alone or jointly with others): (A) newly developed

 

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software that is not Developed Phoenix Software or Developed Vendor Software;
and (B) modifications to, and enhancements and derivative works of, Third Party
Software. As between Phoenix and Vendor, Phoenix shall own all copyright (to the
extent permitted by the terms of any governing Third Party Software licenses
with respect to item (B) above) in and to Newly Developed Software. To the
extent permitted by the terms of any governing Third Party Software licenses
with respect to item (B) above, Phoenix hereby grants to Vendor (and its
Approved Subcontractors if and to the extent required to provide the Services) a
worldwide, fully paid-up, nonexclusive license during the Term to use Newly
Developed Software solely to the extent necessary for performing the Services.
Vendor shall not be permitted to use Newly Developed Software for the benefit of
any entities other than Phoenix, Phoenix’s Affiliates, and other End Users,
without the prior written consent of Phoenix, which may be withheld at Phoenix’s
sole discretion. Except as otherwise requested or approved by Phoenix, Vendor
shall cease all use of Newly Developed Software upon expiration or termination
of this Agreement and deliver to Phoenix or destroy any copies in its
possession. Except for the Work Order Services in the Applications Development
and Maintenance Service Tower and any consulting services which are the subject
of Work Orders (with any such Work Orders being executed subsequent to the
Amended and Restated Effective Date), the Parties agree that the Statement of
Work set out in Schedule A (Statement of Work), as of the Amended and Restated
Effective Date, does not include any software development work that would either
result in any Newly Developed Software or be subject to the ownership provisions
of Section 7.5, and that no such software development work will be undertaken by
Vendor pursuant to this Agreement unless, prior to the initiation of such work,
a new statement of work (or other separate written agreement) that specifically
addresses the Parties’ respective ownership rights in such software is agreed to
and executed by an officer of both Parties who is at least as senior as the
respective officers executing this Agreement on behalf of the Parties.

(ii) “Developed Vendor Software” shall mean modifications to, and enhancements
and derivative works of, Vendor Software developed pursuant to this Agreement.
Subject to Section 7.4(a)(i), as between Vendor and Phoenix, Vendor shall own
all patent, copyright, trademark, trade secret, transferable moral and other
intellectual property rights (collectively, the “Intellectual Property Rights”)
in the Developed Vendor Software, subject to the licenses granted to Phoenix
under this Agreement. With respect to Developed Vendor Software, Phoenix shall
have the license rights granted in, as applicable to Phoenix, Section 7.2(b)
with respect to Vendor Software.

(iii) “Developed Phoenix Software” shall mean modifications to, and enhancements
and derivative works of, Phoenix Software developed pursuant to this Agreement,
but shall not include the base software to which such modifications,
enhancements and derivative works are made. As between Vendor and Phoenix,
Phoenix shall own all Intellectual Property Rights in the Developed Phoenix
Software, subject to the licenses granted to Vendor under this Agreement. With
respect to Developed Phoenix Software, Vendor shall have the license rights
granted in, as applicable to Phoenix, Section 7.1(a) with respect to Phoenix
Software.

 

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(b) Non-Software Materials. Subject to the allocation of rights with respect to
business processes and methodologies set forth below, with respect to
non-Software literary works or other works of authorship created or generated by
Vendor pursuant to this Agreement such as manuals, training materials and other
materials containing Vendor’s technical or operational procedures, including the
Procedures Manual and the change control procedure referenced in this Agreement
(“Non-Software Materials”), the Parties’ rights, including license rights, shall
be the same as with respect to Software. With respect to business processes and
methodologies generated or created solely by Vendor incidental to providing
Services under this Agreement (“Vendor Business Processes”), Vendor shall own
all Intellectual Property Rights in such business processes and methodologies,
subject to the confidentiality provisions set forth in this Agreement. Phoenix
shall have a worldwide, fully paid-up, nonexclusive license during the Term to
exercise any Intellectual Property Right with respect to the Vendor Business
Processes to the extent necessary for Phoenix to perform work as permitted under
this Agreement for the benefit of Phoenix. The Parties may otherwise agree to
the allocation of ownership of business processes and methodologies by a written
amendment executed pursuant to the change order process.

(c) Works Made for Hire.

(i) Newly Developed Software and Phoenix Non-Software Materials shall be deemed
“works made for hire” for Phoenix for purposes of copyright law. If, and to the
extent, any of the Newly Developed Software or Phoenix Non-Software Materials
are not deemed “works made for hire” by operation of law, Vendor hereby
irrevocably assigns, transfers and conveys to Phoenix without further
consideration the copyright in such Newly Developed Software or Phoenix
Non-Software Materials. Phoenix and its assigns shall have the right to obtain
and hold in their own name the copyright in and to such materials. Vendor agrees
to (and shall cause its Affiliates, subcontractors and their respective
employees to) execute any documents or take any other actions as may reasonably
be necessary, or as Phoenix may reasonably request, to perfect Phoenix’s
ownership of any copyrights in such Newly Developed Software or Phoenix
Non-Software Materials, without additional consideration and regardless of
whether during or after the Term.

(ii) Phoenix hereby irrevocably assigns, transfers and conveys to Vendor without
further consideration all of its right, title and interest in Developed Vendor
Software, Vendor Non-Software Materials, and Vendor Business Processes including
all Intellectual Property Rights in such materials, subject to the
confidentiality provisions set forth in this Agreement. Vendor and its assigns
shall have the right to obtain and hold in their own name all Intellectual
Property Rights in and to such materials. Phoenix agrees to (and shall cause its
Affiliates, subcontractors and their respective employees to) execute any
documents or take any other actions as may reasonably be necessary, or as Vendor
may reasonably request, to perfect Vendor’s ownership of any Intellectual
Property Rights in such Developed Vendor Software, Vendor Non-Software
Materials, and Vendor Business Processes without additional consideration and
regardless of whether during or after the Term.

 

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7.5 Services Provided Pursuant to Work Orders

Notwithstanding anything to the contrary set forth in this Agreement, the
following terms and conditions in this Section 7.5 shall govern with respect to
Vendor’s performance of Work Order Services pursuant to Work Orders. For
avoidance of doubt, to the extent there is a conflict between the terms and
conditions in this Section 7.5 and the other terms and conditions in Article 7,
the terms and conditions in this Section 7.5 shall prevail as it relates to
Vendor’s performance of Work Order Services pursuant to Work Orders. Further,
for the avoidance of doubt, as of the Amended and Restated Effective Date, the
only Services being provided pursuant to a Work Order are those Work Order
Services to be provided by Vendor pursuant to the Work Orders in the
Applications Development and Maintenance Service Tower and any consulting
services which are the subject of Work Orders (with any such Work Orders being
executed subsequent to the Amended and Restated Effective Date).

(a) Ownership of Work Product.

(i) (X) Unless otherwise expressly set forth in the applicable Work Order,
Phoenix shall own (A) any enhancements performed by Vendor as to any Phoenix
Software or, as between Vendor and Phoenix, any Phoenix Third Party Software;
(B) the tangible output of any consulting services which Vendor performed under
the Work Order; and (C) those items developed or created in the provision of
Work Order Services which pertain to Phoenix’s core business; (D) any
documentation, technical information and operating instructions related to the
items in A, B, C above; and (E) any modifications to, or enhancements and
derivative works of, any of the foregoing in items A, B, C, and D above
(collectively, the “Work Product”), subject to the license to Vendor reflected
below. As used herein, Phoenix’s “core business” shall mean Phoenix’s business
as it relates to life insurance, annuities, banking, financial asset management
and investment management. Vendor’s core business shall mean Vendor’s business
as it relates to computer system implementation, data processing, data
communications and computer systems operations, support and maintenance. The
Parties agree that, in the course of Vendor’s provision of the Work Order
Services, if Vendor creates or develops items which relate to Phoenix’s core
business, Phoenix will own that item as Work Product and the Intellectual
Property Rights therein. If any such item relates to Vendor’s core business,
Vendor will own such items and the Intellectual Property Rights therein, and
Phoenix shall have the same license rights with respect to such items as granted
in Section 7.5(c) with respect to Vendor Proprietary Materials. In the event the
Parties are unable to agree as to which core business the item relates to, the
Parties will submit such dispute to the informal dispute resolution process
reflected in Article 20 and in the event the matter is not resolved by informal
dispute resolution, the matter will be submitted to binding arbitration to be
conducted by an independent arbitrator in compliance with Section 20.3. In
performing the Work Order Services, some or all of the following items might be
developed or created: Newly Developed Software, Non-Software Materials, business
methods or processes, programs, systems, processes, data development,
modifications and enhancements of systems, computer programs, operating
instructions, specifications, technical information, ideas, inventions,
drawings, works of authorship, designs, and concepts, documents, data and other
information of any kind, including

 

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information incorporating, based upon, or derived from the foregoing, and
reports and notes prepared by Vendor or any Vendor Personnel (any of the
foregoing whether or not completed), together with all modifications, revisions,
changes, copies, partial copies, translations, compilations, and derivative
works of the foregoing.

(Y) For Work Product to which Phoenix owns the Intellectual Property Rights
reflected in item C above (the “Phoenix Core Business Work Product”), subject to
the limitation described below, Phoenix hereby grants to Vendor: (a) a
non-transferable, non-exclusive, royalty-free, fully paid-up license to use such
Phoenix Core Business Work Product during the Term as necessary to provide the
Services to Phoenix; and (b) a royalty free, perpetual, non-exclusive, worldwide
license to use, make, sell, offer to sell, have used, have made and have sold,
such Phoenix Core Business Work Product in the course of Vendor’s business,
either internally or for the benefit of others, including other Vendor clients.
Notwithstanding the above, Vendor will not use the license to an item of Phoenix
Core Business Work Product for the benefit of other Vendor clients for a period
of two (2) years following the date such item of Phoenix Core Business Work
Product is placed into production for use by Phoenix or, in the ordinary course
of business, should have been placed into production by Phoenix (since such
Phoenix Core Business Work Product had met applicable testing). If Vendor
properly terminates this Agreement pursuant to Section 21.2, this license
restriction will terminate and become unenforceable as of the effective date of
the termination.

(ii) For the avoidance of doubt, neither Work Product or a Deliverable shall be
or include (v) Vendor Software, (w) Developed Vendor Software, (x) Vendor
Proprietary Materials, (y) Vendor Third Party Software, or (z) any modifications
to, or enhancements and derivative works of, any of the foregoing in this
Section 7.5(a)(ii), the Intellectual Property Rights in all of which, as between
Phoenix and Vendor, shall continue to be owned by Vendor (although a Deliverable
might have such items embedded in the Deliverable in which event Section 7.5(b)
or (c) will govern the license to be granted to Phoenix). In the event Phoenix
desires to have Vendor develop items beyond those defined as being within Work
Product, Phoenix and Vendor shall specify such item(s) in a Work Order as a
Deliverable.

(iii) Phoenix shall have all right, title and interest, including worldwide
ownership of all Intellectual Property Rights in and to the Work Product and any
Deliverable and all copies made from them. To the extent any of the Work Product
or a Deliverable is not deemed a “work for hire” by operation of law, Vendor
hereby irrevocably assigns, transfers and conveys to Phoenix, and shall cause
the Vendor Personnel to assign, transfer and convey to Phoenix, without further
consideration, all of its and their right, title and interest in and to such
Work Product or Deliverable, including all Intellectual Property Rights in and
to such Work Product or Deliverable. Vendor acknowledges, and shall cause the
Vendor Personnel to acknowledge, that Phoenix and its successors and permitted
assigns shall have the right to obtain and hold in their own name any
Intellectual Property Rights in and to such Work Product or Deliverable,
unencumbered by any claim by Vendor or any Vendor Personnel. Vendor agrees to
execute, and shall cause the Vendor Personnel to execute, any documents as
Phoenix may reasonably request to evidence, perfect, maintain and enforce
Phoenix’s ownership of any such Work Product or Deliverable, whether during

 

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the Term or thereafter. The territorial extent of the rights in the Work Product
assigned to Phoenix by Vendor and/or the Vendor Personnel under this Agreement
shall extend to all the countries in the world. The assignment of the
Intellectual Property Rights in the Work Product or Deliverable by Vendor and/or
the Vendor Personnel to Phoenix shall be royalty-free absolute, irrevocable and
perpetual. With respect to Work Product or Deliverable, Vendor shall have the
license rights granted in, as applicable to Phoenix, Section 7.1(a) with respect
to Phoenix Software.

(b) Vendor Software. Each Work Order shall list the Vendor Software and Vendor
Third Party Software, if any, that will be incorporated into any Deliverable or
that will be necessary to be used by Phoenix or any Phoenix Affiliate in order
to access, modify, maintain, enhance or use the Deliverable, each such Work
Order to be updated from time to time as needed with the prior approval of the
Phoenix Contract Executive. Without Phoenix’s prior written consent, Vendor
shall not incorporate into any Deliverable under a Work Order any (i) Third
Party Software; or (ii) Vendor Proprietary Materials even if such Third Party
Software or Vendor Proprietary Material is generally commercially available.
Only for so long as Vendor Software is incorporated into a particular
Deliverable or is necessary to be used by Phoenix or any Phoenix Affiliate in
order to access, modify, maintain, enhance or use such Deliverable, Vendor
hereby grants to Phoenix and Phoenix Affiliates a nonexclusive, fully paid,
perpetual and worldwide license to use, execute, reproduce, display, perform,
distribute, create derivative works of, and make modifications and improvements
to (and authorize others to do any, some or all of the foregoing) any Vendor
Software and Vendor Third Party Software that is incorporated into any
Deliverables or that is necessary to be used by Phoenix or any Phoenix Affiliate
in order to access, modify, maintain, enhance or use the Deliverables (such
derivative works, modifications and improvements made by Phoenix or by another
party on behalf of Phoenix other than Vendor, (“Phoenix Modifications”) only to
the extent necessary for Phoenix and Phoenix Affiliates to have full use of the
Deliverables. In no event shall Phoenix commercially exploit the license or the
Vendor Software separate and apart from the Deliverable. Phoenix shall own all
right, title and interest in and to any Phoenix Modifications, including without
limitation all Intellectual Property Rights in and to such Phoenix
Modifications. Notwithstanding anything to the contrary herein, the foregoing
provisions in this Section 7.5(b) shall not apply to any Third Party Software
used by Vendor to provide the Services solely from within its own computing
environment, provided that (A) such Third Party Software is not incorporated
into any Deliverable; and (B) is not otherwise required by Phoenix or any
Phoenix Affiliate to access, modify, maintain, enhance or use the Deliverable
under a Work Order. For purposes of this Section 7.5(b), Vendor Software shall
include Vendor Developed Software.

(c) Vendor Proprietary Materials. Phoenix acknowledges that Vendor may, subject
to the restrictions set forth in Section 7.5(b) above, incorporate into any
Deliverables certain pre-existing materials, information, libraries, tools,
content, forms or models developed or obtained by Vendor outside and independent
of this Agreement and the Services provided thereunder (collectively, the
“Vendor Proprietary Materials”). Such Vendor Proprietary Materials, even if
incorporated into any Deliverable, shall remain (as between Vendor and Phoenix)
the exclusive property of Vendor. Only for so long as Vendor Proprietary
Materials are incorporated into a particular Deliverable or

 

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are necessary to be used by Phoenix or any Phoenix Affiliate in order to access,
modify, maintain, enhance or use such Deliverable, Vendor hereby grants to
Phoenix and Phoenix Affiliates a nonexclusive, fully paid, perpetual and
worldwide license to (and authorize other parties to do any, some or all of the
foregoing, subject to Phoenix entering into a confidentiality agreement with
such other parties containing to protect the confidentiality of Phoenix
Proprietary Materials that are at least as restrictive as the confidentiality
terms set forth in this Agreement) use, execute, reproduce, sublicense, display,
perform, distribute, and create Phoenix Modifications to the Vendor Proprietary
Materials incorporated into any Deliverables or that is necessary to be used by
Phoenix or any Phoenix Affiliate in order to access, modify, maintain, enhance
or use the Deliverables only to the extent necessary for Phoenix and Phoenix
Affiliates to have full use of the Deliverable. In no event shall Phoenix
commercially exploit the license or the Vendor Proprietary Materials separate
and apart from the Deliverable

(d) Source Code. All software Deliverables and software Work Product will be
provided to Phoenix in source code and object code form together with all
programs, objects, components, classes, base-classes, sub-classes, compiler(s),
interpreter(s), template(s), tools, libraries and any other software necessary
to support the runtime execution of the object oriented software system and all
relevant technical specifications and documentation, including, without
limitation, flow charts, algorithms and subroutine descriptions, memory and
overlay maps and other documentation of the source code, all in sufficient
detail to enable a trained programmer through study of such materials to
maintain or modify the Deliverables without undue experimentation.

7.6 Services Performed in India.

With respect to any Services performed in India, the Parties agree that, without
limitation of any other Phoenix rights or remedies under the Agreement, Vendor
acknowledges that, notwithstanding the provisions of Section 19(4) of the Indian
Copyright Act, 1957, any assignment to Phoenix of Intellectual Property Rights
to Newly Developed Software, Developed Phoenix Software and Work Product in
connection with this Agreement shall not lapse nor the right transferred therein
revert to Vendor and/or the Vendor Personnel even if Phoenix and the successors
and permitted assigns of Phoenix do not exercise the rights under assignment
within a period of one (1) year from the date of such assignment. Vendor shall
not, and shall ensure that its Vendor Personnel and Affiliates who provide
Services do not, take any steps against Phoenix and the successors and permitted
assigns of Phoenix under Section 19A of the Copyright Act, 1957. For the
avoidance of doubt, the Parties agree that in the event of the commencement of
any winding up proceeding by or against Vendor or any Vendor Affiliate under the
Indian Companies Act, 1956, Phoenix shall be entitled to retain all of its
rights under this Agreement.

7.7 Export.

The Parties acknowledge that certain Software and technical data to be provided
under this Agreement and certain transactions under this Agreement may be
subject to export controls under the laws and regulations of the United States
and other countries. Neither Party shall export or re-export any such items or
any direct

 

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product thereof or undertake any transaction in violation of any such laws or
regulations. Except as set forth in Section 3.13, to the extent within each
Party’s respective control, such Party shall be responsible for, and shall
coordinate and oversee, compliance with such export laws in respect of such
items exported or imported under this Agreement.

8. PHOENIX OFFICE SPACE

8.1 Phoenix Obligations.

(a) Subject to Section 8.2(a), below, Phoenix shall provide to Vendor the office
space reasonably needed and comparable to similarly situated employees of
Phoenix to accommodate Vendor Personnel who are onsite at the Phoenix Locations
(the “Phoenix Office Space”), as the same may be changed by Phoenix from time to
time throughout the Term. As of the Effective Date, the Parties contemplate that
approximately fifty (50) Vendor Personnel will initially be situated onsite at
Phoenix Locations. With respect to such Phoenix Office Space, except as
otherwise provided in this Article 8, Vendor shall have the same privileges
regarding use thereof (such as heating, lights, air conditioning (‘HVAC’)
systems, use of cafeteria, etc. (excluding parking privileges)) as do any other
tenants of Phoenix. Furthermore, for those Vendor employees who are performing
Services or any portion of the Services from Phoenix Office Space, such Vendor
employees shall be free to use and consume, at no cost to Vendor, a reasonable
amount of office supplies (such as pencils, pens, pads, copy machines and
facsimile machines) that are ordinarily furnished by Phoenix to its personnel,
and in accordance with the same policies and procedures regarding the use of
office supplies and services as are applicable to similarly-situated Phoenix
employees, as such policies and procedures may be modified from time to time.
Vendor shall be responsible for providing all other facilities required to
perform the Services, including data center and print and fulfillment facilities
at the Phoenix Office Space or such other mutually acceptable location(s).

(b) Phoenix shall retain the costs of applicable facilities leases and related
leasehold improvements with respect to the Phoenix Office Space to the extent
required by the applicable facilities leases and related documents.

(c) The Phoenix Office Space shall be made available to Vendor on an “AS IS”
basis, with no warranties whatsoever.

(d) Phoenix shall inform Vendor of any plans or determination to relocate the
Phoenix Office Space so that Vendor shall have a reasonable amount of time to
prepare for and implement such change or relocation as it impacts Vendor. If
Phoenix Office Space is relocated thirty (30) miles or less from its current
location, Vendor shall be responsible for all costs and expenses in connection
with relocating Vendor Personnel. If Phoenix Office Space is relocated more than
thirty (30) miles from its current location, Phoenix shall reimburse Vendor for
Vendor’s one time Out-of-Pocket Expenses incurred in connection with such
relocation, including those in connection with relocating Vendor Personnel, that
Vendor can demonstrate to Phoenix’s reasonable satisfaction.

 

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8.2 Vendor Obligations within Phoenix Office Space.

(a) Vendor shall use the Phoenix Office Space for the sole and exclusive purpose
of providing the Services, unless in its sole discretion Phoenix approves
another use. Notwithstanding the foregoing, Vendor may perform limited back
office work at Phoenix Office Space that is incidental to the provision of the
Services, such as human resources matters pertaining to in-scope Vendor
employees. The use of Phoenix Office Space by Vendor shall not constitute a
leasehold, a usufruct, or other property interest in favor of Vendor.
Notwithstanding any provision in this Agreement to the contrary, in no event may
Vendor file a notice of lease or comparable instrument on the applicable land
records and any such filing shall be automatically deemed to be null and void.

(b) Vendor shall use the Phoenix Office Space in an efficient manner and in a
manner that is coordinated, and does not interfere, with Phoenix’s other
business operations. To the extent that Vendor operates the space in a manner
that unnecessarily or unreasonably increases facility or other costs incurred by
Phoenix, Phoenix reserves the right to deduct such costs pursuant to
Section 14.7 of this Agreement.

(c) Vendor shall be responsible for any damage to the Phoenix Office Space
resulting from the abuse, misuse, neglect, or negligence of Vendor or other
failure to comply with the obligations respecting the Phoenix Office Space.

(d) Vendor shall keep the Phoenix Office Space in good order, not commit or
permit waste or damage to Phoenix Office Space or use Phoenix Office Space for
any unlawful purpose or act, and shall comply with Phoenix’s standard policies
and procedures and with applicable leases regarding access to and use of the
Phoenix Office Space, including procedures for the physical security of the
Phoenix Office Space.

(e) Subject to compliance with Vendor’s reasonable security requirements and
reasonable advance notice (where practical given the nature of access required),
Vendor shall permit Phoenix and its agents and representatives to enter into
those portions of the Phoenix Office Space occupied by Vendor staff at any time
to (i) inspect the premises; (ii) show the premises; and (iii) perform
facilities-related services.

(f) Vendor shall not make improvements or changes involving structural,
mechanical or electrical alterations to the Phoenix Office Space without
Phoenix’s prior written approval. At Phoenix’s option, any improvements or
fixtures to the Phoenix Office Space shall become the property of Phoenix. If
Phoenix does not elect to take title thereto Vendor shall remove the same at the
end of the use of the Phoenix Office Space and shall repair any damage caused by
such removal.

(g) When the Phoenix Office Space is no longer required for performance of the
Services, Vendor shall return them to Phoenix in substantially the same
condition as when Vendor began use of them, subject to reasonable wear and tear.

 

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9. SERVICE LEVELS

9.1 General.

Vendor shall perform the Services at least at the same level and with at least
the same degree of accuracy, quality, completeness, timeliness, responsiveness
and efficiency as was provided prior to the Effective Date or Work Order
Effective Date, as applicable, by or for Phoenix (as reflected in documentation
provided to Vendor), and, notwithstanding the foregoing, in accordance with the
quantitative performance standards for certain of the Services (the “Service
Levels”) set forth in Schedule B (Service Levels). At all times Vendor’s level
of performance shall be at least equal to specific Service Levels identified in
this Agreement, as such Service Levels are modified during the Term, and to
levels achieved by well-managed operations performing services similar to the
Services. In the event there is a conflict between specific Service Levels
identified in this Agreement and service levels achieved by well-managed
operations, the Service Levels identified in this Agreement shall control and
govern.

