Document:

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                                                                   Exhibit 10.14

                              EMPLOYMENT AGREEMENT

                                     PARTIES

              This Employment Agreement (this "Agreement") dated and effective
as of August 3, 1998 (the "Effective Date"), is entered into by and between
MSS-Delaware, Inc., a Delaware corporation (the "Company"), and John S. Mills,
("Executive").

                               TERMS OF AGREEMENT

              In consideration of the mutual covenants in this Agreement, the
parties agree as follows:

       1.     Definitions. For purposes of this Agreement, the terms listed
below shall be defined as indicated.

                     Acquisition Agreement: See definition of Management
Certificate.

                     Affiliate: A domestic or foreign business entity controlled
by, controlling, under common control with or in joint venture with, the
Company, including The Bear Steams Companies, Inc. and its Affiliates.

                     Annual Bonus: See Section 3.2.

                     Annual Bonus Pool: the "Annual Bonus Pool" for a period
shall be 10% of EBITDA in excess of the EBITDA Target for such period.

                     Base Salary: See Section 3.1.

                     Board: The Board of Directors of the Company.

                     Cause: See Section 5. 1.

                     Company Sale: A transaction, whether in a single
transaction or in a series of related transactions pursuant to which a person or
group of persons independent of the Sponsor (a) acquires, whether by merger,
stock purchase, recapitalization, reorganization, redemption, issuance of
capital stock or otherwise, more than 50% of the outstanding Common Stock (on a
fully diluted basis as of the date of the Company Sale) or (b) acquires assets
(whether by purchase, lease or otherwise) constituting all or substantially all
of the assets of the Company or its Subsidiaries.

                     Common Stock: The $.01 par value common stock of the
Company.

                     Confidential Information: All secret proprietary
information of the Company and its Subsidiaries, not otherwise publicly
disclosed (except if disclosed by the Executive in violation of this Agreement),
whether or not discovered or developed by Executive, known by Executive as a
consequence of Executive's employment with the Company at any time (including
prior to the commencement of this Agreement) as an employee or agent. Without

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limiting the generality of the foregoing, such proprietary information shall
include (a) customer lists; (b) acquisition, expansion, marketing, financial and
other business information and plans; (c) research and development; (d) computer
programs; (e) sources of supply; (f) identity of specialized consultants and
contractors and confidential information developed by them for the Company and
its Subsidiaries; (g) purchasing, operating and other cost data; (h) special
customer needs, cost and pricing data; (i) manufacturing methods; (j) quality
control information, (k) inventory techniques; (l) employee information; any of
which information is not generally known in the industries in which the Company
and its Subsidiaries are conducting business or shall at any time during
Executive's Employment conduct business including (without limitation) the
apparel retailing industry. Confidential Information also include the overall
business, financial, expansion and acquisition plans of the Company and its
Subsidiaries, and includes information contained in manuals, memoranda,
projections, minutes, plans, drawings, designs, formula books, specifications,
computer programs and records, whether or not legended or otherwise identified
by the Company and its Subsidiaries as Confidential Information, as well as
information which is the subject of meetings and discussions and not so
recorded.

                     Cumulative EBITDA: As of the last day of the given period,
the total of EBITDA from the Effective Date to such last day.

                     Cumulative EBITDA Achievement Ratio: As of the last day of
a given period, the ratio of Cumulative EBITDA to the Cumulative EBITDA Target
as of such date, provided that (A) if such ratio is less than 0.95, the
Cumulative EBITDA Achievement Ratio for the period shall be 0 and (B) the
Cumulative EBITDA Achievement Ratio shall not exceed 1.0.

                     Cumulative EBITDA Target: As of the last day of a given
period, the total of EBITDA Targets from the Effective Date to such last day.

                     Cumulative Vested Options: As of the last day of a given
Vesting Period, the total Options which have vested as of such date pursuant to
Section 3.5.

                     Deemed Bonus: As of a given date during a Fiscal Year,
Deemed Bonus shall mean the product of

                     (a)    the ratio of

                            (i)    the sum of the Annual Bonuses paid or payable
              to the Executive with respect to all prior Fiscal Years since the
              Effective Date (but including the Gap Period), to

                            (ii)   the sum of all the Base Salary amounts paid
              or payable to the Executive with respect to all prior Fiscal Years
              since the Effective Date (but including the Gap Period), and

                     (b)    the sum of the Base Salary payments paid or payable

       to the Executive for the then current Fiscal Year through such date.

Notwithstanding the foregoing, the Deemed Bonus for any termination of the
Employment, Period which occurs during the Gap Period shall be a pro-rated
(based upon the number of days

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of the Cap Period during which Executive was employed) portion of the Annual
Bonus that would otherwise have been payable for the Crap Period and shall be
calculated following the Gap Period.

                     Disability. The absence of the Executive from the
Executive's duties to the Company on a full-time basis for a total of 120 days
during any 12 month period as a result of incapacity due to mental or physical
illness which is determined to be permanent by a physician selected by the
Company and acceptable to the Executive or the Executive's legal representative
(such agreement as to acceptability not to be withhold unreasonably).

                     EBITDA: EBITDA for a given period shall mean the Company's
consolidated earnings before interest, taxes, depreciation and amortization and
other non-cash charges, before management fees payable for such period to
Sponsor (or its designees) pursuant to the management agreement between the
Company and Sponsor and before any and all payments for the Prior Period Bonus
for each member of the Executive Group (as provided in Section 3.3 hereof and in
Section 3.3 of the other Employment Agreements executed contemporaneously
herewith) or from any and all Annual Bonus Pools and for each payment to
employees of the Company based upon the accrual therefor on the Working Capital
Balance Sheet.

                     EBITDA Achievement Ratio: The EBITDA Achievement Ratio for
a given period shall be equal to the ratio of EBITDA for such period to the
EBITDA Target for such period, provided that (A) if such ratio for any period is
less than 0.95, the EBITDA Achievement Ratio for such period shall be 0 and (B)
for purposes of Section 3.5, the EBITDA Achievement Ratio for any such period
shall not exceed 1.0.

                     EBITDA Target: See Exhibit A.

                     Employment Period: Unless earlier terminated as provided in
Section 5 hereof, the Employment Period shall be the period commencing on the
Effective Date and terminating on the last day of the 2001 Fiscal Year, provided
that the Employment Period shall automatically be extended for successive one
yew periods unless either party hereto gives notice of non-extension to the
other no later than six months prior to the end of the otherwise applicable
Employment Period.

