Document:

Exhibit
10.1

 

 

INVESTORS FINANCIAL SERVICES CORP.

 

1997 EMPLOYEE STOCK PURCHASE PLAN

 

 

1.        Purpose.

 

This 1997 Employee
Stock Purchase Plan (the “Plan”) is intended to encourage stock ownership by
all eligible employees of Investors Financial Services Corp., a Delaware
corporation (the “Company”), and its participating subsidiaries (as defined in
Article 17) so that they may share in the growth of the Company by
acquiring or increasing their proprietary interest in the Company.  The Plan is designed to encourage eligible
employees to remain in the employ of the Company and its participating
subsidiaries.  It is intended that
options issued pursuant to this Plan will constitute options issued pursuant to
an “employee stock purchase plan” within the meaning of Section 423(b) of
the Internal Revenue Code of 1986, as amended (the “Code”).

 

2.        Administration of the
Plan.

 

The Plan may be
administered by a committee appointed by the Board of Directors of the Company
(the “Committee”).  The Committee shall
consist of not less than two members of the Company’s Board of Directors.  The Board of Directors may from time to time
remove members from, or add members to, the Committee.  Vacancies on the Committee, however caused,
shall be filled by the Board of Directors. 
The Committee may select one of its members as Chairman, and shall hold
meetings at such times and places as it may determine.  Acts by a majority of the Committee, or acts
reduced to or approved in writing by a majority of the members of the
Committee, shall be the valid acts of the Committee.

 

The interpretation
and construction by the Committee of any provisions of the Plan or of any
option granted under it shall be final, unless otherwise determined by the
Board of Directors.  The Committee may
from time to time adopt such rules and regulations for carrying out the Plan as
it may deem best, provided that any such rules and regulations shall be applied
on a uniform basis to all employees under the Plan.  No member of the Board of Directors or the Committee shall be
liable for any action or determination made in good faith with respect to the
Plan or any option granted under it.

 

In the event the
Board of Directors fails to appoint or refrains from appointing a Committee,
the Board of Directors shall have all power and authority to administer the
Plan.  In such event, the word
“Committee” wherever used herein shall be deemed to mean the Board of
Directors.

 

3.        Eligible Employees.

 

All employees who
have completed six months of employment with the Company or any of its
participating subsidiaries and whose customary employment is more than twenty
(20) hours per week and for more than five (5) months in any calendar year
shall be eligible to receive options under this Plan to purchase the Company’s
Common Stock, and all eligible employees shall have the same rights and
privileges hereunder.  Persons who are
eligible employees on the first business day of any Payment Period (as defined
in Article 5) shall receive their options as of such day.  Persons who become eligible employees after
any date on which options are granted under this Plan shall be granted options
on the first day of the next succeeding Payment Period on which options are
granted to eligible employees.  In no event
may an employee be granted an option if such employee, immediately after the
option is granted, owns stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company or of its
parent corporation or subsidiary corporations, as the terms “parent
corporation” and “subsidiary corporation” are defined in Section 424(e)
and (f) of the Code.  For purposes of
determining stock ownership under this paragraph, the rules of
Section 424(d) of the Code shall apply, and stock which the employee may
purchase under outstanding options shall be treated as stock owned by the
employee.

 

 

4.        Stock Subject to the
Plan.

 

The stock subject
to the options under the Plan shall be shares of the Company’s authorized but
unissued Common Stock, par value $.01 per share, or shares of such Common Stock
reacquired by the Company, including shares purchased in the open market.  The aggregate number of shares which may be
issued pursuant to the Plan is 1,620,000, subject to adjustment as provided in
Article 12.  In the event any
option granted under the Plan shall expire or terminate for any reason without
having been exercised in full or shall cease for any reason to be exercisable
in whole or in part, the unpurchased shares subject thereto shall again be
available under the Plan.

 

5.        Payment Period and
Stock Options.

 

The six-month
periods January 1 through June 30, and July 1 through
December 31, are Payment Periods during which payroll deductions will be
accumulated under the Plan.  The first
Payment Period under the Plan will commence on July 1, 1997 and expire on
December 31, 1997.

 

Twice each year,
on the first business day of each Payment Period, the Company will grant to
each eligible employee who is then a participant in the Plan an option to
purchase on the last day of such Payment Period, at the Option Price
hereinafter provided for, a maximum of 8,000 shares, on condition that such
employee remains eligible to participate in the Plan throughout such Payment
Period.  The participant shall be
entitled to exercise such option so granted only to the extent of the
participant’s accumulated payroll deductions on the last day of such Payment
Period.  In the event that the
participant’s accumulated payroll deductions on the last day of the Payment
Period would enable the participant to purchase more than 8,000 shares except
for the 8,000-share limitation, the excess of the amount of the accumulated
payroll deductions over the aggregate purchase price of the 8,000 shares shall
be promptly refunded to the participant by the Company, without interest.  The Option Price for each Payment Period
shall be the lesser of (i) 90% of the average market price of the
Company’s Common Stock on the first business day of the Payment Period or
(ii) 90% of the average market price of the Company’s Common Stock on the
last business day of the Payment Period, in either event rounded up to avoid
fractions of a dollar other than 1/4, 1/2 and 3/4.  The foregoing limitation on the number of shares which may be
granted in any Payment Period and the Option Price per share shall be subject
to adjustment as provided in Article 12.

 

For purposes of
this Plan, the term “average market price” on any date means (i) the
average (on that date) of the high and low prices of the Company’s Common Stock
on the principal national securities exchange on which the Common Stock is
traded, if the Common Stock is then traded on a national securities exchange;
or (ii) the last reported sale price (on that date) of the Common Stock on
the Nasdaq National Market List, if the Common Stock is not then traded on a
national securities exchange; or (iii) the average of the closing bid and
asked prices last quoted (on that date) by an established quotation service for
over-the-counter securities, if the Common Stock is not reported on the Nasdaq
National Market List.  If the Company’s
Common Stock is not publicly traded at the time an option is granted under this
Plan, “average market price” shall mean the fair market value of the Common
Stock as determined by the Committee after taking into consideration all
factors which it deems appropriate, including, without limitation, recent sale
and offer prices of the Common Stock in private transactions negotiated at
arm’s length.

 

For purposes of
this Plan, the term “business day” means a day on which there is trading on the
Nasdaq National Market System or on the aforementioned national securities
exchange, whichever is applicable pursuant to the preceding paragraph.

 

No employee shall
be granted an option which permits the employee’s right to purchase Common
Stock under this Plan, and under all other Section 423(b) employee stock
purchase plans of the Company or any parent or subsidiary corporations, to
accrue at a rate which exceeds $25,000 of fair market value of such stock (determined
at the time such option is granted) for each calendar year in which such option
is outstanding at any time.  The purpose
of the limitation in the preceding sentence is to comply with
Section 423(b)(8) of the Code.  If
an eligible employee’s accumulated payroll deductions on the last day of the
Payment Period would otherwise enable such employee to purchase Common Stock in
excess of the Section 423(b)(8) limitation described in this paragraph,
the excess of the amount of the accumulated

 

 

payroll deductions
over the aggregate purchase price of the shares actually purchased shall be
promptly refunded to the employee by the Company, without interest.

 

6.        Exercise of Option.

 

Each eligible
employee who continues to be a participant in the Plan on the last day of a
Payment Period shall be deemed to have exercised his/her option on such date
and shall be deemed to have purchased from the Company such number of full
shares of Common Stock reserved for the purpose of the Plan as his/her
accumulated payroll deductions on such date will pay for at the Option Price,
subject to the 8,000-share limit of the option and the Section 423(b)(8)
limitation described in Article 5. 
If a person is not an eligible employee on the last day of a Payment
Period, he/she shall not be entitled to exercise his/her option.  Only full shares of Common Stock may be
purchased under the Plan.  Unused
payroll deductions remaining in an employee’s account at the end of a Payment
Period by reason of the inability to purchase a fractional share will be
carried forward to the succeeding Payment Period.

 

7.        Authorization for
Entering the Plan.

 

An employee may
enter the Plan by filling out, signing and delivering to the Company an
authorization:

 

A.            Stating the percentage
to be deducted regularly from the employee’s pay;

 

B.             Authorizing the
purchase of stock for the employee in each Payment Period in accordance with
the terms of the Plan; and

 

C.             Specifying the exact
name in which stock purchased for the employee is to be issued as provided
under Article 11 hereof.

 

Such authorization
must be received by the Company at least ten (10) days before the beginning
date of the next succeeding Payment Period.

 

Unless an employee
files a new authorization or withdraws from the Plan, the deductions and
purchases under the authorization the employee has on file under the Plan will
continue from one Payment Period to succeeding Payment Periods as long as the
Plan remains in effect.

 

The Company will
accumulate and hold for the employee’s account the amounts deducted from
his/her pay.  No interest will be paid
on these amounts.

 

8.        Maximum Amount of
Payroll Deductions.

 

An employee may
authorize payroll deductions in an amount (expressed as a percentage) not less
than one percent (1%) but not more than fifteen percent (15%) of the employee’s
base salary compensation actually paid to the employee in the Payment Period,
excluding without limitation any benefits, bonuses or commissions.

 

9.        Change in Payroll
Deductions.

 

Deductions may not
be increased or decreased during a Payment Period.  However, an employee may withdraw in full from the Plan.

 

10.      Withdrawal from the Plan.

 

An employee may
withdraw from the Plan in whole but not in part, at any time prior to the last
business day of each Payment Period by delivering a withdrawal notice to the
Company, in which event the Company will promptly refund the entire balance of
the employee’s deductions not previously used to purchase stock under the Plan.

 

 

To re-enter the
Plan, an employee who has previously withdrawn must file a new authorization at
least ten (10) days before the beginning date of the next Payment Period in
which he or she wishes to participate. 
The employee’s re-entry into the Plan becomes effective at the beginning
of such Payment Period, provided that he or she is an eligible employee on the
first business day of the Payment Period.

 

11.      Issuance of Stock.

 

Certificates for
stock issued to participants will be delivered as soon as practicable after
each Payment Period by the Company’s transfer agent.

 

Stock purchased
under the Plan will be issued only in the name of the employee, or if his/her
authorization so specifies, in the name of the employee and another person of
legal age as joint tenants with rights of survivorship.

 

12.      Adjustments.

 

Upon the happening
of any of the following described events, an optionee’s rights under options
granted under the Plan shall be adjusted as hereinafter provided:

 

A.            In the event shares of
Common Stock of the Company shall be subdivided or combined into a greater or
smaller number of shares or if, upon a reorganization, split-up, liquidation,
recapitalization or the like of the Company, the shares of the Company’s Common
Stock shall be exchanged for other securities of the Company, each optionee
shall be entitled, subject to the conditions herein stated, to purchase such
number of shares of Common Stock or amount of other securities of the Company
as were exchangeable for the number of shares of Common Stock of the Company
which such optionee would have been entitled to purchase except for such
action, and appropriate adjustments shall be made in the purchase price per
share to reflect such subdivision, combination or exchange; and

 

B.             In the event the
Company shall issue any of its shares as a stock dividend upon or with respect
to the shares of stock of the class which shall at the time be subject to
option hereunder, each optionee upon exercising such an option shall be
entitled to receive (for the purchase price paid upon such exercise) the shares
as to which he/she is exercising his/her option and, in addition thereto (at no
additional cost), such number of shares of the class or classes in which such
stock dividend or dividends were declared or paid, and such amount of cash in
lieu of fractional shares, as is equal to the number of shares thereof and the
amount of cash in lieu of fractional shares, respectively, which he/she would
have received if he/she had been the holder of the shares as to which he/she is
exercising his/her option at all times between the date of the granting of such
option and the date of its exercise.

 

Upon the happening
of any of the foregoing events, the class and aggregate number of shares set
forth in Article 4 hereof which are subject to options which have been or
may be granted under the Plan and the limitations set forth in the second
paragraph of Article 5 shall also be appropriately adjusted to reflect the
events specified in paragraphs A and B above.  Notwithstanding the foregoing, any adjustments made pursuant to
paragraphs A or B shall be made only to the extent that the Committee,
based on advice of counsel for the Company, determines whether such adjustments
would constitute a “modification” (as that terms is defined in Section 424
of the Code) or would constitute a change requiring stockholder approval
(pursuant to Section 423(b)(2) of the Code).  If the Committee determines that such adjustments would
constitute a modification or would require stockholder approval, it may refrain
from making such adjustments.

 

If the Company is
to be consolidated with or acquired by another entity in a merger, a sale of
all or substantially all of the Company’s assets or otherwise (an
“Acquisition”), the Committee or the board of directors of any entity assuming
the obligations of the Company hereunder (the “Successor Board”) shall, with
respect to options then outstanding under this Plan, either (i) make
appropriate provision for the

 

 

continuation of
such options by arranging for the substitution on an equitable basis for the
shares then subject to such options either (a) the consideration payable
with respect to the outstanding shares of the Company’s Common Stock in
connection with the Acquisition, (b) shares of stock of the successor
corporation, or a parent or subsidiary of such corporation, or (c) such
other securities as the Successor Board deems appropriate, the fair market
value of which shall not materially exceed the fair market value of the shares
of Common Stock subject to such options immediately preceding the Acquisition;
or (ii) terminate all outstanding options in exchange for a cash payment
equal to the excess of (a) the fair market value on the date of the
Acquisition, of the number of shares of Common Stock that the participant’s
accumulated payroll deductions as of the date of the Acquisition could
purchase, at an option price determined with reference only to the first
business day of the applicable Payment Period and subject to the 8,000-share,
Code Section 423(b)(8) and fractional-share limitations on the amount of
stock a participant would be entitled to purchase, over (b) the result of
multiplying such number of shares by such option price.

 

The Committee or
Successor Board of Directors shall determine the adjustments to be made under
this Article 12, and its determination shall be conclusive.

 

13.      No Transfer or Assignment
of Employee’s Rights.

 

An employee’s
rights under the Plan are the employee’s alone and may not be transferred or
assigned to, or availed of by, any other person other than by will or the laws of
descent and distribution.  Any option
granted under the Plan to an employee may be exercised, during the employee’s
lifetime, only by the employee.

 

14.      Termination of Employee’s
Rights,

 

An employee’s
rights under the Plan will terminate when he/she ceases to be an employee
because of retirement, voluntary or involuntary termination, resignation,
lay-off, discharge, death, change of status or for any other reason and the
Company shall promptly refund, without interest, the entire balance of his or
her payroll deduction account under the Plan. 
Notwithstanding the foregoing, eligible employment shall be treated as
continuing intact while a participant is on military leave, sick leave or other
bona fide leave of absence, for up to 90 days, or for so long as the
employee’s right to re-employment is guaranteed either by statute or by
contract, if longer than 90 days. 
A withdrawal notice will be considered as having been received from the
employee on the day his/her employment ceases, and all payroll deductions not
used to purchase stock will be refunded.

 

If an employee’s
payroll deductions are interrupted by any legal process, a withdrawal notice
will be considered as having been received from the employee on the day the
interruption occurs.

 

15.      Termination and
Amendments to Plan.

 

Unless terminated
sooner as provided below, the Plan shall terminate on January 1,
2007.  The Plan may be terminated at any
time by the Company’s Board of Directors but such termination shall not affect
options then outstanding under the Plan. 
It will terminate in any case when all or substantially all of the
unissued shares of stock reserved for the purposes of the Plan have been
purchased.  If at any time shares of
stock reserved for the purpose of the Plan remain available for purchase but
not in sufficient number to satisfy all then unfilled purchase requirements,
the available shares shall be apportioned among participants in proportion to
their options and the Plan shall terminate. 
Upon such termination or any other termination of the Plan, all payroll
deductions not used to purchase stock will be refunded, without interest.

 

The Committee or
the Board of Directors may from time to time adopt amendments to the Plan
provided that, without the approval of the stockholders of the Company, no
amendment may (i) increase the number of shares that may be issued under the
Plan; (ii) change the class of employees eligible to receive options under the
Plan, if such action would be treated as the adoption of a new plan for
purposes of Section 423(b) of the Code; or (iii) cause Rule or (iv)
cause Rule 16b-3 under the Securities Exchange Act of 1934 to become
inapplicable to the Plan.

 

 

16.      Limits on Sale of Stock
Purchased Under the Plan.

 

The Plan is
intended to provide shares of Common Stock for investment and not for
resale.  The Company does not, however,
intend to restrict or influence any employee in the conduct of his/her own
affairs.  An employee may, therefore,
sell stock purchased under the Plan at any time the employee chooses, subject
to compliance with any applicable federal or state securities laws and subject
to any restrictions imposed under Article 21 to ensure that tax
withholding obligations are satisfied.  THE EMPLOYEE
ASSUMES THE RISK OF ANY MARKET FLUCTUATIONS IN THE PRICE OF THE STOCK.

 

17.      Participating
Subsidiaries.

 

The term
“participating subsidiary” shall mean any subsidiary of the Company, as that
term is defined in Section 424(f) of the Code, which is designated from
time to time by the Board of Directors to participate in the Plan.  The Board of Directors shall have the power
to make such designation before or after the Plan is approved by the
stockholders.

 

18.      Optionees Not
Stockholders.

 

Neither the
granting of an option to an employee nor the deductions from his/her pay shall
constitute such employee a stockholder of the shares covered by an option until
such shares have been actually purchased by the employee.

 

19.      Application of Funds.

 

The proceeds
received by the Company from the sale of Common Stock pursuant to options
granted under the Plan will be used for general corporate purposes.

 

20.      Notice to Company of
Disqualifying Disposition.

 

By electing to
participate in the Plan, each employee agrees to notify the Company in writing
immediately after the employee transfers Common Stock acquired under the Plan,
if such transfer occurs within two years after the first business day of
the Payment Period in which such Common Stock was acquired.  Each employee further agrees to provide any
information about such a transfer as may be requested by the Company or any
subsidiary corporation in order to assist it in complying with the tax
laws.  Such dispositions generally are
treated as “disqualifying dispositions” under Sections 421 and 424 of the Code,
which have certain tax consequences to participants and to the Company and its
participating subsidiaries.

 

21.      Withholding of Additional
Income Taxes.

 

By electing to
participate in the Plan, each employee acknowledges that the Company and its
participating subsidiaries are required to withhold taxes with respect to the
amounts deducted from the employee’s compensation and accumulated for the
benefit of the employee under the Plan, and each employee agrees that the
Company and its participating subsidiaries may deduct additional amounts from
the employee’s compensation, when amounts are added to the employee’s account,
used to purchase Common Stock or refunded, in order to satisfy such withholding
obligations.  Each employee further
acknowledges that when Common Stock is purchased under the Plan the Company and
its participating subsidiaries may be required to withhold taxes with respect
to all or a portion of the difference between the fair market value of the
Common Stock purchased and its purchase price, and each employee agrees that
such taxes may be withheld from compensation otherwise payable to such
employee.  It is intended that tax
withholding will be accomplished in such a manner that the full amount of
payroll deductions elected by the participant under Article 7 will be used
to purchase Common Stock.  However, if
amounts sufficient to satisfy applicable tax withholding obligations have not
been withheld from compensation otherwise payable to any employee, then, notwithstanding
any other provision of the Plan, the Company may

 

 

withhold such
taxes from the employee’s accumulated payroll deductions and apply the net
amount to the purchase of Common Stock, unless the employee pays to the
Company, prior to the exercise date, an amount sufficient to satisfy such
withholding obligations.  Each employee
further acknowledges that the Company and its participating subsidiaries may be
required to withhold taxes in connection with the disposition of stock acquired
under the Plan and agrees that the Company or any participating subsidiary may
take whatever action it considers appropriate to satisfy such withholding
requirements, including deducting from compensation otherwise payable to such
employee an amount sufficient to satisfy such withholding requirements or conditioning
any disposition of Common Stock by the employee upon the payment to the Company
or such subsidiary of an amount sufficient to satisfy such withholding
requirements.

 

22.      Governmental Regulations.

 

The Company’s
obligation to sell and deliver shares of the Company’s Common Stock under this
Plan is subject to the approval of any governmental authority required in
connection with the authorization, issuance or sale of such shares, including
the Securities and Exchange Commission, the Board of Governors of the Federal
Reserve System, and the Internal Revenue Service.  Government regulations may impose reporting or other obligations
on the Company with respect to the Plan. 
For example, the Company may be required to identify shares of Common
Stock issued under the Plan on its stock ownership records and send tax
information statements to employees and former employees who transfer title to
such shares.

 

23.      Governing Law.

 

The validity and
construction of the Plan shall be governed by the laws of the Commonwealth of
Massachusetts, without giving effect to the principles of conflicts of law
thereof

 

24.      Approval of Board of
Directors and Stockholders of the Company.

 

 

The Plan was
adopted by the Stockholders on April 13, 2004Exhibit 10.2

 

INFORMATION TECHNOLOGY

 

SERVICE
AGREEMENT

 

 

BETWEEN

 

INVESTORS
BANK & TRUST COMPANY

 

 

AND

 

 

INTERNATIONAL
BUSINESS MACHINES CORPORATION

 

[THE
“PROVIDER”]

 

1
of 76

 

TABLE OF
CONTENTS

 

	
  1.

  	
  SCOPE OF
  SERVICES

  	
   

  
	
   

  	
  1.1

  	
  GENERAL DESCRIPTION OF SERVICES

  	
   

  
	
   

  	
   

  	
  1.1.1 Scope of
  Services.

  	
   

  
	
   

  	
  1.2

  	
  TRANSITION

  	
   

  
	
   

  	
   

  	
  1.2.1
  Transition Services

  	
   

  
	
   

  	
   

  	
  1.2.2 Critical Milestones

  	
   

  
	
   

  	
   

  	
  1.2.3 Progress Reports

  	
   

  
	
   

  	
  1.3

  	
  MANAGEMENT SERVICES

  	
   

  
	
   

  	
   

  	
  1.3.1
  Procurement

  	
   

  
	
   

  	
   

  	
  1.3.2 Disaster
  Recovery

  	
   

  
	
   

  	
   

  	
  1.3.3 Security
  Management

  	
   

  
	
   

  	
  1.4

  	
  TECHNOLOGY
  MANAGEMENT; UPGRADES AND ENHANCEMENTS

  	
   

  
	
   

  	
   

  	
  1.4.1 Technological
  Enhancements

  	
   

  
	
   

  	
   

  	
  1.4.2 Technology
  Planning

  	
   

  
	
   

  	
   

  	
  1.4.3 Technology
  Upgrades

  	
   

  
	
   

  	
   

  	
  1.4.4 Shared
  Use Assets

  	
   

  
	
   

  	
  1.5

  	
  VIRUSES
  AND DISABLING DEVICES

  	
   

  
	
   

  	
  1.6

  	
  END-USER
  SATISFACTION AND COMMUNICATION

  	
   

  
	
   

  	
  1.7

  	
  STANDARDS
  AND PROCEDURES MANUAL

  	
   

  
	
   

  	
   

  	
  1.7.1 Development
  of Manual

  	
   

  
	
   

  	
   

  	
  1.7.2  Content of Manual

  	
   

  
	
   

  	
  1.8

  	
  SERVICE
  COMPATIBILITY

  	
   

  
	
   

  	
  1.9

  	
  MASLS

  	
   

  
	
   

  	
   

  	
  1.9.1 Commitment to
  MASLs

  	
   

  
	
   

  	
   

  	
  1.9.2 MASL Measurement
  and Reporting

  	
   

  
	
   

  	
   

  	
  1.9.3 Root-Cause
  Analysis and Resolution

  	
   

  
	
   

  	
   

  	
  1.9.4 Improvements
  in Performance

  	
   

  
	
   

  	
   

  	
  1.9.5 Service
  Compliance Relief

  	
   

  
	
   

  	
  1.10

  	
  EXCLUSIVITY
  / NON-EXCLUSIVITY

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  ASSETS AND
  THIRD-PARTY CONTRACTS

  	
   

  
	
   

  	
  2.1

  	
  INVESTORS-OWNED
  ASSETS

  	
   

  
	
   

  	
  2.2

  	
  INVESTORS-LEASED
  ASSETS

  	
   

  
	
   

  	
  2.3

  	
  THIRD-PARTY
  APPROVALS

  	
   

  
	
   

  	
  2.4

  	
  RETURN
  OF INVESTORS ASSETS

  	
   

  
	
   

  	
  2.5

  	
  PROVISION
  OF PROVIDER ASSETS

  	
   

  
	
   

  	
   

  	
  2.5.2 Provision of
  Provider Assets to Investors

  	
   

  
	
   

  	
   

  	
  2.5.3
  Installation of Provider Assets

  	
   

  
	
   

  	
   

  	
  2.5.4 Maintenance of
  Provider Assets

  	
   

  
	
   

  	
  2.6

  	
  RETURN
  AND ACQUISITION OF PROVIDER ASSETS BY INVESTORS

  	
   

  
	
   

  	
  2.7

  	
  INVESTORS
  MAINTENANCE AGREEMENTS

  	
   

  
	
   

  	
  2.8

  	
  FURTHER
  ASSURANCES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  HUMAN RESOURCES

  	
   

  
	
   

  	
  3.1

  	
  EMPLOYEES

  	
   

  
	
   

  	
  3.1.2

  	
  INVESTORS IN-SCOPE EMPLOYEE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  PROVISION OF RESOURCES
  BY INVESTORS

  	
   

  
	
   

  	
  4.1

  	
  OFFICE
  SPACE AND FURNISHINGS

  	
   

  
	
   

  	
  4.2

  	
  DESIGNATED
  RESOURCES

  	
   

  
	
   

  	
  4.3

  	
  ACCESS
  TO PERSONNEL AND INFORMATION

  	
   

  

 

2  of 76

 

	
   

  	
  4.4

  	
  OTHER FACILITY-RELATED
  OBLIGATIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  RETAINED
  AUTHORITY

  	
   

  
	
   

  	
  5.1

  	
  STRATEGIC AND OPERATIONAL
  PLANNING

  	
   

  
	
   

  	
  5.2

  	
  SERVICE DESIGN AND DELIVERY

  	
   

  
	
   

  	
  5.3

  	
  MOVES,
  ADDS, AND CHANGES; APPLICATIONS DEVELOPMENT

  	
   

  
	
   

  	
  5.4

  	
  BUSINESS PROCESS REENGINEERING

  	
   

  
	
   

  	
  5.5

  	
  CONTRACT
  MANAGEMENT

  	
   

  
	
   

  	
  5.6

  	
  BUDGET
  MANAGEMENT

  	
   

  
	
   

  	
  5.7

  	
  VALIDATION AND VERIFICATION

  	
   

  
	
   

  	
  5.8

  	
  OTHER RETAINED AUTHORITY

  	
   

  
	
   

  	
  5.9

  	
  REVIEW AND ACCEPTANCE

  	
   

  
	
   

  	
   

  	
  5.9.1
  Acceptance Testing

  	
   

  
	
   

  	
   

  	
  5.9.2 Cure

  	
   

  
	
   

  	
   

  	
  5.9.3 Final
  Acceptance

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  FINANCIAL TERMS

  	
   

  
	
   

  	
  6.1

  	
  ANNUAL SERVICE FEES

  	
   

  
	
   

  	
   

  	
  6.1.1 Annual
  Service Fees

  	
   

  
	
   

  	
   

  	
  6.1.2 Currency / Charges

  	
   

  
	
   

  	
   

  	
  6.1.3 Annual
  Services Fees Invoice

  	
   

  
	
   

  	
   

  	
  6.1.4 Adds Charges

  	
   

  
	
   

  	
   

  	
  6.1.5 Other Charges

  	
   

  
	
   

  	
   

  	
  6.1.6 Deletes
  Credits

  	
   

  
	
   

  	
   

  	
  6.1.8 Monthly Usage
  Charge

  	
   

  
	
   

  	
  PRICING AUDIT

  	
   

  
	
   

  	
  6.3

  	
  REDUCTION OF PAYMENTS

  	
   

  
	
   

  	
  6.4

  	
  TAXES

  	
   

  
	
   

  	
  6.5

  	
  BENCHMARKING

  	
   

  
	
   

  	
  6.6

  	
  WORK ORDERS

  	
   

  
	
   

  	
  6.7

  	
  INITIATIVES

  	
   

  
	
   

  	
  6.8

  	
  INCENTIVES AND FEE REDUCTIONS

  	
   

  
	
   

  	
  6.10

  	
  DISPUTED AMOUNTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  RELATIONSHIP
  MANAGEMENT

  	
   

  
	
   

  	
  7.1

  	
  PERSONNEL

  	
   

  
	
   

  	
   

  	
  7.1.1 Provider’s
  Key Personnel

  	
   

  
	
   

  	
   

  	
  7.1.2 Provider
  Contract Manager

  	
   

  
	
   

  	
   

  	
  7.1.3 Additional
  Personnel Requirements

  	
   

  
	
   

  	
   

  	
  7.1.4 Minimum
  Proficiency Levels

  	
   

  
	
   

  	
   

  	
  7.1.5 Specialized
  Personnel

  	
   

  
	
   

  	
   

  	
  7.1.6 Training

  	
   

  
	
   

  	
   

  	
  7.1.7 Replacement
  of Personnel

  	
   

  
	
   

  	
   

  	
  7.1.8
  Conduct of Provider Personnel

  	
   

  
	
   

  	
  7.2 

  	
  MANAGEMENT COMMITTEE

  	
   

  
	
   

  	
  7.3

  	
  PARTIES’ RELATIONSHIP

  	
   

  
	
   

  	
  7.4

  	
  WORK ORDER PROCEDURES; CHANGE
  MANAGEMENT PROCEDURE

  	
   

  
	
   

  	
  7.5

  	
  EXTRAORDINARY EVENTS OR
  CIRCUMSTANCES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  INITIATIVES

  	
   

  
	
   

  	
  8.1

  	
  INITIATIVE REQUIREMENTS AND
  PROCESS

  	
   

  
	
   

  	
  8.2

  	
  COOPERATION AND COORDINATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  PROPRIETARY
  RIGHTS [CUT AND PASTE IP LANGUAGE ONCE WE FINALIZE]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  SECURITY AND
  PROTECTION OF INFORMATION

  	
   

  
	
   

  	
  10.1

  	
  SECURITY

  	
   

  
	
   

  	
   

  	
  10.1.1Security
  and Policies

  	
   

  
	
   

  	
   

  	
  10.1.2
  Information Access

  	
   

  

 

3  of 76

 

	
   

  	
   

  	
  10.1.3
  Background Checks

  	
   

  
	
   

  	
   

  	
  10.1.4 Other
  Policies

  	
   

  
	
   

  	
   

  	
  10.1.5 Minimum Security
  Standards and Audit

  	
   

  
	
   

  	
  10.2

  	
  PROTECTION OF CONFIDENTIAL
  INFORMATION

  	
   

  
	
   

  	
   

  	
  10.2.1
  Nondisclosure; Policies and Procedures

  	
   

  
	
   

  	
  10.3

  	
  LEGALLY REQUIRED DISCLOSURE

  	
   

  
	
   

  	
  10.4

  	
  NOTIFICATION

  	
   

  
	
   

  	
  10.5

  	
  INJUNCTIVE RELIEF

  	
   

  
	
   

  	
  10.6

  	
  RETURN OF CONFIDENTIAL INFORMATION

  	
   

  
	
   

  	
  10.7

  	
  RESIDUAL INFORMATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  TERM

  	
   

  
	
   

  	
  11.1

  	
  INITIAL TERM; RENEWALS

  	
   

  
	
   

  	
   

  	
  11.1.1 Initial
  Term and Appropriations

  	
   

  
	
   

  	
   

  	
  11.1.2
  Notification of Expiration

  	
   

  
	
   

  	
   

  	
  11.1.3 Renewal by
  Investors

  	
   

  
	
   

  	
   

  	
  11.1.4 Extensions by
  Investors

  	
   

  
	
   

  	
  11.2

  	
  EARLY TERMINATION

  	
   

  
	
   

  	
   

  	
  11.2.1 For
  Convenience

  	
   

  
	
   

  	
   

  	
  11.2.2 For Missed
  MASLs

  	
   

  
	
   

  	
  11.5

  	
  TERMINATION FOR FORCE MAJEURE
  EVENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  DISENTANGLEMENT

  	
   

  
	
   

  	
  12.1

  	
  GENERAL OBLIGATIONS

  	
   

  
	
   

  	
  12.2

  	
  DISENTANGLEMENT PROCESS

  	
   

  
	
   

  	
  12.3

  	
  SPECIFIC OBLIGATIONS

  	
   