9.2 Failure to Perform.

If Vendor fails to meet any Service Level, Vendor shall promptly (taking into
consideration the severity of the failure): (a) investigate, assemble and
preserve pertinent information with respect to, and report on the causes of, the
problem causing the Service Level failure, including performing a root cause
analysis of the problem; (b) advise Phoenix, as and to the extent requested by
Phoenix, of the status of remedial efforts being undertaken with respect to such
problem; (c) minimize the impact of and correct such problem and begin meeting
the Service Level; and (d) take appropriate preventive measures so that such
problem does not recur. Vendor shall correct any such failure, whether or not
material, as soon as possible after Vendor becomes aware of such failure;
provided, however, that, in the event the root cause analysis reflects that
Vendor was not at fault in failing to meet the Service Level or if such failure
is due to an exception to Service Level performance, Vendor will not be
responsible or obligated to perform the activities reflected in (b), (c) or
(d) above, but will do so if requested, in advance and in writing, by Phoenix
and in such event Phoenix shall reimburse Vendor for any costs or expenses
incurred by Vendor for any correction of such failure as reflected in the
preceding portion of this sentence. In addition, Vendor shall be excused from
the compliance of applicable Service Levels and the payment or credit of any
Service Level Credits to the extent such performance is excused under
Section 3.4 of Schedule B (Service Levels).

9.3 Critical Service Levels and Service Level Credits.

Vendor recognizes that its failure to meet those Service Levels identified in
Exhibit B-3 to Schedule B (Service Levels) as critical Service Levels (“Critical
Service Levels”) may have a material adverse impact on the business and
operations of Phoenix and that the damage from Vendor’s failure to meet a
Critical Service Level is not susceptible to precise determination. Accordingly,
if Vendor fails to meet Critical Service Levels for reasons other than
circumstances that constitute a Force Majeure

 

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Event or events that excuse Vendor’s performance under Section 3.4(b) of
Schedule B (Service Levels), then in addition to any non-monetary remedies
available to Phoenix under this Agreement, at law or in equity, Phoenix may
elect, in lieu of pursuing other monetary remedies, to recover as its sole and
exclusive monetary remedy for the failure to meet Critical Service Levels, as
liquidated damages and not as a penalty for such failure to met Critical Service
Levels, the service level credits calculated as specified in Section 4.2 of
Schedule B (Service Levels) (the “Service Level Credits”). Vendor shall include
any such Service Level Credits elected by Phoenix in the next monthly invoice or
pay such Service Level Credits to Phoenix upon its request; provided, however,
that, notwithstanding the preceding, no Service Level Credits or any other
financial remedy shall be due or paid until the time a root cause analysis has
been completed and such root cause analysis reflects that Vendor was at fault in
meeting such Critical Service Level. The methodology for calculating such
Service Level Credits is set forth in Section 4.2 of Schedule B (Service
Levels). This Section shall not limit Phoenix’s rights with respect to the
events upon which Phoenix may rely as a basis for Phoenix’s termination of this
Agreement for cause, which are in addition to, and not a substitution for, such
provisions.

9.4 Priority of Recovery Following Interruption of Services.

Vendor shall give the recovery of its capabilities to perform the Services and
the resumption of its actual performance of the Services the same or greater
priority it gives to recovering its capabilities to perform services and
resuming its performance of those services for any other similarly situated
customer of Vendor (and Vendor’s own operations).

9.5 User Satisfaction.

Vendor and Phoenix shall conduct a survey at agreed-to intervals (not less than
annually) of an agreed upon percentage of the Phoenix user community. The
surveys shall be designed to determine the level of user satisfaction and areas
where user satisfaction can be improved. Such surveys shall include
representative samples of each major category of user within Phoenix and an
agreed upon number of in-depth face-to-face or telephone interviews. Vendor and
Phoenix shall mutually agree on the form and content of the surveys, which shall
be no less thorough than Vendor’s customary user satisfaction program. The
Parties shall jointly review the results of the surveys, and Vendor shall
develop and implement a plan to improve user satisfaction in areas where user
satisfaction is low. Phoenix’s satisfaction shall be an element of Vendor
employees’ personal measurements and a key factor in determining business unit
success. Surveys conducted under this Section 9.5 will be pursuant to this
Section as well as Section 8.10(c) of Schedule A (Statement of Work).

9.6 Periodic Reviews.

Without limitation of Section 5 of Schedule B (Service Levels), every six months
(or as otherwise mutually agreed by the Parties) starting twelve (12) months
after the Effective Date, Phoenix and Vendor shall review the Service Levels and
shall make adjustments to them as appropriate to reflect improved performance
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associated with advances in technology, processes and methods. During such
reviews, Vendor shall work with Phoenix to identify possible cost/service level
tradeoffs (but any resulting changes in the Service Levels shall be implemented
only if approved by Phoenix in its sole discretion). The Parties expect and
understand that the Service Levels shall be improved over time. As new
technologies and processes are introduced, the Parties shall establish
additional Service Levels reflecting industry best practices for those
technologies and processes.

9.7 Measurement and Reporting.

As described more fully in Schedule B (Service Levels), Vendor shall utilize the
necessary measurement and monitoring tools and procedures required to measure
and report Vendor’s performance of the Services against the applicable Service
Levels. Such measurement and monitoring shall permit reporting at a level of
detail sufficient to verify compliance with the Service Levels, and shall be
subject to audit by Phoenix. Vendor shall provide Phoenix with information and
access to such tools and procedures upon request, for purposes of verification,
project and contract management.

10. PROJECT AND CONTRACT MANAGEMENT

10.1 Steering Committee.

The Parties shall form a steering committee to facilitate communications between
them (the “Steering Committee”). The Steering Committee shall be initially
composed of (i) the Vendor Accounts Executive, and (ii) the Phoenix Contract
Executive, Phoenix’s Chief Information Officer, and Phoenix’s Chief Financial
Officer. Phoenix has the right to change the composition of Phoenix’s portion of
the Steering Committee upon providing notice to Vendor.

10.2 Reports.

(a) Prior to an applicable Service Tower Commencement Date or Work Order
Commencement Date, as applicable, the Parties shall determine an appropriate set
of periodic reports to be issued by Vendor to Phoenix with respect to such
Service Tower or Work Order, as applicable. For reports that relate to Services
provided across multiple Service Towers, such reports shall be established prior
to the first Service Tower Commencement Date in which such Services shall be
provided. Such reports shall (i) be no less comprehensive than the internal
reporting of Phoenix prior to the Effective Date or Work Order Effective Date,
as applicable; and (ii) be issued at the frequency reasonably requested by
Phoenix. An initial list of all such reports (including a description of the
frequency of such reports) is set forth in Schedule R (Monthly Reports). Vendor
shall provide Phoenix with suggested formats for such reports for Phoenix’s
review and approval.

(b) Vendor’s reports shall include, at a minimum, (i) daily and real-time
reports consistent with Phoenix’s practice prior to the applicable Service Tower
Commencement Date or Work Order Commencement Date, as applicable; and (ii) a
monthly performance

 

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report, which shall be delivered to Phoenix within ten (10) Business Days after
the end of each month, describing Vendor’s performance of the Services in such
month (the “Monthly Performance Report”).

(c) Vendor shall enable Phoenix to (i) access reports (both management and
operational reports) online; (ii) access supporting information for reports; and
(iii) manipulate such reports and supporting information and generate new
reports.

10.3 Meetings.

(a) Within ninety (90) days after the Effective Date, the Parties shall
determine an appropriate set of meetings to be held between representatives of
Phoenix and Vendor. Vendor shall prepare and circulate an agenda sufficiently in
advance of each such meeting to give participants an opportunity to prepare for
the meeting. Vendor shall incorporate into such agenda items that Phoenix
desires to discuss. At Phoenix’s request, Vendor shall prepare and circulate
minutes promptly after a meeting, although Phoenix shall not be bound thereto
and shall be under no obligation to correct or object to any errors therein.

(b) Initially such meetings shall, at a minimum, include the following:

(i) a weekly meeting of the Phoenix Contract Executive and the Vendor Account
Executive to discuss day-to-day operations and such other matters as
appropriate;

(ii) a monthly meeting among operational personnel representing Phoenix and
Vendor to discuss the Monthly Performance Report, daily performance, planned or
anticipated activities and changes that might adversely affect performance, and
otherwise to address, review and discuss matters specific to Phoenix;

(iii) a quarterly management meeting of the Steering Committee to review the
reports for the quarter (including the Monthly Performance Reports), review
Vendor’s overall performance under this Agreement, review progress on the
resolution of issues, provide a strategic outlook for Phoenix’s IT requirements,
and discuss such other matters as appropriate;

(iv) a semi-annual senior management meeting by the Parties to review relevant
contract and performance issues; and

(v) such other meetings between Phoenix representatives and Vendor Personnel
reasonably requested by either Party as necessary to address performance of the
Services.

10.4 Procedures Manual.

(a) The “Procedures Manual” shall describe the method that Vendor shall use to
perform and deliver the Services under this Agreement, the Equipment and
Software being used, and the documentation (e.g., operations manuals, user
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specifications) which provide further details of such activities. The Procedures
Manual shall also describe the activities Vendor proposes to undertake in order
to provide the Services, including those direction, supervision, monitoring,
staffing, reporting, planning and oversight activities normally undertaken to
provide services of the type Vendor is to provide under this Agreement. The
Procedures Manual also shall include descriptions of the acceptance testing and
quality assurance procedures approved by Phoenix, Vendor’s problem management
and escalation procedures, and the other standards and procedures of Vendor
pertinent to Phoenix’s interaction with Vendor in obtaining the Services. The
Procedures Manual, available for access by Phoenix on-line as well as in hard
copy, shall be suitable for use by Phoenix to understand the Services.

(b) On each Service Tower Commencement Date, Vendor will provide an outline of
the Procedure Manual applicable to that Service Tower. Within sixty (60) days
after such Service Tower Commencement Date, Vendor shall deliver a draft
Procedures Manual with respect to such Service Tower to Phoenix for Phoenix’s
comments and review. Vendor shall incorporate comments or suggestions of Phoenix
and shall finalize the Procedures Manual thirty (30) days after receiving
Phoenix’s comments. The final Procedures Manual shall be subject to the approval
of Phoenix. Vendor shall periodically, but no less than quarterly, update the
Procedures Manual to reflect changes in the operations or procedures described
therein. Without limiting the foregoing sentence, Vendor shall provide such an
update to the Procedures Manual following the completion of Transformation and
deliver such updated Procedures Manual to Phoenix within thirty (30) days of
such completion. Updates of the Procedures Manual shall be provided to Phoenix
for review, comment and approval. Vendor shall perform the Services in
accordance with the Procedures Manual. The Procedures Manual shall not be used
to amend this Agreement. In the event of a conflict between the provisions of
this Agreement and the Procedures Manual, the provisions of this Agreement shall
control. Until the Parties agree upon a Procedures Manual pursuant to this
Section 10.4, Vendor will follow the Phoenix procedures which were in effect on
the applicable Service Tower Commencement Date and which are made known to EDS
prior to the applicable Service Tower Commencement Date.

10.5 Change Control.

(a) Technical Change Control.

(i) At all times Phoenix shall be responsible for establishing Phoenix’s IT
architecture, standards and strategic direction; provided however, Vendor shall
actively participate in and provide subject mater expertise to Phoenix as it
establishes such IT architecture, standards and strategic direction. In
performing the Services, Vendor shall conform with and shall support such
architecture, standards and strategic direction in accordance with the technical
change control procedures set forth in this Section 10.5.

(ii) Vendor shall be responsible for all changes to Phoenix’s IT environment
pertaining to the Services, including changes to programs, manual procedures,
job control language statements, distribution parameters and schedules. Vendor
shall comply with the following change control requirements:

(A) Prior to using any new Systems Software or new Equipment to provide the
Services, Vendor shall have verified that the item is (1) consistent with the IT
architecture, standards and strategic direction specified by Phoenix, (2) has
been properly installed, is operating in accordance with its specifications,
(3) is performing its intended functions in a reliable manner, and (4) has been
thoroughly tested and been proven to inter-operate with and within Phoenix’s
then-existing IT infrastructure environment.

 

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(B) Vendor may make temporary changes required by an emergency if it has been
unable to contact an appropriate Phoenix manager to obtain such approval after
making Commercially Reasonable Efforts. Vendor shall document and promptly
report such emergency changes to Phoenix, which changes shall then be subject to
Phoenix’s approval.

(C) Vendor shall not make the following changes, including implementing a change
in technology, without first obtaining Phoenix’s approval, which such approval
Phoenix may withhold in its discretion:

(1) a change adversely affecting the function or performance of, or decreasing
to any significant degree the resource efficiency of, the Services;

(2) a change increasing Phoenix’s Charges under this Agreement or other costs or
fees of Phoenix;

(3) a change inconsistent with the IT architecture, standards or strategic
direction specified by Phoenix; or

(4) a change impacting the way in which Phoenix conducts its business or
operations which impact Phoenix considers to be adverse.

(D) Vendor shall move programs from development and test environments to
production environments in a controlled and documented manner, so that no
changes are introduced into the programs during such activity, and with the full
capability of restoring to the prior state until the programs have been
established as fully operational.

(iii) Beginning on the Effective Date, the Parties shall use the “Technical
Change Control Procedure” attached as Schedule U-1 (Technical Change Control
Procedure). Within sixty (60) days after the Service Tower Commencement Date for
the Help Desk, which the Parties anticipate will occur on November 1, 2004,
Vendor shall propose a more detailed Technical Change Control Procedure
detailing how Vendor will comply with the requirements set forth in this
Section 10.5 and otherwise control changes to Phoenix’s IT environment
pertaining to the Services throughout the Term. Vendor shall incorporate
comments or suggestions of Phoenix and shall finalize the Technical Change
Control Procedure thirty (30) days after receiving Phoenix’s comments. Once
approved by Phoenix, the final Technical Change Control Procedure shall replace
the initial Technical Change Control Procedure attached as Schedule U-1
(Technical Change Control Procedure) and thereafter the

 

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Parties shall implement and comply with such revised procedure. The Parties
acknowledge that they have completed the final Technical Change Control
Procedure, the current (as of the Amended and Restated Effective Date) version
of which is attached as Schedule U-1. The Technical Change Control Procedure
shall not be used to amend this Agreement; however, it may be used to identify
the need for the Parties to amend this Agreement. In the event of a conflict
between the provisions of this Agreement and the Technical Change Control
Procedure, the provisions of this Agreement shall control.

(iv) Phoenix shall have the right to approve in advance any action or decision
of Vendor affecting the provision of Services, including Equipment, Software,
and systems configuration, that may have an adverse effect on Phoenix’s use of
the Services. Adverse effect on Phoenix’s cost or Service Levels is acknowledged
to be a reasonable basis for disapproval. Phoenix shall have the right to set
priorities in scheduling work. If, in accordance with the Procedures Manual,
Phoenix requests a change in priorities, Vendor shall accommodate the change
without negatively impacting the Service Levels; if the Service Levels shall be
impacted, Vendor shall notify of the anticipated impact and the Parties shall
agree on the approach to be taken.

(b) Contractual Change Control. In addition to the Technical Change Control
Procedure, the Parties shall also implement a change control process for
documenting and mutually agreeing to changes to this Agreement that are intended
to be minor modifications to this Agreement. To institute and implement such a
contract change control process (the “Contractual Change Control Procedure”),
the Parties shall use that procedure reflected in Schedule U-2 (Contractual
Change Control Procedure). Any modifications to this Agreement made pursuant to
the Contractual Change Control Procedure shall (i) be by mutual agreement of the
Parties, (ii) require appropriate executions by the Parties to evidence such
agreement, and (iii) be deemed amendments to this Agreement.

(c) In determining whether the Charges should be adjusted as a result of a
change implemented pursuant to this Section 10.5, the Parties shall be guided by
the following principles:

(i) To the extent and for so long as such a change does not increase the scope
of the Services or can be performed in accordance with the Service Levels
without an increase in the resources then being utilized by Vendor therefor,
there will be no adjustment to the Charges.

(ii) In the event such a change increases the scope of the Services and such
increase cannot reasonably be accommodated without a change in priorities or an
increase in the resources then being utilized by Vendor for the performance of
the Services (and Phoenix so requests), Vendor and Phoenix will work together to
adjust the Service Levels and priorities with respect to other Services being
performed by Vendor so as to permit such change to be implemented without an
increase in Vendor’s Charges.

 

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(iii) If such a change cannot be implemented without an increase in the Charges,
and Phoenix agrees to implement the change, then, if such change can be
reasonably performed on a time and material basis, the increase in Charges shall
be calculated using the applicable T&M Rates set forth in Exhibit C-5 to
Schedule C (Charges). If such work cannot be reasonably performed on a time and
material basis, then the change shall be implemented at a price to be mutually
agreed to by the Parties in writing.

(iv) To the extent that such a change causes a reduction in the scope of the
Services or priority of the Services that does not also cause a reduction in the
Vendor resources then being utilized therefor, there will be no adjustment to
the Charges.

(v) If such a change decreases the scope of the Services, the Charges will be
equitably adjusted by mutual agreement of the Parties.

(d) Authorization of Certain Changes and Charges. Notwithstanding anything to
the contrary contained herein, including this Section 10.5, no change that would
result in an increase to Phoenix’s Charges under this Agreement or to other
costs or fees of Phoenix shall be implemented unless it has been approved, in
advance and in writing, by an authorized agent of Phoenix in accordance with
Phoenix’s then-current authorization policies.

10.6 Subcontracting.

(a) Except as and to the extent Phoenix may agree otherwise in writing, Vendor
may subcontract its obligations under this Agreement only in accordance with the
following:

(i) Vendor may not delegate or subcontract any of its responsibilities under
this Agreement (excluding to Affiliates) without prior written approval of
Phoenix, which Phoenix may withhold in its sole discretion. Prior to entering
into a subcontract with a third party, Vendor shall give Phoenix reasonable
prior written notice specifying the components of the Services affected, the
scope of the proposed subcontract, and the identity and qualifications of the
proposed subcontractor. At Phoenix’s request, Vendor shall forward to Phoenix a
description of the material terms (other than financial) of the subcontract or
proposed subcontract. Notwithstanding the foregoing or any other provision in
this Agreement to the contrary, Vendor may, in the ordinary course of business,
subcontract for third party services or products (1) that are not dedicated to
Phoenix or that are not material to a particular function constituting a part of
the Services, and (2) that do not result in a material change in the way Vendor
conducts its business, provided such subcontract does not adversely affect
Phoenix, whether in performance of or Charges for the Services or otherwise.
Without limitation of the provisions set forth in Section 5.3, if Phoenix
expresses concerns to Vendor about a subcontract covered by this
Section 10.6(a)(i), Vendor shall discuss such concerns with Phoenix and work in
good faith to resolve Phoenix’s concerns on a mutually acceptable basis.

 

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(ii) Phoenix may request that Vendor use a particular subcontractor in certain
limited circumstances in which case Vendor will use such proposed subcontractor
unless Vendor determines in good faith that the use of such subcontractor would
impair Vendor’s ability to satisfy the Service Levels or such use would cause a
Vendor to breach an agreement.

(iii) Phoenix shall have the right to revoke its prior approval of a
subcontractor and direct Vendor to replace such subcontractor if the
subcontractor’s performance is materially deficient, good faith doubts exist
concerning the subcontractor’s ability to render future performance because of
changes in the subcontractor’s ownership, management, financial condition, or
otherwise, or there have been material misrepresentations by or concerning the
subcontractor, or a subcontractor which at the time approved is a majority owned
Affiliate of Vendor ceases to be such an Affiliate.

(b) Vendor shall remain responsible for obligations, services and functions
performed by subcontractors to the same extent as if such obligations, services,
and functions were performed by Vendor employees (including requiring
subcontractors to adhere to the standards applicable to Vendor and the policies
and procedures then in effect, whether promulgated by Phoenix or Vendor) and for
purposes of this Agreement such work shall be deemed work performed by Vendor.
Vendor shall be Phoenix’s sole point of contact regarding the Services,
including with respect to payment.

(c) Vendor shall not disclose Phoenix Confidential Information to a
subcontractor unless and until such subcontractor has agreed in writing to
protect the confidentiality of such Confidential Information in a manner
substantially equivalent to that required of Vendor under this Agreement, and
then only on a need-to-know basis.

(d) To the extent subcontractors, agents, representatives, and other entities
perform, or otherwise provide support to Vendor related to the Services, Vendor
shall cause such entities to comply with the obligations and restrictions
associated with the services, functions, and responsibilities performed by such
subcontractors, agents, representatives, and other entities that are applicable
to Vendor under this Agreement (except in the case of a subcontract assigned to
Vendor by Phoenix to the extent Vendor’s ability to do so is limited by the
terms of the applicable subcontract). In addition, Vendor shall include in its
subcontracts, as flowdown provisions, provisions substantially similar to the
provisions of this Agreement relating to: compliance with Applicable Laws;
audit; confidentiality, security and intellectual property rights of Phoenix;
and each other provision which is necessary to assure that Vendor will fulfill
its obligations under this Agreement.

10.7 Technology Planning and Budgeting.

(a) Technology Plan. The Parties shall annually jointly prepare a technology
plan in accordance with the provisions of this Section and subject to the first
sentence of Section 10.5(a) (the “Technology Plan”). The Technology Plan shall
address the IT requirements of Phoenix’s activities and future opportunities to
enhance delivery of Services and to reduce the costs of the Services through
introduction of tools,

 

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procedures and other improvements into Phoenix’s IT environment (“Enhancement
Activities”). Each Technology Plan after the first shall review and assess the
immediately preceding Technology Plan. The Technology Plan shall consist of a
three-year plan and an annual implementation plan as described below.

(b) Targeted Cost Savings. Within ninety (90) days of the Effective Date, the
parties shall meet with the intention of developing a plan to identify targeted
cost saving opportunities for a selected Service Tower. The resulting plan shall
outline the activities to undertaken in order for Phoenix to realize the
anticipated cost savings if Phoenix chooses to pursue such opportunity. In each
subsequent Contract Year, the parties will undertake a similar process for
another Service Tower (one Service Tower per Contract Year).

(c) Three-Year Plan. The Technology Plan shall include a comprehensive
assessment and strategic analysis of Phoenix’s then-current IT systems and
services including the Phoenix Standards and an assessment of the appropriate
direction for such systems and services for the next three (3) years in light of
Phoenix’s business priorities and strategies and competitive market forces (to
the extent such business information is provided by Phoenix to Vendor). The
Technology Plan shall include:

(i) a specific identification of proposed software and hardware strategies and
direction;

(ii) a cost/benefit analysis of any proposed changes;

(iii) a general plan and a projected time schedule for developing and achieving
the recommended elements;

(iv) the resulting impact on Phoenix information technology costs;

(v) a description of the types of personnel skills and abilities needed to
respond to any recommended changes or upgrades in technology;

(vi) the changes, if any, in the personnel and other resources required to
operate and support the changed environment;

(vii) the expected performance, quality, responsiveness, efficiency,
reliability, security risks and other service levels to be achieved based on the
recommended strategies and directions; and

(viii) Any Enhancement Activities generally known within the information
technology industry at the time of the particular Technology Plan which could be
implemented into the Services on a long-term basis (i.e., during the term of the
three-year Technology Plan) and an initial high-level benefits analysis with
regard to such Enhancement Activities and the implementation of same.

(d) Annual Implementation Plan. As necessary to support the overall objectives
and directions of the three-year plan, the annual implementation plan shall
include

 

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information services requirements, plans, projects (which may include Projects)
for the upcoming year, including details on operations, maintenance backlog and
development activities. The annual implementation plan shall include a summary
review of Vendor’s performance of the Services in the year then concluding, and
shall provide updates and revisions of the three-year plan as appropriate. The
annual implementation plan will also include any Enhancement Activities
generally known within the information technology industry at the time of the
particular annual technology plan which could be implemented into the Services
on a short-term basis (i.e., during the term of the annual technology plan) and
an initial benefits analysis with regard to such Enhancement Activities and the
implementation of same. An annual implementation plan shall be prepared for each
year of the Agreement. As part of the process for preparing the annual
implementation plan, the Parties shall review the overall operation of the
Agreement with regard to a determination of whether the Services are meeting
Phoenix’s strategic IT requirements.

