Document:

Exhibit
10.4

 

Execution Copy

 

 

Master Services
Agreement

 

by and between

 

ACI Worldwide, Inc.

 

and

 

International
Business Machines Corporation

 

 

	
  1.

  	
  Background, Goals and
  Objectives

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1

  	
  Background, Goals and Objectives

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.2

  	
  Construction

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Definitions

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  Certain Definitions

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.2

  	
  Inclusion of Affiliates in Definition of ACI and
  Vendor

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.3

  	
  Other Defined Terms

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Services

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  General

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.2

  	
  Implied Services

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.3

  	
  Services Evolution

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.4

  	
  Services Variable in Scope and Volume

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.5

  	
  Work Prioritization

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.6

  	
  Services Performed by ACI or Third Parties

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.7

  	
  Existing Equipment and Vendor Supported Software

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.8

  	
  Transition

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.9

  	
  ACI IT Standards

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.10

  	
  End Users of the Services

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.11

  	
  Projects

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.12

  	
  Protection of ACI Information

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.13

  	
  Relocation of the Services

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.14

  	
  Acquisitions and Divestitures

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.15

  	
  ACI Retained Systems and Processes

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.16

  	
  Knowledge Sharing

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Term of Agreement

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Term

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.2

  	
  Extension of Term

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Personnel

  	
   

  	
  10

  

 

i

 

	
   

  	
  5.1

  	
  Key Vendor Positions

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.2

  	
  Transitioned Personnel

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.3

  	
  Qualifications, Retention and Removal of Vendor
  Personnel

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Responsibility for
  resources

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  Generally

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.2

  	
  Intentionally left blank

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.3

  	
  Financial Responsibility for Equipment

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.4

  	
  Equipment Access and Operational and Administrative
  Responsibility

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.5

  	
  Financial Responsibility for Software

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.6

  	
  Third Party Contracts

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.7

  	
  Required Consents

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.8

  	
  Straddle Agreements

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  Software and
  Proprietary Rights

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  ACI Software

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.2

  	
  Vendor Software

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.3

  	
  ISV Software

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.4

  	
  Rights in Newly Developed Software and Other
  Materials

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.5

  	
  Export

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Office Space

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  ACI Obligations

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.2

  	
  Vendor Obligations within ACI Office Space

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.3

  	
  Use of Vendor Facilities by ACI

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  Service Levels

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.1

  	
  General

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.2

  	
  Failure to Perform

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.3

  	
  Critical Service Levels and Service Level Credits

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.4

  	
  Priority of Recovery Following Interruption of
  Services

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.5

  	
  User Satisfaction

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

ii

 

	
   

  	
  9.6

  	
  Periodic Reviews and Adjustments to Service Levels

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.7

  	
  Measurement and Reporting

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  Project and Contract
  Management

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.1

  	
  Governance Guidelines and Principles

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.2

  	
  Executive Steering Committee

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.3

  	
  Reports

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.4

  	
  Meetings

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.5

  	
  Procedures Manuals

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.6

  	
  Change Control

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.7

  	
  Subcontracting

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.8

  	
  Technology Planning and Budgeting

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.9

  	
  Quality Assurance and Improvement Programs

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.10

  	
  Management of Issues

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  Audits, Record
  Retention

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.1

  	
  Intentionally left blank

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.2

  	
  Audit Rights

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.3

  	
  Vendor Internal Controls

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.4

  	
  Audit Follow-up

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.5

  	
  Records Retention

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.6

  	
  Discovery of Overcharge of ACI

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  ACI Responsibilities

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  Charges

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.1

  	
  General

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.2

  	
  Pass-Through Expenses

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.3

  	
  Incidental Expenses

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.4

  	
  Taxes

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.5

  	
  Extraordinary Events

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

iii

 

	
   

  	
  13.6

  	
  New Services

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.7

  	
  Benchmarks for Cost of Services

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  Invoicing and Payment

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.1

  	
  Invoicing.

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.2

  	
  Payment Due

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.3

  	
  Accountability

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.4

  	
  Pro-ration

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.5

  	
  Prepaid Amounts

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.6

  	
  Refunds and Credits

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.7

  	
  Deduction

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.8

  	
  Disputed Charges

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
  Safeguarding of Data;
  Confidentiality

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.1

  	
  General

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.2

  	
  Safeguarding ACI Data

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.3

  	
  Confidential Information

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.4

  	
  Corporate Information Risk Controls

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.5

  	
  Step-In Rights

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
  Warranty

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.1

  	
  General

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.2

  	
  Work Standards

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.3

  	
  Maintenance

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.4

  	
  Efficiency and Cost Effectiveness

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.5

  	
  Technology

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.6

  	
  Non-Infringement; Licenses

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.7

  	
  Authorization and Other Consents

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.8

  	
  Inducements

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.9

  	
  Viruses

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

iv

 

	
   

  	
  16.10

  	
  Disabling Code

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.11

  	
  Deliverables

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.12

  	
  Software Ownership or Use

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.13

  	
  Other

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.14

  	
  Application

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.15

  	
  Disclaimer

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
  Insurance

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  17.1

  	
  Insurance

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  17.2

  	
  Insurance Provisions

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
  Indemnities

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  18.1

  	
  Vendor Indemnities

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  18.2

  	
  ACI Indemnities

  	
   

  	
  57

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  18.3

  	
  Infringement

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  18.4

  	
  Indemnification Procedures

  	
   

  	
  59

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
  Liability

  	
   

  	
  60

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  19.1

  	
  General Intent

  	
   

  	
  60

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  19.2

  	
  Liability Restrictions

  	
   

  	
  60

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  19.3

  	
  Direct Damages

  	
   

  	
  61

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  19.4

  	
  Duty to Mitigate

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  19.5

  	
  Disaster Recovery Plan

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  19.6

  	
  Force Majeure

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
  Dispute Resolution

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  20.1

  	
  Informal Dispute Resolution Process

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  20.2

  	
  Litigation

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  20.3

  	
  Continued Performance

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  20.4

  	
  Governing Law

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
  Termination

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  21.1

  	
  Termination For Cause By ACI

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

v

 

	
   

  	
  21.2

  	
  Termination by Vendor

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  21.3

  	
  Termination for Convenience by ACI

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  21.4

  	
  Termination by ACI for Change of Control

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  21.5

  	
  Failure to Transition and Other Termination Rights

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  21.6

  	
  Termination Due To A Party’s Insolvency and Related
  Events

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  21.7

  	
  Intentionally left blank

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  21.8

  	
  Cumulative Termination Rights

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  21.9

  	
  Termination/Expiration Assistance

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  21.10

  	
  Bid Assistance

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  21.11

  	
  Equitable Remedies

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  21.12

  	
  Charge Adjustment

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
  Compliance With Laws

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  22.1

  	
  Compliance with Laws and Regulations Generally

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  22.2

  	
  Liens

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  22.3

  	
  Sarbanes-Oxley

  	
   

  	
  71

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  22.4

  	
  International Considerations

  	
   

  	
  71

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  22.5

  	
  Privacy Laws

  	
   

  	
  71

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
  General

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  23.1

  	
  Binding Nature and Assignment

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  23.2

  	
  Mutually Negotiated

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  23.3

  	
  Joint Verification

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  23.4

  	
  Notices

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  23.5

  	
  Counterparts

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  23.6

  	
  Headings

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  23.7

  	
  Relationship of Parties

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  23.8

  	
  Severability

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  23.9

  	
  Consents and Approvals

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

vi

 

	
   

  	
  23.10

  	
  Waiver of Default

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  23.11

  	
  Cumulative Remedies

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  23.12

  	
  Survival

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  23.13

  	
  Public Disclosures

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  23.14

  	
  Use of Name

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  23.15

  	
  365(n)

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  23.16

  	
  Third Party Beneficiaries

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  23.17

  	
  Covenant of Good Faith

  	
   

  	
  76

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  23.18

  	
  Non-Solicitation

  	
   

  	
  76

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  23.19

  	
  Order of Precedent

  	
   

  	
  76

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  23.20

  	
  Entire Agreement; Amendment

  	
   

  	
  76

  

 

vii

 

Table of Schedules
and Exhibits

 

	
  Schedule A

  	
  Statement
  of Work

  
	
  Exhibit A-1

  	
  Delivery
  Management Services (Cross Functional)

  
	
  Exhibit A-2

  	
  Asset
  Services

  
	
  Exhibit A-3

  	
  Service
  Desk Services

  
	
  Exhibit A-4

  	
  End
  User Services

  
	
  Exhibit A-5

  	
  Server
  Systems Management Services (including mainframe)

  
	
  Exhibit A-6

  	
  Storage
  Management Services

  
	
  Exhibit A-7

  	
  Data
  Network Services

  
	
  Exhibit A-8

  	
  Enterprise
  Security Management Services

  
	
  Exhibit A-9

  	
  Disaster
  Recovery and Business Continuity Services

  
	
  Schedule B

  	
  Service
  Levels

  
	
  Exhibit B-1

  	
  SLA
  Matrix

  
	
  Exhibit B-2

  	
  Critical
  Service Levels and Key Measurements

  
	
  Exhibit B-3

  	
  Critical
  Deliverables

  
	
  Exhibit B-4

  	
  Severity
  Levels

  
	
  Schedule C

  	
  Charges

  
	
  Exhibit C-1

  	
  Base
  Charges, Baselines, ARC/RRC Rates and Termination Charges

  
	
  Exhibit C-2

  	
  Financial
  Responsibility and Ownership Matrix

  
	
  Exhibit C-3

  	
  Form of
  Invoice

  
	
  Exhibit C-4

  	
  Base
  Case

  
	
  Schedule D

  	
  Definitions

  
	
  Schedule E

  	
  Intentionally
  left blank

  
	
  Schedule F

  	
  Intentionally
  left blank

  
	
  Schedule G

  	
  Third
  Party Contracts

  
	
  Schedule H

  	
  Existing
  Equipment

  
	
  Exhibit H-1

  	
  ACI
  US Midrange Inventory

  
	
  Exhibit H-2

  	
  ACI
  Toronto Server Room Inventory

  
	
  Exhibit H-3

  	
  EMEA
  Server Equipment

  
	
  Exhibit H-4

  	
  ACI
  AP Midrange Inventory

  
	
  Exhibit H-5

  	
  Network
  Inventory

  
	
  Exhibit H-6

  	
  People
  Counts by Location

  
	
  Schedule I

  	
  Vendor
  Supported Software

  
	
  Exhibit I-1

  	
  Framingham
  Workstations

  
	
  Exhibit I-2

  	
  Newton
  Workstations

  
	
  Exhibit I-3

  	
  Omaha
  Workstations

  

 

viii

 

	
  Schedule J

  	
  ACI
  Policies and Standards

  
	
  Schedule K

  	
  User
  Satisfaction Survey Guidelines

  
	
  Schedule L

  	
  Transition
  and Transformation

  
	
  Schedule M

  	
  Vendor
  Confidentiality Agreement

  
	
  Schedule N

  	
  Approved
  Subcontractors

  
	
  Schedule O

  	
  Approved
  Benchmarkers

  
	
  Schedule P

  	
  Locations

  
	
  Schedule R

  	
  Reports

  
	
  Schedule S

  	
  Governance

  
	
  Schedule T

  	
  Human
  Resources

  
	
  Schedule U

  	
  Change
  Control Procedure

  
	
  Exhibit U-1

  	
  Form of
  Change Management Document

  
	
  Schedule V

  	
  In-Flight
  Projects

  
	
   

  	
   

  

 

ix

 

MASTER SERVICES AGREEMENT (the “Agreement”),
made and effective as of March 17, 2008 (the “Effective Date”), by
and between ACI Worldwide, Inc., a Delaware corporation with a principal
place of address at 120 Broadway, Suite 3350, New York, NY  10271 (“ACI”), and International
Business Machines Corporation, a New York corporation, with its principal place
of business located at Route 100, Somers, New York 10589 (“Vendor”).

 

1.                                      BACKGROUND, GOALS AND OBJECTIVES

 

1.1                               Background,
Goals and Objectives.

 

This
Agreement is being made and entered into with reference to the following
background, specific goals and objectives, the successful achievement of which
are mutually agreed by the Parties hereto to be in the best business interests
of both Parties and the principal purpose of this Agreement:

 

(a)                                  ACI
is an software company.  Currently ACI
manages and operates its own information technology environment.

 

(b)                                 Vendor
is in the business of providing information technology outsourcing services.

 

(c)                                  ACI
desires to enter into an outsourcing arrangement that will meet its business
objectives, which include:

 

(i)                                     realizing
cost savings (by virtue of the performance of this Agreement by the Parties)
both initially and on an ongoing basis;

 

(ii)                                  restructuring
and standardizing ACI’s IT infrastructure and strengthening its IT governance
model;

 

(iii)                               delivering to ACI world
class, evolving IT outsourcing services;

 

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

 

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

 

(vi)                              treating
fairly ACI personnel being hired by Vendor and also providing such personnel
with meaningful jobs and a package of total compensation and benefits package
that is at current market rates within Vendor’s industry;

 

(vii)                           attaining transparency and
variability of Vendor pricing permitting ACI to fully understand Vendor’s
Charges;

 

(viii)                        identifying means to improve
services and reduce costs to ACI and to enable ACI to improve and expand its
information technology operations;

 

(ix)                                providing
for an uninterrupted transition of responsibility for performing the Services
from ACI and certain of its contractors to Vendor;

 

1

 

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

 

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

 

(xii)                             limiting to the extent possible
the amount of raised floor space in ACI facilities.

 

(d)                                 The
Parties desire to promote a flexible business relationship between them that
allows for and encourages growth of ACI’s core businesses.

 

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

 

(f)                                    The
Parties desire to provide an agreement and pricing structure that, as of the
Effective Date, is intended to establish a mutually beneficial business
relationship.

 

1.2                               Construction.

 

The
provisions of this Article 1 are intended to be a general introduction to
this Agreement and are not intended to expand the scope of the Parties’ clearly
stated obligations or otherwise alter the plain meaning of this Agreement’s
terms and conditions, as set forth hereinafter. 
However, to the extent that any of the terms and conditions of this
Agreement do not address a particular circumstance or otherwise conflict or
give rise to ambiguity, such terms or conditions are to be interpreted and
construed so as to give effect to this Agreement as a whole and this listing of
background, goals and objectives.

 

2.             DEFINITIONS

 

2.1                               Certain
Definitions.

 

The
terms used with initial capital letters in this Agreement shall have the
meanings ascribed to them in Schedule D (Definitions).

 

2.2                               Inclusion
of Affiliates in Definition of ACI and Vendor.

 

(a)                                  References
to “ACI” in this Agreement include Affiliates of ACI as defined in Schedule D
(Definitions).

 

(b)                                 References
to “Vendor” in this Agreement include Affiliates of Vendor but only those
Vendor Affiliates previously approved in writing by ACI.

 

2.3                               Other
Defined Terms.

 

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

 

2

 

3.                                      SERVICES

 

3.1                               General.

 

Beginning
on the Effective Date (if required pursuant to the Transition Plan) and
thereafter on each applicable Service Tower Commencement Date, Vendor shall
provide the following services, functions and responsibilities, as they may
evolve or be modified by mutual agreement of the Parties during the Term and as
they may be supplemented, enhanced, modified or replaced (“Services”):

 

(a)                                  The
Services described in this Agreement, its Schedules, Exhibits and related
documents, including (i) Termination/Expiration Assistance, (ii) Projects,
(iii) New Services, (iv) Enhancement Activities, (v) Vendor
Applications Software Operational Support Services, and (vi) performance
of the Transition; and

 

(b)                                 The
information technology services, functions and responsibilities that are
reasonably related to the Services described in this Agreement, to the extent

 

(i)                                     performed
on a consistent or routine basis during the twelve (12) months preceding the
Effective Date by Affected Employees and ACI Contractor Personnel who are (A) transitioned
to Vendor, or (B) displaced or whose tasks were displaced as a result of
this Agreement, even if the service, tasks or responsibility so performed is
not specifically described in this Agreement. 
Notwithstanding the foregoing, services, functions or responsibilities
that are specifically excluded from the scope of Services under this Agreement
(such as responsibilities retained by ACI) shall not be deemed to be within the
scope of the Services; or

 

(ii)                                  reflected
in those categories in Exhibit C-4 (Base Case) that Vendor is
assuming pursuant to this Agreement.

 

3.2                               Implied
Services.

 

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

 

(b)                                 For
the avoidance of doubt, the following is a non-exclusive listing of services,
tasks and responsibilities that are deemed to be included within the Monthly
Base Charges and, therefore, will not result in additional Charges under the
Change Control Procedure.

 

(i)                                     Invoicing
activities, including support of and providing information for charge-back or
allocation of Charges to individual business units, ACI customers or costs
centers in accordance with this Agreement. 
With the exception of charge-back for testing and other ACI customer
services that are supported by the Services provided by Vendor (and will be
addressed by the Parties pursuant to Section 10.6), ACI agrees that such
charge-back or allocation processes are being followed by ACI as of the
Effective Date;

 

3

 

(ii)                                  All
services, tasks and responsibilities that this Agreement expressly provides are
to be performed at no additional Charge;

 

(iii)                               Vendor’s internal
functions and responsibilities needed to support the Services, including
management reporting, staff planning, quality assurance programs, Vendor
Personnel training and development and maintenance of project management
methodologies;

 

(iv)                              the
development and implementation of action plans to remedy any deficient
Services;

 

(v)                                 compliance
with this Agreement’s security requirements and security-related audit
requirements, including monitoring, executing and coordinating Sarbanes Oxley
testing of logical security, assistance with vulnerability scans, and
management and administration of user IDs and passwords;

 

(vi)                              reasonable
cooperation with respect to software use audits by providers of Third-Party
Software performed with reasonable advance notice and to the extent such
cooperation does not materially affect Vendor’s ability to provide the Services
using existing resources;

 

(vii)                           any training for ACI
personnel required as a result of Changes requested by Vendor;

 

(viii)                        services, tasks and
responsibilities necessary for or incidental to the Transition of the Services;

 

(ix)                                monitoring,
measurement, analysis and reporting of performance against Service Levels; and

 

(x)                                   services,
tasks and responsibilities preliminary to or incidental to Projects or Changes,
including the preparation of change management documents, SOWs, scoping SOWs
and other similar deliverables, pursuant to Schedule V (In-Flight
Projects) and/or Schedule U (Change Control Procedure).

 

3.3                               Services
Evolution.

 

(a)                                  Vendor
and ACI shall cause the Services to evolve and to be modified, enhanced,
supplemented and replaced as necessary for the Services to keep pace with
technological advances and advances in the methods of delivering services,
where such advances are at the time in general use within the IT outsourcing
services industry, as applicable, or otherwise among ACI’s competitors, including
as practices evolve to comply with new or modified Applicable Laws.  Such evolution shall, at a minimum, be made
so as to cause the Services to conform with the requirements for continuous
improvement of Service Levels as set forth in Schedule B (Service
Levels).  As an example, Services
evolution shall include the addition of functionality by Vendor as is made
possible with new Equipment and Software utilized by Vendor during the Term.  Adjustments in Services in accordance with
this Section 3.3 shall be deemed to be included within the scope of the
Services to the same extent and in the same manner as if expressly described in
this Agreement.  Notwithstanding anything
to the contrary in this Section 3.3, the foregoing statement is not
intended to enlarge Vendor’s obligations where evolutions in technology are
specified in this Agreement (e.g., standards, configurations and Service
Levels).  To the extent necessary and
appropriate, the Parties shall equitably modify and adjust the Resource Units
to be measured and the Baselines associated with such Resource Units to be
consistent with such evolution in technology. 

 

4

 

Adjustments to the Services under this Section may also constitute
New Services.  Adjustments to the
Services pursuant to this subparagraph shall be at no charge (unless they are
New Services) and are subject to the technical change control procedure set
forth in the Procedures Manual.

 

(b)                                 The
Parties acknowledge that, from time to time, Vendor may make modifications to
its shared services centers for the benefit of a number of customers including
ACI as a part of Vendor’s normal course of business, including modifications
that are necessary to comply with new or modified Vendor Laws, as defined in Section 22.1.  As such modifications are made by Vendor,
although ACI would enjoy the benefit of the specific modifications at no
additional charge, there may be some planning and testing that needs to occur
for the ACI information technology environment which may result in some
additional internal costs to ACI or would otherwise have a negative impact to
ACI.  Vendor will give ACI forty five
(45) days’ advance written notice if Vendor intends to make such modifications
to a shared service center, shall advise ACI in such notice what internal
planning and testing it believes ACI will have to perform in connection with
Vendor’s implementation of such modifications and shall not make any such
changes unless it (i) reimburses ACI for the costs ACI may incur as the
result of the changes and (ii) takes all reasonable steps to mitigate any
other negative impact to ACI and its customers. 
Any such proposed modification shall be subject to the technical change
control procedure set forth in the Procedures Manual.

 

3.4                               Services
Variable in Scope and Volume.

 

The
Services are variable in scope and volume to the extent specified in the
pricing mechanisms set forth in Schedule C (Charges) and its
Exhibits, or as may otherwise be set forth in this Agreement.  Vendor shall not be entitled to receive an
adjustment to the Charges except as set forth in this Agreement.

 

3.5                               Work
Prioritization.

 

ACI
may identify new or additional work activities to be performed by Vendor
Personnel (including work activities that would otherwise be treated as New
Services or a Project) or reprioritize or reset the schedule for existing work
activities to be performed by such Vendor Personnel.  Unless otherwise agreed, ACI shall incur no
additional Charges for the performance of such work activities by such Vendor
Personnel to the extent then assigned to ACI. 
Vendor shall use Commercially Reasonable Efforts to perform such work
activities without impacting the established schedule for other tasks or the
performance of the Services in accordance with the Service Levels.  If after using such efforts it is not
possible to avoid such an impact, Vendor shall notify ACI of the anticipated
impact and obtain its consent prior to proceeding with such work activities.  ACI, in its sole discretion, may forego or
delay such work activities or temporarily adjust the work to be performed by
Vendor, the schedules associated therewith or the Service Levels to permit the
performance by Vendor of such work activities.

 

3.6                               Services
Performed by ACI or Third Parties.

 

(a)                                  Subject
to Sections 13.5, 13.6 and 21.3 (provided that ACI’s adjustments to the
Services pursuant to this Section 3.6 constitute a termination for
convenience) and any adjustments to Charges provided for in Schedule C
(Charges), ACI retains the right to perform itself, or retain third parties to
perform, any of the Services. 
Notwithstanding anything to the contrary, the total Charges payable by
ACI under the Agreement shall not be less than the annual dollar amounts shown
in the Minimum Revenue Commitment Table in the Pricing Tables, Exhibit C-1,
Tab VII. (Minimum Revenue Commitment and Inflation Sensitivity) in Schedule
C (Charges) (the “Minimum Revenue Commitment” or “MRC”), as
adjusted pursuant to the following.  The
MRC shall be equitably reduced as further described in this Section 3.6 to
the extent that the total Charges payable by ACI fall below the MRC as a result
of any material breach of the Agreement resulting in removal of Services
pursuant to Section 21.1 (Termination 

 

5

 

for Cause by ACI) or a partial termination for convenience by ACI
pursuant to Section 21.3 (Termination for Convenience) of the Agreement,
or reduction in Service volume pursuant to Section 13.5 (Extraordinary
Event) or Section 19.6 (Force Majeure). 
The Minimum Revenue Commitment will not be in effect during the
Termination/Expiration Assistance Period.

 

(b)                                 In
the case of ACI’s withdrawal of Services under this Section 3.6, the
Charges for the remaining Services shall be as reflected in Exhibit C-1
(Base Charges, Baselines, ARC/RRC Rates and Termination Charges) or if not
addressed in such Exhibit C-1 (Base Charges, Baselines, ARC/RRC
Rates and Termination Charges), the Charges shall be equitably adjusted to
reflect those Services that are no longer required.  If, within thirty (30) days following ACI’s
notice, the Parties have not agreed on the Charges for the remaining Services,
then the pricing will be determined under Section 20.1(a).

 

(c)                                  To
the extent ACI performs any of the Services itself, or retains third parties to
do so, Vendor shall cooperate with ACI or such third parties in accordance with
Section 21.9.

 

3.7                               Existing
Equipment and Vendor Supported Software.

 

Schedule H
(Existing Equipment) includes a listing of the Equipment that is, as of the
Effective Date, used by ACI in providing the Services internally, and that will
be used and managed by Vendor in providing the Services from and after the
Effective Date.  Schedule I
(Vendor Supported Software) identifies the Software that is, as of the
Effective Date, used by ACI in providing the Services internally, and that will
be used and managed by Vendor in providing the Services from and after the
Effective Date.

