Document:

Exhibit 10(s)

 

AGREEMENT, RELEASE AND
WAIVER

 

This Agreement, Release and Waiver (“Agreement”) is
entered into by and between Eric P. Grubman (“Grubman”) and Constellation
Energy Group, Inc. (“Company”).

 

1.             In consideration of Grubman’s provision of certain
waivers as set forth in this Agreement in connection with his voluntary
resignation from employment with the Company effective December 1, 2001, the
Company agrees to provide to Grubman (a) a $2,075,000 lump sum cash payment
payable on or before the 8th day following Grubman’s execution of
this Agreement provided Grubman has not revoked the Agreement as set forth in
paragraph 15; (b) access to secretarial support from Janice Sawyer until
December 31, 2001; (c) reimbursement (subject to gross-up for payroll tax
withholding) for the following expenses incurred and paid by Grubman (i) lease
expense on 100 Harborview Apt. PH-2D from September 1, 2001 until December 31,
2001, (ii) rental expense from September 1, 2001 until December 31, 2001 for
furniture at the apartment in (i), 
(iii) real estate commission on the sale of one of Grubman’s Baltimore
area residential dwellings if such dwelling is sold before March 31, 2002, such
commission reimbursement not to exceed $20,000, and (iv) moving and storage
expenses related to any move out of the apartment in (i) incurred on or before
December 31, 2002; (d) reimbursement for moving and storage expenses incurred
before June 15, 2002 related to any move out of Grubman’s office at 250 West
Pratt Street; (e) up to 18 monthly cash payments of $584.95 commencing on or
before January 15, 2002 (subject to gross-up for payroll taxes) toward the cost
of health coverage, which monthly cash payments approximate on an after-tax
basis the monthly premium cost of medical and dental coverage for Grubman as if
he were an active employee and which shall cease effective on the date Grubman
is eligible for health coverage through another employer; (f) maintenance by
the Company until December 31, 2002 of Grubman’s memberships for any clubs for
which Company paid Grubman’s membership fees as of November 30, 2001.  The foregoing consideration is over and
above any benefits to which Grubman will be entitled under the Company’s
benefit plans and policies as a result of his resignation from employment with
the Company effective December 1, 2001, which benefits both parties acknowledge
are set forth in Attachment A.

 

2.             The Company hereby agrees to
provide the benefits set forth in paragraph 1 to Grubman from the
Company’s general assets, and where applicable in accordance with the terms of
the referenced benefit plans.  Except as
set forth in the applicable benefit plans, such amounts set forth in paragraph
1 are not subject to alienation, assignment, attachment, garnishment or other
legal process by or on behalf of Grubman until such amounts are actually
received by him.  Such payments are
subject to applicable payroll tax withholding and will not be considered as
compensation for purposes of the Company’s retirement or welfare benefit plans.

 

3.             In
exchange for the Company’s agreement to provide the consideration set forth in
paragraph 1, Grubman knowingly, freely and voluntarily agrees that, to the full
extent the law permits, he hereby releases and discharges the Company and any
company controlling, controlled by or under common control with the Company
(“Affiliate”), their successors, officers, directors, agents, representatives
or employees from any and all debts, obligations, claims, demands, judgments or
causes of action of any kind whatsoever, known or unknown, in tort, by statute
or

 

 

on any other basis, for equitable relief, compensatory, punitive or
other damages, expenses (including attorneys’ fees), and/or reimbursements of
costs of any kind, including, but not limited to any and all claims, demands,
rights and/or causes of action which might arise out of allegations relating to
a claimed breach of contract (express or implied), or any tort, legal actions
under Title VII of the Civil Rights Act of 1964, as amended (42 U.S.C. § 2000e et
seq.), the Civil Rights Act of 1866 and 1871 (42 U.S.C. §§ 1981 and 1983),
the Americans with Disabilities Act (42 U.S.C. § 12101 et seq.), the Age
Discrimination in Employment Act (29 U.S.C. § 621 et seq.), the Equal
Pay Act (29 U.S.C. § 206(d)(1)), the Rehabilitation Act (29 U.S.C. §§ 701-704),
Executive Order 11246, or any other Federal, State, local or common law
concerning age, gender, race, religion, national origin, disability or any
other protected classification or category which expressly or impliedly may
form the basis of alleged discrimination, or any other law or regulation.  To the extent any such actions are pending,
Grubman agrees that they are or will be immediately withdrawn before or upon
his commencement of receipt of the consideration set forth in paragraph 1.  Grubman also knowingly and voluntarily
agrees that, to the full extent the law permits, he waives any and all causes
of action and will not file, cause to be filed, or voluntarily assist in the
prosecution of any charges, claims, lawsuits, or other actions of any kind
against the Company, its Affiliates and/or or their successors, officers,
directors, agents, representatives or employees.  Grubman is not waiving claims that may arise based on events
occurring after he executes this Agreement, and is not waiving rights to
enforce this Agreement.  Grubman further
acknowledges that he expressly waives any right with respect to and forfeits
any equity grant made at any time to him by the Company and any other
remuneration or benefits not expressly set forth in paragraph 1 and Attachment
A.   Notwithstanding anything in this
Agreement to the contrary, Company acknowledges that Grubman’s right to
indemnification under Company by-laws, charter, and coverage under any
Director’s and Officer’s insurance, for acts and omissions incurred while
Grubman was an employee of Company, is not waived by Grubman under this
Agreement.

 

Additionally, Grubman
does specifically, knowingly and voluntarily waive any and all rights or claims
he may have under the Age Discrimination in Employment Act (ADEA).

 

Subject to paragraphs 6,
7, 8, 9, and 10, Company releases and discharges Grubman from all debts,
obligations, claims, demands judgments or causes of action of any kind
whatsoever, known or unknown, in tort, by statute or on any other basis, for
equitable relief, compensatory, punitive or other damages, expenses (including
attorneys’ fees), and/or reimbursements of costs of any kind, including, but
not limited to any and all claims, demands, rights and/or causes of action
which might arise out of allegations relating to a claimed breach of contract
(express or implied), or any tort. To the extent any such actions are pending,
Company agrees that they are or will be immediately withdrawn before or upon
the expiration of the 7-day period in paragraph 15.  Company also agrees that, to the full extent the law permits, it
waives any and all causes of action and will not file, cause to be filed, or
voluntarily assist in the prosecution of any charges, claims, lawsuits, or
other actions of any kind against Grubman. 
Company is not waiving claims that may arise based on events occurring
after it executes this Agreement.

