Exhibit 10.1
*   CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT
HAVE BEEN REDACTED AND HAVE BEEN FILED SEPARATELY WITH THE COMMISSION.
MASTER SERVICES AGREEMENT
This MASTER SERVICES AGREEMENT (the “Agreement”) is entered into effective
April 9, 2004 (the “Effective Date”), by and between the following Parties:

     
PeopleSupport, Inc.
  Vonage Holdings Corp.
1100 Glendon Avenue, Suite 1250
  2147 Route 27
Los Angeles, CA 90024
  Edison, NJ 08817
 
   
Hereinafter referred to as “PeopleSupport”
  Hereinafter referred to as “Client”

The Parties agree as follows:

1.   SERVICES   A.   Description. PeopleSupport will provide to Client the
services set forth herein and in Exhibit A attached hereto (“Services”) out of
one or more of its contact centers. If and as specified in the Statement of Work
(“SOW”) attached hereto as Exhibit A, the Services will include the provision of
equipment, software, telecommunication lines and other facilities specified as
well as the training and human support specified in the SOW. In support of the
Services, Client will provide the items specified as its responsibilities
herein, and in the SOW.   B.   Additional SOWs and Change Orders. The parties
may mutually agree on additional SOWs, which will reference the terms and
conditions of this Agreement and will become effective upon mutual execution
thereof. During the performance of the Services, Client may request in writing,
and PeopleSupport may agree, to make material changes in this Agreement, or in
the Services, and/or to add services which are not described in a SOW. In
addition, changes to the Services may be necessary due to changes in the
Client’s volume, pattern, or types of its services and/or products, and/or
changes to the Client Provided Technology (defined in Section 4D). Such
additional or materially changed services (“Additional Services”) will be
subject to a written, mutually agreed-upon change order to an SOW (“Change
Order”), including applicable pricing and terms. Upon the mutual execution of
any such Change Order, the Services will be deemed to include such Additional
Services. Unless and until the parties mutually execute such Change Order, only
the terms of this Agreement and the applicable SOW will apply. The parties agree
that an authorized representative of Client may indicate its acceptance of
Change Orders either in accordance with the “Notices” provision of this
Agreement or by facsimile signature, each of which shall be subject to
countersignature by an authorized representative of PeopleSupport.   2.   TERM
AND TERMINATION   A.   Term. The initial term of this Agreement (the “Term”)
will commence on the Effective Date and will extend for one (1) year from the
date the Services are deemed operational (e.g first “live” date of Service). The
Agreement, including Exhibit A, will automatically renew for successive *** year
terms unless either Party provides written notice of its intent not to renew at
least *** before the expiration of the initial Term or at least *** before the
expiration of any subsequent renewal Term, or unless terminated earlier as
otherwise provided herein or in Exhibit A. The term of additional SOW(s) will be
as set forth in such SOW(s)   B.   Effect of Termination. Except as otherwise
provided herein, in the event either Party terminates an SOW for an Event of
Default pursuant to Section 8, unless the termination expressly applies to all
other SOWs or to the operation of the Agreement as a whole, such termination as
to one SOW will not constitute termination with respect to any other SOW(s) or
the Agreement.   C.   Minimum Payments. In the event that PeopleSupport
terminates one or more SOWs due to Client’s Event of Default pursuant to
Section 8, or if Client terminates one or more SOWs in violation of this
Agreement or of the applicable SOW, Client will pay to PeopleSupport ***, as
specified herein or in the applicable SOW.   D.   Termination Within First
Thirty Days. Notwithstanding anything to the contrary in this Agreement or in
any SOW, Client may, at any time on or before the thirtieth (30th) day after the
initial minimum number of *** FTE employees are fully trained, out of nesting
and begin performing services pursuant to the initial SOW hereunder, terminate
this Agreement or any SOW for convenience and upon *** days written notice
provided that in the event of such termination for convenience, Client shall pay
to PeopleSupport, as PeopleSupport’s *** remedy for such termination, the sum of
*** plus charges for those Services listed of Appendix A of SOW #1 rendered
through the effective date of termination calculated in accordance with the
prices set forth on that Appendix irrespective of any minimum commitment, which
shall be payable within ten (10) business days after the effective date of such
termination.

 

*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

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E.   Survival. Any and all obligations under this Agreement, including any SOW
then in effect which, by their nature should reasonably survive the termination
or expiration of this Agreement or such SOW, will so survive, including, but not
limited to, Client’s payment obligations, and the obligations of both Parties
arising from the confidentiality and non-solicitation provisions of this
Agreement.   3.   PRICING AND PAYMENT   A.   Prices and Invoicing. Client agrees
to pay PeopleSupport for the Services according to the prices set forth below
and in any mutually agreed SOW or Change Orders. Amounts payable are subject to
the adjustment(s) by PeopleSupport or Client as specified in the SOW or Change
Orders, with respect to each SOW. Client agrees to pre-pay to PeopleSupport the
***, as specified in an SOW ***, on or before the *** day of each calendar month
(“Minimum Monthly Fee”), notwithstanding the volume of Services actually
provided in a month. The Minimum Monthly Fee is not subject to any discounts. If
the first or last month of the Term is a partial month, the Minimum Monthly Fee
for such month may be prorated based on a thirty (30) day month. At the end of
each calendar month, PeopleSupport will invoice Client for Services actually
rendered in such month, reflecting a credit for the Minimum Monthly Fee
pre-payment. All amounts payable, as set forth on each invoice, will be itemized
by the applicable Service and by the units set forth in the applicable SOW or
Change Order, in sufficient detail to make clear to Client how such amounts were
calculated. Payments are due within *** following date of invoice. Billing per
FTE committed by Client will be on a forty hours week basis.   B.  
Reimbursement for Expenses. Subject to Client’s prior written approval of the
incurrence and amount of such expenses or charges, Client will reimburse
PeopleSupport for: a) all reasonable and actual travel and related living
expenses incurred by PeopleSupport related to the Services, in accordance with
PeopleSupport’s standard travel guidelines, provided that such reimbursement
will be solely for travel expressly requested by Client and only to the extent
that such travel was not reasonably foreseeable as necessary in carrying out
PeopleSupport’s responsibilities under an SOW or Change Order at the time such
SOW or Change Order was agreed to; b) if and as expressly specified in Exhibit A
and/or an applicable SOW or Change Order, any telecommunications, installation,
maintenance and recurring charges for equipment and facilities acquired for the
provision of the Services to Client and used solely for that purpose that are
not Client-Provided Technology as defined below, and c) any other expenses or
charges expressly specified in an applicable SOW or Change Order or otherwise
authorized in writing by Client.   C.   Electronic Invoicing and Wire Transfer
Payment. Client acknowledges that invoices from PeopleSupport will be sent
electronically, and Client agrees to make all payments to PeopleSupport via wire
transfer. Payments of amounts due will be wired via the U.S. Federal Reserve
System to:

     ***

D.   Effect of Non-Payment. In the event any amounts due are not paid within ***
after they are due, such amounts will accrue late charges at the lesser of the
rate of *** per month or the highest rate allowed by applicable law, from the
due date. Payments subsequently received from Client will be first applied to
such late charges, then to amounts past due, and then to current amounts due.  
E.   Taxes. Client will be solely responsible for, and will pay, any use,
excise, sales or privilege taxes, duties, value added taxes, fees, assessments
or similar liabilities however denominated which may now or hereafter be levied
on the provision by PeopleSupport of Services, software, equipment, materials or
other property (tangible or intangible) provided under this Agreement,
chargeable to or against PeopleSupport by any applicable government authority.
PeopleSupport will separately invoice any such taxes of which it is aware on its
invoice. Should PeopleSupport be required to pay or should PeopleSupport pay
these taxes, fees, assessments or similar liabilities, Client will promptly
reimburse PeopleSupport for such payments upon receipt of invoice. The foregoing
will not apply to any taxes based upon the net income, employment or property of
PeopleSupport or franchise or similar fees paid by PeopleSupport for the
privilege of doing business in any jurisdiction.   F.   Right to Dispute
Invoices. Client will not withhold any undisputed portion of any amounts payable
hereunder but may withhold disputed amounts upon written notice of a dispute.
Unless Client provides PeopleSupport with notice in writing of a dispute
regarding the amounts due hereunder within *** after Client’s receipt of the
invoice on which such amounts appear, including the basis for such dispute, the
invoice will be deemed approved by Client and the right to dispute any such
amounts invoiced will be deemed waived. Unless PeopleSupport invoices Client for
Services or other charges within *** after such Services are rendered or such
other charges are incurred, all such Services and/or other charges will be
deemed waived and Client will have no obligation to pay them.   4.   CLIENT
OBLIGATIONS FOR INFORMATION AND TECHNOLOGY       In order for PeopleSupport to
provide the Services, Client agrees to provide the following to PeopleSupport,
as and when reasonably requested by PeopleSupport:   A.   Volume, Pattern and
Handling Forecasts. Client will provide good faith, volume, pattern and handling
time forecasts as and to the extent specified in the applicable SOW; provided
that PeopleSupport’s sole remedy for erroneous forecasts shall be as set forth
in the applicable SOW. All such forecasts will be

 

