Document:

exhibit1020.htm

    Exhibit 10.20

    

 

    

    

    
      

      

      

      

      

      

      

      

      

      

      

      

      CONSECO,
INC.

    

    

    
      2010 Pay
For Performance Incentive Plan

    

    
      	 
      

    

    

     

     

     

    
 

    
      
         

      

      
         

        
          

        

      

      
         

        
          
            CONSECO,
INC.

          

          

          
            2010 Pay
For Performance Incentive Plan

          

          

          

        

      

    

                   Page

    
 

    1.           General                              1

    

    2.           Definitions                        1

    

    3.           Participation                      3

    

    4.           Incentive
Plan Awards    4

    

    5.           Administration               
  6

    

    6.           Miscellaneous                 
 6

    

    
      
         

      

      
         

        
          

        

      

      
         

        
          
            CONSECO,
INC.

          

          

          
            2010 Pay
For Performance Incentive Plan

          

          

        

      

    

    1.           GENERAL

    

    (a)           Purpose.  This
Conseco, Inc. 2010 Pay for Performance Incentive Plan (the "Plan" or “P4P”) is
intended to assist Conseco, Inc., a Delaware corporation (the "Company"), and
its Affiliated Corporations in attracting, retaining, motivating and rewarding
employees who occupy key positions and contribute to the growth and
profitability of the Company and its Affiliated Corporations through the award
of certain incentives.  The Plan also is intended to enable the
Committee to preserve the tax deductibility of incentive awards under Section
162(m) of the Code, and to advance the interests of the shareholders of the
Company by providing performance-based incentives to eligible
individuals.

    

    (b)           Effective
Date.  The Plan shall become effective as of the date of its
adoption by the Board of Directors of the Company, subject to stockholder
approval, and shall continue in effect until terminated by the Board pursuant to
Section 6(a).  No payment may be made hereunder prior to stockholder
approval of the Plan.

    

    2.           DEFINITIONS

    

    (a)           “Affiliated
Corporations” shall include members of the controlled group of
corporations within the meaning of Section 1504 of the Code determined without
regard to Section 1504(b).

    

    (b)           “Board” means the
Board of Directors of the Company.

    

    (c)           “Code” means the
Internal Revenue Code of 1986, as amended from time to time, including
regulations thereunder and successor provisions and regulations
thereto.

     

    (d)           “Committee” means the
committee designated by the Board to administer the P4P.  With respect
to Covered Employees for whom the P4P is intended to provide “qualified
performance-based compensation” within the meaning of Section 162(m) of the
Code, any Committee must consist solely of two or more persons each of whom are
“outside directors” within the meaning of Section 162(m) of the
Code.  To the extent the Committee delegates authority pursuant to
Section 5(b), references to the Committee in the P4P shall, as appropriate, be
deemed to refer to the Committee’s delegate.
 

    

    (e)           “Company” means
Conseco, Inc., a Delaware corporation.

    

    (f)           "Comparison Group"
means the peer group of companies designated by the Committee as the Comparison
Group relative to a given Performance Cycle, as described in Section
2(o).

     

     

     

    
      
        
        

      

      
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          CONSECO,
INC.

        

        

        
          2010 Pay
For Performance Incentive Plan

        

        

      

    (g)           “Covered Employee” has
the meaning given such term under Section 162(m) of the Code.

    

    (h)           “Employer” means the
Company and any Affiliated Corporation that employs a Participant.

    

    (i)           “Fiscal Year” means
the 12-month period beginning on each January 1 and ending on December 31 of the
same calendar year.

    

    (j)           “Incentive Percentage”
means the number determined by the Committee as the percentage of a
Participant’s annual rate of salary in effect for the last full payroll period
of the Performance Period to be paid as an Incentive Plan Award if the specified
Performance Goals are achieved. The Committee may establish different Incentive
Percentages for individual Participants or different classes of Participants,
and/or the achievement of different levels of the Performance
Goals.

    

    (k)           “Incentive Plan Award”
means an incentive compensation award under the P4P, payment of which is
contingent and based upon the attainment of the Performance Goals with respect
to a Performance Period.

    

    (l)           “Participant” means an
employee of an Employer participating in the Plan for a Performance Period as
provided in Section 3.

    

    (m)           “P4P” means the
Conseco, Inc. Pay For Performance Incentive Plan, as it may be amended from time
to time.

    

    (n)           “Performance Goals”
means the pre-established objective performance goals established by the
Committee for each Performance Period.  Solely with respect to Covered
Employees for any Performance Period for which the P4P is intended to provide
Qualified Performance-based Compensation, Performance Goals shall be established
by the Committee no later than 90 days after the beginning of the Fiscal Year to
which the Performance Goals relate (and in the case of a Performance Period
shorter than a Fiscal Year, no later than the date on which 25% of the
Performance Period has elapsed) and while the attainment of the Performance
Goals is substantially uncertain. The Performance Goals may be based upon the
performance of the Company, of any Affiliated Corporation, of a division
thereof, and/or of an individual Participant, using one or more of the
Performance Measures selected by the Committee.  Separate Performance
Goals may be established by the Committee for the Company or an Affiliated
Corporation, or division thereof, or an individual.  With
 respect to Participants who are not
Covered Employees, the Committee may establish other subjective or objective
goals, including individual Performance Goals, which it deems
appropriate.  The preceding sentence shall also apply to Covered
Employees with respect to any Incentive Plan Award not intended at the time of
grant to be Qualified Performance-based Compensation.  Performance
Goals may be set at a specific level, or may be expressed as a relative
percentage to the comparable measure at comparison companies or a defined
index.

     

     

    
      
        
        

      

      
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          CONSECO,
INC.

        

        

        
          2010 Pay
For Performance Incentive Plan

        

        

      

    

    
 

    (o)           “Performance Measure”
means one or more of the following criteria, on which Performance Goals may be
based, subject to Section 4(a): (1) gross or net revenue, premiums
collected, new annualized premiums, and investment income, (2) any earnings
or net income measure, including earnings from operations, earnings before
taxes, earnings before interest and/or taxes and/or depreciation, statutory
earnings before realized gains (losses), or net income available to common
shareholders, (3) operating earnings per common share (either basic or
diluted); (4) return on assets, return on investment, return on capital,
return on equity, or return on tangible equity; (5) economic value created;
(6) operating margin or profit margin; (7) net interest margin;
(8) asset quality; (9) stock price or total stockholder return; and
(10) strategic business criteria, consisting of one or more objectives
based on meeting specified market penetration, total market capitalization,
business retention, new product generation, rate increase actions, geographic
business expansion goals, cost targets (including cost of capital), investment
portfolio yield, risk-based capital, statutory capital, BCAR, tax net operating
loss utilization, customer satisfaction, employee satisfaction, agency ratings,
management of employment practices and employee benefits, supervision of
litigation and information technology, and goals relating to acquisitions or
divestitures of subsidiaries, affiliates or joint ventures. The targeted level
or levels of performance with respect to such business criteria may be
established at such levels and in such terms as the Committee may determine, in
its discretion, including in absolute terms, on a per share basis (either basic
or diluted), as a goal relative to performance in prior periods, or as a goal
compared to the performance of one or more comparable companies or an index
covering multiple companies.

    

    (p)           “Performance Period”
means a Fiscal Year or other period of time (which may be longer or shorter than
a Fiscal Year) set by the Committee.

    

    (q)           “Qualified Performance-based
Compensation” has the meaning given such term under Section 162(m) of the
Code and the regulations promulgated thereunder.

    

    3.           PARTICIPATION

    
 

    
      	
              (a)  

            	
              Participation in
      General.  Individuals eligible to participate in the P4P
      shall consist of officers and other employees of an Employer whom the
      Committee determines have the potential to contribute significantly to the
      success of the Company and its Affiliated Corporations.  For
      each Performance Period the Committee shall determine which officers and
      other employees shall participate in the
P4P.

            

    

    
      	
              (b)  

            	
              Eligibility to Receive
      Performance-Based Compensation.  The Committee shall
      designate which Incentive Plan Awards are intended to be Qualified
      Performance-Based Compensation, and the individuals eligible to receive
      such awards, no later than the 90th day of the Fiscal Year (or, in the
      case of a Performance Period shorter than a Fiscal Year after no later
      than the date on which 25% of the Performance Period has elapsed), so long
      as the attainment of the Performance Goals is still substantially
      uncertain.  Only officers are eligible to receive an Incentive
      Plan Award that is intended to be Qualified Performance-Based
      Compensation.

            

    

    

     
 

    
      
        
        

      

      
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          CONSECO,
INC.

        

        

        
          2010 Pay
For Performance Incentive Plan

        

        

      

    

     

    4.           INCENTIVE
PLAN AWARDS

    

    (a)           Determination of Incentive
Plan Awards.