 

2

 

4.             Nothing
in this Agreement, including the payment of any sum by the Company, constitutes
an admission by the Company or any Affiliate of any legal wrong.

 

5.             The parties agree that the terms of
this Agreement including the consideration set forth in paragraph 1 are
confidential and will not be disclosed to any non-parties hereto; provided,
however, that Grubman may disclose such information to his spouse, personal
attorney, and personal accountant and financial advisors, and otherwise as
required by law or order of a court. 
Should Grubman wish to consult with anyone else he deems appropriate to
review this Agreement, he must first obtain the written consent of the Company
which will not be unreasonably withheld. 
In addition, the Company may disclose such information as is necessary,
in its sole discretion, to federal or state agencies or to comply with any law.

 

6.             Grubman
acknowledges that while he was an active employee of the Company or any
Affiliate, he received or had access to confidential and proprietary
information which is a valuable, special and unique asset of the Company and/or
its Affiliates.  Accordingly, Grubman
agrees that, for a period of one year from the date of this Agreement (noted in
the final sentence of this Agreement), he shall not (directly or indirectly)
divulge or communicate to any person (except as compelled by order of a court
of competent jurisdiction if Grubman provides the Company with notice at least
10 business days before complying with such order, to provide the Company the
opportunity to challenge the order), confidential commercial information, or
any other business or commercial information, or data of the Company, its
customers, or any Affiliates, which is not generally known to the public.

 

Grubman further agrees that he will, as soon as reasonably practicable
following his resignation from employment with the Company, return to the
Company all Company and Affiliate property, as well as all books, records,
customer and pricing lists, correspondence, contracts or orders, advertising or
promotional materials, and other written, typed or printed materials, whether
furnished by the Company or prepared by Grubman, which contain any information
relating to the Company’s business, and Grubman agrees that he will neither
make nor retain copies of such materials; provided, however, that any
correspondence prepared by or addressed to Grubman may be retained by Grubman
subject to Grubman’s obligation not to disclose confidential information as set
forth in this paragraph 6.

 

7.             Grubman agrees to refrain from
making any untruthful oral or written statements to the public, or to any third
party, about the Company or its Affiliates, their business practices, or the
business practices of any present or former officers, directors, executives,
employees, representatives, agents or customers or any related services of the
Company, or any general matter concerning the Company or any of its Affiliates’
reputation, standing in the business community, or business practices.    Company agrees to refrain from making any
untruthful oral or written statements to the public, or to any third party,
about Grubman, his reputation, standing in the business community, or business
practices.

 

8.             Grubman agrees that prior to July
1, 2002, he will not directly or indirectly, whether or not for compensation
and whether or not as an employee, be engaged in or have any financial interest
in  certain entities as reasonably
requested by the Company and agreed to by Grubman in writing.  For purposes of this Agreement, Grubman
shall be deemed to be engaged

 

3

 

in or have a financial interest in such entity  if he is an employee, officer, director,
member, principal or partner, of such entity, or if he directly or indirectly
performs services for such entity or if he or any member of his immediate
family beneficially owns an equity interest, or interest convertible into
equity, in any such entity; provided, however, that the foregoing shall not
prohibit Grubman or a member of his immediate family from owning, for the
purpose of passive investment, less than 5% of any class of securities of a
publicly held corporation.

 

9.             Prior to July 1,
2002, Grubman will not, directly or indirectly, either as a proprietor,
stockholder, partner, principal, officer, employee, consultant, advisor or
otherwise, personally induce or entice any employee of the Company or an
Affiliate to leave such employ; provided, however, that Grubman will not be
precluded from hiring any such employee who he has not so induced or enticed.

 

10.           In
the event of a breach or threatened breach by Grubman of the provisions of
paragraphs 6, 7, 8, or 9 of this Agreement, Grubman agrees that the Company
will be authorized and entitled to obtain, from any court of competent
jurisdiction, an injunction restraining Grubman from such breach and from
rendering any services to any person, firm, or entity in breach of such
paragraphs.  Nothing in this Agreement
shall be construed as prohibiting the Company from pursuing any other remedies
available to it for a breach or threatened breach of paragraphs 6, 7, 8, or 9.

 

11.           In
the event any provision of paragraphs 6, 7, 8, or 9  of this Agreement is held to be an unreasonable restriction upon
Grubman, the court so holding may reduce the territory to which it pertains and/or
the period of time in which it operates, or order any other change to the
extent necessary to render such provision enforceable.

 

12.           If
it is determined by a court of competent jurisdiction that Grubman has failed
to comply with one or more terms of this Agreement, the damages, if any, which
the Company may receive from him shall not exceed, in the aggregate, the value
of the payments described in paragraph 1.

 

13.           Grubman acknowledges
that the Company has advised him to consult with an attorney prior to executing
this Agreement.

 

14.           Grubman
acknowledges that he has a period of at least twenty-one (21) calendar days to
consider this Agreement.  Grubman
further acknowledges that if this Agreement, signed by him, is not received by
the Vice President of Human Resources, Constellation Energy Group, Inc., 24th
Floor, 250 West Pratt Street, Baltimore, Maryland 21201, on or before December
24, 2001, this Agreement is null and void and unenforceable by the parties, and
Grubman will not be entitled to the consideration set forth in paragraph 1.

 

15.           Grubman acknowledges that he has been
specifically informed by the Company that for a period of seven (7) calendar
days following the date of his execution of this Agreement (as indicated in the
last paragraph of this Agreement) he has the absolute right to revoke this

 

4

 

Agreement by notifying
Vice President of Human Resources, Constellation Energy Group, Inc., in writing
on or before the expiration of the seven (7) day period.

 

16.           This Agreement shall not become
effective or enforceable until the aforesaid seven (7) calendar day revocation
period has expired.