                     Executive Group: Julian R. Geiger, David R. Geltzer and
John S. Mills.

                     Fair Market Value: The "Fair Market Value" of a share of
Common Stock as of a given date shall be (a) if such stock has first become
publicly traded on such date, the mean between the final bid and asked prices on
the principal exchange (or NASDAQ if applicable) on which such shares are traded
on such date as reported in the Wall Street Journal, (b) if such stock was
publicly traded prior to such date, the average over the last 20 trading days
(or such smaller number of days as follow the day prior to the day on which such
stock was first publicly traded) prior to the date of determination of the mean
between the final bid and asked prices on the principal exchange (or NASDAQ if
applicable) on which such shares are traded, as reported in The Wall Street
Journal or (c) if such stock is not publicly traded, on the basis of an
enterprise value of the Company equal to 5 times trailing twelve month EBITDA.

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                     Fiscal Year: The 52 or 53 week period ending on the
Saturday closest to January 31 of each calendar year. Fiscal Years shall be
referred to herein on the basis of the calendar year which contains 11 months of
such Fiscal Year. (For example, "1998 Fiscal Year" means the twelve month period
ending January 30, 1999).

                     Gap Period. The period beginning on the Effective Date and
ending on January 30, 1999.

                     Internal Rate of Return. The internal rate of return
(taking into account of all dividends, distributions, fees and all other amounts
received by the Sponsor and its Affiliates with respect to its investment in the
equity of the Company) on the entirety of the Sponsor's investment in the equity
of the Company calculated by valuing the Common Stock at its Fair Market Value
and the Series B Preferred Stock at its stated liquidation value, plus
accumulated and accrued but unpaid dividends.

                     Inventions: Those discoveries, developments, concepts and
ideas, whether or not patentable, relating to the present, future and
prospective activities and Products and Services of the Company and its
Subsidiaries, which such activities and Products and Services are known to
Executive by virtue of Executive's employment with the Company and its
Subsidiaries.

                     IPO: shall mean the first public offering by the Company of
its Common Stock which brings the total amount raised by the Company and sold by
stockholders of the Company in such public offerings to at least $20 million.

                     Key Man Insurance: See Section 3.8.

                     Options. See Section 3.5.

                     Management Certificate: shall mean those certificates
delivered to Federated Specialty Stores ("FSS") pursuant to the Acquisition
Agreement dated July 22, 1998 among FSS, Federated Department Stores and
Specialty Acquisition Corp. (the "Acquisition Agreement').

                     Products and Services: All products or services sold,
rented, leased, rendered or otherwise made available to its customers by the
Company and its Subsidiaries, or otherwise the subject of the business of the
Company and its Subsidiaries.

                     Restricted Period: The period beginning on the Effective
Date and ending on the later of the termination of Executive's employment or the
date all payments to Executive under Section 6 have ceased.

                     Special Bonus: See Section 3.4.

                     Sponsor: MSS Acquisition Corp. II, a wholly owned
subsidiary of The Bear Stearns Companies Inc.

                     Stock Option Plan: The 1998 Stock Option Plan of MSS -
Delaware, Inc.

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                     Stockholders Agreement: shall mean that certain
"Stockholders Agreement" dated as of the date hereof to which the Company, MSS
Acquisition Corp. II, FSS and the Executive Group are parties.

                     Subsidiary: Any entity of which the Company owns, directly
or indirectly, 50% or more of the aggregate voting power of the voting
securities.

                     Voted Options: Options which become vested pursuant to
Sections 3.5(c) or (d).

                     Vesting Period: The twelve consecutive month periods
beginning, respectively, on the first day of the first fiscal Year following the
date of grant of Options and the first second and third anniversaries of such
first date.

                     Working Capital Balance Sheet: shall mean that "Closing
Date Balance Sheet" as such term as defined in the Acquisition Agreement.

       2.     Employment.

                     (a)    Subject to the terms and conditions of this
       Agreement, the Company hereby agrees to employ and the Executive hereby
       accepts employment in the position of Executive Vice President and Chief
       Operating Officer (with responsibility for Information Systems, Real
       Estate (including new store construction), Aeropostale store operations,
       warehousing, distribution and transportation and creative services) of
       the Company and agrees during the Employment Period to perform to the
       best of Executive's ability, experience and talent those acts and duties
       and to finish those services to the Company and its Subsidiaries in
       connection with and related to such positions as the Board shall from
       time to time direct, provided such acts and directives are consistent
       with the duties of Executive Vice President and Chief Operating Officer.
       Executive shall, during the Employment Period, to perform to the best of
       Executive's ability, experience and talent those acts and duties and to
       furnish those services to the Company and its Subsidiaries in connection
       with and related to such positions as the Board shall from time to time
       direct, provided such acts and directives are consistent with the duties
       of Executive Vice President and Chief Operating Officer. Executive shall,
       during the Employment Period, use Executive's best efforts to promote the
       interests of the Company and its Subsidiaries.

                     (b)    During the Employment Period, subject to Section
       5.2(c) hereof, Executive's principal place of employment shall be located
       at one of the Company's principal places of business or principal
       executive officer, wherever located as designated from time to time by
       the Board. and Executive shall be provided with secretarial services, an
       office and similar support services and facilitates as appropriate to
       Executive's position and responsibilities and of at least substantially
       the same quality as provided to Executive on the Effective Date.

                     (c)    During the Employment Period, Executive shall devote
       his full business time and best efforts to the business affairs of the
       Company; however, the Executive may devote reasonable time and attention
       to:

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                            (i)    serving as a director of, or member of a
              committee of the directors of, any not-for-profit organization or
              engaging in other charitable or community activities; and

                            (ii)   serving as a director of, or member of a
              committee of the directors of, the corporations or organizations
              for which the Executive presently serves in such capacity, and
              such other corporations and organizations that the Board may from
              time to time approve in the fixture;

                            (iii)  from and after any date that the Company
              gives Executive a notice of non-extension described in the
              definition of "Employment Period," seeking alternative employment
              so long as such time and attention do not unreasonably detract
              from his duties hereunder,

        provided that, except as specified above, the Executive may not accept
        employment with any other individual or other entity, or engage in any
        other venture which is indirectly or directly in conflict or competition
        with the then existing business of the Company.