*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

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    deemed Client’s confidential information subject to PeopleSupport’s
obligations as set forth in Section 7. PeopleSupport shall reasonably determine
the number of persons that are required to be trained in light of such
forecasts, and will not be required to have prior approval from Client to hire
and/or train them, though PeopleSupport will make every reasonable effort to
communicate any planned training with Client, and Client shall have no
obligation with respect thereto except as expressly specified in an applicable
SOW.   B.   Forecasts for Special Promotions and Advertising. Client will
provide notice of and forecasts related to all media promotions (including, but
not limited to, radio, television, direct mail, Internet and other media) within
a reasonable amount of time before the start of the promotion, so that
PeopleSupport can make appropriate staffing or other adjustments and so that the
parties may agree on appropriate Change Order(s), if necessary. All such notice
and forecasts will be deemed Client’s confidential information subject to
PeopleSupport’s obligations as set forth in Section 7.   C.   Product Literature
and Related Materials. Client will provide all information, sales and product
literature (including updates and/or modifications), and if applicable, samples
and any other materials related to Client’s services and/or products, which are
reasonably necessary for PeopleSupport to provide the Services. PeopleSupport
may copy all such information, sales and product literature and other materials
solely for purposes of providing Services.   D.   Client-Provided Technology. If
and to the extent specified in Exhibit A, Client will provide any necessary
hardware, software, telecommunication systems and similar materials
(collectively, the “Client Provided Technology”), and the right to use such
Client Provided Technology, solely in order to perform the Services, including
as specified in Exhibit A:

  i)   Software and hardware specific to Client (as defined in Exhibit A),
including legacy systems, terminal emulation and required applications not
already part of PeopleSupport’s infrastructure;     ii)   Maintenance for the
Client-Provided Technology; and     iii)   All training materials and any
additional training reasonably required by PeopleSupport and approved by Client
with respect to new or revised Client-Provided Technology.

    Client will be responsible for the installation of the Client-Provided
Technology and for the maintenance and repair of, and any changes, updates and
upgrades to the Client-Provided Technology. Client agrees to provide to
PeopleSupport upon request copies of any licenses or other legal requirements
applicable to the Client-Provided Technology, and PeopleSupport agrees to comply
with all such licenses and other legal requirements. In the event it becomes
necessary as specified in any SOW or Change Order for Client to provide any
additional Client-Provided Technology, including increasing the scope of use of
any licensed software, Client will obtain and provide to PeopleSupport such
additional Client-Provided Technology.   E.   Information Necessary for the
Performance of Services. The information provided by Client to PeopleSupport, as
required hereunder, including necessary instructions for communications with
Client’s prospective customers and/or customers, will be accurate to the best of
Client’s knowledge and belief. Client will respond promptly and accurately to
all reasonable requests for such information made by PeopleSupport, and provide
relevant new data and regular updates of changes to data previously provided.
PeopleSupport personnel will not make any representations to any person that are
inconsistent with the information provided by Client, and PeopleSupport will be
solely responsible for any misrepresentations made by its personnel to the
extent such misrepresentations are not contained in information provided by
Client. Without limiting the generality of the foregoing, Client agrees to
provide necessary login identification and passwords for any of its applications
to be used by PeopleSupport as specified in an applicable SOW or Change Order,
within no more than two (2) business days following PeopleSupport’s request. In
addition, Client shall provide PeopleSupport with reasonable access to any of
its systems, software and files provided to PeopleSupport and/or installed at
PeopleSupport’s facilities. PeopleSupport shall be entitled to rely upon written
information or instructions received from authorized Client personnel, including
those sent electronically via email.   5.   JOINT OBLIGATIONS OF THE PARTIES  
A.   Contact Person. Each Party will designate a single point of contact with
the authority to discuss and resolve day-to-day issues and the relations between
the Parties relating to the Services, such as the provision of information,
reports, and the Client-Provided Technology. Such contact person may be changed
upon written notice to the other Party.   B.   Compliance with Law and
Agreements. Each of the Parties will perform its obligations under this
Agreement in compliance with all applicable laws, ordinances and regulations,
and will obtain and maintain in full force and effect, any permits, licenses,
consents, approvals and authorizations necessary for the performance of its
obligations hereunder. To the extent that Client is responsible for the
provision of information regarding its prospective customers and/or customers,
and the provision of scripts or other instructions to be followed by
PeopleSupport, Client will be responsible for confirming that such lists and/or
instructions comply with applicable law and that, by following Client’s
instructions, PeopleSupport is not violating any law or regulation, and is not
subject to any obligation to any third party. PeopleSupport will be responsible
for ensuring that its personnel follow all instructions from authorized Customer
personnel. To the extent that either Party requires the license or other consent
of a third party to provide software, data, materials, or other items to the
other Party hereunder, the Party providing such items shall have and maintain
any such consent, in substance and form reasonably acceptable to the other
Party, and shall provide evidence of such consent to the other Party, upon
request.

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C.   Further Documents and Cooperation. Each Party will execute such other
documents, and provide such cooperation as the other Party reasonably requests,
in order to give full effect to the provisions related to this Agreement,
including, but not limited to, the provisions of this Agreement related to the
ownership of rights.   D.   Timeliness of Compliance. Any delay by a Party in
the performance of its obligations will extend the time for performance by the
other Party of such of the other Party’s obligations that are affected by such
delay by an amount of time reasonably required to compensate for such delay.  
6.   OWNERSHIP AND INTELLECTUAL PROPERTY RIGHTS   A.   Pre-Existing and
Independently Developed Works. Each Party will retain all rights in any
software, ideas, concepts, know-how, processes, development tools, techniques or
any other proprietary material or information that it owned or developed prior
to the date of this Agreement, or acquires or develops after the date of this
Agreement without use or incorporation of the intellectual property of the other
Party.   B.   Client’s Ownership Rights. As between PeopleSupport and Client,
Client will own all Client-Provided Technology and customer data provided and/or
collected pursuant to the performance of Services. During the term of this
Agreement and/or the applicable SOW, Client grants to PeopleSupport a
non-exclusive license and right to use such Client-Provided Technology and
customer data, solely for purposes of the performance of Services. PeopleSupport
will not reproduce or distribute the Client-Provided Technology, or copy it to
any server or location for reproduction or distribution, for any other purpose
whatsoever. People Support may not reverse engineer, decompile or disassemble
the Client-Provided Technology. Subject to any third party rights or
restrictions and the other provisions of this Section, Client will own any
deliverables that are specified to be owned by Client in the applicable SOW,
which: (i) are custom developed specifically for Client, and (ii) are paid for
by Client. PeopleSupport will deliver such Client-owned deliverables, and return
all Client-Provided Technology, to Client upon expiration or termination of this
Agreement or the applicable SOW.   C.   PeopleSupport Ownership Rights.
PeopleSupport retains all right, title and interest in and to all software
development tools, know-how, methodologies, processes, technologies and/or
algorithms used in performing the Services which are based on trade secrets or
proprietary information of PeopleSupport or are otherwise owned or licensed by
PeopleSupport. Insofar as PeopleSupport is in the business of creating
innovations in its industry, PeopleSupport will be free to use any ideas,
concepts, know-how and other intellectual property which are developed or
created solely by PeopleSupport in the course of performing the Services,
provided that PeopleSupport will not be permitted to incorporate any
Client-Provided Technology or other Client intellectual property therein or to
create any derivative works of Client-Provided Technology or other Client
intellectual property. PeopleSupport will retain ownership of any
PeopleSupport-owned intellectual property rights as incorporated into software
or tools that are used in producing any deliverables, even if such ideas,
concepts, know-how or other intellectual property is used or embedded in such
deliverables, provided that Client is hereby granted a royalty-free,
nonexclusive license to .such intellectual property rights to the extent
incorporated into any such deliverables. Client will not reproduce or distribute
the PeopleSupport intellectual property, or copy it to any server or location
for reproduction or distribution, for any purpose other than to make use of such
deliverables or otherwise in connection with its receipt of Services and the
performance of its obligations under this Agreement. Client may not reverse
engineer, decompile or disassemble the PeopleSupport intellectual property.   D.
  Permitted Use of Marks. Each Party warrants and represents that it has full
right, title and interest in and to all trade names, trademarks, service marks,
symbols and other proprietary marks (“Marks”) which it provides to the other
Party, if any, for use related to the Services, and that any Marks provided by a
Party will not infringe the marks of any third party. As necessary for the
performance of the Services, the providing Party grants to the other Party the
non-exclusive right to reasonably utilize the Marks solely in connection with
the performance of the obligations of the parties hereunder, including, but not
limited to, internally on signs or posters (e.g., to identify Client’s part of a
facility, if applicable, or for internal promotions), in PeopleSupport
newsletters, closed-circuit television and training. Any specific use by
PeopleSupport of Client’s Marks shall be subject to Client’s written approval,
which may be granted or withheld by Client in its sole discretion, and
PeopleSupport will adhere to any written guidelines for the use of Client’s
Marks that may be promulgated by Client from time to time. Each Party agrees to
use the other Party’s Marks only for the agreed-upon purposes. Upon reasonable
request, the providing Party will provide to the receiving Party, camera and/or
video ready art, and/or digital tiff, eps or bitmap files of the providing
Party’s Marks.   7.   CONFIDENTIALITY   A.   Confidentiality. Each Party,
including such Party’s employees, agrees to keep confidential the other Party’s
confidential and proprietary information and not use it for any purpose other
than to perform its obligations under this Agreement. Each Party agrees that the
following will be deemed to have been received in confidence and will be used
only for purposes of this Agreement: (i) all information communicated to it by
the other and identified as confidential, whether before or after the Effective
Date, (ii) all information identified as confidential to which it has access in
connection with the Services, whether before or after the Effective Date,
(iii) all information, whether or not so identified, that a reasonable
businessperson would understand to be confidential by reason of its nature or
content; and (iv) the terms of this Agreement and the Parties’ rights and
obligations hereunder. Each Party agrees to use the same means as it uses to
protect its own confidential information, but in no event less than reasonable
care, to prevent the disclosure and to protect the confidentiality of the
confidential information of the other Party. No such information will be
disclosed to third parties by the recipient Party without the prior written
consent of the disclosing Party; provided, however, that each recipient Party
may disclose confidential information of the

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other Party to those of the recipient Party’s attorneys, auditors, insurers,
vendors and subcontractors who have a need to have access to such information in
connection with their engagement, provided that such persons and entities will
be bound by non-disclosure obligations equivalent to those set forth herein.