 

17.           This Agreement supersedes any and all
other agreements or proposals, written or oral, made by the Company or any
Affiliate, or on their behalf to Grubman, and this Agreement is the full and
final understanding between the parties; provided, however that any written
document designating an entity referenced in paragraph 8 shall be deemed a part
of this Agreement.

 

18.           The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force and
effect.  This Agreement may only be
modified by a written agreement signed by the parties.

 

19.           This Agreement shall be governed by
the laws of Maryland.

 

20.           Grubman does hereby acknowledge that
he has read and understands this Agreement.

 

21.           Grubman does hereby acknowledge that
he has signed this Agreement freely and voluntarily.

 

IN WITNESS WHEREOF, Eric P. Grubman does hereby execute this Agreement on
this         day of December, 2001.

 

	
   

  	
   

  	
   

  	
  (Seal)

  
	
   

  	
   

  	
  Eric P. Grubman

  
	
   

  	
   

  	
   

  
	
   

  	
  Received and accepted by:

  	
  CONSTELLATION ENERGY GROUP,

  
	
   

  	
   

  	
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  (Seal)

  
	
   

  	
   

  	
  Name: Mayo A. Shattuck III

  
	
   

  	
   

  	
  Title: 
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
					

 

5

 

Benefits

 

Health
and dental benefit COBRA coverage.

 

Ability to convert employee life insurance coverage to an individual
policy.

 

Ability to convert disability insurance coverage to an individual
policy.

 

Payout for unused vacation.

 

Tax and estate planning services rendered through December 1, 2001.

 

6<PAGE>

                                                                   Exhibit 10.34

  Confidential Materials omitted and filed separately with the Securities and
                Exchange Commission. Asterisks denote omissions.

                     Amendment 013 to Outsourcing Agreement
                                     between
                                   IBM and MSL

The purpose of this document is to amend the IBM/MSL Outsourcing Agreement
between International Business Machines Corporation ("IBM") and Manufacturer's
Services Western U.S. Operations, Incorporated ("MSL"), dated May 5, 1998
("Agreement"). Following execution signatures by IBM and MSL (each a Party and
together the "Parties"), this amendment will be effective on June 1, 2002 unless
otherwise stated for specific Sections of this Amendment 013.

The Parties agree to amend the Agreement as follow:

1. Delete Section 1.15 of the Outsourcing Base Agreement, as amended in
Amendment 012, in its entirety and replace with the following:

         ""Product Attachment" shall mean Attachments A, G, and L of the
         Statement of Work and Exhibit 1 to Supplement 1 of the Statement of
         Work to this Agreement which describe the details of a specific
         transaction or series of transactions. Product Attachments are
         incorporated into and made a part of this Agreement."

2. Delete the first sentence in SECTION 4.0 TERM of the Outsourcing Base
Agreement, as amended in Amendment 012, in its entirety and replace with the
following:

         "This Agreement shall become effective on the Effective Date and shall
         continue for a period of seven (7) years unless terminated as provided
         in Section 5.0."

3. Delete SECTION 2.0 TERM of Attachment 1, Statement of Work to the Agreement,
as amended in Amendment 012, in its entirety and replace with the following:

         "This Attachment and its Product Attachments shall become effective on
         the Effective Date and shall continue for a period of seven (7) years
         unless terminated as provided in Section 5.0 of the Base Agreement.
         This Attachment will automatically be renewed for periods of twelve
         (12) months unless either party gives six (6) months written notice of
         its intent to terminate this Agreement. Such renewals shall continue
         for successive periods under the same terms and conditions, unless
         otherwise agreed in writing by both Parties."

4. Delete the RELATIONSHIP MANAGERS identification information which follows
Section 5.2 g) of Attachment 1, Statement of Work to the Agreement, as amended
in Amendment 012, in its entirety and replace with the following:

                                                                    Page 1 of 14

<PAGE>

         "WORLD WIDE RELATIONSHIP MANAGERS:

         IBM: Jesus Martinez Ons
         Mgr of RS Mfg&FF Operations Local Mgr C. Valenciana / Murcia
         Avenida de Aragon, 30 46021 Valencia ( Spain )
         +34-96-3881861
         +34-96-3610640
         jmartinez @ es.ibm.com

         MSL: J. Donald Oldham
         VP Worldwide Sales and Program Management
         300 Baker Avenue Concord, Massachusetts USA 01742-2121
         +1-978-371-5426
         +1-978-287-5635
         don.oldham @msl.com"
5. Add the following to Section 7.4 of Attachment 1, Statement of Work to the
Agreement in its entirety:

         "f)      In the event that IBM recognizes a potential loss of an
                  incremental business opportunity, based upon the pricing of
                  MSL Products and/or Services, including, without limitation,
                  those for pre machine type 4800 RS Product(s), and IBM
                  believes that MSL can assist by making reasonable adjustments
                  to such pricing of MSL Products and/or Services, IBM will
                  notify the MSL World Wide Relationship Manager in writing,
                  requesting special pricing consideration. MSL shall have five
                  (5) Days after such IBM written notice to respond to IBM's
                  request in writing with it's good faith efforts to satisfy
                  IBM's request."

6. Delete Section 7.5 e) of Attachment 1, Statement of Work to the Agreement, as
amended in Amendment 012, in its entirety and replace with the following:

         "Proposals for updates to the initial prices will be reviewed each
         quarter on a thirty (30) calendar day cycle. The schedule will be as
         follows

                  "T" shall be the date that MSL prices and IBM Inter Company
                  Billing Price's (ICBPs) are ready for table load; it is the
                  last day of a calendar quarter end month.

                  Thirty (30) calendar days before T, MSL shall initiate an
                  update proposal.

                  Fifteen (15) calendar days before T, MSL shall answer all IBM
                  questions and issues and revise its proposal.

         Update reviews shall include:

                  i) Updates of materials costs, including packaging costs, with
                  latest quotes of IBM Nominated Suppliers and MSL suppliers.
                  IBM Parts materials costs will be updated to the latest IBM
                  market price. For Parts with a low annual value, the material
                  costs will be updated to the latest purchase costs.