(e) Drafting Responsibility. Vendor shall submit to Phoenix a draft of the
Technology Plan for Phoenix’s review and approval, which draft shall have been
developed with input from key business users of Phoenix. Vendor shall submit the
final Technology Plan to Phoenix within thirty (30) days of receiving Phoenix’s
comments. The draft of the Technology Plan for the first year shall be provided
within three (3) months of the final Service Tower Commencement Date.

(f) Technology Plan Timing and Update. The schedule for developing and
delivering each Technology Plan shall be coordinated to support Phoenix’s annual
business planning cycle and the semi-annual senior management meeting described
in Section 10.3(b)(iv). The Technology Plan shall be updated during the year as
necessary to reflect changes in the business of Phoenix that materially impact
the validity of the then-existing Technology Plan. Vendor shall recommend
modifications to the Technology Plan as it deems appropriate, and shall revise
the Technology Plan as requested or approved by Phoenix.

10.8 Quality Assurance and Improvement Programs.

As part of its total quality management process, Vendor shall provide continuous
quality assurance and quality improvement through: (i) the identification and
application of proven techniques and tools from other installations within its
operations (i.e., “Best Practices”) that would benefit Phoenix either
operationally or financially or ensure continued compliance with Applicable
Laws; and (ii) 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 Phoenix to confirm the
quality of Vendor’s performance, and shall be included in the Procedures Manual.
Vendor shall utilize project management tools, including productivity aids and
project management systems, as appropriate in performing the Services.

 

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10.9 Coordination of Additional Marketing to Phoenix.

Subject to Sections 23.12 and 23.13, Vendor shall coordinate all marketing
efforts for expansion of the Services and for New Services to Phoenix and its
Affiliates with, and comply with the rules of engagement provided from time to
time by, the Phoenix Contract Executive.

10.10 Releases Void.

Except where the Parties are otherwise expressly required in this Agreement to
execute any agreements or consents and only to the extent and in those
situations so expressly reflected, if Phoenix’s personnel are required to
execute any releases, waivers, confidentiality agreements, or similar forms to
obtain access to Vendor’s or its subcontractors premises they shall be void and
shall not be pleaded or introduced in any action. This Section shall not apply
to confidentiality and industrial security forms required to access any Vendor
premises that are used by Vendor to provide services to governmental entities.
Notwithstanding the foregoing, each Party shall be responsible for complying
with the confidentiality obligations provided in this Agreement.

11. AUDITS, RECORD RETENTION

11.1 Financial Reporting.

Vendor has obtained for Phoenix a guarantee from Vendor’s parent company,
Hewlett Packard Company, as to Vendor’s performance under this Agreement.

11.2 Audit Rights.

(a) Vendor shall maintain a complete audit trail of all financial transactions
and customary records of non-financial transactions resulting from this
Agreement. Vendor shall provide to Phoenix and Phoenix’s Affiliates and its and
their auditors (including internal audit staff and external auditors),
inspectors, regulators and other representatives as Phoenix may from time to
time designate in writing, access at all reasonable times (and in the case of
regulators at any time required by such regulators), and upon reasonable notice,
to any facility or part of a facility at which either Vendor or any of its
subcontractors is providing any portion of the Services, to Vendor Personnel,
and to data and records relating to the Services excluding: (x) attorney-client
privileged information; (y) internal audits (provided that Vendor shall provide
summaries of such audits that are prepared by the person that produced the
original audit report); and (z) cost data (other than where cost is the basis
for determining Phoenix’s charges) for the purpose of performing audits and
inspections of either Vendor or any of its subcontractors during the Term and
for the period Vendor is required to maintain records hereunder to:

(i) verify the accuracy of Charges and invoices, and the inventory of Phoenix
supplies and other Phoenix assets, if any;

 

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(ii) verify the integrity of Phoenix Data and examine the systems that process,
store, support and transmit that data;

(iii) verify that Vendor and Phoenix are in compliance with Applicable Laws; and

(iv) examine Vendor’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 therefore, 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 of Vendor in performing the Services (but only to the
extent affecting Charges for, or timing of, Services); and

(G) as necessary to enable Phoenix to meet, or to confirm that Vendor is
meeting, applicable regulatory and other legal requirements.

(b) If, as required by Section 10.6(d), Vendor is unable to include such
provisions in a subcontract, Vendor shall disclose such inability in connection
with obtaining Phoenix’s consent to use such subcontractor. Without limiting the
generality of the foregoing, the audit rights with respect to subcontracts
assigned by Phoenix to Vendor shall be as set forth in such subcontracts.

In addition but subject to the procedures described in (a) above, Vendor shall
provide information sufficient to allow Phoenix or a designated third party to
ensure that current server packs, patches and firmware are in place. Vendor will
also permit Phoenix or its Affiliates (or its and their auditors) to perform any
of the following as requested by Phoenix:

 

  •  

a review of information security policy documents;

 

  •  

security policies and procedures review;

 

  •  

physical security controls;

 

  •  

external network penetration attempts;

 

  •  

application penetration attempts;

 

  •  

vulnerability assessment;

 

  •  

internal penetration attempts;

 

  •  

attempts to gain access through social engineering techniques;

 

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  •  

a complete report of attacks and tools used, findings, and recommendations;

 

  •  

a follow-up review to confirm that recommendations were implemented; and

 

  •  

a determination of whether controls testing was performed on each technology
control to be relied upon in production processing—including physical access.

(c) Vendor and Phoenix shall meet and review each audit report promptly after
its issuance, and, as part of such meeting, Vendor shall provide responses to
Phoenix on the issues in such audit report. Vendor shall provide to Phoenix’s
auditors, inspectors, regulators, and representatives the assistance they
require, including installing and operating audit software. Vendor shall notify
Phoenix if the installation of any audit software would materially and adversely
affect Vendor’s ability to meet the Service Levels. After receiving such notice,
Phoenix shall either alter its request or temporarily waive the Service Levels
that would be adversely affected. Vendor shall cooperate fully with Phoenix and
its designees in connection with audit functions and with regard to examinations
by regulatory authorities. Phoenix shall require that its auditors and other
representatives comply with Vendor’s reasonable security requirements.

(d) If a pre-existing or new agreement between Phoenix and any of its customers
provides such customers the right to audit Phoenix’s operations, the audit
rights hereunder shall be extended to such customer to the extent relevant to
such customer’s agreement with Phoenix; provided that Phoenix shall at all times
be responsible for such auditors as if they were Phoenix personnel and for
coordinating any such audits.

(e) With respect to any change management or benchmarking adjustment proposed by
Vendor, or any proposed adjustment offered by Vendor in connection with an
Extraordinary Event, New Service or Phoenix’s withdrawal of Services under
Section 3.6(b) (each, an “Adjustment”), if Phoenix disputes such Adjustment, in
addition to any other rights that Phoenix has under this Agreement, Phoenix may
retain an independent third party (which may include Phoenix’s auditors or
Deloitte & Touche, notwithstanding their other relationships with Phoenix) to
audit Vendor’s or any of its subcontractor’s costs (only to the extent cost is
the basis for determining Phoenix’s Charges) associated with such Adjustment;
provided (i) such independent third party shall execute a nondisclosure
agreement with both Parties containing confidentiality and nondisclosure terms
substantially similar to those set forth in this Agreement, and (ii) such
independent third party may not disclose Vendor’s or any of its subcontractor’s
cost data (only to the extent such third party had the right to include cost
data, as indicated above) associated with such Adjustment to Phoenix, but may
provide sufficient information to Phoenix to enable Phoenix to assess the
validity of such Adjustment. Vendor shall maintain, and shall cause its
subcontractors to maintain, sufficient records to permit such independent third
party to conduct such audits, and shall provide such independent third party
with reasonable access to its and each of its subcontractor’s records for the
purpose of performing such audits. Vendor shall provide its full cooperation and
assistance as is reasonably requested by such independent third party.

 

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11.3 Vendor Internal Controls.

(a) Vendor 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. Subject to the following
provisions regarding the costs or fees to perform such audits, Vendor will
provide Phoenix with SAS 70 II reports for facilities used to provide Services
to Phoenix if required by Phoenix’s independent auditors. With regard to the
costs of such SAS 70 II audits, Vendor regularly performs such audits on some,
but not all, of the hardware/software platforms within its data centers. If
Phoenix desires to have the SAS 70 II audit results of one of the platforms
within a particular data center on which Vendor regularly performs such audits
made available to it, Phoenix shall be charged the allocated cost to the Vendor
account at that time on a per hardware/software platform per data center basis.
If Phoenix desires to have the SAS 70 II audit results of one of the platforms
within a data center on which Vendor does not regularly perform such audits made
available to it, Phoenix may bring in a third party to perform such an audit and
Vendor shall reasonably cooperate with Phoenix and such third party in the
performance of such audit, subject to confidentiality and security measures.

(b) Vendor shall perform a security audit at least annually. This audit shall
test the compliance to the agreed-upon security standards and procedures as
reflected in Schedule A (Statement of Work). If the audit shows any matter that
may adversely affect Phoenix, Vendor shall disclose such matter to Phoenix and
provide a detailed plan to remedy such matter. If the audit does not show any
matter that may adversely affect Phoenix, Vendor shall provide the audit or a
reasonable summary thereof to Phoenix. Any such summary may be limited to the
extent necessary to avoid a breach of Vendor’s security by virtue of providing
such summary. Vendor shall perform such security audits at a level no less
thorough than Phoenix’s requirements as of the Effective Date as made known to
Vendor prior to the Effective Date. Phoenix may use a third party or its
internal staff for an independent audit or to monitor the Vendor audit. If
Phoenix chooses to conduct its own security audit, such audit shall be at
Phoenix’s expense.

(c) As reasonably requested by Phoenix, on an annual basis, Vendor will provide
materials and documentation to Phoenix with regard to (i) Vendor’s then current
control objectives, and (ii) related information as to the manner in which
Vendor’s control objectives are implemented among and across the various
software and hardware platforms in the particular Vendor data centers from which
the Services may be provided for Phoenix as well as the manner in which such
control objectives may differ across such platforms.

11.4 Audit Follow-up.

(a) Following an audit or examination, Phoenix may conduct (in the case of an
internal audit), or request its external auditors or examiners to conduct, an
exit conference with Vendor to obtain factual concurrence with issues identified
in the review.

 

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(b) Vendor shall make available promptly to Phoenix the results of any review or
audit conducted by Vendor or Vendor’s Affiliates, or their contractors, agents
or representatives (including internal and external auditors), relating to
Vendor’s operating practices and procedures to the extent that the review, audit
or subsequent results are relevant to the Services or Phoenix. Such audits shall
include SAS 70 II reports to the extent such reports are performed or available
as reflected in Section 11.3(a).

(c) Vendor and Phoenix shall meet to review each audit report promptly after its
issuance and to mutually agree upon the appropriate manner, if any, in which to
respond to the changes suggested by the audit report. Vendor shall provide
status updates covering the audit responses. Phoenix and Vendor agree to develop
operating procedures for the sharing of audit and regulatory findings and of
reports related to Vendor’s operating practices and procedures produced by
auditors or regulators of either Party. Audit issues resulting from Vendor’s
actions will be corrected as set forth in Section 11.6, and, as applicable, by
reducing pricing that addresses issues(s) revealed by such audit.

11.5 Records Retention.

Until the latest of (a) seven (7) 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 Phoenix’s
records retention policy as such policy may be adjusted from time to time,
Vendor shall maintain and provide access upon request to the records, documents,
and other information required to meet Phoenix’s audit rights under this
Agreement. Before destroying or otherwise disposing of such information, Vendor
shall provide Phoenix with sixty (60) days prior notice and offer Phoenix the
opportunity to recover such information or to request Vendor to deliver such
information to Phoenix.

11.6 Discovery of Overcharge of Phoenix.

If an audit shows that Vendor has overcharged Phoenix, at Phoenix’s option
Vendor shall credit to Phoenix’s account an amount equal to the amount of the
overcharge plus interest at the prime rate plus two (2) percentage points
calculated from the date the overcharge was paid by Phoenix to Vendor, or to pay
the amount to Phoenix directly. For the purposes of this Section, the prime rate
shall be the rate set forth in the Wall Street Journal, New York edition, “Money
Rates” section (or any successor thereto) at the time of such audit. If an audit
shows that Vendor overcharged Phoenix, net of any undercharges identified in the
audit, then Vendor shall also pay Phoenix an amount equal to the cost of the
audit.

12. PHOENIX RESPONSIBILITIES

12.1 Responsibilities.

Phoenix shall have no other responsibilities than those expressly set forth in
this Agreement (including any reflected in any schedules or exhibits to this
Agreement). Those responsibilities include the following:

(a) Phoenix shall designate one (1) individual to whom Vendor may address all
Vendor communications concerning this Agreement (the “Phoenix Contract
Executive”).

 

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(b) Phoenix shall cooperate with Vendor, including by making available
management decisions, information, approvals and acceptances, as reasonably
requested by Vendor so that Vendor may accomplish its obligations and
responsibilities under this Agreement. The Phoenix Contract Executive or its
designee shall be the principal point of contact for obtaining such decisions,
information, approvals and acceptances. Only personnel as expressly so
designated by the Phoenix Contract Executive shall be authorized to make
commitments on the part of Phoenix that amend this Agreement or commit resources
that are subject to a Resource Volume Baseline. To the extent Vendor relies on
the apparent authority of other personnel, it does so at its own risk and
without obligation on Phoenix’s part.

12.2 Savings Clause.

Due to the impact any termination of this Agreement would have on Phoenix’s
business, Phoenix’s failure to perform its responsibilities set forth in this
Agreement (other than as provided in Section 21.2) shall not be grounds for
termination by Vendor notwithstanding any provision in this Agreement to the
contrary. Vendor acknowledges that Phoenix would not be willing to enter into
this Agreement without assurance that it may not be terminated by Vendor and
that Vendor may not suspend performance except, and only to the extent, provided
under this Agreement.

13. CHARGES

13.1 General.

The charges for the Services (“Charges”) are set forth in Schedule C (Charges)
of this Agreement. Phoenix shall not be required to pay Vendor any amounts for
the Services in addition to those set forth in this Agreement. Except as
otherwise set forth in this Agreement, in no event will information or changes
in circumstances discovered after the Effective Date regarding Phoenix
operations of any kind serve as the basis for Vendor to adjust the pricing or
terms of this Agreement or any of the Schedules.

13.2 Pass-Through Expenses.

(a) “Pass-Through Expenses” shall mean third-party charges that are to be
(i) paid directly by Phoenix and (ii) administered by Vendor. All Pass-Through
Expenses shall be listed in Exhibit C-7 to Schedule C (Charges), as may be
amended.

(b) Vendor shall arrange for delivery by third parties to Vendor of invoices for
Pass-Through Expenses. Vendor shall promptly review such invoices upon receipt
and provide Phoenix with the original invoice together with a statement
identifying which Charges are proper and valid and should be paid by Phoenix.

 

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(c) Vendor shall use Commercially Reasonable Efforts to minimize the amount of
any particular Pass-Through Expense. With respect to services or materials paid
for on a Pass-Through Expenses basis, Phoenix reserves the right to:

(i) obtain such services or materials directly from one or more third parties;

(ii) designate the third-party source for such services or materials;

(iii) designate the particular services or materials (e.g., equipment make and
model) Vendor shall obtain (although if Vendor demonstrates to Phoenix that such
designation shall have an adverse impact on Vendor’s ability to meet the Service
Levels, such designation shall be subject to Vendor’s reasonable approval);

(iv) designate the terms for obtaining such services or materials (e.g.,
purchase or lease and lump sum payment or payment over time);

(v) require Vendor to identify and consider multiple sources for such services
or materials or to conduct a competitive procurement; and

(vi) review and approve the applicable Pass-Through Expenses before entering
into a contract for particular services or materials.

13.3 Incidental Expenses.

Except as may be otherwise provided in this Agreement, expenses that Vendor
expects to incur in performing the Services (including travel and lodging,
document reproduction and shipping, and long-distance telephone) are included in
Vendor’s Charges and rates set forth in this Agreement. Accordingly, such Vendor
expenses are not separately reimbursable by Phoenix unless, on a case-by-case
basis for unusual expenses, Phoenix has agreed in advance and in writing to
reimburse Vendor for the expense. Notwithstanding the above or any other
provision in this Agreement to the contrary, Vendor shall use Commercially
Reasonable Efforts to minimize any expenses that Phoenix is required or elects
to pay under this Agreement.

13.4 Taxes.

(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 corporate level gross receipts.

(b) Vendor shall be responsible for any sales, use, excise, value-added,
services, consumption or other taxes and duties payable by Vendor on the goods
or services used or consumed by Vendor in providing the Services (including,
subject to Section 18.1(k), related interest and penalties) where the tax is
imposed on Vendor’s acquisition or use of such goods or services and the amount
of tax is measured by Vendor’s costs in acquiring such goods or services.

 

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(c) Subject to Section 13.4(k), Phoenix shall be responsible to pay to Vendor,
or reimburse Vendor for the payment of, and Vendor shall be responsible for the
collection and remittance of, any and all sales, use, excise, value-added,
services, consumption, and other taxes assessed on the provision of the Services
provided by the Vendor after the Effective Date (including, subject to
Section 18.2(f), related interest and penalties). Vendor and Phoenix shall agree
on the appropriate method for invoicing the Services to be certain to capture
only those services subject to tax and the appropriate tax rate. If and to the
extent any such tax is reduced or eliminated during the Term, Vendor shall
decrease the amounts invoiced to Phoenix to fully reflect the reduction or
elimination of such tax.

(d) The Parties agree to comply with the requirements of the exemption under the
Connecticut Sales and Use Tax Law pertaining to all computer related services
and related equipment as provided for in Ruling 98-1, 96-8.

(e) If, any 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 (3) payment
streams:

(i) those for taxable Services;

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

(iii) those for other nontaxable Services, including those services and related
equipment sales that qualify under the exemption of outsourcing as noted in the
ruling referenced in Section 13.4(d).

(f) 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
maximum extent legally permissible. Unless Phoenix has provided Vendor with
tax-exemption, direct pay, or resale certificates, Vendor’s invoices shall
separately state the amounts of any taxes Vendor is collecting from Phoenix, and
Vendor shall remit such taxes to the appropriate authorities.

(g) Each Party shall provide and make available to the other any direct pay or
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.

(h) Each Party shall promptly notify the other Party of, and coordinate with
such other Party the response to and settlement of, any claim for taxes asserted
by applicable taxing authorities for which it 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 right to elect to
control the response to and settlement of the claim, but the other Party shall
have all rights to participate in the responses and settlements that are
appropriate to its potential responsibilities or liabilities. Vendor

 

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reserves the right to settle any and all claims and audits, without notification
to or approval by Phoenix, provided however, that (a) in such event, Vendor
shall not hold Phoenix responsible for any such settled claim or audit and
(b) such settled claim or audit did not and will not directly relate to Phoenix.

(i) If Phoenix reasonably requests Vendor, timely and in writing, and with
appropriate statutory authority, to challenge the imposition of any tax, Vendor
shall do so in a timely manner and Phoenix shall reimburse Vendor for the
reasonable legal fees and expenses it incurs.

(j) Each Party shall be entitled to any tax refunds or rebates granted to the
extent such refunds or rebates are of taxes that were paid by such Party.

(k) Notwithstanding anything to the contrary set forth in this Section 13.4,
Vendor will be responsible for any sales, use, excise, value-added, services,
consumption or other transaction taxes (including, subject to Section 18.1(k),
related interest and penalties) imposed by (i) any taxing authority outside the
United States with respect to Services provided outside of the United States or
(ii) any taxing authority in the United States with respect to Services provided
outside the United States to the extent that such taxes imposed pursuant to this
subsection (ii) are incremental to taxes that would otherwise be imposed on such
Services if provided in the United States, in each case under subsection (i) and
(ii) however designated or levied.

13.5 Extraordinary Events.

(a) An “Extraordinary Event” shall mean

(i) with respect to a resource subject to a baseline, a circumstance in which
Phoenix’s actual purchase of such resource within such Service Tower from Vendor
varies or is expected to vary from the applicable baseline for the foreseeable
future or at least three (3) consecutive months by more than plus or minus
twenty-five percent (25%);

(ii) with respect to a Service that is not subject to a baseline, in a
circumstance in which Phoenix’s actual purchase of such Service within such
Service Tower from Vendor is reduced under Section 3.6 by an amount that exceeds
25% of the Base Charges for such Service Tower in any Contract Year, or

(iii) A reduction of Services within a Service Tower resulting from any
combination of (A) RRCs and (B) reductions pursuant to Section 3.6 of this
Agreement, that exceeds a 35% reduction of the Base Charges for such Service
Tower in any Contract Year.

(b) Upon the occurrence of an Extraordinary Event, the Parties shall negotiate
in good faith with regard to the adjustment of Vendor’s Charges and resources
(including Base Charges and rates as appropriate) as well as any other impacted
terms and conditions of this Agreement. For the avoidance of doubt, either Party
may notify the other that an Extraordinary Event has occurred.

 

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(c) If within sixty (60) days following a Party’s notice of the occurrence of an
Extraordinary Event, the Parties have not agreed upon the foregoing, then the
pricing will be determined (i) initially as provided under Section 20.1(a) and,
if not resolved thereunder after ten (10) Business Days, (ii) by binding
arbitration conducted pursuant to Section 20.3.

13.6 New Services.

Services that are materially different from, and in addition to, the Services
shall be considered “New Services.” The Parties’ obligations with respect to New
Services shall be as follows:

(a) If the performance of the additional functions can be reflected in a change
in the volume of chargeable resource usage, and the net change in the resources
and expenses required to perform the additional functions would not be
disproportionately different from the corresponding change in the volume or
composition of such chargeable resource usage from performing such additional
functions, then the charge, if any, for such additional functions shall be
determined pursuant to Section 6.2 of Schedule C (Charges), this Section 13.6
and the other Sections of this Agreement relating to New Services. The
additional functions shall then be considered “Services” and shall be subject to
the provisions of this Agreement. In addition, the Parties may work together to
re-prioritize certain then existing Services and/or Service Levels in order to
determine if, by such re-prioritization of existing work or Service Levels,
Vendor could accommodate the Phoenix requested additional functions with the
then current account staff, Equipment, Software and other related items. If
Vendor determines, in its sole discretion, that it could accommodate such
additional functions, such function shall become Services without the necessity
of an added charge so long as such accommodation does not jeopardize the
performance by Vendor of any other of the Services at the Service Levels.

(b) If the performance of the additional functions cannot be reflected in a
change in the volume of chargeable resource usage, or if the net change in the
resources and expenses required to perform the additional functions would be
disproportionately different from the corresponding change in the volume or
composition of chargeable resource usage from performing such additional
functions, then:

(i) Vendor shall quote to Phoenix a charge (which may be variable) for such
additional functions that is competitive with the charge Vendor provides for
similar functions to its other customers. Such charges shall take into account,
as applicable, resources and expenses of Vendor for then-existing portions of
the Services that would no longer be required if the additional functions would
be performed by Vendor; and

(ii) upon receipt of such quote, Phoenix may then elect to have Vendor perform
the additional functions, and the Charges under this Agreement shall be
adjusted, if appropriate, to reflect such functions. If Phoenix so elects, such
services shall be subject to the provisions of this Agreement.