       3.     Compensation and Benefits; Disability.

              3.1    Base Salary. During the Employment Period, the Company
shall pay Executive a Base Salary at the initial annual rate of $260,000.
Provided the Cumulative EBITDA Achievement Ratio through the end of the Gap
Period is at least 1.0, Executive's Base Salary shall be increased for the 1999
Fiscal Year to $265,000. Provided the Cumulative EBITDA Achievement Ratio
through the end of the 1999 Fiscal Year is at least 1.0, Executive's Base Salary
shall be increased for the 2000 Fiscal Year to $270,000. Provided the Cumulative
EBITDA Achievement Ratio through the end of the 2000 Fiscal Year is at least
1.0, Executive's Base Salary shall be increased for the 2001 Fiscal Year to
$280,000. Any such increase in Base Salary shall only be reflected in regular
salary payments after the applicable FBITDA has been calculated, based on the
audited financial statements for the applicable fiscal period. The amount of any
increased Base Salary which has not been paid pending completion of ouch audited
financial statements shall be paid in a single lump sum payment at the time of
such salary payment adjustment. Except as described in the prior sentence, the
Base Salary shall be payable in equal installments pursuant to the Company's
customary payroll policies in force at the time of payment (but in no event less
frequently than monthly), less required payroll deductions. The Base Salary
shall be subject to cost of living or other increases in the sole discretion of
the Board.

              3.2    Annual Bonus. In addition to Executive's Base Salary during
the Employment Period the Company shall pay Executive, as soon as reasonably
practicable but in no event later than 30 days following the Company's receipt
of its audited financial statements for the applicable Fiscal Year, an Annual
Bonus in cash for each Fiscal Year which is

                     (a)    For the 1998 Fiscal Year, the sum of

                            (i)    the percentage of his Base Salary actually
              paid for the Gap Period as indicated on Exhibit A with respect to
              the EBITDA Achievement Ratio for such period; and

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                            (ii)   the product of

                                  (A)    the Annual Bonus Pool for the Gap
                     Period, and

                                  (B)    the ratio of Executive's Base Salary
                     actually paid for the Gap Period to the total Base Salary
                     actually paid for the Gap Period to the Executive Group
                     (provided, however, that for purposes of this calculation
                     each member of the Executive Group shall be deemed to have
                     received no less than the Base Salary set forth for him in
                     the Employment Agreement executed by him contemporaneously
                     herewith).

                     (b)    For the 1999 Fiscal Year and each Fiscal Year
       thereafter the sum of

                            (i)    the percentage of his Base Salary actually
              paid for such Fiscal Year indicated on Exhibit A with respect to
              the EBITDA Achievement Ratio for such period; and

                            (ii)   the product of

                                  (A)    the Annual Bonus Pool, and

                                  (B)    the ratio of Executive's Base Salary
                     actually paid for such Fiscal Year to the total Base Salary
                     actually paid for such Fiscal Year to the Executive Group
                     (provided, however, that for purposes of this calculation
                     each member of the Executive Group shall be deemed to have
                     received no less than the Base Salary set forth in the
                     Employment Agreement executed by him contemporaneously
                     herewith).

An example of the operation of this Section 3.2 is set forth in Exhibit B.

              3.3    Prior Period Bonus. Within five days following the
Effective Date, the Company shall pay to Executive in cash a bonus of $34,300.

              3.4    Special Bonus. Whether or not Executive is employed by the
Company or its Subsidiaries, the Company shall pay to Executive, in cash upon
the first consummation of an IPO or Company Sale, a Special Bonus equal to Mills
$58,857.

              3.5    Stock Options. As of the Effective Date, Executive shall be
granted options (the "Options") to purchase 1,760 shares of Common Stock
pursuant to the Stock Option Plan. The Options shall be granted pursuant a
separate stock option agreement containing the following terms and other
customary terms:

                     (a)    The Options shall be exercisable at the price of
       $11.50 per share of Common Stock.

                     (b)    (i) So long as Executive remains employed hereunder,
       Vested Options shall be exercisable upon the earlier of

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                                  (A)    the fourth anniversary of the Effective
                     Date, or

                                  (B)    an IPO or Company Sale with respect to
                     which, in either case, the Internal Rate of Return on the
                     entirety of the Sponsor's investment in the equity of the
                     Company as of the Closing Date is at least equal to 35% per
                     annum.

and shall remain exercisable until the day following the eighth anniversary of
the Effective Date.

                            (ii)   Options shall not be exercisable on or
       following Executive's termination of employment pursuant to Section 5.1
       and shall be exercisable following any other termination of employment
       only as follows:

                                  (A)    if Executive's employment is terminated
                     on or prior to the fourth anniversary of the date of grant
                     of Options, Executive (or his estate) may exercise Vested
                     Options for the 60 day period following the fourth
                     anniversary of the date of grant of such Options.

                                  (B)    If Executive's employment is terminated
                     later than the fourth anniversary of the date of grant of
                     Options, Executive (or his estate) may exercise Vested
                     Options within 60 days of the date of termination.

                     (c)    So long as Executive is employed hereunder, the
       number of Options which shall vest as of the end of each Vesting Period
       shall be the greater of

                            (i)    the product of 586 2/3 and the EBITDA
              Achievement Ratio for such year, and

                            (ii)   the excess of

                                  (A)    the product of

                                        (1)    586 2/3,

                                        (2)    the Cumulative EBITDA Achievement
                            Ratio as of the end of such Vesting Period and

                                        (3)    the number of Vesting Periods (up
                            to three) elapsed since the date of grant; over

                                  (B)    the Cumulative Vested Options as of the
                     end of the prior Vesting Period.

        Notwithstanding the preceding sentence, at the end of the Gap Period a
        number of Options equal to the product of 195 5/9 and the EBITDA
        Achievement Ratio for the Gap Period shall also vest and the number of
        Options that would have vested as of the end of

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       the 1999 Fiscal Year pursuant to the preceding sentence shall bc reduced
       by the number of Options that vest at the end of the Gap Period pursuant
       to this sentence.

                     (d)    Notwithstanding the foregoing, so long as Executive
       remains employed hereunder, all Options shall become vested upon the
       earlier of (i) the eighth anniversary of the date such Options were
       granted, or (ii) an IPO or Company Sale with respect to which, in either
       case, the Internal Rate of Return an the entirety of the Sponsor's
       investment is at least equal to 35% per annum.