                                                                    Page 2 of 14

<PAGE>

                  ii) Updates of MSL Value Add shall only occur semiannually.
                  MSL Value Add updates are to be included in MSL prices on the
                  last calendar day of each March and on the last calendar day
                  of each September. MSL Value Add is determined by multiplying
                  Materials Cost times the appropriate Value Add Rate from table
                  1 a) of Appendix 1: Mark Up to Attachment 1, Statement of Work
                  to the Agreement.

                  iii) Update of MSL quotes for MSL manufactured Products.

                  iv) Changes in MSL labor rates, markups and margins, in
                  accordance with the best price and Product price conditions of
                  Sections 7.4 and 7.5 a), b), c), and d).

                  v) Changes in Integration Labor Hours for specific Integration
                  projects based on the latest IBM agreed to quotes."

7. Delete Section 13.0 f) of Attachment 1, Statement of Work to the Agreement in
its entirety and replace with the following:

         "MSL prices, and MSL WW surplus inventory carrying charges ("SICC") as
         specified in Section 13.0 g) of Attachment 1, Statement of Work to the
         Agreement, include charges for MSL inventory management and ownership.
         Both parties agree that IBM has no liability for inventories that MSL
         purchases for the purposes of this contract, providing that forecast
         (requirements) accuracy is equal to or greater than the level defined
         in Appendix 2. If Requirements Accuracy falls below 65% liabilities for
         any machine type for any quarter, IBM will compensate MSL according to
         the method describe in Appendix 2."

8. Add the following to Section 13.0 of Attachment 1, Statement of Work to the
Agreement in its entirety:

         "g)      IBM will pay agreed to SICC to MSL quarterly at [**]% annual
                  rate as specified in Section 13.0 g) i) and as specified in
                  Section 13.0 g) ii) and as specified in Section 13.0 g) iii).
                  The SICC rate will be renegotiated annually such that a
                  revised rate is effective each June, beginning June 2003. IBM
                  and MSL must mutually agree upon MSL WW surplus RS inventory
                  subject to SICC. MSL WW surplus RS inventory is MSL RS
                  inventory which exceeds the next 12 months requirements
                  according to the latest IBM forecast, and which MSL purchased
                  consistent with IBM forecasts and agreed upon lead times.

                  i)       For a period beginning June 1, 2002 through the term
                           of the Agreement, IBM will pay MSL SICC for inventory
                           contained in the March 2001 ICC payment list, less
                           the inventory sold or otherwise no longer mutually
                           considered part of this inventory .

                  ii)      For a period beginning April 1, 2002 through the term
                           of the Agreement, IBM will pay MSL SICC for MSL WW
                           surplus RS inventory which was purchased prior to
                           June 1,2002, and which is not contained in the March
                           2001 ICC payment list, less the inventory sold or
                           otherwise no longer mutually considered part of this
                           inventory.

                                                                    Page 3 of 14

<PAGE>

                  iii)     For MSL WW surplus RS inventory which was purchased
                           on June 1, 2002 or later (less the inventory sold or
                           otherwise no longer considered part of this
                           inventory), IBM, at the end of each quarter, will
                           calculate the maximum MSL WW surplus RS inventory for
                           all machine types and models by using an algorithm
                           which has been agreed upon by both Parties in
                           writing. At the end of each quarter, the average ship
                           cost for all RS machine types and models is known and
                           will be stated in US currency. IBM's maximum
                           liability for MSL WW surplus RS inventory for the
                           quarter will be the maximum MSL WW surplus RS
                           inventory multiplied by the respective average ship
                           cost, multiplied by the current SICC rate. IBM's
                           maximum SICC liability for MSL WW surplus RS
                           inventory for the quarter will be compared to MSL' s
                           respective claim, and IBM will pay MSL the lower of
                           the two."

9. Add the following to the first paragraph of Section 7.0 of Attachment 1,
Statement of Work to the Agreement in its entirety.

          "All prices in this Agreement which are stated in pesetas will be
          divided by [**] for conversion to Euros."

10. Add the following to the end of the first paragraph of Section 11.2 of
Attachment 1, Statement of Work to the Agreement:

         "Weekly when driven by significant change to the most recent IBM
         forecast, IBM may provide updates of up to the current month plus the
         following two months."

11. Delete Section 11.2 b of Attachment 1, Statement of Work to the Agreement
in its entirety and replace with the following:

         "MSL will notify IBM within ten (10) Days of receipt of a monthly
         forecast if MSL is unable to meet the quantities and Delivery Dates.
         MSL will notify IBM within five (5) Days of receipt of a weekly
         forecast if MSL is unable to meet the quantities and Delivery Dates. If
         MSL cannot meet the quantities and Delivery Dates in a weekly forecast,
         MSL shall have an additional five (5) Days to meet the quantities and
         Delivery Dates in the weekly forecast. MSL will notify IBM, again,
         within the additional five (5) Days if MSL remains unable to meet the
         quantities and Delivery Dates requested in the weekly forecast. If MSL
         fails to notify IBM within ten (10) Days following receipt of a monthly
         forecast, or if MSL fails to notify IBM within the five (5) Days
         following receipt of a weekly forecast, or if MSL fails to notify IBM
         again within the additional five (5) Days following receipt of a weekly
         forecast, MSL will be deemed to have accepted the quantities and
         Delivery Dates and will be bound by them; provided, however, that MSL's
         actual or deemed acceptance of any forecast shall be subject to the
         availability of IBM Parts and IBM Designated Parts as needed, and MSL
         shall not be subject to any penalties (and IBM shall not be able to
         reject any proposed rescheduling of Delivery Dates) under this
         Agreement for failure to meet Delivery Dates due to the unavailability
         of such Parts at the times necessary to meet Delivery Dates, provided
         further however that such unavailability of IBM Parts or IBM Designated
         Parts is not due to MSL's failure to properly order such Parts or
         otherwise properly manage its relationship with the provider of such
         Parts."