    

    The
Committee shall, promptly after the date on which the necessary financial,
individual or other information for a particular Performance Period becomes
available, determine and certify in writing the degree to which each of the
Performance Goals has been attained.  Performance Goals shall, to the
extent applicable, be based upon generally accepted accounting
principles.  The Committee may adjust Performance Goals to take into
account the effect of the following, subject to Section 6(l):  Changes
in accounting standards that may be required by the Financial Accounting
Standards Board, the Securities and Exchange Commission or any other rulemaking
body after the Performance Goal is established; realized investment gains and
losses; extraordinary, unusual, non-recurring or infrequent items; currency
fluctuations; acquisitions; divestitures; litigation losses; financing
activities; expenses for restructuring or productivity initiatives; other
non-operating items; new laws, cases or regulatory developments that result in
unanticipated items of gain, loss, income or expense; executive severance
arrangements; and other items as the Committee determines to be required so that
the operating results of the Company, division, or an Affiliated Corporation
shall be computed on a comparative basis from Performance Period to Performance
Period.  Determination by the Committee or its designee shall be final
and conclusive on all parties, but shall be based on relevant objective
information or financial data.
 The
Committee may also, in its discretion, adjust a P4P Award based on other factors
it deems relevant and appropriate; provided, however, that the Committee may
only exercise such discretion to reduce, and not to increase, a P4P Award unless
such award was not intended to be Qualified Performance- based
Compensation.

    

    

    (b)           Eligibility and Amount of
Incentive Plan Award.

    

    (i) To be eligible for payment of
any P4P Award, the Participant must: (x) have performed the Participant’s duties
to the satisfaction of the Committee; (y) have not engaged in any act deemed by
the Committee to be inimical to the best interest of the Company or an
Affiliated Corporation; and (z) otherwise complied with Company and Employer
policies at all times prior to the date the P4P Award is actually
paid.  No P4P Award shall be paid to any Participant who does not
satisfy each of the above.  In addition, unless the Committee
determines otherwise, the Participant must be employed by the Company or an
Affiliated Corporation on the day on which the P4P Award is scheduled to be paid
in accordance with Section 4(c), except in the event termination is due to the
Participant’s death or disability (as defined in Section 422(c) of the Code), or
a separate agreement entered into between the Participant and his or her
Employer specifically provides otherwise; provided however, that no Participant
shall receive such a P4P Award 

     

     

    
      
        
        

      

      
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          CONSECO,
INC.

        

        

        
          2010 Pay
For Performance Incentive Plan

        

        

      

    

     

    upon
retirement or pursuant to a separate agreement entered into between the
Participant and his or her Employer unless such award was not intended to be
Qualified Performance-based Compensation.  In the event of a
Participant’s death or disability, the P4P Award shall be prorated based upon
the period of employment during the Performance Period.  The Committee
may, in its sole discretion, reduce, eliminate or increase any P4P Award for any
individual or group, except that the amount of any P4P Award intended to be
Qualified Performance-based Compensation may not be increased above the amount
determined under Section 4(a) hereof.

    

    (ii) The P4P Award shall be
determined by multiplying the Incentive Percentage applicable to the Participant
by the Participant’s annual rate of salary in effect for the last full payroll
period of the Performance Period to which the P4P Award pertains.  In
no event, however, will a P4P Award for a Covered Employee exceed $5,000,000 for
a Fiscal Year Performance Period (or in the case of a Performance Period other
than a Fiscal Year, an amount that bears the same ratio to $5,000,000 as the
Performance Period bears to a Fiscal Year).

    

    (iii) The Committee shall have the
discretion and authority to make adjustments to any P4P Award in circumstances
where, during the Performance Period: (1) a Participant leaves the Employer and
is rehired as a Participant; (2) a Participant is hired, promoted or transferred
into a position eligible for P4P participation; (3) a Participant transfers
between eligible P4P positions with different Incentive Percentages or
Performance Goals; (4) a Participant transfers to a position not eligible to
participate in the P4P; (5) a Participant becomes eligible for an incentive from
another incentive plan maintained by the Company or Affiliated Corporation; (6)
a Participant is on a leave of absence; and (7) similar circumstances deemed
appropriate by the Committee, consistent with the purpose and terms of the P4P;
provided however, that the Committee shall not be authorized to increase the
amount of the P4P Award payable to a Covered Employee if the amount was intended
to be Qualified Performance-based Compensation.

    

    (c)           Payment of
Award.  Unless the Committee provides otherwise, P4P Awards
will be paid in cash or cash equivalent within 75 days of the end of the
applicable Performance Period to which the award pertains, but in no event prior
to certification by the Committee as provided in Section 4(a) and in no event
past the date that would otherwise qualify the P4P Award as a “short-term
deferral” as that term is defined in Treasury Regulation 1.409A-1(b) promulgated
under Section 409A of the Code.  If any portion of a P4P Award payable
to a Covered Employee that is intended to be Qualified Performance-based
Compensation for any reason is not deductible, payment of that portion shall, at
the Committee’s discretion, be deferred until the earliest date it may be paid
and deducted; provided however, that any such deferral shall be made in
compliance with a plan designed to comply with the requirements of Section 409A
of the Code.  Further, if the Participant is on administrative
suspension at the time payment would otherwise be made, payment shall be delayed
until the matter is resolved by the Employer.  No payment shall be
made if the Committee determines the qualification requirements of Section
4(b)(i) have not been satisfied by the Participant.

     

     

    

    
      
        
        

      

      
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          CONSECO,
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          2010 Pay
For Performance Incentive Plan

        

        

      

    

    5.           ADMINISTRATION

    

    (a)           General.  The
P4P shall be administered by the Committee.  Subject to the provisions
of the P4P, the Committee shall have full discretionary authority to administer
and interpret the P4P, to exercise all powers either specifically granted to it
under the P4P or as are necessary or advisable in the administration of the P4P,
to decide the facts in any case arising under the P4P, to prescribe, amend and
rescind rules and regulations relating to the P4P, to require performance
reports on which it can base its determinations under Section 4(a), and to make
all other determinations necessary or advisable for the administration of the
P4P, all of which shall be binding on all persons, including the Company,
Affiliated Corporations, the Participants (or any person claiming any rights
under the P4P from or through any Participant), and any shareholder of the
Company.  A majority of the Committee shall constitute a quorum, and,
provided a quorum is present (or unanimous written consent is otherwise
obtained), the Committee shall act pursuant to a majority vote of those
present.  No member of the Board or the Committee shall be liable for
any action taken or determination made in good faith with respect to the P4P or
any Plan Award.

    

    (b)           Delegation.  Except
to the extent prohibited by applicable law or the applicable rules of a stock
exchange, the Committee may allocate all or any portion of its responsibilities
and powers to any one or more of its members, may delegate all or any part of
its responsibilities and powers for administering the P4P to one or more persons
as the Committee deems appropriate, and at any time revoke the allocation or
delegation; provided however, the Committee may not delegate its
responsibilities under the Plan relating to any Covered Employee’s P4P Award
intended to be Qualified Performance-based Compensation to the extent delegation
is prohibited under Section 162(m) of the Code.

    

    

    6.           MISCELLANEOUS

    

    (a)           Amendment and
Termination.

    

    (i) The Board may at any time amend
or terminate the P4P (in whole or in part) without the approval of the
shareholders of the Company, except as otherwise provided in this Section
6(a).  Neither the Company nor any Affiliated Corporation is obligated
to continue this P4P.

    

    (ii)  Unless terminated
earlier by the Committee, the Plan shall terminate on the fifth anniversary of
the effective date.  No further P4P Awards may be granted under the
Plan following the termination date, but outstanding P4P Awards for Performance
Periods begun prior to the Plan termination date shall continue in accordance
with their terms.

     

     

    
      
        
        

      

      
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          CONSECO,
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          2010 Pay
For Performance Incentive Plan

        

        

      

    (iii) Any amendment to the P4P that
changes the class of individuals of an Employer eligible to participate, changes
the Performance Measures or the formula used or increases the maximum dollar
amount that may be paid to a Participant for a Performance Period shall not be
effective with respect to Plan Awards to Covered Employees intended to be
Qualified Performance-based Compensation unless the amendment is approved by
shareholders before the Plan Award is paid.

    

    (b)           Effect of Incentive Plan
Awards on Other Compensation.

    

    (i) Plan Awards shall not be
considered eligible pay under other plans, benefit arrangements, or fringe
benefit arrangements of the Company or an Affiliated Corporation, unless
otherwise provided under the terms of other plans.

    

    (ii) To the extent provided in the
applicable benefit plan or benefit arrangement of the Company or an Affiliated
Corporation, amounts payable as Plan Awards will be reduced in accordance with
the Participant’s compensation reduction election, if any, in effect under other
plans at the time the Plan Award is otherwise payable.

    

    (c)           No Guarantee, No
Funding. The payment of a Plan Award for any Performance Period does not
guarantee any person eligibility for or payment of a Plan Award for any other
Performance Period.  Plan Awards shall be paid solely from the general
assets of the Participant’s Employer, to the extent the payments are
attributable to services for the Employer.  To the extent any person
acquires a right to receive payments from an Employer under the P4P, the right
is no greater than the right of any other unsecured general
creditor.

    

    (d)           Tax
Withholding.  The Participant’s Employer shall have the right
to deduct from all payments made under the P4P any federal, state or local taxes
required by law to be withheld with respect to the payments.

    

    (e)           Governing
Law.   The provisions of the P4P shall be interpreted,
construed, and administered in accordance with the referenced provisions of the
Code and with the laws of the State of Delaware.