 

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(c) If, although the Parties cannot agree upon the pricing applicable to a New
Service that, although materially different from the Services is still closely
related to the Services then being provided by Vendor, Phoenix nonetheless
desires Vendor to perform such New Service, and as the incumbent service
provider Vendor has a competitive advantage over third parties in providing such
New Service, then upon Phoenix’s written instruction to proceed, Vendor shall
begin performance of such New Service and, until that time when Phoenix and
Vendor can agree on the applicable charge for the New Service, Vendor will
provide such New Service at the applicable time and materials rates reflected in
Exhibit C-5 to Schedule C (Charges). If within sixty (60) days following
Phoenix’s written instruction to proceed, the Parties have not agreed on the
applicable charges for the New Service, then the pricing will be determined
(i) initially as provided under Section 20.1(a) and, if not resolved thereunder
after ten (10) Business Days, (ii) by binding arbitration conducted pursuant to
Section 20.3.

(d) Phoenix may in its discretion elect to solicit and receive bids from, or
otherwise enter into agreements with, third parties to perform or to perform
itself such additional functions. If Phoenix so elects, Vendor shall cooperate
with Phoenix and the third parties with respect to the provision of such
services.

(e) Evolution, supplements, modifications, enhancements and replacements of the
Services over time to keep pace with technological advancements and improvements
in the methods of delivering services shall not be deemed to be New Services.

13.7 Benchmarks for Cost of Services.

(a) Phoenix shall have the right during the Term to benchmark the Charges for
all or a portion of the Services by Service Tower.

(b) A benchmarking under this Section shall be conducted by an independent
industry-recognized benchmarking service provider (other than a Vendor
Competitor) designated by Phoenix (the “Benchmarker”). For the avoidance of
doubt, the following shall not be deemed to be a “Vendor Competitor” and are
acceptable Benchmarkers to the Parties: Gartner, Compass, Nautilus Advisors and
Price Waterhouse Coopers. The Parties shall jointly retain and pay the charges
for the Benchmarker. The Parties shall cooperate with the Benchmarker,
including, as appropriate, making available knowledgeable personnel and
pertinent documents and records.

(c) The Benchmarker shall perform the benchmarking in accordance with
Benchmarker’s documented procedures that shall be provided to the Parties prior
to the start of the benchmarking process. The Benchmarker shall compare the
Charges under this Agreement for the Services being benchmarked to the costs
being incurred in a representative sample of IT operations by or for other
entities. The Benchmarker shall select the representative sample from entities
(i) identified by the Benchmarker and approved by the Parties and
(ii) identified by a Party and approved by the Benchmarker. The following
conditions apply to the representative sample: (A) it shall include no more than
eight (8) entities and no less than four (4) entities; (B) it may include
entities that are outsourcing customers of Vendor; and (C) it may not include
non-outsourced entities.

 

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(d) The Benchmarker is to conduct a benchmarking as promptly as is prudent in
the circumstances. 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, service
levels, financing or payment streams, service window coverage, geographic scope,
Vendor’s upfront costs, the relationship between charges for an individual tower
and the aggregate charges, the overall financial structure of the agreement,
sophistication of the underlying technology, contract terms and conditions (to
the extent available), other factors unique to Phoenix’s and the comparison
contract’s requirements, and other factors the Benchmarker views to be
pertinent. Each Party shall be provided a reasonable opportunity to review,
comment on and request changes in the Benchmarker’s proposed findings. Following
such review and comment, the Benchmarker shall issue a final report of its
findings and conclusions.

(e) If in the final report of the Benchmarker, the Charges to Phoenix under this
Agreement for the benchmarked Services are not in the least expensive quartile
of the representative sample, then:

(i) Vendor shall give Phoenix written notification within thirty (30) days after
issuance of the Benchmarker’s final report whether or not Vendor accepts such
final report even after the review and comment period reflected in (d) above,
and, if Vendor does not accept such final report, Vendor shall give Phoenix its
reasons in writing for not accepting such report; provided however, that Vendor
shall only be permitted to reject such final report if the Benchmarker has
materially failed to follow the normalization procedures reflected in (d) above,
in which event the parties shall discuss such failure with the Benchmarker so
that the Benchmarker can take appropriate corrective action. Subject to the
foregoing if Vendor does accept such final report, Vendor promptly shall develop
a plan and schedule, subject to the approval of Phoenix, to bring Vendor’s
Charges within the top quartile in a reasonable period of time, but in any event
no longer than within six (6) months. Without limiting the generality of the
foregoing, the plan may propose changes to the method, manner, or quality of the
Services to the extent Vendor can demonstrate the changes were not already
reflected in the benchmark. Vendor then shall implement the plan and achieve the
top quartile in the designated period of time. If Vendor fails to implement the
plan and achieve the top quartile in the designated period of time then, without
limitation of any other remedy hereunder and notwithstanding anything to the
contrary contained in this Agreement, Phoenix may terminate the applicable
Services without the payment to Vendor of any termination or other fees of any
kind.

(ii) If Vendor does not provide notification in accordance with paragraph
(i) above, fails to develop promptly and implement a plan in accordance with
paragraph (i) above, or fails to satisfy paragraph (i) above in the required
time period, then Phoenix may terminate the benchmarked Services or any portion
thereof by giving Vendor at least sixty (60) days prior notice. In the case of
termination by Phoenix of Services in accordance with this Section, the Charges
payable under this Agreement for continuing Services shall be equitably adjusted
to reflect the Services that are terminated.

 

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(f) If in the final report of the Benchmarker, the Charges to Phoenix under this
Agreement for the benchmarked Services are in the top quartile of the
representative sample (viewed from the perspective of most beneficial to
Phoenix), then no adjustment shall be made. In no event shall Charges be
increased based on the results of a benchmarking process.

(g) Subject to the provisions of this Section 13.7, the determination of the
Benchmarker shall be final and binding on the Parties, unless a Party
demonstrates: (i) fraud or collusion in the benchmarking process, (ii) that the
Benchmarker made an arithmetic error, or (iii) a material failure of the
Benchmarker to conform to the methodology set forth in Sections 13.7(c) and
13.7(d).

14. INVOICING AND PAYMENT

14.1 Invoicing.

(a) Vendor shall invoice Phoenix for all Charges due under this Agreement in the
manner reflected in this Section 14.1 and Schedule C (Charges). Base Charges
shall be invoiced on a monthly basis in arrears at the end of the month in which
the Services which are the subject of the Base Charges were performed. Work
Order Charges shall be invoiced as set forth in the applicable Work Order. ARCs,
RRCs and any other variable amounts or Charges that are in addition to the Base
Charges and Work Order Charges for a month will be invoiced on a monthly basis
but will be invoiced on the following month’s invoice.

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

(c) Vendor shall render a single, consolidated, monthly invoice for each month’s
Charges, showing the details reasonably specified by Phoenix, including details
necessary to satisfy Phoenix’s internal accounting and chargeback requirements
(such as allocating Charges among business units, Service components, Work
Orders, Projects, locations, Affiliates and departments, as such requirements
are reflected in Schedule A (Statement of Work) at a level at least as
comprehensive and detailed as that specified in Exhibit C-6 and Exhibit C-6.1 to
Schedule C (Charges). Such invoice shall separately identify (i) Pass-Through
Expenses for the month, (ii) amounts prepaid by Phoenix, (iii) the number of
hours allocated to Projects, broken out by Project and, prior to the Amended and
Restated Effective Date, indicating (as applicable) (A) where Project pool
resources were drawn down and (B) where additional Charges (other than the Base
Charges) have been incurred, and (iv) the amounts of any taxes Vendor is
collecting from Phoenix. The invoice shall state for each item or Service
charged, other than the Annual Services Charges and ARCs or RRCs, the clause in
this Agreement authorizing Vendor to charge for such item or Service. Vendor
shall include with the invoice the calculations utilized to establish the
charges in sufficient detail to enable Phoenix to confirm the accuracy of the
Charges included in the invoice. The form of invoice is included as Exhibit C-6
to Schedule C (Charges).

 

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(d) Each month’s invoice shall be complete as to the Charges applicable to the
Services provided in the month to which such invoice applies. Vendor may not
charge Phoenix any additional amounts for Charges for a month for which an
invoice has been rendered, except: (i) mistakes not corrected in the next
month’s invoices (e.g. the month after the erroneous billing); (ii) certain
charges which are not reasonably capable of being determined as of the date of
such invoice, provided that such charges are invoiced within ninety (90) days
after they have been incurred; or (iii) if different payment terms are agreed
upon with respect to a specific amount.

14.2 Payment Due.

Subject to the other Sections of this Agreement, invoices complying with the
requirements of this Agreement and properly submitted to Phoenix shall be due
and payable by Phoenix within thirty (30) days after receipt by Phoenix with
respect to the Base Charges component of the invoice and sixty (60) days after
receipt by Phoenix with respect to the ARCs/RRCs and any other non-Base Charge.
If a due date does not fall on a business day, payments must be received by
Vendor on or before one business day after such date. Subject to Section 14.8,
any amount not paid when due will bear interest until paid at a rate of interest
equal to the lesser of (x) prime rate plus two (2) percentage points calculated
from the date payment was due or (y) the maximum rate of interest allowed by
applicable law. For the purposes of this Section, the prime rate shall be the
rate set forth in the Wall Street Journal, New York edition, “Money Rates”
section (or any successor thereto) at that time.

14.3 Accountability.

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

14.4 Proration.

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

14.5 Prepaid Amounts.

Subject to Section 10.2 of Schedule C (Charges), where Phoenix has prepaid for a
service or function for which Vendor is assuming financial responsibility under
this Agreement, upon either Party identifying the prepayment, Vendor shall
refund to Phoenix that portion of such prepaid expense that is attributable to
periods on and after the applicable Service Tower Commencement Date or Work
Order Commencement Date, as applicable. Upon Vendor’s request and as a condition
to Vendor’s obligation, Phoenix shall provide substantiation and documentation
of any prepaid expense for which it believes it is entitled to credit hereunder.

 

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14.6 Refunds and Credits.

If Vendor receives a refund, credit or other rebate for goods or services
previously paid for by Phoenix, Vendor shall promptly notify Phoenix 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 Phoenix.

14.7 Deduction.

Phoenix shall have the right to deduct from amounts owed by Phoenix to Vendor
under this Agreement any amount that Vendor is obligated to pay to or credit to
Phoenix.

14.8 Disputed Charges.

Subject to Phoenix’s right of deduction under Section 14.7, Phoenix shall pay
undisputed Charges when those payments are due. If any portion of an amount due
to Vendor under this Agreement is subject to a bona fide dispute between the
Parties, Phoenix shall pay to Vendor on the date such amount is due all amounts
not disputed in good faith by Phoenix. Within twenty (20) days of the date of
Phoenix’s receipt of the invoice on which a disputed amount appears, Phoenix
will notify Vendor in writing of the specific items in dispute, and will
describe in reasonable detail Phoenix’s reason for disputing each such item. If
Phoenix has failed to give notice of such a dispute, Vendor may request Phoenix
to identify the reasons for its dispute. Phoenix shall reply to any such request
within ten (10) days. For the avoidance of doubt, Phoenix’s failure to provide
any notice of dispute or meet any other obligation under this Section 14.8 shall
not constitute a waiver by Phoenix of any right or remedy available to it at law
or equity or this Agreement, including any right Phoenix may have to dispute (or
recover) amounts claimed by Vendor to be due hereunder. In the event the dispute
is found in Vendor’s favor, interest (at the rate reflected in Section 14.2)
will be due and owing accruing back to the date such amount would have been due
as an undisputed amount.

15. SAFEGUARDING OF DATA; CONFIDENTIALITY

15.1 General.

(a) Phoenix Confidential Information shall be and remain, as between the
Parties, the property of Phoenix. Vendor shall not possess or assert any lien or
other right against or to Phoenix Confidential Information. Phoenix Confidential
Information shall not be:

(i) used by Vendor other than in connection with providing the Services;

(ii) disclosed, sold, assigned, leased or otherwise provided to third parties by
Vendor, other than as permitted in this Agreement; or

 

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(iii) commercially exploited by or on behalf of Vendor.

(b) Phoenix Confidential Information shall not be utilized by Vendor for any
purpose other than that of rendering the Services under this Agreement.

(c) Upon Phoenix’s reasonable request, Vendor will, on a site-by-site basis as
to locations from which a portion of the Services may be performed, host Phoenix
personnel at such site(s) in order for Phoenix to tour such site. In addition,
and without limiting its other obligations in this Agreement, including
Section 3.13, Vendor will provide adequate information to Phoenix (either during
such site visits or in conversations regarding such sites) in order for Phoenix
to attain a level of satisfaction as to Vendor’s security plans, measures and
protocols at such site.

15.2 Safeguarding Phoenix Data.

(a) Vendor shall establish and maintain safeguards (to the extent and as
reflected in Schedule A (Statement of Work)) against the access, destruction,
loss, or alteration of Phoenix Data in the possession of Vendor which are no
less rigorous than those implemented and in use by Phoenix as of the Effective
Date, to the extent such safeguards are made known to Vendor, either through
documented security policies provided by Phoenix or through disclosure by
Transitioned Employees, and Vendor shall make no changes thereto unless agreed
by Phoenix. Vendor shall maintain such safeguards until the Security Plan (as
defined below) becomes effective.

(b) Within three (3) months of the first Service Tower Commencement Date, and
annually thereafter as part of the technology planning process described in
Section 10.7, Vendor shall provide Phoenix with a security plan (the “Security
Plan”) describing upgrades to Phoenix’s data security procedures and the related
infrastructure for Phoenix Data in the possession of Vendor necessary to bring
such procedures and infrastructure into compliance with the standards the
Parties agree are appropriate for Phoenix, which at a minimum will include any
then-current Phoenix security standards and policies. Vendor shall implement and
comply with the initial Security Plan and each annual plan thereafter.

(c) If Phoenix requests enhancements that are not necessary to satisfy the
requirements of any Security Plan agreed upon by the Parties, Vendor shall
implement such improvements as a New Service, except that any additional (i.e.,
other than those reflected in Schedule A (Statement of Work)) disaster recovery
measures or safeguards reasonably deemed by Phoenix to be necessary to protect
any Personally Identifiable Information shall be subject to the Contractual
Change Control Procedure. Phoenix shall have the right to establish backup
security for data and to keep backup data and data files in its possession if it
chooses. In the event Phoenix requests some enhancements to a Security Plan as a
result of requirements under Applicable Laws, such enhancements will be made
pursuant to Section 22.1.

(d) Vendor Personnel shall not attempt to access, or allow access to, any
Phoenix Data which they are not permitted to access under this Agreement. If
such access is attained (or is reasonably suspected), Vendor shall promptly
report such incident to Phoenix, describe in detail the accessed Phoenix Data,
and if applicable return to Phoenix any copied or removed Phoenix Data.

 

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(e) The systems security measures required under Sections 15.2(a) and 15.2(b)
shall include, to the extent the same is being used by Phoenix as of the
applicable Service Tower Commencement Date or Work Order Commencement Date, as
applicable, any System Software which:

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

(ii) controls and tracks the addition and deletion of users; and

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

(f) Phoenix Data (a) shall not be used by Vendor other than pursuant to this
Agreement, (b) shall not be disclosed, sold, assigned, leased or otherwise
provided to third parties by Vendor, except as required by any court or
administrative agency, by Applicable Law, (c) shall not be commercially
exploited by or on behalf of Vendor, its employees or agents, (d) shall be
stored separately from Vendor’s property or any property or data of third
parties, and (e) shall not be co-mingled with Vendor’s data or any data from any
other client.

(g) Vendor will maintain and enforce at any facilities where any Services are
performed, other than Phoenix facilities, industry standard safety and security
procedures. In addition, Vendor will comply with all reasonable requirements of
Phoenix and its Affiliates which are made known to Vendor with respect to
security at Phoenix facilities. In the event Vendor becomes aware of any breach
or attempted breach of the security of any Phoenix facilities, Vendor will
immediately notify Phoenix of such event, will assist in ascertaining and
containing any damage as part of Services, and will cooperate with Phoenix and
any law enforcement or regulatory official.

(h) Without limiting Vendor’s obligations under this Agreement, including the
other Sections of this Article 15, in the event Vendor becomes aware of any
Security Breach:

(i) Vendor shall, at its own expense, (i) immediately notify Phoenix of such
Security Breach and perform a root cause analysis thereon, (ii) investigate such
Security Breach, (iii) provide Phoenix with a remediation plan, acceptable to
Phoenix, to address the Security Breach and prevent any further incidents,
(iv) remediate the effects of such Security Breach in accordance with such
remediation plan, and (v) cooperate with Phoenix and any law enforcement or
regulatory official investigating such Security Breach. A “Security Breach”
shall be (A) any actual, attempted, or threatened (x) breach of physical
security at any Vendor facility or of any systems maintained by Vendor or its
agents or contractors in connection with the Services; (y) unauthorized
acquisition of computerized data that compromises the confidentiality, integrity
or availability of any such systems or Phoenix Data

 

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maintained, processed or transmitted by Vendor or Vendor Personnel or (B) any
circumstance pursuant to which Applicable Law requires notification of such
breach to be given to affected parties or other activity in response to such
circumstance; provided, however, that a Security Breach in (A) or (B) above must
have resulted from an act or omission by Vendor which is related to Vendor’s
performance of the Services or is otherwise a breach of this Agreement by
Vendor. Notwithstanding the foregoing, Phoenix shall make the final decision on
notifying Phoenix customers, employees, service Vendors and/or the general
public of such Security Breach or any other breach related to security which is
not a Security Breach, and the implementation of the remediation plan. If a
notification to a Phoenix customer is required under any Applicable Law or
pursuant to any of Phoenix policies or procedures, then notifications to all
customers who are affected by the same event (as reasonably determined by
Phoenix) shall be considered legally required; and

(ii) Vendor shall reimburse Phoenix for all reasonable Notification Related
Costs incurred (subject to Section 19.4) by Phoenix and its Affiliates arising
out of or in connection with a Security Breach resulting in a requirement for
legally required notifications (as determined by Phoenix in accordance with
Section 15.2(h)(i)). “Notification Related Costs” shall include Phoenix’s
internal and external costs associated with addressing and responding to the
Security Breach, including but not limited to: (aa) preparation and mailing or
other transmission of legally required notifications; (bb) preparation and
mailing or other transmission of such other communications to customers, agents
or others as Phoenix deems reasonably appropriate; (cc) establishment of a
hotline or other communications procedures in response to such Security Breach
(e.g., customer service FAQs, talking points and training); (dd) legal and
accounting fees and expenses associated with Phoenix’s investigation of and
response to such event; and (ee) costs for commercially reasonable credit
reporting services for a period not to exceed 12 months that are associated with
legally required notifications or are advisable under the circumstances. The
Parties agree and acknowledge that the Notification Related Costs and the
payment of such costs by Vendor will be damages that are subject to Article 19.

(i) In the event that Vendor becomes aware of any breach related to security
which is not a Security Breach, Vendor shall immediately notify Phoenix of such
breach, and the Parties shall reasonably cooperate regarding which of the
foregoing or other activities may be appropriate under the circumstances,
including any applicable Charges for the same.

(j) Vendor will not modify, delete or destroy any Phoenix Data or media on which
Phoenix Data resides without prior authorization from Phoenix. Vendor will
maintain and provide to Phoenix one or more reports that identify Phoenix Data
or media that have been modified or destroyed. In the event any Phoenix Data is
modified, lost or destroyed due to any act or omission of Vendor or any Vendor
Personnel, including any breach of the security procedures described in this
Article 15, Vendor shall be responsible for the prompt regeneration or
replacement of Phoenix Data. Vendor shall prioritize this effort so that the
loss of Phoenix Data will not have an adverse effect upon Phoenix’s business or
the Services. Phoenix agrees to cooperate with Vendor to provide any available
information, files or raw data needed for the regeneration of Phoenix Data.

 

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If Vendor fails to correct or regenerate the lost or destroyed Phoenix Data
within the time reasonably set by Phoenix, then Phoenix may obtain data
reconstruction services from a third party, and Vendor shall cooperate with such
third party as requested by Phoenix.

15.3 Confidential Information.

(a) Vendor and Phoenix each acknowledge that they may be furnished with, receive
or otherwise have access to information of or concerning the other Party that
such Party considers to be confidential, a trade secret or otherwise restricted.
“Confidential Information” shall mean all information, in any form, furnished or
made available directly or indirectly by one Party to the other that is marked
confidential, restricted, or with a similar designation. The terms and
conditions of this Agreement shall be deemed Confidential Information of each
Party. In the case of Phoenix, Confidential Information also shall include,
whether or not marked confidential, restricted or with a similar designation:
(i) Phoenix Data; (ii) the specifications, designs, documents, software,
documentation, data and other materials and work products owned by Phoenix
pursuant to this Agreement; (iii) all information concerning the operations,
employees, assets, customers, affairs or businesses of Phoenix, the financial
affairs of Phoenix, or the relations of Phoenix with its customers, employees
and service providers (including customer lists, customer information, account
information, analyses, compilations, forecasts, studies, and consumer market
information); and (iv) Software provided to Vendor by or through Phoenix
(collectively, the “Phoenix Confidential Information”). In the case of Vendor,
Confidential Information also shall include, whether or not whether or not
marked confidential, restricted or with a similar designation, Vendor’s
financial information, personnel records, information regarding Vendor’s, its
Affiliates’ or its subcontractors’ business plans and operations, and software,
tools, and methodologies owned or used by Vendor, its Affiliates or its
subcontractors.

(b) Obligations in Connection with Confidential Information.

(i) Each Party shall use at least the same degree of care as it employs to avoid
unauthorized disclosure of its own information, but in any event no less than
Commercially Reasonable Efforts (except that the case of Phoenix Data, the
degree of care required of Vendor shall be that degree of care specified under
Section 15.2), to prevent disclosing to unauthorized parties the Confidential
Information of the other Party, provided that Vendor may disclose such
information to properly authorized entities as and to the extent necessary for
performance of the Services, and Phoenix may disclose such information to third
parties as and to the extent necessary for the conduct of its business, where in
each such case:

(A) the receiving entity first agrees in writing to terms and conditions
substantially the same as the confidentiality provisions set forth in this
Agreement;

(B) use of such entity is authorized under this Agreement;

 

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(C) such disclosure is necessary or otherwise naturally occurs in that entity’s
scope of responsibility; and

(D) the disclosing Party assumes full responsibility for the acts and omissions
of such third party.

(ii) As requested by Phoenix during the Term (provided that Vendor shall be
excused from the Service Levels to the extent Phoenix’s request precludes
performance of the Services), upon expiration or any termination of this
Agreement, or completion of Vendor’s obligations under this Agreement, Vendor
shall return or destroy, as Phoenix may direct, all material in any medium that
contains, refers to, or relates to Phoenix Confidential Information, in the form
reasonably requested by Phoenix (provided that no data conversion is required),
and retain no copies; provided, however, that Vendor may retain copies of Vendor
generated Phoenix Confidential Information such as invoices and related
financial records and Vendor may retain Phoenix materials required as evidence
for an ongoing dispute in its legal department or with its outside counsel.

(iii) Each Party shall ensure that its personnel comply with these
confidentiality provisions.

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

(A) notify the furnishing Party upon becoming aware thereof;

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

(C) take such actions as may be necessary or reasonably requested by the
furnishing Party to minimize the violation; and

(D) cooperate in all reasonable respects with the furnishing Party to minimize
the violation and any damage resulting therefrom.

(c) The Parties’ obligations with respect to Confidential Information (other
than Personally Identifiable Information) shall not apply to any particular
information which Vendor or Phoenix can demonstrate:

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

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

 

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

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

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

(d) In addition, a Party shall not be considered to have breached its
obligations by:

(i) disclosing Confidential Information of the other Party (including Personally
Identifiable Information) as required to satisfy any legal requirement of a
competent government body provided that, immediately upon receiving any such
request and to the extent that it may legally do so, such Party advises the
other Party of the request prior to making such disclosure in order that the
other Party may interpose an objection to such disclosure, take action to assure
confidential handling of the Confidential Information, or take such other action
as it deems appropriate to protect the Confidential Information; or

(ii) disclosing Confidential Information of the other Party (other than
Personally Identifiable Information) to its attorneys, auditors and other
professional advisors in connection with services rendered by such advisors,
provided that such Party has confidentiality agreements with such professional
advisors and/or such advisors owe professional confidentiality obligations to
the Party.