                                                                    Page 4 of 14

<PAGE>

12. Delete the first paragraph of Section 11.2 c) of Attachment 1, Statement of
Work to the Agreement in its entirety and replace with the following:

         "If MSL notifies IBM that it cannot meet the quantities and Delivery
         Dates in an IBM forecast, MSL's notification will include the
         quantities MSL can deliver within the forecast's Delivery Dates and
         proposed schedule of Delivery Dates for delivering the quantities MSL
         cannot deliver within the forecast. IBM shall notify MSL in writing,
         within ten (10) Days of receipt of MSL's notification relative to a
         monthly forecast or within (5) Days of receipt of MSL's additional five
         (5) Day notification relative to a weekly forecast, of its decision
         either, in its sole discretion to:"

13. Add the following to Section 11.2 of Attachment 1, Statement of Work to the
Agreement:

         "e)      MSL, has on Ian. 15, 2002, forwarded to IBM a proposed
                  solution for the weekly full MRP Plan ("Proposal"). The
                  parties agree to work together in good faith to finalize the
                  processes, timing and costs of the Proposal with the common
                  goal to implement the Proposal as soon as practicable. Subject
                  to such timely implementation, MSL will have WW processes in
                  place by Dec. 31, 2002 such that MSL will respond to IBM's
                  monthly rolling twelve (12) month forecast by machine type,
                  model and geography within five (5) Days with notification to
                  IBM of MSL's ability to meet requested quantities and
                  Delivery Dates."

14. Delete the table in 1 a) of Appendix 1: Mark Up, as amended by Amendment
012, to Attachment 1, Statement of Work to the Agreement in its entirety and
replace it with the following:

         (a) Value Add and Profit Rates are per the following table:

<TABLE>
<CAPTION>
                                                               VALUE ADD     PROFIT
                                                                RATES        RATES
                                                                -----        ------
<S>                                                            <C>          <C>
RS Fulfillment (US & V ALENCIA Work Centers),

         IBM payment to MSL within fifth teen (15) Days
         after receipt of an acceptable invoice.                [**]%         [**]%

         IBM payment to MSL within thirty (30) Days
         after receipt of an acceptable invoice.                [**]%         [**]%
         IBM payment to MSL within forty five (45) Days
         after receipt of an acceptable invoice.                [**]%         [**]%

         except Drop Shipments (refer to notes 1. and 2.)       [**]%         [**]%
         except GEM POS                                         [**]%         [**]%
         except 4678 -Electronic Shelve Label                      (refer to note 3.)

</TABLE>

                                                                    Page 5 of 14

<PAGE>

<TABLE>
<CAPTION>
                                                               VALUE ADD     PROFIT
                                                                RATES        RATES
                                                                -----        ------
<S>                                                            <C>          <C>

Security Mfg & Fulfillment
         A-Sourced Products                                     [**]%         [**]%
         MSL Manufactured Products                              [**]%         [**]%

Spares to Mechanicsburg and Amsterdam

         US Work Center                                         [**]%         [**]%

         Valencia Work Center                                   [**]%         [**]%

</TABLE>

         note 1. IBM will limit RS machine type Drop Shipments to 5% of total RS
annual machine type fulfillment volumes.

         note 2. except that the sum of the Value Add and Profit rates to be
applied to 4001- T01 shall be [**]%.

         note 3. 4678 Electronic Shelve Label pricing is as agreed by IBM and
MSL in Exhibit 1 and Exhibit 2 to Attachment A, Product Attachment for RS, to
Attachment 1, Statement of Work, to the Agreement."

15. Delete Section 1 b) i) of Appendix 1: Mark Up, as amended by Amendment 012,
to Attachment 1, Statement of Work to the Agreement in its entirety and replace
it with the following:

         "The Scrap Rate is equal TO [**]% except no scrap provision will be
         applied to RS Drop Shipments or to OEM Products other than OEM POS as
         identified in Attachment A, Product Attachment for RS, to Attachment 1,
         Statement of Work, to the Agreement."

16. Delete Section 1 b) ii) of Appendix 1: Mark Up to Attachment 1, Statement of
Work to the Agreement in its entirety and replace it with the following:

<TABLE>
<CAPTION>
                                            "Initial NIC rates         NIC RATES
                                            Mar. 01, 2002 through      April 01, 2002 through
                                            Mar. 31, 2002              May 31, 2005, with updates
<S>                                        <C>           <C>          <C>        <C>
                                            US            Val.          US         Val
         4610- 20 ft. ocean                 [**]%         [**]%        [**]%       [**]%
         4610- 40 ft. ocean                 [**]%         [**]%        [**]%       [**]%
         4694 large -20 ft. ocean           [**]%         [**]%        [**]%       [**]%
         4694 large -40 ft. ocean           [**]%         [**]%        [**]%       [**]%
         4694 small- 20 ft. ocean           [**]%         [**]%        [**]%       [**]%
         4694 small- 40 ft. ocean           [**]%         [**]%        [**]%       [**]%
         4800- 20 ft. ocean                 [**]%         [**]%        [**]%       [**]%
         4800- 40 ft. ocean                 [**]%         [**]%        [**]%       [**]%
         4820- 20 ft. ocean                 [**]%         [**]%        [**]%       [**]%
         4820- 40 ft. ocean                 [**]%         [**]%        [**]%       [**]%
         4840- 20 ft. ocean                 [**]%         [**]%        [**]%       [**]%

</TABLE>

                                                                    Page 6 of 14

<PAGE>

<TABLE>
<S>                                        <C>           <C>          <C>        <C>
         4840- 40 ft. ocean                 [**]%         [**]%        [**]%       [**]%
         US peripherals -surface*           [**]%         [**]%        [**]%       [**]%
         US peripherals -ocean*             [**]%         [**]%        [**]%       [**]%
         AP peripherals -ocean*             [**]%         [**]%        [**]%       [**]%
         EU peripherals-surface*            [**]%         [**]%        [**]%       [**]%
         Mex/Can peripherals -surface*      [**]%         [**]%        [**]%       [**]%
         Mex/Can peripherals -ocean*        [**]%         [**]%        [**]%       [**]%
         LA peripherals -ocean*             [**]%         [**]%        [**]%       [**]%
</TABLE>

         *The above Initial NIC rates/NIC RATES for peripherals are temporary.
         IBM and MSL will develop mutually agreed to replacement Initial NIC
         rates/NIC RATES for peripherals on or before Feb. 15, 2002.