    

    (f)           Awards Not
Transferable.   Subject to Section 6(h), no amount payable
to, or held under the P4P for the account of, any Participant, spouse or
beneficiary shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, or charge, and any attempt to so
anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the
same shall be void; nor shall any amount payable to, or held under the P4P for
the account of, any Participant be in any manner liable for such Participant's
debts, contracts, liabilities, engagements, or torts, or be subject to any legal
process to levy upon or attach.

     

     

    
      
        
        

      

      
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          CONSECO,
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          2010 Pay
For Performance Incentive Plan

        

        

      

    (g)           No
Contract.  This P4P shall not be deemed a contract of
employment with any Participant, nor shall any provision hereof affect the right
of the Company or any Affiliated Corporations to terminate a Participant's
employment.

    

    (h)           Payments to Minors and
Incompetents; Death. If any Participant, spouse or beneficiary entitled
to receive any benefits hereunder is a minor or is deemed by the Committee or is
adjudged to be legally incapable of giving valid receipt and discharge for such
benefits, they will be paid to such person or institution as the Committee may
designate or to the duly appointed guardian.  Such payment shall, to
the extent made, be deemed a complete discharge of any such payment under the
Plan.  In the event of a Participant’s death prior to payment of any
Plan Award to which Participant is otherwise entitled, payment shall be made to
the Participant’s then-effective beneficiary or beneficiaries in accordance with
the beneficiary designation on file with the Company.  If no such
beneficiary designation is in effect, payments shall be made to the
Participant’s estate.

    

    (i)           Recapture
Rights.  If at any time after the date on which a Participant
has received payment, or becomes vested in the right to receive payment, of an
Incentive Plan Award the Committee determines that the earlier determination as
to the achievement of a Performance Goal was based on incorrect data and that in
fact the Performance Goal had not been achieved or had been achieved to a lesser
extent than originally determined and a portion of the Incentive Plan Award
would not have been paid or have vested, given the correct data, then (i) any
such portion of the Incentive Plan Award for which payment had been received by
the Participant shall be paid by the Participant to the Company upon notice from
the Company as provided by the Committee and (ii) such portion of the Incentive
Plan Award that became vested shall be deemed to be not vested.

    

    (j)           Right of
Setoff.  The Company or any subsidiary or affiliate of the
Company may, to the extent permitted by applicable law, deduct from and set off
against any amounts the Company or a subsidiary or affiliate of the Company may
owe to the Participant from time to time (including any amounts payable in
connection with any Incentive Plan Award, owed as wages, fringe benefits or
other compensation owed to the Participant), such amounts as may be owed by the
Participant to the Company under the Plan, including but not limited to amounts
owed under Section 6(i), although the Participant shall remain liable for any
part of the Participant’s payment obligation not satisfied through deduction and
setoff.  By accepting any Incentive Plan Award hereunder, the
Participant agrees to any deduction or setoff under this Section
6(j).

    

    (k)           Nonexclusivity of the
Plan.  Neither the adoption of the Plan by the Board nor its
submission of any terms of the Plan to the stockholders of the Company for
approval shall be construed as creating any limitations on the power of the
Board or a committee thereof to adopt such other incentive arrangements, apart
from the Plan, as it may deem desirable, including incentive arrangements and
awards which do not qualify under Section 162(m) of the Code, and such
other arrangements may be either applicable generally or only in specific
cases.

     

     

    
      
        
        

      

      
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          2010 Pay
For Performance Incentive Plan

        

        

      

    (l)           Compliance with Section
162(m) of the Code.  It is the intent of the Company that
compensation under the Plan payable to Covered Employees shall constitute
Qualified Performance-based Compensation unless otherwise determined by the
Committee at the time of allocation of an award.  Accordingly, the
terms of Section 4 and other provisions of the Plan, including the
definitions and other terms used therein, shall be interpreted in a manner
consistent with Section 162(m) of the Code.  If any provision of
the Plan or any document relating to an award that is designated as intended to
comply with Section 162(m) of the Code does not comply or is inconsistent with
the requirements of Section 162(m) of the Code, such provision shall be
construed or deemed amended to the extent necessary to conform to such
requirements, and no provision shall be deemed to confer upon the Committee or
any other person discretion to increase the amount of compensation otherwise
payable in connection with any such award upon attainment of the applicable
performance objectives.  Notwithstanding the foregoing, however,
whenever the Committee determines that it is advisable to grant or pay Plan
Awards that do not qualify as Qualified Performance-based Compensation, the
Committee may make grants or payments without satisfying the requirements of
Section 162(m) of the Code, provided, however, that any such determination must
be made prior to the time that any such grant or payment is made.

    

    (m)           Severability; Entire
Agreement.  If any of the provisions of this Plan or any award
document is finally held to be invalid, illegal or unenforceable (whether in
whole or in part), such provision shall be deemed modified to the extent, but
only to the extent, of such invalidity, illegality or unenforceability, and the
remaining provisions shall not be affected thereby; provided, that, if any of
such provisions is finally held to be invalid, illegal, or unenforceable because
it exceeds the maximum scope determined to be acceptable to permit such
provision to be enforceable, such provision shall be deemed to be modified to
the minimum extent necessary to modify such scope in order to make such
provision enforceable hereunder.  The Plan and any award documents
contain the entire agreement of the parties with respect to the subject matter
thereof and, unless specified otherwise, supersede all prior agreements,
promises, covenants, arrangements, communications, representations and
warranties between them, whether written or oral, with respect to the subject
matter thereof.

    

    
      	
               
      

            	
              (n)

            	
              Captions.  The
      captions contained in the P4P are inserted only as a matter of convenience
      and for reference and in no way define, limit, enlarge or describe the
      scope or intent of the Plan, nor do they in any way affect the
      construction of any provision of the
Plan.

            

    

     

     

    
      
        
        

      

      
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          CONSECO,
INC.

        

        

        
          2010 Pay
For Performance Incentive Plan

        

        

      

    (o)        Section
409A.  For purposes of this Plan, references to an award term
or event (including any authority or right of the Company or a Participant)
being in compliance with Section 409A of the Code shall mean, for an award that
is a “deferral” under Section 409A (a “409A Award”), that the term or event will
not cause the Participant to be liable for payment of interest or a tax penalty
under Section 409A and, for an award that is not considered a “deferral” under
Section 409A (a “non-409A Award”), that the term or event will not cause the
award to be treated as a deferral subject to Section 409A. Other provisions of
the Plan notwithstanding, the terms of any 409A Award and any Non-409A Award,
including any authority of the Company and rights of the Participant with
respect to the Award, shall be limited to those terms permitted under Section
409A, and any terms not permitted under Section 409A shall be automatically
modified and limited to the extent necessary to conform with Section 409A. For
this purpose, other provisions of the Plan notwithstanding, the Company shall
have no authority to accelerate distributions relating to 409A Awards in excess
of the authority permitted under Section 409A, and any distribution subject to
Section 409A(a)(2)(A)(i) (separation from service) to a “key employee” as
defined under Section 409A(a)(2)(B)(i), shall not occur earlier than the
earliest time permitted under Section 409A(a)(2)(B)(i).

    

    

    

    

    

    
      
         

      

      
        - 10
-ex10-30.htm

     

     

    Exhibit 10.30

    

    Confidential
treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidentiality request. Omissions
are designated as *. A complete version of this exhibit has been filed
separately with the Securities and Exchange Commission.

    

    MASTER
SERVICES AGREEMENT - No. AC000032509

    

    This
Master Services Agreement (“Agreement”) is entered into by and between the
following Parties:

    

    Customer:                      Answers
Corporation                                                   C7
Data Centers, Inc.

    Address:                        237
West 35th
Street                                                     357
South 670 West

            Suite
1101                                                
                      Suite
100

            New York, NY
10001                                                     Lindon,
Utah  84042

    

    Phone:                           646-502-4777                                         
                        801-822-5300

    Fax:                                646-502-4778                                       
                         801-822-5301

    
 

    AGREEMENT

    

    C7 Data
Centers, Inc. (“C7”) is engaged in the business of providing colocation, hosting
and managed services, together with other services as mutually agreed, to others
(collectively the “Services,” as further defined herein).  The
Services enable the Customer to monitor and manage its assets (e.g.,
applications, databases, servers, routers, IT devices, non-IT devices and/or
other networkable assets of Customer) located at C7’s data centers, to manage
third party services, and to access reliable Internet colocation and hosting
services.  Customer hereby engages C7 to perform the Services as fully
described in one or more Statements of Work and in accordance with this
Agreement.  The Parties agree to the following Terms and
Conditions.

    

    TERMS
AND CONDITIONS

    

    1.0       Services

    

    
      	
               
      

            	
              1.1

            	
              Summary of
      Services.  C7 will provide the Services to Customer as
      described below and in the applicable SOW(s) (see Section
      1.3).  The Services include the
  following:

            

    

    

    
      	
              (a)  

            	
              Colocation
      Services.  Colocation services for web sites,
      Internet-based applications, including facilities, “ping, power and pipe”
      and other customary services.

            

    

    

    
      	
              (b)  

            	
              Monitoring and
      Management. Infrastructure, services, and tools that enable the
      Customer to monitor and manage certain “Managed Assets” identified in an
      applicable SOW.  Customer will access reports and other
      pertinent information through a web browser.  The applicable SOW
      will include further descriptions of the Services as required by Customer.
      C7 may, at C7’s expense and with Customer’s prior written approval,
      replace or use different hardware, computer programs, databases, policies,
      and means.