(e) Except in emergency situations, prior to a Party commencing any legal action
or proceeding in respect of any unauthorized possession, use, or knowledge, or
attempt thereof, of Confidential Information by any person or entity which
action or proceeding identifies the other Party or its Confidential Information,
such Party shall seek such other Party’s consent. If a Party withholds its
consent, the other Party’s performance shall be excused to the extent such lack
of consent impacts its ability to perform its obligations under this Agreement.

(f) Each Party’s Confidential Information shall remain the property of that
Party. Nothing contained in the Parties’ obligations with respect to
Confidential Information 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.

15.4 Corporate Information Risk Controls.

(a) Vendor shall support and adhere to Phoenix’s corporate information, rules,
policies, standards, procedures, and applicable regulatory requirements (i) to
the extent and as reflected in Schedule A (Statement of Work) or (ii) otherwise
furnished in writing

 

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to Vendor as of the Amended and Restated Effective Date (collectively, “Phoenix
Risk Control Requirements”). Any modifications to the Phoenix Risk Control
Requirements shall be subject to the Technical Change Control Procedure or
Contractual Change Control Procedure, as appropriate. As set forth more fully in
Schedule A (Statement of Work), Vendor shall implement and administer effective
solutions as necessary to implement the Phoenix Risk Control Requirements, or as
otherwise directed by Phoenix (subject to the Technical Change Control Procedure
or Contractual Change Control Procedure, as appropriate), and shall certify that
the systems used to provide the Services are in compliance with such
requirements.

(i) At no additional charge (A) beginning on the first Service Tower
Commencement Date, Vendor shall maintain compliance with the Phoenix Risk
Control Requirements with which Phoenix is in compliance as of such date to the
extent and as reflected in Schedule A (Statement of Work) and (B) within six
(6) months of the last Service Tower Commencement Date, Vendor shall upgrade its
facilities and otherwise begin performing the Services in a manner necessary to
comply with Vendor’s own requirements of a similar nature. Notwithstanding the
foregoing, if at any time Vendor provides the Services from a shared data center
at which Vendor provides services to more than one Vendor customer, Vendor shall
at all times comply with Vendor’s own risk rules, policies, procedures,
standards and guidelines.

(ii) If Phoenix changes any Phoenix Risk Control Requirements after the first
Service Tower Commencement Date, or requests that Vendor comply with any such
requirements with which Phoenix was not in compliance as of the first Service
Tower Commencement Date, and such requirements exceed Vendor’s own requirements
of a similar nature, any effort necessary to bring the in scope infrastructure
into compliance with such requirements may be performed as a New Service, a
Project, or otherwise pursuant to the Technical Change Control Procedures or
Contractual Change Control Procedure. If at any time Phoenix requests additional
security, Vendor shall make such security available, but shall first notify
Phoenix of the incremental cost (if any) for such security and such changes
shall be subject to the Contractual Change Control Procedure. Each Party shall
designate an individual who shall serve as the primary contact for
security-related issues.

(b) If control deficiencies are identified in systems used to provide the
Services, Vendor shall take immediate and concerted action to correct the
deficiency, and shall conduct a post-incident assessment and institute measures
to prevent reoccurrence. On an event-occurrence basis, Vendor shall inform
Phoenix of any significant issues surrounding the control environment caused by
system changes or errors and track the status of such issues as they are
resolved. Controls in modified or reengineered systems shall be tested against
those of the previous system versions to ensure desired levels of control are in
place. Vendor shall update Phoenix on the status of those system control
improvements identified during audits and agreed to by Phoenix.

(c) Suspected or actual incidents of non-compliance with Phoenix rules,
policies, and procedures shall be managed to resolution by Vendor’s compliance
team, in cooperation and consultation with Phoenix, and reports shall be
provided to Phoenix on an event-occurrence basis. If Vendor Personnel are
responsible for such incidents,

 

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appropriate disciplinary action shall be taken in accordance with the
appropriate Vendor personnel policies. Additionally, Phoenix shall have the
right to direct Vendor to remove any personnel on the Phoenix account connected
with such incidents.

(d) Vendor shall conduct benchmarks or provide assessments by third parties, at
Phoenix’s request and expense, of Vendor’s compliance with the Phoenix corporate
information risk control requirements set forth in this Agreement. Vendor shall
perform self-assessments of such compliance and make results of such
engagement-related self-assessments available to Phoenix for review. In
developing new systems, Vendor shall interface with Phoenix so that Phoenix may
understand the associated controls required. This shall include informing
Phoenix of Vendor’s methodology for developing control specifications and
providing Phoenix with the ability to request changes to controls early in the
systems development process.

16. REPRESENTATIONS, WARRANTIES AND COVENANTS

16.1 General.

Vendor represents, warrants and covenants that: (a) it has successfully provided
and performed services that are substantially equivalent to the Services for
other major customers of Vendor; (b) it has performed all necessary due
diligence on Phoenix’s environment (including systems, software and personnel)
to provide the Services in accordance with this Agreement; (c) its financial
condition is, and during the Term shall remain, sufficient to enable Vendor to
provide the Services in accordance with this Agreement; and (d) no additional
corporate action is required to authorize Vendor to execute and deliver this
Agreement or to perform the Services.

16.2 Work Standards.

Vendor covenants that the Services shall be rendered with promptness and
diligence and shall be executed in a workmanlike manner, in accordance with the
Service Levels and the practices and high professional standards then prevailing
in the IT services industry and used in other well-managed operations performing
services similar to the Services. In the event there is a conflict between
specific Service Levels identified in this Agreement and service levels or
practices and high professional standards then prevailing in the IT services
industry and used in other well-managed operations, the Service Levels
identified in this Agreement shall control and govern. Vendor covenants that it
shall use adequate numbers of qualified individuals with suitable training,
education, qualifications, rights, resources, experience and skill to perform
the Services.

16.3 Maintenance.

Vendor covenants that it shall maintain the Equipment and Software so that they
operate in accordance with their specifications, including:

(a) maintaining Equipment in good operating condition, subject to normal wear
and tear;

 

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(b) undertaking repairs and preventive maintenance on Equipment in accordance
with the applicable Equipment manufacturer’s recommendations; and

(c) performing Software maintenance in accordance with the applicable Software
vendor’s documentation and recommendations.

16.4 Efficiency and Cost Effectiveness.

Vendor covenants that with respect to chargeable resources it shall perform the
Services in the most cost-effective manner consistent with the required level of
quality and performance.

16.5 Technology.

Vendor covenants that it shall provide the Services using, consistent with the
Technical Change Control Procedure and refresh obligations referenced in this
Agreement, proven, then-current technology that shall enable Phoenix to take
advantage of technological advancements in its industry and support Phoenix’s
efforts to maintain competitiveness in the markets in which it competes
throughout the Term. This Section 16.5 is not intended to conflict with or
enlarge specific provisions of this Agreement (e.g., refresh or software
currency versions) or conflict with Phoenix’s technology environment.

16.6 Non-Infringement.

(a) Each Party 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.

(b) Phoenix covenants that Phoenix’s limited access rights as expressly provided
for in this Agreement will not infringe upon any patent, copyright, trademark,
trade secret or other proprietary rights of any third party.

(c) Vendor covenants that it has obtained all requisite licenses and permits
necessary to perform the Services

16.7 Authorization and Other Consents.

Each Party represents, warrants and covenants 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 shall
not constitute a violation of any judgment, order or decree;

 

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

(d) As to Vendor, there is no outstanding proceeding pending or, to the
knowledge of Vendor, threatened, to which Vendor is a party that Vendor, without
predicting the outcome of such matter, reasonably expects to have a material
adverse affect on the ability of Vendor to fulfill its obligations under this
Agreement or the transactions contemplated by this Agreement. As to Phoenix,
there is no outstanding proceeding pending or, to the knowledge of Phoenix,
threatened, to which Phoenix is a party that Phoenix, without predicting the
outcome of such matter, reasonably expects to have a material adverse affect on
the ability of Phoenix to fulfill its obligations under this Agreement or the
transactions contemplated by this Agreement.

16.8 Inducements.

Vendor represents, warrants and covenants to Phoenix that it has not violated,
and will not violate, any Applicable Laws (including the U.S. Foreign Corrupt
Practices Act) or any Phoenix policies regarding the offering of unlawful
inducements in connection with this Agreement or the Services. If at any time
during the Term, Phoenix determines that the foregoing warranty is inaccurate,
then, in addition to any other rights Phoenix may have at law or in equity,
Phoenix shall have the right to terminate this Agreement for cause without
affording Vendor an opportunity to cure.

16.9 Viruses.

Vendor shall use Commercially Reasonable Efforts to ensure that no Viruses are
coded or introduced into the Software, Equipment or any expressly specified
deliverable delivered under the Agreement, if any. If a Virus is found to have
been introduced into the Software, Equipment or deliverable, Vendor shall use
Commercially Reasonable Efforts at no additional charge to assist Phoenix in
reducing the effects of the Virus and, if the Virus causes a loss of operational
efficiency or loss of data, to assist Phoenix to the same extent to mitigate and
restore such losses. Vendor shall immediately notify Phoenix of any existing or
anticipated Virus.

16.10 Disabling Code.

Each Party covenants that, without the prior written consent of the other Party,
it shall not insert into the Software any code designed to disable or otherwise
shut down all or any portion of the Services. Notwithstanding the foregoing,
both Parties acknowledge that certain third-party, commercial off-the shelf
software may include passwords, software keys, trial-period software and similar
programming code that are distributed as part of hardware or software to
automatically ensure that the purchaser or licensee uses the product in
accordance with the acquisition or license agreement. Each Party shall inform
the other Party of all such disabling code in the Software of which such Party
has operational knowledge. Vendor further covenants that, with

 

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respect to any disabling code that may be part of the Software, Vendor shall not
knowingly invoke such disabling code at any time, including upon expiration or
termination of this Agreement for any reason, without Phoenix’s prior written
consent.

16.11 Deliverables.

Unless otherwise agreed in writing by the Parties, Vendor covenants that during
the Term each expressly specified Deliverable delivered under a Work Order, if
any, produced by any software development project undertaken by Vendor, or for
which Vendor otherwise has responsibility for the successful completion as part
of the Services, shall not, after final acceptance of the Deliverable by Phoenix
and for the period of one hundred and twenty (120) (or as otherwise mutually
agreed) days after such final acceptance by Phoenix, materially deviate from the
specifications and requirements for such Deliverable set forth or referred to in
the applicable Work Order.

16.12 Software Ownership or Use.

Vendor represents and warrants that it is, and covenants that it will be at the
applicable time and after obtaining the applicable Required Consents, either the
owner of, or authorized to distribute, provide and use the Software provided by,
licensed or developed by Vendor under this Agreement or in connection with the
provision of Services hereunder.

16.13 Open Source.

Vendor represents and warrants that it has not and will not incorporate any
software (whether in source code or object code format) into the Work Product,
Deliverables, Phoenix Software, Vendor Software, Third-Party Software, Newly
Developed Software, Developed Phoenix Software or Developed Vendor Software or
any other Software delivered to Phoenix or used in connection with providing the
Services which would subject any property of Phoenix (including Phoenix Software
and Deliverables) of any variety to any license, other agreement or
understanding, that (i) would require the distribution of source code with such
property or require source code to be made available when such is distributed to
any third party; (ii) would impact, restrict or impair in any way Phoenix’s
ability to license such property pursuant to terms of Phoenix’s choosing; or
(iii) would impact or limit Phoenix’s ability to enforce Phoenix’s patent or
other Intellectual Property Rights against any third party in any manner.
Phoenix acknowledges that Phoenix has used and will continue to use Software
that subjects Phoenix to the items reflected in (i), (ii) and (iii) above and
has an inventory for the Parties to be able to consult in order to determine a
baseline in Phoenix Software, Phoenix Third Party Software and any other
materials or items provided by Phoenix to be used in the provision of the
Services and the amount Phoenix has incorporated or used such software.

 

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16.14 Other.

Vendor represents, warrants and covenants, as applicable, that:

(a) Neither Vendor nor any of its directors, officers, employees, agents or
subcontractors (including, without limitation, any Approved Subcontractors and
Vendor Personnel): (i) have ever been convicted of a felony (or outside of the
United States, a crime of the same or similar level as a felony) or, within a
three (3) year period preceding the Effective Date, been convicted of or had a
civil judgment rendered against them for commission of fraud or a criminal
offense in connection with obtaining, attempting to obtain or performing a
public (federal, state or local) transaction or contract under a public
transaction, or for violation of federal or state antitrust statutes or
commission of embezzlement, theft, forgery, bribery, falsification or
destruction of records, making false statements or receiving stolen property;
(ii) are presently indicted for, or other criminally or civilly charged by a
governmental entity (U.S. or non-U.S. federal, state or local) with commission
of any of the offenses enumerated clause (i) of this paragraph; or (iii) have
been barred from receiving federal or state contracts.

(b) Vendor will maintain at Vendor’s expense all of the necessary certification
and documentation such as I-9’s as well as all necessary insurance for its
employees, including workers’ compensation and unemployment insurance, and that,
with respect to contractors, Vendor has a written agreement with each and every
contractor which specifically provides that the contractor shall not be entitled
to any benefits or payments from any company such as Phoenix for which Vendor
will provide services, and that each and every contractor shall maintain current
employment eligibility verification (DOJ, INS, I-9 (“I-9”)) and other necessary
certification and documentation or insurance for all its employees provided
under this Agreement. Vendor will be solely responsible for the withholding and
payment, if any, of employment taxes, all benefits and workers’ compensation
insurance.

(c) In the event that a Vendor contractor is in the United States on work
authorization documents, such contractor has an F-1, TN, or H-1B or an L-1 visa,
provided, however, in the case of an H-1B or L-1 visa, contractor has a presence
or office in the United States. In no event shall any contractor for Vendor be
in the United States on a B-1 visa. Vendor covenants that all work authorization
documents issued to contractors shall be valid at the time of issuance and shall
remain valid and in full force and effect during the entire period of the
contractors’ assignment(s) under any SOW. If a contractor is in the United
States on the approved work authorization documents, then prior to a
contractor’s access to Phoenix’s premises or systems, each contractor must
execute a release granting Phoenix (or its agent) the right to perform a
background check on such contractor and each contractor shall present to Phoenix
his or her work authorization documents and evidence of identity of each such
contractor by providing two (2) or more forms of identification. The acceptable
forms of identification are as set forth on the current I-9.

 

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16.15 Application.

For the avoidance of doubt, each of the covenants set forth in this Article 16
shall remain in effect continually throughout the Term of this Agreement and
those reflected in Section 23.11 shall remain in effect after the expiration or
termination of this Agreement.

16.16 Disclaimer.

THE WARRANTIES SET FORTH IN THIS AGREEMENT, INCLUDING THOSE SPECIFIED AS
APPLYING, IF ANY, TO ANY LICENSES GRANTED OR TO BE GRANTED UNDER THIS AGREEMENT,
ARE EXCLUSIVE. OTHER THAN AS PROVIDED IN THIS AGREEMENT, NEITHER THIS AGREEMENT
NOR ANY LICENSES GRANTED OR TO BE GRANTED ARE SUBJECT TO ANY EXPRESS WARRANTIES
AND THERE ARE NO IMPLIED WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. SOFTWARE MADE AVAILABLE BY
PHOENIX TO VENDOR IS MADE AVAILABLE ON AN “AS IS” BASIS.

17. INSURANCE

17.1 Insurance Coverages.

Vendor covenants that as of the Effective Date it shall have, and agrees that
during the Term it shall maintain in force, at least the following insurance
coverages:

(a) Employer’s Liability Insurance and Worker’s Compensation Insurance,
including coverage for occupational injury, illness and disease, and other
similar social insurance in accordance with the laws of the country, state or
territory exercising jurisdiction over the employee with minimum limits per
employee and per event of $1,000,000 or the minimum limit required by law,
whichever limit is greater.

(b) Comprehensive General Liability Insurance, including Products, Completed
Operations, Premises Operations, Bodily Injury, Personal and Advertising Injury,
Broad Form Contractual and Broad Form Property Damage liability coverages, on an
occurrence basis, with a minimum combined single limit per occurrence of
$1,000,000 and a minimum combined single aggregate limit of $2,000,000. This
coverage shall include Phoenix and its Affiliates as additional insureds.

(c) Property Insurance, including Extra Expense, terrorism coverage in the
United States (both TRIA and non-TRIA) and Business Income coverage, for all
risks of physical loss of or damage to buildings, business personal property or
other property that is owned or leased by Vendor pursuant to this Agreement or
otherwise. Such insurance shall have a minimum limit adequate to cover risks on
a replacement costs basis.

(d) Automotive Liability Insurance covering use of all owned, non-owned and
hired automobiles for bodily injury, property damage liability with a minimum
combined single limit per accident of $1,000,000 or the minimum limit required
by law, whichever limit is greater. This coverage shall include Phoenix and its
Affiliates as additional insureds.

 

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(e) Commercial Crime Insurance, including blanket coverage for Employee
Dishonesty and Computer Fraud, for loss or damage arising out of or in
connection with any fraudulent or dishonest acts committed by the employees of
Vendor, acting alone or in collusion with others, including the property and
funds of others in their possession, care, custody or control, with a minimum
limit per event of $5,000,000. Phoenix shall be designated as a Loss Payee as
its interest may appear under this policy. However, loss payments hereunder
shall be reduced by fifty percent (50%) for any covered claim that involves the
employees of both Vendor and Phoenix.

(f) Errors and Omissions Liability Insurance covering liability for loss or
damage due to an act, error, omission or negligence, with a minimum limit per
event of $10,000,000.

(g) Umbrella Liability Insurance with a minimum limit of $15,000,000 in excess
of the insurance coverage described above in Subsections (a), (b), and (d).

17.2 Insurance Provisions.

(a) The insurance coverages described above that include Phoenix as an
additional insured shall be primary, and all coverage shall be non-contributing
with respect to any other insurance or self insurance which may be maintained by
Phoenix. All coverage described above shall contain the standard separation of
insureds provisions regarding Phoenix. To the extent any coverage is written on
a claims-made basis, it shall have a retroactive date no earlier than the
Effective Date and shall be maintained for a period of two (2) years after the
expiration of the Agreement

(b) Vendor shall provide certificates of insurance evidencing that the coverages
and policy endorsements required under this Agreement are maintained in force
and that not less than thirty (30) days written notice shall be given to Phoenix
prior to any material modification, cancellation or non-renewal of the policies.
The insurers selected by Vendor shall have an A.M. Best rating of A-, Size VII
or better, or, if such ratings are no longer available, with a comparable rating
from a recognized insurance rating agency. Vendor shall assure that all approved
subcontractors, if any, maintain insurance coverages described above naming
Vendor as an additional insured where relevant.

(c) In the case of loss or damage or other event that requires notice or other
action under the terms of any insurance coverage described above, Vendor shall
be solely responsible to take such action. Vendor shall provide Phoenix with
contemporaneous notice and with such other information as Phoenix may request
regarding the event.

(d) Vendor’s obligation to maintain insurance coverage in specified amounts
shall not act as a limitation or expansion on any other liability or obligation
which Vendor would otherwise have under this Agreement.

 

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18. INDEMNITIES

18.1 Vendor Indemnities.

Vendor shall defend, indemnify, and hold harmless Phoenix and Phoenix’s
Affiliates and their respective officers, directors, employees, agents,
successors and assigns (collectively, “Phoenix Indemnitees”) against any and all
Losses and threatened Losses, to the extent arising from, in connection with, or
based on allegations whenever made of, any of the following:

(a) Claims arising out of Vendor’s failure to observe or perform any duties or
obligations to be observed or performed by Vendor under any of the contracts,
including Software licenses, Equipment leases and Third-Party Services Contracts
(including the terms of any Required Consents with respect to any of the
foregoing): (i) assigned to Vendor, if any; or (ii) for which (and to the
extent) Vendor has assumed financial, administrative, or operational
responsibility, all to the extent such duties or obligations were required to be
observed or performed by Vendor on or after the date of such assignment or
assumption;

(b) Any claims of infringement:

(i) that would amount to a breach by Vendor of the covenants set forth in
Section 16.6; or

(ii) that:

(A) arise from any of the Vendor Software or Vendor Third Party Software and
related material provided by Vendor, Newly Developed Software, Developed Vendor
Software, Developed Phoenix Software, Non-Software Materials, Vendor Business
Processes, Work Product, Deliverables, Vendor Proprietary Materials or other
products provided, used and to be used by Vendor in connection with the
Services. The Parties agree and acknowledge that Vendor will pass through any
warranties and indemnities for any Vendor provided Third Party Software or other
products provided, used and to be used by Vendor and its Affiliates in
connection with the Services;

(B) are not caused by improper acts or omissions of Phoenix (such as use of more
copies of an item than that for which a license was to have been obtained); and

(C) do not result from Phoenix’s failure to fulfill its obligation to provide
reasonable cooperation under Section 6.7 in connection with Vendor’s efforts to
obtain Required Consents.

Vendor’s obligations under this Section 18.1(b) shall not apply to the extent
that (A) the claim of infringement is based upon Phoenix’s use of software
provided by Vendor hereunder: (1) in connection or in combination with
equipment, devices or software not supplied or approved by Vendor or used by
Vendor to provide

 

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the Services, or (2) in a manner for which the software was not designed (as
demonstrated in documentation provided to Phoenix in advance of the initiation
of such claim of infringement), (B) a Phoenix Indemnitee (1) modifies any
software provided by Vendor hereunder without Vendor’s consent nor at Vendor’s
direction and such infringement would not have occurred but for such
modification, or (2) uses the software in the practice of a patented process not
contemplated by this Agreement and there would be no infringement in the absence
of such practice, or (C) the claim of infringement arises out of Vendor’s
implementation of the specifications provided by a Phoenix Indemnitee and such
infringement would not have occurred but for such implementation.

(c) Any claim or action by, on behalf of, or related to, any employee of Vendor
or its Affiliates, or any of their subcontractors (which, if made by a
Transitioned Employee arises out of acts, incidents or omissions occurring on or
after, or out of events occurring on or after, the date such employee is
transferred to Vendor or acts or omissions specifically requested by Vendor or
its Affiliates or their subcontractors at any time) and also including, without
limitation, any Approved Subcontractor and Vendor Personnel, including claims
arising under occupational health and safety, ERISA, worker’s compensation, or
other Applicable Laws, except where such claim arises out of acts or omissions
specifically requested by Phoenix or its Affiliates;

(d) Any claim or action asserted against Phoenix but resulting from an act or
omission of Vendor or its Affiliates or its or their respective officers,
directors, employees, subcontractors or agents in its or their capacity as an
employer;

(e) The material inaccuracy or untruthfulness of any representation or warranty
made by Vendor pursuant to Sections 16.7 and 16.8;

(f) Any claim or action by subcontractors arising out of Vendor’s breach or
violation of Vendor’s subcontracting arrangements;

(g) Any claim or action arising out of acts or omissions of Vendor, except acts
or omissions specifically requested by Phoenix, that result in, arise from or
relate to:

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

(ii) sexual discrimination or harassment by Vendor, its employees,
subcontractors or agents;

(iii) vested employee benefits of any kind expressly assumed by Vendor;

(h) Vendor’s gross negligence, recklessness or willful or criminal misconduct in
providing the Services and performing its other obligations under this
Agreement;

 

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(i) Any breach of Vendor’s obligations under Article 15 (Safeguarding of Data;
Confidentiality) or under the Business Associate Agreement;

(j) Any claim or action by any employee or contractor of Vendor or its
subcontractors that Phoenix is liable to such person as the employer or joint
employer of such person, including and any claim for employee benefits as a
result thereof, other than claims by Transitioned Employees arising out of
events, acts, incidents or omissions occurring prior to the date such
Transitioned Employees are transferred to Vendor;

(k) Any and all taxes, including related interest and penalties, for which
Vendor is responsible under Section 13.4, and any claim or action arising out of
or relating to Vendor’s failure to comply with the obligations provided in
Section 13.4, provided that Vendor shall not be responsible for interest or
penalties related to such failure to comply that are occasioned by Phoenix’s
failure to timely remit taxes to Vendor which Phoenix is responsible to pay
except to the extent that such failure is due to Vendor’s failure to timely
notify or charge Phoenix for taxes which Vendor is responsible to collect and
remit (i) for which Vendor had failed to timely request all necessary tax
information from Phoenix or (ii) for which Phoenix had previously provided all
required necessary tax related information previously requested by Vendor on a
timely basis;

(l) Any physical injury, death or real or tangible property loss caused by
Vendor or Vendor Personnel as a result of the provision of the Services;

(m) A breach by Vendor or any Vendor Personnel of its obligations to comply with
Vendor Applicable Laws in accordance with Article 22; or

(n) Any claim or action asserted against Phoenix by a Vendor Affiliate arising
from or in connection with this Agreement.