  
	
   

  	
   

  	
  12.3.1 Full
  Cooperation and Information

  	
   

  
	
   

  	
   

  	
  12.3.2 No
  Interruption or Adverse Impact

  	
   

  
	
   

  	
   

  	
  12.3.3
  Third-Party Authorizations

  	
   

  
	
   

  	
   

  	
  12.3.4 Licenses
  to Proprietary Software

  	
   

  
	
   

  	
   

  	
  12.3.5 Transfer
  of Leases, Licenses, and Contracts

  	
   

  
	
   

  	
   

  	
  12.3.6 Delivery
  of Documentation

  	
   

  
	
   

  	
   

  	
  12.3.7 Hiring of
  Employees

  	
   

  
	
   

  	
  12.4

  	
  PREPARATION FOR
  DISENTANGLEMENT

  	
   

  
	
   

  	
   

  	
  12.4.1
  Maintenance of Assets

  	
   

  
	
   

  	
   

  	
  12.4.2 All
  Necessary Cooperation and Actions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  REMEDIES;
  LIMITATIONS OF LIABILITY

  	
   

  
	
   

  	
  13.3

  	
  LIMITATION OF LIABILITY AND
  DISCLAIMERS

  	
   

  
	
   

  	
  13.5

  	
  FORCE MAJEURE EVENTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  INSURANCE

  	
   

  
	
   

  	
  14.1

  	
  REQUIRED GENERAL LIABILITY INSURANCE
  COVERAGE

  	
   

  
	
   

  	
   

  	
  14.1.1
  Commercial General Liability Insurance

  	
   

  
	
   

  	
   

  	
  14.1.2
  Required General Liability Policy Coverage

  	
   

  
	
   

  	
   

  	
  14.1.3
  Additional Insureds

  	
   

  
	
   

  	
   

  	
  14.1.4
  Primary Insurance Endorsement

  	
   

  
	
   

  	
   

  	
  14.1.5 Form
  of General Liability Insurance Policies

  	
   

  
	
   

  	
  14.2

  	
  BUSINESS AUTOMOBILE
  LIABILITY INSURANCE

  	
   

  
	
   

  	
  14.3

  	
  STATUTORY WORKERS’
  COMPENSATION AND EMPLOYERS’ LIABILITY INSURANCE

  	
   

  
	
   

  	
  14.5

  	
  GENERAL PROVISIONS

  	
   

  
	
   

  	
   

  	
  14.5.1 Evidence of Insurance

  	
   

  
	
   

  	
   

  	
  14.5.2 Claims-Made
  Coverage

  	
   

  
	
   

  	
   

  	
  14.5.3
  Notice of Cancellation or Change of Coverage

  	
   

  
	
   

  	
   

  	
  14.5.4
  Qualifying Insurers

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
  INVOICES
  AND REPORTS

  	
   

  
	
   

  	
  15.1

  	
  INVOICES

  	
   

  
	
   

  	
   

  	
  15.1.1 General

  	
   

  

 

4  of 76

 

	
   

  	
   

  	
  15.1.2
  Fee-Reductions

  	
   

  
	
   

  	
   

  	
  15.1.3 Work Orders

  	
   

  
	
   

  	
   

  	
  15.1.4 Initiatives

  	
   

  
	
   

  	
  15.2

  	
  REPORTS

  	
   

  
	
   

  	
   

  	
  15.2.1 General

  	
   

  
	
   

  	
   

  	
  15.2.2 Media

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
  RECORDKEEPING AND AUDIT
  RIGHTS

  	
   

  
	
   

  	
  16.1

  	
  RECORDKEEPING

  	
   

  
	
   

  	
  16.2

  	
  OPERATIONAL AUDIT RIGHTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
  LEGAL COMPLIANCE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  17.1

  	
  COMPLIANCE WITH ALL LAWS AND REGULATIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
   

  
	
   

  	
  18.1

  	
  PROVIDER REPRESENTATIONS, WARRANTIES,
  AND RELATED COVENANTS

  	
   

  
	
   

  	
   

  	
  18.1.1
  Performance of the Services

  	
   

  
	
   

  	
   

  	
  18.1.2 Y2K
  Compliance

  	
   

  
	
   

  	
   

  	
  18.1.4
  Litigation and Service of Process

  	
   

  
	
   

  	
   

  	
  18.1.5 Legal
  and Corporate Authority

  	
   

  
	
   

  	
   

  	
  18.2.1
  Legal and Corporate Authority

  	
   

  
	
   

  	
   

  	
  18.2.2 Disclaimer

  	
   

  
	
   

  	
  18.3

  	
  WARRANTY DISCLAIMER

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
  INDEMNIFICATION

  	
   

  
	
   

  	
   

  	
  19.1
  Technology Indemnification by Provider

  	
   

  
	
   

  	
   

  	
  19.2 Injury, Property, or Other Damage

  	
   

  
	
   

  	
   

  	
  19.3 Third-Party
  Contracts

  	
   

  
	
   

  	
   

  	
  19.4 Transitioned
  Employees

  	
   

  
	
   

  	
   

  	
  19.5
  Hazardous Material

  	
   

  
	
   

  	
   

  	
  19.6
  Proprietary Information Disclosure

  	
   

  
	
   

  	
   

  	
  19.7
  Investors Technology

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
  DISPUTE
  RESOLUTION

  	
   

  
	
   

  	
  20.1

  	
  RESOLUTION PROCESS

  	
   

  
	
   

  	
  20.2

  	
  LEGAL ACTION

  	
   

  
	
   

  	
  20.4

  	
  NO TERMINATION OR SUSPENSION OF
  SERVICES

  	
   

  
	
   

  	
  20.5

  	
  NO LIMITATION ON REMEDIES FOR
  DEFAULT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  21

  	
  APPROVAL OF
  PROMOTIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
  USE OF AFFILIATES
  AND SUBCONTRACTORS

  	
   

  
	
   

  	
  22.1

  	
  APPROVAL; KEY SUBCONTRACTORS

  	
   

  
	
   

  	
  22.2

  	
  SUBCONTRACTOR AGREEMENTS

  	
   

  
	
   

  	
  22.3

  	
  LIABILITY AND REPLACEMENT

  	
   

  
	
   

  	
  22.4

  	
  DIRECT AGREEMENTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  24.

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
  24.1

  	
  ENTIRE AGREEMENT

  	
   

  
	
   

  	
  24.3

  	
  CAPTIONS; REFERENCES; TERMINOLOGY

  	
   

  
	
   

  	
  24.4

  	
  ASSIGNMENT

  	
   

  
	
   

  	
  24.5

  	
  NOTICES TO A PARTY

  	
   

  
	
   

  	
  24.6

  	
  AMENDMENTS;
  WAIVERS

  	
   

  
	
   

  	
  24.7

  	
  RELATIONSHIP BETWEEN, AND LEGAL STATUS
  OF, THE PARTIES

  	
   

  
	
   

  	
  24.8

  	
  SEVERABILITY

  	
   

  
	
   

  	
  24.9

  	
  COUNTERPARTS

  	
   

  
	
   

  	
  24.10

  	
  LAWS AND REGULATIONS

  	
   

  
	
   

  	
  24.11

  	
  VENUE AND JURISDICTION

  	
   

  
	
   

  	
  24.12

  	
  NO THIRD-PARTY BENEFICIARIES

  	
   

  
	
   

  	
  24.13

  	
  EXPENSES

  	
   

  

 

5  of 76

 

	
   

  	
  24.14
  

  	
  SURVIVAL

  	
   

  
	
   

  	
  24.15

  	
  NEITHER PARTY CONSIDERED DRAFTER

  	
   

  

 

6  of 76

 

SCHEDULES

 

	
  Schedule A

  	
   

  	
  Distributed
  Computing Services

  
	
   

  	
   

  	
   

  
	
  Schedule B

  	
   

  	
  Enterprise
  Network Communication Services

  
	
   

  	
   

  	
   

  
	
  Schedule C

  	
   

  	
  Help
  Desk Services

  
	
   

  	
   

  	
   

  
	
  Schedule D

  	
   

  	
  On
  Demand Data Center Services

  
	
   

  	
   

  	
   

  
	
  Schedule E

  	
   

  	
  Pricing
  Schedule

  
	
   

  	
   

  	
   

  
	
  Schedule F

  	
   

  	
  Incentives
  and Fee Reductions

  
	
   

  	
   

  	
   

  
	
  Schedule G

  	
   

  	
  Invoice
  and Reports

  
	
   

  	
   

  	
   

  
	
  Schedule H

  	
   

  	
  Relationship
  Management

  
	
   

  	
   

  	
   

  
	
  Schedule I

  	
   

  	
  Provider’s
  Key Personnel

  
	
   

  	
   

  	
   

  
	
  Schedule J

  	
   

  	
  None

  
	
   

  	
   

  	
   

  
	
  Schedule K

  	
   

  	
  Security
  Matters; Investors Security Policy

  
	
   

  	
   

  	
   

  
	
  Schedule L

  	
   

  	
  Assets
  – (Investors-Owned Assets, Provider Assets, Shared Use Assets, and Acquired
  Assets)

  
	
   

  	
   

  	
   

  
	
  Schedule M

  	
   

  	
  List
  of Assigned Contracts

  
	
   

  	
   

  	
   

  
	
  Schedule N

  	
   

  	
  Leases

  
	
   

  	
   

  	
   

  
	
  Schedule O

  	
   

  	
  Change
  Management Procedures (Sample Forms)

  
	
   

  	
   

  	
   

  
	
  Schedule P

  	
   

  	
  None

  
	
   

  	
   

  	
   

  
	
  Schedule Q

  	
   

  	
  List
  of Non-Approved Subcontractors and Key Subcontractors

  
	
   

  	
   

  	
   

  
	
  Schedule R

  	
   

  	
  In-Scope
  Locations

  
	
   

  	
   

  	
   

  
	
  Schedule S

  	
   

  	
  Transition
  Plan

  
	
   

  	
   

  	
   

  
	
  Schedule T

  	
   

  	
  IBM
  Business Conduct Guidelines

  
	
   

  	
   

  	
   

  
	
  Schedule U

  	
   

  	
  In-Scope
  Employees

  
	
   

  	
   

  	
   

  
	
  Schedule V

  	
   

  	
  Auditors
  Confidentiality Agreement

  
	
   

  	
   

  	
   

  
	
  Schedule W

  	
   

  	
  Preexisting
  Conditions

  
	
   

  	
   

  	
   

  
	
  Schedule X

  	
   

  	
  Web
  Hosting Services

  
	
   

  	
   

  	
   

  
	
  Schedule Y

  	
   

  	
  Communications
  Lines

  

 

7  of 76

 

 

	
  Schedule Z

  	
   

  	
  IT
  Scheduled Audits

  

 

8
of 76

 

INFORMATION
TECHNOLOGY

 

SERVICES
AGREEMENT

 

This INFORMATION TECHNOLOGY SERVICE AGREEMENT (the
“Agreement”)
is entered into as of the latest date following the signatures of the Parties
(the “Contract
Signing Date”), by and between Investors Bank & Trust Company, a
Massachusetts Trust Company, (“Investors”) with corporate offices at 200
Clarendon Street, Boston, MA 02117, and International Business Machines Corporation,
a New York corporation, (“Provider”) with corporate offices at New
Orchard Road, Armonk, New York 10504.

RECITALS

 

WHEREAS, Investors and Provider desire to enter into this Agreement whereby
Provider will act as an external supplier of certain information technology
service requirements of Investors, as set forth and subject to the terms and
conditions herein.

 

NOW,
THEREFORE, in
consideration of the mutual promises and covenants contained herein, the
receipt, sufficiency, and adequacy of which are hereby acknowledged, the
Parties, intending to be legally bound, hereby contract and agree as follows:

 

1.             SCOPE OF
SERVICES

 

1.1   General Description of
Services

 

Subject at all
times to Investors’ exercise of its management and oversight functions and
prerogatives, as identified in Section 5 or otherwise, and subject to
the provisions of the Agreement hereof, Provider shall perform all of the
Services outlined in this Agreement, including those in this Section 1,
and all Schedules attached to this Agreement, in which obligations of Investors
and Provider are set forth in detail.

 

In all cases,
Provider shall deliver high-quality, value-added services that assist Investors
in effectively utilizing information technology (“IT”) to increase the
efficiency and productivity of Investors’ business operations. Unless otherwise
expressly stated in the Schedules to this Agreement or elsewhere in this
Agreement, Provider shall commence all Services under this Agreement at 12:01
a.m., local time, on the 1st day of July 2004 (“Contract
Effective Date”).

 

1.1.1       Scope of Services.

 

Starting on the Contract Effective Date and continuing
during the Term, Provider shall provide and perform the Services to and for
Investors as follows:

 

(a)           each of the services specifically described and defined in
this Section 1,
the any Services schedule (including, as of the Contract Signing Date, Schedules A,
Schedule B,
Schedule C,
Schedule D,
and Schedule X)
(collectively “Services Schedules”), or services described elsewhere in this
Agreement to the extent of the “Baselines” or “Forecasted Monthly Usage” (as
each term is defined in Schedule E) as applicable and as set
forth in Schedule E;
and

 

(b)           if any services, functions, responsibilities or tasks not
specifically described in Section 1.1.1(a) are required for the
proper performance and provision of the services described in Section 1.1.1(a)
and are an inherent part of, or a necessary sub-part included within, the
services described above and elsewhere in this Agreement, such services,
functions, responsibilities and tasks shall be deemed to be implied by and
included within the scope of the Services to the same extent and in the same
manner as if specifically described in this Agreement.

 

9 of 76

 

1.2   Transition

 

1.2.1       Transition
Services 

 

Provider shall accomplish
the transparent, seamless, and orderly (which would include, but is not limited
to, uninterrupted compliance with all Initial MASLs as identified in Schedule F)
transition (“Transition”) from the manner in which Investors currently
(prior to the Contract Effective Date) receives the services defined in Section 1.1.1
of this Agreement (“Current Services”) to the performance of
Services by Provider, as described in this Agreement, which shall include
cooperation on the part of Investors (as may be specifically required by this
Agreement).

 

1.2.2       Critical Milestones

 

The Parties recognize and
agree that the timely performance of the services related to the Transition (“Transition
Services”), is required for a successful Transition and they have
designated certain Transition Services actions and projects in this Agreement
as Critical Milestones.  The specific
Transition Services and the completion criteria for the Critical Milestones
will be identified in the Transition Plan. If Provider fails to meet any
Critical Milestone by the date corresponding thereto, except as otherwise set
forth in Section 1.9.5,
Provider shall be subject to Incentives and Fee Reductions pursuant to Schedule F
hereof.

 

1.2.3       Progress Reports

 

Provider shall provide to
the Investors CIO (or an Investors Representative) a written update as to the
progress of the Transition Plan implementation, at least monthly until such
implementation and each of the Parties’ responsibilities thereunder have been
met.

 

1.3   Management
Services

 

Commencing at 12:01 a.m.,
local time, on the Contract Effective Date, and at all times thereafter during
the Term, Provider shall perform, at all in-scope locations (“In-Scope
Locations”), as described in Schedule R, all Services under this
Agreement. .

 

1.3.1       Procurement  

 

Except for Provider Assets
and Shared Use Assets (including any upgrades to those foregoing assets), and
except as otherwise agreed to by the Parties in writing, Investors shall
procure for Provider’s use in providing the Services, all hardware, needed and
specially required (and not already provided by Provider in the form of Shared
Use Assets or Provider Assets) in order for Provider to provide the Services in
accordance with this Agreement (“Procured Assets”); provided, however, that
Provider shall offer reasonable assistance in evaluating potential suppliers
(including offering opinions on proposed technology changes).   Provider shall also offer reasonable
assistance in negotiating rates and contract terms related to Procured Assets
to the extent those Procured Assets relate to the Services.  With regard to each category of Procured
Assets, Provider will negotiate with Investors in good faith to agree in
advance to a discount off list price arrangement for each category of Procured
Assets to be purchased or leased. The discount off list price for each category
of Procured Assets will be valid for the period of time that is mutually agreed
to between the Parties. The Parties will document its mutual agreement
regarding the initial discount off list price arrangement in Schedule E.
Once the Procured Assets are purchased or leased, Provider shall configure,
install, test, and distribute the Procured Assets according to the Baselines in
Schedule E,
or if above and beyond the Baselines (and corresponding Deadbands, if any) in Schedule E,
as a Work Order.  As requested by
Investors from time-to-time, Provider may provide additional procurement
services and bid on additional Investors requirements.  Except as otherwise agreed to by the Parties
in writing, all purchase prices, license fees, lease payments, and support and
maintenance fees for all Procured Assets, shall be paid for by Investors. All
right, title and interest in and to each item of the Procured Assets shall
belong to Investors and the Procured Assets shall be considered an
Investors-Owned Assets under this Agreement.

 

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1.3.2       Disaster Recovery 

 

Except to the extent that
the Services are still being performed by a third party provider, as of the
Contract Effective Date, Provider will assume Investors’ disaster recovery plan
for the scope of Services performed by Provider.  Subsequently, not later than ninety (90) calendar days after the
Contract Effective Date, Provider shall provide Investors a disaster recovery
plan for the scope of Services performed by Provider (excluding those not being
assumed on the Contract Effective Date), for Investors’ review and approval,
designed to ensure the continuing availability of Services (excluding those
Services not being assumed on the Contract Effective Date) as designated in
this Agreement, during any event that would, under the circumstances, otherwise
affect Provider’s ability to deliver the Services.  Commencing not later than one hundred eighty (180) calendar days
after the Contract Effective Date, Provider shall implement the plan and
provide or make available the disaster recovery services to Investors. With
regard to any Services that are not assumed by Provider on the Contract
Effective Date (“Delayed Services”), Provider will assume Investors’ disaster
recovery plan for the Delayed Services performed by Provider as of the date
that Provider assumes responsibility from the third party provider for the
Delayed Services (“Delayed Services Effective Date”).  Subsequently, not later than ninety (90)
calendar days after the Delayed Services Effective Date, Provider shall provide
Investors a disaster recovery plan for the Delayed Services performed by
Provider, for Investors’ review and approval, designed to ensure the continuing
availability of Delayed Services as designated in this Agreement, during any
event that would, under the circumstances, otherwise affect Provider’s ability
to deliver the Services.  Commencing not
later than one hundred eighty (180) calendar days after the Delayed Services
Effective Date, Provider shall implement the plan and provide or make available
the disaster recovery services to Investors. 
Provider shall provide such disaster recovery services at all times
without regard to any Force Majeure Event (except to the extent and only to the
extent that the Force Majeure Event also impacts the disaster recovery site.
Such disaster recovery services shall include the preparation and testing (as
defined in any Services Schedule, and the Standards and Procedures Manual) and
updating of a disaster recovery plan (including plans for data, backups,
storage management, contingency operations), disaster recovery services in the
event that Investors determines that a disaster has occurred, and the provision
of regular reports and notices to Investors’ clients upon the occurrence of any
event covered by a disaster recovery plan, subject to the review and approval
of Investors.  Provider shall update and
test all disaster recovery procedures per Schedule E; provided, however, tests
will be conducted on a weekly, server by server basis.

 

1.3.3       Security Management

 

Provider shall provide
physical (when on Provider’s site) and logical protection for any Investors
hardware, software, applications and data as specified in Schedule K.  Provider shall provide Investors with
reasonable access, subject to Provider’s reasonable access security
requirements and upon reasonable notice, seven (7) calendar days a week, twenty
four (24) hours a calendar day to Provider facilities and data centers, as well
as In-scope Locations managed by Provider, and other locations as appropriate for
the purposes of inspection and monitoring access and use of Investors Data and
maintaining Investors systems.  Provider
shall provide such assistance which may be reasonably required in connection
with any such inspection and monitoring.

 

Provider shall also provide
logical protection and comply with Investors’ policies for physical protection,
with respect to Investors hardware, software, applications and data located in
any Investors’ Site and used for the performance of the Services as specified
in Schedule K.

 

1.4   Technology
Management; Upgrades and Enhancements

 

1.4.1       Technological Enhancements

 

It
is expected that, as part of the Services provided by Provider under this
Agreement, Provider shall provide technology management and upgrade services,
subject to the terms and conditions set forth in this Agreement, or as
otherwise agreed to in writing by the Parties. 
Unless otherwise directed by Investors, such technology management and
upgrade services shall include performing procurement tasks specified in Section 1.3.1,
installation, implementation and distribution of upgraded and replacement
assets for all assets used in the provision of the Services.

 

 

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Provider
shall schedule any upgrades and replacements of Procured Assets,
Investors-Owned Assets, Provider Assets or Share Used Assets in advance and in
such a way as to prevent any material disruption of the Services, prevent the
Services from falling below any MASL, or any material diminution in the nature
or level of any portion of the Services. 
Provider shall be required to obtain the prior written consent of
Investors before acquiring, maintaining, upgrading, or replacing any asset that
is used in the satisfaction of this obligation if such acquisition,
maintenance, upgrade, or replacement could result in any additional charge or
material change in the method, manner or types of Services that are being
provided hereunder to Investors.

 

1.4.2       Technology Planning

 

Each
Contract Year, Provider shall prepare a plan, subject to approval by Investors,
(the “Technology
Plan”) in accordance with the following procedures:

 

(a) The Technology Plan will
be composed of short-term and long-range plans, which tie into business
goals.  The long-range plan will include
strategic and flexible use of information technology systems in light of
Investors’ anticipated business goals, current mission, objectives and its
priorities and strategies.  The
short-term plan will include information technology budget development for the
next fiscal year and an identification of proposed software and hardware, as
appropriate, for which technology refresh may be needed in the next Contract
Year, and a projected time schedule for obtaining the necessary software,
hardware and services and implementing the proposed changes. Provider will on a
regular basis and prior to the preparation of each annual Technology Plan (i)
identify Provider and non-Provider products and technology services that may
benefit Investors and support the mission, goals and objectives of Investors,
(ii) identify Provider or Investors resources required to complete the
long-range and short-term plans and (iii) upon request of Investors investigate
the requirements, costs and benefits of new technology.

 

(b)   Investors and Provider will prepare the initial draft of the first
Technology Plan based on the Agreement. 
Provider will provide input and information regarding industry trends in
production capabilities and pricing, and information regarding the implementation
of proposed hardware and software changes. 
The first Technology Plan will then be amended and updated each Contract
Year, and will, upon approval by Investors, establish the mutual agreement by
the Parties as to the strategic approach to Provider’s conduct and
implementation of the Technology Plan.

 

(c)   The first Technology Plan under this Agreement will be completed
on or before one hundred and eight (180) calendar days into the Agreement and
annually during the Term.

 

(d)   Notwithstanding the development of the Technology Plan on an
annual basis, Provider shall also have a regular and ongoing responsibility
during each Contract Year to provide Investors with information regarding any
newly improved or enhanced commercially available information technology,
including equipment and improved processes, that could reasonably be expected
to have a positive impact in terms of increased efficiency, increased quality,
or reduced costs (“Enhanced Technology”) for evaluation. At a
minimum, at least once during the first six (6) months and once during the
second six (6) months of each Contract Year, Provider shall meet with Investors
and provide Investors with a written report to inform Investors of any Enhanced
Technology that Provider and its principal Subcontractors are developing and to
provide information about IT trends of which Investors should be made aware.

 

(e)   Upon the identification of any Enhanced Technology that the
Parties believe would materially improve performance, capacity, bandwidth, or
reduce the cost, of the Services, the Parties will meet and discuss in good
faith the terms upon which such Enhanced Technology may be implemented into the
Services, including detailed MASLs specific to each enhancement and in the
format used in this Agreement hereof for the Services.

 

(f)    Except for (1) the maintenance, replacement and upgrade of Shared
Use Assets and Provider Assets, and (2) the configuration, installation and
implementation of any Procured Assets (within the Baselines set forth in Schedule E),
Investors’ Owned Assets, Shared Use Assets or Provider Assets, which will all
be at Provider’s expense, the Parties will agree to the provision of additional
services

 

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pursuant to the Technology Plan
in accordance with the change management procedures set forth in Section 7.4
of this Agreement.  The Technology Plan
shall be provided “AS-IS” and for Investors’ internal use only.

 

1.4.3       Technology Upgrades

 

Within ninety (90)
calendar days of the Contract Effective Date, Provider will develop, subject to
Investors approval (except for, with regards specifically to approval by
Investors, the ODCS environment), a “Technology Refresh Plan” and
schedule for upgrade and replacement. In this regard, all hardware and
software will be kept at levels supportable by manufacturers. Additionally, as
hardware and software upgrades and maintenance become available from their
respective vendors, Provider is to notify Investors within thirty (30) calendar
days and coordinate implementation of the upgrades and maintenance (at
Provider’s expense, Provider will configure, distribute and install any
necessary upgrades as a Work Order or Initiative).  Provider will offer all baseline technology upgrades without an
increase in charges to Investors; provided, however, that Investors will
purchase or lease any necessary upgrades to Investors-Owned Equipment (and
equipment used by Provider exclusively to provide the Services specified in Schedule X
to Investors, hereinafter “Web Hosting Equipment”) and Provider will
purchase or lease any necessary upgrades to Shared Use Assets and Provider
Assets (except for the Web Hosting Equipment). 
Unless otherwise mutually agreed to between the Parties, Provider will maintain
all hardware and software at a level that is at least equal to current,
supported technology.   If Provider
fails to satisfy this requirement and Investors incurs additional documented
costs due to Investors’ inability to exploit the functionality provided by the
current, supported technology, Provider shall reimburse or credit Investors for
such additional costs and expenses specifically related to having an inability
to exploit the functionality provided by the current, supported technology;
provided however, Investors shall notify Provider in writing and in advance of
the possibility of additional cost if Provider fails to maintain all and
software at a current, supported level. 
If Provider can not achieve functionality due to Investors withholding
an approval for any upgrade to a level that is supported and Provider incurs
additional documented costs specifically due to having to support technology
that is not supported, Investors shall reimburse Provider for such additional
costs and expenses specifically related to having to support technology that is
not otherwise supported by the manufacturer; provided however, Provider shall
notify Investors in writing and in advance of the possibility of additional
cost if Investors fails to approve any upgrade of technology to a current,
supported versions.

 

1.4.4       Shared Use Assets

 

Prior
to migrating or relocating any of the Services to a shared hardware or software
environment (including any software for which Provider maintains a master
license agreement that allows it to use that particular software for all of its
clients), or to any shared network or platform (“Shared Use Assets”), Provider
shall provide to Investors for review and approval a proposal for such
migration or relocation and a breakdown of the price benefits to Investors
during the Term and the estimated cost savings and risks following the
expiration or termination of this Agreement (including, but not limited to, a
good faith estimate of what that Shared Use Assets would cost if purchased
individually by Investors at the expiration or termination of this Agreement,
and a representation regarding whether the Shared Use Assets will be used to
store any Investors Data).  Subject to Section 9
(Proprietary Rights) and Section 12 (Disentanglement), upon the
expiration or termination of this Agreement, Provider shall identify and assist
Investors in procuring (at Investors’ expense, except as otherwise provided in Section 9)
suitable functionally equivalent replacements for any Shared Use Assets, such
as hardware, software, networks or platforms then used by Provider, to
facilitate a smooth transition of the Services back to Investors.  Schedule L lists all Shared Use Assets
that Provider will be using to provide the Services at the completion of the
Transition period.

 

1.5   Viruses
and Disabling Devices

 

Provider shall implement
commercially reasonable practices and procedures (including, but not limited
to, implementing the practices and procedures described in Schedule K) to identify,
screen, and prevent, and shall not itself install, any Disabling Device in
resources utilized by Provider, Investors, or any third party, to provide the
Services.  A “Disabling Device” is any
virus,  timer,
clock, counter, time lock, time bomb, Trojan horse, worms, file infectors, boot
sector infectors, or other limiting design, instruction, or routine that could,
if triggered, erase data or programming or cause the resources to become
inoperable or otherwise incapable of being used in the full manner for which
such resources were intended to be used. Provider will use 

 

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commercially reasonable efforts to minimize or
eliminate the effects of any Disabling Device and Provider will use
commercially reasonable efforts to prevent or minimize the loss of operating
efficiency or data; provided, however, to the extent the Disabling Device was
introduced due to Provider’s failure to comply with this Section 1.5, any
additional resources necessary in addition to the Services shall be at
Provider’s sole expense.

 

1.6   End-User
Satisfaction and Communication

 

Provider shall
conduct End-User satisfaction surveys during the Term in accordance with this
Section.  The surveys shall cover a
representative sample of the End-Users and, as a separate sample category,
senior Investors management.  Investors
shall provide reasonable assistance to Provider to: (i) identify the
appropriate sample of End-Users; (ii) distribute the surveys; and (iii)
encourage participation by such End-Users in order to obtain meaningful
results.  The Provider Contract Manager
shall review the results of the survey with Investors.  Additionally, within ninety (90) calendar
days of the Contract Effective Date, Provider shall submit an End-User
communication plan to Investors, for its review and approval.  Such plan shall include, at a minimum,
monthly updates to the End-Users regarding the results of the satisfaction
surveys.  The communication plan shall be
reviewed and modified by the Parties, as appropriate but not less frequently than
once annually.

 

1.7   Standards
and Procedures Manual

 

1.7.1       Development of Manual

 

Within
ninety (90) calendar days after the Contract Effective Date, Provider shall
deliver a reasonable and appropriate draft standards and procedures manual,
specific to the Services to be provided under the Agreement, (“Standards
and Procedures Manual”) to Investors for its review, comment, and
approval.  Provider shall incorporate
all relevant comments or suggestions of Investors and shall finalize the
Standards and Procedures Manual within one hundred eighty (180) calendar days
after the Contract Effective Date. Provider shall periodically (but not less
than quarterly) update the Standards and Procedures Manual to reflect changes
in the operations or procedures described therein.  Updates of the Standards and Procedures Manual shall be provided
to Investors for review and approval. 
To the extent that an Investors requested change to the Standards and
Procedures Manual (including proposed changes to the draft version) may
materially interfere with or materially degrade Provider’s provision of the
Services or have a materially detrimental impact on Provider’s cost of
providing the Services or time for delivery of the Services, the Parties shall
mutually agree to any requested change pursuant to the change management
procedure to be mutually agreed pursuant to Section 7.4 of this
Agreement, prior to adopting such change(s).

 

1.7.2       Content of Manual

 

The
Standards and Procedures Manual shall be provided electronically (and in a
manner such that it can be accessed via either Investors’ Intranet or the
Internet) to Investors, with reasonable notice to allow for Investors’ review
and approval. The Standards and Procedures Manual should describe how Provider
shall perform the Services under this Agreement, the equipment and software
being and to be used, and the documentation (including, e.g., operations
manuals, user guides, specifications, and End-User support) that provide
further details of such activities.  The
Standards and Procedures Manual is intended to describe to Investors how the
Services shall be performed and act as a guide to operations personnel (and
Investors’ clients, subject to confidentiality obligations, for informational
purposes only) seeking assistance in the Services offered under this
Agreement.  The Standards and Procedures
Manual shall in no event be interpreted as an amendment to this Agreement or so
as to modify, augment, or relieve Provider of any of its performance
obligations under this Agreement.

 

1.8   Service
Compatibility

 

Provider shall make
commercially reasonable efforts to ensure that all Services, equipment,
networks, software, enhancements, upgrades, modifications, and other resources,
including those provided by Investors (collectively, the “Resources”) utilized by
Provider or approved by Provider for utilization by Investors in connection
with the Services, shall be successfully integrated and interfaced, and shall
be compatible, with services, systems, items, and other resources (collectively,
the “Third-Party
Resources”) that are provided by third party service suppliers and
interact with or support the Current Services as of the Contract Effective
Date.