            

    

    

    
      	
              (c)  

            	
              Smart
      Hands. C7 will provide Customer ongoing “smart hands” support, at rates
      set forth in any SOW, which shall include, among other remote support
      services:

            

    

    

    
      	
              o  

            	
              Pushing
      buttons, toggling switches

            

    

    
      	
              o  

            	
              Securing
      cables to connections

            

    

    
      	
              o  

            	
              Rebooting
      or power cycling equipment

            

    

    
      	
              o  

            	
              Basic
      observation and reporting on
environment

            

    

    
      	
              o  

            	
              Relaying
      information from equipment status
indicators

            

    

    
      	
              o  

            	
              Moving,
      securing or terminating cables

            

    

    
      	
              o  

            	
              Providing
      visual verification to assist
troubleshooting

            

    

    
      	
              o  

            	
              Adding,
      removing, or verifying demarcation
labels

            

    

    
      	
              o  

            	
              Labeling
      or taking digital photos

            

    

    
      	
              o  

            	
              Reading
      serial numbers on equipment

            

    

    
      	
              o  

            	
              Replacing
      or verifying integrity of cross
connects

            

    

    
      	
              o  

            	
              Plugging
      in console port for remote
management

            

    

    
      	
              o  

            	
              Installing
      equipment components, including opening servers to add/replace RAM
      (memory)

            

    

    
      	
              o  

            	
              Inserting
      and replacing removable media

            

    

    
      	
              o  

            	
              Equipment
      installation and basic configuration, including attaching power and
      network cables to newly installed
hardware

            

    

    
      
        
          Confidential                                     Page
1

        

         

      

      
         

        
          

        

      

      
         

      

    

    

    

    
      	
              o  

            	
              Basic
      patch and power cable installation and
  reconfiguration

            

    

    
      	
              o  

            	
              Shipping
      and handling incoming hardware and RMA
equipment

            

    

    
      	
              o  

            	
              Unpacking,
      racking and labeling delivered servers, network equipment, and tasks of
      similar nature

            

    

    
      	
              o  

            	
              Assisting
      with relocating or movement of
equipment

            

    

    
      	
              o  

            	
              Replacing
      hot-swap HDDs & power supplies

            

    

     

    
      	
               
      

            	
              1.2

            	
              Other
      Services.  C7 may provide other services to Customer if
      and as such other services are described in an SOW (see Section
      1.3).  Other services including but not limited to those listed
      below shall also be governed by this Agreement as
    “Services.”

            

    

     

    
      	
              Server
      Administration

            	
              Managed
      Firewall Services

            	
              Network
      Administration

            
	
              Network
      Monitoring

            	
              Disaster
      Recovery

            	
              Managed
      Backup Services

            
	
              Managed
      Web Services

            	
              Virtualization

            	
              Managed
      SAN Services

            
	
              Smart
      Hands

            	 
      	 
      

    

     

    

     

    
      	
               
      

            	
              1.3

            	
              Statements of
      Work.  From time to time, the Parties may enter into one
      or more Statements of Work (“SOW’s” or “SOW”).  To be binding on
      the parties, an SOW must be in writing and signed by both
      parties.  Each SOW will be tied to this
    Agreement.

            

    

    

    Any
mutually acceptable other terms and conditions may be included by the parties in
the SOW.  The parties may agree to include other appendices or
provisions in the SOW.  Each SOW will be governed by the terms and
conditions of this Agreement.  In the event of a conflict precedence
shall first be given to the applicable SOW, then to this Agreement.

    

    
      	
               
      

            	
              1.4

            	
              Services and
      Resources.  “Services” shall mean the services to be
      performed by C7 as described in the Section 1.0 SERVICES or elsewhere in
      the SOW.  C7 shall perform the Services for Customer and will
      use the Resources (see Section 1.5), as applicable, in performing
      Services.

            

    

    

    
      	
               
      

            	
              1.5

            	
              Resources.  “Resources”
      shall mean the hardware, software, policies, and other resources, if any,
      identified in Section 1.0 of the SOW.  Unless expressly stated
      otherwise in the SOW, all Resources provided by C7 are owned by C7, and
      all Resources provided by Customer are owned by Customer.  In
      the case of Resources in the form of software licenses, ownership by C7
      means that C7 holds and controls the license granted by the software
      licensor.  If the SOW indicates that certain Resources are to be
      provided by Customer, then Customer shall provide such Resources to C7 for
      purposes of the Services.  C7 shall be responsible for
      maintenance of all Resources owned by C7. Unless otherwise stated in the
      SOW, Customer shall be responsible for maintenance of all Resources not
      owned by C7.  C7’s Resources are not dedicated exclusively to
      the Services or Customer unless expressly indicated in the
      SOW.  Subject to C7’s obligation to provide the Services set
      forth in the Agreement and any SOWs executed hereunder, the parties
      acknowledge and agree that C7 retains title to all Resources provided by
      C7 and that Customer may not pledge or grant a security interest in the
      Resources, or otherwise use the Resources as collateral with respect to
      any lease, land or other financial relationship. C7 expressly acknowledges
      and agrees that Customer retains title to all Resources provided by
      Customer and that C7 may not pledge or grant a security interest in the
      Resources, or otherwise use the Resources as collateral with respect to
      any lease, land or other financial relationship.  It is
      understood that the level of Services is based on the assumptions and
      estimates stated in each SOW.  If actual loads, traffic, demands
      or other circumstances are not within such assumptions and estimates, then
      additional or changed Resources may be required and an amended SOW
      pursuant to Section 1.7 below may be
required.

            

    

    

    
      	
                       1.6

            	
              Justification
      of Resources and IP Addresses

            

    

    

    
      	
               
      

            	
              C7
      reserves the right to request justification of IP address usage from
      Customer. Possible justification questions and requests could include the
      following:

            

    

    

    
      	
              ·  

            	
              What
      products and services does your organization
  provide?

            

    

    
      	
              ·  

            	
              How
      many IP addresses are you currently using on your
  network?

            

    

    
      	
              ·  

            	
              How
      many new hosts will you be numbering in the next 12
  months?

            

    

    
      	
              ·  

            	
              Please
      provide a numbering topology and accounting for the IP addresses in use in
      your network today.

            

    

    
      
        
          Confidential                                     Page
2

        

         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              1.7

            	
              Responsibilities.  If
      and to the extent that the SOW attributes or assigns any responsibility,
      task, deliverable or obligation to Customer or a third party (“Non-C7
      Obligations”), then Customer or the third party shall be responsible for
      such Non-C7 Obligations, not C7.  C7’s obligations are subject
      to the performance and delivery of Non-C7 Obligations, provided, however, that
      in the event any C7 obligation is unrelated to a Non-C7 Obligation and
      requires fulfillment and/or performance on the part of C7 regardless of
      whether any Non-C7 Obligation was fulfilled and/or performed, by a
      standard of reasonableness, then, such C7 Obligation shall not be subject
      to any Non-C7 Obligation.

            

    

    

    
      	
               
      

            	
              1.8

            	
              SOW
      Amendments.  If the Parties desire to amend an SOW, they
      may do so, but such amendment will only be effective following the
      execution of a written amended SOW by both Parties.  An
      amendment may include additions or changes to Services, Resources,
      payments and/or other provisions.   If Customer desires
      that Services be changed, then Customer will submit a request for such
      change in the form of a written change order.  C7 will respond
      in writing to Customer within five (5) business days of each submitted
      change order request either accepting or denying the change
      order.  If the change is accepted by C7, then C7 will prepare an
      amendment to the SOW specifying the additions or changes to the Services,
      Resources, payments and/or other provisions, as the case may be as well as
      any additional fees, charges and expenses resulting from the change order,
      if any.

            

    

    

    
      	
               
      

            	
              1.9

            	
              Cooperation. Each Party
      shall make promptly available to the other such information, assistance
      and cooperation as such other Party may reasonably request in performing
      its obligations under this Agreement; provided that in the event such
      information is considered to be confidential, such information shall be
      provided under the protection of a mutual non-disclosure agreement, a copy
      of which is attached hereto and incorporated into this
      agreement.

            

    

    

    
      	
                     
      1.10

            	
              Contact Persons and Notices;
      Escalation Path.  See Section 4.0 of the SOW. C7 agrees
      that Customer shall have a dedicated C7 Account Manager, the details of
      whom appear in Section 4.0 of the SOW, serving as a single point of
      contact for Customer. C7 shall at all times maintain an “escalation path”
      for unresolved issues related to the Services, with names, contact
      numbers and relevant escalation times, which current escalation path is
      set forth in Section 4.0 of the
SOW.

            

    

    

    
      	
                     
      1.11

            	
              Time
      Schedules.  TIME IS OF THE ESSENCE TO THIS AGREEMENT AND
      EACH SOW.

            

    

    

    
      	
                     
      1.12

            	
              Nature of
      Agreement.  Customer acknowledges that this is a services
      agreement, not a lease of any real
property.