 

3.8                               Transition.

 

Vendor
will perform all functions and services necessary to accomplish the transition
to Vendor of ACI’s information technology operations embodied in the Services
described in Schedule A (Statement of Work) (other than those
specified in the Agreement as ACI’s responsibility (the “Transition”))
in accordance with the initial, high level, transition plan (as revised and
supplemented by the Parties under the Changes Control Procedure from time to
time, the “Transition Plan”) attached as Schedule L
(Transition and Transformation).  Within
the timeframes set forth in the Schedule L (Transition and
Transformation), the Parties shall mutually agree on a more detailed plan,
which, upon such mutual agreement, shall supersede and replace Schedule L
(Transition and Transformation).  Vendor
will perform the Transition without causing material disruption to ACI’s
business or that of its customers or Affiliates.  No functionality of the information
technology operations being Transitioned shall be disabled until Vendor
demonstrates to ACI’s reasonable satisfaction that it has fully tested and
implemented equivalent capabilities for such functionality.  ACI may monitor, test and otherwise
participate in the Transition in its discretion.

 

3.9                               ACI
IT Standards.

 

As
requested by ACI from time to time, Vendor shall assist ACI in defining and
developing, and integrating with Vendor’s information technology standards, ACI’s
information technology architectures and standards applicable to the Services
on an ongoing basis (collectively, the “ACI IT Standards”).  ACI will retain primary responsibility for
determining the ACI IT Standards.  The
ACI IT Standards as of the Effective Date are set forth in Schedule J
(ACI Policies and Standards).  Subject to
the Change Control Procedure,
Vendor will comply with changes from time to time in the ACI IT Standards.  The assistance to be provided by Vendor shall
include:

 

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

 

6

 

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

 

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

 

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

 

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

 

(f)                                    recommending
then current and available appropriate information technology services
(including platforms comprising various hardware and software combinations)
that support Service Level requirements, exploiting industry trends in
production capabilities and provide potential price and performance improvement
opportunities.

 

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

 

3.10                        End Users
of the Services.

 

(a)                                  Subject
to Section 3.10(b) hereof, the Services may be used by ACI and, as
directed by ACI, (i) its Affiliates and those third parties (such as
suppliers, service providers and joint venturers) with whom, at any point
during the Term, ACI or any Affiliate has a commercial relationship; and (ii) those
persons and entities that, as determined by ACI, access ACI’s or any of its
Affiliates’ IT infrastructure (for example, these who are registered/authorized
users of ACI’s website and who are made known to Vendor) at any time during the
Term through standard operating procedures (the parties in Sections 3.10(a)(i) and
3.11(a)(ii) will collectively be referred to as “End Users”).  Vendor acknowledges that such access is
ongoing as of the Effective Date. 
Services provided to End Users shall be deemed to be Services provided
to ACI.

 

(b)                                 In
accordance with Schedule A (Statement of Work), Vendor shall
perform the Services at the Service Locations set forth in Schedule P
(Locations), which include ACI facilities and non-ACI facilities as designated
on Schedule P (Locations). 
If ACI requests that Vendor provide Services in or from a new Service
Location, then Charges set forth in Schedule C (Charges) shall
apply and ACI shall pay the applicable labor rate(s) for additional
personnel reasonably required by Vendor and for the incremental Out-of-Pocket
Expenses reasonably incurred by Vendor in physically relocating to such new
Service Location, and for any additional ongoing costs incurred by Vendor that
would not have been incurred but for the requirement that the Services be
provided from or in a new Service Location and only to the extent those ongoing
costs are disclosed in a written plan approved by ACI.  All such changes and any additional payments
will be determined through the contractual Change Control Procedure, as
appropriate (collectively, the “Change Control Procedure”).  Notwithstanding the foregoing, if ACI changes
a location at which Vendor Personnel are performing Services, and the
relocation is 50 miles or less in distance, ACI will not be responsible for any
Vendor employee relocation costs, including reimbursement of relocation costs
or changes in employee compensation related to any local labor market
conditions.

 

7

 

3.11                        Projects.

 

At ACI’s
request and upon mutual agreement, Vendor shall perform Projects.  Charges for such Projects shall be determined
in accordance with Schedule C (Charges).  Projects shall be proposed and implemented in
accordance with Schedule C (Charges), Schedule V
(In-Flight Projects) (which contains procedures regarding initiation and
management of Projects) and Schedule U (Change Control Procedure).

 

3.12                        Protection
of ACI Information.

 

If any
information of ACI is processed in any facility used by Vendor to perform
services for any ACI Competitor, Vendor will take such steps as are reasonably
necessary to prevent ACI’s information from being disclosed.

 

3.13                        Relocation
of the Services.

 

For a
relocation of substantially all of the Services under a Service Tower to a new
or different Service Location, Vendor shall give ACI at least ninety (90) days
prior notice; for any other relocation of Services to a new or different
Service Location, Vendor shall give ACI reasonable notice under the
circumstances which shall in no event be less than thirty (30) days (in either
case, the “Relocation Notice”). 
Notwithstanding the foregoing, if a relocation is required to obtain
critical skills, is required for Vendor to meet Service Levels or as otherwise
agreed by the Parties, then such thirty (30) days notice shall not be required
but Vendor will provide as much notice to ACI as is reasonably possible.  If the relocation would result in one or more
of the following impacts, then Vendor shall obtain ACI’s prior approval, and
such approval shall not be unreasonably withheld, for such relocation proposed
by Vendor, its Affiliates or subcontractors;

 

(i)                                     if
the relocation of the Services would prevent ACI or its Affiliates from being
in compliance with any ACI Laws, or results in a material administrative burden
for ACI or its Affiliates to comply with any ACI Law;

 

(ii)                                  if
the relocation of the Services would result in a negative regulatory or
financial impact on a customer of ACI or its Affiliates, or would cause ACI or
its Affiliates to be in breach of its contract with a customer of ACI or its
Affiliates; or

 

(iii)                               if the relocation
involves the movement of Equipment to a new or different Service Location.

 

If ACI determines within the period of the
Relocation Notice that one of the above criteria is met, ACI shall provide
written notice of such to Vendor.  ACI
and Vendor shall then meet in good faith to review alternatives to mitigate the
impact of the proposed relocation.  If
the impact cannot be mitigated using the Parties’ Commercially Reasonable
Efforts, ACI may withhold its consent. 
Any incremental expenses incurred by ACI as a result of such a relocation
(or a relocation as a result of Vendor’s failure to perform its obligations in
accordance with this Agreement) will be paid or reimbursed by Vendor.

 

3.14                        Acquisitions
and Divestitures.

 

(a)                                  If,
as a result of a Restructure, an entity that was not an Affiliate of ACI on the
Effective Date becomes an Affiliate of ACI during the Term (a “New Entity”),
then, at ACI’s option and to the extent such New Entity is not a Vendor
Competitor and in accordance with ACI’s directions, Vendor will provide the
Services designated by ACI to the End Users of the New Entity.  In such case, the Parties will utilize the
Change Control Procedure to address any integration services requested by ACI
with respect to the integration required for the New Entity to receive the
Services and any associated Charges.

 

8

 

(b)                                 If
at any time during the Term, ACI divests or otherwise transfers ownership of a
business unit or entity receiving Services from Vendor, then, if requested by
ACI, Vendor shall continue to provide the Services to such entity on the terms
and conditions set forth in this Agreement for such period as specified by ACI,
not to exceed twelve (12) months after the effective date of the divestiture or
transfer.  In such case, the Parties will
utilize the Change Control Procedure to address any required Changes or
additions to the Services and the associated Charges.

 

(c)                                  Where
ACI indicates that it is considering or intends a Restructure, Vendor will, at
no additional cost to ACI to the extent the then-existing Vendor Personnel have
the skill set and availability without causing a materially negative impact on
the Services, provide to ACI reasonable assistance and information as may be
reasonably necessary to facilitate the Restructure, including:

 

(i)                                     working
with ACI to develop a plan to adequately staff any Projects specific to the
Restructure and meet volume increases resulting from the Restructure;

 

(ii)                                  responding
promptly to requests for information relating to the Services and Charges for
the Services;

 

(iii)                               if requested by ACI,
assisting in discussions with third parties relating to any Equipment, licenses
or contracts relevant to any proposed New Entity;

 

(iv)                              cooperating
in good faith with ACI in relation to the Restructure; and

 

(v)                                 performing
any Termination / Expiration Assistance which may be necessary under the
circumstances.

 

Any incremental effort required of Vendor (beyond the
above obligations) to support a Restructure, whether such Restructure is an
acquisition or a divestiture, will be reviewed by the Parties in accordance
with the Change Control Procedure.  The
staffing process generally applicable to the Services will also apply in the
context of a Restructure to staffing for the in-scope Services.

 

3.15                        ACI
Retained Systems and Processes.

 

Vendor
will use Commercially Reasonable Efforts to ensure that, in providing the
Services, it does not, without the consent of ACI, adversely affect or alter (a) the
operation, functionality or technical environment of the software and hardware
used by or on behalf of ACI in connection with ACI’s business other than the
Vendor Equipment (the “Retained Systems”); and (b) the processes
used by ACI in connection with ACI’s business (the “Retained Processes”).  Vendor will be proactive in keeping itself
informed about Retained Systems and Retained Processes as necessary to provide
the Services.  ACI will inform Vendor
about all aspects of the existing and future Retained Systems and the Retained
Processes that are reasonably likely to have a material impact on Vendor’s
ability to perform the Services.  ACI
will provide documentation, information and other cooperation regarding any
existing and future Retained Systems and Retained Processes, as reasonably
necessary for Vendor to perform the Services. 
ACI will also provide training with respect to any ACI System and
Retained Process that is proprietary to ACI that is reasonably required by
Vendor to perform the Services.  At ACI’s
request, Vendor will coordinate with ACI to evaluate the impact of any
alterations to Retained Systems and Retained Processes to the extent such
alterations may impact the Services.

 

9

 

3.16                        Knowledge
Sharing.

 

(a)                                  At
least once every twelve (12) months during the Term, Vendor will meet with ACI
account leaders (such meetings to occur in the United States, EMEA or Asia
Pacific as designated by ACI), at no additional charge, in order to (i) provide
an overview of how the Services are provided, (ii) provide an overview of
how the Vendor Software and Equipment work and should be operated and (iii) provide
such training and documentation 
necessary for ACI to (A) provide the Retained Systems, Retained
Processes or other services that relate to or interface with the Services and (B) provide
an outline of such training and documentation necessary for ACI to understand
and operate the interfaces to the Vendor Software and Equipment and understand
and provide the Services for itself and the other End Users after the
expiration or termination of this Agreement. 
The Parties will document the training and documentation to be provided
in subsection (iii) of the preceding sentence.

 

(b)                                 As
further specified pursuant to the Change Control Procedure, ACI may assign ACI
personnel (excluding any third parties) on a rotational basis to Vendor’s
operating environment (subject to appropriate safeguards to protect the data
and proprietary information of other Vendor customers and Vendors security
policies) as reasonably required in order to (i) maintain visibility and
understanding regarding Services and how they are performed and (ii) provide
assistance to Vendor personnel in connection with a Transition or a modification
to an existing Service.

 

(c)                                  Upon
ACI’s request from time to time, but no more often than once every twelve (12)
months during the Term, Vendor will provide to ACI a full description of the
environmental configuration in respect of the Services, including information
regarding Vendor Software and Equipment, staffing relative to Projects,
operating environment, systems constraints, protocols, interfaces, architecture
and other operating parameters.

 

4.                                      TERM OF AGREEMENT

 

4.1                               Term.

 

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

 

4.2                               Extension
of Term.

 

Vendor
shall provide ACI written notice not less than nine (9) months prior to
the then-existing expiration date of this Agreement of such upcoming
expiration.  No less than three (3) months
prior to such upcoming expiration, ACI shall have the right to extend the Term
of this Agreement for up one (1) year on the terms and conditions then in
effect by delivering written notice to Vendor.

 

5.                                      PERSONNEL

 

5.1                               Key
Vendor Positions.

 

(a)                                  “Key
Vendor Positions” are the Vendor Transition Manager (as defined below), the
Vendor Project Executive, Vendor Delivery Project Executive and Vendor Tower
Leads for each Service Tower.  Vendor
shall cause each of the Vendor Personnel filling the Key Vendor Positions to
devote substantial time and effort to the provision of Services to ACI.  Except with respect to the Vendor
representative assigned primary responsibility for Transition Services (the “Vendor
Transition Manager”), once assigned to a Key Vendor Position, these
individuals shall remain on the ACI account in such position for a period of at
least two (2) years (or if assigned during Transition, during the
Transition and for two (2) years after the Transition).  In the event of the voluntary resignation,
involuntary termination 

 

10

 

for cause, illness, disability or death of one of its Vendor Personnel
filling a Key Vendor Position during or after the specified period, Vendor
shall (i) give ACI as much notice as reasonably possible of such
development, and (ii) expeditiously identify and a suitable replacement.  If an employee of an Approved Subcontractor
is assigned to a Key Vendor Position, Vendor shall obtain commitments from that
Approved Subcontractor to comply with the requirements of this Section 5.1
with respect to such position.  Upon
providing Vendor 30 days prior notice, ACI may from time to time change the
positions designated as Key Vendor Positions. 
ACI shall have the right, in its sole discretion, to change any position
from a non-Key Vendor Position to a Key Vendor Position; provided that in no
event will the aggregate number of Key Vendor Positions increase by more than
five from the number of Key Vendor Positions as of the Effective Date.

 

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

 

(i)            be one of
the Key Vendor Positions;

 

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

 

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

 

(iv)          be located
at ACI’s offices in Omaha, Nebraska or other location reasonably designated by
ACI from time to time;

 

(v)           be willing
to travel to other ACI locations as reasonably requested by ACI from time to
time.

 

(c)                                  Without
limiting Vendor’s obligation to obtain the approvals required by this Section 5.1
for changes in Key Vendor Positions:

 

(i)                                     Vendor
shall implement and maintain a retention strategy designed to retain Vendor
Personnel assigned to Key Vendor Positions for the prescribed period;

 

(ii)                                  Vendor
shall also maintain active succession plans for each of the Key Vendor
Positions; and

 

(iii)                               At least once each year
during the Term, Vendor shall review with ACI the retention strategies and
succession plans for the Key Vendor Positions. 
Such review shall include a status review of the current risk profile
for each of the Vendor Personnel currently assigned to such positions.  The risk profile will include the unique
technical, account or process skills needed for the Key Vendor Position, and an
assessment of the risk that such Vendor Personnel might leave Vendor, and any
actions, including the execution of appropriate retention strategies to assure
ACI that Vendor will be able to continue to perform its obligations under this
Agreement.

 

(d)                                 Before
assigning an individual to a Key Vendor Position, whether as an initial
assignment or a subsequent assignment, Vendor shall advise ACI of the proposed
assignment and introduce the individual to the appropriate ACI
representatives.  ACI shall have the
right to require Vendor to remove from ACI’s account and replace such
individual at any time, in its sole discretion, provided that ACI does not
request the removal of any individual for reasons prohibited by Applicable Law,
and provided that reasonable notice (which may be immediate, depending on the
circumstances surrounding the removal) is

 

11

 

given.  Upon such request from
ACI, Vendor will investigate the request and reasons for it and take
appropriate action.

 

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

 

(f)                                    Except
with respect to the Vendor Transition Manager, so long as an individual is
assigned to a Key Vendor Position, is one of the Vendor employees that is
substantially or fully dedicated to providing Services to ACI or otherwise has
regular access to view or manipulate ACI Confidential Information that is
either identified by ACI as competitively sensitive or a reasonable person
would understand is competitively sensitive for ACI based upon the content of
such information, and for twelve (12) months, thereafter, Vendor shall not
assign such individual to perform services for the benefit of any ACI
Competitor, unless such assignment is approved by ACI, in advance and in
writing.

 

(g)                                 A
meaningful portion of the annual variable compensation for the Vendor Delivery
Project Executive and Vendor Personnel in the other Key Vendor Positions shall
be based upon: (i) the level of ACI satisfaction reflected in the periodic
customer satisfaction surveys; (ii) the extent to which Vendor has met
Vendor’s responsibilities and obligations under this Agreement; (iii) Vendor’s
achievement of the objectives relating to ACI and its businesses set forth in Section 1.1,
and (iv) Vendor’s determination in consultation with ACI as to whether
Vendor has met the technical and business objectives set by ACI.  Vendor maintains the final responsibility and
decisions for determining the compensation levels of all Vendor employees as
well as recognizing and rewarding them.

 

5.2                               Transitioned
Personnel.

 

(a)                                  Promptly
after the Effective Date, Vendor will offer employment to “Potentially Rebadged
Employees” identified in Schedule T (Human Resources).  “Rebadged Employees” shall mean those
Affected Employees who receive and accept such offers and become employed by
Vendor effective as of such Service Tower Commencement Date or such other date
as to which the Parties agree.  The
provisions of Schedule T (Human Resources) shall apply to all Affected
Employees.

 

(b)                                 ACI
believes that the Rebadged Employees are critical in providing the Services (“Key
Rebadged Employees”).  During the
term stated in Section 5.1(a), following the hire date for any Key
Rebadged Employee (the “Mandatory Employment Period”), without ACI’s
prior written approval Vendor may not transfer or re-assign a Key Rebadged
Employee from performing the Services for ACI for a period of at least one (1) years.

 

(c)                                  ACI
has contracted for the services of non-employee personnel who immediately prior
to the Effective Date were performing services similar to the Services (“ACI
Contractor Personnel”).  With regard
to the agreements for ACI Contractor Personnel (“ACI Contractor Agreements”),
such ACI Contractor Agreements shall be terminated or, subject to obtaining
Required Consents in the manner provided in Section 6.7, assigned to
Vendor.  The action of termination or
assignment for particular ACI Contractor Agreements shall be in accordance with
a plan prepared by Vendor within ninety (90) days 

 

12

 

after the Effective Date and approved by ACI.  Vendor shall be responsible for the costs,
charges and fees associated with such actions.

 

5.3                               Qualifications,
Retention and Removal of Vendor Personnel.

 

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

 

(b)                                 ACI
and Vendor agree that it is in their best interests to keep the turnover rate
of Vendor Personnel to a low level. 
Vendor shall use Commercially Reasonable Efforts to keep the turnover
rate to a low level and remains obligated to perform the Services, regardless
of turnover, without degradation and in accordance with this Agreement.

 

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

 

(d)                                 Vendor,
in performing the Services, shall comply, and cause its employees, agents and subcontractors
to comply, with:

 

(i)                                     All
applicable local, state and federal laws and regulations relating to the
workplace and the performance of its obligations, including OSHA and other laws
regarding workplace safety.

 

(ii)                                  The
ACI policies and procedures set forth in Schedule J (ACI Policies
and Standards) (to the extent that ACI is in compliance as of the Effective
Date) and as provided to the Vendor in writing from time to time;

 

(iii)                               Any of ACI’s policies
and procedures as, from time to time, are communicated in writing to Vendor.

 

(e)                                  If
ACI reasonably determines that the continued assignment to ACI’s account of any
of Vendor Personnel is not in the best interests of ACI, then, upon reasonable
notice from ACI, Vendor shall replace that person with another person of equal
or superior ability and qualifications. 
Vendor shall ensure that such replacement has received sufficient and
necessary information to accomplish a satisfactory knowledge transfer from the
Vendor Personnel being replaced and is sufficiently trained so as to assure
continuity of the Services without adverse impact.  Notwithstanding the foregoing, where ACI
notifies Vendor that ACI has determined that the concern is of such a nature
that such Vendor Personnel should be removed immediately (albeit possibly
temporarily) from ACI’s account, Vendor shall immediately remove such
individual(s) from ACI’s account. 
In any event, any request by ACI to remove an individual from ACI’s
account shall not be deemed to constitute a termination of such individual’s
employment by Vendor and in no event shall ACI be deemed an employer of any
such person.  Notwithstanding the above
or any other provision in this Agreement to the contrary, the rights of ACI in 

 

13

 

this Section 5.3(e) shall be restricted to those Vendor
Personnel that either (i) are located at a ACI facility, or (ii) have
direct contact with ACI or an End User (including any ACI clients).

 

(f)                                    Vendor
shall be responsible for conducting at its expense a background investigation
of all Vendor’s employees, contractors, agents and subcontractors assigned to
provide Services to ACI.  Vendor agrees
that the review period and information gathered will be in accordance with
Vendor’s standard policies.  Vendor shall
exercise reasonable care and diligence to ensure that it does not assign
employees, agents or subcontractors to ACI who, based on the results of their
background investigation, are likely to present a threat to the safety or
security of people or other assets on ACI’s premises.

 

(g)                                 Vendor
shall maintain documentation evidencing that the background investigations
required in Section 5.3(f) have been completed.

 

6.                                      RESPONSIBILITY FOR RESOURCES

 

6.1                               Generally.

 

Except
to the extent specifically provided otherwise in this Agreement, Vendor shall
be responsible for providing all resources (including Equipment, Software,
facilities and personnel) necessary or desirable to provide the Services, and
shall be responsible for all costs associated with those resources, and shall
only recover such costs through the corresponding Charges specified in this
Agreement.  Vendor shall permit ACI, or
any third-party provider of services to ACI, (provided Vendor receives reasonable
advance notification and subject to execution by such third party of a
confidentiality agreement in the form of Schedule M (Vendor
Confidentiality Agreement)) to establish and maintain uninterrupted remote
access to the Applications Software and any software running on Equipment and
used to provide the Services, and, upon request, on-site access to any Vendor
facility at which Services are performed as may be reasonably required by ACI.

 

6.2                               Intentionally
left blank.

 

6.3                               Financial
Responsibility for Equipment.

 

As
identified in Exhibit C-2 (Financial Responsibility and Ownership
Matrix), Vendor shall have full financial responsibility for all such
Equipment.  This includes responsibility
for all upgrades, enhancements, growth and technology refreshments to and for
the Equipment not owned or leased by ACI, and all costs and expenses related to
operational support, including installation, support, maintenance, disaster
recovery, and Service Levels with respect to the Equipment.  Vendor shall refresh the Equipment in
accordance with Exhibit C-2 (Financial Responsibility and Ownership
Matrix).

 

6.4                               Equipment
Access and Operational and Administrative Responsibility.

 

(a)                                  Access.  ACI shall grant Vendor the same rights of
access and use, at no cost to Vendor, that ACI has to Equipment used by ACI
immediately prior to the Effective Date to provide services to itself (subject
to the Parties’ having obtained any Required Consents therefore and solely to
the extent necessary to provide the Services).

 

(b)                                 No
Warranties.  All Equipment
transferred or made available to Vendor and Approved Subcontractors under this
Agreement by ACI is provided or made available on an “AS IS, WHERE IS” basis,
with no warranties whatsoever. 
Notwithstanding anything to the contrary contained in this Agreement,
ACI and its Affiliates shall not be responsible for any breach of any of such
manufacturers’ 

 

14

 

warranties and indemnities, and no breach thereof shall affect the
limitation on liabilities, rights and obligations of the Parties set forth in
this Agreement.

 

(c)                                  Hardware
and Software Purchases.  If and as
requested by ACI from time to time and agreed by the Vendor, Vendor will offer
to acquire hardware or software for re-sale to ACI at Vendor’s  charges plus a reasonable mark-up through
Vendor’s contracts with third-party suppliers.

 

(d)                                 Disposal
of Equipment Owned or Leased by ACI. 
Vendor shall, as a part of the Services included in the Monthly Base
Charges, dispose of Equipment owned or leased (in accordance with Schedule A
(Statement of Work)) by ACI and no longer needed for the provision of the
Services.  Vendor is entitled to retain
any salvage value of such Equipment that is owned by ACI without accounting to
ACI.

 

(e)                                  Disposal
of Equipment Not Owned by ACI.  Vendor
shall be responsible for any disposal of Equipment provided or otherwise used
by Vendor or its subcontractors.  Vendor
shall be responsible for all costs, charges or fees associated with the
disposal of such Equipment.