B.   Exceptions. Notwithstanding the other provisions of this Section, neither
Party will be prevented from disclosing the confidential information of the
other Party (i) which, at the time of disclosure, was in the public domain,
(ii) which was lawfully disclosed on a non-confidential basis by a third party
who is not bound by a confidentiality agreement with the other Party,
(iii) which is disclosed with the other Party’s prior written approval, or
(iv) in response to valid legal process, whether issued by a court or
administrative or regulatory body or for purposes of legal or regulatory
compliance. If confidential information of a Party is required to be disclosed
by the other Party pursuant to a requirement of a legal process or for purposes
of legal or regulatory compliance, the Party required to disclose the
confidential information, to the extent possible, will provide the other Party
with timely prior notice of such requirement and will coordinate with such other
Party, at such other Party’s expense, in an effort to limit the nature and scope
of such required disclosure, where appropriate. Upon the expiration or
termination of this Agreement for any reason, all such confidential information
(and all copies thereof) owned by the disclosing Party will be returned to the
disclosing Party or will be destroyed, except that any archival copies may be
retained, subject to the continuation of the confidentiality obligations
hereunder.   8.   EVENTS OF DEFAULT       Subject to any applicable notice and
cure provisions, the following are “Events of Default” under this Agreement, and
give rise to the remedies set forth herein:   A.   Failure to Pay Amounts When
Due. Client’s failure to pay amounts payable hereunder when due shall constitute
an Event of Default. Client shall have ten (10) days after receipt of written
notice to cure any such payment default. The foregoing notwithstanding,
PeopleSupport shall have the right to suspend Services, without the provision of
further written notice, if Client fails to cure such payment default within such
ten (10) day period.   B.   Failure of a Party to Perform Its Material
Obligations. A Party’s failure to substantially perform any other material
obligation under this Agreement, including any SOW, will constitute an Event of
Default. In the event that a Party fails to remedy such an Event of Default
within thirty (30) days after receipt of written notice thereof, the
non-defaulting Party may suspend or terminate the affected SOW, provided that,
if such Event of Default cannot practicably be cured within such thirty 30-day
period and is susceptible to a cure, then the defaulting Party will not be
considered in default if it commences to cure within the initial thirty (30)-day
period and in good faith diligently and continuously proceeds to cure the
default.   C.   Bankruptcy and Similar Proceedings. The following are additional
Events of Default, requiring no written notice or cure period, and the
non-defaulting Party may terminate this Agreement immediately in the event of
any of them:

  i)   The commencement of any involuntary proceeding in bankruptcy or
insolvency under federal or state law or the appointment of a receiver or an
assignee for the benefit of creditors for a substantial portion of a Party’s
assets which is not dismissed or terminated within sixty (60) days after its
initiation; or     ii)   The commencement of any voluntary proceeding in
bankruptcy or insolvency under federal or state law, or the voluntary
appointment of a receiver or an assignee for the benefit of creditors; or    
iii)   A Party ceases to do business in the normal course, or is unable to pay
its debts when they become due.

9.   LIMITED WARRANTY; DISCLAIMER; LIMITATION OF LIABILITY

A.   Limited Warranty. PeopleSupport agrees to perform the Services with a
reasonable degree of care, skill and competence, and in accordance with any and
all performance objectives established by the Parties in any SOW.
PeopleSupport’s sole liability, and Client’s sole remedy under this limited
warranty, will be as follows: (i) PeopleSupport will re-perform any
non-conforming Services within after receipt of notice from Client as to such
non-conformance; and (ii) in the event of *** or more months of such
non-conformances under *** of the SOW within *** month period (except where the
applicable service level is measured on *** basis, in which case the standard
for termination is *** in any rolling *** period), Client may terminate the
affected SOW(s) or this Agreement without liability upon *** written notice to
PeopleSupport. Client will monitor Services in order to determine whether
PeopleSupport has met its warranty obligation hereunder. In the event Client
does not provide notice to PeopleSupport of such non-conformance within ninety
(90) days after performance of Services, such Services will be deemed finally
accepted by Client.

B.   DISCLAIMER OF OTHER WARRANTIES. EXCEPT AS EXPRESSLY STATED HEREIN, THE
SERVICES ARE PROVIDED “AS IS,” AND PEOPLESUPPORT DOES NOT MAKE, AND HEREBY
DISCLAIMS, ANY AND ALL OTHER EXPRESS AND ANY IMPLIED WARRANTIES, INCLUDING, BUT
NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
AND ANY WARRANTIES ARISING FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICE.
PEOPLESUPPORT DOES NOT WARRANT THAT THE SERVICES WILL BE UNINTERRUPTED OR ERROR
FREE, OR COMPLETELY SECURE, DESPITE THE REASONABLE PRECAUTIONS SET FORTH IN THE
APPLICABLE SOW.

C.   LIMITATION OF LIABILITY. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY
SPECIAL, INDIRECT, EXEMPLARY, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES
ARISING UNDER OR

 

*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

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RELATING TO THIS AGREEMENT IN ANY WAY, INCLUDING, BUT NOT LIMITED TO, LOSS OF
DATA, LACK OF SERVICES, OR LOSS OF REVENUES OR PROFITS, EVEN IF A PARTY HAS BEEN
ADVISED, KNOWS OR SHOULD KNOW OF THE POSSIBILITY OF THE FOREGOING. EXCEPT IN THE
CASE OF ITS INDEMNITY OBLIGATIONS PURSUANT TO SECTION 10 AND CLIENT’S OBLIGATION
TO PAY CHARGES PURSUANT TO THIS AGREEMENT, EACH PARTY’S MAXIMUM LIABILITY TO THE
OTHER PARTY ARISING UNDER OR IN RELATION TO THIS AGREEMENT FOR ANY AND ALL
CLAIMS, LOSSES OR DAMAGES, AND REGARDLESS OF THE FORM OF ACTION (I) WILL BE
LIMITED TO ***.

10.   INDEMNIFICATION

A.   Mutual Indemnification for Certain Third Party Claims. Each Party
(“Indemnifying Party”) agrees to indemnify, defend and hold harmless the other
Party, including its affiliates, and its and their respective shareholders,
partners, members, directors, officers, attorneys, representatives, employees,
and agents, and its and their successors and permitted assigns (collectively
“Indemnified Parties”) from any and all third party suits and claims for losses
and threatened losses, including any criminal, administrative, or investigative
action or proceeding, arising from or in connection with, or based on
allegations (i) arising out of or based on the Indemnifying Party’s breach of
the obligations under Section 5(B) (Compliance with Law); (ii) relating to the
death or bodily injury of any person caused by the tortious conduct of the
indemnifying Party; (iii) the damage, loss or destruction or any real or
tangible personal property caused by the tortious conduct of the Indemnifying
Party; or (vi) asserting infringement of any third party intellectual property
right by any patent, copyright, trademark, service mark, trade name, trade
secret or similar proprietary rights regarding intellectual property (or
license, access or use rights therein) provided by the Indemnifying Party to the
Indemnified Party under this Agreement including but not limited to those items
provided under Section 4(D) (“Client-Provided Technology”) and/or Section 4(E)
(“Information Necessary for Performance of Services”). People Support will, in
addition, indemnify, defend and hold harmless Client for any misrepresentations
made by PeopleSupport personnel to the extent such misrepresentations are not
contained in or reasonably derived from information provided by Client.

B.   Indemnification Procedure. Each Party’s obligation to indemnify the other
Party pursuant to this provision will apply only to the extent that the Party
seeking indemnification: (i) promptly after receipt of notice of the
commencement or threatened commencement of any civil, criminal, administrative,
or investigative action or proceeding involving a claim in respect of which any
of the Indemnified Parties will seek indemnification, notifies the Indemnifying
Party of such claim in writing; (ii) allows the Indemnifying Party to control,
and fully cooperates with the Indemnifying Party in the defense of any such
claim; and (iii) does not enter into any settlement or compromise in respect of
such claim without the Indemnifying Party’s prior written consent. Failure to so
notify the Indemnifying Party of a claim will not relieve the Indemnifying Party
of its obligations under this Agreement except to the extent that it can
demonstrate that it was prejudiced by such failure.