            

    

    

    
      	
               
      

            	
              2.0

            	
              Third
      Party Software

            

    

    

    Third party software will be operated
and used by C7 to enable and facilitate the performance of Services. Support for
such third party software is guaranteed by C7; and if, for whatever reason, the
parties learn that any third party software can not be used to enable and
facilitate the performance of the Services, C7 agrees to promptly replace such
third party software, at its own expense.

    

    
      	
               
      

            	
              3.0

            	
              Maintenance

            

    

    

    
      	
               
      

            	
              3.1

            	
              Maintenance.  C7
      shall be responsible for maintenance of its facilities and infrastructure,
      and Customer shall reasonably cooperate therewith.  All
      decisions concerning maintenance window notifications shall be made in
      coordination with Customer, with no less than five (5) business days
      advance written notice. Notwithstanding the foregoing, C7 agrees to
      provide Customer, promptly following the execution of this Agreement, a
      copy of C7’s current maintenance schedule, and to regularly provide
      Customer with updates to such maintenance schedule, no less than thirty
      (30) days in advance of changes to the maintenance
    schedule.

            

    

    

    
      	
               
      

            	
              3.2

            	
              Support.  Any
      support by C7 of Customer shall be described in the applicable SOW and
      shall be considered an integral component of the
  Services.

            

    

    

    
      	
               
      

            	
              4.0

            	
              Payments

            

    

    

    
      	
               
      

            	
              4.1

            	
              Fees. In consideration
      of the Services, Customer shall pay to C7 the fees and other charges set
      forth in the Payment Schedule of the applicable SOW.  Payment of
      these fees and other charges entitles Customer to the Services specified
      in the applicable SOW.  All payments are due within thirty (30)
      days of Customer’s receipt of C7’s invoice detailing the Services
      rendered.

            

    

    

    
      	
               
      

            	
              4.2

            	
              Expenses. In addition to
      these fees, Customer shall reimburse C7 for reasonable and necessary costs
      and expenses (including any travel, lodging and meals) incurred by C7 in
      its performance of the Services at Customer’s request.  Any such
      expenses must be approved by Customer in advance, in
    writing.

            

    

    
      
        
          Confidential                                     Page
3

        

         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
               
    4.3

            	
              Taxes. C7 and Customer
      will responsible for payment of any sales, use and other taxes or
      government assessments or duties that apply to their respective companies
      as required by law.

            

    

    

    
      	
              4.4  

            	
              Late
      Payments.  Any payments paid by Customer more than ten
      (10) days after their due date (“late payments”) shall be subject to a
      finance charge of 1% per month until paid in full.  However, the
      finance charge shall not exceed the maximum rate or amount, if any,
      allowed by applicable law.

            

    

    

    4A.       Copyright
and Website Ownership

    

    Customer shall retain all right,
title and interest (including without limitations copyright and other
proprietary or intellectual property rights) in its websites including the
content on the websites and all legally protectable elements, derivative works,
modifications and enhancements thereof. To the extent that ownership of the
websites’ content does not automatically vest in Customer, C7 agrees to transfer
and assign to Customer all right, title and interest in the websites’ content
and protectable elements or derivative works thereof.  C7 shall not sell or
otherwise transfer, reproduce or use the websites’ content for any purpose
except to provide the services hereunder. For avoidance of doubt, any
intellectual property right and/or invention in the possession of either party
prior to the execution of this Agreement shall remain in the ownership of such
party and the other party shall not acquire any right in such rights and/or
inventions, unless otherwise expressly set forth in this Agreement.

    

    5.0       Unauthorized
Access and Non-Solicitation

    

    
      	
               
      

            	
              5.1

            	
              Unauthorized Access and
      Improper Purposes.  C7’s policy titled “Acceptable Use
      Policy”, as published on its website at the following address:
      http://www.c7dc.com/uploads/Documents/Acceptable%20Use%20Policy.pdf (the
      Policy”), is incorporated into this Agreement, provided, however, that
      notwithstanding anything to the contrary contained in such Policy, C7
      agrees that: (i) C7 may NOT assign its rights
      and duties under the terms of the Policy to any party without Customer’s
      prior written consent; and (ii) C7’s right to modify the Policy without
      Customer’s consent shall be subject to (a) C7 notifying Customer of any
      Policy modification at least fifteen (15) business days prior to the
      effectiveness of such modification; and (b) Customer’s right to terminate
      the Agreement and any applicable SOW then in effect, notwithstanding any
      terms and/or conditions affecting rights of termination and without
      penalty and/or termination fee.

            

    

    

    
      	
               
      

            	
              5.2

            	
              Non-solicitation.  During
      the term of this Agreement and for a period of one (1) year after
      termination, neither Party shall solicit the employment of any employee of
      the other Party or knowingly induce any employee, independent contractor
      or consultant of the other party to terminate or breach an employment,
      contractual or other relationship with the other Party.  This
      Section 5.2 does not prohibit a Party from hiring the other Party’s
      employee if the other Party’s employee first initiated discussions
      concerning employment.  This Section 5.2 does not prohibit any
      general solicitation of employment or services in newspapers or other
      publications, on the Internet, or otherwise, where such general
      solicitation is not specifically directed at the other Party’s
      employees.

            

    

    

    
      	
               
      

            	
              6.0

            	
              Indemnities,
      Warranty and Disclaimers

            

    

    

    
      	
               
      

            	
              6.1

            	
              Intellectual Property
      Indemnification.  In the event that any Services infringe
      any patent, copyright, trade secret or trademark or any other intellectual
      property right of a third party not affiliated with Customer, and such
      third party asserts a claim of such infringement against Customer, then C7
      shall indemnify, defend and hold Customer, and its officers, directors,
      employees, agents and contractors harmless against and from any and all
      such claims, and shall pay any and all damages, including without
      limitation Customer’s reasonable attorneys’ fees and litigation costs ,
      and shall pay any settlement of such claim, provided that:  (i)
      Customer promptly gives notice to C7 of such claim, (ii) Customer allows
      C7 to control the defense and settlement of such claim, provided that
      Customer may, with its own counsel and at its own expense, participate in
      defense of the claim and (iii) Customer fully cooperates with C7 in
      connection with the defense and/or any settlement of such claim, all at
      C7’s expenses.  C7 shall not be obligated or liable for any
      infringement based upon or caused by: (a) anything provided by Customer,
      or (b), any specifications, instructions or requirements provided directly
      by Customer, or (c) the laws of any country or jurisdiction other than the
      United States of America or its
states.

            

    

    

    
      	
               
      

            	
              6.2

            	
              Services
      Warranty.  C7 represents and warrants that C7 is free to
      enter into this Agreement and that C7 is under no disability, restriction,
      or prohibition that will interfere in any manner with C7’s full compliance
      with and performance under this Agreement. C7 warrants that Services will
      be of good quality and to the reasonable satisfaction of Customer and that
      the Services will be performed in a professional and workmanlike manner
      with high quality using sufficiently competent personnel. C7 also warrants
      and represents that no Services provided to the Customer hereunder will
      infringe or violate any right of any person or firm and that Customer may
      exploit such Services provided hereunder without liability or obligation
      to any person or firm. C7 further warrants that it will be liable for any
      equipment loss and/or personal injury suffered by Customer resulting from
      willful misconduct or from negligent acts or omissions by C7 or by its
      representative(s) or designees;

            

    

    
      
        
          Confidential                                     Page
4

        

         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              6.3

            	
              Disclaimer.  C7 MAKES NO WARRANTIES,
      REPRESENTATIONS OR PROMISES NOT EXPRESSLY SET FORTH IN THIS
      AGREEMENT.  C7 DISCLAIMS AND EXCLUDES ANY AND ALL IMPLIED
      WARRANTIES OF MERCHANTABILITY, OR FITNESS FOR A PARTICULAR
      PURPOSE.

            

    

    

    
      	
               
      

            	
              6.4

            	
              Limitation on
      Liability.  EXCEPT WITH RESPECT TO
      LIABILITY FOR INFRINGEMENT OF INTELLECTUAL PROPERTY OR BREACH OF
      CONFIDENTIALITY PURSUANT TO SECTION 1.9, AND EXCEPT WITH RESPECT TO A
      FAILURE OF THE FACILITY AND/OR THE NEGLIGENCE OR WILLFUL MISCONDUCT OF C7,
      ITS EMPLOYEES, AUTHORIZED AGENTS OR REPRESENTATIVES, ARRISING OR GROWING
      OUT OF THE PERFORMANCE OF THIS AGREEMENT, NEITHER PARTY SHALL BE LIABLE TO
      THE OTHER PARTY (REGARDLESS OF THE FORM OF ACTION OR THE CLAIM E.G.
      CONTRACT, WARRANTY, TORT, MALPRACTICE AND/OR OTHERWISE) FOR INDIRECT,
      INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES OR FOR ANY LOSS OF REVENUE,
      PROFITS BUSINESS OPPORTUNITIES, OR FOR ANY FAILURE TO REALIZE SAVINGS OR
      OTHER BENEFITS, EVEN IF ADVISED OF THE POSSIBILITY OF ANY OF THE
      FOREGOING.  EXCEPT FOR INDEMNIFICATION OBLIGATIONS HEREUNDER OR
      A FAILURE OF THE FACILITY, THE AGGREGATE LIABILITY OF EITHER PARTY
      RELATING TO OR ARISING FROM ANY SOW AND FOR ANY AND ALL CAUSES OF ACTION
      ARISING UNDER THIS AGREEMENT OR ANY SOW SHALL NOT EXCEED THE AMOUNT OF
      FEES ACTUALLY PAID BY CUSTOMER TO C7 UNDER THE APPLICABLE
      SOW.  C7 IS NOT RESPONSIBLE FOR LOSS OF USE OF ANY WEB SITE,
      INTERNET ACCESS, HARDWARE OR SOFTWARE, LOSS OF DATA, COSTS OF RE-CREATING
      LOST DATA, THE COST OF ANY SUBSTITUTE PERFORMANCE, EQUIPMENT OR PROGRAM,
      OR CLAIMS BY ANY PARTY OTHER THAN CUSTOMER, EVEN IF ADVISED OF THE
      POSSIBILITY THEREOF.  THIS AGREEMENT, AND THIS SECTION 6 IN
      PARTICULAR, DEFINES A MUTUALLY AGREED UPON ALLOCATION OF RISK AND THE FEES
      AND OTHER CONSIDERATION HAVE BEEN SET TO REFLECT SUCH
      ALLOCATION.  THIS SECTION 6.4 SHALL NOT APPLY TO ANY TORT
      LIABILITY OF EITHER PARTY BASED ON NEGLIGENCE OR WILLFUL MISCONDUCT
      RESULTING IN PHYSICAL DAMAGE TO TANGIBLE PROPERTY OR PERSONAL INJURY OR
      DEATH.