 

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Further, Provider shall take
commercially reasonable efforts to ensure that none of the Services or other
items provided to Investors by Provider shall be adversely affected by, or
shall adversely affect, those of any such third-party suppliers, whether as to
functionality, speed, service levels, interconnectivity, reliability,
availability, performance, response times, or similar measures.  To the extent that any interfaces need to be
developed or modified in order for the Resources to integrate successfully, and
be compatible, with the Third-Party Resources, Provider shall develop or modify
such interfaces as part of the Services, pursuant to the change management
procedure set forth in Section 7.4, subject to Investors’
prior review and approval.  In the event
of any dispute as to whether a particular defect, malfunction, or other
difficulty was caused by products or services furnished by Provider or by
products or services furnished by any supplier of the Third-Party Resources,
Provider shall be responsible for correcting at its cost, such defect,
malfunction, or difficulty, except to the extent that Provider can demonstrate,
by means of a root-cause analysis, that the predominant contributing cause was
not a product or service furnished by Provider.  In addition, Provider agrees that at all times during the Term it
shall cooperate with third-party service suppliers of Investors to coordinate
its provision of the Services with the services and systems of such third-party
service suppliers.  Such cooperation and
access, subject to Provider’s reasonable confidentiality requirements, shall
include providing:  (i) applicable
written information concerning any or all of the systems, data, computing
environment, and technology direction used in providing the Services;
(ii) reasonable assistance and support services to such third-party
suppliers; (iii) access to Provider and Investors systems and architecture
configurations to the extent reasonably required for the activities of such
third-party suppliers; and (iv) access to and use of the Resources.

 

1.9   MASLs

 

1.9.1       Commitment to MASLs

 

Except as otherwise specified in this Agreement,
Provider shall perform all Services under this Agreement at least in accordance
with and in such manner as to meet or exceed the MASLs.  Any applications developed by Provider
pursuant to the terms hereof, if any, shall incorporate methods permitting
measurement of performance-related MASLs.

 

1.9.2       MASL Measurement and Reporting

 

Except as otherwise specified in this Agreement or
any Schedule to this Agreement, Provider shall measure and report its
performance against the MASLs, if applicable, during each month by the
tenth (10th) calendar day of the following month.  For continuing failures in areas that are
measured daily or weekly, Provider shall report such failures in the month such
failure occurs. Investors shall give Provider reasonable advance notice of
anticipated changes in numbers of End-Users or processing volumes.  Provider’s report shall be delivered in
accordance with the Services Schedules. 
Provider shall meet with Investors at least monthly, or more frequently
if requested by Investors, to review Provider’s actual performance against the
MASLs and shall recommend remedial actions to resolve any performance
deficiencies.

 

1.9.3       Root-Cause Analysis and Resolution

 

Promptly,
within the shortest reasonable time period and in no event later than five (5)
calendar days after Provider’s discovery of, or, if earlier, Provider’s receipt
of a notice from Investors regarding, (i) Provider’s failure to provide any
of the Services in accordance with the MASLs, (ii) Provider’s failure to
meet a Critical Milestone, (iii) any “Severity 1” problem as defined by the
Standards and Procedures Manual, or (iv) any problem that has or could
reasonably have a significant business impact on Investors (collectively, “Failure
Notice”), Provider shall: (A) commence a root-cause analysis to
identify the cause of such failure (and subsequently use commercially
reasonable efforts to permanently correct or remedy such failure as soon as
reasonably possible); (B) provide Investors with a written report
detailing the cause of, and any procedure for correcting, such failure; and
(C) provide Investors with satisfactory evidence that Provider has taken
commercially reasonable actions to avert, prevent, avoid, or remedy such
failure in the future. Further, as soon as reasonably possible, and in no event
later than the lesser of the requirements stated in any SLR for that failure or
twelve (12) hours after a Failure Notice, Provider will (D) correct or remedy
such failures (which may include a temporary fix or work around) as are within
Provider’s reasonable control (regardless of whether caused by Provider) in a
timely manner to bring the situation in compliance with the MASLs; and (E) provide
Investors with an impact analysis detailing the impact such failure had on the
Services.  The correction of any such
failure shall be performed, entirely at Provider’s expense, unless it has been
determined through the root

 

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of 76

 

cause
analysis (subject to dispute resolution) that the failure was predominantly
caused by Investors or its Subcontractors, agents or third parties provided by
Investors and Provider could not have worked around the failure without
expending a material amount of additional time or cost.  In such an event:  (y) Provider shall be entitled to temporary relief from its
obligation to timely comply with the affected MASL or Critical Milestone, but
only to the extent and for the duration so affected; and (z) Investors
shall reimburse Provider for Provider’s expenses to correct such failure but
only to the extent Investors  (or its Subcontractors, agents, or third
parties) was the predominant cause of such failure.  Further, if it has been determined by either mutual agreement of
the Parties or through the dispute-resolution process specified in this
Agreement, that Investors (or its Subcontractors, agents, or third parties
provided by Investors and not managed by Provider) was the predominant
contributing cause of the failure, or Provider’s inability to achieve an
affected Critical Milestone, the date by which Provider was obligated to
complete the affected Critical Milestone shall be deferred by one (1) calendar
day for each calendar day so affected by Investors provided Provider
subsequently timely complies with its obligations as measured against the
deferred date.  For purposes hereof, the
“Preexisting
Condition”  of Investors properties and systems (to
the extent the Preexisting Condition is specified in Schedule W of this
Agreement) shall not be deemed a contributing cause of any failure.

 

1.9.4       Improvements in Performance

 

The
Parties shall review and discuss the MASLs and Annual Service Fees from time to
time, but not less frequently than once each Contract Year.  Upon mutual agreement, after any such
review, the MASLs and Annual Service Fees may be adjusted, for the benefit of
Investors, to reflect improved performance requirements based upon advances in
available technology and methods that are suitable for use in performing the
Services, the increased capabilities of any hardware or software acquired for
use by Investors, and other changes in circumstances.  Provider shall continuously evaluate ways to improve its
performance and shall make these improvements available to Investors as soon as
possible.

 

1.9.5       Service Compliance Relief

 

Provider shall be entitled to temporary
relief from its obligations to timely comply with the MASLs, Critical
Milestones, or other Service specifications, if and to the extent: (i)  such failure by Provider is predominantly
caused by: (A) Investors’ act, error, omission, wrongful action (except for
those acts expressly contemplated by the Agreement) or failure to perform its
obligations under this Agreement, (B) the act, error, omission, wrongful action
(except for those acts expressly contemplated by the Agreement) or a failure in
performance of any Investors contractor, agent, or third party (other than
Provider and its Subcontractors); (ii) Provider provides Investors with
reasonable prior written notice of, and a reasonable opportunity to correct,
such failure, to the extent of Provider’s knowledge and ability to provide such
notice; and (iii) Provider could not have worked around the failure without
expending a material amount of additional time or cost.  Such temporary relief shall be only to the
extent and for the duration that Provider’s performance is so affected and
Provider shall in all events use commercially reasonable efforts to return to compliance
with its obligations.

 

Additionally, and
notwithstanding Section 18.2.2, if Investors: (i) disapproves a proposed
Provider upgrade of software, replacement equipment or similar change
contemplated in and subject to Section 1.4.3 (Baseline Technology
Upgrades), or (ii) does not approve a commercially reasonable Provider
recommendation regarding capacity management or performance management, (in
either case, an “Upgrade Disapproval”), and as a result, Provider can
demonstrate that its ability to provide any type of Service (that is
specifically impacted by that software, hardware or equipment) pursuant to the
requirements of the Agreement including the MASLs, is adversely effected by the
Upgrade Disapproval, then Provider shall be excused from its performance
obligations to the extent they are so affected.  Provided, however, that the Parties shall reasonably cooperate to
minimize any such affect on Provider’s ability to provide the Services.

 

1.10 Exclusivity
/ Non-Exclusivity 

 

Nothing herein
shall prevent Investors from: (a) obtaining IT related services, other than the
Services, from itself or any other supplier during the Term, (b) obtaining any
of the Services which Provider no longer provides pursuant the terms of this
Agreement, from itself or any other supplier, during or after the Term and
thereby relieving Provider of the responsibility for

 

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providing and Investors the responsibility
for paying for the Services, or (c) obtaining Services that are above the
applicable Baselines or Forecasted Monthly Usage, from itself or any other
supplier, during or after the Term and thereby relieving Provider of the
responsibility for providing and Investors the responsibility for paying for
the Services (provided, however, that Investors may not adjust future Baselines
downward as a result of obtaining Services elsewhere).  The Parties may also mutually agree in
writing that any portion of the Services may be obtained from a provider other
than Provider.  Except to the extent set
forth above, Provider shall be the exclusive provider of the Services during
the Term of this Agreement.

 

Provider will
be free to enter into similar agreements with others and develop and provide
hardware, software or services that are similar to or competitive with the
hardware, software, and Services provided under this Agreement, provided that
Provider does not breach the terms of this Agreement (including, but not
limited to, Section 9), infringe upon Investors’ intellectual
property ownership rights or breach Provider’s confidentiality obligations.

 

2.             ASSETS AND
THIRD-PARTY CONTRACTS

 

2.1   Investors-Owned
Assets

 

During the Term, Investors
will furnish to Provider, for Provider’s use at no charge, the Procured Assets
(that are purchased) and the hardware, routers and switches, and equipment
owned by Investors that are listed on the attached Schedule L
(collectively, the “Investors-Owned Assets”), which
Investors-Owned Assets will remain the property of Investors and at Investors
retained expense, including any insurance, maintenance or other expense of
ownership.  Notwithstanding the location
of Investors-Owned Assets at a Provider or other non-Investors facility, all
right, title and interest (as applicable) in and to any Investors-Owned Assets
will be and remain in Investors, and Provider will have no interest in that
Investors-Owned Asset.

 

2.2   Investors-Leased
Assets

 

During the term of this
Agreement, Investors will furnish to Provider, for Provider’s use at no charge,
the Procured Assets (that are leased) and the hardware, routers and switches
and equipment leased by Investors that is listed on the Schedule L
(collectively, the “Investors-Leased Assets”).  Investors-Leased Assets are an Investors
retained expense, including any insurance, maintenance or other expense of the
lessee.

 

2.3   Third-Party
Approvals

 

Investors will take all
actions reasonably necessary to obtain any consents, approvals, or
authorizations from third parties as required for Provider to obtain in order
to lawfully access, operate, and use (at or from any In-Scope Location where
Services are to be provided) the Investors-Owned Assets and the
Investors-Leased Assets (including Investors-Vendor Software pursuant to Section 9),  including
without limitation the payment of all costs and expenses associated therewith.
Provider will provide Investors with commercially reasonable support in such
efforts and provide Investors with a process and form for obtaining such
required consents for Investors-Vendor Software.  Investors hereby appoints Provider as its single point of contact
for all maintenance and support matters pertaining to the Investors-Owned
Assets and the Investors-Leased Assets and will promptly notify all appropriate
third parties of such appointment.

 

Notwithstanding the
foregoing or anything in this Agreement to the contrary, and except as set
forth herein or as otherwise agreed to by the Parties, Investors, or the lessor
(if applicable), will be responsible for maintenance of all Investors-Owned
Assets or Investors-Leased Assets after installation; provided, however, that
(i) Provider will provide Investors with reasonable access to all
Investors-Owned Assets or Investors-Leased Assets located at a Provider or
other non-Investors facility; and (ii) Provider will be responsible for all
costs and expenses of repair or replacement to correct any damage to
Investors-Owned Assets or Investors-Leased Assets any part thereof (reasonable
wear and tear excepted) caused by Provider, its employees, subcontractors,
agents or invitees (exclusive of Investors and it’s Subcontractors).  Access to any Provider facility in which a
Investors-Owned Assets or Investors-Leased Assets are located, shall be subject
to Provider’s reasonable access security policy.

 

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2.4   Return
of Investors Assets

 

Upon the expiration or
termination of this Agreement, but no later than thirty (30) calendar days from
such expiration or termination date, Provider will return each item of
Investors-Owned Assets and Investors-Leased Assets to Investors in
substantially the same condition as it was in when initially provided to
Provider, reasonable wear and tear excepted.

 

2.5   Provision
of Provider Assets

 

“Provider Assets” means
hardware, software and equipment owned, licensed or leased by Provider and used
exclusively in the provision of Services. 
As of the Contract Effective Date, the Provider Assets are identified in
Schedule L.  After the Contract Effective Date, Provider
will provide Investors written notice of its intent to incorporate any new
Provider Assets into the provision of Services.  Notwithstanding the location of Provider Assets at Investors
In-Scope Locations, all right, title and interest in and to any Provider Assets
will be and remain in Provider, and Investors will have no interest in that
Provider Assets.

 

2.5.1       Use of Provider Equipment by Provider Employees

 

The Provider will provide Provider Assets for use by
Provider employees on behalf of Investors as necessary, at no additional charge
to Investors other than the Annual Service Fees due under this Agreement.  For the Transitioned Employees or those
subcontractors retained by Investors prior to the Contract Effective Date who
are retained by Provider during the BAU Period, Investors’ will continue to
provide, during the BAU Period, the workstations and laptops and related
periphery equipment (“Workstations”) that was provided to any Transitioned
Employee prior to the Contract Effective Date. 
Provider will provide all other assets necessary for the Transitioned
Employees to perform the Services during the BAU Period and it will provide
Provider Workstations to all Transitioned Employees that are extended continued
employment (once the services for which they are responsible for are
transitioned over to the steady state).

 

2.5.2       Provision of Provider Assets to
Investors

 

Provider may, upon mutual agreement with Investors as to equipment and
charges (if any), provide to Investors certain Provider Assets at mutually agreed
location(s), and on a mutually agreed delivery schedule all determined
using the change management procedure described in Section 7.4.  Investors will prepare and maintain, at
Investors’ cost and expense, any Investors In-Scope Locations in which Provider
Assets will be installed.

 

2.5.3       Installation of Provider Assets

 

Provider will arrange for, and will determine the
mode of transportation and installation of each item of Provider Assets to such
location(s), as may be mutually agreed to by the Parties.  In the event that Investors relocates any
Investors In-Scope Locations in which Provider Assets may be installed,
Investors will be solely responsible for the relocation costs of Provider
Assets.

 

2.5.4       Maintenance of Provider Assets

 

Notwithstanding the foregoing or anything in this Agreement to the
contrary, and except as otherwise mutually agreed to between the Parties,
Provider will be responsible for maintenance of all Provider Assets after
installation at an Investors location; provided, however, that (i) Investors
will provide Provider with reasonable access to all Provider Assets located at
an Investors or other non-Provider facility, and (ii) Investors will be
responsible for all costs and expenses of repair or replacement to correct any
damage to Provider Assets or any part thereof (reasonable wear and tear
excepted) caused by Investors, its employees, or its agents or invitees
(exclusive of Provider and its Subcontractors).   Access to any Investors In-Scope Location in which a Provider
Assets are located, shall be subject to Investors reasonable access security
policy.

 

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2.6   Return
and Acquisition of Provider Assets by Investors

 

Subject to the provisions of
Section 12
and Section 9, upon the expiration or termination of this
Agreement, but no later than thirty (30) calendar days from such expiration or
termination date, Investors will return each item of Provider Assets to
Provider in substantially the same condition it was in when initially provided
to Investors, reasonable wear and tear excepted.

 

2.7   Investors
Maintenance Agreements

 

Investors will retain all of
Investors’ right, title and interest in and to the agreements listed in Schedule M
(the “Investors
Maintenance Agreements”) relating to the maintenance of
Investors-Owned Assets and Investors-Leased Assets.  Provider will manage the administration of the Investors
Maintenance Agreements. Investors represents and warrants to Provider that, as
of the Contract Signing Date, (i) it is not (and, to its knowledge, the
supplier of the maintenance services is not) in default in any material respect
under any of the Investors Maintenance Agreements, and (ii) it will deliver to
Provider full and complete copies of the Investors Maintenance Agreements
(including any amendments thereto) prior to the Contract Effective Date.

 

2.8   Further
Assurances

 

Investors and Provider agree
to execute and deliver such other instruments and documents as either party
reasonably requests to evidence or effect the transactions contemplated by this
Section 2.
Upon Provider’s request and at Provider’s expense, Investors agrees to execute
UCC-1 filing statements for Provider Asset, solely for notice purposes.

 

3.             HUMAN RESOURCES  

 

3.1   Employees

 

Neither Party nor its
employees, subcontractors or other agents are or shall be deemed to be
employees of the other Party.  Subject
to Section 7
of this Agreement, each Party shall have the sole right to direct and control
the management of such personnel and shall be solely responsible for (a) determining
and paying all wages and salaries, and (b) providing welfare and
retirement benefits, as it deems necessary or desirable, which are associated
with employment of its personnel.

 

Provider ensures that its
employees (other than the Tranitioned Employees prior to the completion of the
Transition Period) who perform outsourcing services under this Agreement are
competent to do so.  Investors
represents that the In-Scope Employees who will be performing Services during
the Transition Period are Investors employees who performed Services prior to
the Contract Signing Date.  Provider
acknowledges that not all Investors’ employees who performed the Services prior
to the Contract Signing Date are In-Scope Employees.

 

It is understood by Provider
that all persons employed, directly or indirectly, by Provider to perform
services for Investors shall be employees or agents of Provider, and at no time
shall be authorized to act as agents, servants or employees of Investors,
unless under the specific authorization of Investors.  It is understood by Investors that (except for Provider and
Provider’s agents) all persons employed, directly or indirectly, by Investors
shall be employees or agents of Investors, and at no time shall be authorized to
act as agents, servants or employees of Provider.

 

3.1.1       Security / Business Conduct

 

Provider has also received and shall ensure that all of its employees,
agents and subcontractors, that perform Services at any Investors In-Scope
Location or that have access to Investors Data (at any In-Scope Location),
comply with the applicable provisions of Schedule K, subject to any amendment
pursuant to Section 10.1.1 of this Agreement), and the IBM Business
Conduct Guidelines (attached as Schedule T) in performing the
Services.Any violations or disregard by any Provider personnel of the on-site
security guidelines (included as part of Schedule K) (or violations or
disregard by Provider personnel of any applicable laws, rules or

 

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regulations
relating to the protection of Investors’ premises, equipment or personnel
subject to Section 17.1 (Compliance with Laws)) shall be cause for
denial of access by such personnel to Investors’ premises.

 

3.1.2        Investors In-Scope
Employee

 

An Investors “In-Scope
Employee” is an individual whose current position and job
responsibilities are being outsourced to Provider.  Investors acknowledges that it provided Provider, within Exhibit U-1,
a list of the In-Scope Employees, together with their job descriptions, base
salary, a description of all benefits applicable to such In-Scope Employees,
and the terms of their employment (collectively the  “In-Scope Employees Information”).  Investors acknowledges that Provider has
reasonably relied upon such In-Scope Employees Information in making employment
offers.  Investors also acknowledges
that it will provide Provider with an updated list, if any updates are
necessary, of such In-Scope Employee Information prior to the Contract Signing
Date.

 

3.1.3       Transition of Employees

 

As soon as reasonably
practicable after the Contract Signing Date, but no later than three (3) weeks
prior to the Hire Date, Provider will extend offers of employment (subject to
Provider’s employment policies and practices) to all active In-Scope Employees
listed in Schedule U,
Exhibit U-1 for a minimum period of [*] (unless Provider has reason
to terminate the employment of such employee “for cause”) from the Hire
Date.  Those In-Scope Employees that are
absent from work at the time the offers are to be extended due to a leave of
absence will receive an offer of employment (for the balance of the [*] period
from the Hire Effective Date) when they return to work, provided they return
within [*] of the Contract Effective Date. 
Investors will promptly notify Provider if any In-Scope Employee is due
to be out on leave prior to the date that an offer of employment is to be
made.  Each In-Scope Employee who
accepts Provider’s offer of employment pursuant to this Section 3.1.3 will
become, as of the Hire Date, a Provider employee (each, a “Transitioned Employee”) and
will be eligible to participate in all employee benefit plans or employment
policies and programs available to similarly situated Provider employees.
Provider represents that, during the BAU Period, the Transitioned Employee (or
his or her replacement, if any) shall only perform Services under this
Agreement.  If a Transitioned Employee
must be replaced during the BAU Period, the replacement Employee will be dedicated
to providing the Services under this Agreement through the BAU Period.  Should a Transitioned Employee need to be
replaced, Provider will assign a replacement as soon as reasonably practical
for a minimum of the duration of the BAU Period.

 

Investors shall cooperate
with and assist Provider in offering employment to all In-Scope Employees;
provided, however, Investors will not provide to Provider any additional
information regarding the In-Scope Employees (including, any personnel files or
performance reviews) other than the In-Scope Employee Information provided “as
is” to Provider.

 

Investors will not make any
statements to the In-Scope Employees regarding Provider’s offer letters or the
terms, conditions and benefits of employment to be offered by Provider.  Investors will refer all questions regarding
the Provider’s offer letter, and the terms, conditions and benefits of
employment, to Provider.

 

3.1.4       Management of
Affected Employees

 

Provider
shall determine in good faith and at its risk, during the BAU Period, to which
Transitioned Employees it wishes to extend offers of regular employment.  Provider shall, within the BAU Period,
either (i) notify a Transitioned Employee of Provider’s decision to terminate the
Transitioned Employee, or (ii) extend an offer of regular employment with
Provider to the Transitioned Employee. 
Provider shall provide to Transitioned Employees whom it has decided to
terminate a minimum of [*] notice prior to the effective date of any such
termination.  All decisions regarding
the termination of the employment of any Transitioned Employee will be the sole
responsibility and discretion of Provider management.

 

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3.1.5       Base Salary

 

Provider
will provide each Transitioned Employee a base salary that is not less than the
base salary that such Transitioned Employee was receiving from Investors
immediately prior to the Contract Signing Date, including any merit and salary
adjustments provided by Investors in the ordinary course of business prior to
the Contract Signing Date.  In addition,
each such Transitioned Employee will be eligible for annual increases in their
base salaries to the same extent as similarly situated Provider employees in
accordance with the Provider policy applicable to similarly situated
non-transitioned employees.  Each such
Transitioned Employee will be considered for annual increases in his or her
base salary thereafter, which will be effective to the same extent and paid at
the same time as increases paid to other similarly situated Provider
employees.  Provider will not decrease
the base salary of any Transitioned Employee during the first [*] after the
Hire Date.

 

3.1.6       Performance Bonus

 

Transitioned Employees will be eligible to receive a
Performance Bonus to the same extent as all other similarly situated Provider
employees in accordance with Provider’s standard practices and policies.

 

3.1.7       Achievement Awards

 

Beginning on the Hire Date, Transitioned Employees will be eligible for various levels of
awards and other forms of recognition to the same extent as all other similarly
situated Provider employees in accordance with Provider’s standard practices
and policies.

 

3.1.8       Termination and
Severance

 

a.
Transitioned Employees (except for those Transitioned Employees identified in
3.1.8(b) below)  who are terminated by
Provider within [*] of the Hire Date (other than those terminated for cause)
will receive the severance benefits (“Severance Payments”) pursuant to the
severance formula set forth in Exhibit U-2.   Investors’ employment service and Provider employment service,
combined, will be credited for Severance Payment purposes.  For any
Transitioned Employee terminated within the greater of [*] from the Hire Date
or [*], Investors will reimburse Provider for such actual Severance Payments as
specified in Schedule E.   For
any Transitioned Employee terminated after the greater of [*] from the Hire
Date or [*], Provider will fund the Severance Payments.

 

b. Transitioned Employees whose primary function is related to
Unix/Intel administration support (such Transitioned Employees are identified
with an asterisk in Schedule U) and who are terminated by
Provider up to [*] after the Commencement Date (other than those terminated for
cause) will receive the Severance Payments pursuant to the severance formula
set forth in Exhibit U-2.  
Investors’ employment service and Provider employment service, combined,
will be credited for Severance Payment purposes for those Transitioned
Employees who leave up to [*] after the Commencement Date.  For any
Transitioned Employee terminated up to one [*] after the Commencement Date
Investors will reimburse Provider for such actual Severance Payments as
specified in Schedule E.   For
any Transitioned Employee terminated one [*] after the Commencement Date and
thereafter, the severance payment (if any) will be pursuant to the Provider’s normal severance policies and Provider will fund the severance payments.

 

3.1.9       Release

 

For
any Transitioned Employee who receives a Severance Payment, Provider shall use
commercially reasonable efforts to obtain a general release (“Release”)
in favor of Investors, and its Affiliates, and Provider and its Affiliates and
their respective directors, employees and agents.  The Release shall include but not be limited to a release of any
and all employment-related claims from all Transitioned Employees who receive
Severance Payments.   Investors shall
review and approve the form of Release, which approval shall not be
unreasonably withheld.   If a Transitioned
Employee is not willing to sign such a Release, Provider will not provide them
with Severance Payments (unless Investors and Provider mutually negotiate a
release/severance package that is acceptable to both parties).  In the event that a Transitioned Employee is
not willing to sign such a Release in favor both Provider and Investors, as
described above, then, in consideration of the Severance Payment, Provider will
use commercially reasonable efforts to obtain a general release of all employment
related claims (reasonably acceptable to Investors) in favor of only Investors,
its Affiliates and Subsidiaries and its respective directors, employees and
agents.  Provider will also have the
option of providing a severance 

 

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of 76

 

package (to be funded solely by Provider) based only upon Provider
service in return for a release in favor only of Provider.

 

3.2           Solicitation of
Personnel

 

During the Term of this Agreement and for a period of
[*] following an employee’s termination from a Party, neither Investors nor
Provider, unless otherwise agreed to by the Parties in writing, and which
writing may include a mutually acceptable fee structure, shall not directly or
indirectly solicit, recruit, or employ any employee of the other if such
employee is employed by either Party in the United States.

 

3.3   Benefits

 

3.3.1       Past Service
Credits

 

Provider shall credit each Transitioned Employee for prior years of
service with Investors to the same extent that Investors has given credit for
that employees years of service, with respect to Provider’s vacation plan.  There are currently no waiting periods for
Provider’s medical/hospitalization coverage, prescription drugs, dental,
vision, group life insurance, short term disability plans or 401(k) plan.  Each Transitioned Employee will be eligible
to participate in the Provider “Personal Pension Account”, a cash balance
pension plan, pursuant to the terms of such plan to the same extent as other
similarly situated Provider Employees. 
Participation of Transitioned Employees in the Personal Pension Account
shall begin after one (1) year of employment with Provider.  Transitioned Employees who have completed
five (5) years of employment with Provider shall become fully vested in the
Personal Pension Account and are eligible to receive their Personal Pension
Account balances if they cease to be employed by Provider

 

3.3.2       Waiver
of Certain Conditions

 

For all Transitioned Employees, the Provider’s Health Benefit Plan and
the Provider’s Long Term Disability Plan provide that the Transitioned Employee
will not be subject to any pre-existing condition limitations or exclusions
(provided, however, that there may be some conditions that are covered under
Investors’ health benefit plans that either are not covered or are covered in a
different manner under the Provider’s Health Benefit Plan).  For the calendar year in which a
Transitioned Employee becomes employed by Provider, the Provider’s Health
Benefit Plan, to the extent applicable, will recognize each such Transitioned
Employee’s (and his or her eligible dependents’) unreimbursed expenses to the
extent that such paid expenditures are recognized under the Investors Bank
& Trust Company Omnibus Welfare Benefit Plan as a deductible applicable to
the particular Transitioned Employee or (eligible dependent) for the same
calendar year.

 

3.3.3       Rollover to Provider’s
401(k) Plan

 

As
soon as practicable after the Transition Date, Investors and Provider will
permit direct transfers pursuant to Section 401(a) (31) of the Internal
Revenue Code of 1986, as amended (the “Code”), and to the extent permitted by
Provider’s Plan, of pre-tax account balances if applicable, of Transitioned
Employees from the Investors Bank & Trust Company Savings Plan to the
Provider’s 401(k) Plan.  The Provider
401(k) Plan will provide that (i) Transitioned Employees will be eligible to
participate in the Provider’s 401(k) Plan as of the Transition Date and (ii)
the Provider’s 401(k) Plan will take into account the Transitioned Employees’
past service with Investors for purposes of eligibility and vesting in the
Provider’s 401(k) Plan.  Transitioned
Employees will participate in the Plan consistent with its administrative provisions.

 

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3.3.4       Tuition Aid

 

Each Transitioned Employee
will be eligible to participate in the Provider
“Academic
Learning Assistance Program”, Provider’s tuition reimbursement
program, as of the Hire Date.  Tuition
in respect of any course(s) in which a Transitioned Employee is enrolled in or
has completed as of Hire Date, for which Investors had previously approved
reimbursement, for which the Transitioned Employee has not yet submitted to
Investors evidence of satisfactory completion, will be paid by Provider upon
the Transitioned Employee’s presentation of evidence of satisfactory completion
thereof in accordance with Investors’ tuition reimbursement policy.  Provider will invoice this as a pass-through
expense on the monthly Invoice and Investors will reimburse Provider
accordingly.

 

3.4   Human Resources Representative

 

Provider will appoint a representative as its “Human
Resources Representative.” 
Provider’s Human Resources representative will be responsible for the
transition and initial cultural and administrative assimilation of the
Transitioned Employees.

 

4.             PROVISION OF RESOURCES BY
INVESTORS

 

4.1   Office
Space and Furnishings

 

Investors shall make
reasonably necessary office space, furnishings and storage space (the “Investors
Facilities”) available to Provider’s on-site personnel performing
Services at all Investor’s In-Scope Locations throughout the Term and shall
maintain Investors Facilities at a level similar to that which it maintains for
its own employees performing similar work. 
Office space, furnishings, storage space, and assets installed or
operated on Investors premises, and supplies allocated, are provided “AS IS,
WHERE IS,” and are to be used exclusively for performance of Services for
Investors.  Investors shall provide
Provider reasonably unencumbered access to such Investors In-Scope Locations as
is reasonably required for Provider to provide the Services.  Any furnishings (other than basic office
furnishings) and office supplies for the use of Provider’s (and its Subcontractors’)
personnel are the exclusive responsibility of Provider.  Provider shall be entitled to make
improvements to any space where Provider’s personnel are performing Services
on-site at a In-Scope Location (including, but not limited to, structural,
mechanical and electrical alterations), provided that: (i) such
improvements shall have been previously approved in writing by Investors (which
approval may be withheld in Investors’ sole discretion); (ii) such
improvements shall be made at no cost to Investors; (iii) any
Subcontractors used by Provider to perform such improvements shall have been
identified or otherwise approved in writing by Investors; and
(iv) Investors shall be granted, without further consideration, all rights
of ownership in such improvements.

 

4.2   Designated
Resources

 

Investors shall provide, as
a courtesy to Provider, ordinary office supplies (other than consumable office
supplies), all such telephone (excluding long distance charges), computer
connections, and network access at Investors In-Scope Locations, as may be
necessary for Provider personnel working at such In-Scope Locations to provide
the Services (“Designated Resources”). 
Provider shall be responsible for modem computers and peripheral
devices, all usage-based carrier charges incurred by Provider personnel and all
usage-based carrier charges incurred to provide Provider personnel with
connectivity from the Investors In-Scope Locations and consumable office
supplies (such as pens and notepads). 
Designated Resources will be provided by Investors to Provider “AS IS”
and Provider shall be responsible for paying Investors the “Chargeback
Fee” applicable to such Designated Resource as may be specified in Schedule E.  If no Chargeback Fee is specified in Schedule E
then the Designated Resources will be provided to Provider at no charge to
Provider; provided, however, if Investors expense for such Designated Resources
exceeds [*] in any Contract Year, then the Provider agrees to negotiate in good
faith with Investors for a reasonable Chargeback Fee in subsequent Contract
Years as reimbursement for the expense for such Designated Resources.

 

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4.3   Access
to Personnel and Information

 

With respect to Provider’s
performance of the Services, Investors shall provide Provider with reasonable
access to Investors’ administrative and technical personnel, other similar
personnel, and network management records and information.

 

4.4   Other Facility-Related
Obligations

 

(a)   Except as expressly provided
in this Agreement, Provider shall use Investors In-Scope Locations and
Investors Facilities and In-Scope Locations for the sole and exclusive purpose
of providing the Services.  Use of such
In-Scope Locations by Provider does not constitute a leasehold interest in
favor of Provider.

 

(b)   Provider shall use In-Scope
Locations and Investors Facilities in a reasonably efficient manner.

 

(c)   Provider, and its
Subcontractors, employees, and agents, shall keep Investors In-Scope Locations
and Investors Facilities in good order, shall not commit or permit waste or
damage to such In-Scope Locations and Investors Facilities, and shall not use
such In-Scope Locations and Investors Facilities for any unlawful purpose or
act.

 

(d)   Provided that Investors
adheres to any mutually agreed upon security procedures implemented by Provider
at Investors In-Scope Locations, Provider shall permit Investors and its agents
and representatives to enter into those portions of Investors In-Scope
Locations occupied by Provider staff at any time to perform facilities-related
services.

 

(e)   When Investors In-Scope
Locations and Investors Facilities are no longer required for performance of
the Services, Provider shall return such In-Scope Locations and Investors
Facilities to Investors in substantially the same condition as when Provider
began use of such In-Scope Locations and Investors Facilities, subject to
reasonable wear and tear.