11.   ADDITIONAL PROVISIONS

A.   Insurance. Prior to the commencement of Services to be performed hereunder
and throughout the Term of this Agreement and any SOW, each of the Parties will
procure and maintain commercially reasonable policies of liability and errors
and omissions insurance, in such forms as are appropriate based on the nature of
the Services and the respective obligations of the parties. During the Term of
this Agreement, PeopleSupport will maintain, at its sole expense, all
appropriate insurance for its employees, including, required worker’s
compensation, disability, and unemployment insurance. In the event the Service
includes the offer or sale of products of or for Client, Client will be solely
responsible for providing to PeopleSupport evidence of reasonably appropriate
product liability insurance, such as a certificate of insurance naming Client
and PeopleSupport as additional insured, as provided by the applicable
manufacturer, distributor or other seller of such product.

B.   Non-Solicitation of Employees. During the Term of this Agreement and for a
period of *** after the date of termination of this Agreement, neither Party
will knowingly, directly or indirectly, solicit any of the other Party’s
employees who, in any manner, have worked in the provision of any of the
Services. The use of general advertisements which do not target certain
employees or groups will not be construed to violate this provision.

C.   Relationship Between the Parties. PeopleSupport is engaged hereunder solely
in the capacity as an independent contractor, and no employment, partnership or
joint venture relationship is intended to be created hereby. In no event will
either Party have the power to bind the other.

D.   Force Majeure and Other Delays. For purposes of this Agreement, a “Force
Majeure” will mean a cause outside of a Party’s reasonable control including,
without limitation, acts of God, acts of war, revolution, riots, civil
commotion, acts of a public enemy, terrorism, embargo, acts of government in its
sovereign capacity, strikes, lockouts, boycotts, fire, earthquakes, floods or
other natural disasters. Except for the payment of moneys when due and owing, to
the extent that a Party is unable to fulfill, in whole or part, its obligations
hereunder, where such inability arises by reason of an event of Force Majeure,
or in the event a Party is unable to perform its obligations due to the failure
of the other Party to perform

 

*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

PEOPLESUPPORT, INC. AND VONAGE HOLDINGS CORP. CONFIDENTIAL

6

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its obligations, such Party will be temporarily excused from fulfilling such
obligations under the applicable SOW until the abatement of such Force Majeure
event or until the other Party performs its those obligations necessary for
performance by the Party which is unable to perform. In the event PeopleSupport
is prevented from providing any of the Service by a Force Majeure event, Client
will receive a pro rata credit of the Minimum Monthly Fee based on the amount of
time PeopleSupport is unable to provide such Service. In the event such
inability persists more than ***, Client may terminate any affected SOW(s) or
this Agreement without liability.

E.   Governing Law and Interpretation. This Agreement will be deemed accepted by
PeopleSupport in, and governed by and construed in accordance with, the laws of
*** without giving effect to its conflicts of law provisions. As references to
the term “including” or “such as” shall be construed to mean “including but not
limited to”, and shall not be deemed limiting. In any case where consent is to
be requested by a Party, such consent shall not be unreasonably withheld or
delayed.

F.   Waivers. Failure to enforce compliance with any term or condition of this
Agreement will not constitute a waiver of such term or condition of this
Agreement or the right to subsequently enforce such term or condition in the
future.

G.   Severability. In the event that any provision of this Agreement is held or
construed be invalid by any arbitrator or court having jurisdiction over
disputes related to this Agreement, such provision will, if reasonable to do so,
be restated to reflect as nearly as possible the original intentions of the
Parties in accordance with applicable law or, if not reasonable to do so, be
deemed to be excluded from this Agreement. In any event, all other provisions of
this Agreement will remain in full force and effect.

H.   Notices. Except as specifically provided elsewhere in this Agreement, all
notices required or permitted to be given by one Party to the other under this
Agreement will be in writing and will be sufficient if made by: (i) personal
delivery; (ii) a commercial or overnight delivery service with proof of
delivery; or (iii) registered or certified mail, postage prepaid, return receipt
requested, to the Parties at the respective addresses set forth above or to such
other person or address as the Party to receive the notice has designated by
notice to the other Party. Notices shall be deemed given upon receipt or refusal
of delivery.

I.   Press Release. Upon execution of this Agreement, neither Party may issue
any press release or other public statement regarding the execution of this
Agreement without the prior written approval of the other Party. Client
acknowledges that PeopleSupport may refer to Client as a customer in its
customer lists for marketing purposes.

J.   [INTENTIONALLY LEFT BLANK].

K.   Entire Agreement and Integration. This Agreement, and the Exhibits and
Attachments hereto constitute the entire agreement between the Parties with
respect to the subject matter of this Agreement and supersede all prior
agreements, discussions, proposals, representations or warranties, whether
written or oral on this subject matter. This Agreement, including any SOWs, may
not be modified except in writing signed by a duly authorized representative of
the Parties. References to “this Agreement” shall be construed to include
applicable SOWs, whether attached hereto as Exhibit A, or subsequently agreed
upon by the parties and referencing this Agreement.

L.   Arbitration. Any disputes or claims arising out of or from this Agreement
shall be finally settled by binding arbitration in ***, in accordance with the
then-current rules and procedures of the American Arbitration Association. The
arbitration shall be adjudicated by one (1) arbitrator mutually designated by
the Parties or appointed by the American Arbitration Association if the parties
fail to so designate an arbitrator. Judgment on the award rendered by the
arbitrator may be entered in any court of competent jurisdiction. The Parties
agree that, any provision of applicable law notwithstanding, they will not
request, and the arbitrator shall have no authority to award punitive or
exemplary damages against any Party or any other relief in excess of the
limitations set forth herein. Without limiting the generality of this Section,
any Party may seek temporary or preliminary injunctive relief in a court of
competent jurisdiction, but any request for permanent injunctive relief shall be
resolved by arbitration according to this Section. The arbitrator shall have the
authority to issue injunctive relief, including a permanent or final injunction,
and such orders may be confirmed as enforceable judgments in a court of
competent jurisdiction. The arbitrator’s award shall adhere to the plain meaning
of this Agreement and to applicable law, and shall be supported by written
findings of fact and conclusions of law.

M.   Attorneys’ Fees. In any dispute arising under this Agreement each Party
will bear its own attorneys’ fees and other expenses associated with the
resolution of the dispute; provided, however, that PeopleSupport will be
entitled to recover from the Client all reasonable attorneys’ fees and other
reasonable expenses associated with the collection from Client of delinquent
undisputed charges.

N.   Counterparts. This Agreement may be signed in multiple counterparts, each
of which will be considered an original, and all of which will be considered one
and the same document. This Agreement may be executed by facsimile signature.

 

*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

PEOPLESUPPORT, INC. AND VONAGE HOLDINGS CORP. CONFIDENTIAL

7

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ACCEPTED BY:
  ACCEPTED BY:
 
   
Vonage Holdings Corp. (“Client”)
  PeopleSupport, Inc. (“PeopleSupport”)
 
   
***
  By: \s\ Caroline Rook
 
  Name: Caroline Rook
 
  Title: CFO
 
  Date: April 15, 2004

 

*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

PEOPLESUPPORT, INC. AND VONAGE HOLDINGS CORP. CONFIDENTIAL

8

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EXHIBIT A
Statement of Work No. 1
PEOPLESUPPORT, INC. AND VONAGE HOLDINGS CORP. CONFIDENTIAL

9

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*   CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT
HAVE BEEN REDACTED AND HAVE BEEN FILED SEPARATELY WITH THE COMMISSION.
Statement of Work No. 1
for
Vonage
Inbound Voice Support
(VONAGE LOGO) [v22581v2258101.gif]
Presented by
(PEOPLE SUPPORT LOGO) [v22581v2258102.gif]
April 9, 2004
ver 1.0

 

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Proprietary Statement
Intended for Vonage
This Statement of Work is attached to, and made a part of, the Master Services
Agreement (the “Agreement”), executed as of April 9, 2004, by and between
PeopleSupport, Inc. (“PeopleSupport”) and Vonage Holdings Corp. (“Vonage” or
“Client”). This document and any communications between PeopleSupport and Vonage
related thereto are considered highly confidential for purposes of Section 7 of
the Agreement.
PeopleSupport, Inc.