            

    

    

    
      	
               
      

            	
              7.0

            	
              Termination

            

    

    

    
      	
               
      

            	
              7.1

            	
              Term. Termination and
      Renewal.  The term and termination of each SOW shall be
      as stated in the SOW.  At the end of the term, the SOW will
      automatically renew unless the Customer provides ninety (90) days written
      notice to C7 of their desire to terminate the SOW.C7 retains the right to
      adjust existing SOW power fees to the CPI, not to exceed 5% annually, at
      the time of the SOW renewal.

            

   7.2 To terminate the Agreement, Customer must
provide C7 with ninety (90) days written notice of termination (“Termination Notice Period”),
unless otherwise specified in the SOW, the Network SLA (Exhibit A) or the
Facility SLA (Exhibit B). Unless otherwise provided in this Agreement and/or in
the SOW, in case of early termination by Customer:

    

    *

    

    
      	
               
      

            	
              7.3

            	
              Breach.  If
      either Party breaches an SOW or this Agreement and fails to cure said
      breach within  twenty (20) days after receiving notice of said
      breach from the non-breaching Party, then the non-breaching Party may
      terminate the SOW and this Agreement as it applies to the terminated
      SOW.  This Section shall not limit the relief, remedies and
      damages to which the non-breaching Party may be
  entitled.

            

    

    

    
      	
               
      

            	
              7.4

            	
              Survival.  In
      the event of any termination or expiration of an SOW or this Agreement,
      the following shall apply:  (a) Sections 4, 5, 6, 7 and 8 and
      all obligations in connection with the Services or to indemnify or hold
      harmless shall survive termination and remain in effect;  (b)
      Termination shall not affect or delay any payment under this Agreement
      which would be payable in the absence of termination; (c) Services shall
      cease upon termination; and (d) Any and all other proprietary materials or
      Resources owned or provided by C7 or its suppliers or licensors shall be
      delivered by Customer to C7 in accordance with C7’s reasonable
      instructions and at C7’s cost.

            

    

    

    
      	
               
      

            	
              7.5

            	
              Customer Equipment. Upon
      termination of this Agreement, Customer shall remove from the data center
      all Customer Equipment and shall return the space to C7 in the same
      condition it was provided on the original date of installation, normal
      wear and tear excepted, pursuant to a time schedule agreed upon by C7 and
      Customer, or if no schedule is agreed upon, within ten (10) business days
      after the termination date. Before removal of its equipment, Customer
      agrees to make payment for any outstanding payments for all monthly
      Service Fees and other amounts due to C7. In the event Customer is in
      default on any payments owed to C7, it shall only be permitted to remove
      Customer Equipment in such a manner that Customer Equipment in at least
      the value of any owed payments shall remain in the data center, until all
      payments are made and no further amounts are owed to C7.  If
      Customer fails to comply with this paragraph, Customer shall be
      responsible for all damages and costs incurred by C7, and during any
      period of holdover.

            

    

    
      
        
          Confidential                                     Page
5

        

         

      

      
         

        
          

        

      

      
         

      

    

    

    If
Customer does not remove the Customer Equipment as required by this Agreement,
C7 may, for a period of six (6) months, charge Customer a storage fee for
storing the Customer Equipment in a C7 or third-party storage area, in
accordance with reasonable storage prices as shall be applicable from time to
time. C7 shall not be liable for any loss or damage caused to Customer or its
Customer Equipment or other property resulting from such removal and
storage.  If Customer does not remove its Customer Equipment within
120 days after the end of the Term, C7 may sell the Customer Equipment at public
or private sale.  The proceeds of such sale shall be applied to costs
and to any amounts owing by Customer to C7, and any damages incurred by C7, and
the balance, if any, shall be paid to Customer.

    

    
      	
               
      

            	
              8.0

            	
              General
      Provisions

            

    

    

    
      	
               
      

            	
              8.1

            	
              Assignment and
      Successors.  This Agreement is not assignable or
      transferable without the prior written consent of the non-assigning party,
      which shall not be unreasonably withheld or delayed, except that this
      Agreement may be assigned or transferred, without consent of the
      non-assigning, to any third party who acquires all or substantially all of
      the assigning party’s assets relating to this
      Agreement.  Without limiting the generality of the foregoing,
      such assignment or transfer may be made by either party in connection with
      any reorganization, consolidation, acquisition, sale, or merger of or by
      that party. Notwithstanding the foregoing, in the event C7 notifies
      Customer of its assignment of this Agreement and any SOW to any third
      party pursuant to the sale of all or substantially all of C7’s assets (via
      reorganization, consolidation, acquisition, sale, merger or any other
      extraordinary transaction), Customer shall have the right to terminate the
      Agreement upon ninety (90) days advance written notice to assignee without
      suffering any penalties and/or termination fees
  whatsoever.

            

    

    

    
      	
              8.2  

            	
              Governing Law and Forum.
      This Agreement shall be governed by the laws of the state of Utah without
      giving effect to conflict or choice of law
  principles.

            

    

    
      	
               
      

            	 

    

    
      	
               
      

            	
              8.3

            	
              Force
      Majeure.  Neither Party shall be deemed in breach of this
      Agreement for any failure to perform an obligation where such failure is
      caused by an Act of God, labor dispute or shortage beyond the control of
      that Party; provided that such party shall promptly notify the other party
      of the event and take all commercially reasonable efforts to cure failure
      caused by the event.

            

    

    

    
      	
               
      

            	
              8.4

            	
              Waiver.  Any
      waiver under this Agreement must be in writing and any waiver of one event
      shall not be construed as a waiver of subsequent
  events.

            

    

    

    
      	
               
      

            	
              8.5

            	
              Intentionally
      Omitted

            

    

    

    
      	
               
      

            	
              8.6

            	
              Construction.  This
      Agreement (including each SOW) represents the wording selected by the
      Parties to define their agreement and no rule of strict construction shall
      apply against either Party.  This Agreement is written in, and
      shall be governed by, the English
language.

            

    

    

    
      	
               
      

            	
              8.7

            	
              Government
      Approvals.  If any special government approvals, permits,
      licenses, or other authorizations are necessary for C7’s performance of
      the Services, then C7 shall obtain such approvals, permits, licenses, or
      other authorizations at C7’s sole
expense.

            

    

    

    
      	
               
      

            	
              8.8

            	
              Relationship.  Neither
      Party is the partner, joint venturer, agent or representative of the other
      Party.  Each Party is an independent
      contractor.  There is no employment relationship between the
      Parties.  Neither Party has the authority to make any
      representations or warranties or incur any obligations or liabilities on
      behalf of the other Party.  Neither Party shall make any
      representation to a third party inconsistent with this Section
      8.8.

            

    

    

    
      	
               
      

            	
              8.9

            	
              Subcontractors.  C7
      may subcontract Services or responsibilities to subcontractors, but this
      shall not excuse C7 from all of its duties and obligations pursuant to
      this Agreement and any SOW, including, without limitation, its obligations
      (i) to be the single point of contact for the Services and (ii) to ensure
      that the Services and C7’s responsibilities are performed in accordance
      with this Agreement.

            

    

    

    
      	
                     
      8.10

            	
              Entire
      Agreement.  This Agreement (which includes each
      applicable SOW): (i) represents the entire agreement between the Parties
      relating to the subject matter of this Agreement, (ii) supersedes all
      prior purchase orders, agreements, understandings, representations and
      warranties applicable to the subject matter of this Agreement, and (iii)
      may only be amended, canceled or rescinded by a writing signed by both
      Parties.  Any terms or conditions of any purchase order or other
      document submitted by either Party in connection with any Services, which
      are in addition to, different from or inconsistent with the terms and
      conditions of this Agreement are not binding on the Parties and are
      ineffective.

            

    

    

    
      	
                     
      8.11

            	
              Execution.  The
      persons signing below represent that they are duly authorized to execute
      this Agreement for and on behalf of the Party for whom they are
      signing.