 

(f)    Provider shall not
knowingly breach any lease agreements governing use of Investors In-Scope
Locations.

 

(g)   Investors shall provide and
maintain, for all Investors In-Scope Locations, adequate heating, ventilation,
and air conditioning, electrical connections (to the wall plate), safety and
security equipment, and connections to any facility-wide uninterruptable power
supply.  Investors shall provide
Provider with reasonable notice of proposed changes to any of the foregoing
that may adversely affect Provider’s hardware located at any such facility and,
in such cases, Provider must relocate such hardware and Investors shall
reimburse Provider for its actual costs incurred directly in connection
therewith.  To the extent provided by
Investors, Investors shall maintain any uninterruptable power supply that is
dedicated to support any Investors In-Scope Locations.  Provider shall provide and maintain any
uninterruptable power supply dedicated to Provider’s hardware and shall provide
and maintain all connections from the wall plate to the hardware used to
provide the Services.

 

(h)   For any In-Scope Locations
added by Investors after the Contract Effective Date, Provider shall provide to
Investors, for its review and approval, detailed site fit-up plans and
specifications conforming to the hardware manufacturer’s requirements that are
necessary for Provider to provide the Services to such Locations.

 

5.             RETAINED AUTHORITY

 

Investors shall retain the exclusive right and
authority to set Investors’ IT strategy and to determine, alter, and define any
or all of Investors’ requirements or business processes.  Recognizing that ODCS only supports a
standard platform, subject to Section 9 of this Agreement, IBM will
inform Investors in advance of planned changes to the ODCS environment.  However, Investors shall also have the right
to approve or reject any and all proposed decisions regarding Investors’
infrastructure design, technical platform, architecture, and standards and,  will
have the right and authority to cause Provider at any time to change any or all
of the foregoing, subject 

 

24 of 76

 

to the change management procedure described in Section 7.4
of this Agreement. To the extent that Provider can demonstrate that a
particular exercise of Investors’ rights and authorities as stated in this Section may
interfere with or degrade Provider’s provision of the Services or have a
materially detrimental impact on Provider’s cost of providing the Services or
time for delivery of the Services, the Parties shall mutually agree to any
proposed exercise of such right or authority pursuant to the change management
procedure to be mutually agreed pursuant to this Agreement, prior to the
implementation thereof.  Provider shall
actively participate in any of the foregoing as Investors requests.  Investors shall consult with Provider to
inform Provider of significant changes in Investors’ IT strategy and changes in
its requirements and business processes relating to the Services.  Provider shall also provide Investors with advice,
information, and assistance in identifying and defining IT projects and future
IT requirements to meet Investors’ objectives. Without limiting the generality
of the foregoing and, subject to the change management procedure described
above, Investors shall retain authority, discretion, and rights of approval for
the following IT activities.

 

5.1   Strategic and Operational
Planning

 

Strategic and operational
planning for Investors owned IT systems, which includes the following:

 

(a)   Developing a series of
comprehensive standards and planning guidelines pertaining to the development,
acquisition, implementation, and oversight and management of IT systems;

 

(b)   Identifying and implementing
opportunities for reducing costs for IT systems considering alternatives
provided by Provider;

 

(c)   Approving or disapproving,
in accordance with guidelines established by Investors, each proposed
acquisition of hardware or software for an IT system;

 

(d)   Approving or disapproving,
in accordance with guidelines established by Investors, all requests or
proposed contracts for consultants for IT systems;

 

(e)   Defining and evaluating IT
services including: service availability and minimum acceptable services
levels; service specifications, standards, and benchmarking, selection of
suppliers, security requirements; scheduling, prioritization, and service
conflict resolution among End-Users; and

 

(f)    Service-supplier strategy
including: selection of suppliers, specialized supplier relationships
(e.g., telecommunications), and quality assurance standards.

 

5.2   Service Design and Delivery

 

Service design and delivery,
which includes the following:

 

(a)   Selecting designs of
specific technologies and services from alternatives provided in part by
Provider;

 

(b)   Selecting specific
technologies, hardware, and software, from alternatives provided in part by
Provider, for implementation of such designs;

 

(c)   Selecting suppliers of
specific technologies, hardware, and software from alternatives provided by
Provider in part; and

 

(e)   Selecting implementation
schedules and activities from alternatives provided in part by Provider.

 

5.3   Moves, Adds, and Changes; Applications
Development

 

Ordering move, add, and
change activities with respect to resources used in connection with the
Services and designating Investors’ requirements for applications development
and enhancement.

 

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5.4   Business Process Reengineering

 

Provider shall periodically
identify and Investors shall approve IT opportunities and recommendations for
business process reengineering at Investors. 
Investors shall ensure that performance metrics related to business
process reengineering are accurately and appropriately developed.

 

5.5   Contract Management

 

Managing this Agreement and
Investors’ relationship with Provider.

 

5.6   Budget Management

 

Managing Investors’ annual
budget for all Investors operations, utilizing Provider’s estimates for
Services included in the scope of this Agreement and for additional services
planned or anticipated throughout the Term.

 

5.7   Validation and Verification

 

Performing validation and
verification activities in relation to key projects and operational processes.

 

5.8   Other Retained Authority

 

Provider must obtain the
prior written authorization of Investors before undertaking any activity that
is within the exclusive authority of Investors pursuant to the terms hereof.

 

5.9   Review and Acceptance

 

Investors shall have the
right to review and accept or reject all components, deliverables, and systems
to be provided by Provider to Investors under this Agreement, pursuant to the
methodology set forth in this Section 5.9.  Within thirty (30) calendar days after the Contract Effective
Date, Provider shall develop a functional methodology for the implementation of
the process described in this Section 5.9 by the delivery of control
documents, the preparation of deliverable acceptance documents, the tracking of
accepted deliverables, the maintenance of all deliverables and deliverable
acceptance documents and the timely review and response by Investors when such
methodology calls for any Investors review, acceptance and/or approval.
Provider will finalize the above methodology within thirty (30) calendar days
of the Contract Effective Date.   In the
event business as usual Services are delayed predominantly due to Investors’
request, or failure to abide by the terms of the Agreement or its
responsibilities in the Transition Plan, Provider will not be precluded from
invoicing for those steady state services.  
If steady state Services are delayed predominantly due to a Provider
action or inaction, or failure to abide by the terms and conditions of the
Agreement or the responsibilities in the Transition Plan, Provider will delay
invoicing for those steady state Services until the delay is resolved.

 

5.9.1       Acceptance Testing

 

Upon Provider’s
notification to Investors that Provider has completed any component or
deliverable identified in any Work Order or Initiative as being subject to
testing, Investors shall begin testing the component or deliverable using the
test procedures and standards set forth in the Work Order or Initiative, or
such other standards as the Parties mutually agree in writing, if any (“Acceptance
Test Procedures”), to determine whether such component or
deliverable meets, in all material respects, the acceptance criteria set forth
in such applicable Work Order or Initiative, or such other criteria as the
Parties mutually agree in writing (the “Acceptance Criteria”).   After Investors has completed any such
testing or upon expiration of the agreed-upon testing period specified in the
applicable Work Order or Initiative, or such other testing period upon which
the Parties mutually agree in writing (the “Acceptance Testing Period”),
Investors shall notify Provider in writing either that:  (i) the component or deliverable meets
the Acceptance Criteria and that acceptance of such component or deliverable
has occurred (“Acceptance”); or (ii) the Acceptance Criteria have not
been met, along with the Exception Report described in Section 5.9.2
below.  If Investors fails to deliver an
Exception Report within fifteen (15) calendar days after the expiration of
the applicable Acceptance Testing Period or Extended Acceptance Period (or if
the parties have not specified an Acceptance Testing Period, within fifteen
(15) calendar days after Provider’s written notice of completion), such
component or deliverable shall be 

 

26 of 76

 

deemed to have been
accepted.  If the component or
deliverable is identified in this Agreement, the applicable Work Order or
Initiative, or in the written specifications developed and mutually agreed upon
by the Parties therefore, as being an integrated component of a larger,
integrated system being developed thereunder as being conditional acceptance (“Conditional
Acceptance”), then such component or deliverable shall be subject to
Final Acceptance in accordance with Section 5.9.3 below.

 

5.9.2       Cure

 

If a component or deliverable subject to acceptance
testing as described in Section 5.9.1 above, does not conform
in all material respects with, the applicable Acceptance Criteria, Investors
shall promptly deliver to Provider an exception report describing the
nonconformity with a reasonable degree of specificity and evidentiary documentation
in order to enable Provider to assess such alleged nonconformity and take
appropriate action (the “Exception Report”).  Provider shall promptly investigate the
alleged nonconformity and shall make commercially reasonable efforts to correct
such nonconformity in all material respects within thirty (30) calendar
days of receipt of the Exception Report or, if the nonconformity is incapable
of cure within such thirty (30) calendar day period, Provider shall
present Investors, within such thirty (30) calendar day period, a mutually
agreeable plan to cure such nonconformity within a reasonable amount of
time.  Upon Provider’s notice to
Investors that Provider has so cured such nonconformity, Investors shall re-test
the defective component or deliverable in accordance with the applicable
Acceptance Test Procedures and Acceptance Criteria for an additional testing
period (“Extended
Acceptance Period”) of up to thirty (30) calendar days or such
other period as the Parties mutually agree in writing, at the end of which
period the process described above in Section 5.9.1 shall be repeated.

 

5.9.3       Final Acceptance

 

Upon completion of all components of a larger,
integrated system being developed thereunder and subject to Conditional
Acceptance, Investors shall begin testing the system that is comprised of such
components or deliverables, using the test procedures and standards set forth
in the Work Order or Initiative, or such other standards as the Parties
mutually agree in writing (the “Final Acceptance Test Procedures”), in
order to determine whether such system performs as an integrated whole and
meets, in all material respects, the acceptance criteria set forth in such
applicable Work Order or Initiative, or thereafter developed by the Parties and
mutually agreed upon in writing by the Parties (the “Final Acceptance Criteria”).  After Investors has completed such testing
or upon expiration of the testing period specified in the applicable Work Order
or Initiative, or such other testing period as the Parties mutually agree in
writing (the “Final Acceptance Testing Period”), Investors shall notify
Provider in writing that:  (i) the
system, and all components and deliverables that are a part thereof, meet the
Final Acceptance Criteria and that final acceptance of the system and such
components and deliverables has occurred (“Final Acceptance”); or (ii) that the
Final Acceptance Criteria have not been met. 
If Investors determines that the Final Acceptance Criteria have not been
so met, the process described in Section 5.9.2 shall be initiated, with
all references to “Acceptance Criteria” being references to “Final Acceptance
Criteria,” all references to “component or deliverable” being references to the
“system,” all references to “Acceptance Test Procedures” being references to
“Final Acceptance Test Procedures,” and all references to the “Acceptance
Testing Period” being references to the “Final Acceptance Testing Period.”  Conditional Acceptance by Investors shall
not constitute a waiver by Investors of any right to assert claims based upon
defects not discernable through conduct of the applicable test procedures and
subsequently discovered in a component or deliverable or the system within one
(1) year of Investors’ Final Acceptance thereof.  Upon completion of all of the Services to be provided under a
Work Order or Initiative, to the extent that the Services provided do not
result in the development of a system subject to testing as stated above, the
Final Acceptance Test Procedures shall consist of Investors’ verification that
all of the Services to be provided by Provider under such Work Order or
Initiative have been provided in all material respects in accordance with the
Work Order, or Initiative, or such other acceptance criteria mutually developed
by the Parties and mutually agreed upon by the Parties.   Provider shall notify Investors when
Provider has completed the Services under a Work Order or Initiative and
Investors shall deliver to Provider a statement of deficiencies (if any).  Provider shall correct such deficiencies in
all material respects within thirty (30) calendar days of receipt of such
statement or, if the deficiencies are not correctable within such
thirty (30) calendar days period, Provider shall present Investors with a
mutually agreeable plan to fix such defects within a reasonable amount of
time.  Upon Provider’s notification to
Investors that Provider has so corrected such deficiencies, Investors shall
once again determine whether the Services have been so completed within an
additional period as agreed in writing by the Parties, at the end of which the
process described in the second and first preceding sentences shall be
repeated.

 

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If Investors fails to deliver a statement of the
deficiencies in the Services before the expiration of the applicable review
period, Investors shall be deemed to have accepted the Services.

 

6.             FINANCIAL TERMS

 

As
the sole and entire financial consideration for all of the Services to be
performed by Provider, Investors shall pay to Provider the amounts set forth in
this Section 6
and Schedule E.

 

6.1   Annual Service  Fees

 

6.1.1       Annual Service Fees

 

The Parties hereby agree that the Annual Service
Fees for 2004 of this Agreement shall be as specified in Schedule E.  The Annual Service Fees for subsequent
calendar years will be based on the estimated Baseline volumes and Forecasted
Monthly Usage for that calendar year as calculated against the Annual Service
Fees specified in Schedule E.  Except for ODCS: (1), within thirty (30) calendar days prior to
the end of the calendar year, Investors will determine, in its sole discretion,
the Baseline volumes for the following calendar year so long as those changes
fall within the established “Baseline Floor” and “Baseline  Ceiling” (as those terms are
defined in Schedule E) for that year, and (2) for changes that are
in excess of that year’s Baseline Floor and Baseline Ceiling, Investors must
give Provider no less than ninety (90) calendar days notice of the Baseline volumes
for the following calendar year.  For
ODCS, Investors may adjust its Forecasted Monthly Usage per Schedule E,
Section.2.4.

 

Notwithstanding
the foregoing, during the calendar year, the Annual Service Fees will be
subject to adjustment for changes limited to the unit rate changes specified in
Section 6.1.4
(Add Charges), Section 6.1.6 (Delete Credits), and Section 6.1.8 (Monthly
Usage Charge) of this Agreement. Further, the Annual Service Fees set forth in Schedule E
will be subject to the ECA adjustments, if any, as specified in Schedule E.

 

On a monthly basis, Provider shall report to
Investors the Annual Service Fees incurred to-date during each calendar year
and the amount of Fees projected to be incurred in the remaining months of the
calendar year.  In addition, Provider’s
monthly invoices shall specify adjustments to the Monthly Usage Charges, Add
Charges and/or Delete Credits applied to the monthly portion of the Annual
Service Fees being invoiced.  If either
Provider or Investors reasonably determine, based upon such monthly report,
that the Annual Service Fees that would be payable are likely to exceed Annual
Service Fees prior to the end of the relevant calendar year, the parties shall
cooperate to make adjustments to the Services or Annual Service Fees in
accordance with Schedule E.

 

6.1.2       Currency / Charges

 

All
prices, billing and payments will be in United States Dollars unless explicitly
expressed in some other currency.  All
periodic charges will be computed on a calendar month basis and will be
prorated for any partial month, unless this Agreement expressly states
otherwise.

 

6.1.3       Annual Services Fees Invoice

 

Except
for 2004, Provider will invoice Investors for the year’s Annual Services Fees,
prorated in equal monthly payments for each month of the calendar year (except
for ODCS charges which will be invoiced pursuant Section 6.1.8), in
accordance with the payment terms set forth in 15.1.1 of this Agreement.  In 2004, Provider will invoice Investors for
the ASF, prorated in equal monthly payments for each month of the calendar year
following Transition. The ASF will be decreased proportionately if Transition
for all Services except ODCS Services does not end by December XXX 1, 2004.

 

6.1.4       Adds Charges

 

Provider
will invoice Investors each quarter of the Term, beginning thirty days after
completion of the Transition Period, for all Services except ODCS, for the “Add Charges”,
if any, applicable for the prior 

 

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quarter. Add Charges will be calculated as set forth in
Schedule E, Exhibit E-1-A. Add Charges, if any, for the
prior three (3) months shall be netted at the end of each calendar quarter and
the difference shall be paid or credited (as applicable) in the following
month’s invoice.

 

6.1.5       Other Charges

 

Provider
will invoice Investors for any other agreed upon charges.

 

6.1.6       Deletes Credits

 

Provider
will provide Investors with a credit against Investors’ quarterly invoices
beginning with first month after the completion of the Transition Period, for
all Services except ODCS, for the “Delete Credits”, if any, applicable for the
prior quarter.   Delete Credits will be
calculated as set forth in Schedule E, Exhibit E-1-A. Delete
Credits, if any, for the prior three (3) months shall be netted at the end of
each calendar quarter and the difference shall be paid or credited (as
applicable) in the following month’s invoice.

 

6.1.7       Other Credits

 

At
Investors option, Provider will pay any amounts due and owing to Investors
pursuant to this Agreement by either: (i) paying such amount to Investors, or
(ii) providing Investors with a credit against Provider’s next monthly invoice
to Investors under this Agreement.

 

6.1.8       Monthly Usage Charge

 

Beginning on the Contract
Effective Date, Provider will invoice Investors monthly for an amount equal to
the Forecasted Monthly Usage listed in Schedule E for the applicable month
(“Monthly Usage Charge”) based upon the Monthly Usage Charge Unit Rates set
forth in Schedule E.   Monthly Usage Charges, if any, for the
prior three (3) months shall be netted at the end of each calendar quarter and
the difference shall be paid or credited (as applicable) in the following
month’s invoice.

 

6.2           Pricing Audit

 

Provider shall, upon request, allow auditors mutually
agreed to by the Parties, that are not competitors of Provider or its
Subcontractors with respect to the provision of the types of services as
provided under this Agreement, and who have executed a confidentiality
agreement substantially in the form of the Auditors Confidentiality Agreement
attached as Schedule V, to fully audit Provider to the extent
reasonably necessary to verify any amounts paid or payable hereunder are
consistent with the charges and charging methodology set forth in Schedule E.  Provider shall provide such auditors with
all reasonable and necessary access to documents, and other information
relating to the Services provided under this Agreement as necessary to confirm
the accuracy of Provider’s invoices, and any pricing adjustment computations.  All such audits shall be conducted during
Provider’s normal business hours, with reasonable advance notice and shall
include reasonable access to certain Provider proprietary and confidentiality
information to the extent necessary to comply with this Section 6.2 (provided
the auditors shall have no access to Provider’s profit or cost data, personnel
records, confidential information of other Provider customers or to Provider’s
internal audit data, collectively, “Internal Confidential Information”).  Auditor(s) shall be compensated on a fee
basis rather than a contingency or other incentive compensation scheme.  Provider shall promptly refund all
overcharges.  Further, if any such audit
reveals that Provider has overcharged Investors in excess of five percent (5%)
during the period to which the audit relates as determined prior to the
commencement of the audit, then (subject to Section 20 – Dispute
Resolution) Provider shall promptly refund such overcharges to Investors with
interest equal to the lesser of one percent (1%) of such payments per every
thirty (30) calendar days or portion thereof; or (ii) the maximum amount
permissible by the applicable law. 
Investors may dispute any invoice in accordance with the provisions of
this Agreement and Provider will bear its own internal costs of participating
in such audit.

 

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6.3   Reduction of Payments

 

If Investors terminates as to any of the categories of Services
described in this Agreement, pursuant to the terms of Section 11.2.1, Section 11.2.2,
Section 11.3,
Section 11.4 or Section 11.5, hereof, then the adjustments
to the Annual Service Fees for such category of Services, in accordance with Schedule E,
shall go into effect as of the effective date of such termination.

 

6.4   Taxes

 

All fees payable to Provider
hereunder shall be inclusive of all taxes imposed as of the Contract Signing
Date by any domestic or foreign taxing (unless prohibited by law, e.g.; Ireland
Value Added Taxes)  authority in respect
of the provision of the Services hereunder, including any sales, use, excise,
value-added, services, consumption, or other tax as may be set forth in Schedule E
(collectively, “Sales Tax(es)”); provided, however, that Investors shall not
be responsible for, and such fees shall not include, any personal property
taxes on property Provider owns or leases, for franchise and privilege taxes on
Provider’s business, gross receipts taxes to which Provider is subject, and for
income taxes based on Provider’s income. 
In the event that a Sales Tax becomes effective after the Contract
Signing Date and is assessed on the provision of Services by Provider that are
within scope as of the Contract Signing Date or on Provider’s charges under
this Agreement related thereto, however levied or assessed, Investors shall be
responsible for and pay its proportionate share of any such Sales Tax.

 

The Parties agree to
cooperate with each other to enable each to more accurately determine its own
tax liability and to minimize such liability to the extent legally
permissible.  Provider’s invoices shall
separately state the amounts of any taxes Provider is properly collecting
pursuant to the terms hereof.

 

6.5   Benchmarking

 

With Investors’ direction and cooperation, and as part of the Services,
Provider shall conduct a benchmarking program (“Benchmarking”) that shall
enable Investors to compare the Annual Service Fees (including Add Charges,
Delete Credits and Monthly Usage Charges) and MASLs set forth in this Agreement
with, and to ensure that said Annual Service Fees and MASLs are competitive
with rates and practices available from Provider’s competitors for services
comparable to the Services provided hereunder. 
[*] Provider shall work with either Gartner Measurement, or, as the
Parties mutually agree, another independent and professional benchmarking firm
with substantial experience in the field of benchmarking the type of services
provided under this Agreement.  For
purposes of this Section 6.5, and during the Term, in the event the
parties are unable to otherwise agree upon a benchmarking firm, unless
otherwise disqualified, Gartner Measurement shall be deemed reasonably
acceptable by both parties.  The
selected firm shall not be a competitor of Provider or its Subcontractors in
the information technology markets with respect to the provision of services
similar to the Services and shall be engaged on a fee basis and not on a
contingency or other incentive based compensation scheme.  Provider shall pay [*] of all fees and charges
paid to such benchmarking firm, to conduct the Benchmarking.  The Parties shall cooperate fully with the
benchmarking firm to facilitate a smooth and prompt collection of data with
respect to the Services being benchmarked. Investors and Provider will make
good faith efforts to agree promptly, in advance and in writing, to the
benchmark process, methodology and minimum criteria to be used when conducting
the Benchmarking and when establishing the relevant comparison price.  Each Party shall have the opportunity
to advise the benchmarking firm of any information or factors that it  deems
relevant to the conduct of the Benchmarking, so long as such information is
disclosed to the other Party.  The
benchmarking firm shall provide reports on the Benchmarking exclusively to
Investors and Provider for their internal use only, and shall not otherwise use
or disclose such reports or data or information related thereto. In the event
that, after negotiating in good faith, the Parties are unable to mutually agree
on an acceptable Annual Service Fees or MASLs adjustment, then at Investors
option, Investors may elect to adjust the Annual Service Fees as follows: [*]
In addition to the foregoing, Provider will also discuss and propose
alternatives for further Annual Service Fees, Services scope, MASLs or SLRs
changes to deliver a lower price point to get closer to the comparison
price.  Investors shall also have the
option, [*].

 

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6.6   Work Orders

 

For Work Orders, Provider shall be paid such amounts as may be
determined through the provisions of Section 7.4 hereof.

 

6.7   Initiatives

 

For Initiatives, Provider
shall be paid such amounts as may be determined through the provisions of Section 8
hereof.

 

6.8   Incentives and Fee Reductions

 

Schedule F specifies certain incentives and fee
reductions that may be imposed in the event of any failure (“Fee
Reduction”) or earn back (“Incentive”) in respect of Provider’s actual
performance of Services as measured against the Critical Milestones or the
MASLs.  The Parties acknowledge and
agree that Fee Reductions are intended to reflect, to some extent, the
diminished value of the Services as a result of any such failure; which
diminished value reflects the damages from such failure, which are difficult or
impossible to measure.  Such Fee
Reductions are not intended to constitute penalties, but rather are intended as
liquidated damages, or other compensation for any such failure.   [*].

 

6.9   Only Payments

 

The Annual Service Fees and charges set forth in this Section 6
and Schedule E
are the only payments to be made by Investors to Provider under this
Agreement.  Except as otherwise
expressly stated in this Section 6, Investors shall not pay
Provider any additional fees, assessments, reimbursements, or expenses for
labor and general business expenses (including travel, meals, and overhead
expenses).

 

6.10 Disputed Amounts

 

Subject to and in accordance with the provisions of this Section 6.10,
Investors may withhold payment of any Provider invoice (or part  thereof)
that it in good faith disputes are due or owing.  In such case, Investors shall, by the applicable due date, pay
any amounts then due that are not disputed and provide to Provider a written
explanation of the basis for the dispute as to the disputed amounts.  The failure of Investors to pay a disputed
invoice, or to pay the disputed part of an invoice, shall not constitute a
breach or default by Investors, so long as Investors complies with the
provisions of this Section 6.10.  For purposes of Section 20, any dispute
relating to amounts owed by a Party hereunder shall be considered a
Problem.  In any such event, the Parties
shall diligently pursue an expedited resolution of the dispute.  Provided, however, that the aggregate amount
withheld in respect of amounts being disputed, shall in no event exceed [*] of
the Annual Service Fees for the year in which the dispute arose,
notwithstanding any such dispute. 
Payment by Investors to Provider of amounts in excess of the aggregate
disputed amounts will not constitute a waiver by Investors of their rights with
regard to the dispute.

 

7.             RELATIONSHIP MANAGEMENT

 

7.1   Personnel

 

7.1.1       Provider’s Key Personnel

 

Each of the initial Provider’s Key Personnel, including the Provider
Contract Manager, is designated on, and shall have the functions assigned to
him or her, as set forth in this Agreement or in Schedule I.  Schedule I may be modified from time
to time in accordance with this Agreement, and shall be deemed modified upon
(i) the Parties mutual designation in writing of certain Transitioned Employees
as Provider’s Key Personnel as set forth below, and (ii) any mutually approved
modification, replacement or substitution of a new person for any Provider’s
Key Personnel already listed in Schedule I as may be amended from time
to time.  Prior to the Contract Signing
Date, Investors shall have the right to interview and approve the initial
Provider’s Key Personnel listed on Schedule I, including the Provider
Contract Manager, and if any such Provider’s Key Personnel or the Provider
Contract Manager are not approved by Investors then upon written 

 

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notice
from Investors to Provider such unapproved personnel shall be replaced in
accordance with this Section 7.1.1, and Section 7.1.2
and Section 7.1.7
below.

 

After
the Contract Signing Date, Investors shall have the right, prior to the
assignment, hiring or designation of any person to fill the position or perform
the duties provided by any Provider’s Key Personnel or the Provider Contract
Manager, to interview and participate in the selection of such person to fill
the position or perform the duties provided by Provider’s Key Personnel and/or
the Provider Contract Manager, as and to the extent Investors deems necessary
or desirable.  Except as an emergency,
whether or not Investors conducts an interview or participates in such
selection, Provider shall not hire, assign or designate any new person to fill
the position or perform the duties provided by any Provider’s Key Personnel or
replace its Provider Contract Manager without Investors’ prior written consent,
which may be given or withheld in Investors’ sole discretion.  The Parties acknowledge that certain
Transitioned Employees will, by mutual agreement of the Parties, be designated
as Provider’s Key Personnel by Investors before or concurrently with the
Contract Signing Date.  All Provider’s
Key Personnel shall be assigned to the performance of the Services on a full
time basis, and Provider shall not, without Investors’ prior written consent,
(i) undertake any action with respect to any Provider’s Key Personnel or the
Provider Contract Manager resulting in the alteration or reduction of time
expended by such Provider’s Key Personnel or the Provider Contract Manager in
performance of Provider’s duties under this Agreement; or (ii) transfer,
reassign or otherwise remove or redeploy any Provider’s Key Personnel or the
Provider Contract Manager except in the case of a termination for cause.  Notwithstanding anything in this Agreement
to the contrary, for a period of [*] after the Contract Manager assignment with
Investors is terminated, Provider will not transfer or reassign the Contract
Manager or any Key Personnel to the account of [*], or any parent, subsidiary
or affiliate of any such entity (“Investors Competitor”). If any one of
Provider’s Key Personnel or Provider Contract Manager becomes incapacitated,
voluntarily terminates their employment with Provider (and/or any of Provider’s
Affiliates or Subcontractors), is terminated for cause by Provider or is
transferred with the consent of Investors, Provider shall, within no more than
two (2) business days, temporarily replace such person with another person
reasonably approved by Investors and that is at least as well qualified as the
person who initially performed that person’s functions.  Subsequently, Provider shall, as soon as
reasonably practicable but no more than thirty (30) calendar days, propose a
qualified candidate for the position and such candidate will be subject to
approval by Investors.  For purposes of
this Section 7.1.1,
the movement of Provider’s Key Personnel from the employ of Provider to an
Affiliate or Subcontractor of Provider, at Providers direction, shall be
considered a reassignment requiring Investors’ consent and not a cessation of
employment.  Provider shall maintain
detailed written succession plans and conduct the replacement procedures for
Provider’s Key Personnel in such a manner so as to assure an orderly succession
for any Provider’s Key Personnel that are replaced.  Upon request, Provider shall make such written succession plans
available to Investors.

 

7.1.2       Provider Contract Manager

 

The
“Provider
Contract Manager” appointed by Provider must be (i) knowledgeable
about the Services and each of Provider’s and its Subcontractors products and
services, (ii) experienced at running information technology systems and
networks of a size and scope of at least to that of Investors, and (iii)
otherwise acceptable to Investors. 
Provider represents and warrants that its Provider Contract Manager is
an experienced manager who is experienced as a project leader in a project of
such size and who is knowledgeable as to the Services.  The Provider Contract Manager shall act as the
primary liaison between Provider and Investors’ Representatives, shall have
overall responsibility for directing all of Provider’s activities hereunder,
and shall be vested by Provider with all necessary authority to act for
Provider in connection with all aspects of this Agreement and fulfill that
responsibility.  Provider and
Subcontractor staff shall be managed in the performance of their duties by the
Provider Contract Manager who will serve as Provider’s senior executive within
all of Investors In-Scope Locations. 
The Provider Contract Manager shall report to an Investors
Representative and will perform his or her duties, under this Agreement, as
though part of Investors’ management organization in the same manner as would
be expected of an employee of Investors.

 

Notwithstanding
anything else herein to the contrary, Provider shall not replace the Provider
Contract Manager during the period of time that begins on the Contract
Effective Date and ends on the [*] anniversary of the Contract Effective Date
without Investors’ prior written consent. 
Before any desired replacement of the Provider Contract Manager,
Provider shall notify Investors of the proposed replacement and assignment of a
new the Provider Contract Manager, introduce the individual to appropriate
Investors representatives and provide Investors with a resume and any other
information about the individual reasonably requested by 

 

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Investors.  Investors shall have the right, prior to the
assignment, hiring or designation of any such person to fill the position or
perform the duties provided by the Provider Contract Manager, to interview and
participate in the selection of such person to fill the position or perform the
duties of the Provider Contract Manager, as set forth above.  Provider agrees to discuss with Investors
any objections Investors may have to such assignment and the Parties will
attempt to resolve such concerns on a mutually agreed basis; provided that if
Investors and Provider cannot agree, such person will not be assigned as the
Provider Contract Manager by Provider, but an alternative candidate or
candidates will be identified for consideration and approval as above.  Whether or not Investors consents to any
reassignments or replacements of the Provider Contract Manager, Provider will
be in Default of its obligations under this Agreement if it assign more than
three (3) different individuals to the position of the Provider Contract
Manager during the Term, unless: (w) Investors requests such reassignment or
replacement, (x) Provider Contract Manager voluntarily resigns from Provider or
is unable to work due to his or her death, disability, or leave of absence of
at least thirty (30) calendar days, (y) for personal reasons the Provider
Contract Manager request a reassignment to a different account in a
metropolitan area other than Boston, Massachusetts, or (z) if the Parties
otherwise agree.  Provider shall cause
the Provider Contract Manager to be stationed in the greater Boston,
Massachusetts metropolitan area and to devote substantially all of his or her
full working time and effort to his or her responsibilities for the provision
of the Services under this Agreement. 
For any bonus compensation payable by Provider to the Provider Contract
Manager, Investors’ management’s evaluation of the Provider Contract Manager’s
performance will be taken into account. 
Unless the Provider notifies Investors’ Chief Financial Officer in
writing prior to completing any sale, lease or licensing of software, hardware
or services (outside of the scope of the Services), the Provider Contract
Manager will not directly receive any commissions based on the sale, lease or
licensing of any software, hardware or services (outside of the scope of the
Services) by Provider, Subcontractor or any of their Affiliates to Investors.