 

(f)                                    Refresh
of Equipment.  Vendor is responsible
for acquiring, as a part of the Hardware Services Charge (as defined in
Schedule C (Charges)), such Equipment for refresh and growth as indicated in Exhibit C-2
(Financial Responsibility and Ownership Matrix).  The Equipment to be acquired by Vendor
pursuant to such Equipment refresh is based on the expected volume identified
in the Resource Volume Baseline and in Exhibit C-1.  The Parties acknowledge that the actual
refresh of Equipment will be based on ACI’s changing business needs and Vendor’s
requirements to perform the Services and meet the Service Levels.  Within thirty (30) days after the each
anniversary of the Effective Date, ACI and Vendor will review the then-current
refresh schedule, make any required revisions to the schedule and estimate by
month for the upcoming year the timing such refresh is required.

 

6.5                               Financial
Responsibility for Software.

 

(a)                                  All
licenses to Software in ACI’s name as of the Effective Date shall be retained
in the name of ACI as licensee.  Subject
to Section 6.5(c), financial, administrative and operational
responsibility for Software, including (i) all costs for current and
future packages, new releases, expanded license rights, growth and technology
refreshment (“Software Capital Costs”) and (ii) all costs and
expenses related to operational support, including installation, support,
software maintenance, and achieving Service Levels (“Software Operational
Support Costs”) shall be allocated between the Parties as provided in Exhibit C-2
(Financial Responsibility and Ownership Matrix).  For that Software for which Vendor has
financial responsibility, Vendor shall pay directly, or promptly reimburse ACI
if ACI (or any of its Affiliates) has paid, all such costs that are
attributable to periods from and after the assumption of such responsibility.

 

(b)                                 Licenses.  Vendor shall obtain all licenses for any new
Systems Software acquired during the Term for Equipment that Vendor is
financially responsible for refreshing as specified in Exhibit C-2
(Financial Responsibility and Ownership Matrix).  Any negotiation of
software licenses on behalf of ACI will be in consultation with the ACI legal
and procurement departments.

 

(c)                                  ISV
Software.  Except as otherwise
provided herein or in Exhibit C-2 (Financial Responsibility and
Ownership Matrix), Vendor’s financial responsibility for Software Capital Costs
shall not extend to ISV Software. 
Notwithstanding the foregoing, (i) Vendor shall be responsible for
providing Vendor Applications Software Operational Support Services with
respect to all ISV Software; and (ii) if Vendor elects to operate any
Applications Software on a shared platform, and such election results in any

 

15

 

increase in the Software Capital Costs or Software Operational Support
Costs in relation to such Applications Software, Vendor shall be solely
responsible for such incremental costs.

 

6.6                               Third
Party Contracts.

 

Vendor
has financial, administrative and operational responsibility for those Third
Party Contracts set forth in Schedule G (Third Party
Contracts).  Vendor shall pay directly,
or promptly reimburse ACI, if ACI (or any of its Affiliates) has paid, all such
costs that are attributable to periods from and after the assumption of such
responsibility.

 

6.7                               Required
Consents.

 

Vendor
and its Affiliates shall be administratively responsible, with ACI’s and its
Affiliates’ reasonable cooperation and subject to the provisions of Section 6.6,
for performing all administrative activities necessary for obtaining the
Required Consents for Software, Equipment, facility leases/subleases and Third
Party Contracts as necessary to perform the Services and other obligations
under this Agreement, upon mutually acceptable terms and conditions.  ACI acknowledges that, in those instances
where ACI is the contracting party or licensee, ACI will be the party that must
seek the Required Consents and Vendor will provide assistance and the
administrative activities in seeking such Required Consents.  Vendor will pay any and all fees (including
transfer or upgrade fees, additional licenses, sublicenses and maintenance
fees) required to obtain such Required Consents and will invoice ACI (as part
of Vendor’s normal monthly invoice) such fees on a Pass-Through Expenses
basis.  The Parties shall cooperate with
each other so as to minimize such costs and ensure that mutual agreement exists
as to acceptable terms and conditions for the provision of any such Required
Consent.  As and to the extent consent is
obtained for Vendor and its Affiliates to manage and utilize the Software or a
contract but the relevant license or such contract remains in ACI’s or an
Affiliate’s name, ACI and its Affiliates shall exercise permissible
termination, extension and other rights thereunder as Vendor, after
consultation with ACI, reasonably directs. 
If a Required Consent is not obtained, then, unless and until such
Required Consent is obtained, the
Parties shall determine and promptly adopt, such alternative approaches
as are necessary and sufficient to provide the Services without such Required
Consents (including modifications to the Transition Plan) and, subject to
consultation with and agreement by ACI, an applicable Service Tower
Commencement Date affected by such unavailable Required Consents shall be
adjusted accordingly.

 

6.8                               Straddle
Agreements.

 

If a
Straddle Agreement is discovered by the Parties after the Effective Date,
within ninety (90) days of the date of discovery, the Parties shall undertake
to establish the most appropriate, including the most cost effective, method of
leveraging such Straddle Agreement for the benefit of both Parties and if
necessary, shall negotiate in good faith to determine an alternative to Vendor
using the Straddle Agreement to perform the Services.

 

7.                                      SOFTWARE AND PROPRIETARY RIGHTS

 

7.1                               ACI
Software.

 

(a)                                  ACI
retains all right, title and interest in and to ACI Software, including all
modifications, enhancements and derivative works relating thereto.  ACI grants to Vendor (and its Approved
Subcontractors if and to the extent required to provide the Services) a
worldwide, fully paid-up, nonexclusive license during the Term to use ACI
Software solely to the extent necessary for performing the Services for the
benefit of ACI, ACI’s Affiliates and other End Users as directed by ACI.  ACI 

 

16

 

Software shall be made available to Vendor in such form and on such
media as exists on the Effective Date or as is later obtained by ACI, together
with available documentation and any other related materials.

 

(b)                                 Vendor
shall not modify, decompile, reverse engineer, reverse assemble or reverse
compile any ACI Software or any Software licensed to ACI; distribute, rent,
lease, sublicense or transfer any ACI Software to any third party; use the ACI
Software in a service bureau or time-sharing arrangement; or otherwise allow
direct or indirect use of any ACI Software by any third party other Approved
Subcontractors to the extent necessary for Vendor to perform the Services
without the prior written consent of ACI, which may be withheld at ACI’s sole
discretion.  Vendor shall not use ACI
Software for the benefit of any entities other than ACI, ACI’s Affiliates and
other End Users, without the prior written consent of ACI, which may be withheld
at ACI’s sole discretion.  Except as
otherwise requested or approved by ACI, Vendor shall cease all use of ACI
Software upon expiration or termination of this Agreement and deliver to ACI or
destroy any copies of such ACI Software.

 

7.2                               Vendor
Software.

 

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

 

(b)                                 As
and to the extent necessary for ACI to receive the Services and otherwise
obtain the benefits as specified this Agreement, Vendor grants to ACI a
worldwide, fully paid-up, nonexclusive license during the Term to use Vendor
Software as it exists from time to time during the Term to receive the Services
during the Term and otherwise obtain the benefits as specified this
Agreement.  Subject to the execution of
reasonable confidentiality agreements with the third party, Vendor also grants
to ACI the right to sublicense Vendor Software to a third party for such third
party to perform work as permitted under Section 21.9 of this Agreement
solely for the benefit of ACI, ACI’s Affiliates and End Users.

 

(c)                                  For
generally commercially available Vendor Software which on the date of
expiration or termination of this Agreement Vendor, ACI and ACI Affiliates are
using:

 

(i)                                     solely
to provide the Services to ACI:

 

(A)                              which
Vendor licenses from a third party, subject to the consent of the third party,
Vendor will assign its license, if any, to such software to ACI or its designee
upon ACI’s reimbursement to Vendor of any transfer fees imposed by a third
party for ISV Software, and any one-time license or purchase charges in an
amount equal to the remaining unamortized value, if any, for the software,
depreciated over a period beginning on the date such charges were incurred and
ending on the Termination/Expiration Date (as of the date such charges were
incurred); and

 

(B)                                which
is Vendor Software, Vendor will provide ACI under Vendor’s standard terms and
conditions, a license to such Software upon ACI’s reimbursement to Vendor of
any one-time license fees in an amount equal to the lower of (a) Vendor’s
commercially available price at the time or (b) the discount generally
applicable to ACI based on the discount it generally receives at the time the
Agreement is terminated, in each case of (a) and (b) prorated over a
period starting on the date the cost was incurred and ending on the
Termination/Expiration Date; and

 

17

 

(C)                                for
all Software subject to clauses (A) and (B) of this subsection, ACI
will reimburse Vendor for any recurring periodic license, maintenance, support or
other charges applicable to periods after the date of transfer or license to
ACI, and ACI will be responsible for any additional recurring charges
applicable to periods after such date of transfer or license; and

 

(D)                               to
provide Services to ACI and other customers in a shared environment, Vendor
will use Commercially Reasonable Efforts to assist ACI in obtaining licenses
for such software at ACI’s expense.

 

(d)                                 For
non-commercially available Vendor Software which on the date of expiration or
termination of this Agreement Vendor is using to provide the Services, Vendor
grants to ACI a worldwide, fully paid-up, nonexclusive license during the
Termination/Expiration Assistance Period to use such non-commercially available
Vendor Software solely to provide Services to ACI.  Subject to the execution of reasonable
confidentiality agreements with the third party, Vendor also grants to ACI the
right to sublicense such non-commercially available Vendor Software to a third
party for such third party to perform work during the Termination/Expiration
Transition Period solely for the benefit of ACI, ACI Affiliates and End Users.

 

(e)                                  As
of the Effective Date, the Parties do not intend for Vendor to use any Vendor
Application Software other than for Vendor’s own internal or administrative
use.  If during the Term the Parties
agree that the scope of the Services should be expanded such that Vendor should
use Vendor Application Software, they shall enter into a separate written
agreement governing such use.  Absent
such agreement, ACI shall have no express or implied right to use Vendor
Application Software.

 

7.3                               ISV
Software.

 

(a)                                  Grant
of Rights.  With respect to the ISV
Software licensed by ACI, subject to the Parties having obtained any Required
Consents for such ISV Software, ACI grants to Vendor to the extent necessary
for performing the Services, the rights of use of such Software that ACI has as
of the Effective Date or later obtains during the Term with respect to such
Software.  Vendor shall comply with the
duties, including use and non-disclosure restrictions imposed on ACI by the
licenses for such ISV Software, and Vendor shall not seek to modify or
otherwise revoke the terms of such licenses without ACI’s prior written consent
to the extent that such duties and/or licenses have been provided in writing to
Vendor prior to such compliance obligation. 
Except as otherwise requested or approved by ACI, or with respect to
operating system Software that (i) is licensed for use on Equipment that
ACI does not elect to purchase or assume the lease pursuant to Section 21.9
and (ii) may not be transferred to ACI for use on other Equipment, Vendor
shall cease all use of such Software upon expiration or termination of this
Agreement.

 

(b)                                 Third
Party Applications Software.  Vendor
shall not use or introduce, nor seek compensation or reimbursement for, any
Third Party Applications Software in providing the Services without ACI’s prior
written approval, which will not be unreasonably withheld.

 

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

 

 

(i)                                     Vendor
shall use Commercially Reasonable Efforts to obtain for ACI, ACI Affiliates and
End Users a perpetual, non-exclusive license to Use such Software at the
expiration or termination of this Agreement and at no additional charge to ACI;
or

 

18

 

(ii)                                  If
Vendor is unable to obtain such license, Vendor shall notify ACI of its
inability to obtain such a license and of the cost and viability of any other
software that can perform the requisite functions and with respect to which
Vendor has the ability to obtain such a license.  Such notice shall contain the proposed
third-party vendor’s then-current terms and conditions, if any, for licensing
the software to ACI in accordance with Section 7.3(c)(i).  With ACI’s prior approval, Vendor may
introduce such software in providing the Services.  Moreover, if Vendor desires to introduce
Software, the rights to which have been acquired by Vendor as part of an
enterprise agreement, then Vendor shall notify ACI of the relevant terms of
such agreement and shall obtain ACI’s written consent prior to using such
Software to provide the Services.

 

(d)                                 Exercise
of Rights.  To the extent Vendor has
financial responsibility for licenses for Third Party Systems Software, but
such licenses remain in ACI’s name, ACI shall exercise termination or extension
rights thereunder, as Vendor, after consultation with ACI, reasonably directs
with respect to such Software; provided that Vendor shall be responsible for
the costs, charges and fees associated with the exercise of such rights.

 

7.4                               Rights
in Newly Developed Software and Other Materials.

 

(a)                                  Newly
Developed Software.

 

(i)                                     “Developed
ACI Software” As between ACI and Vendor, all developed Software that is (a) a
modification, enhancement or derivative work of the ACI Software (called “Developed
ACI Software”) (b) newly developed software that Vendor develops for
ACI on a project basis; and (c) modifications to, or upgrades or
enhancements or derivative works of, ISV Software provided by ACI under this
Agreement shall be owned by ACI.  ACI
shall have all right, title and interest, including worldwide ownership of
trade secret, copyright, patent and other proprietary rights in and to the
Developed ACI Software and all copies made therefrom.  To the extent that any of the Developed ACI
Software is not deemed a “work made for hire” by operation of law, Vendor
hereby irrevocably assigns, transfers and conveys, and shall cause Vendor
Personnel to assign, transfer and convey, to ACI, without further
consideration, all of its or their right, title and interest in and to such
Developed ACI Software, including all rights of patent, copyright, trade secret
or other proprietary rights in such Developed ACI Software.  Vendor acknowledges, and shall cause Vendor
Personnel to acknowledge, that ACI and the successors and permitted assigns of
ACI shall have the right to obtain and hold in their own names any Intellectual
Property Rights in and to the Developed ACI Software.  Vendor agrees to execute, and shall cause Vendor
Personnel to execute, any documents or take any other actions as may reasonably
be necessary, or as ACI may reasonably request, at ACI’s expense, to perfect
ACI’s ownership of any such Developed ACI Software.  ACI hereby grants Vendor a fully paid-up,
non-exclusive, worldwide license to use Developed ACI Software solely to
provide the Services during the Term and the Termination/Expiration Assistance
Period, which includes the right to sublicense and otherwise permit Vendor
subcontractors to do any of the foregoing. 
Vendor shall not be permitted to use Developed ACI Software for the
benefit of any entities other than ACI, ACI’s Affiliates, and other End Users,
without the prior written consent of ACI, which may be withheld at ACI’s sole
discretion.  Except as otherwise
requested or approved by ACI, Vendor shall cease all use of Developed ACI
Software upon expiration or termination of this Agreement and deliver to ACI or
destroy any copies in its possession.  No
further license is granted to Vendor with respect to Developed ACI
Software.  However, both Parties are free
to use any ideas, concepts, know-how, or techniques which are developed or
provided by the other or jointly by both Parties during a Project.  Both Parties are free to enter into similar
agreements with others and to develop and provide materials or Services which
are similar to those provided under this Agreement.

 

(ii)                                  “Developed
Vendor Software” shall mean: (a) modifications to, or upgrades or
enhancements or derivative works of, Vendor Software; (b) newly developed
software for which Vendor 

 

19

 

does not charge ACI on a project basis; and (c) modifications to,
or enhancements or derivative works of, ISV Software provided by Vendor under
this Agreement.  Developed Vendor
Software shall also include methods of providing the Services, such as a
work-flow, where such methods were developed under this Agreement. As between
the Parties, Vendor shall have all rights, title and interest in and to
Developed Vendor Software and all copies made from it.  Vendor hereby grants to ACI a perpetual,
fully paid-up, non-exclusive, worldwide license to: (i) use all Developed
Vendor Software (other than with respect to the Software which Vendor is not
entitled to license to ACI under Vendor’s license with the third party and
which ACI is not entitled to use under its own license agreements with the
third party) solely to provide services similar to the Services for itself or
services for the processing of approximately the volume of ACI’s business that existed
during the Term; and (ii) permit third parties to use all Developed Vendor
Software (other than with respect to the ISV Software that Vendor is not
entitled under its license agreement with the ISV Software vendor to license to
third parties unless such third parties are entitled to use under their own
license agreements with the third party) solely to provide services similar to
the Services for ACI.

 

(b)                                 Non-Software
Materials.  All literary works or
other works of authorship including manuals, training materials and
documentation developed or created by Vendor or any Vendor Personnel in
accordance with this Agreement or Schedule A (Statement of Work)
specifically and exclusively for ACI, or at the written request of and
specifically for ACI or its Affiliates pursuant to a Project or the Change
Control Procedures under this Agreement, but excluding Developed ACI Software,
Developed Vendor Software and any Vendor Preexisting IP incorporated into any
of the foregoing (collectively herein referred to as “Work Product”)
shall be exclusively owned by ACI.  ACI
shall have all right, title and interest, including worldwide ownership of
copyright, in and to the Work Product and all copies made from them.  To the extent any of the Work Product is not
deemed a “work made for hire” by-operation of law, Vendor hereby irrevocably
assigns, transfers and conveys, and shall cause Vendor Personnel to assign,
transfer and convey, to ACI without further consideration all, of its or their
right, title and interest in and to such Work Product, including all rights of
copyright in such materials.  Vendor
acknowledges, and shall cause Vendor Personnel to acknowledge, that ACI and the
successors and permitted assigns of ACI shall have the right to obtain and hold
in their own name any copyrights in and to such Work Product.  Vendor agrees to execute, and shall cause
Vendor Personnel to execute, any documents or take any other actions as may
reasonably be necessary, or as ACI may reasonably request, at ACI’s expense, to
perfect ACI’s ownership of any such Work Product. Nothing in Section 7.4
will be interpreted or construed to assign to ACI (and, except as licensed to
the ACI under this Agreement, Vendor reserves all right, title and interest
that Vendor may have or acquire in) any proprietary software, tools, utilities,
methodologies, processes, documentation and other items (i) that are
developed by or on behalf of Vendor in performance of the Services (including
all modifications, enhancements, and derivative works of the Vendor Software
and/or tools made by or on behalf of ACI under Section 7.4 excluding all
Work Product, Developed ACI Software and any ACI Data or other materials or
information provided by ACI to Vendor for use in connection with such
development (“Vendor Developed IP”), or (ii) that were created or
acquired by Vendor prior to the Effective Date, or was developed or acquired by
Vendor outside the scope of this Agreement (and without the use of ACI
Confidential Information), and inserted or incorporated within any Work Product
or Developed Vendor  Software with the
prior written consent of ACI (“Vendor Preexisting IP”).  To the extent: (i) any Work Product or
Developed Vendor Software contains any Vendor Preexisting IP, or (ii) Vendor
Developed IP has been provided to ACI under this Agreement or has been used to
provide Services to ACI under this Agreement, or (iii) use of any Work
Product or Developed Vendor Software requires any Vendor Developed IP or Vendor
Preexisting IP, Vendor grants to ACI a royalty-free, worldwide, non-exclusive
copyright license to such Vendor Developed IP or Vendor Preexisting IP, during
the Term and the Termination/Expiration Assistance Period solely in connection
with internal use of the Work Product, Developed Vendor Software or Vendor
Developed IP that is actually provided to ACI under this Agreement or is
actually used to provide Services to ACI under this Agreement.  ACI hereby grants Vendor an irrevocable,
fully paid-up, non-exclusive,

 

20

 

worldwide license to use the Work Product solely to provide the
Services during the Term and the Termination/Expiration Assistance Period,
which includes the right to sublicense and otherwise permit third parties to do
any of the foregoing.

 

7.5                               Export.

 

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

 

8.                                      OFFICE SPACE

 

8.1                               ACI
Obligations.

 

(a)                                  Subject
to Section 8.2(a), below, ACI shall provide to Vendor the office space
reasonably needed and comparable to similarly situated employees of ACI to
accommodate Vendor Personnel who are on site at the End User Locations (the “ACI
Office Space”), as the same may be changed by ACI from time to time
throughout the Term.  With respect to
such ACI Office Space, except as otherwise provided in this Article 8,
Vendor shall have the same privileges regarding use thereof (such as heating,
lights, air conditioning systems, use of cafeteria, etc. (excluding parking
privileges)) as do any other similarly situated employees of ACI.  Furthermore, those Vendor employees who are
performing Services or any portion of the Services from ACI Office Space, shall
be free to use and consume, at no cost to Vendor, a reasonable amount of office
supplies (such as pencils, pens, pads, copy machines and facsimile machines)
that are ordinarily furnished by ACI to its personnel, and in accordance with
the same policies and procedures regarding the use of office supplies and
services as are applicable to similarly-situated ACI employees, as such
policies and procedures may be modified from time to time to the extent such
policies are provided to Vendor in writing. 
Vendor shall be responsible for providing all other facilities required
to perform the Services.

 

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

 

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

 

(d)                                 ACI
shall inform Vendor of any plans or determination to relocate the ACI Office
Space so that Vendor shall have a reasonable amount of time to prepare for and
implement such change or relocation as it impacts Vendor.  ACI shall reimburse Vendor for Vendor’s
Out-of-Pocket Expenses incurred in connection with such relocation in
accordance with Section 3.10.

 

8.2                               Vendor
Obligations within ACI Office Space.

 

(a)                                  Vendor
shall use the ACI Office Space for the sole and exclusive purpose of providing
the Services, unless in its sole discretion ACI approves another use in advance
and in writing.  Accordingly, Vendor and
its agents may not provide or market services to a third party from the ACI
Office Space.  The use of ACI Office
Space by Vendor shall not constitute a leasehold, a usufruct or other property
interest in favor of Vendor. 
Notwithstanding any provision in this Agreement to the contrary, in no
event may Vendor file a notice of lease or comparable instrument on the
applicable land.

 

21

 

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

 

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

 

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

 

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

 

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

 

(g)                                 Vendor
will comply with the physical safety and security procedures that are
applicable to the ACI Office Space from time to time to the extent such
procedures are provided to Vendor in writing.

 

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

 

8.3                               Use
of Vendor Facilities by ACI.

 

Vendor will make available to ACI reasonable office
space and office facilities when ACI personnel are onsite at Vendor facilities,
including desks, telephones and internet connectivity.

 

9.                                      SERVICE LEVELS

 

9.1                               General.

 

Vendor
shall perform the Services that are subject to Service Levels in a manner that
meets or exceeds the service levels set forth in Schedule B
(Service Levels) (“Service Levels”). 
Vendor will provide all Services without expressly defined Service
Levels with at least the same degree of accuracy, quality, completeness,
timeliness, responsiveness and efficiency as the greater of (i) the level
provided by or for ACI prior to the Effective Date, or (ii) at levels
consistent with the warranty provided in Section 16.2.

 

22

 

9.2                               Failure
to Perform.

 

If
Vendor fails to meet any Service Level twice consecutively or any Critical
Service Level, Vendor shall promptly (taking into consideration the severity of
the failure): (a) investigate, assemble and preserve pertinent information
with respect to, and report to ACI on the causes of, the problem causing the
Service Level failure, including performing a root cause analysis of the
problem; (b) advise ACI, as and to the extent requested by ACI, of the
status of remedial efforts being undertaken with respect to such problem; (c) minimize
the impact of and correct such problem to begin meeting the Service Level; and (d) take
appropriate preventive measures to minimize the recurrence of the problem.  Vendor shall correct any such failure,
whether or not material, as soon as possible after Vendor becomes aware of such
failure; provided, however, that, in the event the root cause analysis
demonstrates that Vendor was not at fault in failing to meet the Service Level
or if such failure is due to an exception to Service Level performance expressly
set forth in Schedule B (Service Levels), and Vendor is unable to
perform remediation efforts without incurring additional expense or adding
significant additional resources, ACI may elect to either (i) reprioritize
the Services, in which event Vendor will perform the activities reflected in
(b), (c) or (d) above, or (ii) authorize Vendor to perform the
remediation as a Project.

 

9.3                               Critical
Service Levels and Service Level Credits.

 

Vendor
recognizes that its failure to meet those Service Levels identified in Schedule B
(Service Levels) as critical Service Levels (“Critical Service Levels”)
may have a material adverse impact on the business and operations of ACI and
that the damage from Vendor’s failure to meet a Critical Service Level is not
susceptible to precise determination. 
Accordingly, if Vendor fails to meet Critical Service Levels, then in
addition to any other remedies available to ACI under this Agreement, Vendor
shall pay or credit to ACI the performance credits specified in Schedule B
(Service Levels) (“Service Level Credits”) in recognition of the
diminished value of the Services resulting from Vendor’s failure to meet the
agreed upon level of performance, and not as a penalty.  The methodology for calculating such Service
Level Credits is set forth in Schedule B (Service Levels).  ACI may from time to time, in accordance with
the limitations set forth in Schedule B (Service Levels), change
the Allocation of  Pool Percentage
and/or Service Level Credit Allocation Percentage, each as defined in and
subject to the limitations set forth in Schedule B (Service
Levels).  This Section 9.3 or the
Service Level Credits shall not limit ACI’s rights to terminate this Agreement
for cause or pursue other damages.