18.2 Phoenix Indemnities.

Phoenix shall defend, indemnify and hold harmless Vendor and Vendor’s Affiliates
and their respective officers, directors, employees, agents, successors and
assigns (collectively, “Vendor Indemnitees”) against any and all Losses,
threatened Losses, to the extent arising from, in connection with, or based on
allegations whenever made of the following:

(a) Claims arising out of Phoenix’s failure to observe or perform any duties or
obligations to be observed or performed by Phoenix under any of the contracts,
including Software licenses, Equipment leases, if any, and Third-Party Services
Contracts: (i) assigned to Vendor, if any; or (ii) for which (and to the extent)
Phoenix has retained financial, administrative, or operational responsibility,
all to the extent such duties or obligations were required to be observed or
performed by Phoenix before the date of such assignment or assumption;

 

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(b) Any claims of infringement

(i) that would amount to a breach by Phoenix of the covenants set forth in
Section 16.6; or

(ii) that:

(A) arise from Phoenix Software or Phoenix Third Party Software and related
material provided, used and to be used by Phoenix, or other products provided by
Phoenix or its Affiliates in connection with the Services. The Parties agree and
acknowledge that Phoenix will pass through any warranties and indemnities for
any Phoenix-provided Third Party Software or other products provided, used and
to be used in connection with the Services;

(B) are not caused by improper acts or omissions of Vendor (such as use of more
copies of an item than that for which a license was to have been obtained); and

(C) do not result from Vendor’s failure to fulfill its obligation under
Section 6.7 to obtain Required Consents.

Phoenix’s obligations under this Section18.2(b) shall not apply to the extent
that (A) the claim of infringement is based upon Vendor’s use of software
provided by Phoenix hereunder: (1) in connection or in combination with
equipment, devices or software not supplied or approved by Phoenix or used by
Phoenix in connection with this Agreement, or (2) in a manner for which the
software was not designed (as demonstrated in documentation provided to Vendor
in advance of the initiation of such claim of infringement), (B) a Vendor
Indemnitee (1) modifies any software provided by Phoenix hereunder without
Phoenix’s consent nor at Phoenix’s direction and such infringement would not
have occurred but for such modification, or (2) uses the software in the
practice of a patented process not contemplated by this Agreement and there
would be no infringement in the absence of such practice, or (C) the claim of
infringement arises out of Phoenix’s implementation of the specifications
provided by a Vendor Indemnitee and such infringement would not have occurred
but for such implementation;

(c) Any claim or action by, on behalf of, or related to, any employee of Phoenix
or any of its subcontractors (which, if made by a Transitioned Employees arises
out of acts, incidents or omissions occurring before, or out of events occurring
before, the date such employee is transferred to Vendor, or acts or omissions
specifically requested by Phoenix or its Affiliates at any time), including
claims arising under occupational health and safety, ERISA, worker’s
compensation, or other applicable federal, state, or local laws or regulations,
except where such claim arises out of acts or omissions specifically requested
by Vendor or its Affiliates;

(d) The material inaccuracy or untruthfulness of any representation or warranty
made by Phoenix pursuant to Section 16.7;

 

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(e) Any claim or action asserted against Vendor but resulting from an act or
omission of Phoenix or its Affiliates or its or their respective officers,
directors, employees, subcontractors or agents in its or their capacity as an
employer;

(f) Any and all taxes, including related interest and penalties, for which
Phoenix is responsible under Section 13.4, and any claim or action arising out
of or relating to Phoenix’s failure to comply with the obligations provided in
Section 13.4, provided that Phoenix shall not be responsible for interest or
penalties related to such failure to comply that are occasioned by Vendor’s
failure to notify or charge Phoenix for taxes which Vendor is responsible to
collect except to extent that such failure is due to Phoenix’s failure to
provide necessary tax related information previously requested by Vendor on a
timely basis;

(g) Any claim or action by subcontractors arising out of Phoenix’s breach or
violation of Phoenix’s subcontracting arrangements;

(h) Any claim or action arising out of acts or omissions of Phoenix, except acts
or omissions specifically requested by Vendor, that result in, arise from or
relate to:

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

(ii) sexual discrimination or harassment by Phoenix, its employees,
subcontractors or agents; or

(iii) vested employee benefits of any kind expressly assumed by Phoenix;

(i) Any claim or action by any employee or contractor of Phoenix or its
subcontractors that Vendor is liable to such person as the employer or joint
employer of such person, including and any claim for employee benefits as a
result thereof, other than claims by Transitioned Employees arising out of
events, acts, incidents or omissions occurring subsequent to the date such
Transitioned Employees are transferred to Vendor;

(j) Any physical injury, death or real or tangible property loss caused by
Phoenix;

(k) A breach by Phoenix or any Phoenix Personnel of its obligations to comply
with Phoenix Applicable Laws in accordance with Article 22; or.

(l) Any claim or action asserted against Vendor by a Phoenix Affiliate arising
from or in connection with this Agreement

 

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18.3 Infringement.

(a) If any item provided by either Party, including those items which are the
subject matter of the covenants set forth in Section 16.6 that is used to
provide or forms part of the Services becomes, or in the providing Party’s
reasonable opinion is likely to become, the subject of an infringement or
misappropriation claim or proceeding that would cause the providing Party to
breach their respective obligations under Section 16.6, in addition to
indemnifying the other Party and in addition to such Party’s other rights, the
providing Party shall promptly take the following actions, at no charge to the
other Party, in the listed order of priority:

(i) promptly secure the right to continue using the item;

(ii) replace or modify the item to make it non-infringing or without
misappropriation, provided that any such replacement or modification must not
degrade the performance or quality of the affected component of the Services, as
reasonably determined by the Parties and the providing Party shall be solely
responsible for the cost of any new interfaces or integration work required as a
result of the replacement or modification, which amount shall be considered to
be a direct damage to the non-providing Party and within the limit of liability
for the purposes of Section 19.2(b) of this Agreement; or

(iii) remove the item from the Services, in which case Vendor’s Charges shall be
equitably adjusted to reflect such removal and if in Phoenix’s reasonable
opinion such removal is material to all or any portion of the remaining Services
to constitute a material breach pursuant to Section 21.1, Phoenix may terminate
such portion of the affected Services or the entire Agreement, as the case may
be, without penalty.

(b) In addition to the indemnities set forth in this Article 18, each Party’s
sole and exclusive remedies for infringement claims arising from the other
Party’s use of Software and Non-Software Materials under this Agreement are set
forth in this Section 18.3.

18.4 Indemnification Procedures.

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

(a) Notice. Promptly after receipt by any entity entitled to indemnification
under Sections 18.1 through 18.3 of notice of the assertion or the commencement
of any action, proceeding or other claim by a third party in respect of which
the indemnitee will seek indemnification pursuant to any such Section, the
indemnitee shall promptly notify the indemnitor of such claim in writing. No
failure to so notify an indemnitor shall relieve it of its obligations under
this Agreement except to the extent that it can demonstrate damages attributable
to such failure. Within fifteen (15) days 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, claim, action 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

 

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and settlement of that claim (a “Notice of Election”); provided, however, that
such acknowledgement and election shall not be, or deemed to be, a waiver of any
defense that the indemnitor may have with respect to the underlying action,
proceeding or claim; provided, further, that, solely with respect to a claim
under Section 18.1(h), the indemnitee shall reimburse the indemnitor for the
costs incurred by indemnitor in defending such action, proceeding or claim
solely in the event that (i) a court of competent jurisdiction determines that
indemnitor did not have an obligation to indemnify and (ii) that the indemnitee
did not have a reasonable good faith basis for asserting that the indemnitor was
obligated to defend such claim.

(b) Procedure Following Notice of Election. If the indemnitor delivers a Notice
of Election relating to any claim within the required notice period, the
indemnitor shall be entitled to have sole control over the defense and
settlement of such claim; provided that (i) the indemnitee shall be entitled to
participate in the defense of such claim and to employ counsel at its own
expense to assist in the handling of such claim and (ii) the indemnitor shall
obtain the prior written approval of the indemnitee 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 expenses incurred by the indemnitee in connection
with the defense of that claim. In addition, the indemnitor shall not be
required to indemnify the indemnitee for any amount paid or payable by the
indemnitee in the settlement of any claim for which the indemnitor has delivered
a timely Notice of Election if such amount was agreed to without the written
consent of the indemnitor.

(c) Procedure Where No Notice of Election Is Delivered. 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 or fails to diligently defend the claim, the
indemnitee shall have the right to defend the claim in such manner as it may
deem appropriate, at the cost, expense, and risk 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. If it is determined that the indemnitor
failed to defend a claim for which it was liable, the indemnitor shall not be
entitled to challenge the amount of any settlement or compromise paid by the
indemnitee.

19. LIABILITY

19.1 General Intent.

Subject to the liability restrictions below, it is the intent of the Parties
that each Party shall be liable to the other Party for any actual damages
incurred by the non-breaching Party as a result of the breaching Party’s failure
to perform its obligations in the manner required by this Agreement.

 

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19.2 Liability Restrictions.

(a) SUBJECT TO SECTION 19.2(C) BELOW, IN NO EVENT, WHETHER IN CONTRACT OR IN
TORT (INCLUDING NEGLIGENCE), BREACH OF WARRANTY, STRICT LIABILITY, OR OTHERWISE,
SHALL A PARTY BE LIABLE FOR INDIRECT, CONSEQUENTIAL, EXEMPLARY, PUNITIVE,
INCIDENTAL, OR SPECIAL DAMAGES, OR LOST PROFITS, EVEN IF SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES IN ADVANCE.

(b) Subject to Section 19.2(c) below, a Party’s total liability to the other
Party, whether in contract or in tort (including negligence), breach of
warranty, strict liability, or otherwise, shall be limited to an amount equal to
the actual amounts received by Vendor pursuant to this Agreement in the twelve
(12) months prior to the time of any such claim (or if such events occur during
the first twelve (12) months of the Term, the amount estimated to be received by
Vendor during the first twelve (12) months of the Term).

(c) The limitations set forth in Sections 19.2(a) and 19.2(b) above shall not
apply with respect to:

(i) damages occasioned by the willful misconduct or gross negligence of a Party;

(ii) claims that are the subject of indemnification pursuant to Sections 18.1
(b), (e), or (l) as to Vendor and to Sections 18.2 (b), (d), or (j) as to
Phoenix;

(iii) (A) claims that are the subject of indemnification pursuant to
Section 18.1(i) or 18.1(m) as to Vendor or 18.2(k) as to Phoenix; or (B) damages
occasioned by a Party’s breach of its obligations under Article 15 or Article 22
(including any breach of a Party’s obligations under the Business Associate
Agreement), but only up to a limit of the actual amounts received by Vendor
pursuant to this Agreement in the fifteen (15) months prior to the time of any
such claim (or if such events occur during the first fifteen (15) months of the
Term, the amount estimated to be received by Vendor during the first fifteen
(15) months of the Term). For avoidance of doubt, the foregoing fifteen
(15) month damages limitation is separate from and in addition to a Party’s
liability for direct damages under Section 19.2(b) above;

(iv) damages occasioned by improper or wrongful termination of this Agreement or
intentional abandonment of all or substantially all of the work required to
perform the Services by Vendor provided, however, that Vendor shall be entitled
to exercise its termination rights in good faith; or

(v) a Party’s nonperformance of its payment obligations to the other expressly
set forth in this Agreement (including, with respect to Phoenix, Phoenix’s
obligation to make payments to Vendor during the Term of this Agreement as
required hereby, whether in the form of charges for Services performed hereunder
or for payment or reimbursement of taxes or Out-of-Pocket Expenses.

 

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19.3 Direct Damages.

The following shall be considered direct damages and shall not be considered
consequential damages to the extent they result from a Party’s failure to
fulfill its obligations in accordance with this Agreement:

(a) Reasonable costs of recreating or reloading any of Phoenix’s information
that is lost or damaged;

(b) Reasonable costs of implementing a workaround or fix in respect of a failure
to provide the Services;

(c) Reasonable costs of replacing lost or damaged equipment and software and
materials;

(d) Reasonable costs and expenses incurred to correct errors in software
maintenance and enhancements provided as part of the Services;

(e) Reasonable costs and expenses incurred to procure the Services from an
alternate source;

(f) Fines and penalties imposed by a governmental or regulatory agency as a
direct result of either Party’s material breach of this Agreement;

(g) The difference in the amounts realized by Phoenix or a Phoenix customer from
orders or sales placed by Phoenix, where such difference is due to a delay or
inability of Phoenix to timely place such orders or sales for a mutual fund or
other security trade as a direct result of an error, omission or delay by Vendor
in the performance of the Services; or

(h) Reasonable straight time, overtime, or related expenses incurred by Phoenix
or its Affiliates, including overhead allocations for employees, wages and
salaries of additional personnel, travel expenses, telecommunication and similar
charges incurred due to the direct failure of Vendor to provide the Services or
incurred in connection with (a) through (e) above.

Notwithstanding the foregoing, to the extent damages payable by Phoenix under
this Article 19 consist of compensation to Vendor for work performed by Vendor
Personnel, such compensation shall be calculated using the time and material
rates provided in Exhibit C-5 to Schedule C (Charges).

19.4 Duty to Mitigate.

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

 

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19.5 Force Majeure.

(a) Provided that Vendor has fully complied with its obligations to provide
disaster recovery-related Services hereunder, neither Party shall be liable for
any default or delay in the performance of its obligations under this Agreement
(except, subject to Section 19.5(b), for the payment of Vendor’s charges
hereunder):

(i) if and to the extent such default or delay is caused, directly or
indirectly, by fire, flood, earthquake, elements of nature or acts of God, acts
of terrorism, riots, labor disputes (other than labor disputes of a Party or its
subcontractors, and its employees), civil disorders, an order under the Defense
Production Act, or any other cause beyond the reasonable control of such Party;

(ii) provided the non-performing Party is without fault in causing such default
or delay, and such default or delay could not 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 Vendor, by Vendor meeting its obligations for
performing disaster recovery services as provided in this Agreement) (each such
event, a “Force Majeure Event”).

(b) The non-performing Party shall be excused from further performance or
observance of the obligations affected by a Force Majeure Event for as long as
such circumstances prevail and such Party continues to use Commercially
Reasonable Efforts to recommence performance or observance 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 twenty-four
(24) hours of the inception of such delay) and describe at a reasonable level of
detail the circumstances causing such delay. Except as set forth in
Section 19.5(c)(i) below, to the extent a Force Majeure Event relieves Vendor of
its obligations to perform the Services, Phoenix’s obligation to pay for such
Services shall also be relieved.

(c) If any Force Majeure Event affecting facilities, personnel, or other
resources under the control of Vendor or any of its Affiliates or subcontractors
substantially prevents, hinders or delays performance of the Services necessary
for the performance of functions identified by Phoenix as critical for more than
three (3) consecutive calendar days or any material portion of the Services for
more than five (5) Business Days, then, at Phoenix’s option:

(i) Phoenix may procure such Services from an alternate source, and provided
that Phoenix continues to pay Vendor for the Services as provided in this
Agreement, Vendor shall be liable for payment for such Services from the
alternate source up to the amount of the payments made by Phoenix to Vendor,
plus the difference between the payments due to the alternate source and the
payments made by Phoenix to Vendor for so long as the delay in performance shall
continue up to the fifteenth (15) day after such alternate source provider was
procured by Phoenix. In the event the alternate provider provides services
longer than the 15 day period reflected above, then Phoenix may, within five
days after the end of such 15 day

 

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period, terminate this Agreement for convenience upon notice to Vendor by paying
to Vendor on the effective date of termination the applicable termination fee,
such termination to be effective at any time within sixty (60) days after such
five-day period. Such force majeure termination fee shall be the sum of the
following amounts: (a) the applicable fee amount reflected in Exhibit C-8 to
Schedule C (Charges) and (b) the then-current book value (as reflected on
Vendor’s books) of all assets, including, without limitation, hardware, software
and any pre-paid amounts for maintenance, to the extent such assets are used by
Vendor solely to provide the Services to Phoenix (less any amounts paid by
Phoenix for such assets pursuant to Section 21.10(c)(iii)(B)). In addition, with
respect to the assets described in (b) above, Vendor shall make a good faith
effort to re-deploy such assets within its environment or with other customers,
and Phoenix shall be relieved of paying the proportionate amount reflected in
(b) to the extent Vendor is successful in doing so; or

(ii) upon Vendor’s failure to resume performance in accordance with this
Agreement within twenty-four (24) hours after written notice is given to Vendor
of Phoenix’s intent to terminate (A) Phoenix may terminate any portion of this
Agreement so affected and the Charges payable hereunder shall be equitably
adjusted to reflect those terminated Services; or (B) Phoenix may terminate this
Agreement as of a date specified by Phoenix in a written notice of termination
to Vendor, with the payment of the applicable force majeure termination fee
described in (i) above, subject to the last sentence of such subsection (i).

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

20. DISPUTE RESOLUTION

Any dispute between the Parties or between a Party and an Affiliate of the other
Party, 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 Vendor, its Affiliates or Phoenix or its Affiliates, shall be
resolved by Vendor and Phoenix, as provided in this Article 20.

20.1 Informal Dispute Resolution Process.

(a) Subject to Sections 20.1(b) and 20.1(c), the Parties initially shall attempt
to resolve their dispute informally, in accordance with the following:

(i) Upon the written notice by a Party to the other Party of a dispute (“Dispute
Date”), each Party shall appoint a designated representative who does not devote
substantially all of his or her time to performance under this Agreement, whose
task it will be to meet for the purpose of endeavoring to resolve such dispute.
The designated representatives of a Party shall have the authority to resolve
the dispute on behalf of such Party.

(ii) The designated representatives shall meet as often as the Parties
reasonably deem necessary in order to gather and furnish to the other all
information

 

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with respect to the matter in issue which the Parties believe to be appropriate
and germane in connection with its resolution. The representatives shall discuss
the problem and attempt to resolve the dispute without the necessity of any
formal proceeding.

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

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

(b) After ten (10) days following the Dispute Date and prior to commencement of
any litigation as permitted under Section 20.1(c), either Party may initiate
non-binding mediation of the dispute by submitting to the American Arbitration
Association (the dispute mediation entity, “DM”) and to the other Party a
written request for mediation under the Commercial Mediation rules of such
organization, setting forth the subject of the dispute and the relief requested.
The Parties shall cooperate with DM and each other in the mediation process, and
any such mediation shall be held in Hartford Connecticut. The mediation shall be
conducted in accordance with the applicable practices and procedures of DM. Upon
commencement of litigation as permitted under Section 20.1(c), either Party,
upon notice to DM and to the other Party, may terminate the mediation process.
Each Party shall bear its own expenses in the mediation process and shall share
equally the charges of DM.

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

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

(ii) forty-five (45) days have elapsed from the Dispute Date.

(d) Notwithstanding the above, either Party may commence litigation if it is
deemed appropriate by a Party 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 21.12 respecting Phoenix, that a breach of the Agreement by the other
Party is such that a temporary restraining order or other injunctive relief is
necessary.

(e) No resolution or attempted resolution of any dispute or disagreement
pursuant to this Section 20.1 shall be deemed to be a waiver of any term or
provision of this Agreement or consent to any breach unless such waiver or
consent shall be in writing and signed by the party claimed to have waived or
consented.

 

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20.2 Litigation.

For all litigation which may arise with respect to this Agreement, the Parties
irrevocably and unconditionally submit (i) to the non-exclusive jurisdiction and
venue (and waive any claim of forum nonconvenience and any objections as to
laying of venue) of the United States District Court for the Southern District
of New York or (ii) if such court does not have subject matter jurisdiction, to
the courts of the State of New York located in Manhattan, New York with
appropriate subject matter jurisdictions in connection with any action, suit or
proceeding arising out of or relating to this Agreement. Each Party further
waives personal service of any summons, complaint or other process and agrees
that the service thereof may be made by certified or registered mail directed to
such Party at such Party’s address provided for purposes of notices under this
Agreement, provided that service occurs upon actual receipt of the notice and
that no other applicable state or Federal rule of civil procedure regarding
jurisdiction or service of process is waived or otherwise altered. In addition,
each Party hereby waives its right to trial by jury.

20.3 Binding Arbitration for Certain Pricing Disputes and Work Product Ownership
Disputes.

Any dispute over pricing described in Section 3.6, 13.5 or 13.6(c) or with
regard to the ownership of certain Work Product under Section 7.5(a)(i)(X) that
the Parties are unable to resolve pursuant to those sections will be submitted
to binding arbitration in accordance with the following procedures:

(a) Demand for Arbitration; Location. Either Party may demand arbitration by
giving the other Party written notice to such effect. The arbitration will be
held before one neutral arbitrator in Hartford, Connecticut.

(b) Identification of Arbitrator. Within 30 days after the other Party’s receipt
of such demand, the Parties will mutually determine who the arbitrator will be.
The arbitrator will be an individual who has a background in, and knowledge of,
the information technology services industry, including the pricing of such
services. If a person with such industry experience is not available, the
arbitrator will be selected from the large and complex case panel or, if an
appropriate person is not available from such panel, the retired federal judges
pool. If the Parties are unable to agree on the arbitrator within that time
period, the arbitrator will be selected by the American Arbitration Association
(“AAA”), based on the foregoing.

(c) Conduct of Arbitration. The arbitration will be governed by the Commercial
Arbitration Rules of the AAA, except as expressly provided in this Section 20.3.
However, the arbitration will be administered by any organization mutually
agreed to in writing by the Parties. If the Parties are unable to agree on the
organization to administer the arbitration, it will be administered by the AAA
under its procedures for large and complex cases.

 

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(d) Scope of Discovery. All discovery will be guided by the Federal Rules of
Civil Procedure. All issues concerning discovery upon which the Parties cannot
agree will be submitted to the arbitrator for determination.

(e) Authority of Arbitrator. The arbitrator will determine the rights and
obligations of the Parties according to the laws of the State of New York,
without reference to conflict of laws provisions. The arbitrator will not have
authority to make any ruling, finding or award that does not conform to the
terms and conditions of this Agreement.

(f) Binding Decision. The decision of the arbitrator will be in writing and will
be final and binding on the Parties. Each Party will bear its own costs and
expenses including filing fees with respect to the arbitration, including
one-half of the fees and expenses of the arbitrator.

20.4 Continued Performance.

Each Party agrees to continue performing its obligations (subject to Phoenix’s
rights to withhold disputed Charges under Section 14.8) under this Agreement
while any dispute is being resolved, regardless of the nature and extent of the
dispute, unless and until such obligations are terminated by the termination or
expiration of the Agreement or by and in accordance with the final determination
of the dispute resolution procedures.

20.5 Governing Law.

This Agreement and performance under it shall be governed by and construed in
accordance with the law of the State of New York without regard to any portion
of its choice of law principles that might provide for application of a
different jurisdiction’s law. The Parties expressly intend to avail themselves
of the benefits of Section 5-1401 of the New York General Obligations Law. The
United Nations Convention on the International Sale of Goods shall not apply to
this Agreement.