                     (e)    Upon termination of Executive's employment all
       unvested Options shall lapse. Upon the day following the last day upon
       which any Vested Option may be exercised, such Option shall lapse. An
       example of The operation of this Section 3.5 is set forth in Exhibit C.

              3.6    Other Benefits. Executive shall be entitled, during the
Employment Period, to participate, on the same basis and to the same extent as
other executive employees of the Company, in any pension, life insurance, health
insurance, short-term disability or hospital plans or other fringe benefits or
benefit plans presently in effect and hereafter maintained or created by the
Company. In addition, Executive shall receive an automobile allowance in the
amount of $8,500 per year, which, at Executive's election, may be applied
towards the Company's expense on the lease of the car currently being driven by
Executive, for the duration of such lease, so long as Executive reimburses the
Company for any cost related thereto in excess of $10,000, payable monthly.
During the Employment Period, Company agrees not to reduce the benefits provided
to Executive except for a reduction that is part of a Company-wide reduction in
benefits. Service with the Company, any Subsidiary, or Federated Department
Stores, Inc. ("Federated") or any affiliate of Federated shall be recognized for
vesting purposes under any benefit plan of the Company (except for the Stock
Option Plan).

              3.7    Vacation. Executive may take such vacation period or
periods during each year as shall be consonant with Executive's responsibilities
and (in the Company's judgment) with the Company's vacation schedule and
policies for senior officers, which vacation shall be at least four weeks per
calendar year.

              3.8    Key Man Insurance; Put Option.

                     (a)    During the Employment Period, the Company shall
       maintain "Key Man" term life insurance with respect to the Executive with
       a face amount equal to the lesser of (a) $3 million and (b) the amount of
       such insurance which may be purchased for an annual premium of $6,200.
       The Company shall be the beneficiary of such insurance and agrees not to
       pledge or otherwise encumber the policies of the proceeds therefrom.

                     (b)    By notice to the Company given within 90 days of
       Executive's death, Executive's estate shall have the right to sell to the
       Company, and the Company shall be obligated to so purchase, at Fair
       Market Value (as of the date of Executive's death), all or such portion
       of the Common Stock owned by Executive on the date of his death as may be
       purchased with the proceeds of Executive's Key Man Insurance. The

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       Company shall take any and all actions necessary promptly to collect the
       proceeds of such insurance and comply with its purchase obligation
       hereunder.

                     (c)    At the time Executive is no longer employed by the
       Company or any of its Subsidiaries, the Company shall use its
       commercially reasonable best efforts to transfer such life insurance
       policy to Executive at the sole cost of the Executive and to name
       Executive as the beneficiary thereof.

              3.9 Expenses. Pursuant to the Company's customary policies in
force at the time of payment, Executive shall be promptly reimbursed, against
presentation of vouchers or receipts therefor, for all authorized expenses
properly incurred by Executive on the Company's behalf in the performance of
Executive's duties hereunder. In addition, Company shall reimburse Executive for
all reasonable legal fees incurred by Executive and charged by Kirkland & Ellis
in connection with the negotiation and preparation of this Agreement.

              3.10 Exclusive Compensation. In respect of services rendered to
the Company, Executive shall receive only the compensation set forth in this
Section 3 and Sections 5 and 6.

       4.     Termination of Employment Period. The Employment Period shall
continue as described in Section 1 unless earlier terminated by reason of (a)
Executive's discharge for Cause pursuant to Section 5.1, (b) Executive's
discharge without Cause pursuant to Section 5.4, (c) Executive's death or
Disability pursuant to Section 5.3 or (d) termination of this Agreement by
Executive pursuant to Section 5.2. In all events, the post employment provisions
of Section 7 shall survive termination of the Employment Period for the periods
provided therein.

       5.     Termination.

              5.1    By Company for Cause. The Company may discharge Executive
and terminate the Employment Period for Cause. As used in this Section 5.1,
"Cause" shall mean any one or more than one of the following:

                     (a)    Gross negligence or gross or willful misconduct of
       Executive in the performance of his duties hereunder during (i) the
       Employment Period, or (ii) to the extent determined to be relevant to the
       ongoing operations of the Company by the Chief Executive Officer of the
       Company, any such conduct which occurred at any time during Executive's
       employment by any predecessor of the Company prior to the Effective Date
       if not disclosed prior to that date;

                     (b)    Executive's conviction of a fraud, felony or crime
       of moral turpitude during the Employment Period;

                     (c)    Willful failure to follow instructions of the Board,
       or Chief Executive Officer, as applicable which instructions are
       material, legal and not inconsistent with the duties assigned to
       Executive hereunder and which failure is not cured within 3 days after
       written notice of such is delivered to Executive by the Board, or Chief
       Executive Officer. as applicable with respect to failures which are
       curable; or

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                     (d)    any breach of any of the material terms of this
       Agreement by Executive which is not cured within 3 days after written
       notice of breach is delivered to Executive by the Board, or Chief
       Executive Officer, as applicable with respect to breaches which are
       curable.

Upon discharge of Executive for Cause, the Company shall be relieved and
discharged of all obligations to make payments to Executive which would
otherwise be due under this Agreement except as to salary, benefits and bonuses
earned for actual services rendered prior to the date of termination, any
payment under Section 3.4 and otherwise reimbursable expenses under Section 3.9.

              5.2    By Executive for Good Reason. Executive may terminate the
Employment Period upon the occurrence of any of the following:

                     (a)    any breach of any of the material terms of this
              Agreement by the Company;

                     (b)    without the consent of Executive, a material
              reduction in the authorities, powers, functions and/or duties
              attached to Executive's position;

                     (c)    without the consent of Executive, the Company
              relocates the principal location of Executive's employment to a
              location more than 25 miles from its current location, unless such
              relocation is proposed by the Chief Executive Officer.

              5.3    On Executive's Death or Disability. The Employment Period
shall terminate, and the Company shall be relieved and discharged of all
obligations to make further payment to Executive after the date of the death or
Disability of Executive, except as to salary earned for actual services rendered
prior to the date of the death or Disability of Executive, reimbursement of
expenses, payments under Section 3.4, and a pro-rata portion of Executive's
Annual Bonus for the full applicable Fiscal Year calculated following such year
and pro-rated for the number of days Executive was actually employed in such
Fiscal Year.