     
Contact:
  ***
 
  Director of Sales
Corporate
  1100 Glendon Avenue
Address:
  Suite 1250
 
  Los Angeles, CA 90024
Telephone:
  ***
Mobile
  ***
Fax:
  (310) 824-6299
Email:
  ***@PeopleSupport.com

 

*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
Page 2

 

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Table of Contents

         
1 INTRODUCTION
    4  
 
       
2 SOLUTION OVERVIEW
    5  
 
       
2.1 Inbound Voice Support Processes
    5  
2.2 Support Escalation Process
    5  
2.3 Performance Objectives
    5  
2.4 Volume Forecasting and Service Level Agreement
    6  
2.5 Adjustment to Forecasts and Ramp-Up Processes
    7  
2.6 PeopleSupport Operational Capacity Planning
    9  
 
       
3 TRAINING
    10  
 
       
3.1 Training Approach
    10  
3.2 Ongoing Training after Live Date
    10  
3.3 Staffing Profile and Training Timelines
    11  
 
       
4 QUALITY ASSURANCE
    13  
 
       
4.1 Quality Assurance Review Process
    13  
 
       
5 TECHNOLOGY
    14  
 
       
5.1 Technology Architecture and Specifications
    14  
5.2 Voice Technology Support
    15  
5.3 Data Connectivity
    16  
5.4 Client Applications
    16  
5.5 Reporting
    17  
5.6 Escalation of Technology issues
    17  
 
       
6 TIMELINE, RESOURCES AND ASSUMPTION
    18  
 
       
6.1 Client Project Team
    18  
6.2 Assumptions
    19  
6.3 Change Management and Change Control
    19  
 
       
APPENDIX A — PRICING
    22  
 
       
APPENDIX B — TECHNICAL ESCALATION PROCEDURES
    25  

This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
Page 3

 

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1 Introduction
This Statement of Work No. 1 (“SOW No. 1”), dated as of April 9, 2004 describes
the Voice services (“Services”) that PeopleSupport, Inc. (“PeopleSupport”) will
provide to Vonage (“Client”). This SOW is entered into in connection with that
certain Master Services Agreement between PeopleSupport and Client dated as of
April 9, 2004 (the “Agreement”). This SOW supercedes all prior functional and
technical understandings, whether written or oral, between PeopleSupport and
Client regarding the matters addressed herein, including all prior SOWs and
change orders. All capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to them in the Agreement.
Overview of PeopleSupport Services
PeopleSupport will provide inbound Voice response for sales support services.
Voice support will be provided for Client’s customer calls routed to
PeopleSupport phone system.
Program Overview
Voice Operations

     
Operating Model
  Outsourced
 
   
Solutions and Services
  Inbound Voice Support
 
   
 
  Voice Support:
PeopleSupport Support Hours
  ***
 
   
 
  Voice Support:
 
  • 1) *** of calls Answered Within ***
 
  • 2 *** abandonment rate
 
  • 3) *** scores to meet or ***
 
  • 4) *** ratio of *** or *** or *** at least ***
Service Level Agreements
  • 5) *** on peoplesupport *** to *** or ***
 
  • 6) network and technical uptime of *** on an *** basis
 
  • 7) *** rate not to exceed *** annualy
 
  • 8) Average *** less than ***
 
  • 9) *** rate of *** or higher
 
   
Client Operating Hours
  24/7
 
   
Languages Supported
  English
 
   
Client Application Platforms
  Client Provided Web Applications:
 
  • ***

 

*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
Page 4

 

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2 Solution Overview
PeopleSupport will provide Voice support services for the Client’s Sales
Services. PeopleSupport eReps will assist customers with the following business
programs:

              Program   Systems Used   Tasks   Touch Points
CRM
  Ø ***   Ø ***   Ø Inbound Voice

2.1 Inbound Voice Support Processes
PeopleSupport will provide Inbound Voice Support response for Client. Inbound
voice support will consist of live voice response to customer general and sales
calls.
Client and PeopleSupport agree on the following Inbound Voice Support processes:
1. ***
2. *** .
3. *** .
4. *** .
5. *** .
The above processes are required voice support processes. Changes to these
processing requirements will be subject to a documented change order.
2.2 Support Escalation Process
The training material provided by Client will enable PeopleSupport to handle all
calls routed to PeopleSupport without escalating them to Client’s facility.
However, there may be situations where PeopleSupport eReps will need to transfer
calls to Client’s center. In such circumstances, the issue will be assigned to
the appropriate internal Client department who will resolve the issue. Client
agrees to provide PeopleSupport a toll free number to be used for all transfers.
Detailed Escalation Process is documented in the training manual.
2.3 Performance Objectives
Client and PeopleSupport agree on the following performance goals for all
programs. Client represents *** . PeopleSupport may request and Client will
provide documentation, if such documentation is (1) in Client’s possession
without analysis and manipulation or (2) reasonably available to Client and
without substantial additional cost to Client, that supports the representations
made in (i) and (ii) above. Should Client require PeopleSupport to significantly
change the processes currently
 

*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
Page 5

 

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in place require PeopleSupport to provide a different type of support, Client
and PeopleSupport may mutually agree to an appropriate set of new service
levels.
Ø Inbound Voice SLAs Measured on a Monthly Basis except as noted

•   1) *** of calls Answered Within *** of calls ***   •   2) *** abandonment
Rate   •   3) *** scores to *** or *** and at ***   •   4) *** ratio of at least
*** and *** at least *** other ***   •   5) *** on peoplesupport *** to ***   •
  6) network and technical uptime of *** measured ***   •   7) *** rate not to
exceed *** annually   •   8) Average *** less than ***
  •   9) *** rate of *** or higher

PeopleSupport is not responsible for delays in meeting the service levels to the
extent arising from any Client provided telecommunication, software
applications, materials, equipments or Client operational delays.
Ramp-up period estimate is *** . PeopleSupport will be on an
all-reasonable-efforts basis to meet the program goal and service levels during
the ramp-up period and the first *** of any subsequent ramp-up initiatives set
forth in the mutually agreed upon Ramp up Plan Change Order for service level
requirements 3 through 5, and 8. For all other service level requirements,
PeopleSupport will be on *** for the first *** of the program
Definitions
Abandonment Rate: Total Calls Abandoned/Total Call Received
Total Calls Abandoned: The total number of calls disconnected while in queue
with a queue time (including the time of any announcements) greater than the
threshold value. The threshold value is the greater of *** .
Quality Score: measured by client internal quality program to be mutually agreed
to by PeopleSupport and Client and or a third party scoring service. Should
Client utilize an internal quality program, Client agrees to conduct regular
calibration sessions with PeopleSupport’s QA team to ensure quality measurements
are in agreement.
Sales Retention: Specific measurement criteria to be defined by Client and
reasonably acceptable to PeopleSupport. *** . PeopleSupport will be provided
similar data as the client uses.
Network and Technical Uptime: On an annual basis, the percentage of time
PeopleSupport’s technical infrastructure is not experiencing an outage that
prevents PeopleSupport from providing support to Client, excluding scheduled
maintenance.
Attrition Rate: The total number of PeopleSupport eReps assigned Client to leave
PeopleSupport (excluding mutually agreed planned ramp downs), divided by the
peak number of reps assigned to Client. Internal movements and promotions within
Client’s account are not included as part of attrition. Peoplesupport attests
that its current annual attrition rate averages between *** and *** %
Occupancy Rate: Voice Handle Time plus Voice Available Time divided by ACD
Billable Time minus Aux Training Time.
 

*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
Page 6

 

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2.4 Volume Forecasting and Service Level Agreement
In order for PeopleSupport to properly staff the Client’s account, Client agrees
to provide PeopleSupport with a *** , , of the number of Voice sessions Client
will deliver to PeopleSupport for each program during that *** period. All such
forecasts will be deemed Client’s confidential information for purposes of
Section 7 of the Agreement. Initially, the forecast submission is considered
locked for *** period and subsequent *** submissions will be locked for that new
*** in accordance with Section 2.5 below. For example, on *** , *** , Client
would submit a forecast for weeks beginning *** , and the forecast would be
considered locked for weeks beginning *** . PeopleSupport will develop a
capacity plan that will allow the forecast to be increased or decreased by
Client up to *** for any subsequent *** forecast without requiring additional
ramp up / ramp down. Should Client fail to deliver a forecast for a given *** ,
the *** of the last forecast shall be extended forward *** and be considered
locked. Should Clients volume require staffing in excess of *** , the ***
forecast may be increased and decreased by no more than *** per *** .
Client must receive written confirmation of receipt of such forecast from its
PeopleSupport before the forecast is deemed accepted by PeopleSupport; provided
that if PeopleSupport does not respond to such forecast within *** , such
forecast will be deemed received and accepted. PeopleSupport shall not withhold
acceptance upon receipt. PeopleSupport agrees to service, in each calendar
month, that number of support sessions equal to the respective Support Target
for such month, but may, in its discretion, service additional support sessions.
PeopleSupport shall not be obligated to meet the agreed upon performance
objectives and service levels numbered *** and any *** specifically related to
*** in the event that, and during such times as, the actual volume of sessions
received by PeopleSupport is more than *** over the respective forecasted
increments for such point of contact. Should Clients volume require staffing in
excess of *** eReps, PeopleSupport shall not be obligated to meet the agreed
upon performance objectives and service levels numbered *** and any ***
specifically related to *** in the event that, and during such times as, the
actual volume of sessions received by PeopleSupport is more than *** All other
service level objectives need to be met and maintained at all times.
PeopleSupport will work with Client to develop a daily volume distribution,
broken down into hourly intervals, based on Client forecasts and historical
data. PeopleSupport will submit such plan, together with a statement of
associated FTE staffing levels, to Client at least *** days prior to the
anticipated date for *** locked-in forecast for Client’s approval and Client
shall give its reasonable approval or disagreement at least *** days prior to
the anticipated *** lock-in forecast date. If Client disagrees with
PeopleSupport’s plan and FTE staffing levels, then the parties will negotiate in
good faith and mutually agree upon the locked-in forecast and FTE staffing
levels at least *** days prior to the anticipated date for the *** locked-in
forecast so that PeopleSupport may staff for such period (thus, in the above
example, PeopleSupport would submit its plan by *** , Client would give its
approval or disagreement by *** and the parties would negotiate to agree on a
plan and staffing levels by *** . Upon Client’s approval or mutual agreement,
PeopleSupport’s daily volume distribution will be incorporated with Client’s
forecast to develop a *** capacity plan for the hourly increments and associated
FTE levels. ***
 

*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
Page 7

 

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2.5 Adjustment to Forecasts and Ramp-Up Processes
PeopleSupport will develop a capacity plan such that the respective Support
Target may be increased or decreased by Client by up to *** from *** ( *** in
advance) without requiring additional ramp-up / ramp-down; provided that the
number of eReps providing Services is *** or less. If the number of eReps
providing Services is greater than *** , then such increase or decrease, as the
case may be, will be *** instead of *** from *** to *** . The Support Targets
for a *** become locked-in *** prior to the start of such *** . All adjustments
made to the Support Targets must be delivered to PeopleSupport Account Manager.
2.5.1 Substantial Volume Increases
If Client requires a volume increase in the number of contacts supported by
PeopleSupport (i.e., *** ) (a “Substantial Volume Increase”), a mutually agreed
upon ramp up period will be planned:

  a)   To facilitate the appropriate collection of human and technical resources
to handle a Substantial Volume Increase, Client must provide reasonable notice
to PeopleSupport, but in no case less than *** written notice before the start
of the Substantial Volume Increase. The proposed Substantial Volume Increase
requirements shall be reasonable under the circumstances and the available
resources and technical infrastructure.     b)   PeopleSupport will present
Client with a Change Order outlining a detailed capacity ramp up plan (“Ramp up
Plan”) for Client’s approval. Client must approve the capacity plan and the
terms of the Change Order before PeopleSupport commences with the ramp up.    
c)   Performance goals shall be as defined in section 2.3 for a ramp-up period.