         Products not itemized in the above Initial NIC rates/NIC RATES will
         utilize the respective Initial NIC rates/NIC RATES for peripherals for
         the appropriate geography.

Following execution signatures by IBM and MSL of this Amendment 013, the above
Initial NIC rates will be effective beginning the first calendar day of March
2002 through March 31, 2002. The above NIC RATES will be effective beginning the
first calendar day of Apri1 2002. NIC RATES shall be updated on the first
calendar day of each April and on the first calendar day of each October,
beginning October 2002. Such NIC RATES updates will be based upon latest quotes,
from mutually agreed upon suppliers, received by MSL for freight, duty, customs,
clearance, appropriate insurance, and any other costs MSL incurs to bring
Product into the US and/or Valencia Work Centers. Updates to NIC RATES must be
agreed upon in writing by both Parties.

For the period beginning the first calendar day of March 2002 through March 31,
2002, any differences between;

         (a) actual invoices paid by MSL for freight, duty, customs, clearance,
         appropriate insurance, and any other costs MSL incurs to bring Product,
         which MSL purchased consistent with IBM forecasts and agreed upon lead
         times, into the US and/or Valencia WorkCenters, and

         (b) the respective NIC compensation which MSL would receive through
         application of NIC RATES in effect as of April 01, 2002,

will be determined and agreed prior to May 31,2002. Differences will be invoiced
to MSL or to IBM as the case may be.

For the period beginning the first calendar day of April 2002 through September
30, 2002, any differences between;

         (a) actual invoices paid by MSL for freight, duty, customs, clearance,
         appropriate insurance, and any other costs MSL incurs to bring Product,
         which MSL purchased consistent with IBM forecasts and agreed upon lead
         times, into the US and/or Valencia Work Centers, and

                                                                    Page 7 of 14

<PAGE>

         (b) the respective NIC compensation which MSL would receive through
         application of the updated NIC RATES in effect as of October 01, 2002,

will be determined and agreed prior to November 30, 2002. Differences will be
invoiced to MSL or to IBM as the case may be."

THE REMAINDER OF THIS PAGE 8. IS INTENTIONALLY LEFT BLANK

                                                                    Page 8 of 14

<PAGE>

17. Delete Section 3. of Appendix 1: Mark Up to Attachment 1, Statement of Work
to the Agreement in its entirety and replace it with the following:

         "RS Integration prices will be per the formula of Section 7.2 b) with
         the following rates:

         US Work Center

         Complex (RS) Integration up to 120K direct hours per year
         @ $[**]/direct hour

         Complex (RS) Integration greater than 120K direct hours per year
         @ $[**]/ direct hour

         Simple (PC) Integration up to 50K direct hours per year
         @ $[**]/direct hour

         Simple (PC) Integration greater than 50K direct hours per year
         @ $[**]/direct hour

         Valencia Work Center

         Complex (RS) Integration @ [**] pesetas*/direct hour
         Simple (PC) Integration @ [**] pesetas/direct hour

         * Without MSL account coordinator.

18. Delete Attachment A, Product Attachment -Retail Store Solutions (RS), to
Attachment 1, Statement of Work, to the Agreement in its entirety and replace it
with the attached Product Attachment of the same name. Exhibits 1 and 2 to
Attachment A, Product Attachment for RS, to Attachment 1, Statement of Work, to
the Agreement are unchanged by this Amendment 013.

19. Delete Attachment C, Product Attachment -Finance Products, to Attachment 1,
Statement of Work to the Agreement in its entirety.

20. Delete Attachment E, Product Attachment -OEM B, Network Computer Division,
PSG, to Attachment 1, Statement of Work to the Agreement in its entirety.

21. Delete Attachment G, Product Attachment -Security Products to Attachment 1,
Statement of Work to the Agreement in its entirety and replace it with the
attached Product Attachment of the same name.

22. Delete Attachment J, Product Attachment -OEM E, Network Computer Division,
PSG, to Attachment 1, Statement of Work to the Agreement in its entirety.

THE REMAINDER OF THIS PAGE 9. IS INTENTIONALLY BLANK

                                                                    Page 9 of 14

<PAGE>

23. Delete Section 11.0 of Attachment L -PRODUCT ATTACHMENT for Product Support
Services ("PSS"), to Attachment 1, Statement of Work to the Agreement in its
entirety and replace it with the following:

"11.0 COORDINATORS

All communications between the parties will be carried out through the following
designated coordinators:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
                     Relationship Managers for MSL Valencia
-----------------------------------------------------------------------------------------------------------------------------
FOR SUPPLIER                                                         FOR BUYER
----------------------------- -------------------------------------- ------------------------ -------------------------------
<S>                          <C>                                    <C>                      <C>
Name                          J. Donald Oldham                       Name                     Jesus Martinez Ons
----------------------------- -------------------------------------- ------------------------ -------------------------------
Title                         VP Worldwide Sales and Program         Title                    Mgr of RS Mfg&FF Operations
                              Management                                                      Local Mgr C. Valenciana /
                                                                                              Murcia
----------------------------- -------------------------------------- ------------------------ -------------------------------
Address Country               300 Baker Avenue                       Address Country          Avenida de Aragon, 30
                              Concord, Massachusetts USA                                      46021 Valencia ( Spain )
                              01742-2121
----------------------------- -------------------------------------- ------------------------ -------------------------------
Phone                         +1-978-371-5426                        Phone                    +34-96-3881861
----------------------------- -------------------------------------- ------------------------ -------------------------------
Fax                           +1-978-287-5635                        Fax                      +34-96-3610640
----------------------------- -------------------------------------- ------------------------ -------------------------------
E-mail                        don.oldham@msl.com                     E-mail                   imartinez @ es.ibm.com
----------------------------- -------------------------------------- ------------------------ -------------------------------
</TABLE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
                     Business Coordinators for MSL Valencia
-----------------------------------------------------------------------------------------------------------------------------
<S>                          <C>                                    <C>                      <C>
Name                          Francisco Vargas                       Name                     Frans Peters
----------------------------- -------------------------------------- ------------------------ -------------------------------
Title                         Program Manager                        Title                    Buyer
----------------------------- -------------------------------------- ------------------------ -------------------------------
Address Country               Carretera, Valencia                    Address Country          Johan Huizingalaan 761, The
                              Ademuz, La Pobla de Vallbona                                    Netherlands
                              (VALENCIA), Spain
----------------------------- -------------------------------------- ------------------------ -------------------------------
Phone                         +34- 96- 2754328                       Phone                    +31-20-5136731
----------------------------- -------------------------------------- ------------------------ -------------------------------
Fax                           +34- 96- 2754328                       Spain                    +31-20-5137405
----------------------------- -------------------------------------- ------------------------ -------------------------------
E-mail                        Fco_vargas@msl.e-mail.com              E-mail                   Frans_Peters@nl.ibm.com
----------------------------- -------------------------------------- ------------------------ -------------------------------
</TABLE>