              5.4    By Company Without Cause. The Company may, on 30 days'
written notice to Executive, terminate the Employment Period without Cause at
any time during the Employment Period.

              5.5    By Executive Without Good Reason. The Executive may
terminate the Employment Period

                     (a)    in connection with a Company Sale, or

                     (b)    at any other time,

upon ten days prior written notice to the Company. In such event described in
Section 5.5(b), the Company shall be relieved and discharged of all obligations
to make further payment to Executive after the date as of which the Employment
Period terminates, except as to salary earned for actual services rendered prior
such date, reimbursement of expenses and payments under Section 3.4.

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       6.     Severance. Upon termination of employment pursuant to Sections
5.2, 5.4 or 5.5(a) (but not upon termination of the Employment Period pursuant
to Sections 5.1, 5.3, 5.5(b) or upon expiration of the Employment Period
pursuant to notice of non-extension (as described in the definition of
"Employment Period") or otherwise), and so long as the Executive executes a
release in the Company's customary form and the Executive has not breached any
of his representations set forth in Section 8, the Company shall, in accordance
with its regular payroll practices

              (a)    continue payment to Executive of his Base Salary until the
       latest of (i) six months following the termination of Executive's
       employment hereunder, (ii) other than for terminations pursuant to
       Section 5.5(a), six months prior to the end of the otherwise applicable
       Employment Period (i.e., January 26, 2002 in the case of the initial term
       hereof and each anniversary thereafter, as applicable) , or (iii) if the
       termination is in connection with a Company Sale, such time as the
       Company elects which is not later than 19 months following such
       termination of Executive's employment, and

              (b)    for the period of such Fiscal Year prior to the termination
       of his employment, pay Executive a Deemed Bonus.

       7.     Inventions, Confidential Information and Related Matters.

       7.1    Assignment of Inventions. All Inventions which are at any time
made by Executive, acting alone or in conjunction with others,

              (a)    during the Employment Period, or

              (b)    if based on or related to any Confidential Information,
       made by Executive within one year after the termination of the Employment
       Period,

shall be the property of the Company. Executive agrees that Executive shall, at
the cost and expense of the Company, execute formal application for U.S. and
other patents, and also do all other acts and things (including, among others,
the execution and delivery of instruments of further assurance or confirmation)
deemed by the Company to be necessary or desirable at any time to perfect the M
assignment to the Company of Executive's right and title (if any) to such
Inventions.

              7.2    Restrictions on Use and Disclosure. Except as required by
Executive's duties hereunder, Executive shall never, directly or indirectly,
use, publish, disseminate or otherwise disclose any Confidential Information or
Inventions which are the subject of Section 7.1 without the prior written
consent of the Board, except as required by law. Nothing in this Section shall
prevent disclosure of information which has been completely disclosed in a
published patent or other integrated publication of general circulation, nor
shall this Section govern the right to use Inventions for which a patent may
have been issued.

              7.3    Return of Documents and Materials. Upon termination of the
Employment Period, Executive shall forthwith deliver to the Company all
procedural manuals, guides, specifications, formulas, plans, drawing, designs
and similar materials, records, notebooks and similar repositories of or
containing Confidential Information and Inventions

                                       12
<PAGE>

which are the subject of Section 7.1, including all copies, then in Executive's
possession or control, whether prepared by Executive or others, as well as all
other Company property in Executive's possession or control.

              7.4    Competitive Activities. During the Restricted Period,
Executive shall not, without the prior written approval of the Board, directly
or indirectly, within the United States, become an employee or consultant or
otherwise render services to, lend funds to, serve on the board of, invest in
(other than as a 1% or less shareholder of a publicly-traded corporation) or
guarantee the debts of, any business organization that competes with the Company
in those businesses in which the Company and its Subsidiaries are engaged on the
date the Employment Period is terminated. The Company may in its sole discretion
give Executive approval to engage in such activities or render such services
after termination of the Employment Period if Executive and such prospective
firm or business organization gives the Company written assurances, satisfactory
to the Board in its sole discretion, that the integrity of the Confidential
Information, the Inventions and the good will of the Company and its
Subsidiaries will not be jeopardized by such employment. Executive shall, during
the Restricted Period, notify the Company of any change in address and identify
each subsequent employment or business activity in which Executive shall engage
during such Restricted Period, stating the name and address of the employer or
business organization and the nature of Executive's position.

              7.5    Solicitation of Employee. During the Restricted Period and
for a period of 12 months thereafter, Executive shall not, without the prior
written approval of the Board, directly or indirectly, solicit, raid, entice or
induce any person who presently is or at any time during the term hereof shall
be an employee, of the Company or any of its Subsidiaries to become employed by
any other person, firm or corporation in any business in competition with the
Company.

              8.     No Other Contacts. Executive represents and warrants that
neither the execution and delivery of this Agreement by Executive nor the
performance by Executive of Executive's obligations hereunder, shall constitute
a default under or a breach of the terms of any other agreement, indenture or
contract to which Executive is a party or by which Executive is bound, nor shall
the execution and delivery of this Agreement by Executive or the performance of
Executive's duties and obligations hereunder give rise to any claim or charge
against either Executive or the Company based upon any other contract, indenture
or agreement to which Executive is a party or by which Executive is bound.

              9.     Notices. Any notices or communication given by any party
hereto to the other party shall be in writing and personally delivered or mailed
by registered or certified mail, return receipt requested, postage prepaid at
the following addresses:

                      If to the Company:

                      11 Penn Plaza
                      6th Floor
                      New York, NY  10001

                                       13
<PAGE>

                      If to the Executive:

                      John S. Mills
                      459 Sterling Place
                      Ridgewood, NJ  07450

        Mailed notices shall be deemed given when received. Any person entitled
to receive notice may designate in writing, by notice to the others, such other
address to which notices to such party shall thereafter be sent.