2.5.2 Volume Decreases
Notwithstanding Section 2.4 above and in the event of a *** . Client shall
provide PeopleSupport with written notice of a *** in order for PeopleSupport to
determine the initial number of FTEs to be used *** .
2.5.3 Forecasts for Special Promotions and Advertising
Client will provide PeopleSupport with notice of and forecasts related to all
special media and program promotions (including, but not limited to, radio,
television, direct mail, Internet and other media) within a reasonable amount of
time before release of the promotion so that PeopleSupport can make appropriate
staffing or other adjustments. All such notices and forecasts will be deemed
Client’s confidential information for purposes of Section 7 of the Agreement.
PeopleSupport shall not be obligated to meet performance objectives in the event
that, and during such times as, the actual volume of sessions received by
PeopleSupport is more than twenty *** over the forecast; provided that if the
number of eRep providing Services is *** or less and if the number of eReps
providing Services to Client is greater than *** then PeopleSupport shall not be
obligated to meet performance objectives in the event
 

*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
Page 8

 

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that, and during such times as, the actual volume of sessions received by
PeopleSupport is more than *** *** over the forecasted increments. However,
PeopleSupport shall make *** to meet performance goal(s) for the volume that is
within the lock-in forecast level.
2.6 PeopleSupport Operational Capacity Planning
PeopleSupport will work closely with Client’s Work Force Management team to plan
capacity, and to develop operational plans. Based on the volume forecasts
provided by Client in the *** Support Forecast, PeopleSupport will provide
Client with a monthly capacity forecast reflecting the number of eReps required
to handle the forecasted volume of contacts in accordance with its performance
objectives and service levels (“Monthly Capacity Plan”). The Monthly Capacity
Plan will factor in PeopleSupport’s analysis of actual contact volumes,
historical performance, existing and new-hire resources and special
circumstances (holidays, seasonality and attrition factors).
 

*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
Page 9

 

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3 Training
The training phase of the outsourcing program is crucial to PeopleSupport’s
ability to provide Client with quality service. In this section, our approach,
initial and ramp-up training process and the on-going program updates or changes
training.
3.1 Training Approach
Client and PeopleSupport will jointly participate in the training needs analysis
process with members from both teams to identify learning objectives and
determine the scope of the training effort. Peoplesupport will certify all
agents have passed a client approved curriculum.
Client will make available all existing training and research documentation,
training materials, and the knowledge base to PeopleSupport. All such materials
and documentation will be deemed Client’s confidential information for purposes
of Section 7 of the Agreement. Client will provide training materials and
related documentation sufficient for PeopleSupport to conduct a successful
training program. If necessary, and to assist in meeting Service Levels,
PeopleSupport may update the Client training material or prepare a new course
program with Client approval via the change order process.
PeopleSupport will develop a training program for Client with the following
capabilities:

•   Utilize the Client trainers and facility for the Train-the-Trainer session.
  •   Provide instructors with extensive background in customer service,
technical support, and sales, as well as stand up classroom training experience.
  •   Provide customer service, sales and communications training, Client
product/program training and pre-certification of agents prior to performing
support for Client.   •   Establish a training and QA structure that supports
Client’s program requirements.   •   Create a separate training environment that
resembles the live Client environment, including individual workstations
equipped with Client’s applications.

All new eReps receive a PeopleSupport New Hire Orientation and the
Client-specific training. After completion of the prescribed training, eReps
will undergo a Nesting Period where Team Supervisors and trainers can observe
and monitor such eReps closely before releasing them onto the production floor.
The Nesting Period is estimated to be *** days in duration during which they
will be handling a reasonable number of calls. The Client specific training and
Nesting Period shall be billed at a *** rate as defined in Appendix A of this
SOW.
3.2 Ongoing Training after Live Date
Increases in the volume of services provided and/or significant changes to
Client’s policies/procedures, products, or service offerings will require
post-implementation training. A need analysis will be conducted to determine if
any course development material must be prepared, and to scope out how long the
training should take so that PeopleSupport can appropriately schedule the
training. In order to meet its goal of providing the highest level of quality,
PeopleSupport will recommend training updates when deemed necessary. Client must
provide PeopleSupport with all relevant ongoing training materials within the
same timeframe
 
*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
Page 10

 

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that it provides its own internal centers. PeopleSupport will provide all new
hires with client approved standard New Hire Orientation and training. Reasons
for needing post-implementation training may, but do not necessarily, include
the following:

         
¨ ***
  ¨ ***   ¨ ***
¨ ***
  ¨ ***   ¨ ***

Client may request PeopleSupport to provide additional training on updated
material and other newly introduced Client system.
Should PeopleSupport and Client mutually agree that ongoing classroom training
is required, PeopleSupport will prepare a change order documenting the training
required, time period for the training, and the cost. PeopleSupport will not
begin any classroom training without written approval from Client. Normal
product update information will be handled as part of the normal day-to-day
operations and will not require a change order.
Client will be responsible for all of Client *** of PeopleSupport personnel for
this activity. ***
3.3 Staffing Profile and Training Timelines
The PeopleSupport eReps staffed on Client’s account will posses general sales
skills and have technical background or demonstrated technical skills.
PeopleSupport will determine that eReps staffed on Client’s account will meet
the following qualifications :

•   ***   •   *** .   •   ***   •   ***   •   ***   •   ***

Implementation timelines may be reassessed or revised if the scope of the
project changes after Client and PeopleSupport mutually agree upon the learning
objectives and training plan and/or if the Client deliverable timelines are not
met.
Here is a proposed timeline for the training dates and program ramp-up phases:

                     
***
  ***   ***   ***   ***   ***
 
                   
***
  ***   ***   ***   ***   ***
 
                   
***
  ***   ***   ***   ***   ***
 
                   
***
  ***   ***   ***   ***   ***

Based on Client’s requirements (initial volume and turnaround SLA),
PeopleSupport will initially
 
*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
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train ***.
PeopleSupport will *** for PeopleSupport’s personnel during the initial *** .
 
*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
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4 Quality Assurance
PeopleSupport will provide a comprehensive quality management and assurance
process with the following components:

•   A Quality Assurance program designed for the Client’s program. Program
format will be mutually agreed upon.

•   A dedicated Quality Assurance (QA) team who together with an eRep’s
supervisor will conduct QA monitoring.

•   Weekly voice coaching calibrations between PeopleSupport QA/Operations Team
and the Client.

•   The frequency of monitoring will be commensurate with individual eRep
performance scores.

•   Development of action plan for agents/teams that fall below the Client QA
standard.

•   A “Best Practices” Training manual

•   A program and eRep score card providing metrics and performance against
goals

PeopleSupport utilizes and maintains an in-house quality assurance manual. The
quality assurance manual is used to document internal and custom client
processes and procedures. PeopleSupport and Client will work together to
regularly update the QA manual based on the close loop feedback mechanism and
through the Calibration Sessions. *** . Quality goals will be established within
*** business days after Live Date of any new program and reviewed monthly.
PeopleSupport agrees to maintain a quality monitoring system.
4.1 Quality Assurance Review Process
Quality Assurance reviewing will be conducted by the QA department and the
Operation Supervisors or Operation Shift Lead. Each month the QA Analyst will
have a target number of sessions to complete. The Analyst may conduct a review
through the use of voice recorded sessions.
During a review session, the eRep’s voice session is either *** or through ***
session. Sessions are analyzed and scored by QA Analyst on the QA Score Sheet.
After this process, the QA Analyst meets with the eRep to deliver targeted
feedback on his/her performance and provides coaching, if necessary. QA Score
Sheet results detailing individual and team performance are reported to the
Supervisors in the weekly team reports. Trending analysis will be provided to
Client on a weekly basis. Individual and detailed information will be provided
at the Client’s request.
In addition, Operation Supervisors review a sample of sessions on a weekly
basis. This review process, is similar to the QA process and is documented on
the same score sheet. The feedback is given to the eRep either immediately or
during a later review session. The Supervisor provides positive feedback or any
necessary coaching. If remedial action is required, the Production Supervisor
may recommend coaching from a Subject Matter Expert, listening to other eReps
during sessions, or providing additional focused training.
 