THE REMAINDER OF THIS PAGE 10. IS INTENTIONALLY BLANK

                                                                   Page 10 of 14

<PAGE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
                     Relationship Managers for MSL Charlotte
-----------------------------------------------------------------------------------------------------------------------------
FOR SUPPLIER                                                         FOR BUYER
----------------------------- -------------------------------------- ------------------------ -------------------------------
<S>                          <C>                                    <C>                      <C>
Name                          J. Donald Oldham                       Name                     Jesus Martinez Ons
----------------------------- -------------------------------------- ------------------------ -------------------------------
Title                         VP Worldwide Sales and Program         Title                    Mgr of RS Mfg&FF Operations
                              Management                                                      Local Mgr C. Valenciana /
                                                                                              Murcia
----------------------------- -------------------------------------- ------------------------ -------------------------------
Address Country               300 Baker Avenue                       Address Country          Avenida de Aragon, 30
                              Concord, Massachusetts USA                                      46021 Valencia ( Spain )
                              01742-2121
----------------------------- -------------------------------------- ------------------------ -------------------------------
Phone                         +1-978-371-5426                        Phone                    +34-96-3881861
----------------------------- -------------------------------------- ------------------------ -------------------------------
Fax                           +1-978-287-5635                        Fax                      +34-96-3610640
----------------------------- -------------------------------------- ------------------------ -------------------------------
E-mail                        don.oldham@msl.com                     E-mail                   imartinez @ es.ibm.com
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
                     Business Coordinators for MSL Charlotte
-----------------------------------------------------------------------------------------------------------------------------
<S>                          <C>                                    <C>                      <C>
Name                          Randy Z. Rice                          Name                     Mark Cappellett
----------------------------- -------------------------------------- ------------------------ -------------------------------
Title                         Program Manager                        Title                    Procurement Advisor
----------------------------- -------------------------------------- ------------------------ -------------------------------
Address Country               7345 IBM Drive, Charlotte NC  28262    Address Country          Mechanicsburg, USA
----------------------------- -------------------------------------- ------------------------ -------------------------------
Phone                         +1-704-945-4848                        Phone                    +1-717-795-4044
----------------------------- -------------------------------------- ------------------------ -------------------------------
Fax                           +1-704-945-4099                        Spain                    +1-717-795-4651
----------------------------- -------------------------------------- ------------------------ -------------------------------
E-mail                        Randy.Rice@msl.com                     E-mail                   cappelet@us.ibm.com
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
                    EMERGENCY ORDER INFORMA TION MSL VALENCIA
-----------------------------------------------------------------------------------------------------------------------------
<S>                          <C>                                             <C>
Supplier Contact              Manuel Macher                                   Manuel_Nacher@msl.e-mail.com
----------------------------- ----------------------------------------------- -----------------------------------------------
Phone                         +34-609 062 301
----------------------------- ----------------------------------------------- -----------------------------------------------
Fax                           +34-96 275 4334
----------------------------- ----------------------------------------------- -----------------------------------------------
E-mail                        Emerval@msl.e-mail.com
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
                   EMERGENCY ORDER INFORMA TION MSL CHARLOTTE
-----------------------------------------------------------------------------------------------------------------------------
<S>                          <C>                                             <C>
Supplier Contact              Ian Berman                                      ian.berman@msl.com.com
----------------------------- ----------------------------------------------- -----------------------------------------------
Phone                         +1-704-945-4816
----------------------------- ----------------------------------------------- -----------------------------------------------
Fax                           +1-704-945-4028
----------------------------- ----------------------------------------------- -----------------------------------------------
E-mail                        ibmclthotline@msl.com
----------------------------- ----------------------------------------------- -----------------------------------------------
</TABLE>

THE REMAINDER OF THIS PAGE 11. IS INTENTIONALLY BLANK

                                                                   Page 11 of 14

<PAGE>

24. Delete the list of appendices, attachments, and supplements and associated
attachments as listed on page 1 of Attachment 1, Statement of Work to the
Agreement, and as amended by Amendment 0 11, in its entirety and replace it with
the following list:

a)       Appendix 1 Markup
b)       Appendix 2 Requirements Accuracy
c)       Appendix 3 Performance Specifications
d)       Appendix 4 Inventory Supply Flexibility
e)       Attachment A -Product Attachment for RS
f)       Exhibit 1 to Attachment A
g)       Exhibit 2 to Attachment A
h)       Attachment G -Product Attachment for Security Products
i)       Attachment L -Product Attachment for Product Support Services ("PSS")
j)       Supplement 1 -Transition Services and associated Attachments as listed;
k)       Exhibit 1 to Supplement 1 -Product Attachment for Wedge Products
l)       Exhibit 2 to Supplement 1 -Wedge Inventory List
m)       Agreement Exchange of Confidential Information Number 4998560076
n)       IBM Purchase Orders
o)       IBM Customer Orders
p)       Equipment and Program Loan Agreement

25. Delete Section 1 of Attachment 4 -Expense Participation to the Outsourcing
Base Agreement in its entirety and replace with the following:

         "I. Valencia Product Engineering Support

         IBM shall pay MSL [**] Euros on the first day of each calendar month
         during the term of the Agreement for MSL' s completion of the product
         engineering responsibilities defined in Product Attachment A of the
         Statement of Work. For any period of less than one month, the above
         amount shall be apportioned based upon the number of days in that
         month."