 

7.1.3       Additional Personnel Requirements

 

In
addition to Provider’s Key Personnel, Provider shall provide and make available
such additional staff and personnel as necessary to properly perform all of
Provider’s obligations under this Agreement. 
All costs and expenses associated with providing, equipping and
retaining Provider staff and other personnel is included within the Annual Service
Fees or other charges payable by Investors pursuant to Schedule E, including,
without limitation, all wages and benefits and associated staffing costs such
as training and education, office supplies, PC refreshment, travel and lodging
costs and recruiting and relocation expenses. 
Provider shall, upon request, provide Investors with a written list of
all Provider and Subcontractor personnel whose time is predominantly dedicated
to providing Services under this Agreement.

 

7.1.4       Minimum Proficiency Levels

 

All personnel assigned by Provider or its Subcontractors to
perform Provider’s obligations under this Agreement shall have the necessary
skills to perform the Services in accordance with the relevant SLRs and
responsibilities assigned.

 

7.1.5       Specialized Personnel

 

Provider agrees that as part of its provision of
Services, all Provider personnel (and the personnel of any Subcontractors) are
trained, qualified, and available to perform all Services required in work
areas requiring specific health, security, or safety precautions, to the extent
such precautions are communicated to Provider.

 

7.1.6       Training

 

Provider shall provide, and
cause its Subcontractors to provide, all such training and certification to the
employees of Provider and its Subcontractors (including the Transitioned
Employees) as may be necessary for them to perform, on behalf of Provider, all
of Provider’s duties under this Agreement.

 

7.1.7       Replacement of Personnel

 

Notwithstanding
Section 7.1.1,
if Investors believes that the performance or conduct of any Person employed or
retained by Provider, who works at the Investors In-Scope Locations or who has
significant 

 

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contact
with Investors personnel or Investors customers, to perform Provider’s
obligations under this Agreement is unsatisfactory for any reason or is not in
compliance with the  provisions of this Agreement, Investors
shall so notify Provider in writing with reasonable specificity and
justification and Provider shall promptly address the performance or conduct of
such person, or, upon prompt confirmation of such justification, at Investors’
request, promptly replace, as soon as reasonably possible, such Person with
another Person reasonably acceptable to Investors with sufficient knowledge and
expertise to perform the Services in accordance with this Agreement.

 

7.1.8       Conduct of Provider Personnel

 

In addition to any obligations contained within Section 3.1,
while at or on the premises of Investors, personnel of Provider and Provider’s
Subcontractors shall (1) conduct themselves in a businesslike manner, and
(2) comply with the standard rules of Investors regarding safety and
health (including adhering to general safety practices or procedures) as may be
required for such locations, to the extent that Provider has been made aware of
such policies.

 

7.2   Management Committee

 

Shall be created pursuant to
Schedule H.

 

7.3   Parties’ Relationship

 

From time to time during the
Term, but on not less than a quarterly basis, Provider shall discuss with
Investors (and provide reports on) operational plans related to this Agreement,
and Provider shall make available its senior management personnel to answer
questions from Investors’ senior management personnel regarding such
plans.  In addition, at Investors’
request, the Sector / Industry Vice President of IBM Global Services) and the
Chief Information Officer of Investors (each a “Senior Executive Contact” and
collectively, the “Senior Executive Contacts”) shall meet to
discuss the general progress of the performance of this Agreement and the
Parties’ relationship.

 

7.4   Work Order Procedures;
Change Management Procedure

 

If Investors requires the performance of work that is not being
performed at a particular time but that is within the scope of the Services,
Investors shall deliver to the Provider Contract Manager a Work Order, in the
form set forth in Schedule O, specifying the proposed
work with sufficient detail to enable Provider to evaluate it.  Unless the Parties mutually agree in writing
to proceed otherwise, or mutually agree to an expedited process, within
five (5) business days following the date of receipt of such Work Order,
Provider shall provide Investors with an initial evaluation of the Work Order
and within ten (10) business days a written proposal containing the following:
a detailed description of the Services to be performed; specifications (if
applicable); implementation plans, with implementation to commence not later
than thirty (30) calendar days after approval thereof, unless otherwise
mutually agreed; the timeframe for performance; and the estimated price for
such performance.  Notwithstanding the
foregoing, if the scope of the Work Order is such that Provider reasonably
determines ten (10) business days would be insufficient amount of time to
finalize a written proposal, then within a mutually agreeable period of
time.  The Parties understand and agree
that all services requested in such written requests shall be presumed to be
subject to the Annual Service Fees unless Provider can demonstrate to Investors’
reasonable satisfaction that the Work Order should not be subject to the Annual
Service Fees based upon the following criteria: (i) whether the Work Order is
to accommodate volume or usage levels that are above the volume and usage
levels planned or anticipated by this Agreement, (ii) whether the Work Order
relates to a role, responsibility, scope or type of service previously
delegated to Investors under this Agreement. 
All Work Orders shall be governed by the terms and conditions of this
Agreement.  Within the timeframe
specified in Provider’s proposal (the “Response Period”), Investors shall notify
Provider in writing whether to proceed with the Work Order.  If, within the Response Period, Investors
notifies Provider in writing (x) not to proceed, or fails to notify
Provider, then the Work Order shall be deemed withdrawn and Provider shall take
no further action with respect to it, or (y) to proceed with the Work
Order, then Provider shall proceed in accordance therewith.  Provider will evaluate whether a Work Order
would alter or affect a service level requirement specified in any Services
Schedules (“SLRs”) and notify Investors in writing and in advance of such
effect.  If Investors elects to go ahead
with the Work Order, despite the affect on the SLRs, Provider will be relieved
of 

 

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such
SLRs to the extent it is affected by the Work Order; provided, however, the
Parties shall reasonably cooperate to minimize any such effect on the
SLRs.  Work Orders must be executed by
authorized representatives of the Parties to be valid.  In the event Provider wishes to perform work
that it is not currently providing but that is within the scope of the
Services, it shall provide Investors with a Work Order and a written proposal;
thereafter, the procedure shall be as stated above.

 

Within thirty (30) calendar days after the Contract Effective Date,
Provider shall develop a change management procedure, in accordance with the
sample procedure set forth in Schedule O, subject to Investors’
review and approval.  Such change
management procedure shall be incorporated in the Standards and Procedures
Manual.

 

7.5   Extraordinary Events or
Circumstances

 

Investors may, at any time,
in a writing signed by an Investors Representative, and as a result of an
extraordinary event or circumstance, including a Force Majeure Event:  (i) direct Provider, in accordance with
the change management procedures in Section 7.4, to perform Services in an
extraordinary manner (e.g., perform services at service levels above or
below the MASLs for a limited duration); (ii) direct Provider to
temporarily cease the performance of certain Services; or (iii) obtain a
third party to perform certain Services for the duration of the extraordinary event
or circumstance.  If any such Investors
request causes an increase in Provider’s direct cost or expense of performance
of the affected Services, Investors shall pay Provider an amount equal to any
such increase.  Any request by Provider
for such an adjustment must be asserted in writing to an Investors
Representative within thirty (30) calendar days after the date of receipt
by Provider of Investors’ writing with respect to the extraordinary
circumstance or event, or within such additional period of time as an Investors
Representative may agree in writing, and shall include factual information and
support for all purported increases and decreases in direct cost or
expense.  Pending the determination of
any such adjustment, Provider will diligently proceed with the requested
Services.  Subject to Section 6.2,
Investors may require the submission of supporting cost and expense
documentation and inspection of Provider’s pertinent for the purpose of
verifying Provider’s request and determining the basis for the adjustment.

 

8.             INITIATIVES

 

8.1   Initiative Requirements and
Process

 

Investors may, at any time
and from time to time, propose a special project that is outside of the scope
of the Services (“Initiative”) to Provider and solicit a
response from Provider for the performance of such Initiative.  Provider shall submit its response in
respect of each Initiative proposed by Investors within fifteen (15)
business days after Provider’s receipt of Investors’ proposed Initiative, or,
if the scope of the Initiative is such that fifteen (15) business days
would be insufficient, within a mutually agreeable period of time.  Provider’s proposed fees for performance of
each Initiative shall be at a fixed price (to the extent the Initiative
consists of design, build, or other development services) or at a fixed rate
per unit of performance or other benefit to be received by Investors (to the
extent the Initiative consists of operational or other ongoing services), in
either case based upon competitive rates Provider is offering to similar
customers for services of a similar nature and scope.  Each such response shall be in writing and shall contain the
following requirements and be in conformance with the process set forth herein:
Provider’s response to Investors’ description and specifications for the
Initiative, including all services to be performed, categories of personnel
(and number of personnel within each category) required to complete the
Initiative, and implementation plans; the amount, schedule, and method of payment;
the timeframe for performance; completion and acceptance criteria; and any
proposed MASLs for new Services that would result from the Initiative.  In the event Investors selects Provider as
its supplier with respect to, or the Parties otherwise reach agreement on the
terms and conditions of, any Initiative, the obligations of Provider with
respect to the Initiative shall be governed by all the terms and conditions of
this Agreement as if it were a  Service, to the extent that such
terms are not inconsistent with those agreed to by the Parties with respect to
such Initiative.

 

8.2   Cooperation and Coordination

 

With respect to each
Initiative as to which Provider is not selected to be the sole or principal
supplier, Provider shall at all times reasonably cooperate and coordinate with
the selected supplier in every respect (to the 

 

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extent that the Initiative
is affected by the Services) to facilitate the successful accomplishment of the
Initiative, provided that such third-party supplier complies in all material
respects with Provider’s technical and confidentiality requirements (which had
been previously disclosed to Investors under this Agreement) and to the extent
that the personnel otherwise assigned to perform the delivery of Services under
this Agreement can reasonably do so without materially and adversely affecting
the MASLs or other aspects of the Services delivered, including incurring any
unanticipated, material expenses as a result of the third party supplier’s
performance of the Initiative.  Such
cooperation shall include: (i) providing information concerning any or all
of the systems, data, computing environment, and technology direction used in
providing the Services; (ii) cooperating with such third party in the
implementation and integration of the Initiative in Investors’ environment;
(iii) providing access to and use of Provider resources to the extent
reasonably necessary for such third parties to perform their obligations; and
(iv) performing tasks assigned to Provider in connection with the
Initiative, as mutually agreed between the Parties and subject to Section 7.4
or Section 8.1
(as applicable).  If Provider is
required to provide material assistance outside the scope of Services,
Investors shall pay Provider, in the absence of mutual written agreement to the
contrary, at Provider’s customary rates charged to similar customers for
similar services, provided Provider notifies Investors in writing of its
required assistance and receives written authorization from an Investors
Representative therefore.  Provider
shall not be required to provide such material assistance absent such
authorization.  Provider acknowledges
that Investors has the right to solicit or accept proposals on any Initiative
from any other supplier and may award any Initiative to any such supplier for
any reason; provided that Provider’s performance under this Agreement shall be
excused to the extent that such other supplier’s performance adversely affects
Provider’s ability to provide the Services and/or to meet the MASLs, on the
condition that Provider notifies Investors as soon as it becomes aware that
Provider’s ability is being so adversely affected.

 

9.             PROPRIETARY
RIGHTS

 

9.1   Investors Proprietary Systems

 

(a)                Investors
shall be the sole and exclusive owner of all of Investors Proprietary Systems
and of all copyright, patent, trademark, trade secret, and other proprietary
rights in Investors Proprietary Systems.

 

(b)                Investors
shall also be the sole and exclusive owner of all copyright, trademark, and
trade secret rights in any derivative work of Investors Proprietary Systems
developed by Provider (“Investors Proprietary System Derivatives”) and such
rights shall be assigned to Investors as set forth in Section 9.6.

 

(c)                During
the Term of this Agreement and to the extent useful to Provider in the
provision of Services, Investors shall promptly deliver to Provider any
Investors Proprietary Systems (or access thereto, as applicable.) [*]  Except as provided in this Section, neither
Provider nor any such Subcontractor may use Investors Proprietary Systems or
any derivative works thereof, in connection with the provision of services to
its other customers without the prior written consent of Investors, which may be
withheld in Investors’ sole discretion.

 

9.2   Work Product and Related Provider
Underlying Works

 

(a)                Provider
shall be the sole and exclusive owner of all Provider Underlying Works
including any derivative works, and of all copyright, patent, trademark, trade
secret, and other proprietary rights in Provider Underlying Works.

 

(b)                During
the Term of this Agreement, Provider shall promptly deliver to Investors all
information necessary for Investors to receive the services.  Subject to any third party restrictions,
upon Investors’ request, made contemporaneously with or at any time after
issuing a Termination Notice, Provider shall promptly deliver to Investors all
Work Product in writing and, with respect to [*].  Following the expiration or termination of this
Agreement, Provider shall deliver updates to the Work Product that address
errors as such updates become available.  Provider
shall also offer to Investors the right to receive maintenance (including all
enhancements and upgrades) and support with respect to Work Product for so long
as Investors requires upon terms and conditions which are 

 

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competitive with those Provider is offering to other major customers
for services of a similar nature and scope.

 

(c)                Except
with respect to any Work Product that is an “Investors Proprietary System
Derivative,” Provider or a third party vendor shall be the sole and exclusive
owner of all copyright, patent, trademark, and trade secret, or other
proprietary rights in any Work Product.

 

(d)                Subject
to any third party restrictions, with respect to any Work Product not assigned
to Investors hereunder, and with respect to any Provider Underlying Work that
would, in the absence of a license, be infringed by the use of the Work
Product, Provider hereby grants to Investors, under all of its intellectual
property rights therein, [*].

 

(e)                The
licenses provided for in this Section may be sublicensed or assigned by
Investors only to an Affiliate or to a successor to all or substantially all of
the assets or stock of Investor or to all or substantially all of the assets
used in any business operation of Investor.

 

9.3   Provider Underlying Works to be delivered
upon Termination.

 

(a)           Upon
any termination or expiration of this Agreement or any portion of the Services,
as allowed in Section 11, upon Investors’ request, made contemporaneously
with or at any time after issuing a Termination Notice, Provider shall deliver
to Investors all Provider Underlying Works used in the provision of the
Services (or the terminated portion thereof as applicable) to Investors in
writing and, [*].  For purposes of this
Section, “used in the provision of the Services” shall include all tools and
processes used in the maintenance and optimization of the hardware and
software.

 

(b)                           In
the event of a termination other than a termination for Convenience by
Investors, or upon the expiration of this Agreement at the conclusion of the
Term, Provider shall grant to Investors the following:

 

(i)    With respect to any
Provider Underlying Work that is (i) deliverable pursuant to this
Section 9; (ii) and that is not subject to the license granted in
Section 9.2(d) above, and (iii) that is not made commercially available by
Provider, Provider shall grant to Investors under all of its intellectual
property rights therein,[*].  For
purposes of this Section 9.3(b)(i) and Section 9.3(c)(i), “Internal
Use” shall mean use of the licensed materials by employees and customers of
Investors and by employees of service providers to Investors in the conduct of
Investors’ business and in the provision of services to Investors’ customers,
provided, however, that “Internal Use” shall not include the delivery of the
licensed materials to any third party engaged to provide external outsourcing
of information technology services to Investors.

 

(ii)   With respect to Provider
Underlying Works licensed pursuant to 9.3(b)(i) above, in addition to the
obligations set forth in Section 12.3, Provider shall offer to Investors
the right to receive maintenance (including all enhancements and upgrades) for
so long as Provider makes such maintenance commercially available at rates
which are competitive with those rates Provider is offering to major customers
for services of a similar nature and scope.

 

(c)           In
the event of a termination of this Agreement or any portion of the Services by
Investors for Convenience, Provider shall grant to Investors the following:

 

(i)    With respect to any
Provider Underlying Work that is (i) deliverable pursuant to this
Section 9; (ii) and that is not subject to the license granted in
Section 9.2(d) above, and (iii) that is not made commercially available by
Provider, Provider shall grant to Investors under all of its intellectual
property rights therein, [*] for a period [*] following the effective date of
the termination.

 

(ii)   With respect to Provider
Underlying Works licensed pursuant to 9.3(c)(i) above, in addition to the
obligations set forth in Section 12.3, Provider shall offer to Investors
the right to receive maintenance (including all enhancements and upgrades) for
so long as Provider makes such 

 

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maintenance commercially available at rates which are competitive with
those rates Provider is offering to major customers for services of a similar
nature and scope.

 

(d)           With
respect to any Provider Underlying Work that is (i) deliverable pursuant to
this Section 9; (ii) and that is not subject to the license granted in
Section 9.2(d) above, and (iii) that is made commercially available by
Provider, upon any termination or the expiration of this Agreement, such
Provider Underlying Works (and maintenance thereof, including all enhancements
and upgrades) shall be made available to Investors upon terms and conditions
which are competitive with those Provider is offering to major customers for
services of a similar nature and scope. 
The obligations set forth in this Section 9.3(d) shall be in
addition to the obligations set forth in Section 12.3, and shall continue
for so long as such Provider Underlying Works and maintenance thereof are made
commercially available by Provider.

 

(e)           All
Post Termination Licenses may be sublicensed or assigned by Investors only to
an Affiliate or to a successor in interest to all or substantially all of the
assets or stock of Investor or to all or substantially all of the assets used
in any business operation of Investor.

 

9.4           Third-Party Underlying
Works 

 

(a)           The
sole and exclusive owner of any third party vendor software and of all
derivative works thereof that are created, invented, or conceived of by such
third party (such derivatives, collectively with the third party’s pre-existing
software, the “Vendor Software”) shall be the applicable third party software
vendor.

 

(b)           Investors
will take all actions reasonably necessary to obtain any consents, approvals,
or authorizations from third parties as required for Provider (and any
Subcontractor engaged by Provider) to lawfully access, operate, and use
(collectively, “Access”) any Vendor Software that is licensed by Investors upon
the Effective Date from a third party (“Investors-Vendor Software”) and that
will be used by Provider in the provision of Services hereunder.  Investors-Vendor Software will remain in the
name of Investors unless Investors gives Provider express written permission to
place the Investors-Vendor Software in Provider’s name.  During the Term, Investor will pay all
expenses related to the maintenance and licensing of Investors-Vendor Software,
including taxes and any cost and expenses associated with providing Access
rights to Provider.  If Provider places
any Investors-Vendor Software in Provider’s name, or if Provider wishes to use
its own license for the same Investors-Vendor Software in lieu of using Investors’
license, Provider will make commercially reasonable efforts to “suspend”
Investors license for the Investors-Vendor Software until the termination of
this Agreement.  Provider will be
excused from providing Services to the extent affected by Investors failure to
obtain the necessary right of Access; provided, however, that the parties shall
reasonably cooperate to minimize any such effect on Provider’s ability to
provide Services.  Provider shall at all
times operate in compliance with the terms of use applicable to all such
Investors-Vendor Software.

 

(c)           Except
with respect to the Investors-Vendor Software, Provider shall obtain from third
parties all rights and licenses required to perform the Services.  Provider warrants and represents that (a)
Provider has obtained all rights necessary for Investors to use such Vendor
Software (either as part of the Services or in connection with any Work
Product), and (b) that use of such Vendor Software (either as part of the
Services or in connection with any Work Product) will not grant any third party
any right or license to any intellectual property of Investors.  Provider shall obtain similar written
undertakings from all Subcontractors, employees, and consultants who will
perform any Services, so as to ensure Investors’ rights to the Work Product,
and shall not commence the deployment of any such Subcontractor, employee, or
consultant until such a written undertaking has been obtained from such
Subcontractor, employee, or consultant.

 

(d)           With
respect to Vendor Software that is obtained by Provider specifically for the
purpose of providing Services to Investors (such that on the date the Vendor
Software is provided, no other customer is an intended beneficiary), Provider
shall not use such Vendor Software in the provision of Services to Investor
hereunder unless and until (a) Provider shall have caused such third party to
agree to grant to Investors, at Provider’s expense (already included in the
Fees), a 

 

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perpetual, irrevocable, non-exclusive, royalty-free, fully paid-up,
worldwide, license (or sublicense) under any and all intellectual property
rights owned or licenseable by such third party, to use, copy, create
derivative works, distribute, and sublicense such Vendor Software, or (b)
Investors has given Provider prior written consent to implement or utilize the
Vendor Software in the provision of Services without obtaining the license set
forth in (a) above in Investors’ name.

 

(e)           With
respect to any other Vendor Software used in the provision of any Services, to
the extent Provider can do so without incurring additional cost, Provider shall
use commercially reasonable efforts to obtain the right to assign or otherwise
extend the applicable license to Investors upon expiration or termination at no
cost to Investors.

 

9.5           Investors
Data

 

(a)           Investors
shall permit Provider to have access to Investors Data solely to the extent
Provider requires such access to such data to provide the Services and maintain
the MASLs.  Provider may only access and
process Investors Data in connection herewith or as directed by Investors in
writing and may not otherwise modify Investors Data, merge it with other data,
commercially exploit it, or otherwise use such data, other than as specified
herein or as directed by Investors in writing.

 

(b)           Provider
understands and agrees that nothing contained in this Agreement shall affect
any ownership right, title, or interest in Investors Data or in any
modification, compilation, or derivative work therefrom (collectively, “Data
and Modified Data”), and Investors owns all copyright, trademark, trade
secrets, and other proprietary rights in the Data and Modified Data.  Provider agrees that all copyrightable
aspects of such Data and Modified Data shall be considered “work made for hire”
within the meaning of the Copyright Act of 1976, as amended.  Provider hereby assigns to Investors
exclusively all right, title, and interest in and to the Data and Modified Data
and to all copyright or other proprietary rights therein that it may obtain,
without further consideration, free from any claim, lien for balance due, or
rights of retention thereto on the part of Provider.  Provider also acknowledges that the Parties do not intend
Provider to be a joint author of the Data and Modified Data within the meaning
of the Copyright Act of 1976, as amended, and that in no event shall Provider
be deemed a joint author thereof.  Furthermore,
Provider and all Subcontractors will not publish or disclose in any manner
privacy and security safeguards related to any Federal, State, or Investors
Data or any other data of which Provider or any Subcontractor has custody.

 

9.6           Cooperation

 

(a)           The
Parties will cooperate with each other and shall make the assignments and
execute such other documents as may be appropriate to achieve the ownership and
other objectives established in this Section 9, including executing and
delivering any documents that the other reasonably requests for transferring or
protecting their respective ownership interests.  Each Party shall have the full and sole power to prosecute such
applications and to take all other action concerning their respective ownership
interests described in this Section 9, and each shall reasonably
cooperate, at the other’s expense, in the preparation and prosecution of all
such applications and proceedings concerning such ownership interests.

 

(b)           If
at any time either Party brings, or investigates the possibility of bringing,
any claim against any third party for infringement of any patent, trademark,
copyright, or similar proprietary right of such Party relating to the Services
(the “Requester”), including misappropriation of trade secrets and misuse of
confidential information, then the other Party, upon the request and at the
expense of the Requester, shall reasonably cooperate with and assist the
Requester in the investigation of such claim, and to the extent permitted by
law and subject to any confidentiality obligations to third parties, provide
the Requester with any information relating to the Services in the possession
of such Party that may be of use to the Requester in the investigation or
pursuit of such claim.

 

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10.          SECURITY AND PROTECTION OF INFORMATION

 

10.1 Security

 

10.1.1     Security and
Policies

 

At all times
during the Term, Provider shall provide all Services, and use all resources
related thereto, in accordance with Schedule K.  To the extent that any Provider security requirement conflicts
with Schedule K,
Schedule K
will supersede any Provider security requirements with respect to the provision
of the Services.  The Parties may
periodically update Schedule K to reflect changes in the
operations or procedures described therein. 
Updates of Schedule K shall be provided to the
other Party for its review.  To the
extent that an Investors change to Schedule K may materially interfere
with or materially degrade Provider’s provision of the Services or have a
materially detrimental impact on Provider’s cost of providing the Services or
time for delivery of the Services, the Parties shall mutually agree to any
requested change pursuant to the change management procedure specified in Section 7.4
of this Agreement, prior to adopting such change(s) with respect to this
Agreement.

 

The operation of Provider vehicles or private vehicles of Provider
personnel on Investors’ property shall conform to posted and other regulations
and safe driving practices.  Vehicular
accidents on Investors’ property and involving Provider personnel shall be
reported promptly to the appropriate Investors security personnel.  The operation of Investors vehicles or
private vehicles of Investors personnel on Provider’s property shall conform to
posted and other regulations and safe driving practices.  Vehicular accidents on Provider’s property
and involving Investors personnel shall be reported promptly to the appropriate
Provider security personnel.

 

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10.1.2              Information
Access

 

Prior to performing any Services,
Provider personnel (including personnel of any Subcontractors) who will access
Investors computer data and software, including Investors Data, shall execute
the Provider’s agreements and forms concerning access protection and
data/software security consistent with the terms and conditions of this
Agreement.  Provider promises that at
all times during the Term, it, and its employees, agents, and Subcontractors,
shall comply with Schedule K regarding data access and
security, including those prohibiting or restricting remote access to Investors
systems and data.  Investors shall
authorize and Provider shall issue any necessary information-access mechanisms,
including access IDs and passwords and Provider agrees that the same shall be
used only by the personnel to whom they are issued.  Provider shall provide to such personnel only such level of
access as is reasonably required to facilitate the tasks and functions for
which such personnel are responsible. 
Provider shall from time to time, upon request from Investors but at
least quarterly, provide Investors with an updated list of those Provider
personnel having access to Investors’ systems, software, and Investors
Data.  Investors Data, provided by Investors
or accessed by Provider personnel, shall be used by Provider personnel only in
connection with Provider’s obligations hereunder, and shall not be commercially
exploited by Provider in any manner whatsoever.  In addition to any other remedies available under this Agreement,
failure of Provider to comply with the provisions of this Section 10 may result in Investors restricting offending
personnel from access to Investors computer systems or Investors Data.

 

10.1.3              Background Checks

 

If Provider assigns, as a resource, Persons (whether employees,
independent contractors, or agents), other than Transitioned Employees, to
perform full time work at any Investors In-Scope Location, Provider shall
conduct a background check, as permitted by law, on all such Persons before
Investors will grant access to such In-Scope Location.  Such background check shall be in the form
generally used by Provider in its initial hiring of employees or contracting
for independent contractors, as applicable, during the employment-screening
process but must, at a minimum, have been performed within the preceding twelve
(12) month period prior to such assignment. 
On an annual basis, Provider’s human resources manager for this
Agreement shall certify Provider’s compliance with the requirements of this Section 10.1.3.

 

10.1.4              Other Policies

 

While on Investors’ In-Scope Locations, and with regard to the
processing and handling of Investors Data, Provider shall, and shall cause its
Subcontractors and employees to, abide by all Investors policies that may be
reasonably established by Investors from time to time and communicated to
Provider; provided, however, new policies that materially increase
Provider’s costs, or otherwise materially impact the Services, shall be subject
to the change management procedures described in Section 7.4.  Additionally in the event a particular
Provider employee or subcontractor employee does not agree to abide by a
particular policy that individual can be removed from performing Services under
this Agreement.

 

10.1.5              Minimum Security Standards and Audit

 

Investors, or Investors’ authorized representatives
that are not competitors of Provider in the IT markets with respect to the
provision of services similar to the Services and who agree to Provider’s Confidentiality
Agreement attached as Schedule V (“Audit Representatives”),
shall have the right, once during any twelve (12) month period within the Term
and with reasonable advance notice (which Investors shall make commercially
reasonable efforts to ensure that such advance notice is not less than ten (10)
business days), to perform an operational audit of the IT environment used to
provide the Services (“IT Internal Audit”).

 

Investors and Investors’ Audit Representatives shall
also have the right to perform scheduled audits of the IT environment used to
provide the Services (“IT Scheduled Audits”).  The IT Scheduled Audits shall include, but
shall not be limited to, the following type of audits: [*].  The schedule of IT Scheduled Audits for
2004 -2005 is attached as Schedule Z.  Schedule Z will be updated every calendar year.

 

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Any regulatory body that has jurisdiction over
Investors activities (“Regulators”) shall also have the right, at
any time to perform an audit of the IT environment used to provide the Services
(“IT
Regulatory Audits”).

 

With regard to the IT Internal Audit, IT Scheduled
Audits and the IT Regulatory Audits (collectively, “IT Audits”), Investors shall
make reasonable efforts to ensure that any such IT Audit shall be scheduled so
as to minimize the disruption to Provider’s business operation or Provider is
excused from it’s duties or obligations to the extent they are affected by such
audit assistance and to the extent the parties agree.  A request for Provider to provide assistance with an IT Audit
will be considered a Work Order or Initiative if such IT Audit assistance
results from a change in Investors’ audit requirements or information is
required to be provided in a format different from the format normally used by
Provider and Investors.  Provider shall
also grant Investors, Regulators and any Audit Representative such necessary
access to Provider’s records and other documents of Provider and its
Subcontractors, as they relate to the IT environment, or as they may be
required to comply with the IT Audits. 
At Investors’ or Regulators request, Provider shall provide: (i) such
documents, data, or information on such media as Investors might reasonably
request that pertain to the IT Audit; (ii) copies (hard copy, optical, magnetic
disk or tape, as appropriate) of all documents, data, or information on such
media as Investors might reasonably request that pertain to the IT Audit; and
(iii) such assistance as reasonably requested in order to perform such IT
Audit; provided, however, that the Parties shall endeavor to arrange such
assistance in such a way that it does not interfere with the performance of
Provider’s duties and obligations hereunder. 
Further, with regards specifically to any IT Regulatory Audits, Provider
shall endeavor to respond to any Regulators driven request within the time
period specified by such Regulator (which in some cases may be twenty four (24)
hours).  Provider shall make reasonable
efforts to cause any Provider Subcontractor to comply with the foregoing
provisions to the extent necessary to complete the IT Audit.  Notwithstanding any other provision in this Section 10.1.5
to the contrary, Investors and its Audit Representatives shall have no access
to Provider’s (or Provider’s Subcontractors’) Internal Confidential
Information, and Provider reserves the right to decline auditor requests or
access (other than a request by a Regulator) that Provider reasonably believes
may disrupt Provider’s business operations.

 

10.2   Protection
of Confidential Information

 

10.2.1              Nondisclosure; Policies and Procedures

 

All Confidential Information shall be deemed the sole property of the
Party disclosing the Confidential Information (“Disclosing Party”) and shall
be used solely by the Party receiving the Confidential Information (“Receiving
Party”), or any of its Subcontractors, for the purpose of performing
its obligations under this Agreement, and shall not be published, transmitted,
released, or disclosed by Receiving Party (or its Subcontractors) to any other
Person without the prior written consent of the Disclosing Party, which consent
the Disclosing Party may withhold in its sole discretion.

 

Receiving Party shall use the same care to prevent disclosure of the
Disclosing Party’s Confidential Information, as it uses to prevent disclosure
of its own information of a similar nature, but in no event less than a
reasonable degree of care.  With regards
specifically to Provider, reasonable degree of care shall include but shall not
be limited to implementing the policies and procedures described in Section 10.1.1
and 10.1.2 hereof.

 

10.2.2              Disclosure Requests

 

Subject to applicable law, any and all requests from
a Receiving Party, from whatever source, for copies of or access to, or other
disclosure of, a Disclosing Party’s Confidential Information shall be promptly
submitted to the Disclosing Party for disposition.

 

10.2.3.    Permitted Disclosure

 

Notwithstanding the above provisions of Section 10.2.1,
Receiving Party may disclose Confidential Information to its employees, agents,
and Subcontractors: (i) who have a need to know such Confidential
Information in order to perform their duties under this Agreement; and
(ii) who agree to be bound by substantially similar confidentiality
requirements by which Receiving Party is bound under this Agreement.

 

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Subject to the terms of Section 13.3, Receiving Party shall be
liable for the acts or omissions of its Subcontractors and employees with
respect to such Confidential Information.

 

10.3   Legally Required Disclosure

 

Notwithstanding any provision herein, either Party
may disclose Confidential Information of the other Party to the extent
disclosure is based on the good faith written opinion of such Party’s legal
counsel (which may include in-house counsel) that disclosure is required by law
or by order of a court or governmental agency; provided, however, that such
Party shall give prompt notice of such requirement and use its best efforts to
assist the owner of such Confidential Information if the owner wishes to obtain
a protective order or otherwise protect the confidentiality of such
Confidential Information.  The owner of
such Confidential Information reserves the right to obtain a protective order
or otherwise protect the confidentiality of such Confidential Information.  For purposes of this Section 10.3, Investors’
in house legal counsel  shall act as Investors’ legal counsel.