*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
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5 Technology
5.1 Technology Architecture and Specifications
This section outlines the technical requirements for the integration of systems
and technologies in support of Client’s operation at PeopleSupport.
The following diagram illustrates the agreed voice and data connectivity
architecture between Client and PeopleSupport facilities:
This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
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***
5.2 Voice Technology Support

***.
***.
 
*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
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***
PeopleSupport will provide and support the following VDNs and routing
requirements to support Client:

          Function Name   Toll Free Number   Routing
***
  ***   ***
 
       
***
  ***   ***

***.
***.
***.
***.
***.
5.3 Data Connectivity
Client’s Sales Tool application is accessed over the Public Internet.
5.4 Client Applications
PeopleSupport utilizes the following applications supplied by Client to provide
customer service for Client’s customers:
 
*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
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1. *** Tool – Web based *** application.
5.5 Reporting
PeopleSupport will provide *** secure web site containing the *** portal. Client
may access and download all of its reports for its account *** . All reports are
***. If Client wishes to have reports generated on information not included in
the PeopleSupport standard reporting package, PeopleSupport can provide custom
reporting. The requirements, cost, and time frame required for development will
be determined by the Implementation Project Manager and will be submitted to
Client in writing for approval prior to commencement of development. This would
include integration of reports with Client’s sales data.
Information available on the Client Portal will be maintained on the Portal for
the following periods of time: *** . It is Client’s responsibility to keep and
store such reports for future reference following such periods. For a period of
*** following such periods, PeopleSupport will keep raw data only.
Interval Call Management can be monitored via *** portal and real time volumes
can be viewed from *** . Client will be able to retrieve hourly call volume
statistics from *** portal. In addition, Client can access the PeopleSupport CMS
system to observe all Client data available through *** including but not
limited to skills, VDNS and agents. Subject to this Section 5.5, Client will
have the ability to download and view information and historical data in
accordance with time frames outlined in Appendix C to this SOW #1. PeopleSupport
will provide Client with software license copy for *** at the price set forth in
Appendix A. As set forth in Appendix A, monthly invoices will be calculated
using reports generated by PeopleSupport on it’s *** using data from the phone
switch reporting system. Such reports will be available for Client to review on
*** site.
5.6 Escalation of Technology issues
PeopleSupport and Client agree to follow the Technical Escalation Procedures
documented hereto as Appendix B for any technical issues that may arise
affecting Client’s customer service operations.
 
* CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
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6 Timeline, Resources and Assumption
Within *** of execution of this SOW and the Agreement, PeopleSupport will
prepare and deliver to Client a project plan (the “Project Plan”) that contains
the critical path dates that each party must meet in order for PeopleSupport to
adhere to the implementation deadlines. PeopleSupport and Client will mutually
agree upon the Live Date set forth in the Project Plan. Client will make all
reasonable efforts to cooperate and work with PeopleSupport to deliver any
Client dependant materials delineated in the agreed upon Project Plan. To the
extent that Client fails to meet a critical path date that impacts
PeopleSupport’s work, PeopleSupport reserves the right to reassess and
reasonably adjust all dates contained within the Project Plan to the extent
necessary to reflect Client’s failure.

             
***
      ***   ***
***
  ***   ***   ***
***
  ***   ***   ***
***
  ***   ***   ***
***
  ***   ***   ***
***
  ***   ***   ***
***
  ***   ***   ***
***
  ***   ***   ***
***
  ***   ***   ***
***
  ***   ***   ***
***
  ***   ***   ***
***
  ***   ***   ***
***
  ***   ***   ***

6.1 Client Project Team
In support of Client’s program, PeopleSupport will conduct conference calls and
request information from a Client-appointed single point of contact and other
Client personnel. Client agrees to:

  •   Client and PeopleSupport will make appropriate personnel available to each
other on a timely basis, including a single point of contact with authority to
make decisions, discuss and resolve day-to-day issues, to assist in completing
deliverables and for coordinating additional resources and sign-off as required.
    •   Client and PeopleSupport will assign a technical resource to the project
to oversee the connectivity, application access and voice/data network
integration projects.

Client and PeopleSupport personnel will accept responsibility for their assigned
tasks and will complete them within the specified schedule. Any delays caused by
the unavailability of Client or
 
*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
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Peoplesupport resources or completion of requests may adversely affect the
project schedule, and PeopleSupport’s adherence to Service Levels and
Performance Objectives.
6.2 Assumptions
     • *** .
     • *** .
     • *** .
6.3 Change Management and Change Control
PeopleSupport and Client recognize that the dynamic nature of Client’s business
model may necessitate that material changes be made to processes outlined herein
Should Client request PeopleSupport to make material changes to the processes
defined in this SOW, PeopleSupport will prepare a change order for Client’s
review and approval before implementing the change. The change order will
include the costs, if any, and the proposed timeline for implementing the
change. All costs will be at the rates defined in this SOW unless other wise
mutually agreed by Client and PeopleSupport.
Items that would require a change order include, but are not limited to the
following:

•   Changes to the technical architecture defined in this SOW

•   Custom report development outside of initial report requirements

•   Telecom programming outside of what is defined in this SOW

•   Significant operation process changes

•   Support for new touchpoints

•   Additional training required

7.0 Additional Requirements

•   PeopleSupport provides *** and call monitoring capability for all of its
locations used to provide Services to Client. This monitoring is password
protected and can be conducted anytime and from anywhere without the need for
prior arrangement with PeopleSupport. Client will be provided with the ability
for live call monitoring capability by dialing into PeopleSupport’s PBXs.
PeopleSupport represents and warrants that such call monitoring capability and
PeopleSupport’s provision of it comply with all applicable laws in all material
respects and that PeopleSupport has obtained, or will obtain prior to the use of
such capability, any requisite consent to such monitoring.

•   PeopleSupport will review all agent and supervisor incentive programs
provided by PeopleSupport with client

•   Agents are to be *** to Client, subject to Minimum Monthly Fees payment by
Client

•   Client has the right to review and audit once a year all documents and
records of PeopleSupport directly related to Services rendered under this
agreement or reasonably requested by Client for purposes of determining
PeopleSupport’s meeting of service level

 
*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
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objectives and compliance with the other provisions of this SOW, with reasonable
prior written notice to PeopleSupport; provided that Client will not interfere
with PeopleSupport’s operations in connection with the audit beyond the
reasonable use of PeopleSupport personnel and resources in retrieving and
compiling such documents and records. PeopleSupport will provide all supporting
documentation related to billing and SLA’s on a monthly basis as requested, if
(1) in PeopleSupport’s possession without analysis and manipulation or
(2) reasonably available to PeopleSupport and without substantial additional
cost to PeopleSupport.

•   *** .   •   PeopleSupport will provide the following computer and network
systems recovery mechanisms:

*** .
*** .
*** .
*** .

•   PeopleSupport’s standard reports are described in Appendix C attached hereto
and are included at no additional charge. The parties will use the Change Order
process to modify Appendix C as necessary.

•   At a minimum, the following ratios will be maintained for the clients
account — *** .

•   PeopleSupport voice equipment utilizes *** technologies. Facilities in the
Philippine are equipped with *** .

 
*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
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IN WITNESS WHEREOF, the Parties have caused their duly authorized
representatives to execute and meet the deliverables outlined in this SOW.

     
Vonage
 
   
 
   
***
   
 
   
 
   
Signature
   
***
   
 
   
 
   
Print Name
   
Senior Vice President
   
 
   
 
Title
   
4/9/04
   
 
   
 
   
Date
   
 
   
PeopleSupport, Inc.
   
 
   
 
   
\s\ Caroline Rook
 
   
 
   
Signature
   
Caroline Rook
   
 
   
 
   
Print Name
   
CFO
   
 
         
Title
   
4/15/04
   
 
   
 
   
Date
   

 
*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
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Appendix A — Pricing

      SERVICE   PRICE
LIVE VOICE SERVICE, Phone
   
 
   
***
  ***
 
   
***
  ***

 
*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
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***
   
 
   
***
  ***
 
   
***
  ***
 
   
***
  ***
 
   
***
  ***
 
   
***
   
 
   
 
  ***
 
   
 
  ***

 
*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
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***
   
 
   
 
  ***
 
   
***
   
 
   
***
  ***
 
   
***
  ***
 
   
***
  ***
 
   
***
   
 
   
***
  ***

     
***
  ***
 
   
***
  ***
 
   
***
  ***
 
   
***
  ***
 
   
***
  ***

 
*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
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Appendix B — Technical Escalation Procedures
Primary Technical Contacts
PeopleSupport and Client have provided the following designated contacts that
are authorized to respond to technical emergencies and escalations:
Client will designate the escalation contact within 30 days of execution of this
SOW.
Client Technical Escalation Information