26. Delete Section 2 of Attachment 4 -Expense Participation of the Outsourcing
Base Agreement in its entirety.

27. Delete Section 5 of Attachment 4 -Expense Participation to the Outsourcing
Base Agreement, as amended by Amendment 0 11, in its entirety and replace with
the following:

         "5. Connectivity Operational Costs for the Valencia Work Center

         MSL agrees to acquire and maintain connectivity to IBM systems through
         IESC secure connections (i.e., the IBM Firewall) beginning July 1, 1999
         and for the period in which IBM requires those systems links, that
         include SNA connectivity, IFX dataflow, Service Manager access and
         TCP/IP dial services. IBM agrees to reimburse MSL for actual A TT
         charges for those links up to the following limits:

                                                                   Page 12 of 14

<PAGE>

Operation cost:  ATT fixed charges for connectivity up to a limit of [**]
                 Euros ([**]) per year.

                 ATT variable IFX consumption charges up to a limit of [**]
                 Euros per year.

         MSL will not add any markup to ATT charges.

         IBM will give MSL 90 calendar day advance notice of when that
         connectivity is no longer required, at which time IBM will no longer
         pay MSL for Operational costs. In the event that MSL has to pay penalty
         charges because IBM cancels the connectivity requirement before the
         IBM/MSL Outsourcing Agreement terminates, IBM and MSL will mutually
         agree on a compensation, that will not exceed the penalty charges that
         MSL pays to the A TT nor will be more than [**] Euros. MSL and IBM
         agree to work together towards reducing the operational cost of their
         system links and migrating to more industry standard, e-commerce based
         connectivity."

28. Add the following to Attachment 4 -Expense Participation, to the Outsourcing
Base Agreement.

         "6. Manufacturing Utilization Expense Participation

         a) By the fifteenth (15) calendar day of the second month of each
         quarter, IBM will provide MSL, an original forecast for each week of
         the third month of that quarter by machine type, model and by
         geography. Such forecasts may be revised by IBM upon written
         notification to MSL.

         b) Lower limit liability: IBM will pay MSL [**] percent ([**]%) of the
         actual expense that MSL paid for unused direct subcontractor labor
         resulting from a shortfall of work in the third month of a quarter.
         which had been forecasted by IBM in the original forecast as described
         in item a) of this Section, unless that forecast had been revised. If
         the original forecast as described in item a) of this Section is
         revised by IBM. IBM will pay MSL [**] percent ([**]%) of the actual
         expense that MSL paid for unused direct subcontractor labor resulting
         from a shortfall of work in the third month of a quarter. which had
         been forecasted by IBM in the original forecast and which is within
         fourteen (14) calendar days from the date of the revised forecast. For
         the purpose of this item b). the revised forecast replaces the
         original forecast and the process repeats; except that IBM will not pay
         multiple payments for any period within the third month of a quarter.

         c) Upper limit liability: IBM will pay MSL [**] percent ([**]%) of the
         MSL standard labor rate for actual MSL direct employee labor resulting
         from work in the third quarter which is in excess of [**] percent
         ([**]%) of that which had been forecasted by IBM in the original
         forecast as described in item a) of this Section, unless that forecast
         has been revised. If the original forecast as described in item a) of
         this Section is revised by IBM, IBM will pay MSL [**] percent ([**]%)
         of the MSL standard labor rate for actual MSL direct employee labor
         resulting from work in the third quarter which is in excess of [**]
         percent ([**]%) of that which had been forecasted by IBM in the
         original forecast and

                                                                   Page 13 of 14

<PAGE>

         which is within fourteen (14),calendar days from the date of the
         revised forecast. Also, IBM will pay MSL [**] percent ([**]%) of the
         direct subcontractor labor rate for actual direct subcontractor labor
         resulting from work in the third quarter which is in excess [**]
         percent ([**]%) of that which had been forecasted by IBM in the
         original forecast as described in item a) of this Section, unless that
         forecast has been revised. If the original forecast as described in
         item a) of this Section is revised by IBM, IBM will pay MSL [**]
         percent ([**]%) of the direct subcontractor labor rate for actual
         direct subcontractor labor resulting from work in the third quarter
         which is in excess [**] percent ([**]%) of that which had been
         forecasted by IBM in the original forecast and which is within fourteen
         (14) calendar days from the date of the revised forecast. For the
         purpose of this item c), the revised forecast replaces the original
         forecast and the process repeats; except that IBM will not pay multiple
         payments for any period within the third month of a quarter.

         d) Items c) and b) of this Section will be implemented for the MSL US
         Work Center and MSL Valencia Work Center independently."

29. Delete Attachment 5: Equipment and Program Loan List, to the Outsourcing
Base Agreement, as amended by Amendment 012, in its entirety and replace it with
the Attachment 5: Equipment and Program Loan List, to the Outsourcing Base
Agreement dated July 25,2001.

All other terms and conditions of the Agreement, its attachments, and amendments
shall remain in full force and effect.

The Parties hereto have caused this Amendment 013 to be executed by their
respective authorized representatives.

ACCEPTED AND AGREED TO:                     ACCEPTED AND AGREED TO:

International Business Machines Corp.       Manufacturer's Services Western U.S.
                                            Operations, Inc.

By: /S/ IAN J. CRAWFORD                     By: /S/ R.L. BUCKINGHAM
    -------------------------------             --------------------------------

    IAN J. CRAWFORD                             R.L. BUCKINGHAM
    -------------------------------             --------------------------------
    Print Name                                  Print Name

    VP, PRODUCTION PROC.                        VP & TREASURER
    -------------------------------             --------------------------------
    Title                                       Title

    2/6/02                                      2/6/02
    -------------------------------             --------------------------------
    Date                                        Date

                                                                   Page 14 of 14

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00036-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00036-of-00352.parquet"}]]