       10.    Indemnification and Insurance, Legal Expenses.

              (a)    The Company shall indemnify Executive to the fullest extent
       permitted by the laws of the State of Delaware, as in effect at the time
       of the subject act or omission, and shall advance to the Executive
       reasonable attorney's fees and expenses as such fees and expenses are
       incurred (subject to an undertaking from the Executive to repay such
       advances if it shall be finally determined by a judicial decision which
       is not subject to further appeal that the Executive was not entitled to
       the reimbursement of such fees and expenses) and he will be entitled to
       the protection of any insurance policies the Company may elect to
       maintain generally for the benefit of its directors and officers
       (Directors and Officers Insurance) against all costs, charges and
       expenses incurred or sustained by him in connection with any action, suit
       or proceeding to which he may be made a party by reason of his being or
       having been a director, officer or employee of the Company or any of its
       Subsidiaries or his serving or having served any other enterprise as a
       director, officer or employee at the request of the Company (other than
       any dispute, claim or controversy arising under or relating to this
       Agreement or to the extent a result of a breach by Executive of his
       representations in Section 8). The Company covenants to maintain during
       the Employment Period for the benefit of the Executive (in his capacity
       as an officer and director of the Company) Directors and Officers
       Insurance providing customary benefits to the Executive; provided,
       however, that the Board may elect to terminate Directors and Officers
       Insurance for all officers and directors, including the Executive, if a
       majority of the Board (excluding employee directors) determines in good
       faith that such insurance is not available or is available only at
       unreasonable expense.

              (b)    Company shall indemnify Executive for any claims brought
       against Executive in respect of the Management Certificate and, subject
       to the following sentence, shall, at the request of the Executive,
       advance reasonable legal fees for Executive's defense thereof Company's
       obligation shall be conditioned upon Executive's written agreement to
       repay all of such fees if he should ultimately be found liable in
       connection with any such claim and further conditioned upon Executive's
       pledging his interest in the equity of the Company (pursuant to documents
       containing customary terms) as security for such repayment obligation,
       unless Executive demonstrates to the reasonable satisfaction of the Board
       his ability to repay such amounts without such security interest.

                                       14
<PAGE>

              (c)    After the Employment Period, each party to this Agreement
       shall bear its own costs and expenses in connection with any claim or
       action with respect to acts and omissions-

       11.    Miscellaneous.

              11.1   Entire Agreement. This Agreement, together with the
Options, the Stock Option Plan, and the Stockholders Agreement contains the
entire understanding of the parties in respect of its subject matter and
supersedes all prior oral and written agreements and understandings between the
parties with respect to such subject matter.

              11.2   Amendment; Waiver. This Agreement may not be amended,
supplemented, canceled or discharged, except by written instrument executed by
the Executive and the Company. No failure to exercise, and no delay in
exercising, any right, power or privilege hereunder shall operate as a waiver
thereof. No waiver of any preceding breach of this Agreement shall operate as a
waiver of a succeeding breach of this Agreement.

              11.3   Binding Effect; Assignment. The rights and obligations of
this Agreement shall bind and inure to the benefit of any successor or
successors of the Company by reorganization, merger or consolidation, or any
assignee of all or substantially all of the Company's business and properties;
Executive's rights or obligations under this Agreement may not be assigned by
Executive.

              11.4   Headings. The headings contained in this Agreement (except
those in Section 1) are for reference purposes only and shall not affect the
meaning or interpretation of this Agreement.

              11.5   Governing Law; Interpretation. This Agreement shall be
construed in accordance with and governed for all purposes by the laws and
public policy of the State of New York applicable to contracts executed and to
be wholly performed within such State. Service of process in any dispute shall
be effective (a) upon the Company, if served on any senior officer of the
Company (other than Executive); (b) upon Executive, if served at Executive's
residence last known to the Company. Executive acknowledges that breach of
Sections 7.1 through 7.5 would entail irreparable injury and that, in addition
to the Company's other express and implied remedies, the Company shall be
entitled to injunctive and other equitable relief to prevent any actual,
intended or likely such breach.

              11.6   Dispute Resolution. All controversies, claims and disputes
arising out of or relating to this Agreement, including without limitation any
alleged violation of its terms, shall be resolved by final and binding
arbitration before a single arbitrator in New York, New York in accordance with
the Commercial Arbitration Rules of the American Arbitration Association
("AAA"). The arbitration shall be commenced by filing a demand for arbitration
with the AAA within sixty days after the filing party has given notice of such
breach to the other party. The subject matter of the arbitration shall be
limited to the conduct of the parties hereto and their employees. no arbitrator
shall award the prevailing party attorneys' fees, as well as the costs and
expenses of the arbitration. including expert fees, if any.

                                       15
<PAGE>

              11.7   Further Assurances. Each party agrees at any time, and from
time to time, to execute, acknowledge, deliver and perform, and/or cause to be
executed, acknowledged, delivered and performed, all such further acts, deeds;
assignments, transfers, conveyances, powers of attorney and/or assurances as may
be necessary, and/or proper to carry out the provisions and/or intent of this
Agreement.

              11.8   Gender; Singular/Plural. In this Agreement, the use of one
genders (e.g., "he," "she" and "it") shall mean each other gender; and the
singular shall mean the plural, and vice versa, all as the context may require.

              11.9   Severability. The parties acknowledge that the terms of
this Agreement are fair and reasonable at the date signed by them. However, in
light of the possibility of a change of conditions or differing interpretations
by a court of what is fair and reasonable, the parties stipulate as follows: if
any one or more of the terms, provisions, coven ants and restrictions of this
Agreement shall be determined by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated; further, if any
one or more of the provisions contained in this Agreement shall for any reason
be determined by a court of competent jurisdiction to be excessively broad as to
duration, geographical scope, activity or subject, it shall be construed, by
limiting or reducing it, so as to be enforceable to the extent compatible with
then applicable law.

              11.10  Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original.

                                    EXECUTION

              IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date and year above first written.