 

10.4   Notification

 

In the event of any disclosure, loss, or destruction
of Confidential Information, the Receiving Party shall, promptly upon
discovery, notify the Disclosing Party.

 

10.5   Injunctive Relief

 

If the Receiving Party publishes, transmits, releases, or discloses any
Confidential Information of the Disclosing Party in violation of this Section 10
or if either Party anticipates that the other Party shall violate or continue
to violate any restriction set forth in this Section 10, the
Disclosing Party may have the right to have the provisions of this Section 10
specifically enforced by any court having equity jurisdiction.  In addition, the Disclosing Party and any
individuals that were the subject of such Confidential Information may take all
such other actions and shall have such other remedies available to it or them
at law or in equity and shall be entitled to such damages as it or they can
show have been sustained by reason of such violation.

 

10.6   Return of Confidential Information

 

Subject to Section 12 (Disentanglement) and Section 9
(Proprietary Rights), promptly upon the expiration or termination of the Term
and at any other time upon written request by the Disclosing Party to the
Receiving Party, the Receiving Party shall promptly return to the sole custody
of the Disclosing Party, all Confidential Information (or such Confidential
Information as specified in such request) of the Disclosing Party then in its
possession or control, in whatever form, or, in the case of written request by
the Disclosing Party, such Confidential Information specified in such request
as then in the Receiving Party’s possession or control, in whatever form.  In addition, unless the Disclosing Party
otherwise consents in writing, the Receiving Party shall also deliver to the
Disclosing Party or, if requested by the Disclosing Party, shall delete or
destroy, any copies, duplicates, summaries, abstracts, or other representations
of any such Confidential Information or any part thereof, in whatever form,
then in the possession or control of the Receiving Party. Notwithstanding the
foregoing: (i) Provider may retain one (1) copy of documentation and data,
excluding Investors Data, for archival or evidentiary purposes or warranty
support; and (ii) Investors may retain copies of Provider Confidential
Information to the extent required by law or regulation or to the extent
otherwise permitted under this Agreement.

 

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10.7   Residual Information

 

The
Receiving Party may use in its business activities the ideas, concepts, and
know-how contained in the Disclosing Party’s Confidential Information which are
retained in the memories of the Receiving Party’s employees who have had access
to the Confidential Information pursuant to the terms of the Agreement.

 

11.                               TERM

 

11.1   Initial Term; Renewals

 

11.1.1              Initial Term and Appropriations

 

The period during which Provider shall be obligated
to provide the Services under this Agreement shall commence on the Contract
Effective Date (except as otherwise specified herein) and shall end on the Seventh (7th)
anniversary of the Contract Effective Date (the “Initial Term”).

 

11.1.2              Notification of Expiration

 

Provider shall notify Investors of the expiration of
the Initial Term, and of any Renewal Term thereof, not earlier than
twelve (12) months, nor later than six (6) months, before the date on
which the Term would expire if not renewed.

 

11.1.3              Renewal by Investors

 

Investors may, in its sole discretion, extend the
Initial Term for up to two (2) successive renewal periods of twelve (12) months
each (“Renewal
Term”) by providing written notice delivered to Provider at least
six (6) months before the end of then-current Term.

 

11.1.4              Extensions by Investors

 

Investors may, at its sole option and discretion,
upon at least  [*] calendar days’ notice to Provider, extend the effective
date of any expiration or termination of the Term for successive periods of not
less than [*] calendar days each, with such extension periods not to exceed a
period of time that is the lesser of: (i) [*] calendar days in the aggregate,
or (ii) [*] calendar days after the [*] Contract Year.  Each such extension shall be upon the same
terms and conditions in effect immediately prior to such extension.  Any adjustments to the Annual Service Fees
applicable to any extension period shall be mutually agreed by the Parties,
consistent with the pricing methodology set forth in Schedule E.  In the event the Parties are unable to agree
on such applicable Annual Service Fees, the Annual Service Fees shall be the
same Annual Service Fees as were applicable in the immediately preceding
Contract Year or extension period, as the case may be, subject to any ECA
increase (if any) in accordance with Schedule E.

 

11.2   Early Termination

 

11.2.1              For Convenience

 

Investors shall have the
right to terminate as to any category of Services described in this Agreement
(i.e., any Services described in any section thereof) or in any Services
Schedule, for its convenience, or to end the Term for its convenience,
effective at 11:59 p.m. on the intended date of termination (the “Termination
Date”), by delivering to Provider a written notice of termination
(the “Termination
Notice”) at least [*]calendar days before the Termination Date.  In the event Investors terminates all of the
Services and the Term solely for its convenience (“Termination for Convenience”),
and Provider has performed all of its obligations (including its
Disentanglement obligations), Investors shall pay to Provider on or before the
[*]  calendar day after the Termination
Date, an amount determined in accordance with Schedule E.  In the event Investors elects to terminate
any category of Service (but not all Services in the aggregate) pursuant to the
terms hereof, Provider shall perform its Disentanglement obligations hereunder
to the extent applicable to the Service or Services being terminated.  In the event Investors elects to terminate a
category of Service described in this Agreement, rather than all of the
Services, the charge associated with the termination of such category or

 

44 of 76

 

Service shall instead be an amount determined in accordance with Schedule E,
with respect thereto.  In the event
Investors elects to terminate a certain category of Service the Agreement will
be amended to reflect the adjusted Annual Services Fees, SLRs and other
affected areas of the Agreement.  The
effective date for Termination for Convenience will be no earlier than [*],
after Provider’s receipt of such notice.

 

11.2.2              For Missed MASLs

 

Investors
shall also have the right, without payment of any Termination Fee or any other
additional fees, to terminate any portion of the Services with respect to which
Provider’s performance has been, during any [*] of then-preceding [*]
measurement periods, by a percentage below any single applicable “Critical
MASLs” (as defined in Schedule F) and it has been determined
through a root cause analysis that Provider was the predominant cause of that
failure.  The percentage below the
Critical MASL will be identified in Schedule F.  In the event Investors elects to terminate any portion of Service
(but not all Services in the aggregate) pursuant to the terms hereof, Provider
shall perform its Disentanglement obligations hereunder to the extent
applicable to the Service or Services being terminated.

 

11.3   Change of Control of Provider

 

In the event of a Change
in Control of Provider resulting from a single transaction or series of related
transactions, Investors shall have the right to end the Term by sending a
Termination Notice to Provider at least ninety (90) calendar days prior to
the Termination Date, provided that Investors authorizes such termination based
on its reasonable determination that (i) the continued provision of the
Services by Provider as a result of such Change in Control is not in the best
interests of Investors, or (ii) the surviving entity will be incapable of
providing the Services in compliance with the SLRs as a result of such Change
of Control.  Except as provided in this Section 11.
3, no termination pursuant to this Section 11.3 shall
require Investors to make any payments to Provider not otherwise required under
Section 6
hereof.  In the event Investors
terminates the Services pursuant to this Section, Provider shall continue to
perform its Disentanglement obligations hereunder until they are fulfilled.
Solely for purposes of this Section 11.3, “Control” shall mean the
legal, beneficial, or equitable ownership, direct or indirect, of more than
fifty percent (50%) of the assets of Provider;  “Change in Control” shall mean that Provider has divested all
or substantially all of the assets and business of Provider’s “Global Services”
division (or any Provider division that is responsible for providing fifty
percent (50%) or more of the Services under this Agreement), other than a
corporate reorganization such that the Provider retains Control of such
division.

 

11.4   Termination for Default

 

Section 20.1 hereof notwithstanding, the Term may be
ended by either Party by a Termination Notice delivered to the other Party if
the other Party (“Defaulting Party”) commits a Default (as
applicable to each Party).  Notice of
Default will be delivered to Defaulting Party within sixty (60) calendar days
of a Party becoming aware of the Default. 
If the Default is not cured during the applicable cure period, the Party
not in Default (“Non-Defaulting Party”) may terminate this Agreement by
providing the Defaulting  Party with written notice within sixty
(60) calendar days after the expiration of the applicable cure period,
declaring termination of this Agreement for Default under this Section,
effective on the date stated in such notice. 
Such effective date will be no later than one hundred twenty (120)
calendar days after the Defaulting Party’s receipt of such notice of
termination for Default.

 

Termination shall be effective at 11:59 p.m. on
the Termination Date specified in the Termination Notice, subject to the
provisions of Section 20.4 hereof; provided, however, that Provider
shall continue to perform its Disentanglement obligations hereunder until they
are fulfilled.  No termination by
Investors pursuant to this Section 11.4 shall be deemed a
Termination for Convenience subject to Section 11.2.1 or otherwise require
Investors to make any payments to Provider not otherwise required under Section 6
or Schedule E
hereof.  Subject to Section 13, termination
shall not constitute a Party’s exclusive remedy for Default, and the
Non-Defaulting Party shall not be deemed to have waived any of its rights
accruing hereunder prior to such Default.

 

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11.5   Termination for Force
Majeure Event

 

If a delay or
interruption of performance by Provider results from its experiencing a Force
Majeure Event despite Provider’s use of its commercially reasonable efforts,
Investors may either:

 

(a)                                  procure
such Services from an alternate provider until Provider is able to provide the
Services.  Subject to Section 13.5
(Force Majeure Events) below, Provider will reimburse Investors for payments to
such alternate provider for such Services, provided Investors has acted
reasonably in procuring such alternate services, for the lesser of [*] or the remainder
of the Term; or

 

(b)                                 terminate
this Agreement or the affected categories of Service (in whole or in part) by
providing Provider with a written notice of termination and paying Provider for
any Unrecovered Start-Up Expenses, and any reasonable and necessary
out-of-pocket expenses associated with ramp-down costs.

 

Such termination shall be effective at
11:59 p.m. on the Termination Date, by delivering to the party affected by
such Force Majeure Event (“Affected Party”) a Termination Notice
specifying the Termination Date; provided, however, notwithstanding Section 11.5
(b) above, that Provider shall continue to perform its
Disentanglement obligations in respect of such terminated Services until such
obligations are fulfilled.  Except as
provided in this Section 11.5, no termination pursuant to this Section 11.5
shall require Investors to make any payments to Provider not otherwise required
under Section 6
hereof.  In the event Investors
terminates the Services pursuant to this Section, Provider shall continue to
perform its Disentanglement obligations hereunder until they are fulfilled.

 

11.6 Termination by
Provider Other than for Default

 

Other than for reasons of an Investors’ Default,
Provider may not, for any other reason whatsoever, terminate the Term prior to
its expiration, terminate this Agreement, or otherwise repudiate this Agreement
or refuse to perform its obligations hereunder.  Termination due to Investors’ Default shall be effective at
11:59 p.m. on the Termination Date specified in the Termination Notice,
and notwithstanding the provisions of Section 20.4 hereof.

 

12.                               DISENTANGLEMENT

 

12.1   General Obligations

 

Provider shall accomplish a complete
transition of the Services being terminated from Provider and the
Subcontractors to Investors, or to any replacement supplier designated by
Investors, without any material interruption of or any material adverse impact
on the Services (at a minimum, providing that the Services do not fall below
any MASL) or any other services provided by third Parties (the “Disentanglement”).  Provider shall cooperate with Investors and
any new service supplier and otherwise promptly take all steps required to
assist Investors in effecting a complete Disentanglement.  Provider shall provide all information
regarding the Services or as otherwise needed for Disentanglement, including
data conversion, interface specifications, and related professional
services.   Provider shall provide for
the prompt and orderly conclusion and/or transfer of all work, as Investors may
direct, including completion or partial completion of projects, documentation
of work in process, and other measures to assure an orderly transition to
Investors or Investors’ designee.  To
the extent that any Disentanglement can be achieved using the existing
resources dedicated to providing the Services hereunder, the services related
to Disentanglement shall be deemed a part of the Services and shall be
performed by Provider at no additional cost to Investors beyond what Investors
would pay for the Services absent the performance of the Disentanglement
services.  Any additional resources
required for Disentanglement will be provided at the rates set forth in Schedule E.
Provider’s obligation to provide the Services shall not cease until each of
Provider’s Disentanglement obligations set out in this Section 12 and within
Section 9, including the performance by Provider of all
asset-transfers and other obligations of Provider provided in this Section 12,
have been completed.

 

12.2   Disentanglement Process

 

The Disentanglement process shall begin on
any of the following dates: (i) the date designated by Investors not earlier
than one hundred eighty (180) calendar days prior to the end of any Term
that Investors has not elected to extend or renew pursuant to Section 11.1;
or (ii) the date any valid Termination Notice is delivered, if

 

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Investors elects to terminate any or all of the Services pursuant to Sections 11.2,
Section 11.3, Section 11.4, or Section 11.5.  Subject to Section 11.1.4,
Provider’s obligation to perform Services, shall expire: (x)  at the end
of any Term set forth in Section 11.1; or (y) on the
Termination Date, pursuant to Sections 11.2, Section 11.3,
Section 11.4 or Section 11.5 (with the applicable date
on which Provider’s obligation to perform the Services expires being referred
to herein as the “Expiration Date”); provided, however, that
Provider shall remain obligated to provide Disentanglement services for up to
twelve (12) months after any such Expiration Date, at rates that are the
lower of: (1) the applicable rates set forth in Schedule E for the
applicable Services; and (2) Provider’s then current commercially-available
rates for similar services to other similarly situated customers.  Provider and Investors shall discuss and
agree in good faith to a plan for determining the nature and extent of
Provider’s Disentanglement obligations and for the transfer of Services in
process; provided, however, that Provider’s obligation under this Agreement to
provide all Services necessary for Disentanglement shall not be lessened in any
respect.  Provider shall make all
reasonable efforts to perform its Disentanglement obligations on an expedited
basis, if Investors terminates the Term pursuant to Sections 11.3 or Section 11.4.

 

12.3   Specific Obligations

 

The Disentanglement shall
include the performance of the following specific obligations:

 

12.3.1              Full Cooperation and Information

 

Upon Disentanglement, the Parties shall cooperate
fully with one another to facilitate a smooth transition of the Services being
terminated from Provider to Investors or Investors’ designated replacement
supplier.  Such cooperation shall
include the provision (both before and after the cessation of Provider’s
providing all or any part of the Services under this Agreement) by Provider to
Investors of complete, detailed, and sufficient information (including
information then being utilized by Provider in providing the Services but
excluding Provider’s Internal Confidential Information) for the period of the
Disentanglement (up to twelve (12) months) and for up to two (2) months
thereafter to enable Investors’ personnel (or that of third parties) to
completely assume and continue without any material interruption the provision
of the Services.

 

12.3.2              No Interruption or Adverse Impact

 

Provider shall cooperate with Investors and all of
Investors’ other service suppliers to provide a smooth transition at the time
of Disentanglement, with no material interruption of Services, no material
adverse impact on the provision of Services or Investors’ activities, no material
interruption of any services provided by third parties, and no material adverse
impact on the provision of services provided by third parties.

 

12.3.3              Third-Party Authorizations

 

Without limiting the obligations
of Provider pursuant to Section 9, Provider shall, subject
to the terms of any third-party contracts, use commercially reasonable efforts
to assist Investors in procuring at no charge to Investors any third-party
authorizations necessary to grant Investors the use and benefit of any
third-party contracts between Provider and third-party contractors used to
provide the Services, pending their assignment to Investors pursuant to Section 12.3.5.

 

12.3.4              Licenses to Proprietary Software

 

Upon
termination or expiration of Provider’s provision of any Service, Provider
shall make the deliveries and grant the licenses provided for in Section 9
to occur upon termination or expiration.

 

12.3.5              Transfer of Leases, Licenses, and Contracts

 

Without limiting the obligations of Provider
pursuant to Section 9, Provider shall, to the extent of its
reasonable ability to do so and at Investors’ expense, convey or assign to
Investors or its designee such leases, licenses, and other contracts used by
Provider solely in connection with the Services to Investors.  Provider will make reasonable efforts to
support such conveyance or assignment without undue financial burden.  Provider’s obligation under this Section 12.3.5
shall include Provider’s performance of all obligations under such leases,

 

47 of 76

 

licenses, and other contracts to be performed by it with respect to
periods prior to the date of conveyance or assignment.

 

In addition to its other obligations hereunder, upon termination or
expiration of any Service, Provider shall make commercially reasonable efforts
to assist Investors in the transition of Services, including in obtaining for
Investors’ benefit and at Investors’ cost, such necessary consents from all
licensors and lessors to the conveyance or assignment of licenses and leases
used by Provider exclusively to provide the Services to Investors (or to assist
Investors in obtaining Investors’ own licenses and leases with respect to
licenses or leases used by Provider not exclusively to provide Services to Investors),
including the right to obtain maintenance (including all enhancements and
upgrades) and support with respect to the assets that are the subject of such
leases and licenses at the price at which, and for so long as, such maintenance
and support is made commercially available to other customers of such third
parties whose consent is being procured hereunder.

 

12.3.6              Delivery of Documentation

 

Provider shall deliver to Investors or its designee,
at Investors’ request and at no charge to Investors, all reasonably necessary
documentation and data related to Investors  and held by Provider (subject to any third
party recipient of any Provider Confidential Information being bound by
confidentiality terms reasonably acceptable to Provider), including Investors Confidential
Information and Investors Data, and Provider shall destroy all copies of
Investors Confidential Information and Investors Data thereof not turned over
to Investors.  Notwithstanding the
foregoing, Provider may retain one (1) copy of the documentation and data,
excluding Investors Data, for archival purposes or warranty support.

 

12.3.7              Hiring of Employees

 

Provider shall cooperate with and assist (and shall
use commercially reasonable efforts to cause its Subcontractors to cooperate
and assist) Investors (or Investors’ designee) in offering employment, at the
sole discretion of Investors, to any or all Provider employees (and to any or
all employees of Provider’s Subcontractors) that are dedicated to the provision
of the Services whether such offers are made at the time of, after, or in
anticipation of expiration or termination of the Term.  Subject to Section 3.1.8, Provider
shall be solely responsible for, and shall pay, all severance and related
payments, if any are payable pursuant to Provider’s standard policies, to any
such employees of Provider hired by Investors or its designee, and shall make
commercially reasonable efforts to cause the relevant Subcontractors of
Provider to pay severance and related payments, if any are payable pursuant to
the Subcontractor’s standard policies, to any such employee of a Subcontractor
that is hired by Investors or its designee.

 

12.3.8              Option to Acquire Provider Assets

 

Provider shall convey to Investors or its designee,
from among those Provider Assets located at any In-Scope Location, such
Provider Assets as Investors might select at a price that is greater than the
remaining lease cost, or if the asset is not under lease, at the fair market
value of that Provider Asset selected. 
Such Provider Assets shall be provided “as is, where is” and there are
no warranties of any kind with respect to the condition, capabilities, or other
attributes of such asset, except as otherwise expressly stated in this
Agreement.  Provider shall promptly
remove from any Investors In-Scope Location any Provider Assets that Investors,
or its designee, chooses not to purchase.

 

12.4   Preparation for Disentanglement

 

12.4.1              Maintenance of Assets

 

Provider shall maintain all of
the hardware, software, systems, networks, technologies, and other assets
utilized in providing Services to Investors (including leased and licensed
assets) for which Provider is responsible for maintaining and that may be
subject to transfer to Investors upon the termination or expiration of this
Agreement, in a condition suitable to provide the Services and in as good
condition as that maintained by Provider for its own assets, reasonable wear
and tear excepted, and in such locations and configurations as to be readily
identifiable and transferable back to Investors or its designees in accordance
with the provisions of this Agreement.  
In addition, Provider shall insure such assets on Provider sites in
accordance with the requirements

 

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of Section 14.  For those Assets
owned or leased by Investors, Provider will provide maintenance, if any,
according to the maintenance agreements provided by Investors.

 

12.4.2              All Necessary Cooperation and Actions

 

Provider
shall provide all cooperation, take such additional actions, and perform such
additional tasks, as may be necessary to provide a timely Disentanglement in
compliance with the provisions of this Section 12,
including full performance, on or before the Expiration Date, of Provider’s
obligations under this Section.

 

13.                               REMEDIES;
LIMITATIONS
OF LIABILITY

 

13.1   Remedies Cumulative

 

Except as otherwise expressly limited in Section 13.3
below, or elsewhere in this Agreement, the remedies provided in this
Section and elsewhere in this Agreement are neither exclusive nor
mutually exclusive, and the Parties shall be entitled to resort to any and all
such remedies, and any other remedy or remedies available at law or in equity,
by statute or otherwise, individually or in any combination thereof.  No delay in exercising or failure to
exercise any right or remedy shall operate as a waiver thereof except where
specifically provided herein.

 

13.2   Attorney’s Fees

 

The prevailing Party shall be entitled to recover
from the non-prevailing Party reasonable attorneys’ fees and costs in
connection with any legal proceedings related to this Agreement.

 

13.3   Limitation of Liability
and Disclaimers

 

Subject to the express provisions and limitations of
this Section 13.3,
the Parties intend that each Party shall be liable to the other Party for all
direct damages incurred as a result of the breaching Party’s failure to perform
its obligations under the Agreement.

 

(a)  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED BELOW, THE
AGGREGATE CUMULATIVE MONETARY LIABILITY OF EITHER PARTY HEREUNDER FOR ALL
CLAIMS ARISING UNDER OR RELATING TO THIS AGREEMENT, NOTWITHSTANDING THE FORM
(e.g., CONTRACT, TORT, OR OTHERWISE) IN WHICH ANY ACTION IS BROUGHT, SHALL BE
LIMITED IN THE AGGREGATE OVER THE LIFE OF THIS AGREEMENT TO AN AMOUNT EQUAL TO
THE ANNUAL SERVICE FEES FOR THE [*] PREVIOUS IN WHICH THE CLAIM AROSE; PROVIDED,
HOWEVER, IF THE CLAIM ARISES IN THE FIRST TWELVE (12) MONTHS AFTER THE CONTRACT
EFFECTIVE DATE, THE AGGREGATE CUMULATIVE LIABILITY OF EITHER PARTY SHALL BE
LIMITED TO THE GREATER OF THE (1) THE ANNUAL SERVICE FEES FOR THE [*] PREVIOUS
IN WHICH THE CLAIM AROSE, OR (2) [*].  IF
THIS AGREEMENT IS RENEWED OR EXTENDED BY MUTUAL AGREEMENT, BEYOND SEVEN YEARS,
THE LIMITATION OF LIABILITY SHALL BE LIMITED IN THE AGGREGATE OVER THE RENEWED
OR EXTENSION OF THE TERM, FROM THE DATE OF SUCH RENEWAL OR EXTENSION, TO AN
AMOUNT EQUAL TO THE ANNUAL SERVICE FEES FOR THE [*] PREVIOUS IN WHICH THE CLAIM
AROSE (INCLUDING ANNUAL SERVICE FEES FROM THE PRIOR TERM IF PAID WITHIN THE [*]
PERIOD).  THE FOREGOING LIMITATIONS
SHALL NOT APPLY TO: (A) LOSSES SUBJECT TO INDEMNIFICATION UNDER
THIS AGREEMENT, (B) LIABILITY ARISING AS A RESULT OF A FAILURE TO COMPLY WITH SECTION 10.2,
(C)
INVESTORS’ FAILURE TO PAY ANY AMOUNTS DUE OR OWING UNDER THIS AGREEMENT,
INCLUDING AMOUNTS THAT WOULD HAVE BEEN DUE FOR SERVICES NOT RENDERED AS A
CONSEQUENCE OF INVESTORS’ DEFAULT, (D) ANY DAMAGES FOR BODILY INJURY
(INCLUDING DEATH) AND DAMAGES TO REAL AND TANGIBLE PERSONAL PROPERTY FOR WHICH
SUCH PARTY IS LEGALLY LIABLE, OR (E) ACTIONS IN EQUITY FOR SPECIFIC
PERFORMANCE, INJUNCTIVE RELIEF OR OTHER APPROPRIATE REMEDIES.

 

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(b) NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, SPECIAL, INDIRECT,
OR INCIDENTAL DAMAGES, (EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES), OR
EXEMPLARY OR PUNITIVE DAMAGES, REGARDLESS OF THE FORM IN WHICH ANY ACTION IS
BROUGHT.  NOTWITHSTANDING THE FOREGOING,
THIS SECTION 13.3(B)
SHALL NOT BE DEEMED TO LIMIT OR AFFECT EITHER PARTY’S INDEMNITY OBLIGATIONS
PURSUANT TO SECTION 19.

 

13.4 Inclusion
as Direct Damages

 

The following shall be considered direct damages and Provider shall not
assert that they are indirect, incidental, special, or consequential damages or
lost profits to the extent they result from Provider’s failure to provide the
Services in accordance with the Agreement[*]. 
The intention of the foregoing list of “direct damages” is to avoid any
doubt on how those types of damages should be classified under this
Agreement.  However, the foregoing list of
“direct damages” is not intended to be exclusive or exhaustive.

 

13.5   Force Majeure Events

 

If a Force Majeure Event is the material
contributing cause of a Party’s failure to perform any of its obligations
hereunder, such obligations, after notification by such Party to the other
Party, shall be deemed suspended to the extent such obligations are directly
affected by such Force Majeure Event, until the Force Majeure Event has ended
and a reasonable period of time for overcoming the effects thereof has passed;
provided, however, that if a Force Majeure Event results in Provider being
unable to perform during any period any or all of the Services in accordance
with the terms hereof: (i) Investors shall continue to pay for any such
Services that Provider is unable to perform due to such Force Majeure Event,
(ii) Provider shall, without any additional payment (other than the Annual
Service Fees otherwise due Provider for such Services), engage an alternate
provider, on an interim basis subject to Section 11.5 (Termination for Force
Majeure Events), to perform the Services that Provider is unable to perform as
a result of such Force Majeure Event; (iii) Investors shall be entitled to
a share of Provider’s resources devoted to returning Provider to full performance
of all Services hereunder, that is equal to or greater than that of Provider’s
similarly-situated customers; and (iv) Investors shall have the right to
terminate this Agreement in accordance with the terms of Section 11.5
(Termination for Force Majeure Events) hereof .  Both Parties shall use commercially reasonable efforts to
minimize delays that occur due to a Force Majeure Event.  Other than as set forth above, neither Party
shall be excused from those obligations not affected by a Force Majeure Event
(including disaster recovery services unless also affected by such Force
Majeure Event), and if the Force Majeure Event is predominantly caused by
either Party’s failure to comply with any of its obligations under this
Agreement or by either Party’s negligence or omission, there shall be no relief
from any of that Party’s obligations under this Agreement.

 

14.                               INSURANCE

 

Provider shall provide and maintain, during the Term
and for such other period as may be required herein, at its sole expense,
insurance in the amounts and form described below.  The fact that Provider has obtained the insurance required in
this Section 14
shall in no manner lessen nor effect Provider’s other obligations or
liabilities set forth in this Agreement, including its obligations to defend,
indemnify, and hold Investors Indemnitees harmless in accordance with Section 19
hereof.

 

14.1   Required General
Liability Insurance Coverage

 

Provider
shall procure Commercial General Liability Insurance in the amounts and form
set forth below:

 

14.1.1              Commercial
General Liability Insurance

 

A policy of Commercial General Liability Insurance
that provides limits of not less than:

 

	
  (a)

  	
  Per Occurrence:

  	
   

  	
  $[*]

  
	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
  Project Specific Aggregate:

  	
   

  	
  $[*]

  

 

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  (c)

  	
  Products/Completed Operations:

  	
   

  	
  $[*]

  
	
   

  	
   

  	
   

  	
   

  
	
  (d)

  	
  Personal and Advertising Injury:

  	
   

  	
  $[*]

  

 

Any deductible or self-insured
retention must be disclosed to Investors along with any changes thereto. Any
deductible or self-insured retention shall be the responsibility of Provider.

 

14.1.2              Required General
Liability Policy Coverage

 

Any general liability policy provided by Provider
hereunder shall include the following coverage:  (i) premises and operations; (ii) products/completed
operations; (iii) contractual liability; (iv) personal injury and
advertising injury liability; and (v) severability of interest clause.

 

14.1.3              Additional
Insureds

 

Any general liability policy provided by Provider
hereunder shall name Investors; and the officers, agents, employees, and
volunteers of Investors, individually and collectively, as additional insureds.

 

14.1.4              Primary Insurance
Endorsement

 

The coverage afforded to Provider and Investors
under the general liability policy described above shall apply as primary
insurance, and any other insurance maintained by Investors, or its officers,
agents, employees, and volunteers, or any Investors self-funded program, shall
be excess only and not contributing with such coverage.

 

14.1.5              Form of General Liability Insurance Policies

 

All general liability policies shall be written to
apply to bodily injury, including death, property damage, personal injury, and
other covered loss, occurring during the policy term, and shall specifically
insure the performance by Provider of its obligations under Section 19.
2 below.

 

14.2   Business Automobile Liability Insurance

 

Provider shall procure business automobile liability
insurance written for bodily injury and property damage occurring during the
policy term, in the amount of not less than [*], combined single limit per
accident, applicable to all owned, non-owned, and hired vehicles.

 

14.3   Statutory Workers’ Compensation and Employers’ Liability Insurance

 

Provider shall maintain a policy of workers’
compensation coverage for no less than the minimum statutory amount required
for the State or States in which Provider’s employees are performing Services
on Investors’ behalf, and employers’ liability coverage for not less than [*]
per occurrence for all employees of Provider engaged in the performance of
Services under this Agreement.  Coverage
shall include a mutual waiver of subrogation.

 

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14.4   Property Insurance

 

Provider shall provide insurance on all property owned by Provider and
used to perform Services under this Agreement. 
Such policy shall provide “all risk” perils, including flood, and shall
be written on a basis of the lesser of the cost of complete repair or  one
hundred percent (100%) replacement value of the property.  Coverage shall include business personal
property, tenant improvements, business interruption, property of others, in
the care, custody, and control of the insured, and transit.  Provider shall be responsible for any
deductible or self-insured retention.

 

14.5   General Provisions

 

14.5.1              Evidence of Insurance

 

Provider shall, as soon as practicable following the
placement of insurance required hereunder, but in no event later than thirty
(30) calendar days after the Contract Signing Date, deliver to Investors
certificates of insurance evidencing the same, evidencing that Provider has
obtained such coverage.  Thereafter,
copies of certificates and appropriate separate endorsements (if any) shall be
delivered to Investors within thirty (30) calendar days after the expiration
thereof.  The provisions of such
policies shall constitute Provider Confidential Information; provided, however,
such information may be disclosed by Investors to the extent necessary to
enforce the terms of this Agreement.

 

14.5.2              Claims-Made Coverage

 

If coverage is written on a “claims-made” basis, the
certificate of insurance shall clearly so state.  In addition to the coverage requirements specified above,
Provider will make all commercially reasonable efforts to provide that:

 

(a)  The policy’s retroactive date
shall coincide with or precede the Contract Effective Date (including
subsequent policies purchased as renewals or replacements);

 

(b)  Similar insurance is
maintained during the required extended period of coverage for an extended Term
following expiration of the Agreement;

 

(c)  If insurance required under Section 14
is terminated for any reason, Provider shall purchase a replacement claims-made
policy with the same or an earlier retroactive date or shall purchase an extended
reporting provision to report claims arising in connection with this Agreement
for a minimum of two (2) years following termination or completion of the
Services; and

 

(d)  All claims-made policies shall
allow the reporting of circumstances or incidents that might give rise to
future claims is permissible.

 

14.5.3              Notice of
Cancellation or Change of
Coverage

 

All certificates of insurance provided by Provider
under this Section 14 must evidence that the insurance supplier will
give Investors thirty (30) calendar days’ written notice in advance of any
cancellation, lapse, reduction, or other adverse change in respect of such
insurance.

 

14.5.4              Qualifying
Insurers

 

All policies of insurance required pursuant to this Section 14
shall be issued by companies that have been approved to do business in State or
States in which such insurance would be applicable, unless prior approval is
obtained from Investors’ risk manager.

 

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15.                               INVOICES AND REPORTS

 

15.1   Invoices

 

15.1.1              General

 

All invoices submitted by
Provider must meet the mutually agreed invoice format and conform to the agreed
charges and charging methodologies. 
Provider shall submit invoices as specified in this Agreement.  Invoices must reference this Agreement and
provide detailed and customized information in accordance with Schedule G.  Such detailed and customized
information may include, but not limited to, the separate billing of multiple
entities, general fee visibility, and billing requirements that are consistent
with Investors’ specific financial requirements and practices.  Invoices shall be accompanied by information
and data that support the invoiced Annual Service Fees.   Invoices are payable as follows:

 

(a)          Investors will pay Provider’s
invoices on or before the date (the “Payable Date”) below:

 

(i)             the last business day
of the calendar month in which Investors receives the invoice from Provider,
provided Investors receives such invoice on or before the tenth (10th)
calendar day of the month; and

 

(ii)          thirty (30) calendar
days after Investors’ receipt of such invoice, if Investors receives such
invoice after the tenth (10th) calendar day of the month.