 

9.4                               Priority
of Recovery Following Interruption of Services.

 

If a
Force Majeure Event or other occurrence creates an interruption in Vendor’s
rendition of the Services, Vendor shall give the recovery of its capabilities
to perform the Services and the resumption of its actual performance of the Services
the same or greater priority it gives to recovering its capabilities to perform
services and resuming its performance of those services for any other similarly
situated customer of Vendor (and Vendor’s own operations).

 

9.5                               User
Satisfaction.

 

Vendor
and ACI shall conduct satisfaction surveys in accordance with Schedule K
(User Satisfaction Survey Guidelines). 
The surveys shall be designed to determine the level of user
satisfaction and areas where user satisfaction can be improved.  Such surveys shall include representative
samples of each major category of user within ACI and may include a number of
in-depth face-to-face or telephone interviews. 
Vendor and ACI shall mutually agree on the form and content of the
surveys, which shall be no less thorough than Vendor’s customary user
satisfaction program as set forth in Schedule K (User Satisfaction
Survey Guidelines).  The Parties shall
jointly review the results of the surveys, and Vendor shall develop and
implement a plan to improve user satisfaction in areas where user satisfaction
is low.  ACI’s satisfaction as indicated
in the survey results will be a factor in determining the compensation for all
individuals holding Key Vendor Positions.

 

23

 

9.6                               Periodic
Reviews and Adjustments to Service Levels.

 

(a)                                  Without
limitation of Schedule B (Service Levels), every six (6) months
(or as otherwise mutually agreed by the Parties) starting twelve (12) months
after the Effective Date, ACI and Vendor shall review the Service Levels.  During such reviews, Vendor shall work with
ACI to identify possible cost/Service Level tradeoffs (but any resulting
changes in the Service Levels shall be implemented only if approved by ACI in
its sole discretion).  Upon such review,
ACI may, in accordance with Schedule B (Service Levels), adjust the
applicable Service Levels.

 

(b)                                 In
accordance with Schedule B, ACI may change (i) the Service
Levels to reflect its changing business needs, including by adding or removing
a Service Level, or (ii) one or more of the calculation metrics and other
mechanisms used to determine the Service Level (a “Changed Service Level”).  Except as otherwise specified in Schedule
B (Service Levels), Changed Service Level will take effect sixty (60) days after
ACI gives Vendor a notice specifying the Changed Service Level.  Notwithstanding the foregoing, Vendor
acknowledges that ACI customers may from time to time require faster
implementation of new or revised Service Levels that pertain to the On Demand environment,
and Vendor will use all Commercially Reasonable Efforts to implement such new
Service Levels or modifications as quickly as possible.  If Vendor can demonstrate to ACI’s reasonable
satisfaction that such Changed Service Level or On Demand Service Levels will
materially increase Vendor’s cost of performing the Services in accordance with
the Changed Service Level, ACI may only add that Changed Service Level or On
Demand Service Level if:

 

(i)                                     Vendor
agrees; or

 

(ii)                                  Vendor
does not agree, but: (a) ACI removes an existing Service Level at the same
time as introducing a Changed Service Level and the cost of providing the
Services in accordance with the Changed Service Level and the cost of
achieving, measuring and reporting on such Changed Service Level is not
materially higher than the cost of providing the Services under the existing
Service Level and the cost of achieving, measuring and reporting on the
existing Service Level; or (b) ACI agrees to pay Vendor for its
incremental cost of providing the Services under the Changed Service Level and
the cost of achieving, measuring and reporting on the Changed Service Level.

 

(c)                                  Any
disputes in respect of such incremental cost will be subject to the dispute
resolution provisions of this Agreement. 
If the Changed Service Level has associated Service Level Credits, ACI
will adjust the then-current aggregate percentage allowed, subject to any
limitations set forth in Schedule B (Service Levels).

 

(d)                                 The
Parties expect and understand that the Service Levels shall be improved over
time.  Therefore, each Service Level will
be reset annually in accordance with the terms of Schedule B
(Service Levels) governing continuous improvement of Service Levels.

 

(e)                                  As
new technologies and processes are introduced, subject to Section 9.6(b) above,
the Parties shall establish additional Service Levels reflecting industry best
practices for those technologies and processes. 
Vendor will, on a regular basis, attempt to identify ways to improve the
Service Levels.  Vendor will, from time
to time, include updates with respect to such improvements in the reports
provided to ACI in connection with such Service Levels.

 

24

 

9.7                               Measurement
and Reporting.

 

(a)                                  In
addition to Critical Service Levels, Schedule B (Service Levels)
also sets forth certain key measurements with associated service level
expectations (“Key Measurements”). 
Vendor will measure its performance of the Services against such Key
Measurements, will report such performance to ACI on a monthly basis and will
strive to improve its performance related to such Key Measurements over the
course of the Term.  For each Key
Measurement, Vendor will either use ACI’s existing methodology for measuring
and reporting the Key Measurement or (if no such methodology exists) Vendor
will formulate and propose to ACI a comprehensive, accurate and sufficiently
detailed, measurement scope, calculation and reporting methodology.

 

(b)                                 Vendor
shall utilize the necessary measurement and monitoring tools and procedures
required to measure and report Vendor’s performance of the Services against the
applicable Service Levels.  Such
measurement and monitoring shall permit reporting at a level of detail
sufficient to verify compliance with the Service Levels, and shall be subject
to audit by ACI.  Vendor shall provide
ACI with (i) performance and measurement data, for purposes of
verification, project and contract management; (ii) problem management
data and other data regarding the status of incidents, problems, Service
Requests and Authorized User inquiries; and (iii) access to the data used
by Vendor to calculate its performance against the Service Levels and
procedures utilized by Vendor to generate such data for purposes of audit and
verification.  ACI shall not be required to pay
any amount in addition to the Charges for such measurement and monitoring tools
or the resource utilization associated with their use.

 

(c)                                  The
raw data, the detailed supporting information, and the reports delivered to ACI
under this Agreement relating to Service Levels and performance under this
Agreement (“Performance Information”) will be ACI Data for the purposes
of this Agreement.  Vendor may only use
Performance Information in the course of providing the Services and for its
internal business purposes and will provide material containing that
Performance Information to ACI promptly on request.  Vendor may also use aggregated data derived
from Performance Information for external purposes provided that such aggregated
data is not identifiable as relating to ACI.

 

10.                               PROJECT AND CONTRACT MANAGEMENT

 

10.1                        Governance
Guidelines and Principles.

 

Governance
of the Parties’ relationship pursuant to this Agreement will follow the
guidelines and principles set out in Schedule S (Governance), as
such guidelines and principles are amended or supplemented by the Parties from
time to time during the Term.

 

10.2                        Executive
Steering Committee.

 

The
Parties shall form a steering committee to facilitate communications between
them (the “Executive Steering Committee”).  The members, activities and responsibilities
of the Executive Steering Committee are set forth in Schedule S
(Governance).

 

10.3                        Reports.

 

(a)                                  Prior
to an applicable Service Tower Commencement Date, the Parties shall determine
an appropriate set of periodic reports to be issued by Vendor to ACI with
respect to such Service Tower.  For
reports that relate to Services provided across multiple Service Towers, such
reports shall be established prior to the first Service Tower Commencement Date
for the Service Towers the report is intended to cover.  Such reports shall be issued at the frequency
set forth in Schedule R (Reports). 
An initial list of all such reports (including a description of the
frequency of such reports) is set forth in Schedule R (Reports).

 

25

 

Vendor shall provide ACI with suggested formats for such reports for
ACI’s review and approval.

 

(b)                                 Vendor’s
reports shall include, at a minimum, (i) reports consistent with ACI’s
practice prior to the applicable Service Tower Commencement Date; and (ii) a
monthly performance report, which shall be delivered to ACI within ten (10) Business
Days after the end of each month, describing Vendor’s performance of the Services
in such month (the “Monthly Performance Report”).

 

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

 

10.4                        Meetings.

 

(a)                                  The
Parties shall conduct periodic meetings that shall, at a minimum, include the
following:

 

(i)                                     a
weekly meeting of the ACI Project Office Executive and the Vendor Delivery
Project Executive to discuss day-to-day operations and such other matters as
appropriate;

 

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

 

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

 

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

 

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

 

(b)                                 Vendor
shall prepare and circulate an agenda sufficiently in advance of each such
meeting to give participants an opportunity to prepare for the meeting.  Vendor shall incorporate into such agenda
items that ACI desires to discuss.  For
each meeting held between representatives of Vendor and ACI, Vendor shall
prepare and circulate detailed, precise, complete and accurate minutes
reporting, at a minimum all decisions reached during the meeting and for each
such decision, which Party representative raised the issue, a summary of the
major points for and in opposition of each issue and the results or actions
agreed upon, promptly after a meeting, although ACI shall not be bound thereto
and shall be under no obligation to correct or object to any errors therein.

 

10.5                        Procedures
Manuals.

 

(a)                                  The
“Procedures Manual” shall describe the method that Vendor will use to
perform and deliver the Services under this Agreement, the Equipment and
Software being used, and the documentation (e.g., operations manuals, user
guides, specifications) which provide further details of 

 

26

 

such activities.  Procedures
Manuals shall also describe the activities Vendor will undertake in order to
provide the Services, including those direction, supervision, monitoring,
reporting, planning and oversight activities normally undertaken to provide
services of the type Vendor is to provide under this Agreement.  Procedures Manuals also shall include
descriptions of the acceptance testing and quality assurance procedures
approved by ACI, Vendor’s problem management and escalation procedures, and the
other standards and procedures of Vendor pertinent to ACI’s interaction with
Vendor in obtaining the Services. 
Procedures Manuals shall be written explicitly and comprehensively
enough to describe how the Services will be performed.  Vendor will make all Procedures Manuals
available for access by ACI on-line as well as in hard copy.

 

(b)                                 Vendor
will provide for ACI’s review and consent an outline of the Procedures Manual
applicable to that Service Tower on the dates specified in Exhibit B-3
(Critical Deliverables).  Within
forty-five (45) days after such dates, Vendor shall deliver a draft Procedures
Manual with respect to such Service Tower to ACI for ACI’s comments and
review.  Vendor shall incorporate
comments or suggestions of ACI and shall finalize the Procedures Manual thirty
(30) days after receiving ACI’s comments on the Procedures Manual.  The final Procedures Manual shall be subject
to the approval of ACI.  Vendor shall
periodically, but no less than semi-annually, update Procedures Manuals for all
Service Towers to reflect changes in the operations or procedures described
therein.  Updates of the Procedures
Manuals shall be provided to ACI for review, comment and approval.  Vendor shall perform the Services in
accordance with the Procedures Manuals. 
In the event of a conflict between the provisions of this Agreement and
the Procedures Manuals, the provisions of this Agreement shall control.  Until the Parties agree upon a Procedures
Manual pursuant to this Section 10.5, Vendor will follow the ACI
procedures which were in effect on the applicable Service Tower Commencement
Date to the extent that such procedures have been provided to Vendor in
writing.

 

10.6                        Change
Control.

 

(a)                                  Technical
Change Control.

 

(i)                                     At
all times ACI shall be responsible for establishing ACI’s IT architecture,
standards and strategic direction; provided, however, that Vendor shall
actively participate in and provide subject matter expertise to ACI as it
establishes such IT architecture, standards and strategic direction.  In performing the Services, Vendor shall
conform with and shall support such architecture, standards and strategic
direction in accordance with the technical change control procedures defined in
this Section 10.6 and in the Procedures Manual.

 

(ii)                                  Vendor
shall be responsible for all Changes to ACI’s IT environment pertaining to the
Services, including Changes to programs, Procedures Manuals, job control
language statements, distribution parameters and schedules.  Vendor shall comply with the following Change
control requirements:

 

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

 

(B)                                Vendor
may make temporary Changes required by an emergency if, after making
Commercially Reasonable Efforts, Vendor has been unable to contact an appropriate
ACI 

 

27

 

manager to discuss Vendor’s proposed actions.  Vendor shall document and promptly report
such emergency Changes to ACI, which Changes shall then be subject to ACI’s
approval.

 

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

 

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

 

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

 

(3)                                  a
Change inconsistent with ACI’s physical or information security policies or
procedures to the extent such policies or procedures have been provided to
Vendor in writing and in advance;

 

(4)                                  a
Change impacting the safety or security of ACI personnel, resources or
information;

 

(5)                                  a
Change inconsistent with the IT architecture, standards or strategic direction
specified by ACI; or

 

(6)                                  a
Change impacting the way in which ACI conducts its business or operations which
impact ACI considers to be adverse.

 

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

 

(iii)                               Within ninety (90) days
after the Effective Date, Vendor shall propose a detailed technical change
control procedure, to be set forth in the Procedures Manual, detailing how
Vendor will comply with the requirements set forth in this Section 10.6
and otherwise control Changes to ACI’s IT environment pertaining to the
Services throughout the Term.  Vendor
shall incorporate comments or suggestions of ACI and shall finalize the
technical change control procedure thirty (30) days after receiving ACI’s comments.  The technical change control procedure may be
used to identify the need for the Parties to amend this Agreement.  ACI shall have the right to approve in
advance any action or decision of Vendor materially affecting the provision of
Services, including Equipment, Software and systems configuration.  ACI shall have the right to set priorities in
scheduling work.  If, in accordance with
the Procedures Manual, ACI requests a change in priorities, Vendor shall strive
to accommodate the change without negatively impacting the Service Levels; if
the Service Levels shall be impacted, Vendor shall notify ACI of the
anticipated impact and the Parties shall agree on the approach to be taken.

 

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

 

28

 

(c)                                  In
determining whether the Charges should be adjusted as a result of a Change
implemented pursuant to this Section 10.6, the Parties shall be guided by
the following principles:

 

(i)                                     To
the extent and for so long as such a Change can be performed in accordance with
the Service Levels without a material increase in the resources then being
utilized by Vendor therefore and is not a New Service, there will be no
adjustment to the Charges.

 

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

 

(iii)                               A Change that is
required to cure a defective Deliverable or other Service default resulting
from Vendors action or inaction will be provided at no additional Charge.

 

(iv)                              If
such a Change cannot be implemented without an increase in the Charges, and ACI
agrees to implement the Change, then, if such Change can be reasonably
performed on a time and material basis, the increase in Charges shall be
calculated using the applicable time and materials rates set forth in Exhibit C-1
(Base Charges, Baselines, ARC/RRC Rates and Termination Charges).  If such work cannot be reasonably performed
on a time and material basis, then the Change shall be implemented at a price
to be mutually agreed to by the Parties in writing.

 

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

 

(vi)                              If
such a Change results in a reduction of the resources required by Vendor to
perform the Services and that reduction is not reflected in the Charges through
the Charges mechanism set forth in Schedule C (Charges), the
Charges will be equitably adjusted by mutual written agreement of the Parties.

 

(d)                                 Notwithstanding
anything to the contrary contained herein, including this Section 10.6, no
Change that would result in an increase to ACI’s Charges under this Agreement
or to other costs or fees of ACI shall be implemented unless it has been
approved, in advance and in writing, in accordance with Schedule U
(Change Control Procedure).

 

10.7                        Subcontracting.

 

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

 

(i)                                     Except
as set forth below, Vendor may not delegate or subcontract any of its
responsibilities under this Agreement (including to Affiliates) without prior
written approval of ACI, which ACI may withhold in its sole discretion.  Prior to entering into a subcontract with a
third party, Vendor shall give ACI not less than ten (10) Business Days’
prior written notice specifying the components of the Services affected, the
scope of the proposed subcontract, and the identity and qualifications of the
proposed subcontractor.  Notwithstanding
the foregoing or any other provision in this Agreement to the contrary, Vendor
may, in the ordinary course of business and without notice to ACI, subcontract
for any third-party service and/or product that (1) is not material to any
function constituting a 

 

29

 

part of the Services, and (2) does not result in a material change
in the way Vendor conducts its business, provided such subcontract does not
adversely affect ACI, whether in performance of or Charges for the Services or
otherwise.  Without limitation of the
provisions set forth in Section 5.3, if ACI expresses concerns to Vendor
about a subcontract covered by this Section 10.7(a)(i), Vendor shall
discuss such concerns with ACI and work in good faith to resolve ACI’s concerns
on a mutually acceptable basis.

 

(ii)                                  ACI
may request that Vendor use a particular subcontractor in certain limited
circumstances in which case Vendor will attempt to use such proposed
subcontractor unless Vendor persuades ACI that the use of such subcontractor
would impair Vendor’s ability to satisfy the Service Levels or such use would
cause a Vendor to breach an agreement. 
For purposes of clarity, Vendor Charges shall be equitably adjusted
should the use of such ACI requested subcontractor cause Vendors costs to
increase.

 

(iii)                               ACI shall have the right
to revoke its prior approval of a subcontractor and direct Vendor to replace
such subcontractor if the subcontractor’s performance is materially deficient,
or there have been material misrepresentations by or concerning the
subcontractor, or a subcontractor which at the time approved is a majority
owned Affiliate of Vendor ceases to be such an Affiliate.

 

(b)                                 Vendor
shall remain responsible for obligations, services and functions performed by
subcontractors to the same extent as if such obligations, services and
functions were performed by Vendor employees (including requiring
subcontractors to adhere to the standards applicable to Vendor and the policies
and procedures then in effect, whether promulgated by ACI or Vendor) and for
purposes of this Agreement such work shall be deemed Services performed by Vendor.  Vendor shall be ACI’s sole point of contact
regarding the Services performed by Vendor’s subcontractors, including with
respect to payment.  It is understood and
agreed that, as between the Parties, Vendor shall be solely liable for all
costs and payment obligations owed by Vendor to its subcontractors and third
parties in connection with the Services.

 

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

 

(d)                                 To
the extent subcontractors, agents, representatives or other entities perform
the Services, Vendor shall cause such entities to comply with the obligations
and restrictions associated with the services, functions and responsibilities
performed by such subcontractors, agents, representatives and other entities
that are applicable to Vendor under this Agreement  In addition, Vendor shall include in its
subcontracts, as “flow-down” provisions, provisions substantially similar to
the provisions of this Agreement relating to compliance with Applicable Laws;
audit; confidentiality, security and Intellectual Property Rights of ACI; and
each other provision which is necessary to assure that Vendor will fulfill its
obligations under this Agreement.  In
addition, all documents (e.g., contracts) between Vendor and its subcontractors
or other third parties relating to creative services shall contain a provision
whereby the subcontractor transfers intellectual property rights to
customer-developed materials to Vendor or Vendor’s customers.

 

(e)                                  Vendor
will, at ACI’s request, enforce the subcontracts as necessary to cause the
subcontracted obligations to be fulfilled on Vendor’s behalf in accordance with
this Agreement.

 

(f)                                    Vendor
shall exercise prudence and good business judgment in the selection and
monitoring of performance of subcontractors. 
In the event of loss resulting from such failure of 

 

30

 

performance by any subcontractor, the burden shall be on Vendor to show
that it complied with the aforesaid standard of selection and monitoring of the
subcontractor.

 

(g)                                 ACI
may request at any time, and Vendor shall provide within thirty (30) calendar
days of such request, a listing of all Vendor employees, agents and subcontractors
who are then performing Services under this Agreement, such listing to include
basic information about each person including name, job title and basic job
function with respect to the Services.

 

(h)                                 Subcontractors
as to which ACI has, as of the Effective Date, given the approvals required by
this Section 10.7 are identified in Schedule N (Approved
Subcontractors).

 

10.8                        Technology
Planning and Budgeting.

 

(a)                                  Technology
Plan.  The Parties shall annually
jointly prepare a technology plan in accordance with the provisions of this Section 10.8
(“Technology Plan”).  The
Technology Plan shall address the IT requirements of ACI’s activities and
future opportunities to enhance delivery of Services and to reduce the costs of
the Services through introduction of tools, procedures and other improvements
into ACI’s IT environment (“Enhancement Activities”).  Each Technology Plan after the first shall
review and assess the immediately preceding Technology Plan.  The Technology Plan shall consist of a three-year
plan and an annual implementation plan as described below.

 

(b)                                 Targeted
Cost Savings.  In addition to cost
savings opportunities that apply generally to the Services to be discussed as a
part of annual knowledge sharing and technology planning processes, the Parties
intend to more closely examine on an annual basis specific aspects of the
Services for cost savings opportunities. 
The Parties will identify cost saving opportunities for a selected
Service Tower each year of the Term.  The
resulting plan shall outline the activities to undertake in order for ACI to
realize the anticipated cost savings if ACI chooses to pursue such opportunity
and any gainsharing by the Parties related to such anticipated cost
savings.  In each subsequent Contract
Year, the Parties will undertake a similar process for another Service Tower
(one Service Tower per Contract Year).

 

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

 

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

 

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

 

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

 

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

 

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

 

31

 

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

 

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

 

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

 

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

 

(e)                                  Drafting
Responsibility.  Vendor shall submit
to ACI a draft of the Technology Plan for ACI’s review and comment, which draft
shall have been developed with input from key business users of ACI.  Vendor shall submit the final Technology Plan
to ACI for its approval within thirty (30) days of receiving ACI’s comments.  The draft of the first Technology Plan shall
be provided within six (6) months of the completion of Transition.

 

(f)                                    Technology
Plan Timing and Update.  The schedule
for developing and delivering each Technology Plan shall be coordinated to
support ACI’s annual business planning cycle and the semi-annual senior
management meeting described in Section 10.4(a)(iv).  Vendor shall recommend modifications to the
Technology Plan as it deems appropriate, and shall revise the Technology Plan
as requested or approved by ACI. During Transition, an outline and the contents
of the Technology Plan will be jointly developed by the Parties.

 

10.9                        Quality
Assurance and Improvement Programs.

 

As
part of its total quality management process, Vendor shall provide continuous
quality assurance and quality improvement through: (a) the identification
and application of proven techniques and tools from other installations within
its operations (i.e., “best practices”) that would benefit ACI either
operationally or financially or ensure continued compliance with Applicable
Vendor Laws; and (b) the implementation of concrete programs, practices
and measures designed to improve Service Levels.  Such procedures shall include checkpoint
reviews, testing, acceptance and other procedures for ACI to confirm the
quality of Vendor’s performance, and shall be included in the Procedures
Manuals.  Vendor shall utilize project
management tools, including productivity aids and project management systems,
as appropriate in performing the Services.

 

32

 

10.10                 Management of
Issues.

 

(a)                                  Notwithstanding
anything to the contrary contained in this Section 10.10, Vendor will
proactively manage issues in a manner such that tasks required to be performed
under this Agreement are performed in a timely manner.  Each member of the Vendor Personnel is
expected to promptly escalate an issue if the performance of any such Vendor
Personnel member’s obligation is directly impacted by the failure of ACI or an ACI
agent to perform a prerequisite task. 
Vendor will not have met its obligation with respect to the hindered
task unless and until the ACI Contract Executive has been notified of such
failure to perform, but only to the extent ACI’s ability to cure its failure is
prejudiced by Vendor’s delay or failure in escalating the applicable issue.

 

(b)                                 If
ACI, a ACI Affiliate or a ACI agent fails to perform any of its
responsibilities set forth in Schedule L (Transition and
Transformation), Schedule A (Statement of Work) or operational
responsibility set forth in connection with a Project, Vendor will be excused
from the performance of Vendor’s obligation that is adversely affected by such
failure to the extent and only for so long as ACI’s failure is the direct cause
of Vendor’s non-performance, but only (i) if Vendor promptly notifies the
ACI Contract Executive of such failure, (ii) if, after notifying the ACI
Contract Executive, ACI fails to promptly rectify such failure; and (iii) with
respect to such specific obligations for which no reasonable workaround exists.