21. TERMINATION

21.1 Termination For Cause By Phoenix.

(a) Phoenix may terminate this Agreement, either in whole or by affected Service
Tower or Work Order, if Vendor:

(i) commits a material breach of this Agreement and fails to cure such breach
within thirty (30) days after notice of breach from Phoenix to Vendor;

(ii) commits a material breach of this Agreement which Vendor demonstrates,
during the thirty (30) days after notice of breach from Phoenix to Vendor, is
not capable of being cured within such thirty (30) days and fails to (A) proceed
promptly and diligently to correct the breach; (B) within thirty (30) days
following such notice develop a complete plan for curing the breach; and
(C) cure the breach within sixty (60) days of such notice;

 

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(iii) commits a material breach of this Agreement that is not subject to cure
with due diligence within sixty (60) days after notice of breach from Phoenix to
Vendor;

(iv) commits numerous breaches of the same duty or obligation which collectively
constitute a material breach of this Agreement which is not cured within thirty
(30) days notice from Phoenix; or

(v) fails to meet the same Minimum Critical Service Level for three
(3) consecutive months or has six (6) or more Minimum Critical Service Level
Defaults (of any combination of Minimum Critical Service Levels) for six (6) or
more months during any rolling twelve (12) month period (provided that if a
single incident causes multiple Minimum Critical Service Level Defaults, only
one such default will count toward the six).

(b) Phoenix may terminate a Service (and any other Service that is integrally
related to such terminated service) if Vendor commits a material breach of this
Agreement with respect to such Service and fails to cure such breach within
thirty (30) days after notice of breach from Phoenix to Vendor.

(c) For the purposes of this Section 21.1 payment of monetary damages by Vendor
shall not be deemed to cure a material breach by Vendor of its obligations under
this Agreement.

21.2 Termination by Vendor.

If, and only if, Phoenix fails to pay Vendor as set forth in Section 14.2
undisputed Charges under the Agreement totaling at least one month’s Base
Charges, Vendor may by giving written notice to Phoenix terminate this Agreement
as of a date specified in the notice of termination which is at least thirty
(30) days thereafter.

21.3 Termination for Convenience by Phoenix.

(a) Entire Agreement. Commencing on the twenty-fifth (25th) month from the
Amended and Restated Effective Date of this Agreement, Phoenix may terminate the
entirety of this Agreement for convenience and without cause at any time by
(i) giving Vendor at least six (6) months prior written notice designating the
effective termination date and (ii) the payment of the applicable termination
for convenience fee. Such termination for convenience fee shall be the sum of
the following amounts: (a) the amount reflected in Exhibit C-8 to Schedule C
(Charges) and (b) the then current book value (as reflected on Vendor’s books)
of all assets, including, without limitation, hardware, software and any
pre-paid amounts for maintenance, to the extent such assets are used by Vendor
solely to provide the Services to Phoenix (less any amounts paid by Phoenix for
such assets pursuant to Section 21.10(c)(iii)(B)). In addition, with respect to
the assets described in (b) above, Vendor shall make a good faith effort to
re-deploy

 

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such assets within its environment or with other customers, and Phoenix shall be
relieved of paying the proportionate amount reflected in (b) to the extent
Vendor is successful in doing so. If a purported termination for cause by
Phoenix is determined by a competent authority not to have been properly a
termination for cause, then such termination by Phoenix shall be deemed to be a
termination for convenience and Phoenix shall be obligated to pay to Vendor the
applicable termination for convenience fee.

(b) Partial Termination for Convenience.

(i) Commencing on the twenty-fifth (25th) month from the Amended and Restated
Effective Date of this Agreement, Phoenix may terminate certain Service Towers,
in the manner reflected in this Section 21.3(b), for convenience and without
cause at any time by (i) giving Vendor at least six (6) months prior written
notice designating the effective termination date and (ii) the payment of the
applicable partial termination for convenience fee. Such partial termination for
convenience fee shall be the sum of the following amounts: (a) the applicable
amount reflected in Exhibit C-8 to Schedule C (Charges), (b) the then-current
book value (as reflected on Vendor’s books) of all assets, including, without
limitation, hardware, software and any pre-paid amounts for maintenance, to the
extent such assets are used by Vendor in the Service Tower being terminated
solely to provide the Services to Phoenix (less any amounts paid by Phoenix for
such assets pursuant to Section 21.10(c)(iii)(B)), and (c) an amount which is
equal to the sum of ten percent (10%) of the Base Charges for the terminated
Service Tower for the twelve (12) month period following the effective date of
such partial termination. Solely with respect to that portion of the partial
termination for convenience fee described in (a) above, if, at the end of such
twelve (12) month period, the total aggregate Charges paid by Phoenix to Vendor
in such period (the “Actual Annual Revenues”) exceeds the projected Base Charges
for all Service Towers for such period (including any applicable cost of living
adjustments described in Section 8 of Schedule C (Charges) (the “Projected Base
Charges”) then, Vendor shall pay Phoenix an amount equal to the difference
between the Actual Annual Revenues and the Projected Base Charges not to exceed
the fee paid in (a) above. In addition, with respect to the assets described in
(b) above, Vendor shall make a good faith effort to re-deploy such assets within
its environment or with other customers, and Phoenix shall be relieved of paying
the proportionate amount reflected in (b) to the extent Vendor is successful in
doing so.

(ii) Pursuant to this Section 21.3(b), Phoenix may terminate any one or more of
the following Service Towers: Help Desk, Desktop, Network, or Print and Mail.

(c) Work Order Termination for Convenience. Subject to the requirements and
terms and conditions of the Work Order, Phoenix may terminate a Work Order for
convenience at any time by (i) giving Vendor at least thirty (30) days (unless a
Work Order specifies a different time period) prior written notice designating
the effective termination date and (ii) the payment of the applicable
termination for convenience fees, if any, specified in the applicable Work
Order.

 

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21.4 Termination for Excessive Claims.

If, at any time, the aggregate of all judgments awarded to Phoenix and claims
paid by Vendor to Phoenix arising out of or relating to this Agreement equals or
exceeds seventy-five percent (75%) of the amount of Vendor’s limitation of
liability under Section 19.2(b) or Section 19.2(c)(iii) (as adjusted in
accordance with the next sentence), Phoenix may elect to give written notice to
Vendor of such circumstance. If Vendor does not, within thirty (30) days of
receipt of Phoenix’s notice, agree to increase the then current limitation on
the amount of damages under Section 19.2(b) or Section 19.2(c)(iii), as
applicable, by fifty percent (50%), Phoenix shall be entitled to terminate this
Agreement, without liability or the payment of additional charges (including any
termination for convenience fees), by giving Vendor further written notice;
provided, however, such termination will not entitle Phoenix to additional
damages in excess of the amount under Section 19.2. If Vendor does, within
thirty (30) days of receipt of Phoenix’s notice, agree to increase the then
current amount of damages under Section 19.2(b) or Section 19.2(c)(iii), as
applicable, by fifty percent (50%), Phoenix shall not be entitled to terminate
this Agreement pursuant to this Section 21.4, and the Parties will amend
Section 19.2(b) or Section 19.2(c)(iii), as applicable, to reflect the increased
limitation of liability amount.

21.5 Termination by Phoenix for Change of Control.

(a) If (i) another entity not currently an Affiliate of Phoenix, directly or
indirectly, in a single transaction or series of related transactions, acquires
either Control of Phoenix or all or substantially all of the assets of Phoenix;
or (ii) Phoenix is merged with or into another entity, then, at any time within
nine (9) months after the last to occur of such events, Phoenix may terminate
this Agreement by (i) giving Vendor at least ninety (90) days prior written
notice and designating a date upon which such termination shall be effective,
and (ii) by the payment of a termination fee equal to the sum of (A) the
applicable change of control termination fee reflected in Exhibit C-8 to
Schedule C (Charges), and (B) the then-current book value (as reflected on
Vendor’s books) of all assets, including, without limitation, hardware, software
and any pre-paid amounts for maintenance, to the extent such assets are used by
Vendor solely to provide the Services to Phoenix (less any amounts paid by
Phoenix for such assets pursuant to Section 21.10(c)(iii)(B)). With respect to
the assets described in (B) above, Vendor shall make a good faith effort to
re-deploy such assets within its environment or with other customers, and
Phoenix shall be relieved of paying the proportionate amount reflected in (B) to
the extent Vendor is successful in doing so.

(b) If, following the Amended and Restated Effective Date, (i) another entity
not currently an Affiliate of Vendor, directly or indirectly, in a single
transaction or series of related transactions, acquires either Control of Vendor
or Vendor’s parent entity (i.e., Hewlett Packard Company) or all or
substantially all of the assets of Vendor or Vendor’s parent entity; or
(ii) Vendor or Vendor’s parent entity is merged with or into another entity,
then, at any time within nine (9) months after the last to occur of such events,
Phoenix may terminate this Agreement by (i) giving Vendor at least ninety
(90) days prior written notice and designating a date upon which such
termination shall be effective, and (ii) by the payment of a termination fee
equal to the sum of (A) the

 

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applicable change of control termination fee reflected in Exhibit C-8 to
Schedule C (Charges), and (B) the then-current book value (as reflected on
Vendor’s books) of all assets, including, without limitation, hardware, software
and any pre-paid amounts for maintenance, to the extent such assets are used by
Vendor solely to provide the Services to Phoenix (less any amounts paid by
Phoenix for such assets pursuant to Section 21.10(c)(iii)(B)). With respect to
the assets described in (B) above, Vendor shall make a good faith effort to
re-deploy such assets within its environment or with other customers, and
Phoenix shall be relieved of paying the proportionate amount reflected in (B) to
the extent Vendor is successful in doing so.

21.6 Termination Due To Force Majeure Event.

This Agreement may be terminated by Phoenix in whole or by affected Service
Tower following a Force Majeure Event as provided in Section 19.5(c).

21.7 Termination Due To Vendor’s Insolvency and Related Events.

Phoenix may terminate this Agreement without liability if Vendor (a) files any
petition in bankruptcy; (b) has an involuntary petition in bankruptcy filed
against it which is not challenged in forty (40) days and not dismissed within
one hundred twenty (120) of the filing of such involuntary petition; (c) makes a
general assignment for the benefit of creditors; (d) admits in writing its
inability to pay its debts as they mature; or (e) has a receiver appointed for a
substantial portion its assets and the receivership is not released within sixty
(60) days.

21.8 Financial Filings and Notice of Change of Financial Condition.

(a) Financial Filings. Promptly, but in no event later than (i) fourteen
(14) days after Vendor’s parent Entity files any Quarterly Report on Form 10-Q
or Annual Report on Form 10-K with the Securities and Exchange Commission
(“SEC”) pursuant to the Securities Exchange Act of 1934, and (ii) five
(5) Business Days after Vendor’s parent Entity files a Current Report on Form
8-K with the SEC, Vendor shall notify Phoenix’s Chief Information Officer and
Chief Financial Officer of such filing by e-mail, which notice shall include a
link to a copy of such filing.

(b) Notice. Vendor shall, within fourteen (14) days after obtaining actual
knowledge of the occurrence of a Credit Trigger Event, provide notice to Phoenix
of the occurrence of such Credit Trigger Event. Promptly following the date
Phoenix receives such notice, senior executives of Phoenix and Vendor (being
Electronic Data Systems, LLC as opposed to Vendor’s parent Entity) shall meet to
discuss Vendor’s parent Entity’s financial condition and Vendor’s ability to
continue to perform its obligations hereunder.

(c) Definitions. For the purposes of this Section 21.8, “Credit Trigger Event”
means a Downgrade Event. “Downgrade Event” means (A) any downgrade of the long
term unsecured debt rating of Vendor’s parent Entity below Moody’s rating BA1 or
Standard & Poor’s rating BBB-, or (B) the failure of Vendor’s parent Entity to
have a long term unsecured debt rating from both Standard & Poor’s and Moody’s.

 

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21.9 Extension of Termination Effective Date.

Phoenix may extend the effective date of termination/expiration a maximum of
three (3) times as it elects in its discretion, provided that the total of all
such extensions shall not exceed one hundred eighty (180) days following the
effective date of termination/expiration in place immediately prior to the
initial extension under this Section, on terms and conditions (including
Charges) then in effect. For any notice or notices of such extensions provided
to Vendor within thirty (30) days of the then-scheduled date of
termination/expiration, Phoenix shall also reimburse Vendor for additional
Out-of-Pocket Expenses caused by such notices.

21.10 Termination/Expiration Assistance.

(a) During (i) (A) the six (6) month period prior to expiration of this
Agreement or on such earlier date as Phoenix may request, or commencing upon a
notice of non-renewal or termination (including notice based upon default by
Phoenix) of this Agreement or of termination of one or more Service Towers or
Work Orders; and (B) any period during which the effective date of
termination/expiration is extended pursuant to Section 21.9)((A) and
(B) collectively, the “Pre-Termination/Expiration Period”), and; (ii) continuing
for such period of time designated by Phoenix, not to exceed twelve (12) months
after the actual effective date of expiration or, if applicable, of termination
of this Agreement (the “Post-Termination/Expiration Period”, Vendor shall
provide to Phoenix, or at Phoenix’s request to Phoenix’s designee, the
reasonable termination/expiration assistance requested by Phoenix to facilitate
the orderly transfer of the Services to Phoenix or its designee (including a
competitor of Vendor) (“Termination/Expiration Assistance”).

(b) During the Pre-Termination/Expiration Period, to the extent that
Termination/Expiration Assistance cannot reasonably be provided by Vendor’s
then-current level of dedicated Vendor Personnel staff, Termination/Expiration
Assistance will be provided by Vendor at the time and materials rates specified
in Exhibit C-5 to Schedule C (Charges); provided, however, that in the event of
a termination by Phoenix pursuant to Section 21.1, such Termination/Expiration
Assistance will be provided by Vendor at no charge to Phoenix. During the
Post-Termination/Expiration Period, Termination/Expiration Assistance will in
all events be provided by Vendor at the time and materials rates specified in
Exhibit C-5 to Schedule C (Charges). All charges for Termination/Expiration
Assistance will be billed to Phoenix on a monthly basis in arrears; provided,
however, that in the event of a termination by Vendor pursuant to Section 21.2,
Vendor may require that Phoenix pay monthly in advance for such
Termination/Expiration Assistance and any other Services, and Vendor shall not
be obligated to provide Termination/Expiration Assistance or any other Services,
and shall not be in breach under this Agreement for failing to provide
Termination/Expiration Assistance or any other Services, unless Phoenix prepays
for such Termination/Expiration Assistance or Services as set forth in this
Section 21.10; further provided, however, that at least ten (10) days prior to
the beginning of each month, Vendor shall provide Phoenix with an invoice
setting out a reasonable, good faith, estimate of the charges for the
Termination/Expiration Assistance and any other Services for that month and such
amounts shall be due and payable by Phoenix prior to

 

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the beginning of the month (with a monthly true up/reconciliation of the amounts
actually due, provided however that charges that are not reasonably capable of
being determined as of the date of such monthly true-up will be reconciled in
the next month’s invoice).

(c) Termination/Expiration Assistance shall include the following:

(i) Vendor shall provide all reasonable information and assistance necessary to
permit the smooth transition of Services and functions being performed by Vendor
or its subcontractors to Phoenix or to Phoenix’s designee, provided, however,
that if any of such information is to be disclosed to Phoenix’s designee, such
designee must first execute a reasonable confidentiality agreement with Vendor
prior to receiving such information;

(ii) Phoenix or its designee shall be permitted to undertake, without
interference from Vendor or Vendor subcontractors, to hire any Vendor Personnel
primarily performing the Services as of the date of notice of termination, or,
in the case of expiration, within the six (6) month period (or longer period
requested by Phoenix) prior to expiration. Vendor shall waive, and shall cause
its subcontractors to waive, their rights, if any, under contracts with such
personnel restricting the ability of such personnel to be recruited or hired by
Phoenix or Phoenix’s designee. Phoenix or its designee shall have reasonable
access to such personnel for interviews and recruitment and Vendor and its
subcontractors shall not interfere with any such hiring efforts;

(iii) except where the Parties have agreed otherwise in writing with respect to
a specific circumstance:

(A) Vendor shall provide Phoenix will all licenses, sublicenses, and other
rights to use any Software to which Phoenix is entitled under this Agreement;

(B) at Phoenix’s request, Vendor shall (1) obtain any Required Consents pursuant
to Section 6.7 from third parties and thereafter assign to Phoenix or its
designee leases for some or all of the Equipment that was necessary as of the
date of termination/expiration of this Agreement primarily for providing the
Services, and Phoenix shall assume the obligations under such leases that relate
to periods after such date; and (2) sell to Phoenix or its designee, at Vendor’s
then current book value, some or all of the Equipment owned by Vendor that, as
of the date of termination/expiration of this Agreement, was primarily used for
providing the Services; and (3) to the extent assignable, assign to Phoenix, and
Phoenix shall have and be entitled to, the benefits of any manufacturers”
warranties and indemnities issued with any Equipment sold (or leases to
Equipment assigned) to Phoenix under this subsection 21.10(c)(iii)(B). Vendor
shall also provide all user and other documentation relevant to such Equipment
which is in Vendor’s possession. Phoenix shall assume responsibility under any
maintenance agreements for such Equipment to the extent such responsibilities
relate to periods after the date of termination/expiration of this Agreement;
and

 

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(C) Vendor shall obtain any necessary rights and thereafter make available to
Phoenix or its designee, pursuant to reasonable terms and conditions, any
third-party services then being utilized by Vendor in the performance of the
Services including services being provided through third-party service or
maintenance contracts on Equipment and Software. To the extent Vendor has
prepaid for third party services, the benefit of which shall be received by
Phoenix after the effective date of termination or expiration of this Agreement,
Phoenix shall reimburse Vendor for the portion of prepayment amount attributable
to Phoenix after such date. Vendor shall be entitled to retain the right to
utilize any such third-party services in connection with the performance of
services for any other Vendor customer; and

(iv) Vendor shall provide capacity planning, consulting services, facilities
planning, telecommunications planning, Software configuration, reviewing all
System Software with a new service provider, generating machine
readable/listings of source code to which Phoenix is otherwise entitled pursuant
to this Agreement, uploading production databases, providing parallel
processing, providing application software maintenance and support, providing
testing services, and providing Equipment where practical; provided that such
services are provided by the then assigned Vendor Personnel and to the extent
that so doing does not adversely affect the ability of Vendor to provide the
Services at the Service Levels. If Phoenix requires Vendor to provide services
that shall result in an adverse affect to the Service Levels, Vendor shall so
notify Phoenix. If Phoenix still requires Vendor to provide such services,
Vendor shall be excused from performing at the required Service Levels for the
affected Services to the extent caused by such services.

(d) As reasonably requested by Phoenix, Vendor shall provide
Termination/Expiration Assistance for any Services that Phoenix reduces or
terminates, or otherwise withdrawals from Vendor’s scope, under this Agreement.

(e) If Vendor has incorporated Phoenix’s network into a Vendor proprietary
telecommunications network, or has incorporated proprietary Software, Equipment
or other materials into Phoenix’s network, then, at Phoenix’s request, Vendor
will provide up to two (2) years continued network services at the then current
contract rates for such service. This will permit Phoenix to establish its own
network or transfer to another vendor’s network in an orderly manner.

(f) Following the effective date of expiration or, if applicable, of termination
of this Agreement (as such effective date may be extended under this Agreement
or as such period is extended pursuant to Section 21.9) and continuing for the
remainder of any Termination/Expiration Assistance period, Vendor will provide,
at Phoenix’s request, any or all of the Services being performed by Vendor prior
to such effective date at the applicable Charges that were in effect for such
Services as of such effective date; provided, however, that such Charges shall
be equitably reduced on an on-going basis during the Termination/Expiration
Assistance period to take into account the reduced level of Services being
provided (whether in scope, volume or otherwise). Furthermore, the quality and
level of such Services shall not be degraded during the provision of
Termination/Expiration Assistance.

 

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21.11 Bid Assistance.

In the process of evaluating whether to undertake or allow
termination/expiration or renewal of this Agreement, Phoenix may consider
obtaining, or determine to obtain, offers for performance of services similar to
the Services following termination/expiration of this Agreement. As and when
reasonably requested by Phoenix for use in such a process, Vendor shall provide
to Phoenix 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
disadvantaged compared to Vendor if Vendor were to be invited by Phoenix to
submit a proposal. The types of information and level of cooperation to be
provided by Vendor shall be no less than those initially provided by Phoenix to
Vendor prior to commencement of this Agreement. Vendor’s support in this respect
shall include providing information regarding Equipment, Software, staffing and
other matters that Vendor would otherwise provide as part of
Termination/Expiration Assistance. Vendor shall provide such support at no
additional charge to the extent such support can be provided by Vendor personnel
without materially affecting Vendor’s ability to meet the Service Levels. Any
additional assistance shall be provided at the time and materials rates set
forth in Exhibit C-5 to Schedule C (Charges).

21.12 Equitable Remedies.

Vendor acknowledges that, if it breaches (or attempts or threatens to breach)
its obligation to provide Termination/Expiration Assistance, Phoenix shall be
irreparably harmed. In such a circumstance, Phoenix may proceed directly to
court. If a court of competent jurisdiction should find that Vendor has breached
(or attempted or threatened to breach) any such obligations, Vendor agrees that,
without any additional findings of irreparable injury or other procedural
requirements for injunctive relief (including the posting of bond), it shall not
oppose the entry of an appropriate order compelling performance by Vendor and
restraining it from any further breaches (or attempted or threatened breaches).
Nothing contained in this Section 21.12 shall be deemed to prevent a court from
imposing substantive provisions or requirements, such as requiring payment for
services rendered.

21.13 Charge Adjustment.

Unless otherwise expressly set forth herein, if Phoenix chooses to terminate
this Agreement in part, the Charges payable under this Agreement shall be
equitably reduced to reflect those services that are terminated.

21.14 Reduction of Services.

The reductions of Services resulting from any termination pursuant to this
Article 21 shall not count as RRCs or towards any Service reduction threshold
reflected in this Agreement, including in Sections 3.6 and 13.5.

 

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22. COMPLIANCE WITH LAWS

22.1 Compliance with Laws and Regulations Generally.

(a) Subject to Section 3.13, each Party shall perform its obligations in a
manner that complies with all Applicable Laws which impact the respective
Parties’ businesses or, in Vendor’s case, those which also directly impact the
performance of the Services (including identifying and procuring required
certificates, approvals and inspections). If a charge occurs of non-compliance
of a Party with any such Applicable Laws as to the Services, in the case of
Vendor, or the receipt or use of the Services, in the case of Phoenix, the Party
so charged shall promptly notify the other Party of such charges in writing.