 

(b)         Investors will pay each
invoice by wire funds transfer or other electronic means reasonably acceptable
to Provider to an account specified by Provider in writing.

 

(c)          If any payments or
portion thereof (not otherwise disputed by Investors in accordance with Section 6.10)
are not received by Provider within five (5) calendar days after the Payable
Date,  Investors will also pay Provider
a late fee for each calendar day between and including the sixth (6th)
calendar day after the Payable Date and the date Provider receives such late
payment in full.  The amount of the late
fee will be invoiced to Investors and payable in accordance with
subsection (a) above.  The late fee
will be based on a rate equal to the lesser of:

 

(i)    two percent (2%) of such payments per every
thirty (30) calendar days or portion thereof; or

 

(ii)          the maximum amount
permissible by the applicable law.

 

Investors may dispute any
invoice in accordance with the provisions of this Agreement, and the above late
fee shall not apply to disputed amounts.

 

 

15.1.2              Fee-Reductions

 

Any Fee Reductions due in accordance with Section 6.8
of this Agreement will be applied as credits against Provider’s invoices with
appropriate information attached.  Any
such credits will be applied to Investors’ account in the month following
determination of the amount, in accordance with the quarterly billing cycle.

 

15.1.3              Work Orders

 

Invoicing with respect to Work Orders that are not
subject to the Annual Service Fees shall be consistent with the requirements
for such Work Orders approved in accordance with the applicable Work Order.

 

15.1.4              Initiatives

 

Invoicing with respect to Initiatives will be
consistent with the requirements approved for each Initiative.

 

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15.2   Reports

 

15.2.1              General

 

Provider shall furnish Investors with reports
described in the Services Schedules (and any ad-hoc reports related to capacity
planning, trending analysis, resource utilization and invoice support) at no
additional cost and such additional reports that Investors may reasonably
request from time to time, provided that Investors pays Provider’s reasonable
and necessary costs in providing such additional reports if their preparation
requires additional resources.  Schedule G
contains sample reports.   Provider’s
reports shall also include information regarding: Provider’s performance of the
Services; utilization reports, Subcontractor relationships; and End-User
satisfaction.  Provider shall promptly
(but not later than two (2) business days after gaining knowledge thereof)
inform Investors of any deficiencies, omissions, or irregularities in
Provider’s performance of the Services (to the extent that such deficiencies,
omissions, or irregularities have a material impact on the Services) that come
to Provider’s attention.  Provider shall
furnish Investors with existing and future non-confidential research and
development resources, such as published materials, and industry studies
conducted for or by Provider, that come to its attention and pertain to the
Services and that might assist Investors in setting its IT policies or
requirements.  The Provider Contract
Manager shall also advise Investors of other matters of a material nature, that
he or she believes would be helpful to Investors in setting or revising its IT policies
or requirements.

 

15.2.2              Media

 

Provider shall furnish Investors with all reports in
both hard copy and electronic form per Investors’ specifications as in effect
on the Contract Signing Date and as reasonably requested by Investors from time
to time thereafter.

 

16.                               RECORDKEEPING AND AUDIT RIGHTS

 

16.1   Recordkeeping

 

Provider shall maintain complete and accurate
records and books of account with respect to this Agreement utilizing GAAP,
consistently applied and complying in all respects with all applicable State or
Federal laws or regulations.  Such
records and books, and the accounting controls related thereto, shall be
considered Provider Confidential Information and shall be sufficient to provide
reasonable assurance that transactions are recorded so as to permit the
preparation of Provider’s financial statements in accordance with GAAP and to
maintain accountability for its assets.

 

Records of Provider’s business shall be maintained
by Provider at its project office, and Investors may examine and make extracts
of information and copy any part thereof at any reasonable time during normal
business hours subject to the limitations set out in Section 6.2.   Provider shall retain and maintain accurate
records and documents relating to performance of Services under this Agreement
until the latest of: (i) six (6) years after the final payment by
Investors to Provider hereunder; (ii) one (1) year following the
final resolution of all audits or the conclusion of any litigation with respect
to this Agreement; or (iii) such longer time period as may be required of
Provider by applicable law or regulation.

 

16.2   Operational Audit
Rights

 

On an annual basis, Investors or any Audit
Representative, shall have the right, at any time and with reasonable advance
notice (which Investors shall make commercially reasonable efforts to provide
no less than ten (10) calendar days advance notice), to perform an operational
audit with respect to Provider’s performance hereunder (“Internal Operational Audit”).   Further, any Regulator shall also have the
right, at any time to perform an operational audit with respect to Provider’s
performance hereunder (“Regulatory Operational Audits”).

 

With respect to any Internal Operational Audit or
any Regulatory Operational Audits (collectively, “Operational Audits”),
Provider shall grant Investors, any Regulators or any Audit Representative,
full and complete access to Provider’s records and other documents of Provider
and its Subcontractors, as they relate to

 

54 of 76

 

this Agreement, or as they may be required in order for Investors to
ascertain any facts relative to Provider’s performance hereunder.  At Investors’ request or Regulators request,
Provider shall provide: (i) such documents, data, or information on such media
as Investors might reasonably request that pertain to the Operational Audits;
(ii) copies (hard copy, optical, magnetic disk or tape, as appropriate) of all
documents, data, or information on such media as Investors might reasonably
request that pertain to the Operational Audits; and (iii) such assistance as
reasonably requested in order to perform such Operational Audits; provided,
however, that the Parties shall endeavor to arrange such assistance in such a
way that it does not interfere with the performance of Provider’s duties and
obligations hereunder, or Provider is excused from it’s duties or obligations
to the extent they are affected by such audit assistance and to the extent
agreed by the Parties.  A request for
Provider to provide assistance with Operational Audits will be considered a
Work Order or Initiative if such Audit assistance results from a change in
Investors’ audit requirements or information is required to be provided in a
format different from the format normally used by Provider and Investors.  Further, with regards specifically to any
Regulatory Operational Audits, Provider shall endeavor to respond to any
Regulator driven request within the time period specified by such Regulator
(which in some cases may be twenty four (24) hours).  Operational Audits under this section, that relate to the Annual
Service Fees or pricing, shall be subject to the limitations set out in Section 6.2.

 

Provider
shall make reasonable efforts to cause any Provider Subcontractor to comply
with the foregoing provisions to the extent necessary to complete the
Operational Audit.  Notwithstanding any
other provision in this Section 16.2, Investors and its Audit
Representatives shall have no access to Provider’s Internal Confidential
Information.

 

17.                               LEGAL
COMPLIANCE

 

17.1   Compliance with
All Laws and Regulations

 

Both Provider and Investors shall at all times
perform their obligations hereunder in compliance with all applicable Federal,
State, and local laws and regulations of all applicable jurisdictions
(collectively, “Laws”), and in such a manner as not to cause the other to be
in violation of any applicable laws or regulations including any applicable
requirements of any Federal, State, or local authority.  No provision of this Agreement, including
any Work Order, shall have any force or effect if it would cause a violation of
any Federal or State law, ordinance, statute, rule, regulation, or order, or
would require any consent or approval to prevent any such violation.  However, with respect to Provider, the
foregoing compliance obligations shall only be to (a) comply with such Laws
applicable to businesses in such jurisdiction generally (such as, by way of
example, employment laws); and (b) comply with such Laws applicable to Provider
in its role as a provider of information technology outsourcing services
generally, and (c) specifically to data privacy laws or Laws applicable to
Provider by virtue of the nature of Investors’ business to the extent those
laws are made known to Provider.  If
Provider’s compliance with a particular Law requires a material change to the
method in which Services hereunder are delivered, Investors shall notify
Provider of such requirement and such requirement and such change shall be made
pursuant to the change management process set forth in Section 7.4 of this
Agreement.

 

17.2   Provider Permits
and License

 

Provider shall obtain and maintain, and shall cause
its Subcontractors to obtain and maintain, at no cost to Investors, all
approvals, permissions, permits, licenses, and other forms of documentation
required in order to comply with all existing foreign or domestic statutes,
ordinances, and regulations, or other laws, that may be applicable to
performance of Services by Provider hereunder, to the extent of Provider’s
obligation to comply with Laws as described in Section 17.1.  Investors reserves the right to reasonably
request and review all such permits and licenses prior to the commencement of
any Services hereunder.  If requested,
Investors shall cooperate with Provider, at Provider’s cost and expense, to
obtain any such approvals, permits, and licenses.

 

17.3   Hazardous Materials

 

Each Party shall be responsible for its own
compliance with all Environmental Laws and all other laws, rules, regulations,
and requirements regarding Hazardous Materials, health and safety, notices, and
training (required by law) in connection with the Services.  Neither Party shall store any Hazardous
Materials at any 

 

 

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facility of the other for periods in excess of
ninety (90) calendar days or in violation of the applicable site storage
limitations imposed by Environmental Law. 
Each Party agrees to take, at its expense, all reasonable actions necessary
to protect third parties, including, without limitation, employees and agents
of the other, from any exposure to Hazardous Materials generated or utilized in
its performance under this Agreement. 
Provider agrees to report to the appropriate governmental agencies all
discharges, releases, and spills of Hazardous Materials that are required to be
reported by Provider pursuant to any Environmental Law and if the discharge,
release or spill occurs on Investors facility to immediately notify Investors
of same.  Provider shall not be liable
to Investors for Investors’ failure to comply with, or violation of, any
Environmental Law.

 

18.                               REPRESENTATIONS AND WARRANTIES

 

18.1   Provider Representations,
Warranties, and Related Covenants

 

18.1.1              Performance of the Services

 

Provider represents and warrants that (i) it is
capable in all respects of providing and shall provide all Services in a
professional, and workmanlike manner consistent with commercially reasonable
standards of quality and integrity; and (ii) no amendment to this
Agreement or additional cost or expense shall be required by Provider during
the Term in order for it to be able to perform the Services as set forth in the
Baselines set forth in Schedule E and in accordance with the
MASLs.

 

18.1.2              Y2K Compliance

 

Provider warrants
that any Provider logoed hardware or software made available by Provider to its
customers, which is provided to Investors pursuant to this Agreement, when used
in accordance with Provider associated documentation, is capable of correctly
processing, providing and/or receiving date data within and between the
twentieth and twenty-first centuries, provided that all products (for example,
hardware, software, and firmware) used with such hardware or software properly
exchange accurate date data with it.

 

18.1.3              Conflict of Interest

 

(a)  Provider represents, warrants,
and agrees that Provider, its Affiliates, and any employee of either associated
with the delivery of the Services to Investors, shall have, and shall acquire,
no contractual, financial, business, or other direct interest, that would
materially conflict in any manner or degree with Provider’s performance of its
duties and responsibilities to Investors under this Agreement or otherwise
create an appearance of impropriety with respect to the award or performance of
this Agreement.  Provider shall promptly
inform Investors of any such interest upon becoming aware of such conflict.

 

(b)  Provider represents, warrants,
and agrees that:

 

(i)             No Abuse of Authority for
Financial Gain. That neither
Provider, nor any of its Affiliates, nor any employee of either, has used or
shall use any Investors Confidential Information acquired in the performance of
the Agreement to obtain financial gain for Provider, or any such Affiliate or
employee, or a member of the immediate family of any such employee, other than
(1) the amounts due Provider pursuant to this Agreement, (2) as permitted in
the Agreement, and (3) the compensation Provider and its Affiliates pay their
employees.

 

(ii)          Independent Prices. The prices presented in the Provider
response to Investors request for proposal were arrived at independently,
without consultation, communication, or agreement with any other proposer for
the purpose of restricting competition; the prices quoted were not knowingly
disclosed by Provider to any other proposer; and no attempt was made by
Provider to induce any other Person to submit or not to submit a proposal for
the purpose of restricting competition.

 

(iii)       No Payment
Tied to Award. Provider has
not paid or agreed to pay any Person, other than bona fide employees working
solely for Provider, any fee, commission, percentage, brokerage fee, 

 

 

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gift,
or any other consideration, contingent upon or resulting from the award or
making of this Agreement.

 

18.1.4              Litigation and
Service of Process

 

Provider represents that Provider is unaware of any
pending or anticipated civil or criminal litigation in any judicial forum that
involves Provider or any of its Affiliates or Subcontractors that may adversely
affect Provider’s ability to perform its obligations under this Agreement.  Provider shall notify Investors, as soon as
reasonably practicable of Provider’s knowledge of its occurrence, of any such
pending or anticipated civil or criminal litigation that Provider reasonably
determines may adversely impact the Provider’s ability to perform the
Services.  Provider shall notify
Investors, as soon as reasonably practical after process is served on Provider
in connection with this Agreement, including any subpoena of Provider’s
records, and shall send a written notice of the service together with a copy of
the same to Investors as soon as reasonably practical.

 

18.1.5              Legal and Corporate Authority

 

Provider represents and warrants
that: (i) it is a New York corporation, and is qualified and registered to
transact business in all locations where the performance of its obligations
hereunder would require such qualification; (ii) it has all necessary
corporate powers, and authority to enter into and perform this Agreement, and
the execution, delivery, and performance of this Agreement has been duly
authorized by all necessary corporate action of the respective Provider’s
corporation; (iii) the execution of this Agreement by Provider shall not
violate any law, statute, or regulation and shall not breach any agreement,
covenant, court order, judgment, or decree to which Provider is a party or by
which it is bound; and (iv) that it owns or leases and covenants that it shall
own or lease, free and clear of all liens and encumbrances, other than lessors’
interests, or security interests of Provider’s lenders, all right, title, and
interest in and to the tangible property that Provider intends to use or uses
in relation to the Services.

 

18.2                           Investors’
Representations,
Warranties, Covenants and Disclaimers

 

18.2.1              Legal and
Corporate Authority

 

Investors represents and warrants
that:  (i) it is a Massachusetts Trust Company, and is qualified and
registered to transact business in all locations where the performance of its
obligations hereunder would require such qualification; (ii) it has all
necessary corporate powers, and authority to enter into and perform this
Agreement, and the execution, delivery, and performance of this Agreement has
been duly authorized by all necessary corporate action of Investors’
corporation; (iii) the execution of this Agreement by Investors shall not
violate any law, statute, or regulation and shall not breach any agreement,
covenant, court order, judgment, or decree to which Investors is a party or by
which it is bound; and (iv) that it owns or leases and covenants that it shall
own or lease, free and clear of all liens and encumbrances, other than lessors’
interests, or security interests of Investors lenders, all right, title, and interest
in and to the tangible property that Investors intends to use or uses in
relation to the Services.

 

18.2.2              Disclaimer

 

Investors does not make any representation or
warranty, express or implied, with respect to the skills, capabilities, or
medical or other condition (with the exception of job title, salary
information, description of benefits and terms of employment) of any of the
Transitioned Employees.  All hardware,
software, networks, and other IT-related assets made available or conveyed by
Investors to Provider under this Agreement are made available or conveyed to
Provider “AS IS, WHERE IS” and there are no warranties of any kind with respect
to the condition, capabilities, or other attributes of such items, except as
otherwise expressly stated in this Agreement.

 

18.2.3              Conflict of Interest

 

Investors represents, warrants, and agrees that neither Investors, nor
any of its Affiliates, nor any employee of either, has used or shall use any
Provider Confidential Information acquired in the performance of the Agreement
to obtain financial gain for Investors, or any such Affiliate or employee, or a
member of the 

 

 

57
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immediate
family of any such employee, other than (1) the amounts due Investors pursuant
to this Agreement, (2) as permitted within the Agreement, and (3) the
compensation Investors and its Affiliates pay their employees.  Investors has not paid or agreed
to pay any Person, other than bona fide employees working solely for Investors,
any fee, commission, percentage, brokerage fee, gift, or any other
consideration, contingent upon or resulting from the award or making of this
Agreement.

 

18.2.4              Acquired Assets and
Leases

 

(a)                      Investors represents and warrants that as of
the Contract Effective Date, it has clear title to all Acquired Assets and it
transfers all right, title, and interest in such Acquired Assets to Provider,
free of all liens and encumbrances; and the Acquired Assets have been
maintained in accordance with the applicable manufacturer’s maintenance
requirements.

 

(b)                     Investors represents and warrants that all
obligations with respect to the Leases accruing, or attributable to periods,
prior to the Contract Effective Date have been satisfied.

 

“Acquired
Assets” are listed in the attached Schedule L.

 

18.3   Warranty Disclaimer

 

EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, THERE
ARE NO EXPRESS WARRANTIES BY EITHER PARTY. 
THERE ARE NO IMPLIED WARRANTIES OR CONDITIONS, INCLUDING THE IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR OTHERWISE
ARISING FROM A COURSE OF DEALING OR USAGE OF TRADE.

 

19.                               INDEMNIFICATION

 

19.1   Technology Indemnification by Provider

 

Provider shall indemnify, defend, and hold Investors
Indemnitees harmless from, and shall pay all settlements and final damages and
cost awarded against any of them, arising out of any claim brought by any third
party against any of them for actual or alleged infringement of any patent,
trademark, copyright, or similar proprietary right, including misappropriation
of trade secrets, based upon any Provider Underlying Works, Provider Vendor
Software, and/or Work Product used by Provider in providing the Services
(collectively, “Infringement Claim”); and Provider shall defend, indemnify,
and hold Investors Indemnitees harmless from and against any and all claims,
demands, judgments, awards, fines, mechanics’ liens or other liens,
liabilities, losses, cost, damages, and expense, including reasonable
attorneys’ fees and disbursements and court costs (collectively, “Losses”),
associated with any such claim or action incurred by any of them in connection
with any such Infringement Claim.  Also,
notwithstanding the foregoing, Provider shall defend, indemnify, and hold
harmless Investors Indemnitees from and against all Losses that could have been
avoided by moving to a new release or version of the infringing software and
Provider was offered the new release or version and did not move to the same;
provided, however, that if the decision not to move to the new release or
version was an Upgrade Disapproval, then Provider shall have no liability to
indemnify Investors due solely to its failure to upgrade the infringing
software.  In the event that Investors’
right to use any such technology is enjoined, Provider may, in its reasonable
discretion and at Provider’s sole expense: (i) procure a license to enable
Investors to continue to use such technology; (ii) develop or obtain a
non-infringing substitute reasonably acceptable to Investors; or (iii)
discontinue such Services as are prevented by the unavailability of such
technology and the Parties will mutually agree, in good faith, to an equitable
adjustment in Annual Service Fees. 
Provider shall have no obligation with respect to any claim or action to
the extent that it is based solely upon: 
(w) modification of a program or machine by Investors, any
third-party supplier of Investors, or any agent of Investors that was not
approved by or requested by Provider; (x) Investors’ combination,
operation, or use with apparatus, data, or programs neither furnished nor
approved by Provider; (y) the use by Investors of any software provided by
any third party other than in accordance with relevant software licenses; or
(z) the use of software owned by or licensed to Investors by a party other
than Provider.  Provider shall have no
obligation with respect to any Infringement Claim or Loss to the extent that it
is based upon any Assigned Contract, as it exists as of the Contract Signing Date.

 

 

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19.2   Injury, Property, or Other
Damage

 

Without limiting either Party’s
obligations with respect to insurance as provided in Section 14 hereof, each Party shall indemnify, defend, and
hold the other Party’s Indemnitees harmless with respect to any and all Losses
related to any third-party claim alleging bodily injury or death, damage to
tangible personal or real property, or any other damage, notwithstanding the
form in which any such action is brought (e.g., contract, tort, or otherwise),
to the extent such injuries or damages arise directly or indirectly from acts,
errors, or omissions that constitute negligence, willful misconduct, or
violations of law, by the Party or its personnel, agents, or Subcontractors.

 

19.3   Third-Party Contracts

 

Each Party shall indemnify, defend, and hold the
other Party’s Indemnitees harmless from and against any and all Losses based
upon, or related to, third-party claims based upon an alleged breach by a Party
of any agreement with any third party, including an alleged breach by a Party
prior to the Contract Signing Date with respect to any Assigned Contract.

 

19.4   Transitioned Employees

 

Each Party shall indemnify, defend, and hold the
other Party’s Indemnitees harmless from and against any Losses sustained by or
incurred by such Party’s Indemnitees, as a result of any claim by a
Transitioned Employee to the extent such person’s claim is based upon an act by
a Party or its Subcontractors after the Hire Date.

 

19.5   Hazardous Material

 

The Parties shall indemnify, defend, and hold the
other Party’s Indemnitees harmless from and against any claim by any third
party and any and all Losses sustained or incurred by such Party’s Indemnitees
as a result of the other Party’s breach of its obligations under Section 17.3.

 

19.6   Proprietary Information Disclosure

 

Provider shall indemnify, defend, and hold Investors
Indemnitees harmless from and against any and all Losses based upon or
resulting from any third-party claim or challenge with respect to disclosure of
Confidential Information as a consequence of Provider’s breach of its
obligations under Section 10.2.

 

19.7   Investors Technology

 

Investors shall indemnify, defend, and hold Provider
Indemnitees harmless from, and shall pay all settlements and final damages and
cost awarded against any of them, arising out of any claim brought by any third
party against any of them for actual or alleged infringement of any patent,
trademark, copyright, or similar proprietary right, including misappropriation
of trade secrets, based upon Investors Proprietary Systems or Investors-Vendor
Software provided to Provider by Investors either before or after the Contract
Signing Date.  In the event that
Provider’s right to use such Investors Proprietary System or Investors-Vendor
Software is enjoined, Investors may, in its reasonable discretion and at
Investors’ sole expense: (i) procure a license to enable Provider to continue
use of such technology, (ii) develop or obtain a non-infringing replacement, or
(iii) discontinue such Services as are prevented by the unavailability of such
technology and the Parties will mutually agree, in good faith, to an equitable
adjustment in Annual Service Fees. 
Investors shall have no obligation with respect to any claim or action
to the extent it is based solely upon: 
(i) modification of the software by Provider or any of its
Affiliates or Subcontractors; or (ii) Provider’s combination, operation,
or use of such software with Provider-approved apparatus, data, or
programs.  Investors shall have no obligation
with respect to any claim or action to the extent that it is based upon:
(w) modification of the software by Provider or any of its Affiliates or
Subcontractors; (x) Provider’s combination, operation, or use of such
software with Provider-approved apparatus, data, or programs; (y) the use
by Provider of any software provided by any third party other than in
accordance with relevant software licenses; or (z) the use of software
owned by or licensed to Provider by a party other than Investors.  As between Provider and Investors, Investors
shall have no obligation with respect to any Assigned Contract, after the
Contract Signing Date.

 

59 of 76

 

19.8   General Obligation

 

If any legal action governed by this Section 19
is commenced against a Provider Indemnitee or Investors Indemnitee (“Party
Indemnitee”), such Party shall give written notice thereof to the
indemnifying Party promptly after such legal action is commenced; provided,
however, that failure to give prompt notice shall not reduce the indemnifying
Party’s obligations under this Section 19, except to the extent the
indemnifying Party is prejudiced thereby. 
After such notice, if the indemnifying Party shall acknowledge in
writing to the other Party that the right of indemnification under this
Agreement applies with respect to such claim, then the indemnifying Party shall
be entitled, if it so elects in a written notice delivered to the other Party
not fewer than ten (10) calendar days prior to the date on which a
response to such claim is due, to take control of the defense and investigation
of such claim and to employ and engage attorneys of its choice, that are
reasonably satisfactory to the other Party, to handle and defend same, at the
indemnifying Party’s expense.  The Party
Indemnitee shall cooperate in all reasonable respects with the indemnifying
Party and its attorneys in the investigation, trial, and defense of such claim
and any appeal arising therefrom; provided, however, that the Party Indemnitee
may participate, at its own expense, through its attorneys or otherwise, in
such investigation, trial, and defense of such claim and any appeal arising
therefrom.  No settlement of a claim
that involves a remedy other than the payment of money by the indemnifying
Party shall be entered into by the indemnifying Party without the prior written
consent of the Party Indemnitee, which consent may not be unreasonably
withheld.  If the indemnifying Party
does not assume the defense of a claim subject to such defense as provided in
this Section, the indemnifying Party may participate in such defense, at its
expense, and the Party Indemnitee shall have the right to defend the claim in
such manner as it may deem appropriate, at the expense of the indemnifying
Party.

 

20.                               DISPUTE RESOLUTION

 

20.1   Resolution Process

 

If a Problem or dispute arises, the Parties’
respective designated representatives shall attempt to resolve the
Problem.  If such Problem cannot be
promptly resolved, Investors’ Representative and Provider’s Contract Manager
shall discuss and endeavor to resolve such Problem.  If the Parties have resolved the Problem, the Investors’
Representative and Provider’s Contract Manager shall mutually agree to a Problem
Resolution Report and each Party shall commence the resolution of the Problem
in accordance therewith.  In the event
the Provider Contract Manager and Investors’ Representative have failed to
resolve the Problem within ten (10) calendar days after the referral of the
Problem to them, the Parties shall refer the Problem to the Management
Committee for resolution.  If the
Management Committee is unable to resolve the dispute within ten (10)  business
days of its receipt of the Problem, the dispute will be referred in writing to
the Senior Executive Contacts of each Party for their review and
resolution.   Investors and Provider
will exercise reasonable, good faith efforts to resolve the dispute throughout
the dispute resolution process outlined above. 
Provider and Investors may not initiate formal proceedings for the
resolution of such dispute until the earlier of: (a) the Senior Executive
Contacts’ joint written conclusion that amicable resolution through continued
negotiation is unlikely; (b) thirty (30) calendar days after the written
referral to such Senior Executive Contacts was made; or (c) ninety (90)
calendar days before the limitations period governing any such cause of action
relating to such dispute would expire. 
The determination of a mutually acceptable resolution, through this
process with respect to the Problem shall be binding on the Parties.

 

20.2   Legal Action

 

If any Problem or other dispute, arises between the
Parties, and the disputed matter has not been resolved by the Senior Executive
Contacts of each Party as specified in Section 20.1 above, or such longer
period as agreed to in writing by the Parties, and without regard to whether
either Party has contested whether these procedures, including the duty of good
faith, have been followed, each Party shall have the right to commence any
legal proceeding as permitted by law. 
Neither Party shall be obligated to comply with Section 20.1 or Section 20.2
in regard to material breach of Section 10 hereof or for any other
Default as to which injunctive relief is sought or if compliance with this Section 20.1
or Section 20.2
would materially affect such Party’s remedies at law or equity.

 

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20.3   De Minimis Dispute

 

Notwithstanding anything to the contrary provided in
Section 20
or elsewhere in this Agreement, if: 
(i) Investors requests services, products, or resources from
Provider and the Parties disagree as to whether any such request is within the
scope of the Services; and (ii) the financial impact on Provider of
satisfying such request is less than [*], then the disagreement shall not be
deemed a Problem, but absent mutual agreement of the Parties through the
Management Committee, shall be deemed resolved in Investors’ favor.  The maximum financial impact on Provider of
disagreements that shall not be deemed Problems, but shall instead be resolved
by the Management Committee in Investors’ favor pursuant to this Section 20.3,
shall not exceed [*] in the aggregate during any Contract Year.

 

20.4   No Termination or Suspension of Services

 

Notwithstanding anything to the contrary contained
herein, and even if any Problem or other dispute arises between the Parties and
regardless of whether or not it requires at any time the use of the dispute
resolution procedures described above, in no event nor for any reason shall
Provider interrupt the provision of Services to Investors or any obligations
related to Disentanglement, disable any hardware or software used to provide
Services, or perform any other action that prevents, impedes, or reduces in any
way the provision of Services or Investors’ ability to conduct its activities,
unless:  (i) authority to do so is
granted by Investors or conferred by a court of competent jurisdiction;
(ii) the Term of this Agreement has been terminated or has expired
pursuant to Section 11 hereof and a Disentanglement satisfactory to
Investors has been completed; or (iii) Investors is in payment Default and
fails to cure the payment Default within the time permitted under this
Agreement, if any.

 

20.5   No Limitation on Remedies for Default

 

The procedure described in this Section 20 shall not be
deemed to limit either Party’s rights under Section 11 or either
Party’s rights under Section 13 in connection with a
Default by either Party.

 

21                                  APPROVAL
OF PROMOTIONS

 

Each Party will coordinate with the other regarding
any media release, public announcement or similar disclosure relating to this
Agreement or its subject matter and will give the other Party a reasonable
opportunity to review and comment on the content of such release, announcement
or disclosure prior to its release; provided, further, Investors shall also
have the right to approve or disapprove any Provider media release, public
announcement or similar disclosure (relating to this Agreement or its subject
matter) that is made within thirty (30) calendar days of the Contract Signing
Date.  This provision does not alter the
restrictions on the disclosure of Confidential Information set forth in Section 10.2
and, subject to Section 10.2, will not be construed so as to delay or
restrict either Party from disclosing any information required to be disclosed
in order to comply with any applicable laws, rules or regulations.  Subject to any applicable laws, rules or
regulations, and this Section, each Party will have the right to list the name
of the other Party, to make general references to the basic nature of the
relationship between the Parties under this Agreement and to describe generally
the type of services being provided by Provider to Investors under this
Agreement in such Party’s promotional and marketing materials, in such Party’s
oral or visual presentations to third parties, in interviews conducted by the
news media or securities analysts and in or through any other available media
channels, including print, internet, radio, cable and broadcast mediums;
provided, however, the Party using the other Party’s name, shall not imply that
the other Party is endorsing its products or services (unless it is otherwise
authorized in writing to do so by the other party).

 

22.                               USE
OF AFFILIATES
AND SUBCONTRACTORS

 

22.1   Approval; Key Subcontractors

 

Provider shall not perform the Services through its
Affiliates or through the use of Provider-selected Subcontractors, including
suppliers of hardware and software, without the advance written consent of an
Investors Representative as to the selection of the Subcontractor, which
consent may be withheld in Investors’ sole discretion, and the execution by
such Subcontractor of a confidentiality agreement in accordance with Section 10.2.3
hereof; provided, however, that Provider may subcontract, without Investors’
advance written consent, for goods and services that do not involve the
anticipated expenditure with a given Subcontractor under this Agreement of more
than $[*] within any ninety (90) calendar day period.  Investors hereby consents to any

 

61 of 76

 

Subcontractor selected by the Provider to provide
the Services, except those identified in Schedule Q; provided, that each such
selected Subcontractor shall execute a confidentiality agreement in accordance
with Section 
10.2.3 hereof.  Additionally,
each Subcontractor shall be properly licensed in the State or States to perform
the Services for which such Subcontractor is responsible.  Provider agrees that it shall continue
throughout the Term to retain the Subcontractors identified as “Key
Subcontractors” (if any) in Schedule Q, and that such Persons
shall continue to provide the Services initially provided, unless Provider has
obtained Investors’ prior written consent, which may be withheld in Investors’
sole discretion or in the event of an emergency that requires such
subcontractor to be removed.  In the
event of such emergency Provider will provide notice as soon as is reasonably
possible.  Furthermore, prior to the
Contract Signing Date, Investors may require that a particular Service be
subcontracted to a certain Subcontractor. 
In no event shall Provider be entitled to perform the Services through
the use of any Subcontractor who has been disbarred from performing services
for the United States government.

 

22.2   Subcontractor Agreements

 

Provider will make commercially reasonable efforts
to cause its contracts with Subcontractors to contain substantially the same
material terms and conditions as those contained in this Agreement, to the
extent such provisions are relevant to the subordinate agreement.

 

22.3   Liability and Replacement

 

In no event shall Provider be relieved of its
obligations under this Agreement as a result of its use of any
Subcontractors.  Provider shall
supervise the activities and performance of each Subcontractor and Provider
shall be liable for any act or failure to act by such Subcontractor.  If Investors determines that the performance
or conduct of any Subcontractor is unsatisfactory, Investors may notify
Provider of its determination in writing, indicating in reasonable specificity
the reasons therefore, in which event Provider shall promptly take all
necessary actions to remedy the performance or conduct of such Subcontractor or
to replace such Subcontractor by another third party or by Provider personnel.

 

22.4   Direct Agreements

 

Upon expiration or termination of the Term for any
reason, Investors shall have the right to enter into direct agreements with any
Subcontractors.  Provider represents,
warrants, and agrees that its arrangements with such Subcontractors shall not
prohibit or restrict such Subcontractors from entering into direct agreements
with Investors.