 

11.                               AUDITS, RECORD RETENTION

 

11.1                        Intentionally
left blank.

 

11.2                        Audit
Rights.

 

(a)                                  Vendor
shall maintain a complete record of all financial transactions and customary
records of non-financial transactions resulting from this Agreement.  Vendor shall provide to ACI and ACI’s
Affiliates and its and their auditors (including the internal audit staff of
ACI and ACI’s external auditors), inspectors, regulators and other
representatives who are not Vendor Competitors as ACI may from time to time
designate in writing and who agree in writing to substantially the terms and
conditions set forth in Schedule M (Vendor Confidentiality
Agreement), access at all reasonable times (and in the case of regulators at any
time required by such regulators), and upon at least five (5) Business
Days notice (or a shorter period of time as may be required by Applicable Law
or entities that regulate ACI), to any facility or part of a facility at which
either Vendor or any of its subcontractors is providing any portion of the
Services (subject to Vendor’s and its subcontractors standard security rules for
such facility), to Vendor Personnel, and to data and records relating to the
Services excluding: (x) attorney-client privileged information; (y) Vendor
internal audit reports of Vendor’s activities (provided that Vendor shall
provide summaries of such audits that are prepared by the person that produced
the original audit report); and (z) cost data (other than where  the Agreements specifies that cost or cost
plus is the basis for determining the Charges), for the purpose of performing
audits and inspections of either Vendor or any of its subcontractors during the
Term and for the period Vendor is required to maintain records hereunder.  The purpose of such audits will be to:

 

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

 

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

 

(iii)                               verify that Vendor and
ACI are in compliance with their respective obligations under Article 22;
and

 

33

 

(iv)                              examine
Vendor’s performance of the Services and conformance to the terms of this
Agreement including, to the extent applicable to the Services and to the
Charges therefore, performing audits:

 

(A)                              of
practices and procedures;

 

(B)                                of
systems, Equipment and Software;

 

(C)                                of
supporting information and calculations regarding compliance with Service
Levels;

 

(D)                               of
general controls and security practices and procedures;

 

(E)                                 of
disaster recovery and back-up procedures;

 

(F)                                 of
the efficiency of Vendor in performing the Services; and

 

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

 

ACI
shall not use auditors engaged on a contingency fee basis to perform audits
under this Section 11.2.  If an audit by or on behalf of ACI hereunder
shows any matter that may adversely affect ACI, ACI shall notify Vendor of such
matter and Vendor shall provide ACI with a detailed plan to remedy such matter
within ten (10) Business Days after Vendor’s receipt from ACI of the final
audit report.  Vendor will then
immediately proceed to implement the remediation plan and correct such matters.

 

(b)                                 If,
as required by Section 10.7(d), Vendor is unable to include substantially
similar audit-related provisions in a subcontract, or audit provisions that are
at least as protective of ACI, Vendor shall disclose such inability in
connection with requesting ACI’s consent to use such subcontractor.  Without limiting the generality of the
foregoing, the audit rights with respect to contracts assigned by ACI to Vendor
shall be as set forth in such contracts.

 

(c)                                  In
addition but subject to the procedures described in (a) above, Vendor
shall provide information sufficient to allow ACI or a designated third party
who is not a Vendor Competitor to ensure that current server packs, patches and
firmware are in place for Equipment Vendor has refresh responsibility.  Vendor will also permit ACI or its Affiliates
(or its and their auditors who are not Vendor Competitors) to audit compliance
with laws and regulations and any IT general controls, including the Change
Control Procedure, Network security, logical security, computer operations,
backup and recovery and disaster recovery.

 

(d)                                 Vendor
and ACI shall meet and review each audit report promptly after its issuance,
and, as part of such meeting, Vendor shall provide responses to ACI on the
issues in such audit report.  Vendor
shall provide to ACI’s auditors, inspectors, regulators and representatives the
reasonable assistance they require, including installing and operating audit
software to the extent such assistance is during Business Hours and does not
materially interfere with Vendors ability to perform its obligations under the
Agreement.  Vendor shall notify ACI if the
assistance required, including installation of any audit software would
materially and adversely affect Vendor’s ability to meet the Service
Levels.  After receiving such notice, ACI
shall either alter its request or temporarily waive the Service Levels that
would be adversely affected.  Vendor
shall cooperate fully with ACI and its designees in connection with audit
functions and with regard to examinations by regulatory authorities.

 

34

 

(e)                                  Vendor
agrees to promptly provide ACI and its auditors with all reasonable cooperation
and information that may be required in connection with any audits conducted by
ACI’s or its Affiliates’ customers that pertain to the Services.

 

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

 

11.3                        Vendor
Internal Controls.

 

(a)                                  Vendor
agrees that, beginning no sooner than eight (8) months following
completion of Transition, each calendar year during the Term, it will have one
of the “big four” accounting firms (“Auditors”) conduct, at Vendor’s
expense, at least one SAS 70 Type II Audit in Vendor’s shared delivery center
in North America at or from which the Services are provided.  Vendor shall provide ACI with one copy of
each applicable audit report resulting from such SAS 70 Type II Audit (“SAS
70 Type II Report”) at no charge.  To
the extent ACI provides reasonable notice and requests that, in addition to the
SAS 70 Type II Audit described in the preceding sentence, Vendor conducts a
ACI-specific SAS 70 Type II Audit, Vendor shall do so at ACI’s expense
(provided, Vendor notifies ACI of such expense, obtains ACI’s approval and uses
Commercially Reasonable Efforts to minimize such expense).

 

(b)                                 Vendor
or an independent third party shall perform a security and controls audit at
least annually.  This audit shall test
the compliance to the agreed-upon security standards, procedures as reflected
in Schedule A (Statement of Work) and the other requirements in
this Agreement.  If the audit shows any material
matter that may adversely affect ACI, Vendor shall disclose such matter to ACI
and prepare a detailed plan to remedy such matter within thirty (30) Business
Days of completion of the audit.  If the
audit does not show any matter that may adversely affect ACI, Vendor shall
provide the audit or a reasonable summary thereof within ten (10) Business
Days of audit completion to ACI.  Any
such summary may be limited to the extent necessary to avoid a breach of Vendor’s
security by virtue of providing such summary. 
ACI may use a third party or its internal staff for an independent
audit.  If ACI chooses to conduct its own
security audit, such audit shall be at ACI’s expense.

 

11.4                        Audit
Follow-up.

 

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

 

35

 

(b)                                 Vendor
shall promptly make available to ACI SAS 70 Type II Reports to the extent such
reports are performed or available as reflected in Section 11.3(a).

 

(c)                                  Vendor
will promptly remediate any audit issues arising in SAS 70 Type II Reports that
impact or are reasonably likely to impact ACI or the Services in accordance
with the remediation process described in Section 11.2(a).

 

11.5                        Records
Retention.

 

Until the latest of (a) seven (7) years
after expiration or termination of this Agreement; (b) all pending matters
relating to this Agreement (e.g., disputes) are closed; or (c) the
information is no longer required to meet ACI’s records retention policy as
such policy may be adjusted from time to time and communicated in writing to
Vendor, Vendor shall maintain and provide access upon reasonable request to the
records, documents, and other information required to meet ACI’s audit rights
under this Agreement.  Before destroying
or otherwise disposing of such information, Vendor shall provide ACI with not
less than sixty (60) days prior written notice and offer ACI the opportunity to
recover such information or to request Vendor to deliver such information to
ACI.

 

11.6                        Discovery
of Overcharge of ACI.

 

If an audit shows that Vendor has overcharged ACI
in the current contract year and/or previous calendar year, at ACI’s option,
Vendor shall either credit to ACI’s account or pay to ACI directly an amount
equal to the amount of the overcharge plus interest at the prime rate
calculated from the date the overcharge was paid by ACI to Vendor.  For the purposes of this Section 11.6,
the prime rate shall be the rate set forth in the Wall Street Journal, New York
edition, “Money Rates” section (or any successor thereto) at the time of such
audit.  If an audit shows that Vendor overcharged
ACI by more than five (5) percent of the Charges, net of any undercharges
identified in the audit, then Vendor shall also pay ACI an amount equal to the
cost of the portion of the audit related to such overcharges discovery.  If any such audit reveals an undercharge by
Vendor in the Charges for a particular Charges category, ACI shall promptly pay
to Vendor the amount of such undercharge plus interest at the prime rate
calculated from the date the undercharge should have been paid to Vendor.

 

12.                               ACI RESPONSIBILITIES

 

ACI
shall have no other responsibilities than those expressly set forth in this
Agreement (including any reflected in any Schedules, Exhibits or Attachments to
this Agreement).  Those responsibilities
include the following:

 

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

 

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

 

36

 

13.                               CHARGES

 

13.1                        General.

 

The
charges for the Services (“Charges”) are set forth in this
Agreement.  ACI shall not be required to
pay Vendor any amounts for the Services in addition to those set forth in this
Agreement.

 

13.2                        Pass-Through
Expenses.

 

(a)                                  “Pass-Through
Expenses” shall mean third-party charges paid by Vendor and reimbursed
(without markup or administrative charge of any kind) by ACI.  Pass-Through Expenses agreed by the Parties
as of the Effective Date are set forth in Schedule C
(Charges).  Additional Pass-Through
Expenses may be agreed by the Parties through the Change Control Procedure.

 

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

 

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

 

(ii)           subject to
Section 10.6, designate the third-party source for such services or
materials;

 

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

 

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

 

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

 

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

 

13.3        Incidental
Expenses.

 

Except
as may be otherwise provided in this Agreement, expenses that Vendor expects to
incur in performing the Services (including travel and lodging, document
reproduction and shipping, and long-distance telephone) are included in Vendor’s
Charges and rates set forth in this Agreement. 
Accordingly, such Vendor expenses are not separately reimbursable by ACI
unless, on a case-by-case basis for unusual expenses, ACI has agreed in advance
and in writing to reimburse Vendor for the expense.  Notwithstanding the above or any other
provision in this Agreement to the contrary, Vendor shall use Commercially
Reasonable Efforts to minimize any expenses that ACI is required or elects to
pay under this Agreement.  Vendor agrees
that any such expenses will be invoiced to ACI without markup.

 

37

 

13.4                        Taxes.

 

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

 

(b)                                 Vendor
shall be responsible for any sales, use, excise, value-added, services,
consumption or other taxes and duties payable by Vendor on the goods or
services used or consumed by Vendor in providing the Services where the tax is
imposed on Vendor’s acquisition or use of such goods or services and the amount
of tax is measured by Vendor’s costs in acquiring such goods or services.  ACI shall be responsible to pay to Vendor, or
reimburse Vendor for the payment of, and Vendor shall be responsible for the
collection and remittance of, any and all sales, use, excise, value-added,
services, consumption and other taxes imposed or assessed on the Charges or the
provision of the Services provided by the Vendor after the Effective Date.  Vendor and ACI shall agree on the appropriate
method for invoicing the Services to be certain to capture only those Services
subject to tax and the appropriate tax rate. 
If and to the extent any such tax is increased, reduced or eliminated
during the Term, Vendor shall adjust the amounts invoiced to ACI to fully
reflect the increase, reduction or elimination of such tax.  If new or higher taxes thereafter become
applicable to the Services as a result of Vendor moving all or part of its
operations to a different Service Location (for example, Vendor relocating
performance of Services to a shared service center or subcontracting any
portion of the Services), Vendor shall (i) specify the tax rate that
applies to the new Service Location on all subsequent invoices, and (ii) reimburse
ACI for any incremental taxes that arise from the move to the new Service
Location.

 

(c)                                  If
any sales, use, excise, value added, services, consumption or other tax is
assessed on the provision of any of the Services, the Parties shall work together
to segregate the payments of such taxes under this Agreement into three (3) payment
streams:

 

(i)                                     those
for taxable Services;

 

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

 

(iii)                               those for other
nontaxable Services, including those Services and related Equipment sales that
qualify under the exemption of outsourcing.

 

(d)                                 Each
Party shall provide and make available to the other any direct pay or resale
certificates, information regarding out-of-state or out-of-country sales or use
of Equipment, materials or services, and other exemption certificates or
information reasonably requested by the other Party.

 

(e)                                  The
Parties agree to cooperate with each other to enable each to more accurately
determine its own tax liability and to minimize such liability to the maximum
extent legally permissible.  Unless ACI
has provided Vendor with tax-exemption, direct pay or resale certificates,
Vendor’s invoices shall separately state the amounts of any taxes Vendor is
collecting from ACI, and Vendor shall remit such taxes to the appropriate
authorities.

 

(f)                                    Each
Party shall promptly notify the other Party of, and cooperate with,  such other Party regarding the response to
and settlement of, any claim for taxes asserted by applicable taxing
authorities for which it is responsible hereunder.

 

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

 

38

 

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

 

13.5                        Extraordinary
Events.

 

(a)                                  An
“Extraordinary Event” means a circumstance in which ACI experiences a
significant change in the scope or nature of its business (e.g. changes to the
locations where the ACI operates, changes in the ACI’s products or markets,
mergers, acquisitions or divestitures involving ACI, changes in the ACI’s
method of service delivery, changes in the ACI’s market priorities) that is
expected by ACI to vary from the applicable Charges at applicable Resource
Volumes Baselines for at least three (3) consecutive months by more than
plus or minus thirty-five percent (+/-35%) provided that any such decrease is
not due to ACI resuming provision of the Services itself or transferring
provision of the Services to another service provider.

 

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

 

(c)                                  If
within thirty (30) days following a Party’s notice of the occurrence of an
Extraordinary Event, the Parties have not agreed upon the foregoing, then
either Party may submit the issue to dispute resolution under Article 20.  Unless and until the Parties have agreed on
the adjustment contemplated in paragraph (b) above, Vendor will continue
to perform, and ACI will continue to pay, in accordance with the terms and
conditions of this Agreement as applicable before the Extraordinary Event.

 

13.6                        New
Services.

 

Services
that are materially different from, or in addition to, the Services, but for
which there is no charging methodology, or which the existing charging
methodology was not intended to cover (e.g., start-up expenses) shall be
considered “New Services.” The Parties’ obligations with respect to New
Services shall be as follows:

 

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

 

(b)                                 If
the performance of the New Services cannot be reflected in a change in the
volume of chargeable resource usage, or if the net change in the resources and
expenses required to perform the New 

 

39

 

Services would be disproportionately different from the corresponding
change in the volume or composition of chargeable resource usage from
performing such New Services, then:

 

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

 

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

 

(c)                                  If
the Parties cannot agree upon the pricing applicable to a New Service that,
although materially different from the Services, is still closely related to
the Services then being provided by Vendor, ACI nonetheless desires Vendor to
perform such New Service, then upon ACI’s written instruction to proceed,
Vendor shall begin performance of such New Service and, until that time when
ACI and Vendor can agree on the applicable charge for the New Service, Vendor
will provide such New Service at the applicable time and materials rates
reflected in Exhibit C-1 (Base Charges, Baselines, ARC/RRC Rates
and Termination Charges).  If within
sixty (60) days following ACI’s written instruction to proceed, the Parties
have not agreed on the applicable charges for the New Service, then the Charges
will be determined as provided under Section 20.1(a).

 

(d)                                 ACI
may in its discretion elect to solicit and receive bids from, or otherwise
enter into agreements with, third parties to perform or to perform itself any
New Services.  If ACI so elects, Vendor
shall cooperate at no charge with ACI and the third parties with respect to the
provision of such New Services.

 

(e)                                  Evolution,
supplements, modifications, enhancements and replacements of the Services
required by Section 3.3 above shall not be deemed to be New Services.

 

(f)                                    With
regard to Production Mainframe and Hosting Services which may be required by
ACI in the future to provide market competitive service offerings to their
external clients, the Parties agree that Vendor will provide market competitive
pricing.

 

13.7                        Benchmarks
for Cost of Services.

 

(a)                                  Beginning
in the second Contract Year and up to once in each Contract Year thereafter,
ACI may benchmark the Services within a Services Tower.  If ACI notifies Vendor in writing that it
elects not to exercise its right to perform a benchmarking within the twelve
(12) month period following such notice, ACI will receive a credit of $200,000.00 on the next invoice
following the notice.  Once such a credit
has been paid, a benchmark may not be initiated during the applicable twelve
(12) month period.

 

(b)                                 A
benchmarking under this Section 13.7 shall be conducted by an independent
industry-recognized benchmarking service provider designated by ACI from the
list of approved benchmarkers attached hereto as Schedule O
(Approved Benchmarkers) (the “Benchmarker”), which list the Parties will
update under the Contract Change Control Procedure from time to time as
necessary to reflect changes in the industry. 
The Parties shall be jointly responsible for the fees of the
Benchmarker.  The Benchmarker shall
execute a confidentiality agreement in substantially the form set forth in Schedule M
(Vendor Confidentiality Agreement).  The
Benchmarker’s compensation shall not be contingency fee based.  The Parties shall cooperate with the
Benchmarker, including, as appropriate, making available knowledgeable 

 

40

 

personnel and pertinent documents and records.  Notwithstanding the preceding sentence, the
Benchmarker shall not have access to any proprietary data other than pricing
information, or data related to another Vendor customer.  The Benchmarker may not use any information
provided by either Vendor or ACI for any purpose other than conducting the
benchmark study hereunder, unless such use is expressly agreed to in writing by
Vendor and ACI.

 

(c)                                  The
Benchmarker shall perform the benchmarking in accordance with Benchmarker’s
documented procedures, which shall be provided to the Parties prior to the
start of the benchmarking process.  The
Benchmarker shall, separately as to each Service Tower benchmarked, compare the
aggregate Charges under this Agreement for the Services being benchmarked to
the aggregate charges (for services similar to those in that Service Tower)
being incurred in a representative sample of outsourced IT operations by or for
other entities.  The Benchmarker shall
select the representative sample from entities (i) identified by the
Benchmarker and approved by the Parties, or (ii) identified by a Party and
approved by the Benchmarker.  The
following conditions apply to the representative sample: (A) it shall
include no more than eight (8) entities and no less than four (4) entities
and (B) it may include entities that are outsourcing customers of Vendor.

 

(d)                                 The
Benchmarker is to conduct a benchmarking as promptly as is prudent in the
circumstances.  In conducting the
benchmarking, the Benchmarker shall normalize the data used to perform the
benchmarking to accommodate, as appropriate, differences in volume of services,
scope of services, service levels, financing or payment streams, service window
coverage, geographic scope, Vendor’s upfront costs, the overall financial
structure of the agreement, sophistication of the underlying technology,
contract terms and conditions (to the extent available), other factors unique
to ACI’s and the comparison contract’s requirements, and other factors the
Benchmarker views to be pertinent.  Each
Party shall be provided a reasonable opportunity to review, comment on and
request changes in the Benchmarker’s preliminary findings.  Following such review and comment, the
Benchmarker shall issue a final report of its findings and conclusions.

 

(e)                                  If
in the final report of the Benchmarker, the Charges to ACI under this Agreement
for the benchmarked Services are in the aggregate  within five (5) percent of the average of the
representative sample then no adjustment shall be made to Vendor’s
Charges.  If in the final report of the
Benchmarker, the Charges to ACI under this Agreement for the benchmarked
Services are in the aggregate between five (5) percent and (10) percent
higher than the average of the representative sample, then the relevant Charges
for the Services shall be reduced to the average of the representative sample
for each percent above five (5) percent, effective thirty (30) days after
the initial date of delivery of the benchmark results provided however, the
Vendor’s Charges shall not be reduced by more than five (5) percent of the
Charges payable for the particular Service Tower benchmarked.  For example, if in the final report of the
Benchmarker, the Charges to ACI under this Agreement for the benchmarked
Services are in the aggregate seven (7) percent higher than the average of
the representative sample, then the Vendor Charges payable for the particular
Service Tower would be reduced by two (2) percent.  If in the final report of the Benchmarker,
the Charges to ACI under this Agreement for the benchmarked Services are in the
aggregate more than ten percent (10%) greater than the average of the
representative sample then (A) the relevant Vendor Charges payable for the
particular Service Tower would be reduced by five (5) percent effective
thirty (30) days after the initial date of delivery of the benchmark results
and (B) the Vendor shall promptly offer an alternative proposal for the
ACI’s consideration for further adjustments to either the scope of the
Services, Service Levels or Charges.

 

(f)                                    Without
limiting the generality of the foregoing, the foregoing proposal may include
Changes to the method, manner or quality of the Services to the extent Vendor
can demonstrate the Changes were not already reflected in the benchmark.  Vendor then shall implement the agreed plan
for the benchmarked Services in the designated period of time.

 

41

 

(g)                                 If
Vendor (A) fails to develop promptly and implement a plan to adjust its
Charges in accordance with paragraph (i) above, or (B) fails to adjust its
Charges in accordance with the plan in the required time period, then ACI may
terminate the benchmarked Services or any portion thereof without the payment
of any Termination Charges, other than payment of the Wind Down Expenses for
the affected Services, by giving Vendor at least sixty (60) days’ prior
notice.  In the case of termination by
ACI of Services in accordance with this Section 13.7, the Charges payable
under this Agreement for continuing Services shall be equitably adjusted to
reflect the removal of the Services that are terminated.

 

(h)                                 In
no event shall Charges be increased based on the results of a benchmarking
process.

 

14.                               INVOICING AND PAYMENT

 

14.1                        Invoicing.

 

(a)                                  Vendor
shall invoice ACI for all Charges due under this Agreement in the manner reflected
in this Section 14.1.  Monthly Base
Charges, as defined in Schedule C (Charges), shall be invoiced on
or before the tenth (10th) day of each month in which the Services
which are the subject of the Monthly Base Charges are performed with payment
due to Vendor on or before the last day of the month; provided however, if such
invoice is received after the tenth (10th) day of the month, payment
for such invoice shall be due to Vendor within thirty (30) days of the invoice
receipt date.  ARCs, RRCs and any other
variable Charges that are in addition to the Monthly Base Charges for a month
will be invoiced on a monthly basis but will be invoiced on the following month’s
invoice.

 

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

 

(c)                                  Vendor
shall render a single, consolidated, monthly invoice for each month’s Charges,
showing the details specified in Exhibit C-3 (Form of Invoice)
including details necessary to satisfy ACI’s accounting and chargeback
requirements in accordance with Section 3.2(b).  Such invoice shall separately identify
Pass-Through Expenses for the month (if any), Charges prepaid by ACI, the
number of hours allocated to Projects, broken out by Project and indicating, as
applicable, (i) where Project pool resources are drawn down (as described
in Schedule C (Charges)) and (ii) where additional Charges
(other than the Monthly Base Charges) have been incurred, and the amounts of
any taxes Vendor is collecting from ACI. 
Vendor shall include with the invoice the calculations utilized to establish
the charges in sufficient detail to enable ACI to confirm the accuracy of the
Charges included in the invoice.  The
form of invoice is included as Exhibit C-3 (Form of
Invoice).  If Vendor fails to provide an
invoice to ACI for any amount within one calendar year after the date on which
the Services in question are rendered or the expense incurred, Vendor shall
waive any right it may otherwise have to invoice for and collect such amount.

 

14.2                        Payment
Due.

 

Subject
to the other Sections of this Agreement, undisputed Charges on invoices
submitted to ACI shall be due and payable by ACI as specified in 14.1(a).  Such payments will be made by ACI by
electronic funds transfer.  If a due date
does not fall on a Business Day, payments must be received by Vendor on or
before one (1) Business Day after such date.  Subject to Section 14.8, any undisputed
Charges not paid within five (5) days of when they are due will bear
interest until paid at a rate of interest equal to the lesser of: (i) one
percent per month of such outstanding amount per every thirty days or portion
thereof or; (2) the maximum rate of interest allowed by Applicable Law
calculated from the date payment was due.

 

42

 

14.3                        Accountability.

 

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

 

14.4                        Pro-ration.

 

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

 

14.5                        Prepaid
Amounts.

 

Where
ACI has prepaid for a service or function for which Vendor is assuming
financial responsibility under this Agreement, upon either Party identifying
the prepayment, Vendor shall refund to ACI that portion of such prepaid expense
that is attributable to periods on and after the applicable Service Tower
Commencement Date on the next monthly invoice. 
Upon Vendor’s request and as a condition to Vendor’s obligation, ACI
shall provide substantiation and documentation of any prepaid expense for which
it believes it is entitled to credit hereunder.

 

14.6                        Refunds
and Credits.

 

If
Vendor receives a refund, credit or other rebate for goods or services
previously paid for by ACI, Vendor shall promptly notify ACI of such refund,
credit or rebate and shall promptly credit the full amount of such refund,
credit or rebate, as the case may be, to ACI on the next monthly invoice;
provided that Vendor will make payment in lieu of such a credit if requested by
ACI.

 

14.7                        Deduction.

 

ACI
shall have the right to deduct from Charges owed by ACI to Vendor under this
Agreement any amount (i) not in dispute between the Parties, (ii) that
ACI has notified Vendor in writing of, on or before the payment due date, and (iii) that
Vendor is obligated to pay to or credit to ACI.

 

14.8                        Disputed
Charges.

 

Subject
to ACI’s right of deduction under Section 14.7, ACI shall pay undisputed
Charges when those payments are due.  ACI
may withhold invoiced amounts that ACI disputes in good faith subject to the
limits specified herein and pursuant to the following procedures:

 

(i) 
After receipt of an invoice from Vendor, but prior to the date on which payment
for such invoice is due, ACI shall give written notice to Vendor of its intent
to dispute and reasons for disputing such invoice.