(b) Without limitation to the above, Vendor covenants that it shall and it shall
ensure that all Vendor Personnel shall comply with those laws that are
applicable to Vendor’s business or operations or performance of the Services,
including Healthcare Laws, IT Laws, Insurance Regulations, Privacy Laws, U.S.
Foreign Corrupt Practices Act, data protection and export and import laws, rules
and regulations, in connection with the Services and otherwise under this
Agreement, including Schedule A (Statement of Work) (“Vendor Applicable Laws”),
as such laws, rules and regulations are in effect as of the Amended and Restated
Effective Date. If there are changes to such Vendor Applicable Laws during the
term and such changes materially impact the provision of the Services, such
changes in the Services will be subject to the Technical Change Control
Procedure or Contractual Change Control Procedure, as appropriate but such
modifications in the Services due to changes in Vendor Applicable Laws shall not
be deemed New Services under this Agreement or otherwise increase the Charges
payable by Phoenix. Without limitation to the generality of the foregoing,
Phoenix must comply with all Applicable Laws applicable to Phoenix’s business or
operations or its use or receipt of the Services (“Phoenix Applicable Laws”).
Phoenix must provide its requirements to Vendor for what Phoenix needs to comply
with Phoenix Applicable Laws if such requirements are to be provided by Vendor
as a portion of the Services. Phoenix must determine, on its own accord, if the
Services, its use of the Services and operation by Phoenix as to such use comply
with all Phoenix Applicable Laws and will not violate any Phoenix Applicable
Laws. If there are changes or additions to such Phoenix Applicable Laws during
the term and such changes or additions impact the use or receipt of the
Services, Vendor shall, subject to the Technical Change Control Procedure or
Contractual Change Control Procedure, as appropriate, modify its performance of
the Services, to the extent directed by Phoenix, as necessary for Phoenix to
comply with such Phoenix Applicable Laws, as so changed or added. To the extent
that such changes or additions in Phoenix Applicable Laws apply to multiple
clients of Vendor, Phoenix shall only be liable to pay Vendor for an amount
proportionate to the number of other Vendor clients so affected. To the extent
that such changes or additions in Phoenix Applicable Laws do not apply to
multiple clients of Vendor, Phoenix shall pay Vendor for the full amount of such
change. If any change in Applicable Law prevents or delays Vendor from
performing its obligations under this Agreement, the Parties will develop and
implement a suitable workaround until such time as Vendor can perform its
obligations under the Agreement without such workaround. In the event there is a
change in Applicable Laws which (a) applies to both Vendor and Phoenix and does
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fall into the respective definitions of either Vendor Applicable Laws or Phoenix
Applicable Laws, and (b) requires a modification to the Services, then such
modification will be subject to the Technical Change Control Procedure and the
Contractual Change Control Procedures and the Parties will discuss in good faith
as to the manner in which any resultant charges will be handled by the Parties.
The Parties agree and acknowledge that, as to the Services, Vendor will not take
on any responsibilities which would cause it to be subject to licensing as a
Third Party Administrator or otherwise be regulated as an insurance entity, nor
is Vendor taking on any obligations that would subject Vendor to any health care
laws other than the Business Associate requirements related to the protection of
Protected Health Care Information and other HIPAA requirements as expressly
agreed to by the Parties in this Agreement. Vendor will be responsible for any
fines and/or penalties incurred by Phoenix arising from Vendor’s noncompliance
with Vendor Applicable Laws that directly impact its business, as stated above,
and Phoenix will be responsible for any fines and/or penalties incurred by
Vendor arising from Phoenix’s noncompliance with Phoenix Applicable Laws that
directly impact its business, as stated above. If either Party receives any
correspondence from any regulatory authority of competent jurisdiction that
specifically relates to, or has a potentially significant adverse impact on, the
Services, it will provide a copy of that correspondence to the other Party to
the extent that it is able to pursuant to Applicable Laws. Each Party shall
promptly notify the other Party if it becomes aware of any non-compliance or
suspected non-compliance with this Section 22.1.

22.2 Equal Employment Opportunity.

Each Party represents to the other that it is, and covenants that during the
Term shall remain, an equal opportunity employer. Each Party certifies that it
does not, and shall not, discriminate against its employees or applicants for
employment on any legally impermissible basis and is and shall remain in
compliance with all applicable Phoenix policies (made known to Vendor as to
Vendor) and Applicable Laws prohibiting discrimination and otherwise encouraging
the hiring of minorities. Each Party certifies in accordance with 41 CFR Chapter
60-1.8 that its facilities are not segregated and that each Party complies with
the Equal Opportunity Clause (41 CFR §60-1.4), the Affirmative Action Clause for
Handicapped Workers (41 CFR §60-250.4), and the Affirmative Action Clause for
Disabled Veterans and Veterans of the Vietnam Era (41 CFR §60-741.4), which are
incorporated in this Agreement by reference.

22.3 Occupational Safety And Health Act.

All work performed under this Agreement shall fully comply with the provisions
of the Federal Occupational Safety and Health Act of 1970 and with any rules and
regulations promulgated pursuant to the Act and any similar state or local laws.

22.4 Hazardous Products or Components.

Neither Party shall bring onto Phoenix’s premises any material that is toxic or
hazardous under any Applicable Law or if the material is capable of constituting
a hazard. With regard to Phoenix, in its role as owner of the Phoenix Office
Space, the Parties acknowledge that, from time to time, Phoenix or Phoenix
Contractor Personnel may bring onto the Phoenix premises and use cleansers and
other items used in the normal course of maintenance for the premises.

 

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22.5 Fair Labor Standards Act.

Each Party certifies to the other Party that, in the performance of this
Agreement, (a) it shall comply with all applicable provisions of Section 6, 7,
and 12 of the Fair Labor Standards Act, 29 USC §§ 201 - 219, as amended, and
upon either Party’s request the other Party shall provide any necessary
certificates of compliance and (b) that there shall be no violations by such
Party of the ‘hot goods’ or ‘hot cargo’ provisions of such Act.

22.6 Liens.

(a) Vendor hereby waives and forever releases Phoenix and its Affiliates and
their real and personal property (whether owned or leased) from any past,
present, or future lien notices, lien claims, liens, encumbrances, security
interests, or other lien rights of any kind based, in whole or in part, on any
Services provided under this Agreement except for any judgment liens obtained by
Vendor against Phoenix in a court of competent jurisdiction. Vendor shall obtain
and provide to Phoenix similar waivers from all of Vendor’s subcontractors and
suppliers. Nothing in this Section 22.6 shall apply to, or in any way be deemed
to encumber, any of the rights Vendor and its subcontractors have in their own
tangible personal and intellectual property, nor act as a release of the
underlying debt, if any.

(b) Vendor shall indemnify and hold Phoenix and its affiliates harmless from and
against all liabilities, losses, damages, judgments, penalties, fees, costs, or
expenses (including reasonable attorney’s fees) due to any and all lien notices,
lien claims, liens, encumbrances, security interests, or other lien rights of
any kind filed by any of Vendor’s subcontractors or suppliers, or by
subcontractors or suppliers of Vendor’s subcontractors, which in whole or in
part, are based on any work, Services, material, or equipment to be provided
hereunder except for any judgment liens obtained by Vendor against Phoenix in a
court of competent jurisdiction.

(c) Except for any judgment liens obtained by Vendor against Phoenix in a court
of competent jurisdiction, if any lien claims or liens are filed against Phoenix
or its Affiliates or its or their real or personal property (whether owned or
leased) by any of Vendor’s subcontractors or suppliers at any tier, which are
based on any work, Services, materials, or equipment provided or to be provided
hereunder, then at no cost or expense to Phoenix, Vendor shall promptly (and in
any event within ten (10) days of becoming aware thereof) either pay the
claimant and obtain a discharge of lien claim from the claimant or cause the
lien claim to be discharged by filing a surety bond or making a deposit of funds
as required by law, and take all other actions which may be necessary to resolve
and discharge as of record any lien claims or liens. If Vendor fails to take
such actions in a timely manner, without waiving the breach Phoenix may do so
without notice to Vendor and Vendor shall be responsible for all costs
(including attorney’s fees) incurred by Phoenix in connection therewith.

 

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(d) At least ten (10) days prior to the performance of any work at Phoenix or
its Affiliates’ premises, Vendor shall provide Phoenix with an accurate and full
list of the names and addresses of each potential lien claimant. Vendor shall be
under a continuing obligation to promptly update this list as necessary so as to
maintain its accuracy and completeness. In those jurisdictions where it is
possible to avoid the imposition of liens by the posting or filing of notices,
Vendor shall promptly post and/or file such notices.

22.7 Sarbanes-Oxley.

Notwithstanding anything to the contrary set forth in this Agreement, at all
times during the Term and continuing thereafter until the completion of the
audit of Phoenix’s financial statements for the fiscal year during which this
Agreement expires or is terminated, Vendor shall, and shall cause each of its
Affiliates to:

(a) maintain in effect the controls, operations and systems reflected in
Schedule A (Statement of Work) for Phoenix to comply with its obligations under
the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations
promulgated thereunder (collectively, “SOA”), including Section 404 of SOA and
the rules and regulations promulgated thereunder (“Section 404”). Any changes in
the Services from the Amended and Restated Effective Date which Phoenix would
require (as Phoenix may determine) to comply with SOA and Section 404 shall be
subject to the Contractual Change Control Procedure;

(b) provide to Phoenix and/or Phoenix’s auditors, on a timely basis, all
information, reports and other materials to the extent reflected in Schedule A
(Statement of Work) in order to: (i) evaluate and confirm that Phoenix is in
compliance with its obligations under SOA; and (ii) enable Phoenix’s auditors to
attest to and report on the assessment of Phoenix’s management as to the
effectiveness of its internal control structure and procedures for financial
reporting relating to the Services within the meaning of Section 404
(collectively, “Auditor Attestation”), including, (i) thirty (30) days prior to
the end of Phoenix’s fiscal year, a service auditor’s report on controls placed
in operation and tests of operating effectiveness (otherwise known as a Type II
Report) as defined in SAS No. 70 to the extent such reports are performed
pursuant to Section 11.3 of this Agreement, (ii) by January 31st of each year, a
letter attesting to the controls in place as of the most recent SAS No. 70 Type
II Report were still in effect as of December 31st of the previous year to the
extent such reports are performed pursuant to Section 11.3 of this Agreement,
and (iii) by January 31st of each year, a letter attesting that such controls
were in effect as of the date of issuance of the financial statement covering
all or part of said year. Any additional information or assistance that Phoenix
or Phoenix’s auditors require over and above that reflected in Schedule A
(Statement of Work) so that Phoenix may to comply with SOA and Section 404 shall
be subject to the Contractual Change Control Procedure;

(c) provide to Phoenix and its auditors access to such of the Vendor’s and its
Affiliate’s and subcontractor’s books and records (in any medium) and personnel
as Phoenix and/or its auditors reasonably may request to enable: (i) Phoenix
and/or its auditors to evaluate the controls, operations and systems of the
Vendor as they relate to

 

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Phoenix and its compliance with SOA as it relates to the Services and the
effectiveness of its internal control structure and proceedings for financial
reporting therefor; and (ii) to enable Phoenix’s auditors to provide the Auditor
Attestation; and

(d) generally cooperate with Phoenix and its auditors in any other way that
Phoenix and/or its auditors may request in order to: (i) enable Phoenix to
comply with, and Phoenix and its auditors to evaluate whether Phoenix complies
with the SOA as it relates to the Services; and (ii) Phoenix’s auditors to
provide the Auditor Attestation.

For the avoidance of doubt, there shall be a direct connection between the type
of Services provided by Vendor to Phoenix and the contents in the Type II report
referred to above, including mainframe platform, distributed systems platforms,
network platforms, Internet and Virtual Private Network platforms, and general
controls and security practices procedures.

22.8 Privacy Laws.

Without limitation to the provisions of Article 15:

(a) Vendor shall comply, as to its performance of the Services, with all Vendor
Applicable Laws that apply to Vendor as a “Service Provider” of services or
“data processor” under this Agreement, and as otherwise provided in this
Agreement, or the Schedules or the Statement of Work attached hereto. Vendor
acknowledges that Phoenix is regulated as a financial institution under Phoenix
Applicable Laws, including the Graham-Leach-Bliley Act and rules or regulations
promulgated thereunder (collectively, the “GLBA”), and that Vendor may receive
Personally Identifiable Information. Subject to the foregoing, but
notwithstanding any provisions in this Agreement to the contrary, the Parties
agree that, if Phoenix has certain requirements as to its business as a result
of such regulated status and Phoenix Applicable Laws, including the GLBA,
Privacy Laws or Privacy Rules, the responsibility of Vendor shall be to
(i) fully comply with its obligations as a Service Provider or “data processor”
under Vendor Applicable Laws and (ii) further perform any acts or actions in
support of such compliance by Phoenix with Phoenix Applicable Laws to the extent
Phoenix has provided such requirements to Vendor, as reflected in Section 22.1
(b). The Parties agree and acknowledge that, with respect to Phoenix’s
compliance with Phoenix Applicable Laws, Phoenix will have the ongoing
obligation to assure compliance with Phoenix Applicable Laws and such compliance
will include, but not be limited to, the interpretation of such laws and any
resulting direction to Vendor as to what is needed within the Services for
Phoenix to remain so compliant. Without limiting the generality of the
foregoing, Vendor agrees to: maintain appropriate safeguards with respect to any
Personally Identifiable Information it receives; comply with any security plans
Phoenix may implement under Phoenix Applicable Laws, as Phoenix may amend from
time to time, in its sole discretion; and comply with any reuse and redisclosure
limitations set forth in the GLBA. If new or additional rules or regulations are
issued under the GLBA, and/or if official guidance with respect to the GLBA is
issued prior to or during the term of this Agreement and such new or additional
rules, regulations or guidance would require a modification in the provision of
the Services, such modifications to the Services shall be subject to the
Contractual Change Control Procedure and the charges for such modifications will
be handled as stated in Section 22.1(b) depending on whether the change in
Applicable Laws was a Vendor Applicable Law or a Phoenix Applicable Law.

 

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(b) To the extent applicable to Vendor as a “Service Provider”, the Services
provided under this Agreement will comply with: the Standards for Electronic
Code Sets and Electronic Transaction Regulations, 45 C.F.R. parts 160 and 162,
published in the Federal Register on August 17, 2000, issued pursuant to HIPAA;
the Standards for Privacy of Individually Identifiable Health Information, 45
C.F.R. part 164, published in the Federal Register on December 28, 2000 and
modified on August 14, 2002 (“Privacy Rule”) and the guidance released by the
Department of Health and Human Services on July 6, 2001 relating to the Privacy
Rule upon the effective date of the final rule, currently scheduled for on
April 21, 2005, as provided for in, and the Security and Electronic Signature
Standards published in the Federal Register/ Vol. 68, No. 34 / February 20, 2003
(collectively, the “HIPAA Regulations”). If new or additional regulations are
issued under HIPAA, and/or if official guidance with respect to the HIPAA
Regulations or any other Privacy Law or Privacy Rule is issued prior to or
during the term of this Agreement and such new or additional regulations would
require a modification in the provision of the Services, such modifications to
the Services shall be subject to the Contractual Change Control Procedure and
the charges for such modifications will be handled as stated in Section 22.1(b)
depending on whether the change in Applicable Laws was a Vendor Applicable Law
or a Phoenix Applicable Law. The Parties agree and acknowledge that (i) Vendor
will comply with those provisions of the above stated HIPAA Regulations that are
applicable to a Business Associate and that are in final form and in effect as
of the Amended and Restated Effective Date, and (ii) for the purposes of such
laws, rules and regulations, Phoenix is the Covered Entity and Vendor is the
Business Associate, as such terms are used and defined in such laws, rules and
regulations. To the extent and as stated above, Vendor acknowledges that Phoenix
and Phoenix’s Affiliates will rely upon the Vendor to keep the Services as of
the Amended and Restated Effective Date in HIPAA compliance with the
requirements applicable to a Business Associate. Without limitation of the
foregoing, and notwithstanding anything to the contrary contained in the
Agreement, Vendor shall comply with the terms of the Business Associate
Agreement.

(c) Vendor shall comply with any other Vendor Applicable Laws relating to
privacy not referred to directly or indirectly in Section 22.8 (a) or (b) to the
extent such laws are applicable to Vendor as a provider of information
technology services, as a Service Provider or a data processor, in general,
under Applicable Laws.

(d) For purposes of this Agreement the term “Data Owner” or “data controller”
shall mean the party having ownership of the data and, as a result, the
authority to control and direct the purposes for which any item of data is
processed or used, and the term “Service Provider” or “data processor” shall
mean the party providing services to the Data Owner, including the processing of
the data on behalf and upon instruction of the Data Owner. Phoenix will be and
remain the Data Owner of the Phoenix Data for purposes of this Agreement and all
Applicable Laws relating to data privacy, personal data, transborder data flow
and data protection, with rights under such laws and under this Agreement to
determine the purposes for which the Phoenix Data is processed. As Data Owner,
Phoenix is directing Vendor to process the Phoenix Data in accordance

 

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with the terms of this Agreement and is consenting to Vendor’s access to the
Phoenix Data solely for such purpose. Vendor agrees to process the Phoenix Data
in accordance with the terms of this Agreement and based upon Phoenix’s
instructions, and, in doing so Vendor will be and remain the Service Provider
under this Agreement, in addition to complying with its contractual obligations
hereunder, and will comply with all responsibilities of a Service Provider under
Applicable Law as of the Amended and Restated Effective Date. To the extent that
such responsibilities of a Service Provider are subsequently modified by new or
modified Applicable Laws applying to Service Providers in its capacity as a
provider of services, such new or modified responsibilities will be considered
to be a part of the Services to be provided by Vendor under this Agreement. To
the extent that such responsibilities of a Service Provider are subsequently
modified by new or modified Applicable Laws applying to the Data Owner and not
to the Service Provider in its capacity as a provider of services, Vendor shall
perform Services, to the extent directed by Data Owner, as necessary for Data
Owner to comply with such Applicable Laws, as so modified or added, but such
activities will be subject to the Technical Change Control Procedure or the
Contractual Change Control Procedure, as appropriate, and such changes will be
handled pursuant to Section 22.1(b) depending on whether the change in
Applicable Laws was a Vendor Applicable Law or a Phoenix Applicable Law

23. GENERAL

23.1 Binding Nature and Assignment.

This Agreement shall be binding on the Parties and their respective permitted
successors and assigns. Neither Party may, or shall have the power to, assign
this Agreement without the prior written consent of the other, except that
Phoenix may assign its rights and obligations under this Agreement without the
approval of Vendor to: (a) an entity which acquires all or substantially all of
the assets of Phoenix’s line of business to which the Services relate; (b) to
any Affiliate; or (c) to the successor in a merger or acquisition of Phoenix;
provided that (i) the assignee assumes the obligations set forth in this
Agreement; and (ii) in no event shall such assignment relieve Phoenix of its
obligations under this Agreement. Subject to the foregoing, any assignment by
operation of law, order of any court, or pursuant to any plan of merger,
consolidation or liquidation, shall be deemed an assignment for which prior
consent is required and any assignment made without any such consent shall be
void and of no effect as between the Parties.

23.2 Mutually Negotiated.

Each Party acknowledges that the limitations and exclusions contained in this
Agreement have been the subject of active and complete negotiation between the
Parties and represent the Parties’ agreement based upon the level of risk to
Phoenix and Vendor associated with their respective obligations under this
Agreement and the payments to be made to Vendor and credits to be issued to
Phoenix pursuant to this Agreement. The Parties agree that the terms and
conditions of this Agreement (including any perceived ambiguity in this
Agreement) shall not be construed in favor of or against any Party by reason of
the extent to which any Party or its professional

 

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advisors participated in the preparation of the original or any further drafts
of this Agreement as each Party has been represented by counsel in its
negotiation of this agreement and it represents their mutual efforts.

23.3 Notices.

All notices, requests, demands and determinations under this Agreement (other
than routine operational communications), shall be in writing and shall be
deemed duly given: (a) when delivered by hand, (b) on the designated day of
delivery after being timely given to an express overnight courier with a
reliable system for tracking delivery, (c) when sent by confirmed facsimile or
electronic mail with a copy sent by another means specified in this
Section 23.3, or (d) six (6) days after the day of mailing, when mailed by
United States mail, registered or certified mail, return receipt requested and
postage prepaid, and addressed as follows:

 

In the case of Phoenix:    with copies to:   

Phoenix Life Insurance Company

One American Row

Hartford, CT 06102-5056

Attn: Phoenix Contract Executive

          Beth Gilchrist

  

Phoenix Life Insurance Company

One American Row

Hartford, CT 06102-5056

Attn: Office of the General Counsel

   In the case of Vendor to:    with copies to:   

Electronic Data Systems, LLC

153 East 53rd Street

28th Floor

New York, New York 10022

  

Electronic Data Systems, LLC

5400 Legacy Drive

H3-3A-05

Plano, Texas 75024

Attn: Office of the General Counsel

  

A Party may from time to time change its address or designee for notification
purposes by giving the other prior written notice of the new address or designee
and the date upon which it will become effective. Because facsimile numbers and
email addresses may change over time and facsimile transmissions and emails may
not be treated with the same degree of seriousness as more formal
communications, notices given by facsimile or email shall only be deemed
effective if responded to by the intended recipient (or his or her successor).

23.4 Counterparts/Facsimile.

This Agreement and Work Orders may be executed in several counterparts, all of
which taken together shall constitute but one single agreement between the
Parties. This Agreement and Work Orders may also be executed and delivered by
facsimile with confirmation of delivery.

 

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23.5 Headings.

The 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.

23.6 Relationship of Parties.

Vendor, in furnishing the Services, is acting as an independent contractor, and
Vendor has the sole right and obligation to supervise, manage, contract, direct,
procure, perform or cause to be performed, all work to be performed by Vendor
under this Agreement. No contract of agency and no joint venture is intended to
be created hereby. Vendor is not an agent of Phoenix and has no authority to
represent Phoenix as to any matters, except as expressly authorized in this
Agreement. None of Vendor’s employees shall be deemed employees of Phoenix and
Vendor shall be responsible for reporting and payment of all wages,
unemployment, social security and other payroll taxes, including contributions
from them when required by law. Neither Party shall have actual, potential or
any other control over the other Party or its employees.

23.7 Severability.

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

23.8 Consents and Approvals.

Where approval, acceptance, consent or similar action by either Party is
required under this Agreement, such action shall not be unreasonably delayed or,
except where expressly provided as being in the discretion of a Party, withheld.
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.

23.9 Waiver of Default.

A delay or omission by either Party in any one or more instances 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.

23.10 Cumulative Remedies.

Except as otherwise expressly provided in this Agreement, including without
limitation the liability restrictions set forth in Section 19.2, all remedies
provided for in

 

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this Agreement shall not be exclusive of one another and shall be cumulative and
in addition to and not in lieu of any other remedies available to either Party
at law or in equity.

23.11 Survival.

Sections 2, 6.2(e), 6.4, 7 (except as to the termination of the license
restriction reflected in Section 7.5(a)(i)(Y) in accordance therewith), 11.2,
11.4, 11.5, 11.6, 12.2, 13.4, 14.3, 14.8, 15, 16.7, 16.8, 16.14, 16.15, 16.16,
18, 19, 20, 21.10, 21.12, 21.13, 22.6, 22.7, 22.8, 23 and any other provision
that by its terms is intended to survive termination or expiration of this
Agreement, shall survive any expiration or termination of this Agreement.

23.12 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 in writing
prior to release, and be subject to Section 23.13 below.

23.13 Use of Name.

Vendor agrees that it will not directly or indirectly, without the prior written
consent of Phoenix’s Corporate Communications Department, use for the purposes
of advertising, promotion, or publicity, or otherwise, the name of Phoenix or
any of its divisions, subsidiaries or Affiliates, or any trademarks, trade
names, service marks, symbols or any abbreviation or permutation thereof, of or
associated with Phoenix or of any of its divisions, subsidiaries or Affiliates.

23.14 365(n).

All licenses granted under or pursuant to this Agreement by Vendor to Phoenix
and Phoenix Affiliates are, and shall otherwise be deemed to be, for purposes of
Section 365(n) of the United States Bankruptcy Code (the “Code”), licenses to
rights to “intellectual property” as defined in the Code. Phoenix and Phoenix
Affiliates, as licensee of such rights under this Agreement, shall retain and
may fully exercise all of its rights and elections under the Code. In the event
of the commencement of bankruptcy proceeding by or against Vendor under the
Code, Phoenix and Phoenix Affiliates shall be entitled to retain all of its
rights under the licenses granted hereunder.

23.15 Third Party Beneficiaries.

This Agreement is entered into solely between, and may be enforced only by,
Phoenix and Vendor, and this Agreement shall not be deemed to create any rights
in third parties, including suppliers and customers of a Party, or to create any
obligations of a Party to any such third parties.

 

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23.16 Covenant of Good Faith.

Each Party in its respective dealings with the other Party under or in
connection with this Agreement, shall act reasonably, except to the extent
otherwise provided in Section 23.8, and in good faith.

23.17 Entire Agreement; Amendment.

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

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

 

ELECTRONIC DATA SYSTEMS, LLC

    PHOENIX LIFE INSURANCE COMPANY By:  

/s/ Mark J. DeBenedictus

    By:  

/s/ John V. LaGrasse

Name:  

Mark J. DeBenedictus

    Name:  

John V. LaGrasse

Title:  

VP Financial Services

    Title:  

CIO and EVP

Date:  

12-30-2008

    Date:  

12-30-2008

 

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