            

    

    
      
        
          Confidential                                     Page
6

        

         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
                    
      8.12

            	
              Jurisdiction and
      Venue.  The exclusive venue for any judicial action
      arising out of or relating to this Agreement shall be the state or federal
      courts located in Salt Lake City, Utah, and the parties hereby consent to
      the jurisdiction of said courts and waive any objection that venue in such
      courts is inconvenient.

            

    

    

    
      	
                    
      8.13

            	
              Customer Name and Logo
      Usage.  Customer grants C7 the right to list Customer’s
      name and logo on C7’s website and to place a hyperlink on C7’s website to
      Customer’s website, provided it coordinates in writing the usage of any
      particular name, logo and/or hyperlink with Customer, in advance. C7 shall
      be entitled to provide Customer’s name to potential clients of C7 for the
      purpose of reference, provided, however, that C7 shall not publish or
      distribute any advertising or promotional material regarding its
      relationship with Customer without the prior written consent of
      Customer.

            

    

    

    
      	
               
      

            	
              9.
      Service Level Agreement

            

    

    

    C7 has
provided this Service Level Agreement (SLA) to guarantee the performance and
availability of your solution. Through built-in redundancy at all levels and
proactive monitoring C7 strives for 100% availability during normal operation
times as defined in this Statement of Work.

    

    
      	
              a.  

            	
              Normal
      Operational Times

            

    

    Non-compliance
can only occur during normal operational times as agreed upon between C7 and the
Customer. In addition, the following items are excluded from normal operational
times:

    
      	
              ·  

            	
              Issues
      associated with non-certified Customer provided hardware, software and
      other equipment; Issues associated with Customer provided or Customer
      leased local area networks or ISP
connections.

            

    

    
      	
              ·  

            	
              Use
      of unapproved or modified hardware or
software.

            

    

    
      	
              ·  

            	
              Issues
      arising from the use of the solution by the Customer, its employees,
      agents, or contractors, in ways not agreed upon in this
      document.

            

    

    
      	
              ·  

            	
              Repair
      times coordinated in advance between C7 and the
  Customer.

            

    

    
      	
              ·  

            	
              Scheduled
      maintenance times.

            

    

    
      	
              ·  

            	
              Normal
      business hours are 6:00am to 6:00pm Monday through Friday excluding
      holidays.

            

    

    

    
      	
              b.  

            	
              Uptime
      Guarantee

            

    

    C7
strives for “true SLA” which is a goal of 100% availability. C7 achieves this
level of compliance through redundant services and the proactive monitoring of
the solution.

    

    C7
guarantees a minimum facility availability of 99.99% on a 24x7x365 basis except
for scheduled maintenance. Availability will be calculated monthly using the
following formula.  Actual Minutes of Facility Availability during the
month / Total Minutes of Availability during the month x 100 shall equal the
Percent of Availability.

    

    Should
the monthly availability fall below the agreed to 99.99% for any month, C7 shall
credit the customer the equivalent of 1 (one) day of the Monthly Administration
Cost (see Section 3.1 of this SOW) for each 1%, or part thereof, of the 99.99%
target not met due to a power, cooling or network outage. This SLA is applicable
only to items within C7’s assumed control and to outages outside scheduled
maintenance windows.

    

    
      	
              c.  

            	
              A
      & B Legs of Power

            

    

    

    C7 highly
recommends that our customers purchase and use both the A and B legs of power to
provide redundant power to all of their computer equipment. During electrical
equipment maintenance or upgrade windows, or if we experience a hardware failure
somewhere in either leg of power, C7 will not be responsible for downtime for
customer equipment if the customer elects not to implement A & B legs of
redundant power.

    

    The
C7 SLA guarantees 99.99% uptime for customers who deploy redundancy in both
network and power connectivity. The 99.99% SLA does not apply
otherwise.

    

    
      	
              d.  

            	
              Response
      Time Guarantee

            

    

    C7
guarantees the Customer the following response times for down systems and
Priority 1 phone requests for service:

    

    
      	
              Mountain
      Time

            	
              Issue
      Acknowledged / Work In Progress

            
	
              Prime
      Time: Monday thru Friday 6:00am – 6:00pm

            	
              Within
      1 hour

            
	
              Weekend
      Prime: Saturday, Sunday, National Holidays 8:00am – 5:00pm

            	
              Within
      2 hours

            
	
              Off
      Prime: 7 days / Week 6:00pm – 6:00am

            	
              Within
      2 hours

            

    

    Requests that are a Priority 2 or lower
will be worked as soon as possible.

    

    
      
        
          Confidential                                     Page
7

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    9.1           Network Service Level Agreement
(“Network SLA”)

    

    This
Network Service Level Agreement (the “SLA”) between C7 and Customer is entered
into pursuant to Master Services Agreement (“Agreement”) between C7 and the
Customer. Capitalized terms used in this Network SLA and not otherwise defined
below shall have the meanings given to them in the Agreement.

    

    C7
managed network environments will be available on a 7 (day) x 24 (hour) x 365
(day) basis, except for scheduled outages which C7 will inform Customer of it at
least five (5) business days in advance. Such notice to Customer regarding
scheduled outages shall include an estimate as to the expected duration of the
Scheduled Outage.

    

    C7’s
performance levels for managed network availability and latency are as
follows:

    

    
      	
              LAN
      Performance

               

            
	
              Latency

            	
              Availability

            
	
              <
      40 ms

            	
              >
      99.99%

            
	 
      	 
      

    

    

    

    

    
      	
              WAN
      Performance

               

            
	
              External
      Gateway to Internet (Domestic)

            	
              VPN
      (only when provided and managed by C7)

               

            	
              Private
      Network

              (Domestic)

            
	
              Latency

            	
              Latency

            	
              Latency

            	
              Avail.

            
	
              <60
      ms

            	
              <100
      ms

            	
              <70
      ms

            	
              >99.99%

            

    

    

    Any
failure in the network environment that causes a loss of availability (to
Customer or its users), shall be reported by Customer to C7. C7 shall then issue
a trouble ticket and track such failure in order to resolve it. At Customer’s
request such trouble ticket, along with Customer’s own documentation related to
such failure report shall be reviewed and analyzed by C7 and Customer, in order
to jointly determine the source of failure as well as the relevant degree of LAN
and/or WAN Availability/Performance at the time of such failure, for the purpose
of determining whether Customer is eligible for a Service credit.

    

    C7’s
network operations center (NOC) is available 24x7x365 and will respond as
quickly as reasonably possible when it becomes aware of and/or is notified of a
network failure that causes loss of availability to Customer and/or its users:
In the event of a Severe Failure (as defined below), C7 will respond promptly
and begin resolving the failure as quickly as reasonably possible. In any other
event, C7 shall respond within four (4) hours. In any event C7 shall work
diligently and continuously to solve any failure.

    

    A “Severe
Failure”: shall mean any significant problem with usage that materially
diminishes users’ access to the systems or ability to use major features of the
system.

    

    

    Termination for Chronic
Problems:

    

    The
conditions warranting termination of Services applicable to this Network SLA,
are as follows:

    

    C7’s failure to achieve SLA specified
performance for thirty (30) consecutive days.

    

    Customer
must provide C7 written notice of termination for Chronic Problems and such
termination will be effective upon five (5) business days prior written notice
to C7, without any further liability and/or penalty to Customer, notwithstanding
anything to the contrary within the Agreement or any SOW.

    

    Emergency Termination
Option:

    

    In the
event that C7 is unable to maintain network availability of greater then
90%  for ten (10) consecutive days, Customer shall have the right of
immediate termination without penalty and/or any termination fees whatsoever.
This termination must be in writing and supported by appropriate documentation
of the facility not meeting the minimum 90% availability for ten (10)
consecutive days.

    
      
        
          Confidential                                     Page
8

        

         

      

      
         

        
          

        

      

      
         

      

    

    

    9.2
Facility Availability Service Level Agreement (“Facility SLA”)

    

    This
Facility Availability Service Level Agreement between C7 and Customer is entered
into pursuant to Master Services Agreement (“Agreement”) between C7 and the
Customer. Capitalized terms used in this Facility SLA and not otherwise defined
below shall have the meanings given to them in the Agreement.

    

    C7 Data
Centers will be available on a 7 (day) x 24 (hour) x 365 (day) basis, except for
scheduled outages which C7 will inform Customer of it at least fifteen (15) days
in advance.

    

    C7 Data
Centers are designed with environmental support system redundancy and managed
environmental system infrastructures that provide for un-interruptible power and
cooling for all components within such C7 Data Center. C7 will continuously
monitor capacity levels for power generation, cooling, and un-interruptible
power supply systems at C7 Data Centers. C7 will, at C7’s expense, upgrade or
improve capacity levels within C7 Data Centers as necessary. Capacity upgrades
will follow the established change management practices described in this
Facility SLA. C7's performance level for Facility Availability is set as 99.99%
available. Availability will be calculated monthly using total actual minutes
available divided by total possible minutes available and shall be reported to
Customer at the end of each month. Availability calculations will exclude
scheduled outages.