 

(ii) Unless
Vendor gives ACI written notice of Vendor’s agreement as to ACI’s position by
the payment date for such invoice, ACI shall pay the disputed invoice upon the
due date.

 

(iii) Vendor
shall have thirty (30) days from the date of ACI’s notice to cure any breach or
otherwise resolve the issue related to the dispute.  If Vendor is unable to cure the breach or
otherwise 

 

43

 

resolve the issue within thirty days, ACI  may withhold the disputed amount from the
next month’s payment

 

If any
portion of an invoice is subject to a bona fide dispute between the Parties,
ACI may withhold the amount ACI disputes in good faith, directly attributable
to such dispute, up to twenty (20) percent of the Monthly Base Charge each
month, not to exceed, in the aggregate, the Monthly Base Charge for one months.  ACI’s payment of invoiced amounts shall not
constitute a waiver by ACI of any right or remedy available to it at law or
equity or this Agreement, including any right ACI may have to dispute (or
recover) such amounts.  Any dispute regarding
payment shall be resolved in accordance with the Dispute Resolution Process in Section 20
below.  In the event the dispute is
resolved in Vendor’s favor, interest (at the rate reflected in Section 14.2)
will be due and owing accruing back to the date that is five (5) days
after the date such amount would have been due as an undisputed amount.

 

15.                               SAFEGUARDING OF DATA; CONFIDENTIALITY

 

15.1                        General.

 

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

 

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

 

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

 

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

 

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

 

15.2                        Safeguarding
ACI Data.

 

Vendor
shall establish and maintain safeguards against the destruction, loss or
alteration of ACI Data in the possession of Vendor which are no less rigorous
than those implemented and in use by ACI as of the Effective Date, to the
extent such safeguards are made known to Vendor, either through documented
security policies provided by ACI (“ACI Information Security Requirements”)
and in no event less rigorous than the safeguards employed by Vendor to protect
its own confidential information.  Vendor
will comply with Changes in the ACI Information Security Requirements as soon
as reasonably practicable after such Changes have been provided to Vendor,
subject to ACI’s payment of additional Charges, if any, determined to be
payable with respect to such Change under the Change Control Procedure.  Vendor shall make no Changes to ACI’s
safeguards unless agreed by ACI.  Vendor
shall maintain such safeguards until the Security Plan (as defined below)
becomes effective.

 

(a)                                  Within
three (3) months of the completion of Transition, and annually thereafter
as part of the technology planning process described in Section 10.8,
Vendor shall provide ACI with a security plan (the “Security Plan”)
describing upgrades to ACI’s data security procedures and the related
infrastructure for ACI Data in the possession of Vendor necessary to bring such
procedures and infrastructure into compliance with the standards the Parties
agree are appropriate for ACI, which at a minimum will include any then-current
ACI Information Security Requirements. 
Vendor shall implement the initial Security Plan and each annual plan
thereafter.  Any Changes to the Services
as a result of 

 

44

 

upgrades to the Security Plan shall be implemented by Vendor, subject
to ACI’s payment of any Charges therefore agreed by the Parties in accordance
with the Change Control Procedure.

 

(b)                                 If
ACI requests enhancements that are not necessary to satisfy either the
safeguards maintained by ACI as of the Effective Date, or the requirements of
any Security Plan agreed upon by the Parties, Vendor shall implement such
improvements as a New Service, except that any additional disaster recovery
measures or safeguards reasonably deemed by ACI to be necessary to protect any
Personally Identifiable Information shall be subject to the Change Control
Procedure.  ACI shall have the right to
establish backup security for data and to keep backup data and data files in
its possession if it chooses.

 

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

 

(d)                                 The
systems security measures required under Sections 15.2(a) and 15.2(b) shall
include, any System Software which:

 

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

 

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

 

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

 

(e)                                  ACI
Data (i) shall not be used by Vendor other than pursuant to this
Agreement; (ii) shall not be disclosed, sold, assigned, leased or
otherwise provided to third parties by Vendor, except as required by any court
or administrative agency under Applicable Law; (iii) shall not be
commercially exploited by or on behalf of Vendor, its employees or agents; and (iv) shall
not be stored or co-mingled with Vendor’s data or any data from any other
Vendor client except as permitted by ACI’s Risk Control Requirements.

 

15.3                        Confidential
Information.

 

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

 

45

 

regarding Vendor’s, its Affiliates’ or its subcontractors’ business
plans and operations, and software, tools and methodologies owned or used by
Vendor, its Affiliates or its subcontractors, and information that a reasonable
person would deem confidential under the context of disclosure or due to the
nature of the information.

 

(b)                                 Obligations
in Connection with Confidential Information.

 

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

 

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

 

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

 

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

 

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

 

(ii)                                  As
requested by ACI during the Term, or upon expiration or any termination of this
Agreement, or completion of Vendor’s obligations under this Agreement, Vendor
shall return or destroy, as ACI may direct, all material in any medium that
contains, refers to or relates to ACI Confidential Information, in the form
reasonably requested by ACI, and retain no copies.

 

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

 

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

 

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

 

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

 

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

 

46

 

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

 

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

 

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

 

(ii)                                  after
disclosure to it, is published or otherwise becomes part of the public
knowledge through no breach of this Agreement or any other confidentiality
agreement;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(f)                                    Each
Party’s Confidential Information shall remain the property of that Party.  Nothing contained in the Parties’ obligations
with respect to Confidential Information shall be construed as obligating a
Party to disclose its Confidential Information to the other Party, or as
granting to or conferring on a Party, expressly or impliedly, any rights or
license to the Confidential Information of the other Party, and any such obligation
or grant shall only be as provided by other provisions of this Agreement.

 

47

 

15.4                        Corporate
Information Risk Controls.

 

(a)                                  Vendor
shall support and adhere to ACI’s corporate information, rules, policies,
standards, procedures and applicable regulatory requirements as provided to
Vendor in writing by ACI (collectively, “ACI Risk Control Requirements”).  Vendor will comply with any modifications to
the ACI Risk Control Requirements, subject to clause (ii) of this Section 15.4(a).  Vendor shall implement and administer
effective solutions as necessary to implement the ACI Risk Control
Requirements, or as otherwise directed by ACI (subject to clause (ii) of
this Section 15.4(a)), and shall cause the systems used to provide the
Services to comply with such requirements. 
ACI confirms that ACI is solely responsible for interpreting the
applicable regulatory requirements (including the Federal Financial
Institutions Examination Council regulations and the Payment Card Industry Data
Security Standard) and ensuring that the ACI Risk Control Requirements and
other instructions provided to Vendor comply with both the ACI Risk Control
Requirements and ACI Laws.  Immediately
prior to the Effective Date, Vendor received from ACI copies of the FFIEC and
PCI regulations and standards with which Vendor will comply, subject to the
following:

 

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

 

(ii)                                  If
ACI changes any ACI Risk Control Requirements after the first Service Tower
Commencement Date, or requests that Vendor comply with any such requirements
with which ACI was not in compliance as of the first Service Tower Commencement
Date, and such requirements exceed Vendor’s own requirements of a similar
nature, and Vendor is unable to perform the new requirements without adding
substantial additional resources, Vendor will so notify ACI.  ACI may elect to either (A) reprioritize the
Services in a manner which allows Vendor to expend the effort necessary to
bring the in scope infrastructure into compliance with such requirements at no
additional charge; or (B) authorize Vendor to expend the effort necessary
to bring the in scope infrastructure into compliance with such requirements as
a New Service, a Project or otherwise pursuant to the Change Control
Procedure.  If at any time ACI requests
additional security, Vendor may make such security available, but shall first
notify ACI of the incremental charges (if any) for such security and such
Changes shall be subject to the Change Control Procedure.  Each Party shall designate an individual who
shall serve as the primary contact for security-related issues.

 

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

 

(c)                                  Suspected
or actual incidents of non-compliance with ACI rules, policies and procedures
shall be managed to resolution by Vendor’s compliance team, in cooperation and
consultation with ACI, 

 

48

 

and reports shall be provided to ACI on an event-occurrence basis.  If Vendor Personnel are responsible for such
incidents, appropriate disciplinary action shall be taken in accordance with
the appropriate Vendor personnel policies. 
Additionally, ACI shall have the right to direct Vendor to remove any
Vendor Personnel from performing Services pursuant to this Agreement connected
with such incidents.

 

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

 

15.5                        Step-In
Rights.

 

(a)                                  The
Parties acknowledge that, upon the occurrence of any Step-In Event, and at ACI’s
option, ACI will have a reasonable opportunity to identify, and assist Vendor
in remedying, the causes underlying the Step-In Event so that Vendor may
perform its obligations in respect of the affected Services in accordance with
this Agreement.

 

(b)                                 Accordingly,
upon the occurrence of a Step-In Event and upon ACI’s request, Vendor will meet
with ACI as promptly as possible in order to discuss the actions that ACI may
take in order for ACI to have such a reasonable opportunity.  Such actions may include providing a ACI
management team to work closely with Vendor’s management team at the affected
Service Locations or hiring (at ACI’s expense) a third-party expert to do so,
or both.  ACI and Vendor will expedite
such discussions to agree upon such actions as quickly as possible, but in no
event later than ten (10) days after ACI’s request.

 

(c)                                  Vendor
will cooperate with ACI, the ACI management team and any third-party expert as
reasonably necessary for ACI to have such a reasonable opportunity and to take
such agreed actions at the affected locations from which the Services are
provided, including:

 

(i)                                     giving
the ACI management team or such third-party expert, or both, reasonable access
to relevant Vendor management personnel at the affected Service Locations
subject to Vendor’s security policies that otherwise apply pursuant to the
other provisions of this Agreement;

 

(ii)                                  working
with ACI to identify the causes underlying the Step-In Event and to develop a
plan for Vendor to remedy the Step-In Event, which, if appropriate, will
include a root cause analysis.  The plan
will describe the objective criteria upon the satisfaction of which ACI will
consider such Step-In Event remedied; and

 

(iii)                               subject to Section 10.5
(solely for purposes of documenting the plan and specifying the timeframe),
promptly implementing the plan approved by ACI.

 

The Parties agree that the period during which ACI
will have such a reasonable opportunity and take such actions will not exceed
ninety (90) days after the Parties agree upon such actions.  Nothing in this Section 15.5 limits ACI’s
rights with respect to any default or non-performance by Vendor under this
Agreement.

 

49

 

16.                               WARRANTY

 

16.1                        General.

 

Vendor
represents, warrants and covenants that: (a) it has successfully provided
and performed services that are substantially equivalent to the Services for
other major customers of Vendor; (b) it has performed all necessary due
diligence on ACI’s environment (including systems, Software and personnel) to
provide the Services in accordance with this Agreement; and (c) its
financial condition is, and during the Term shall remain, sufficient to enable
Vendor to provide the Services in accordance with this Agreement.

 

16.2                        Work
Standards.

 

Vendor
warrants that the Services shall be rendered with promptness and diligence and
shall be executed in a workmanlike manner, in accordance with Section 9.1.  Vendor warrants that it shall use adequate
numbers of qualified individuals with suitable training, education,
qualifications, rights, resources, experience and skill to perform the
Services.

 

16.3                        Maintenance.

 

Vendor
warrants that it shall maintain the Equipment and Software for which Vendor has
maintenance responsibility as identified in Exhibit C-2 (Financial
Responsibility and Ownership Matrix) so that they operate in accordance with
their specifications, including:

 

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

 

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

 

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

 

(d)                                 using
Software in accordance with any and all applicable licensing agreements and
associated user manuals.

 

16.4                        Efficiency
and Cost Effectiveness.

 

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

 

16.5                        Technology.

 

Vendor
warrants that it shall provide the Services using, consistent with the
Procedures Manual and refresh obligations referenced in this Agreement, proven,
then-current technology that will enable ACI to take advantage of technological
advancements in its industry and support ACI’s efforts to maintain
competitiveness in the markets in which it competes throughout the Term.

 

16.6                        Non-Infringement;
Licenses.

 

(a)                                  Vendor
warrants that (i) Vendor will perform the Services and its other
responsibilities under this Agreement in a manner that does not infringe or
misappropriate any Intellectual Property Rights of any third party; (ii) the
Vendor Provided Technology will not infringe upon or misappropriate the
Intellectual Property Rights of any third party; and (iii) there is no
claim or proceeding pending or, to Vendor’s knowledge, threatened alleging that
the Services or any of the Vendor Provided Technology infringes or
misappropriates the Intellectual Property Rights of any third party.

 

50

 

(b)                                 Vendor
warrants that it has obtained all requisite licenses and permits necessary to
perform the Services and grant the licenses to be granted by Vendor under this
Agreement.

 

(c)                                  To
the extent capable, Vendor will pass through any warranties and indemnities for
any Vendor provided ISV Software, Equipment or other products purchased or
licensed from third parties and provided to ACI or used by Vendor or its
Affiliates in connection with the Services.

 

16.7                        Authorization
and Other Consents.

 

Each
Party represents, warrants and covenants to the other that:

 

(a)                                  It
has the requisite corporate power and authority to enter into this Agreement
and to carry out the transactions contemplated by this Agreement;

 

(b)                                 The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated by this Agreement have been duly authorized by
the requisite corporate action on the part of such Party and shall not
constitute a violation of any judgment, order or decree;

 

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

 

(d)                                 As
to Vendor, Vendor is duly licensed, authorized or qualified to do business and
is in good standing in every jurisdiction in which a license, authorization or
qualification is required for the ownership or leasing of its assets or the
transaction of business of the character transacted by it, except where the
failure to be so licensed, authorized or qualified would not have a material
adverse effect on Vendor’s ability to fulfill its obligations under this
Agreement; and

 

(e)                                  As
to Vendor, there is no outstanding proceeding pending nor, to the knowledge of
Vendor, threatened, to which Vendor is a party that Vendor, without predicting
the outcome of such matter, reasonably expects to have a material adverse
affect on the ability of Vendor to fulfill its obligations under this Agreement
or the transactions contemplated by this Agreement.  As to ACI, there is no outstanding proceeding
pending nor, to the knowledge of ACI, threatened, to which ACI is a party that
ACI, without predicting the outcome of such matter, reasonably expects to have
a material adverse affect on the ability of ACI to fulfill its obligations
under this Agreement or the transactions contemplated by this Agreement.

 

16.8                        Inducements.

 

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

 

16.9                        Viruses.

 

Vendor
shall use Commercially Reasonable Efforts to reduce the likelihood that Viruses
are coded or introduced into the Software, Equipment or any expressly specified
deliverable delivered under 

 

51

 

this Agreement.  If a Virus is
found in the Software, Equipment or deliverable, Vendor shall use Commercially
Reasonable Efforts to assist ACI in reducing the effects of the Virus and, if
the Virus causes a loss of operational efficiency or loss of data, to assist
ACI to the same extent to mitigate and restore such losses; provided that, if
it is ultimately determined such Virus was introduced by ACI, an ACI
subcontractor or vendor or an ACI Affiliate or other third party, such
assistance will be at Charges determined under the Change Control
Procedure.  Vendor shall immediately
notify ACI of any existing or anticipated Virus.

 

16.10                 Disabling Code.

 

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

 

16.11                 Deliverables.

 

Unless
otherwise agreed in writing by the Parties, Vendor warrants that during the
Term each expressly specified deliverable provided to ACI under this Agreement
will conform in all material respects to the stated requirements and
specifications set forth in the relevant documents with respect to such
deliverable.

 

16.12                 Software
Ownership or Use.

 

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

 

16.13                 Other.

 

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

 

(a)                                  Neither
Vendor nor any of its employees, agents or subcontractors (including any
Approved Subcontractors and Vendor Personnel) that will perform Services or
provide other services to the ACI account (i) have ever been convicted of
a felony or, within a seven (7) year period (three (3) years for
Vendor agents and subcontractors) preceding that employee’s, agent’s or
subcontractor’s date of hire or use by Vendor, been convicted of a criminal
offense in connection with obtaining, attempting to obtain or performing a
public (federal, state or local) transaction or contract under a public
transaction, or for violation of federal or state antitrust statutes or
commission of embezzlement, theft, forgery, bribery, falsification or
destruction of records, making false statements or receiving stolen property;
or (ii) are presently indicted for, or other criminally charged by a
governmental entity (U.S. or non-U.S. federal, state or local) with commission
of any of the offenses enumerated in clause (i) of this paragraph. Nothing
in this Agreement shall be interpreted as requiring Vendor to conduct
background checks in jurisdictions where it is legally prohibited from
conducting such checks.

 

52

 

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

 

(c)                                  In
the event that a Vendor contractor is in the United States on work
authorization documents, such contractor has an F-1, TN, or H-1B or an L-1
visa, provided, however, in the case of an H-1B or L-1 visa, contractor has a
presence or office in the United States. 
Vendor covenants that all work authorization documents issued to
contractors shall be valid at the time of issuance and shall remain valid and
in full force and effect during the entire period of the contractors’
assignment(s) under any SOW.  ACI
shall have the right to perform a background check on such contractor.  The acceptable forms of identification are as
set forth on the current I-9.

 

16.14                 Application.

 

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

 

16.15                 Disclaimer.

 

THE
WARRANTIES SET FORTH IN THIS AGREEMENT, INCLUDING THOSE SPECIFIED AS APPLYING,
IF ANY, TO ANY LICENSES GRANTED OR TO BE GRANTED UNDER THIS AGREEMENT, ARE
EXCLUSIVE.  THERE ARE NO IMPLIED
WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.  SOFTWARE MADE
AVAILABLE BY ACI TO VENDOR IS MADE AVAILABLE ON AN “AS IS” BASIS.

 

17.                               INSURANCE

 

17.1                        Insurance.

 

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

 

(a)                                  Employer’s
Liability Insurance (Coverage B) and Worker’s Compensation Insurance (Coverage
A), including coverage for occupational injury, illness and disease, and other
similar social insurance in accordance with the laws of the country, state or
territory exercising jurisdiction over the employee with Statutory Limits
(Coverage A) and minimum limits (Coverage B) per employee and per event of
$2,000,000 or the minimum limit required by law, whichever limit is greater.

 

(b)                                 Comprehensive
General Liability Insurance, including Products, Completed Operations, Premises
Operations, Bodily Injury, Personal and Advertising Injury, on an occurrence
basis, with a minimum combined single limit per occurrence of $3,000,000 and a
minimum combined single aggregate limit of $5,000,000.  This coverage shall include ACI and its
Affiliates as Additional Insureds.

 

53

 

(c)                                  Property
Insurance and Business Income coverage, for all risks of physical loss of or
damage to buildings, tangible business personal property or other tangible
property that is owned or leased and supplied by Vendor pursuant to this
Agreement or otherwise.  Such insurance
shall have a minimum limit adequate to cover risks on a replacement costs
basis.

 

(d)                                 Automotive
Liability Insurance covering use of all owned, non-owned and hired automobiles
for bodily injury, property damage liability with a minimum combined single
limit per accident of $3,000,000 or the minimum limit required by law,
whichever limit is greater.  This
coverage shall include ACI and its Affiliates as Additional Insureds.

 

(e)                                  Commercial
Crime Insurance, including blanket coverage for Employee Dishonesty for loss or
damage to tangible property arising out of or in connection with any fraudulent
or dishonest acts committed by the employees of Vendor, acting alone or in
collusion with others, including the property and funds of others in Vendor’s
or its employees’ possession, care, custody or control, with a minimum limit per
event of $1,000,000.00.  ACI shall be
designated as a “loss payee” as its interest may appear under this policy.  However, loss payments hereunder shall not
include any loss to the extent such loss results from the dishonest acts of the
employees of ACI.

 

Errors and Omissions Liability Insurance covering
liability for loss or damage due to an act, error, omission or negligence, with
a minimum limit per event of $5,000,000.

 

17.2                        Insurance
Provisions.

 

(a)                                  The
insurance coverages described above that include ACI as an additional insured
(i.e. the Commercial General Liability and Automobile Liability policies) shall
be primary, and all coverage shall be non-contributing with respect to any
other insurance or self insurance which may be maintained by ACI and is primary and non-contributory with respect
to liability arising out of Vendor’s negligence and as respects this Agreement
only.  All coverages described
above shall contain the standard separation of insureds provisions regarding
ACI.  To the extent any coverage is
written on a claims-made basis, it shall have a retroactive date no later than
the Effective Date and shall be maintained for a period of two (2) years
after the expiration or premature termination of this Agreement.

 

(b)                                 Vendor
shall provide certificates of insurance evidencing that the coverages and
policy endorsements required under this Agreement are in force and should any
of the policies described herein be cancelled before the expiration date
thereof, the insurer affording coverage will endeavor to mail 30 days written
notice to the certificate holder named herein, but failure to mail such notice
shall impose no obligation of liability of any kind upon the insurer affording
coverage, its agents or representatives.  The insurers selected by Vendor
shall have an A.M. Best rating of A-, Size VII or better, or, if such
ratings are no longer available, with a comparable rating from a recognized
insurance rating agency.  Vendor shall
assure that all Approved Subcontractors, if any, maintain insurance coverages
described above naming Vendor as an additional insured where relevant.

 

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

 

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

 

54

 

18.                               INDEMNITIES

 

18.1                        Vendor
Indemnities.

 

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

 

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

 

(b)                                 Any
claims of infringement that would amount to a breach by Vendor of the
warranties set forth in Section 16.6; provided that (i) the claim is
not caused by improper acts or omissions of ACI (such as use of more copies of
an item than that for which a license was to have been obtained); (ii) the
claim does not result from ACI’s failure to fulfill its obligation to provide
reasonable cooperation under Section 6.7 in connection with Vendor’s
efforts to obtain Required Consents; and (iii) Vendor’s obligations under
this Section 18.1(b) shall not apply to the extent that (A) the
claim of infringement is based upon ACI’s use of Vendor Provided Technology (1) in
combination with equipment, devices or software not specified or approved in writing
by Vendor, contemplated by this Agreement, or otherwise used by Vendor to
provide the Services or (2) in a manner that violates any license grant or
other term or condition of this Agreement; (B) a ACI Indemnitee modifies
the software provided by Vendor hereunder without Vendor’s written approval and
such infringement would not have occurred but for such modification; or (C) the
claim of infringement arises out of designs or specifications provided by a ACI
Indemnitee that necessarily caused such infringement claim and that describe
detailed, non-discretionary methods of processes for meeting a business
requirement of achieving a required outcome (as opposed to just describing
business requirements of expected outcomes);

 

(c)                                  Any
claim or action by, on behalf of, or related to, any employee of Vendor or its
Affiliates, or any of their subcontractors (which, if made by a Rebadged
Employee arises out of acts, incidents or omissions occurring on or after, or
out of events occurring on or after, the date such employee is transferred to
Vendor or acts or omissions specifically requested by Vendor or its Affiliates
or their subcontractors at any time), including claims asserting liens or other
encumbrances on assets of ACI or ACI Affiliates and claims arising under
occupational health and safety, ERISA, worker’s compensation or other
Applicable Laws;

 

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

 

(e)                                  The
material inaccuracy or untruthfulness of the representations or warranties made
by Vendor in Sections 16.7 and 16.12;

 

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

 

55

 

(g)                                 Any
claim or action arising out of acts or omissions of Vendor which result in,
arise from or relate to:

 

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

 

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

 

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

 

(iv)                              representations
(oral or written) to ACI personnel by Vendor, Vendor Affiliates (or their
respective officers, directors, employees, representatives, subcontractors or
agents), or other acts or omissions with respect to ACI personnel by such
persons or entities, including any act, omission or representation made in
connection with the interview, selection, hiring and/or transition process
(other than any representations to the Affected Employees based on information
or direction provided by ACI), any offers of employment made to such employees,
the failure to make offers to any such employees required hereunder or the
terms and conditions of such offers (including compensation and employee
benefits).