                                    EXECUTIVE

                                            /s/ John S. Mills
                                            ---------------------------
                                            John S. Mills

                                    MSS-DELAWARE, INC.
                                    a Delaware Corporation

                                    By:    /s/ Julian R. Geiger
                                           -----------------------------
                                    Its:   Chairman and Chief Executive Officer

                                       16
<PAGE>

                                    EXHIBIT A

                                 EBITDA TARGETS

                                   (IN '000'S)

<TABLE>
                  Fiscal Year                               Target
                  -----------                               ------
                 <S>                                       <C>
                  Gap Period                                $10,993

                  1999                                      $ 8,842

                  2000                                      $13,952

                  2001                                      $20,726

                  2002                                      $26,486

                  2003 and thereafter, as determined by the Board.
</TABLE>

<TABLE>
<CAPTION>
                                  ANNUAL BONUS
                                  ------------

            EBITDA ACHIEVEMENT RATIO           PERCENTAGE OF BASE SALARY
            ------------------------           -------------------------
                   <S>                                  <C>

                       0.95                                10%

                       0.955                               11%

                       0.96                                12%

                       0.965                               13%

                       0.97                                14%

                       0.975                               15%

                       0.98                                16%

                       0.985                               17%

                       0.99                                18%

                       0.995                               19%

                       1.0                                 20%

</TABLE>

                               Exhibit A - Page 1<PAGE>

                                                                    EXHIBIT 10.1

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                             INFORMATION TECHNOLOGY
                               SERVICES AGREEMENT

                                    BETWEEN

                      UNITED STATES FIRE INSURANCE COMPANY

                                      AND

                              FAIRFAX INFORMATION
                           TECHNOLOGY SERVICES, INC.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>

                                    SUMMARY
                               TABLE OF CONTENTS

<Table>
<Caption>
                                                              PAGE
                                                             -------
<S>                                                          <C>
1.   ENGAGEMENT.............................................       1
2.   DEFINITIONS............................................       2
3.   TRANSFER OF RESOURCES..................................       7
4.   SERVICES...............................................       8
5.   ACCEPTANCE.............................................      11
6.   PROVISION OF RESOURCES BY CLIENT.......................      12
7.   CLIENT-RETAINED AUTHORITY..............................      12
8.   FINANCIAL TERMS........................................      12
9.   INITIATIVES............................................      14
10. RELATIONSHIP MANAGEMENT.................................      15
11. PROPRIETARY RIGHTS......................................      17
12. TERM....................................................      19
13. DISENTANGLEMENT.........................................      20
14. DEFAULT.................................................      22
15. INSURANCE...............................................      23
16. INVOICES AND REPORTS....................................      24
17. RECORDKEEPING AND AUDIT RIGHTS..........................      24
18. CONFIDENTIALITY.........................................      25
19. LEGAL COMPLIANCE........................................      26
20. REPRESENTATIONS, WARRANTIES, AND COVENANTS..............      26
21. INDEMNIFICATION.........................................      27
22. DISPUTE RESOLUTION......................................      29
23. USE OF AFFILIATES AND SUBCONTRACTORS....................      30
24. MISCELLANEOUS...........................................      30
</Table>

                                        i
<PAGE>

                                    DETAILED
                               TABLE OF CONTENTS

<Table>
<Caption>
                                                              PAGE
                                                             -------
<S>                                                          <C>
1.   ENGAGEMENT.............................................       1
2.   DEFINITIONS............................................       1
  2.1.  ACCEPTANCE..........................................       1
  2.2.  ACCEPTANCE CRITERIA.................................       1
  2.3.  ACCEPTANCE TESTING PERIOD...........................       1
  2.4.  ACCEPTANCE TEST PROCEDURES..........................       1
  2.5.  AFFILIATE...........................................       1
  2.6.  AGREEMENT...........................................       1
  2.7.  ASSIGNED CONTRACTS..................................       2
  2.8.  CLIENT..............................................       2
  2.9.  CLIENT COMPETITOR...................................       2
  2.10.  CLIENT DATA........................................       2
  2.11.  CLIENT SOFTWARE....................................       2
  2.12.  CLIENT'S AUDITORS..................................       2
  2.13.  CLIENT'S CONTRACT MANAGER..........................       2
  2.14.  CONFIDENTIAL INFORMATION...........................       2
  2.15.  CONTRACTOR ACCOUNT MANAGER.........................       3
  2.16.  CONTRACTOR COMPETITOR..............................       3
  2.17.  CONTRACTOR PERSONNEL...............................       3
  2.18.  DEFAULT............................................       3
  2.19.  DISPUTE REPORT.....................................       4
  2.20.  END-USER...........................................       4
  2.21.  EXCEPTION REPORT...................................       4
  2.22.  FEES...............................................       4
  2.23.  FORCE MAJEURE EVENT................................       4
  2.24.  INDEMNITEES........................................       5
  2.25.  INITIATIVE.........................................       5
  2.26.  INTEREST...........................................       5
  2.27.  IT.................................................       5
  2.28.  KEY PERSONNEL......................................       5
  2.29.  LICENSES...........................................       5
  2.30.  LOCATION...........................................       5
  2.31.  MACHINES...........................................       5
  2.32.  MANAGEMENT COMMITTEE...............................       5
  2.33.  PERSON.............................................       5
  2.34.  PROCEDURES MANUAL..................................       6
  2.35.  REQUIRED CONSENTS..................................       6
  2.36.  RESIDUALS..........................................       6
  2.37.  ROOT-CAUSE ANALYSIS................................       6
  2.38.  SERVICE COMMENCEMENT DATE..........................       6
  2.39.  SERVICE LEVEL......................................       6
  2.40.  SERVICE REQUEST....................................       6
  2.41.  SERVICES...........................................       6
  2.42.  SUBCONTRACTOR......................................       6
  2.43.  SUBSIDIARY.........................................       6
  2.44.  TERM...............................................       6
</Table>