    

    The
following Service credits shall apply, as a remedy provision, under this
Facility SLA:

    

    
      	
              Facility
      Availability

            	
              Service
      Credit                                (%
      of Monthly Fee(1))

               

            
	
              99.99%or
      greater

            	
              0%

               

            
	
              ≥99.90%
      but <99.99%

            	
              5%

            
	
              ≥99.50%
      but <99.90%

            	
              15%

            
	
              <99
      50%

            	
              25%

            

    

     

    (1) based
on C7’s monthly invoice for the month in which the Facility SLA failure
occurred.

    

    Termination for Chronic
Problems:

    

    The
conditions warranting termination of Services applicable to this Facility SLA
are as follows:

    

    C7's failure to achieve SLA specified
performance for thirty (30) consecutive days.

    

    Customer
must provide C7 written notice of termination for Chronic Problems and such
termination will be effective upon five (5) business days written notice to C7,
without any further liability and/or penalty to Customer.

    

    Emergency Termination
Option:

    

    In the
event that C7 is unable to maintain Facility Availability of greater than 50%
for ten (10) consecutive days, Customer shall have the right of immediate
termination without penalty or any further liability. This termination must be
in writing and supported by appropriate documentation of the facility not
meeting the minimum 50% availability for ten (10) consecutive days.

    

    Agreed to
and accepted by:

    

    

    AUTHORIZED
SIGNATURES

    

    

    Customer:              /s/ Robert S.
Rosenschein       C7:                      /s/ Nathan
Hatch

    

    Title:                      CEO                                             Title:                      CEO

    

    Date:                      3-31-2009                                     Date:                      3-30-2009

    
      
        
          Confidential                                     Page
9

        

         

      

      
         

        
          

        

      

      
         

      

    

    

    STATEMENT
OF WORK

    

    This
Statement of Work (“SOW”) is entered into by and between Answers.com (“Customer”) and
C7 Data Centers, Inc. (“C7”).  In the event of any conflict between
this SOW and the C7 Master Service Agreement, this SOW shall
govern.

    

    Installation
Site:    C7 Data Centers, Inc.  __X__      C7
Data Centers, Inc.   ____                                                             
C7 Data Centers, Inc.   ____

    *                                                703 East
Technology
Ave.                                                                179
E Social Hall Ave.

    *                                                Building E,
Suite
1300                                                                        
Salt Lake City, UT 84111

    Lindon, UT
84042                          
Orem, UT 84097

    

    1.0           Services

    

    1.1  Hardware and
Software

    

    
      	
               
      

            	
              a.

            	
              C7
      is responsible for supplying * in the C7 Data Center designated
      above.

            

    

    
      	
               
      

            	
              b.

            	
              Customer
      is responsible for supplying any and all hardware and software that may be
      required to configure and certify this system ready for production unless
      otherwise specified by Customer.  By providing these licenses,
      Customer certifies it is legally compliant with all licensing terms
      required by each software vendor.

            

    

    
      	
               
      

            	
              c.

            	
              Assignment of
      additional *

            

    

    

    

    1.2  Internet

     

    
      	
              a.  

            	
              C7
      will provide Customer with * Mbps redundant bandwidth (Committed
      Bandwidth) with burstable capacity to * Mbps for the Customer’s
      environment.  Daily averages are taken and a monthly average is
      calculated.  Usage that exceeds the Committed Bandwidth 95% of
      the billing period will be billed at the Customer’s current rate per Mbps
      as listed in this SOW. If the Customer consistently exceeds their
      Committed Bandwidth, C7 will request the Customer to increase the amount
      of Committed Bandwidth purchased under this
SOW.

            

    

     

     

    
      	
              b.  

            	
              Customer
      will initially be provided with * Block of IP address/licenses. Customer
      shall also be provided with small publicly-routable network segments, as
      necessary, to establish redundant BGP connectivity to the C7
      network.

            

    

     

    

    

      	
                  1.3

            	
              Reporting
      Problems

            

    

    

    Should
the Customer encounter a problem that requires the assistance of a C7 engineer,
Customer must contact C7’s Network Operations Center (NOC). The NOC is available
24 hours a day, 7 days a week, 365 days a year. The analyst that takes the call
will create a help desk ticket for the issue and contact the appropriate C7
staff.  Contact with C7 and creation of a ticket can also be done
through the C7 Portal available to all Customers via the C7’s
website.

    

    The
Customer can contact C7’s NOC by:

    
      	
              ·  

            	
              Phone:

            

    

    
      	
              ·  

            	
              Email:

            

    

    
      	
              ·  

            	
              Use
      the C7 Help Desk web interface to open a
  request.

            

    

    

    When the
Customer calls the NOC, an analyst will ask for the following
information:

    
      	
              ·  

            	
              Name,
      Company Name, and contact
information

            

    

    
      	
              ·  

            	
              Priority
      Customer assigns to the event

            

    

    
      	
              ·  

            	
              Description
      of the issue

            

    

    

    The
Customer will receive a request number that can be used to track the issue. To
report issues that are not as urgent, the Customer can Email the NOC. To avoid
callbacks for information, the Customer should include the information outlined
above.

    

    
      	
               
      

            	
              1.4

            	
              Facilities

            

    

    

    
      	
              a.  

            	
              Data
      Centers

            

    

    C7 data
center locations house the network infrastructure and feature a fully switched
gigabit backbone network, connecting core network devices at gigabit
speeds.

    

    
      	
              b.  

            	
              Reliability
      and Performance

            

    

    A
constant supply of power is absolutely essential to C7 service operations and is
ensured through the use of uninterruptible power sources, DC Batteries, diesel
generators, and mobile diesel generators.

    

    
      	
              c.  

            	
              Connectivity

            

    

    C7
provides redundant Internet connections to multiple carriers who are connected
to C7 via GigE links (or equivalent).

    

    
      	
              d.  

            	
              Security

            

    

    C7 data
centers are provisioned with security systems, including video monitoring
systems, man-traps, card-key systems, biometric systems, and a 24x7 team of
security officers.

    

    
      	
              e.  

            	
              Environmental
      Controls

            

    

    C7 data
centers are equipped with advanced cooling systems and are protected with fire
suppression systems.

    

    

    
      
        
          Confidential                                     Page
10

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2.0           Resources

    

    2.1                 Provided
By C7

    

    Resources
provided to meet the service obligations to Customer may not be used exclusively
to deliver the Services. Other hardware and software resources owned or
maintained by C7 may also be used to provide the Services. C7 retains title to
all Resources it provides; Customer may not pledge or grant a security interest
in the Resources, or otherwise use the Resources as collateral with respect to
any lease, land or other financial relationship.

    

    
      	
              ·  

            	
              Personnel
      necessary to complete the scope of
services

            

    

    
      	
              ·  

            	
              Customer
      shall have available, for use across all provisioned * minutes per
      provisioned * per month of “smart hands” service. “Smart hands” services
      shall be billed at fifteen (15) minute increments. (Troubleshooting not
      included) For a description of “smart hands” services, see
      Agreement

            

    

    
      	
              ·  

            	
              *
      Mbps bandwidth burstable to * Mbps

            

    

    
      	
              ·  

            	
              *
      Legs of A/B Redundant Power at 208V 60A
3P

            

    

    
      	
              ·  

            	
              *
      Legs of A/B Redundant Power at 208V
30A

            

    

    
      	
              ·  

            	
              *
      redundant network ports – Gigabit Ethernet over
  copper

            

    

    
      	
              ·  

            	
              *
      separate, independent network port for “out-of-band” requirement –
      100M/Gigabit Ethernet over copper

            

    

    
      	
              ·  

            	
              *

            

    

    

    2.2                 Provided
By Customer

    

    
      	
              ·  

            	
              Personnel
      contact information to assist Center for ongoing
  support

            

    

    
      	
              ·  

            	
              Materials
      required to connect to C7

            

    

    

    3.0           Payment (*)

    

    3.1                 Payment
Schedule

    

    
      	
              ·  

            	
              Initial
      Term:                                                                                36
      Months

            

    

    
      	
              ·  

            	
              Setup/Hardware
      Fees
      (one-time):                                                                   
         $ *

            

    

    
      	
              ·  

            	
              Monthly
      Administration
      Cost                                                                           $
      * plus metered power

            

    

    

    Amount                                           Due                                Description

    $*                              Upon
Signing                Setup
Fees, 1st
Month

    $* Plus
metered
power.                                                        Subsequent
Months

    

    3.2                 Contract
Term

    

    The
contract term shall be 36 months beginning the date of installation at C7. The
Customer shall be invoiced 30 days in advance.

    

    3.3                 Monthly
Payment Changes

    

    C7 will
notify Customer in writing 30 days before any additional charges are added to
the monthly invoice.  These charges will require an amendment to the SOW
which must be signed by both C7 and Customer.

    

    
      
        
          Confidential                                     Page
11

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    4.0      Contact
Information; Escalation Path

    

    Each
Party shall designate a contact person below.  Notices and other
communications shall be directed to the other Party’s contact
person.

    

     

    

    AUTHORIZED
SIGNATURES:

    

    

    Customer:       Robert S.
Rosenschein                                           C7:           Nathan
Hatch

    

    

    Title:               CEO                                                                    
       Title:        CEO

    

    

    Date:               3-31-2009                                                                    Date:        3-30-2009

    

    
      
        
          Confidential                                     Page
12

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