 

(h)                                 Any
breach of Vendor’s obligations under Article 15 (Safeguarding of Data;
Confidentiality) as a result of Vendor’s or Vendor’s subcontractors’
misappropriation;

 

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

 

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

 

(k)                                  Any
failure to obtain or maintain the Required Consents as contemplated under Section 6.7;

 

(l)                                     Any
failure to comply with any Vendor Laws resulting in claims by government
regulators or agencies for fines, penalties, sanctions, underpayments or other
remedies to the extent such fines, penalties, sanctions, underpayments or other
remedies are caused by Vendor’s failure to comply with any Vendor Laws; or

 

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

 

56

 

18.2                        ACI
Indemnities.

 

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

 

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

 

(b)                                 Any
claim by a third party of infringement of such third party’s Intellectual
Property Rights directly arising from (i) designs or specifications provided by
ACI to Vendor under this Agreement that necessarily caused such infringement
claim and that describe detailed, non-discretionary methods of processes for
meeting a business requirement of achieving a required outcome (as opposed to
just describing business requirements of expected outcomes), or (ii) data,
documents, code or other technology or materials that have been provided by ACI
to Vendor for Vendor to provide Services to ACI under this Agreement
(collectively, the “ACI Provided Technology”); provided that (A) the
infringement claim is not caused by improper acts or omissions of Vendor; (B) the
claim does not result from Vendor’s failure to fulfill its obligation to
provide reasonable cooperation under Section 6.7 in connection with
efforts to obtain Required Consents; and (C) ACI’s obligations under this Section 18.2(b) shall
not apply to the extent that: (1) the claim of infringement is based upon
Vendor’s use of ACI Provided Technology: (x) in combination with
equipment, devices or software not approved, specified or reasonably
anticipated by ACI, contemplated by this Agreement or otherwise used by ACI
prior to the Effective Date, or (y) in a manner that violates any license
grant or other term or condition of this Agreement, (2) Vendor modifies
the ACI Provided Technology and such infringement would not have occurred but
for such modification, or (3) the claim of infringement arises out of
designs or specifications provided by a Vendor Indemnitee that necessarily
caused such infringement claim and that describe detailed, non-discretionary
methods of processes for providing the Service. 
The indemnities in this Section  18.2(b) are Vendor’s sole and
exclusive remedies for infringement claims related to any Software or other
technology provided by ACI;

 

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

 

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

 

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

 

(f)                                    Any
breach of ACI’s obligations under Article 15 (Safeguarding of Data;
Confidentiality) as a result of misappropriation by ACI;

 

57

 

(g)                                 Any
failure to obtain or maintain the Required Consents as contemplated under Section 6.7;

 

(h)                                 Vendor
and ACI agree that in the United Kingdom, the Transfer of Undertakings
(Protection of Employment) Regulations 2006 (the “Regulations”) do not
apply to service transfers and that other than the one employee specified below
(the “ACI Employee”), no employee of ACI or any of its subcontractors
will transfer employment from ACI to Vendor as a result of the service
transfer.  In the event that the contract
of employment of any other ACI employee or the employee of any ACI
subcontractor or any collective agreement shall have effect or is alleged to
have effect as if originally made between Vendor and such person or trade union
pursuant to the Regulations, unless Vendor should make a decision to take any
such person into employment or such person is the ACI Employee, Vendor may,
within one month of becoming aware of the application or alleged application of
the Regulations to any such contract or collective agreement (having promptly
communicated such awareness to Vendor) terminate (or purport to terminate) such
contract of employment or collective agreement. 
ACI shall indemnify, keep indemnified and hold harmless Vendor against
any claims, losses, proceedings, costs, demands, liabilities and expenses
(including without limitation all legal expenses and other professional fees
together with any valued added tax thereon) suffered or incurred by Vendor
arising out of or in connection with:

 

(i)                                     any
termination of any  contract of employment
or collective agreement in accordance as set forth above;

 

(ii)                                  in
the event the Regulations are found to apply, any failure by ACI to comply with
its obligations pursuant to the Regulations, including any failure by ACI to
provide the information which it is obliged to provide to employee
representatives in accordance with the Regulations; or

 

(iii)                               anything done or omitted
to be done by ACI or its subcontractors in respect of the ACI Employee before
the service transfer, including without limitation, any claim by the ACI
Employee that ACI or its subcontractors violated any Applicable Law in
connection with the employment of the ACI Employee.

 

Vendor agrees that on or before May 15, 2008, it
shall make or shall procure that its subcontractor shall make an offer to
employ Steve Newbury (being the ACI Employee) at its or its subcontractor’s
location at Watford in the United Kingdom on substantially equivalent or better
terms than such employee enjoys with ACI, without reference to occupational
retirement plans and that upon such acceptance, Vendor or its subcontractors
shall employ the ACI Employee in accordance with such offer.  ACI shall render all reasonable assistance to
Vendor or its subcontractor so that the ACI Employee accepts such employment
and shall waive any notice of termination of employment that such employee is
required to give ACI.

 

(i)                                     Except
to the extent covered by another provision of this Article 18, claims by
any individual or entity, other than ACI, that uses or receives the benefits of
the Services by or through ACI or by virtue of this Agreement (as the Parties
intend that only ACI shall be permitted to enforce rights against Vendor under
this Agreement or related to the Services); or

 

(j)                                     Any
physical injury, death or real or tangible property loss caused by ACI.

 

18.3                        Infringement.

 

If any
item provided by either Party that is used in the provision of the Services
becomes, or in the providing Party’s reasonable opinion is likely to become,
the subject of an infringement or misappropriation claim, in addition to
indemnifying the other Party to the extent required in 

 

58

 

Section 18.1(b) and 18.2(b), and in addition to such Party’s
other rights, the providing Party shall promptly take the following actions, at
no charge to the other Party, in the listed order of priority:

 

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

 

(b)                                 replace
or modify the item to make it non-infringing or without misappropriation,
provided that any such replacement or modification must not degrade the
performance or quality of the affected component of the Services, as reasonably
determined by the Parties; or

 

(c)                                  remove
the item from the Services, in which case Vendor’s Charges shall be equitably
adjusted to reflect such removal; provided that (i) such removal and
adjustment does not limit Vendor’s liability for any failure of the remaining
Services to fully comply with the requirements of this Agreement, whether such
failure is due to the absence of the removed item or the removal’s impact on
the remaining Services and (ii) any resulting failure of the Services to
comply with this Agreement may constitute a material breach entitling ACI to
terminate this Agreement under Section 21.1, in which case ACI will not be
required to observe the otherwise applicable cure period.

 

18.4                        Indemnification
Procedures.

 

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

 

(a)                                  Notice.  Promptly after receipt by a ACI Indemnitee or
Vendor Indemnitee, as applicable, of notice of the assertion or the
commencement of any action, proceeding or other claim by a third party in
respect of which the indemnitee will seek indemnification pursuant to this Article 18,
the indemnitee shall promptly notify the indemnitor of such claim in
writing.  No failure to so notify an
indemnitor shall relieve it of its obligations under this Agreement except to
the extent that it can demonstrate that such failure has increased the indemnifying
Party’s costs or liability.  Within
fifteen (15) days following receipt of written notice from the indemnitee
relating to any claim, but no later than ten (10) days before the date on
which any response to a complaint, claim, action or summons is due, the
indemnitor shall notify the indemnitee in writing if the indemnitor
acknowledges its indemnification obligation and elects to assume control of the
defense and settlement of that claim (a “Notice of Election”); provided,
however, that such acknowledgement and election shall not be, or deemed to be,
a waiver of any defense that the indemnitor may have with respect to the
underlying action, proceeding or claim.

 

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

 

(c)                                  Procedure
Where No Notice of Election Is Delivered. 
If the indemnitor does not deliver a Notice of Election relating to a
claim, or otherwise fails to acknowledge its indemnification obligation or to
assume the defense of a claim, within the required notice period or fails to
diligently defend the claim, the indemnitee shall have the right to defend the
claim in such manner as it may deem appropriate, at the cost, expense and risk
of the indemnitor, including payment of any judgment or award, indemnitee’s
attorneys’ fees and expenses and the costs of settlement or compromise of the
claim.  The 

 

59

 

indemnitor shall promptly reimburse the indemnitee for all such costs
and expenses, including payment of any judgment or award and the costs of
settlement or compromise of the claim. 
If it is determined that the indemnitor failed to defend a claim for
which it was liable, the indemnitor shall not be entitled to challenge the
amount of any settlement or compromise paid by the indemnitee.

 

19.                               LIABILITY

 

19.1                        General
Intent.

 

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

 

19.2                        Liability
Restrictions.

 

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

 

(b)                                 Subject
to Section 19.2(c) and Section 19.2(d) below, each of the
Parties will be liable to the other for any direct damages arising out of or
relating to its performance or failure to perform under this Agreement;
provided, however, that the liability of a Party to the other Party, whether
based on an action or claim in contract, equity, negligence, tort or otherwise,
will not in the aggregate exceed an amount equal to the greater of:  (i) $5,000,000 or (ii) the amount
of Charges paid or payable by ACI under this Agreement during the twelve (12)
months immediately preceding the occurrence of the first event, act or omission
on which such liability is based; provided, however, that however, that (1) if
twelve (12) months has not elapsed since the Effective Date, the amount for
this subsection (ii) will be equal to twelve (12) times the average
monthly Charges for the elapsed period of the Term or (2) if the event,
act or omission occurred after the expiration or termination of this Agreement,
the amount for this subsection (ii) will be equal to the aggregate amount
of Charges paid or payable by ACI during the last twelve (12)-month-period of
time during the Term.

 

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

 

(i)                                     claims
that are the subject of indemnification pursuant to Sections 18.1 and 18.2;
provided, however that damages payable for indemnification claims set forth in Section 18.1(l) (relating
to violations of Vendor Laws) shall (i) be included in the damages cap set
forth in Section 19.2(b) and (ii) not exceed $1,000,000; and

 

(ii)                                  damages
occasioned by infringement of a Party’s Intellectual Property Rights or
misappropriation of its Confidential Information.

 

(d)                                 The
limitations set forth in Section 19.2(b) above shall not apply with
respect to:

 

(i)                                     damages
occasioned by the willful misconduct or gross negligence of a Party;  in which case each of the Parties will be
liable to the other for any direct damages arising out of or relating to its
performance or failure to perform under this Agreement; provided, however, that
the liability of a

 

60

 

Party to the other Party, whether based on an action or claim in
contract, equity, negligence, tort or otherwise, will not in the aggregate
exceed an amount equal to the greater of: 
(i) $7,000,000 or (ii) the amount of Charges paid or payable
by ACI under this Agreement during the fifteen (15) months immediately
preceding the occurrence of the first event, act or omission on which such
liability is based; provided, however, that however, that (1) if fifteen
(15) months has not elapsed since the Effective Date, the amount for this
subsection (ii) will be equal to fifteen (15) times the average monthly
Charges for the elapsed period of the Term or (2) if the event, act or
omission occurred after the expiration or termination of this Agreement, the
amount for this subsection (ii) will be equal to the aggregate amount of
Charges paid or payable by ACI during the last fifteen (15)-month-period of
time during the Term.

 

(ii)                                  damages
occasioned by abandonment of all or substantially all of the work required to
perform the Services in which case the limitations will be the same as those
set forth in Section 19.2(d)(i) above.

 

In addition, for Vendor’s breaches of its
obligations under Section 15.3 (Confidential Information) resulting in a
release of Personally Identifiable Information, in addition to the direct
damages limited by Section 19.2(b) above and ACI’s other rights under
the Agreement, Vendor shall pay for (i) legally required notifications to
ACI’s customers and (ii) credit monitoring services for ACI’s customers up
to an amount not to exceed $1,000,000.

 

19.3                        Direct
Damages.

 

For
purposes of this Agreement, direct damages shall include, but not be limited
to, the following, which shall not be considered consequential damages to the
extent they result from a Party’s failure to fulfill its obligations in
accordance with this Agreement:

 

(a)                                  Reasonable
costs of recreating or reloading any of ACI’s information that is lost or
damaged to the last available back-up; provided, however, that if Vendor has
the responsibility under this Agreement to back up ACI’s data, and fails to
fulfill its obligation to do so with respect to the lost or damaged data,
Vendor shall pay for the costs of recreating or reloading such data up to the
limit of liability in Section 19(b);

 

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

 

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

 

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

 

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

 

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

 

Notwithstanding the foregoing, to the extent damages
payable by ACI under this Article 19 consist of compensation to Vendor for
work performed by Vendor Personnel, such compensation shall be calculated 

 

61

 

using the time and material rates provided in Exhibit C-1
(Base Charges, Baselines, ARC/RRC Rates and Termination Charges).

 

19.4                        Duty to
Mitigate.

 

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

 

19.5                        Disaster
Recovery Plan.

 

(a)                                  Vendor
will implement and maintain disaster recovery plans and business continuity
plans for Service Locations and Vendor’s business (collectively, “DR/BC
Plans”) as set forth in Exhibit A-9 (Disaster Recovery /
Business Continuity Plans) and provide reasonable cooperation and support with
the then-current resources being applied by Vendor to ACI’s account for ACI’s
implementation of its internal disaster recovery and business continuity
plans.  Vendor will (1) update and
test the operability of the DR/BC Plans annually, (2) verify for ACI upon
each such test that the DR/BC Plans are fully operational and provide ACI with
a summary of any report regarding the results of such test and (3) implement
the DR/BC Plans upon the occurrence of a disaster.  Subject to the Change Control Procedure, ACI
may request and Vendor will perform additional testing and support for such
testing as may be requested by ACI customers.

 

(b)                                 Upon
the occurrence of a disaster, Vendor will reinstate the Services within the
time periods set forth in Exhibit A-9 (Disaster Recovery / Business
Continuity Plans) or, if not set forth in Exhibit A-9 (Disaster
Recovery / Business Continuity Plans), the recovery time periods set forth in
the DR/BC Plans.

 

19.6                        Force
Majeure.

 

(a)                                  Provided
that Vendor has fully complied with its obligations to provide disaster
recovery-related Services hereunder, to the extent that the Vendor facilities
intended to be used for such disaster recover Services are not impacted by the
event, neither Party shall be liable for any default or delay in the
performance of its obligations under this Agreement:

 

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

 

(ii)                                  provided
the non-performing Party is without fault in causing such default or delay, and
such default or delay could not have been prevented by reasonable precautions
and could not reasonably be circumvented by the non-performing Party through
the use of alternate sources, workaround plans or other means (including, with
respect to Vendor, by Vendor meeting its obligations for performing disaster
recovery services as provided in this Agreement) (each such event, a “Force
Majeure Event”).

 

(b)                                 The
non-performing Party shall be excused from further performance or observance of
the obligations affected by a Force Majeure Event for as long as such
circumstances prevail and such Party continues to use Commercially Reasonable
Efforts to recommence performance or observance without delay.  Any Party so delayed in its performance shall
immediately notify the Party to whom performance is due by telephone (to be
confirmed in writing within twenty-four (24) hours of the inception of such
delay) and describe at a reasonable level of detail (1) the circumstances
causing such delay and (2) the steps the non-performing Party intends to
take to mitigate the effect of the Force 

 

62

 

Majeure Event, including the use of resources available to such
non-performing Party through its DR Plan. 
Except as set forth in Section 19.6(c) below, to the extent a
Force Majeure Event relieves Vendor of its obligations to perform the Services
impacted by such event and Vendor does not perform due to such Force Majeure
Event, ACI’s obligation to pay for such Services shall also be relieved.

 

(c)                                  If
any Force Majeure Event affecting facilities, personnel or other resources
under the control of Vendor or any of its Affiliates or subcontractors
substantially prevents, hinders or delays performance of the Services necessary
for the performance of functions identified by ACI as critical for more than
three (3) consecutive days or any material portion of the Services for
more than five (5) Business Days, then, at ACI’s option, ACI may procure
such Services from an alternate source, and Vendor shall be liable for payment
for such Services from the alternate source for up to ninety (90) days of such
alternate services based upon the number of days that ACI receives such
alternate services.   ACI will continue to pay Vendor undisputed
Charges for the impacted Services during such ninety (90) day period for so
long as ACI continues to receive the alternate Services.  Vendor’s reimbursement obligation pursuant to
this Section 19.6 is limited to reimbursement for the alternate services
that are substantially similar to the Services impacted by the Force Majeure
Event, and does not extend to any additional services that ACI may elect to
procure from the alternate source.  If
ACI returns to Vendor facilities after use of the alternate source, Vendor will
reimburse ACI for all reasonable out of pocket costs of returning to the Vendor
facility.  If the alternate source
provides services for longer than fifteen (15) days, then ACI may, within five (5) days
after the end of such fifteen (15) day period
and upon payment to Vendor for: (i) any unrecovered startup
expenses, (ii) unamortized assets, and (iii) other reasonable
out-of-pocket expenses associated with ramp-down, terminate the affected
portion of the Services upon notice to Vendor, such termination to be effective
at any time within ninety (90) days after such five (5) day period.  However,
if the impacted Services are within the scope of Exhibit A-9 and Vendor
does not provide Services pursuant to the DR / BC Plan, ACI may terminate
without payment of the expenses described in the foregoing sentence.  ACI agrees to use Commercially Reasonable
Efforts to mitigate damages arising pursuant to this Section 19.6.

 

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

 

20.                               DISPUTE RESOLUTION

 

Any
dispute between the Parties arising out of or relating to this Agreement,
including with respect to the interpretation of any provision of this Agreement
and with respect to the performance by Vendor or ACI, shall be resolved as
provided in this Article 20.

 

20.1                        Informal
Dispute Resolution Process.

 

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

 

(i)                                     Upon
the written notice by a Party to the other Party of a dispute (“Dispute Date”),
each Party shall appoint a designated representative whose task it will be to
meet for the purpose of endeavoring to resolve such dispute.  The designated representatives of a Party
shall have the authority to resolve the dispute on behalf of such Party.

 

(ii)                                  The
designated representatives shall meet as often as the Parties reasonably deem
necessary in order to gather and furnish to the other all information with
respect to the matter in issue which the Parties believe to be appropriate and
germane in connection with its resolution. 
The 

 

63

 

representatives shall discuss the problem and attempt to resolve the
dispute without the necessity of any formal proceeding.

 

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

 

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

 

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

 

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

 

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

 

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

 

(d)                                 Notwithstanding
the above, either Party may commence litigation if it is deemed appropriate by
a Party to avoid the expiration of an applicable limitations period or to
preserve a superior position with respect to other creditors, or a Party makes
a good faith determination, including as provided in Section 21.10
respecting ACI, that a breach of this Agreement by the other Party is such that
a temporary restraining order or other injunctive relief is necessary.

 

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

 

20.2                        Litigation.

 

For
all litigation which may arise with respect to this Agreement, the Parties
irrevocably and unconditionally submit to the jurisdiction and venue (and waive
any claim of forum nonconveniens and any objections as to laying of venue) of
the New York state and federal courts located in New York, New York in
connection with any action, suit or proceeding arising out of or relating to
this Agreement.  Each Party further
waives personal service of any summons, complaint or other process and agrees
that the service thereof may be made by certified or registered mail directed
to such Party at such Party’s address provided in Section 23.3 for
purposes of notices under this Agreement, provided that service occurs upon
actual receipt of the notice and that no other applicable state or federal rule of
civil procedure regarding jurisdiction or service of process is waived or
otherwise altered.

 

64

 

20.3                        Continued
Performance.

 

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

 

20.4                        Governing
Law.

 

This
Agreement and performance under it shall be governed by and construed in
accordance with the laws of the State of New York without regard to any portion
of its choice of law principles that might provide for application of a
different jurisdiction’s law.  The United
Nations Convention on the International Sale of Goods shall not apply to this
Agreement.

 

21.                               TERMINATION

 

21.1                        Termination
For Cause By ACI.

 

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

 

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

 

(ii)                                  commits
a material breach of this Agreement which Vendor demonstrates, during the
thirty (30) day cure period, is not capable of being cured within such period
and fails to (A) proceed promptly and diligently to correct the breach; (B)
within thirty (30) days following such notice provide ACI with a written plan
for curing the breach; and (C) cure the breach within thirty (30) days
after such notice;

 

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

 

(iv)                              fails
to meet the Minimum Service Level value for the same Critical Service Level for
three (3) consecutive months or six (6) months during any rolling twelve (12)
month period; provided that for purposes of this subsection (iv) only ACI
agrees to pay Vendor for: (x) any unrecovered startup expenses, (y) unamortized
assets, and (z) other reasonable out-of-pocket expenses associated with
ramp-down.

 

(b)                                 ACI
may terminate a Service (and any other Service that is integrally related to
such terminated Service) if Vendor (i) commits a material breach of this
Agreement with respect to such Service and fails to cure such breach within
thirty (30) days after notice of breach from ACI to Vendor, or (ii) commits
a material breach of this Agreement with respect to such Service which Vendor
demonstrates, during the thirty (30) day cure period, is not capable of being
cured within such period and fails to (A) proceed promptly and diligently
to correct the breach; (B) within thirty (30) days following such notice
provide ACI with a written plan for curing the breach; and (C) cure the
breach within thirty (30) days after such notice.  The reductions of Services resulting from any
such termination will not give rise to payment of any Termination Charges.

 

65

 

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

 

21.2                        Termination
by Vendor.

 

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

 

(b)                                 If
and only if ACI fails to pay Vendor as set forth in Section 14.2 and Section 14.8
undisputed Charges under the Agreement totaling at least $50,000.00 within fourteen (14) days after
the due date for such Charges, Vendor may by giving written notice to
ACI terminate this Agreement as of a date specified in the notice of
termination which is at least ten (10) days after the date on which such
notice is received by ACI, unless ACI has cured within such timeframe.

 

21.3                        Termination
for Convenience by ACI.

 

At any
time during the Term, ACI may terminate this entire Agreement or any one or
more of the Service Towers for convenience and without cause by giving Vendor
at least six (6) months’ prior written notice designating the effective
termination date.  In that event, on the
effective date of the termination, ACI will pay to Vendor an amount calculated
in accordance with Exhibit C-1 (Base Charges, Baselines, ARC/RRC
Rates and Termination Charges) consisting of the sum of (A) the applicable
Termination for Convenience Fee and (B) Wind Down Expenses.

 

21.4                        Termination
by ACI for Change of Control.

 

(a)                                  If
(i) another entity not currently an Affiliate of ACI, directly or
indirectly, in a single transaction or series of related transactions, acquires
either Control of ACI or all or substantially all of the assets of ACI; or (ii) ACI
is merged with or into another entity, then, at any time within nine (9) months
after the last to occur of such events, ACI may terminate this Agreement by (A) giving
Vendor at least six (6) month’s prior written notice and designating a
date upon which such termination shall be effective, and (B) by the
payment of 90% of the then-applicable Termination Charge specified in Exhibit C-1
(Base Charges, Baselines, ARC/RRC Rates and Termination Charges), and Wind Down
Expenses.

 

(b)                                 If
(i) another entity not currently an Affiliate of Vendor, directly or
indirectly, in a single transaction or series of related transactions, acquires
either Control of Vendor or all or substantially all of the assets of Vendor;
or (ii) Vendor is merged with or into another entity that results in a
change of Control of Vendor, then, at any time within nine (9) months
after the last to occur of such events, ACI may terminate this Agreement by (A) giving
Vendor at least six (6) months’ prior written notice and designating a
date upon which such termination shall be effective, and (B) by the
payment of 50% of the then-applicable Termination Charge specified in Exhibit C-1
(Base Charges, Baselines, ARC/RRC Rates and Termination Charges), and Wind Down
Expenses.

 

21.5                        Failure to
Transition and Other Termination Rights.

 

(a)                                  This
Agreement may be terminated by ACI in whole or in part as provided in Section 13.7(e)(ii),
Section 16.8, Section 18.3(c) or Section 19.6(c).

 

66

 

(b)                                 ACI
may terminate this Agreement without liability, except for payment for Services
already performed, by paying 50% of the then-applicable Termination Charge
specified in Exhibit C-1 (Base Charges, Baselines, ARC/RRC Rates and
Termination Charges), and by paying Wind Down Expenses, if there is a change in
Applicable Law that makes receiving the Services illegal.  ACI may terminate this Agreement, by paying
75% of the then-applicable Termination Charge specified in Exhibit C-1
(Base Charges, Baselines, ARC/RRC Rates and Termination Charges), and by paying
Wind Down Expenses, if there is a change in Applicable Law that makes receiving
the Service impractical or would significantly increase the Charges for the
Services.

 

21.6                        Termination
Due To A Party’s Insolvency and Related Events.

 

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

 

21.7                        Intentionally
left blank.

 

21.8                        Cumulative
Termination Rights.

 

Rights
of termination under this Article 21 are cumulative.  Circumstances that are relevant to one Section of
this Article 21, but do not entitle the Party to terminate this Agreement
under that Section, may nonetheless entitle the Party to terminate under
another Section of this Article 21.

 

21.9                        Termination/Expiration
Assistance.

 

(a)                                  During
the Termination/Expiration Assistance Period, Vendor shall provide to ACI or,
at ACI’s request, to ACI’s designee the reasonable termination/expiration
assistance requested by ACI to allow the Services to continue without
interruption or adverse effect and to facilitate the orderly transfer of the
Services to ACI or its designee (including a competitor of Vendor) (“Termination/Expiration
Assistance”).