 

23.                               DEFINITIONS

 

The following words and phrases, when used in this
Agreement or any Schedule to this Agreement, shall have the indicated
meanings.

 

23.1   Terms Defined Elsewhere in this Agreement.

 

For purposes of this Agreement, the following terms
have meanings set forth in the sections indicated:

 

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  Term:

  	
  Section or
  Schedule:

  
	
  Academic
  Learning Assistance Program

  	
  Section 3.3.4

  
	
  Acceptance

  	
  Section 5.9.1

  
	
  Acceptance Criteria

  	
  Section 5.9.1

  
	
  Acceptance
  Testing Period

  	
  Section 5.9.1

  
	
  Acceptance
  Testing Procedure

  	
  Section 5.9.1

  
	
  Access

  	
  Section 9.4

  
	
  Acquired
  Assets

  	
  Section 18.2.4,
  Schedule L

  
	
  Add
  Charges

  	
  Section 6.1.4

  
	
  Affected
  Party

  	
  Section 11.5

  
	
  Audit
  Representative

  	
  Section 10.1.5

  
	
  Baselines

  	
  Section 1.1,
  Schedule E

  
	
  Benchmark
  Deadband

  	
  Section 6.5

  
	
  Benchmarking

  	
  Section 6.5

  
	
  Ceiling

  	
  Section 6.1.1,
  Schedule E

  
	
  Change
  in Control

  	
  Section 11.3

  
	
  Chargeback
  Fee

  	
  Section 4.2

  
	
  Code

  	
  Section 3.3.3

  
	
  Conditional
  Acceptance

  	
  Section 5.9.1

  
	
  Contract
  Effective Date

  	
  Section 1.1

  
	
  Control

  	
  Section 11.3

  
	
  Critical
  MASLs

  	
  Section 11.2.2,
  Schedule F

  
	
  Current
  Services

  	
  Section 1.2.1

  
	
  Data
  and Modified Data

  	
  Section 9.5

  
	
  Defaulting
  Party

  	
  Section 11.4

  
	
  Delayed
  Services

  	
  Section 1.3.2

  
	
  Delayed
  Services Effective Date

  	
  Section 1.3.2

  

 

63 of 76

 

	
  Delete
  Charges

  	
  Section 6.1.6

  
	
  Designated
  Resources

  	
  Section 4.2

  
	
  Disabling
  Device

  	
  Section 1.5

  
	
  Disclosing
  Party

  	
  Section 10.2.1

  
	
  Disentanglement

  	
  Section 12.1

  
	
  Enhanced
  Technology

  	
  Section 1.4.2

  
	
  Exception
  Report

  	
  Section 5.9.2

  
	
  Expiration
  Date

  	
  Section 12.2

  
	
  Extended
  Acceptance Period

  	
  Section 5.9.2

  
	
  Failure
  Notice

  	
  Section 1.9.3

  
	
  Fee
  Reduction

  	
  Section 6.8,
  Schedule F

  
	
  Final
  Acceptance

  	
  Section 5.9.3

  
	
  Final
  Acceptance Criteria

  	
  Section 5.9.3

  
	
  Final
  Acceptance Test Procedures

  	
  Section 5.9.3

  
	
  Final
  Acceptance Testing Period

  	
  Section 5.9.3

  
	
  Floor

  	
  Section 6.1.1,
  Schedule E

  
	
  Forecasted
  Monthly Usage

  	
  Section 1.1.1,
  Schedule E

  
	
  Future
  Health Account Plan

  	
  Section 3.3.1

  
	
  Human
  Resources Representative

  	
  Section 3.4

  
	
  In-Scope
  Employee

  	
  Section 3.1.2

  
	
  In-Scope
  Employee Information

  	
  Section 3.1.2

  
	
  In-Scope
  Locations

  	
  Section 1.3,
  Schedule R

  
	
  Incentive

  	
  Section 6.8

  
	
  Infringement
  Claim

  	
  Section 19.1

  
	
  Initial
  Term

  	
  Section 11.1.1

  
	
  Initiative

  	
  Section 8.1

  
	
  Internal
  Confidential Information

  	
  Section 6.2

  

 

64 of 76

 

	
  Internal
  Operational Audit

  	
  Section 16.2

  
	
  Internal
  Use

  	
  Section 9.3

  
	
  Investors
  Competitors

  	
  Section 7.1

  
	
  Investors
  Facilities

  	
  Section 4.1

  
	
  Investors-Leased
  Assets

  	
  Section 2.2

  
	
  Investors
  Maintenance Agreements

  	
  Section 2.7

  
	
  Investors-Owned
  Assets

  	
  Section 2.1

  
	
  Investors
  Proprietary Systems Derivatives

  	
  Section 9.1

  
	
  Investors
  Representative

  	
  Section 7.1.3

  
	
  Investors-Vendor
  Software

  	
  Section 9.4

  
	
  IT

  	
  Section 1.1

  
	
  IT
  Audits

  	
  Section 10.1.5

  
	
  IT
  Internal Audits

  	
  Section 10.1.5

  
	
  IT
  Regulatory Audits

  	
  Section 10.1.5

  
	
  IT
  Scheduled Audits

  	
  Section 10.1.5

  
	
  Losses

  	
  Section 19.1

  
	
  Monthly
  Usage Charge

  	
  Section 6.1.8

  
	
  Non-Defaulting
  Party

  	
  Section 11.4

  
	
  Operation
  Audits

  	
  Section 16.2

  
	
  Party
  Indemnitee

  	
  Section 19.8

  
	
  Payable
  Date

  	
  Section 15.1

  
	
  Pension
  Plan Account

  	
  Section 3.3.1

  
	
  Personal
  Pension Account

  	
  Section 3.3.1

  
	
  Preexisting
  Condition

  	
  Section 1.9.3,
  Schedule W

  
	
  Procured
  Assets

  	
  Section 1.3.1

  
	
  Provider
  Assets

  	
  Section 2.5

  
	
  Provider
  Contract Manager

  	
  Section 7.1.2

  

 

65 of 76

 

	
  Receiving
  Party

  	
  Section 10.2.1

  
	
  Regulators

  	
  Section 10.1.5

  
	
  Regulatory
  Operational Audits

  	
  Section 16.2

  
	
  Release

  	
  Section 3.1.6

  
	
  Renewal
  Term

  	
  Section 11.1.3

  
	
  Requester

  	
  Section 9.6

  
	
  Resources

  	
  Section 1.8

  
	
  Response
  Period

  	
  Section 7.4

  
	
  Sales
  Tax

  	
  Section 6.4

  
	
  Senior
  Executive Contact

  	
  Section 7.3

  
	
  Senior
  Executive Contacts

  	
  Section 7.3

  
	
  Services
  Schedules

  	
  Section 1.1

  
	
  Severance
  Payments

  	
  Section 3.1.5

  
	
  Severity
  1

  	
  Section 1.9.3,
  Standards and Procedures Manual

  
	
  Shared
  Use Assets

  	
  Section 1.4.4

  
	
  SLRs

  	
  Section 7.4

  
	
  Standards
  and Procedures Manual

  	
  Section 1.7.1

  
	
  Technology
  Plan

  	
  Section 1.4.2

  
	
  Technology
  Refresh Plan

  	
  Section 1.4.3

  
	
  Termination
  Date

  	
  Section 11.2.1

  
	
  Termination
  for Convenience

  	
  Section 11.2.1

  
	
  Termination
  Notice

  	
  Section 11.2.1

  
	
  Third
  Party Resources

  	
  Section 1.8

  
	
  Transition

  	
  Section 1.2.1

  
	
  Transition
  Services

  	
  Section 1.2.2

  
	
  Transitioned
  Employee

  	
  Section 3.1.3

  
	
  Upgrade
  Disapproval

  	
  Section 1.9.5

  

 

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  Variable
  Pay

  	
  Section 3.1.6

  
	
  Vendor
  Software

  	
  Section 9.4

  
	
  Web
  Hosting Equipment

  	
  Section 1.4.3

  
	
  Workstations

  	
  Section 2.5.1

  

 

23.2   Affiliate

 

“Affiliate” shall mean, as to any Person,
any other Person that, directly or indirectly, controls, is controlled by, or
is under common control with, such Person, whether through ownership of voting
securities or otherwise.  For this
purpose, and without limiting the foregoing, any Person that owns more than
fifty percent (50%) of the outstanding voting securities of any other Person
shall be deemed to control such other Person.

 

23.3   Agreement

 

“Agreement” shall mean this Information
Technology Service Agreement including all attachments, exhibits, and Schedules
hereto, as amended from time to time.

 

23.4   Assigned
Contracts

 

“Assigned Contracts” shall mean those written
maintenance agreements, service contracts, software license agreements, and
subcontractor agreements under which Investors receives third-party services
relating to its IT requirements listed on Schedule M.  After the Contract Signing Date, if Provider identifies a
maintenance agreement, service contract, software license agreement, or
subcontractor agreement relating to the Services that was omitted from Schedule M,
Provider shall notify Investors in writing and the Parties shall make a
reasonable accommodation therefore, including the determination of additional
charges, in accordance with the procedures set forth in Section 7.4.

 

23.5                           Base
Components

 

 

“Base Components” means the hardware and software that IBM
makes available, if any, including those specified in Schedule L (Assets) for
ODCS.

 

23.6 Boarding
Period

 

“Boarding Period” means the period of time
which Provider boards Investors’ existing servers which are targeting for
migration into the ODCS Environment.

 

23.7   Confidential
Information

 

“Confidential Information” shall mean
records, data, and other information that is received by a Party or any of its
employees or subcontractors from (or with regard to) the other in connection
with the performance of this Agreement, whether in tangible or intangible form,
and whether in written form or readable by machine, and including:

 

(a)           any
information that a Party identifies to the other Party as confidential by a
stamp or other similar notice;

 

(b)                                 all Investors Data; and

 

(c)                                  all financial information, personnel
information, or client information.

 

Confidential Information shall not include
information that Receiving Party can demonstrate was:  (i) at the time of disclosure to Receiving Party, in the
public domain; (ii) after disclosure to Receiving Party, published or

 

67 of 76

 

otherwise made a part of the public domain through
no fault of Receiving Party; (iii) in the possession of Receiving Party at
the time of disclosure to it, if Receiving Party was not then under an
obligation of confidentiality with respect thereto; (iv) received after
disclosure by Disclosing Party to Receiving Party from a third party who had a
lawful right to disclose such information to Receiving Party; (v) independently
developed by Receiving Party without reference to Disclosing Party’s
Confidential Information, or (vi) information relating to the tax treatment or
tax structure of this Agreement or any transaction contemplated by this
Agreement.  For purposes of this provision,
information is in the public domain if it is generally known (through no fault
of Disclosing Party) to third parties who are not subject to nondisclosure
restrictions similar to those in this Agreement.

 

23.6   BAU Period

 

“BAU Period” means the period of time in
which Provider performs those Services (not including Web Hosting) performed in
part by the In-Scope Employees prior to Contract Signing Date and those
Services performed in part by identified contractors prior to the Contract
Signing Date that are to be performed by Provider with additional provider
resources up until the Commencement Date utilizing Investors processes, procedures and tools.

 

23.8 Commencement Date

 

“Commencement Date” means the end of the Boarding
Period

 

23.9   Contract Year

 

“Contract Year” shall mean each twelve (12)
month period beginning on the Contract Effective Date (with “Contract Year 1”),
and on each subsequent anniversary thereof during the Term.

 

23.10 Critical Milestones

 

“Critical Milestones” shall mean those tasks
or project objectives identified as such in any Services Schedule or in Schedule F.

 

23.11                                             Investors
Components

 

“Investors Components” means the hardware, software and other
products and data that Investors provides for ODCS, as specified in Schedule L.

 

23.12  DASD

 

“DASD” means direct access
storage device. 

 

23.13 Socket
Access

 

       ”Socket
Access” means the program used to test accessibility of a
destination by initiating a connection (much as an end user using a Secure
Shell (SSH) client) and waiting for a reply.

 

23.14 Default

 

“Default” shall mean the occurrence of any
of the following:

 

(a)          With respect to Provider:

 

(i)  a material breach by Provider
of any of its obligations under this Agreement, provided that such breach, if
curable, is: (1) not cured by Provider within thirty (30) calendar days
after Provider has received written notice of such material breach; or (2)
if the material breach is one that could not reasonably be cured within

 

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of 76

 

thirty (30) calendar days; (y) the
failure by Provider to adopt, within thirty (30) calendar days after
receiving notice of such breach,  a plan
to cure such breach within a time period not longer than sixty (60)
calendar days after Provider received notice of the breach, or (z) the
failure by Provider to cure such breach within such sixty (60) calendar
day period;

 

(ii)  the discovery that a
representation made in this Agreement by Provider was false when made, if the
nature and the magnitude of the misrepresentation are such as to have had a
probable and material effect upon Investors’ decision to engage Provider or
upon the negotiations as to the other terms of this Agreement; or

 

(iii)  a breach by Provider in
making payment of any amount payable to Investors under this Agreement within
thirty (30) calendar days after the due date specified in this Agreement, or if
Provider is not aware of such amount and after such amount has been identified
through an audit and communicated to Provider, for such payment and the failure
by Provider to cure such breach within twenty (20) calendar days after Provider
has received written notice of such breach.

 

(b)          With respect to Investors:

 

(i)  a breach by Investors in
making payment of any amount payable to Provider under this Agreement within
ten (10)calendar days after the due date specified in this Agreement for such
payment and the failure by Investors to cure such breach within ten (10)
calendar days after Investors has received written notice of such breach;

 

(ii)  a material breach by
Investors of any of its obligations under this Agreement, provided that such
breach, if curable, is: (1) not cured by Investors within thirty (30)
calendar days after Investors has received written notice of such material
breach; or (2) if the material breach is one that could not reasonably be
cured within thirty (30) calendar days, (y) the failure by Investors
to adopt, within thirty (30) calendar days after receiving notice of such
breach,  a plan to cure such breach
within a time period not longer than sixty (60) calendar days after
Investors received notice of the breach, or (z) the failure by Investors
to cure such breach within such sixty (60) calendar day period; or

 

(iii)  the discovery that a
representation made in this Agreement by Investors was false when made if the
nature and the magnitude are such as to have had a probable and material effect
upon the negotiations as to the terms of this Agreement.

 

(c)          With respect to either Party, if either Party:

 

(i)  shall admit
in writing its inability to, or be generally unable to, pay its debts as such
debts become due; or

 

(ii)  shall (1) apply
for or consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee, examiner or liquidator of itself or of all or a
substantial part of its property or assets, (2) make a general assignment for
the benefit of its creditors, (3) commence a voluntary case under the United
States Bankruptcy Code, (4) file a petition seeking to take advantage of any
other law relating to bankruptcy, insolvency, reorganization, liquidation,
dissolution, arrangement or winding-up, or composition or readjustment of
debts, (5) fail to controvert in a timely and appropriate manner, or acquiesce
in writing to, any petition filed against it in an involuntary case under the
United States Bankruptcy Code, or (6) take any corporate action for the purpose
of effecting any of the foregoing;

 

then the other Party may, by giving notice thereof to such
Party, terminate this Agreement as of the date specified in such termination
notice.

 

23.15 ECA

 

“ECA” is the acronym for “economic change
adjustment.”

 

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23.16 End-User

 

“End-User” shall mean any Investors
employee, or any other Person providing products or services to Investors, who
is determined by Investors, in its sole discretion, to require access to any of
the Services.

 

23.17 Environmental Laws  

 

“Environmental Laws” shall mean all
applicable Federal, State, or local statutes, laws, regulations, rules,
ordinances, codes, licenses, orders, or permits of any governmental entity
relating to environmental matters including, but not limited to:  (i) the Clean Air Act (42 U.S.C. 7401
et seq.); the Federal Water Pollution Control Act (33 U.S.C. §1251); the Safe
Drinking Water Act (42 U.S.C. §5 300f et seq.); the Toxic Substances Control
Act (15 U.S.C. 55 2601 et seq.); the Endangered Species Act (16 U.S.C. §1531 et
seq.); the Emergency Planning and Community Right-to-Know Act of 1986 (42 U.S.C.
55 110011 et seq.); and (ii) similar State and local provisions.

 

23.18 Annual Service Fees

 

“Annual Service Fees” shall mean the fees
payable by Investors to Provider hereunder in consideration of Provider’s
provision of the Services.

 

23.19 Force Majeure Event

 

“Force Majeure Event” shall mean an act of
governmental body or military authority, fire, explosion, flood, epidemic, riot
or civil disturbance, war, sabotage, accident, insurrections, blockades,
embargoes, storms, or similar event beyond the reasonable control of the
non-performing Party. Notwithstanding the foregoing, “Force Majeure Event”
expressly excludes the following: any event that either party could reasonably
have prevented by testing either required to be performed pursuant to the Services
or necessary to provide the Services, work-around, or other exercise of
commercially reasonable diligence; any event resulting from any strike,
walkout, or other labor shortage of the non-performing Party; and any failure
of any systems, facilities, or hardware that could have been prevented by
testing either required to be performed pursuant to the Services or necessary
to provide the Services.

 

23.20 GAAP

 

“GAAP” is the acronym for “generally
accepted accounting principles.”

 

23.21
Hazardous Materials

 

“Hazardous Materials” shall mean any
substances the presence of which requires investigation or remediation under
any Environmental Law, or that is or becomes defined as a “hazardous waste,”
“hazardous substance,” pollutant, or contaminant under any Environmental Law.

 

23.22
Investors Data

 

“Investors
Data” shall mean, in or on any media or form of any kind:  all data and summarized data related to
Investors that is entered into software or equipment on behalf of Investors and
all data derived from such data (regardless of whether or not owned by
Investors, generated or compiled by Investors), including such data that is in
Investors’ databases or otherwise stored on Investors-Owned Assets or
Investors-Leased Assets on the Contract Signing Date or at any time during the
Term; and (ii) all other Investors-owned records, data, data files, input
materials, reports, forms, and other such items that may be received, computed,
processed, or stored by Provider, or by any of its Subcontractors, in the performance
of the Services under this Agreement.

 

23.23
Investors Indemnitees

 

“Investors Indemnitees” shall mean
Investors, all of its officers, and each of their respective officers,
directors, employees, agents, successors and assigns.

 

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23.24
Investors Proprietary Systems

 

“Investors
Proprietary Systems” shall mean all computer programs (and all
configurations and set-ups of any such program and all templates reflecting
same), and other developments and all intermediate and/or partial versions
thereof, including all source code, object code and documentation with respect
thereto, and all designs, specifications, inventions, discoveries,
improvements, ideas, know-how, techniques, materials, program materials,
software, flow charts, notes, outlines, lists, compilations, manuscripts,
writings, pictorial materials, schematics, other creations, and the like,
whether or not patented or patentable or subject to copyright, or otherwise
protectable by law, that:  (i) Investors
already owns prior to the Contract Signing Date, or (ii) over which Investors
or its personnel obtain ownership after the Contract Signing Date, independent
of Provider or the Services to be provided under this Agreement, or (iii) that
are assigned to Investors hereunder.                                       23.25 Investors Representative

 

“Investors Representative” shall be the
Chief Information Officer of Investors or his/her Investors designee(s).

 

23.26
Investors Service

 

“Investors Service” means employment with
Investors or an Investors Affiliate.

 

23.27 Logical Partition

 

      ”Logical
Partition” or “LPAR” means a division of a computer’s
processors, memory, and hardware resources into multiple environments so that
each environment can be operated independently with its own operating system
and applications.

 

23.28
MASLs

 

“MASLs” which is the acronym for “minimum
acceptable service level,” specified in any Services Schedules for any task or
service.

 

23.29 On Demand Data Center Services Environment or ODCS
Environment

 

“On Demand Data
Center Services Environment” or “ODCS Environment”  means
the Base Components, and supporting infrastructure and which employs a utility
management infrastructure consisting of a common tool set, processes and
reports.

 

23.30
Party

 

“Party” shall mean Investors or Provider;
the “Parties”
shall mean both of them.

 

23.31
Person

 

“Person” shall mean any natural person,
corporation, limited liability company, limited liability partnership, general
partnership, limited partnership, trust, association, governmental organization
or agency, political subdivision, body politic, or other legal person or entity
of any kind, legally constituted.

 

23.32 Post-Termination License Fee

 

“Post
Termination License” shall mean any of the licenses to be granted by
Provider upon expiration or termination as set forth in Section 9.

 

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23.33 Porting Services

 

“Porting Services” means the programming changes that Provider
performs for Investors’ applications (for example, languages, databases,
middleware) to enable such applications to run in the ODCS Environment.

 

23.34Problem

 

“Problem” shall mean any problem or
circumstance that results from any of the following:

 

(a)          an
alleged failure by either Party to perform its obligations under this
Agreement;

 

(b)         an
alleged inadequacy or delay of either Party’s performance under this Agreement;

 

(c)          a request for products, services, or resources, where the Parties
disagree whether such products, services, or resources are within the Services
(and therefore subject to the Annual Service Fees) or otherwise within the
scope of this Agreement; or

 

(d)         a disagreement as to the responsibilities either Party has under this
Agreement.

 

23.35
Problem Resolution Report

 

“Problem Resolution Report” shall mean a
written report executed by both Parties describing a solution to a Problem.

 

23.36
Provider Indemnitees

 

“Provider Indemnitees” shall mean Provider,
and each of its officers, directors, employees, agents, successors, and
assigns.

 

23.37Provider
Key Personnel

 

“Provider Key Personnel” shall mean,
initially, those personnel of Provider and its Subcontractors who are
respectively so designated in Schedule I.

 

23.38Services

 

“Services” shall mean the following
categories:

 

(a)          The
services described in Sections 1;

 

(b)         Transition
Services; and

 

Any management, planning, and other services that
are ancillary to and appropriate for the performance of any of the foregoing.

 

23.39
Socket Access

 

“Socket
Access” means the program used to test accessibility of a
destination by initiating a connection (much as an end user using a Secure
Shell (SSH) client) and waiting for a reply.

 

23.40
Subcontractor

 

“Subcontractor” shall mean any third party
Person other than Provider that provides Services to Provider for the benefit
of Investors.

 

23.41 Term

 

“Term” shall mean the Initial Term, Renewal
Term or Extended Term, collectively.

 

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23.42
Transition Plan

 

“Transition Plan” shall mean the plan described
in Schedule S,
a copy of which (upon completion) will be attached to this Agreement as Schedule S.

 

23.43 Underlying Works 

 

“Underlying
Works” shall mean all computer programs (and all configurations and
set-ups of any such program and all templates reflecting same), and other
developments and all intermediate and/or partial versions thereof, including
all source code, object code and documentation with respect thereto, and all
designs, specifications, inventions, discoveries, improvements, ideas,
know-how, techniques, materials, program materials, software, flow charts,
notes, outlines, lists, compilations, manuscripts, writings, pictorial
materials, schematics, other creations, and the like, whether or not patented
or patentable or subject to copyright, or otherwise protectable by law,
that:  (i) Provider already owns prior
to the Contract Signing Date, or (ii) over which Provider or its personnel
obtain ownership after the Contract Signing Date, independent of Investors or
the Services to be provided under this Agreement (other than Work Product).

 

23.44
Work Order

 

“Work Order” shall mean a request, in the
form set forth in Schedule O, for the performance of
work that is not being performed at a particular time but is within the scope
of the Services.  Work Orders will be
developed and approved using the change management process set forth in Section 7.4
of the Agreement.

 

22.45
Unrecovered Start-Up Expenses

 

“Unrecovered Start-Up Expenses”
may include:

 

(a)                                  Unrecovered hardware leases, maintenance
agreements (up to twelve (12) months paid in advance);

 

(b)                                 BAU expense obligations payable by Investors
(as specified in Schedule E)- unless already paid;

 

(c)                                  Severance related to the Transitioned
Employees - unless already paid;

 

(d)                                 Transition Services expenses obligations -
unless already paid:

 

(i)                                     Setup for hardware, software;

 

(ii)                                  Setup for network circuits;

 

(iii)                               Establishing processes and procedures; and

 

(iv)                              Establishing reports, measurements.

 

23.46 Work
Product

 

“Work
Product” shall mean all information, computer programs (and all
configurations and set ups of any such program and all templates reflecting
same), and other developments and all intermediate and/or partial versions
thereof , including all source code, object code and documentation with respect
thereto, and all designs, specifications, inventions, discoveries,
improvements, ideas, know how, technique, materials, program materials,
software, flow charts, notes, outlines, list, compilations, manuscripts,
writings, pictorial materials, schematics, other creations, and the like,
whether or not patented or patentable or subject to copyright, or otherwise
protectable by law, created, invented, or conceived for the use or benefit of
Investors or for the provision of the Services in connection with this
Agreement, by any Provider personnel or by any other Person engaged by
Provider.  Work Product shall include
customizations of Vendor Software by any Provider personnel or by any other
Person engaged by Provider for use in the provision of Services to Investor.

 

24.                               MISCELLANEOUS

 

24.1   Entire Agreement

 

This Agreement, including the Schedules hereto,
constitutes the entire understanding and agreement between the Parties with
respect to the transactions contemplated herein and supersedes all prior or
contemporaneous oral or written communications with respect to the subject
matter hereof.  No usage of trade,

 

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of 76

 

or other regular practice or method of dealing
between the Parties or others, may be used to modify, interpret, supplement, or
alter in any manner the express terms of this Agreement.

 

24.2   Order of Precedence

 

In the event of conflict in substance,
interpretation or impact between the terms and conditions contained in Sections 1
through
Section 24 of this Agreement and any terms and conditions
contained in any Schedule or Attachment hereto, the terms and conditions
of this Agreement shall control.

 

24.3   Captions; References; Terminology

 

Captions, Tables of Contents, Indices of Definitions,
and Schedule titles are used herein for convenience of reference only  and
may not be used in the construction or interpretation of this Agreement.  Any reference herein to a particular
Section number (e.g., ”Section 2”), shall be deemed a reference
to all Sections of this Agreement that bear sub-numbers to the number of the
referenced Section (e.g., Sections 2.1, 2.1.1).  Any reference herein to a particular
Schedule (e.g., Schedule ___) shall be deemed a reference to the
Schedule hereto that bears the same letter.  As used herein (except as used in the Schedules), the word
“including” and “include” shall mean “including, but not limited to.”

 

24.4   Assignment

 

Except for subcontracting permitted under the terms
of Section 22
hereof, neither this Agreement, nor any interest therein, nor any of the rights
and obligations (except for Provider’s rights to payment) may be directly or
indirectly assigned, sold, delegated, or otherwise disposed of by either Party,
in whole or in part, without the prior written consent of the other Party,
which shall not be unreasonably delayed or withheld.

 

24.5   Notices
to a Party

 

Except as expressly otherwise stated herein, all
notices, requests, consents, approvals, or other communications provided for,
or given under, this Agreement, shall be in writing and shall be deemed to have
been duly given to a Party if delivered personally, or transmitted by facsimile
or electronic mail to such Party at its telecopier number or e-mail address set
forth below (with the original sent by recognized overnight courier or
first-class mail to the Party at its address set forth below), or sent by first
class mail or overnight courier to such Party at its address set forth below,
or at such other telecopier number or address, as the case may be, as shall
have been communicated in writing by such Party to the other Party in
accordance with this Section.  All
notices shall be deemed given when received in the case of personal delivery or
delivery by mail or overnight courier, or when sent in the case of transmission
by facsimile or electronic mail with a confirmation, if confirmed by copy sent
by overnight courier within one (1) business day of sending the facsimile.

 

Notices to
Investors shall be addressed as follows:

 

Investors
Bank & Trust Company

200
Clarendon Street

Boston,
MA 02117

Attention:
Chief Information Officer

 

Telecopier
No.:

 

with
a copy to the attention of Investors’ General Counsel addressed as follows:

 

Investors
Bank & Trust Company

200
Clarendon Street

Boston,
MA 02117

Attention:
General Counsel

 

Telecopier
No.:

 

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Notices to
Provider shall be addressed as follows:

 

Investors
Bank & Trust Company

200
Clarendon Street

Boston,
MA 02117

Attention:
IBM Project Manager

 

Telecopier
No.:

 

with
a copy to the attention of Provider’s Office of the Associate General Counsel,
IGS Americas at:

 

International
Business Machines Corporation

Mailstop:
4202

Route
100

Somers,
NY 10589

Facsimile:  (914) 766-8444

 

24.6   Amendments; Waivers

 

Except as expressly provided herein, this Agreement
may not be modified, amended, or in any way altered except by a written
document duly executed by both of the Parties hereto. No waiver of any
provision of this Agreement, nor of any rights or obligations of any Party
hereunder, shall be effective unless in writing and signed by the Party waiving
compliance, and such waiver shall be effective only in the specific instance,
and for the specific purpose, stated in such writing.  No waiver of breach of, or default under, any provision of this
Agreement shall be deemed a waiver of any other provision, or of any subsequent
breach or default of the same provision, of this Agreement.

 

24.7   Relationship Between, and Legal Status of, the Parties

 

This Agreement shall not be construed to deem either
Party as a representative, agent, employee, partner, or joint venturer of the
other.  Provider shall be an independent
contractor for the performance under this Agreement.  Neither Party shall have the authority to enter into any
agreement, nor to assume any liability, on behalf of the other Party, nor to
bind or commit the other Party in any manner, except as provided hereunder.

 

24.8   Severability

 

If any provision of this Agreement is determined to
be invalid or unenforceable, that provision shall be deemed stricken and the
remainder of this Agreement shall continue in full force and effect insofar as
it remains a workable instrument to accomplish the intent and purposes of the
Parties; the Parties shall replace the severed provision with the provision
that will come closest to reflecting the intention of the Parties underlying
the severed provision but that will be valid, legal, and enforceable.

 

24.9   Counterparts

 

This Agreement may be executed in duplicate
counterparts.  Each such counterpart, if
executed by both Parties, shall be an original and both together shall
constitute but one and the same document. 
This Agreement shall not be deemed executed unless and until at least
one counterpart bears the signatures of both Parties’ designated signatories.

 

24.10
Laws and Regulations

 

This Agreement shall be interpreted under, and
governed by, the laws and court decisions of the Commonwealth of Massachusetts,
without giving effect to its principles of conflicts of laws.

 

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24.11
Venue and Jurisdiction

 

All actions or proceedings arising out of, or
related to, this Agreement shall be brought only in an appropriate Federal or
State court in Boston, Massachusetts (if the Provider is bringing an action or
proceeding against Investors) and New York, New York (if Investors is bringing
an action or proceeding against Provider), and the Parties hereby consent to
the jurisdiction of such courts over themselves and the subject matter of such
actions or proceedings.  Provider hereby
appoints its Chief General Counsel and his or her successor to be agent upon
whom any process, in any action or proceeding against it arising out of this
Agreement, may be served.

 

24.12
No Third-Party Beneficiaries

 

Except as specifically provided in this Agreement,
this Agreement is an agreement between the Parties and confers no rights upon
any of the Parties’ employees, agents, or contractors, or upon any other
Person.

 

24.13
Expenses

 

Each Party shall pay all expenses paid or incurred
by it in connection with the planning, negotiation, and consummation of this
Agreement, subject to the provisions of Section 11.2.

 

24.14
Survival

 

Any provision of this
Agreement that contemplates performance or observance subsequent to termination
or expiration of this Agreement shall survive termination or expiration of this
Agreement and continue in full force and effect.  For the avoidance of doubt
and without limiting the general applicability of the foregoing, Section 10.2
(Protection of Confidential Information), Section 13 (Remedies, Limitations of
Liability), Section 19 (Indemnification), and Section 6.0
(Financial Terms) shall survive termination and expiration of this Agreement.

 

24.15
Neither Party Considered Drafter

 

Despite the possibility that one Party may have
prepared the initial draft of this Agreement or played the greater role in the
physical preparation of subsequent drafts, the Parties agree that neither of
them shall be deemed the drafter of this Agreement and that, in construing this
Agreement in case of any claim that any provision hereof may be ambiguous, no
such provision shall be construed in favor of one Party on the ground that such
provision was drafted by the other.

 

The
Parties have executed this Agreement as of the later of the dates following the
signatures of each of the Parties as set forth in the signature block below.

 

	
  Investors Bank & Trust
  Company

  	
  International Business Machines
  Corporation

  
	
  By:

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  Date:

  	
   

  
						

 

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