                          ***   ***   ***   ***   ***   ***   ***

***

                          ***   ***   ***   ***   ***   ***   *** ***   ***  
***   ***   ***   ***   ***

 
*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
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Purpose and Scope
PeopleSupport has established a set of standard Client Escalation Procedures
available to all clients. These escalation procedures are outlined below.
PeopleSupport has made an effort to address all operational aspects of providing
continued service to clients. However, we recognize that clients might require
additional procedures unique to their operational needs. To address these unique
requirements outside of the standard escalation procedures, PeopleSupport can
work with each client to create customized business resumption and escalation
procedures as needed.
This document serves as the standard PeopleSupport Client Escalation Procedure.
This procedure documents both Client and PeopleSupport responsibilities with
regards to notification, ongoing communication and correction of problems
arising from an outage in services caused by systems and internal operational
elements under the control of PeopleSupport or caused by external elements
outside of the direct control of PeopleSupport. Specifics as to the
PeopleSupport service (the “Service”) to be provided to the Client are set forth
in Client’s Statement of Work (SOW), which is incorporated, signed into and made
a part of the Agreement.
For reference, policies and procedures for system backup and recovery are stated
in the PeopleSupport Backup and Offsite Storage Policies document. The document
can be obtained by contacting your PeopleSupport Account Executive.
Event Notification
PeopleSupport shall provide initial notice to a designated Client representative
by telephone, e-mail, pager or comparable notification service *** PeopleSupport
becoming aware of an event that has caused or may cause an unscheduled outage or
security breach problem. Client must provide a valid pager number, fax number,
voice mail or email address to PeopleSupport Helpdesk for this purpose.
Client is solely responsible for providing accurate contact information for
Client’s designated point of contact. In the event Client first becomes aware of
such outage or security breach event, Client shall promptly provide initial
notice to PeopleSupport via the assigned PeopleSupport Helpdesk Number provided
to Client. In the event of critical outages, status reports about the event will
continue on an hourly basis until either the event has been resolved or both
PeopleSupport and Client have determined a course of action that does not
require continued notification.
Client Technical Support
PeopleSupport will provide 7x24 customer service in support of Client’s customer
service solution via email, voice and voice mail for the purpose of these Client
Escalation Procedures. The customer service center can be used to log problem
reports or request assistance with system usage. Details of PeopleSupport and
Client responsibility for the applications and services are outlined in the SOW.
Monitoring Services
Monitoring Services refer to the ability of PeopleSupport to observe the
performance and availability of system, application and network components of
the customer service solution in real-time and identifying problems with such
components that indicate an outage of services.
 
*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
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PeopleSupport will perform 7x24 system-level monitoring, including polling of
the hardware, operating system and applications in order to detect abnormal
system conditions. Key system metrics monitored by PeopleSupport include:

  •   Hardware malfunctions     •   Server uptime     •   File System and Space
utilization     •   CPU utilization     •   Memory utilization     •  
Application Service availability     •   Wide-Area network uptime     •  
Intrusion Detection and logging

For equipment under the control of PeopleSupport, PeopleSupport utilizes
hardware sparing and redundant equipment whenever possible to address
malfunctioning equipment outages.
Problem Categories and Priorities
PeopleSupport has established a standard problem management procedure to
identify, categorize and track problems with the operational and hosted
solutions under its direct control. Problems are categorized and prioritized by
order of importance to our Clients. PeopleSupport assigns a case number to the
problem when a client initiates a problem report by notifying the PeopleSupport
Helpdesk.
The PeopleSupport Helpdesk can be reached at numbers listed at the beginning of
this document.
There are four categories of problems ranging from Emergency (Priority 1) to
Assistance (Priority 4.)

•   ***

 
*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
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***
Problem Resolution Response Times
The following table indicates PeopleSupport’s problem resolution goals. These
resolution goals apply to all problems related to systems and services under the
direct control of PeopleSupport. Problem resolution or workaround time commences
after the problem has been identified and reproduced by PeopleSupport. A Call
Back procedure is followed by PeopleSupport to notify clients affected by
priority 1-3 problems. Clients must provide PeopleSupport Helpdesk with up to
date contact information and a preferred method of communication for all
notifications. Client’s primary contact shall have the authority to make
decisions on behalf of Client to facilitate a rapid resolution of all problems.

         
***
  ***   ***
***
  ***   ***
***
  ***   ***
***
  ***   ***
***
  ***   ***

In priority 1 and priority 2 cases that are as a result of PeopleSupport system
problems, PeopleSupport shall work around the clock until a resolution or
workaround is reached.
All priority 1 problems are escalated internally as follows:

         
***
  ***   ***
***
  ***   ***
***
  ***   ***
***
  ***   ***
***
  ***   ***

In priority 3 cases, PeopleSupport shall use commercially reasonable efforts to
notify the Client and resolve problems as quickly as is reasonably practical.
Resolution to problems with priority 4 depends on the scope and nature of the
request (typically a programming or enhancement request) and cannot be
accurately forecasted. If a problem cannot be resolved permanently, a temporary
resolution will be implemented to the extent possible based on mutual agreement
with Client.
Escalation and Problem Resolution Procedures

Ø   If the Source of the Problem is External to PeopleSupport

 
*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
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When there is a site and/or system problem that is external to PeopleSupport
(such as unavailability of the Client Web Site or back-end application system or
tools):

  A)   Client shall notify the PeopleSupport Helpdesk immediately upon noticing
the outage.     B)   PeopleSupport will “troubleshoot” the problem as
appropriate to determine the impact of the problem to systems and networks under
the control of PeopleSupport. If the problem is as a result of systems and
facilities outside the control of PeopleSupport, Client shall assign a
designated resource to PeopleSupport to address the problem within a mutually
agreed upon timeframe.     C)   PeopleSupport shall contact Client’s designated
support staff to inquire about the problem periodically until the problem is
resolved. Client’s designated support entity must be listed at the beginning of
this document.     D)   Client’s designated support staff shall respond to
PeopleSupport inquiries with timely updates in 60-minute intervals until the
problem is resolved.     E)   In the event of a technical problem with Client’s
call tracking system, email management system, or any Client system directly
used by PeopleSupport eReps, problems may have a direct impact on
PeopleSupport’s ability to meet the agreed upon service levels. In such cases,
PeopleSupport reserves the right to waive the agreed upon Service Level measures
or customer care as long as the problem remains unresolved by the Client.

Ø   If the Source of the Problem is Internal to PeopleSupport

When there is a system or operational problem that is internal to PeopleSupport
(such as unavailability of the voice systems, applications or network access):

  A)   Client shall contact the PeopleSupport Helpdesk to report an exact detail
of the problem as soon as Client notices the problem. A PeopleSupport Helpdesk
Analyst will receive the call and open a ticket for the problem under an
assigned priority. In the event that an Analyst is not reachable, a voice mail
or Page may be left for the on-call support analyst at PeopleSupport. The
Helpdesk shall return all voice mails and pages within 30 minutes.     B)  
PeopleSupport Analysts will “troubleshoot” the problem as appropriate to
determine if the problem is related to systems and networks under the control of
PeopleSupport. If the problem is as a result of systems and facilities under the
control of PeopleSupport, a designated resource from PeopleSupport will be
assigned to address the problem.     C)   PeopleSupport Analyst shall notify
Client’s designated point of contact immediately upon noticing an outage.     D)
  PeopleSupport Analyst shall provide Client with updates in 60-minute intervals
until the problem is resolved.     E)   In the event of a major catastrophic
impact to Client’s operation at PeopleSupport caused by systems under
PeopleSupport’s direct control, PeopleSupport shall exercise the Client’s agreed
to Disaster Recovery plan to resolve the problem.

Scheduled Maintenance Policy
To maintain and enhance PeopleSupport’s hosted applications, network
infrastructure and communication systems, we have established a *** . The time
periods below represent a designated window of time that scheduled and routine
maintenance activity may be planned without prior notice. PeopleSupport will
attempt to minimize the impact of the scheduled maintenances as much as possible
without impacting system’s future uptime and availability. Though the systems
might not become unavailable *** during the scheduled times listed below,
clients should assume and plan for momentary outages during these timeframes
accordingly.
 
*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
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***
  ***   ***
***
  ***   ***
***
  ***   ***
***
  ***   ***

In addition to regularly scheduled maintenance, PeopleSupport may at times
perform emergency maintenance. Whenever possible, PeopleSupport shall make
commercially reasonable efforts to provide Client with *** notification of all
scheduled maintenance procedures arising from emergencies.
Modification of Escalation Procedures
Client acknowledges that from time to time, PeopleSupport may be required to
modify terms and conditions of this Client Escalation Procedure as required by
third-party vendors. PeopleSupport shall notify Client of any such Required
Modification. Client shall have *** business days to review such modification
and notify PeopleSupport of its acceptance or rejection of same. Failure to
affirmatively reject shall be deemed an acceptance under this section.
 
*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
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Appendix C — REPORTING
PeopleSupport measures and monitors several key metrics on a continuous basis
across all of our contact centers. This enables us to ensure that we are
managing and exceeding our Service Level Agreements. These measures are reported
in our Client Standard Reports on an hourly, daily, weekly, and monthly. Our key
metrics and their definitions are listed below.
***

     
***
  ***
***
  ***
***
  ***
***
  ***
***
  ***
***
  ***
***
  ***
***
  ***

 
*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
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***

         
***
  ***   ***
***
  ***   ***
***
  ***   ***
***
  ***   ***

***
***
***
 
*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
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***
 
*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
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***
 
*   CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE COMMISSION.
This document contains unpublished, confidential and proprietary information of
PeopleSupport, Inc. No disclosure, duplication or use of any portion of the
contents of these materials, for any purpose, may be made without the prior
express written consent of PeopleSupport, Inc.
SOW No. 1
Page 34