 

(b)                                 Charges
for Termination/Expiration Assistance constituting continuance of the Services
covered by the Monthly Base Charges will be invoiced and paid in the same
manner as prior to the Termination/Expiration Assistance Period.  Termination/Expiration Assistance Services
outside the scope of the Monthly Base Charges that require resources beyond
those account resources required to perform such in-scope Services, will be
compensated on a time and materials basis at the rates set forth in Schedule C  (Charges). 
In the event of a termination by Vendor pursuant to Section 21.2,
ACI shall pay monthly in advance for such Termination/Expiration Assistance and
any other Services that ACI requests Vendor to provide. Notwithstanding the
foregoing, Vendor agrees that it will provide, at no additional cost to ACI,
data extracts, electronic copies of all documentation pertaining to the
Services (to the extent available prior to notice of termination), incident
histories pertaining to the Services and copies of knowledge databases specific
to ACI that are prepared by Vendor in connection with the Services.

 

(c)                                  Termination/Expiration
Assistance shall include the following, provided, Termination/Expiration
Assistance can be performed without unreasonably interfering with the Vendor’s
ability to perform the Services (unless the ACI provides Vendor in advance with
the appropriate written relief from any Service or Service Level commitments or
reprioritizes the Services):

 

67

 

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

 

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

 

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

 

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

 

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

 

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

 

(iv)                              Vendor
shall, within the first thirty (30) days of the Termination/Expiration
Assistance Period, begin to provide and thereafter promptly provide capacity
planning, consulting services, facilities planning, telecommunications
planning, Software configuration, reviewing all System Software with a new
service provider, generating machine readable/listings of source code to which
ACI is otherwise entitled pursuant to this Agreement, uploading production
databases, providing parallel processing, providing application software
maintenance and support, providing testing services, and providing Equipment
where practical; provided that such services are provided by the then assigned
Vendor Personnel.

 

68

 

(d)                                 “Termination/Expiration
Assistance Period” means the period beginning (i) as applicable, upon
ACI’s notice of termination, ACI’s notice of non-renewal, or six (6) months
before the expiration of, this Agreement, or upon notice of termination of the
applicable Service Tower, and ending (ii) at a time designated by ACI,
which may not be later than eighteen (18) months after the expiration of the
Agreement.

 

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

 

(f)                                    If
Vendor has incorporated ACI’s Network into a Vendor proprietary
telecommunications Network, or has incorporated proprietary Software, Equipment
or other materials into ACI’s Network, then, at ACI’s request, Vendor will
provide up to two (2) years’ continued Network services at the then
current contract rates for such service.

 

21.10                 Bid Assistance.

 

In the
process of evaluating whether to undertake or allow termination/expiration or
renewal of this Agreement, ACI may consider obtaining, or determine to obtain,
offers for performance of services similar to the Services following
termination or expiration of this Agreement. 
As and when reasonably requested by ACI for use in such a process,
Vendor shall provide to ACI such information and other cooperation regarding
performance of the Services as would be reasonably necessary for a third party
to prepare an informed, non-qualified offer for such services, and for a third
party not to be disadvantaged compared to Vendor if Vendor were to be invited
by ACI to submit a proposal.  The types
of information and level of cooperation to be provided by Vendor shall be no
less than those initially provided by ACI to Vendor prior to commencement of
this Agreement.  Vendor’s support in this
respect shall include providing information regarding Equipment, Software,
staffing and other matters that Vendor would otherwise provide as part of
Termination/Expiration Assistance. 
Subject to Section 3.5, Vendor shall provide such support at no
additional charge.

 

21.11                 Equitable
Remedies.

 

The
Parties acknowledge that, if either Party breaches (or attempts or threatens to
breach) an obligation related to confidentiality, Intellectual Property Rights,
data security or to provide Termination/Expiration Assistance, the other Party
may be irreparably harmed.  In such a
circumstance, the non-breaching Party may proceed directly to court.  Nothing contained in this Section 21.11
shall be deemed to prevent a court from imposing substantive provisions or
requirements, such as requiring payment for services rendered.

 

21.12                 Charge
Adjustment.

 

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

 

22.                               COMPLIANCE WITH LAWS

 

22.1                        Compliance
with Laws and Regulations Generally.

 

(a)                                  Each
Party shall perform its obligations in a manner that complies with all
Applicable Laws that apply to the Parties’ businesses or, in Vendor’s case,
those which also directly impact the 

 

69

 

performance and use by ACI of the Services (including identifying and
procuring required certificates, approvals and inspections).  If a claim of non-compliance is made against
a Party related to any Applicable Laws, the Party against which the claim is
made shall promptly notify the other Party of such charges in writing.

 

(b)                                 Without
limitation to the above, Vendor warrants that it shall comply with those laws
that are applicable to Vendor or Vendor’s performance of the Services as a
provider of information technology services, including IT Laws, Privacy Laws,
U.S. Foreign Corrupt Practices Act, data protection laws, rules and
regulations, in connection with the Services and otherwise under this
Agreement, including Schedule A (Statement of Work) (together
Applicable Laws for which Vendor is responsible under Section 22.1(a), “Vendor
Laws”).

 

(c)                                  Vendor
and ACI will work together to identify the effect of changes in Applicable Laws
on the provision and receipt of the Services and will promptly discuss the
Changes to the Services, if any, required to comply with all Applicable
Laws.  Vendor will provide all support
reasonably required by ACI to comply with Applicable Law, and ACI’s internal
audit requirements, which may be more stringent than those imposed by
Applicable Law.  “ACI Laws” means all laws (i) applicable to ACI’s operation
of its business activities or (ii) applicable to corporations generally
(i.e., environmental laws) as they may relate to ACI.  If there is a change to Vendor Laws or ACI
Laws or other Applicable Laws during the Term, and such change impacts the
provision of, or ACI’s receipt of the Services, Vendor will work with ACI to
determine the appropriate Change in the Services.  Any such Change (i) in Vendor Laws increasing
the cost of Vendor’s performance of its obligations will be implemented at
Vendor’s sole expense and will not impact the Charges paid by ACI under this
Agreement and (ii) in other Applicable Laws increasing the cost of Vendor’s
performance of its obligations will be implemented at ACI’s request subject to
ACI’s payment of such additional Charges as determined to be payable under the
Change Control Procedure.  Vendor will be
responsible for any fines and/or penalties incurred by ACI arising from Vendor’s
noncompliance with Vendor Laws, and ACI will be responsible for any fines
and/or penalties incurred by Vendor arising from ACI’s noncompliance with ACI
Laws.

 

22.2                        Liens.

 

(a)                                  Vendor
hereby waives and forever releases ACI and its Affiliates and their real and
personal property (whether owned or leased) from any past, present or future
lien notices, lien claims, liens, encumbrances, security interests or other
lien rights of any kind based, in whole or in part, on any Services provided of
under this Agreement except for any judgment liens obtained by Vendor against
ACI in a court of competent jurisdiction. 
Vendor shall obtain and provide to ACI similar waivers from all of
Vendor’s subcontractors and suppliers. 
Nothing in this Section 22.2 shall apply to, or in any way be
deemed to encumber, any of the rights Vendor and its subcontractors have in
their own tangible personal and intellectual property, nor act as a release of
the underlying debt, if any.

 

(b)                                 Except
for any judgment liens obtained by Vendor against ACI in a court of competent
jurisdiction, if any lien claims or liens are filed against ACI or its
Affiliates or its or their real or personal property (whether owned or leased)
by any of Vendor’s subcontractors or suppliers at any tier, which are based on
any work, Services, materials or Equipment provided or to be provided
hereunder, then at no cost or expense to ACI, Vendor shall take actions which
may be necessary to resolve and discharge as of record any lien claims or
liens, including paying the claimant if necessary.  If Vendor fails to take such actions in a
timely manner, without waiving the breach ACI may do so without notice to
Vendor and Vendor shall be responsible for all costs (including attorney’s
fees) incurred by ACI in connection therewith.

 

70

 

22.3                        Sarbanes-Oxley.

 

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

 

(a)                                  maintain
in effect and comply with the controls, operations and systems reflected in Schedule A
(Statement of Work).  Any Changes in the
Services from the Effective Date which ACI would require (as ACI may determine)
to comply with SOX and Section 404 thereunder shall be subject to the
Change Control Procedure;

 

(b)                                 Comply
with the audit and reporting obligations set forth in Article 11;

 

(c)                                  Promptly
cooperate with ACI and its auditors in any other way that ACI and/or its
auditors may reasonably request in order to: (i) enable ACI to comply
with, and ACI and its auditors to evaluate whether ACI complies with the SOX as
it relates to the Services; and (ii) ACI’s auditors to provide the Auditor
Attestation; and

 

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

 

22.4                        International
Considerations.

 

If
Vendor provides Services from outside of the United States, without limiting
any of Vendor’s other obligations set forth in this Agreement and
notwithstanding anything to the contrary contained in this Agreement:

 

(a)                                  Vendor
shall be responsible for compliance with all Applicable Laws governing the
Services in the location from which the Services will be provided and shall be
responsible for compliance with United States export laws and import laws of
the location from which Services will be performed;

 

(b)                                 to
the extent that the responsibilities of ACI pertaining to the Services provided
hereunder are modified by new or modified ACI Laws (and not to Applicable Laws
that apply to Vendor as service provider) Vendor shall modify its performance
of the Services, to the extent directed by ACI, as necessary for ACI to comply
with such ACI Laws, as so modified or added; and

 

(c)                                  implementation
of the foregoing Services (described in Sections 22.4(a) and 22.4(b))
shall be subject to the Change Control Procedure and may give rise to a Project,
as appropriate, and may (in the case new or modified laws arising under Section 22.4(b))
result in additional Charges to ACI and may (in the case new or modified laws
arising under Section 22.4(b)) draw on any “pool” of hours or other
allocation of Services included in the Charges.

 

22.5                        Privacy
Laws.

 

Without
limitation to the provisions of Article 15 and subject to Section 22.4:

 

(a)                                  Vendor
shall comply, as to its performance of the Services, with all Applicable Laws
that apply to Vendor as a provider of Services under this Agreement, and as
otherwise provided in this Agreement. 
Subject to the foregoing, with respect to Applicable Laws relating to
the confidential information and privacy rights and obligations of ACI to its
Affiliates, and/or their customers and 

 

71

 

consumers, including Title V of the Gramm-Leach-Bliley Act, 15 USC
§6801 et. seq. and the Economic Espionage Act, 18 USC §1831 et. seq., it shall
be the obligation of ACI to assure compliance to the extent that any action of
ACI that is required for compliance is not included as an express part of the
Services described in Schedule A (Statement of Work).  Vendor may receive any Personally
Identifiable Information.  Subject to the
foregoing, but notwithstanding any provisions in this Agreement to the
contrary, the Parties agree that, if ACI has certain requirements as to its
business as a result of such regulated status and Applicable Laws, including
Privacy Laws or Privacy Rules, compliance shall be and remain the
responsibility of ACI, and the responsibility of Vendor shall be to perform any
acts or actions in support of such compliance by ACI as are expressly specified
in Schedule A (Statement of Work).

 

(b)                                 Vendor
shall comply with any other Applicable Laws relating to privacy not referred to
directly or indirectly in Section 22.5(a) to the extent such laws are
applicable to Vendor as a provider of information technology services.

 

(c)                                  For
purposes of this Agreement the term “Data Owner” shall mean the Party
having ownership of the data and, as a result, the authority to direct the
purposes for which any item of data is processed or used, and the term “Service
Provider” shall mean the Party providing services to the Data Owner,
including the processing of the data on behalf and upon instruction of the Data
Owner.  ACI will be and remain the Data
Owner of the ACI Data for purposes of this Agreement and all Applicable Laws
relating to data privacy, personal data, transborder data flow and data
protection, with rights under such laws and under this Agreement to determine
the purposes for which the ACI Data is processed.  As Data Owner, ACI is directing Vendor to
process the ACI Data in accordance with the terms of this Agreement and is
consenting to Vendor’s access to the ACI Data solely for such purpose.  Vendor agrees to process the ACI Data in
accordance with the terms of this Agreement and, in doing so Vendor will be and
remain the Service Provider under this Agreement, in addition to complying with
its contractual obligations hereunder, and will comply with all
responsibilities of a Service Provider under Applicable Law as of the Effective
Date.  To the extent that such
responsibilities of a Service Provider are subsequently modified by new or
modified Applicable Laws applying to Vendor in its capacity as a provider of
service, such new or modified responsibilities will be considered to be a part
of the Services to be provided by Vendor under this Agreement.  To the extent that such responsibilities of a
Service Provider are subsequently modified by new or modified Applicable Laws
applying to the Data Owner and not to the Service Provider in its capacity as a
provider of services, Vendor shall perform Services, to the extent directed by
Data Owner, as necessary for Data Owner to comply with such Applicable Laws, as
so modified or added, but such activities will be subject to the Change Control
Procedure.

 

23.                               GENERAL

 

23.1                        Binding
Nature and Assignment.

 

This
Agreement shall be binding on the Parties and their respective permitted
successors and assigns.  Neither Party
may, or shall have the power to, assign this Agreement without the prior
written consent of the other Party, except that ACI may assign its rights and
obligations under this Agreement without the approval of Vendor to (a) an
entity that acquires all or substantially all of the assets of ACI’s line of
business to which the Services relate; (b) any ACI Affiliate; or (c) the
successor in a merger or acquisition of ACI; provided that, (i) the
assignee assumes and agrees in writing to be bound by the obligations set forth
in this Agreement, (ii) is not a Vendor Competitor and (iii) has a
credit rating equal to or higher than ACI. 
Vendor may without approval from ACI elect to assign to a third party
the right to receive payment for the performance of the Services.  Any Party assigning its rights or obligations
to an Affiliate in accordance with this Agreement shall, within ten (10) Business
Days after such assignment, provide notice thereof to the other Party together
with a copy any relevant provisions of the assignment document.  Subject to the foregoing, any assignment by
operation of law, order of any court, or pursuant 

 

72

 

to any plan of merger, consolidation or liquidation, shall be deemed an
assignment for which prior consent is required and any assignment made without
such consent shall be void and of no effect as between the Parties.

 

23.2                        Mutually
Negotiated.

 

Each
Party acknowledges that the limitations and exclusions contained in this
Agreement have been the subject of active and complete negotiation between the
Parties and represent the Parties’ agreement based upon the level of risk to
ACI and Vendor associated with their respective obligations under this
Agreement and the payments to be made to Vendor and credits to be issued to ACI
pursuant to this Agreement.  The Parties
agree that the terms and conditions of this Agreement (including any perceived
ambiguity in this Agreement) shall not be construed in favor for or against any
Party by reason of the extent to which any Party or its professional advisors
participated in the preparation of the original or any further drafts of this
Agreement as each Party has been represented by counsel in its negotiation of
this Agreement and it represents their mutual efforts.

 

23.3                        Joint
Verification

 

During
the ninety (90) day period after the final Service Tower Commencement Date (the
“Joint Verification Period”), ACI and Vendor may inventory and validate
any information that is reflected in or omitted from the Agreement which is
based on the information provided by ACI, such as the Third Party Contracts
(including leases, and licenses).  If,
during such Joint Verification Period, ACI or Vendor discovers inaccuracies in
such information contained in the Agreement or inaccuracies because of an
omission from the Agreement pertaining to such information, Vendor and ACI will
amend the Agreement to provide for an equitable adjustment to the Charges,
Baselines, Service Levels and other terms of the Agreement affected by such
inaccuracies.  If ACI or Vendor disputes
the inaccuracy or the equitable adjustment, ACI and Vendor will submit the
matter to in accordance with Section 20.1.

 

23.4                        Notices.

 

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

 

	
  In the case of ACI:

  	
  with copies to:

  
	
   

  	
   

  
	
  ACI Worldwide, Inc.

  	
  ACI Worldwide, Inc.

  
	
  Attention: Chief
  Administrative Officer

  	
  Attention: General
  Counsel

  
	
  120 Broadway, Suite 3350

  	
  6060 Coventry Drive

  
	
  New York, NY 10271

  	
  Omaha, NE  68022

  
	
   

  	
   

  
	
  In the case of Vendor
  to:

  	
  with copies to:

  
	
   

  	
   

  
	
  International Business
  Machines Corporation

  	
  International Business
  Machines Corporation

  
	
  Attention: Vendor
  Project Executive

  	
  Office of Associate
  General Counsel

  
	
  3613 Ruth Street

  	
  MD4202, Route 100

  
	
  Indian Trail, NC  28079

  	
  Somers, NY 10589

  

 

73

 

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

 

23.5                        Counterparts.

 

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

 

23.6                        Headings.

 

The
section headings and the table of contents used in this Agreement are for
reference and convenience only and shall not enter into the interpretation of
this Agreement.

 

23.7                        Relationship
of Parties.

 

The
Parties are acting as independent contractors. 
Each Party has the sole right and obligation to supervise, manage,
contract, direct, procure, perform or cause to be performed, all work to be
performed by it under this Agreement.  No
contract of agency and no joint venture is intended to be created hereby.  Neither Party is an agent of the other and
has no authority to represent the other Party as to any matters, except as
expressly authorized in this Agreement. 
None of either Party’s employees shall be deemed employees of the other
and ACI and Vendor shall be responsible for reporting and payment of all wages,
unemployment, social security and other payroll taxes, including contributions
from them when required by law for their respective employees.  Neither Party shall have actual, potential or
any other control over the other Party or its employees.

 

23.8                        Severability.

 

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

 

23.9                        Consents
and Approvals.

 

Where approval,
acceptance, consent or similar action by either Party is required under this
Agreement, all such consents and approvals will be in writing and shall not be
unreasonably delayed or, except where expressly provided as being in the discretion
of a Party, withheld.  Each Party shall,
at the request of the other Party, perform those actions, including executing
additional documents and instruments, reasonably necessary to give full effect
to the terms of this Agreement.

 

23.10                 Waiver of
Default.

 

A
delay or omission by either Party in any one or more instances to exercise any
right or power under this Agreement shall not be construed to be a waiver
thereof.  A waiver by either of the
Parties of any of the covenants to be performed by the other or any breach
thereof shall not be construed to be a

 

74

 

waiver of any succeeding breach thereof or of any
other representation, warranty or covenant contained herein.

 

23.11                 Cumulative
Remedies.

 

Except
as otherwise expressly provided in this Agreement, no remedy provided for in
this Agreement shall be exclusive of any other remedy and all remedies shall be
cumulative and in addition to and not in lieu of any other remedies available
to either Party at law or in equity.

 

23.12                 Survival.

 

Sections
1.2, 2, 3.12, 5.3(g), 7, 11.2, 11.5, 11.6, 13.4, 14.2, 14.3, 14.5, 14.6, 14.7,
14.8, 15.1 through 15.4, 16.6, 16.8, 16.12, 16.14, 16.15, 18, 19.1 through
19.4, 20, 21.8, 21.9, 21.10, 21.11 and this Section 23 (except Section 23.3)
and any other provision that by its terms is intended to survive termination or
expiration of this Agreement, shall survive any expiration or termination of
this Agreement.

 

23.13                 Public
Disclosures.

 

All
media releases, public announcements and public disclosures by either Party
relating to this Agreement or the subject matter of this Agreement, including
promotional or marketing material, but not including announcements intended
solely for internal distribution or disclosures to the extent required to meet
legal or regulatory requirements beyond the reasonable control of the
disclosing Party, shall be coordinated with and approved by the other Party in
writing prior to release, and be subject to Section 23.13 below.

 

23.14                 Use of Name.

 

Each
Party agrees that it will not directly or indirectly, without the prior written
consent of the other’s corporate communications department, use for the
purposes of advertising, promotion or publicity or otherwise, the name of the
other Party or any of its divisions, subsidiaries or Affiliates, or any
trademarks, trade names, service marks, symbols or any abbreviation or permutation
thereof, of or associated with the other Party or of any of its divisions,
subsidiaries or Affiliates.

 

23.15                 365(n).

 

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

 

23.16                 Third Party
Beneficiaries.

 

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

 

75

 

23.17                 Covenant of Good
Faith.

 

Each
Party in its respective dealings with the other Party under or in connection
with this Agreement, shall act reasonably and in good faith.

 

23.18                 Non-Solicitation.

 

Except
as contemplated under Section 5.2 and Section 21.9(c)(ii), during the
Term and for a period of one (1) year thereafter, neither Party will
solicit or hire any individual while that individual is an employee or
dedicated consultant of the other Party and involved in the provision or
management or receipt of the Services. 
This Section 23.17 will not restrict the right of either Party to
solicit or recruit generally in the media or prohibit either Party from hiring
an employee of the other who answers any advertisement or who otherwise
voluntarily applies for hire by the hiring Party, provided that the hiring
Party has not taken any action to intentionally solicit or recruit such
employee of the other prior to such employee answering such advertisement or
voluntarily applying.

 

23.19                 Order of
Precedent.

 

If
there is a conflict among the terms in the various documents within this
Agreement to the extent the conflicting provisions can reasonably be
interpreted so that such provisions are consistent with each other, such
consistent interpretation will prevail. 
To the extent that consistent interpretations cannot reasonably be
derived, then (a) this Agreement (exclusive of its Schedules) will prevail
over a conflicting term in its Schedules, (b) a Schedule (exclusive of its
Exhibits) will prevail over a conflicting term in the Exhibits to such Schedule
and an Exhibit (exclusive of its Attachments) will prevail over a
conflicting term in the Attachments to such Exhibit.

 

23.20                 Entire Agreement;
Amendment.

 

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

 

[Signature
Page to Follow]

 

76

 

IN
WITNESS WHEREOF, the Parties have each caused this Master Services Agreement to
be signed and delivered by its duly authorized officer as of the Effective
Date.

 

	
  INTERNATIONAL
  BUSINESS MACHINES

  CORPORATION 

  	
   

  	
  ACI
  WORLDWIDE, INC.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/

  	
   

  	
  By:

  	
   /s/

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name: 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  
							

 

77Exhibit 10.1

 

Director Compensation Summary

 

We pay our
non-management directors an annual retainer of $150,000 per year, $60,000 of
which we pay in cash and $90,000 of which we pay in stock units or restricted
stock. A director may elect to receive up to 100 percent his annual
retainer in stock units or restricted stock. The Chairman of the Board receives
an additional $100,000 annual retainer, the Chairman of the Audit Committee
receives an additional $30,000 annual retainer and the Chairman of each of the
Compensation Committee, the Nominating and Governance Committee, the Finance
Committee and the Risk Oversight Committee receives an additional $10,000
annual retainer. Members of the Audit Committee, other than the chairman,
receive an additional $10,000 annual retainer and members, other than the
chairmen, of each of the Compensation Committee, the Nominating and Governance
Committee, the Finance Committee and the Risk Oversight Committee receive an
additional $5,000 annual retainer. The Company will generally not pay a fee for
attendance at board or committee meetings, though the Chairman of the Board has
the discretion to pay attendance fees of $2,000 for extraordinary or special
meetings.

 

We previously
awarded an initial, one-time grant of restricted shares with a value of
$100,000 to each non-management director upon closing of our IPO in 2004, or,
if later, upon the director’s initial election to the Board of Directors. These
restricted shares will vest on the day immediately prior to the third annual
general meeting of shareholders at which directors are elected following the
grant of the shares.  We have
discontinued the practice of awarding this initial, one-time grant.

 

The Board of
Directors has recommended that each director own at least 10,000 common shares
within three years after joining the Board. Common shares represented by stock
units will count toward that guideline, though restricted shares awarded upon a
director’s initial election will not. We grant annual retainer awards in the
form of stock units until the share ownership guidelines have been met. The
first 10,000 stock units awarded to each director became, or will become,
non-forfeitable on the day immediately prior to the first annual general
meeting of shareholders at which directors are elected following the grant of
the units. We mandatorily defer the issuance of common shares for these units
until six months after termination of the director’s service on the Board of
Directors. After directors meet the share ownership guidelines, they may elect
to receive their annual retainer equity award in the form of either restricted
shares that vest on the day immediately prior to the first annual general
meeting of shareholders at which directors are elected following the grant of
the shares, or stock units that become non-forfeitable on the day immediately
prior to the first annual general meeting of shareholders at which directors
are elected following the grant of the units, with the issuance of common
shares deferred to a later date chosen by the director. Each director has
satisfied our stock ownership guideline. Directors cannot sell or transfer
stock units until we issue the common shares to them. We credit dividend
equivalents to stock units as additional stock units. Grants of restricted
stock receive cash dividends.

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