                                        ii
<PAGE>

<Table>
<Caption>
                                                              PAGE
                                                             -------
<S>                                                          <C>
  2.45.  UNDERLYING WORKS...................................       6
  2.46.  WORK PRODUCT.......................................       7
  2.47.  Y2K COMPLIANT......................................       7
3.   TRANSFER OF RESOURCES..................................       7
  3.1.  LICENSES............................................       7
  3.2.  REQUIRED CONSENTS...................................       7
  3.3.  DEDICATED RESOURCES.................................       8
4.   SERVICES...............................................       8
  4.1.  DEFINITION; AGREEMENT TO PERFORM SERVICES...........       8
  4.2.  PRIME CONTRACTOR....................................       8
  4.3.  SOFTWARE APPLICATION DEVELOPMENT....................       8
  4.4.  RIGHT TO USE LICENSES...............................       8
  4.5.  FACILITIES..........................................       9
  4.6.  VOICE SUPPORT.......................................       9
  4.7.  THIRD PARTY LICENSES................................       9
  4.8.  CAPACITY PLANNING...................................       9
  4.9.  BEST TERMS..........................................       9
  4.10.  MANPOWER...........................................       9
  4.11.  PROTECTION OF CLIENT'S DATA........................       9
  4.12.  ASSET LIFE CYCLE MANAGEMENT........................       9
  4.13.  TECHNOLOGICAL ADVANCEMENTS.........................       9
  4.14.  STATEMENT OF WORK AND DISASTER RECOVERY PLAN.......       9
  4.15.  Y2K COMPLIANT......................................      10
  4.16.  DISABLING DEVICE...................................      10
  4.17.  BEST PRACTICES.....................................      10
  4.18.  PROCEDURES MANUAL..................................      10
  4.19.  ADDITIONAL SERVICES................................      10
  4.20.  INTEGRATION........................................      10
  4.21.  SERVICE LEVELS.....................................      10
  4.22.  ROOT CAUSE ANALYSIS................................      10
  4.23.  ADJUSTMENT TO SERVICE LEVELS.......................      11
  4.24.  NONEXCLUSIVITY.....................................      11
5.   ACCEPTANCE.............................................      11
  5.1.  ACCEPTANCE PROCESS..................................      11
  5.2.  ACCEPTANCE TESTING..................................      11
  5.3.  CURE................................................      11
6.   PROVISION OF RESOURCES BY CLIENT.......................      12
  6.1.  OFFICE SPACE AND FURNISHINGS........................      12
  6.2.  CLIENT SOFTWARE.....................................      12
7.   CLIENT-RETAINED AUTHORITY..............................      12
8.   FINANCIAL TERMS........................................      12
  8.1.  FEES................................................      13
  8.2.  PRICING AUDIT.......................................      13
  8.3.  TAXES...............................................      13
  8.4.  INITIATIVES.........................................      13
  8.5.  LATE PAYMENTS.......................................      13
  8.6.  SET-OFF.............................................      13
  8.7.  DISPUTED AMOUNTS....................................      14
</Table>

                                       iii
<PAGE>

<Table>
<Caption>
                                                              PAGE
                                                             -------
<S>                                                          <C>
9.   INITIATIVES............................................      14
  9.1.  INITIATIVE BIDDING REQUIREMENTS AND PROCESS.........      14
  9.2.  COOPERATION AND COORDINATION........................      14
10. RELATIONSHIP MANAGEMENT.................................      15
  10.1.  PARTIES' PERSONNEL.................................      15
     10.1.1.  Key Personnel.................................      15
     10.1.2.  Contractor's Account Manager..................      15
     10.1.3.  Client's Contract Manager.....................      15
     10.1.4.  Minimum Proficiency Levels....................      15
     10.1.5.  Training......................................      15
     10.1.6.  Security and Background Checks................      15
     10.1.7.  Replacement of Personnel......................      16
     10.1.8.  Security......................................      16
     10.1.9.  Computer Information and Access...............      16
  10.2.  MANAGEMENT COMMITTEE...............................      16
11. PROPRIETARY RIGHTS......................................      17
  11.1.  OWNERSHIP OF WORK PRODUCT..........................      17
     11.1.1.  Intellectual Property Protection..............      17
     11.1.2.  Ownership of Residuals........................      17
     11.1.3.  Derivative Works..............................      17
     11.1.4.  Third-Party Underlying Works..................      17
  11.2.  RIGHTS AND LICENSES................................      18
  11.3.  CLIENT DATA........................................      18
  11.4.  INFRINGEMENT.......................................      18
  11.5.  COOPERATION........................................      18
12. TERM....................................................      19
  12.1.  INITIAL TERM; RENEWALS.............................      19
  12.2.  EARLY TERMINATION..................................      19
     12.2.1.  For Convenience...............................      19
     12.2.2.  Change in Control of Contractor...............      19
  12.3.  TERMINATION FOR DEFAULT............................      19
  12.4.  TERMINATION FOR FORCE MAJEURE EVENT................      20
  12.5.  EXTENSION OF TERMINATION DATE......................      20
  12.6.  EFFECT OF ENDING OF TERM...........................      20
13. DISENTANGLEMENT.........................................      20
  13.1.  DISENTANGLEMENT PROCESS............................      20
  13.2.  GENERAL OBLIGATIONS................................      20
  13.3.  SPECIFIC OBLIGATIONS...............................      21
     13.3.1.  Full Cooperation and Information..............      21
     13.3.2.  Transfer of Leases, Licenses, and Contracts...      21
     13.3.3.  License to Proprietary Technology.............      21
     13.3.4.  Delivery of Documentation.....................      21
     13.3.5.  No Interruptions or Adverse Impacts...........      21
  13.4.  PREPARATION FOR DISENTANGLEMENT....................      21
     13.4.1.  Up-to-Date Documentation......................      21
     13.4.2.  Maintenance of Assets.........................      22
</Table>

                                        iv
<PAGE>

<Table>
<Caption>
                                                              PAGE
                                                             -------
<S>                                                          <C>
14. DEFAULT.................................................      22
  14.1.  REMEDIES...........................................      22
     14.1.1.  Parties Remedies..............................      22
     14.1.2.  Limitation of Liability and Disclaimers.......      22
  14.2.  FORCE MAJEURE EVENTS...............................      23
  14.3.  BREACH.............................................      23
15. INSURANCE...............................................      23
  15.1.  GENERAL REQUIREMENTS...............................      23
  15.2.  COVERAGES..........................................      23
16. INVOICES AND REPORTS....................................      24
  16.1.  INVOICES...........................................      24
     16.1.1.  General.......................................      24
     16.1.2.  Initiatives...................................      24
  16.2.  REPORTS............................................      24
17. RECORDKEEPING AND AUDIT RIGHTS..........................      24
  17.1.  RECORDKEEPING......................................      24
  17.2.  OPERATIONAL AUDIT RIGHTS...........................      24
18. CONFIDENTIALITY.........................................      25
  18.1.  PROTECTION OF CONFIDENTIAL INFORMATION.............      25
  18.2.  REQUIRED DISCLOSURE................................      25
  18.3.  NOTIFICATION.......................................      25
  18.4.  INJUNCTIVE RELIEF..................................      25
  18.5.  RETURN OF CONFIDENTIAL INFORMATION.................      26
  18.6.  CONFIDENTIALITY OBLIGATIONS........................      26
19. LEGAL COMPLIANCE........................................      26
20. REPRESENTATIONS, WARRANTIES, AND COVENANTS..............      26
  20.1.  CONTRACTOR'S REPRESENTATIONS, WARRANTIES, AND
     COVENANTS..............................................      26
     20.1.1.  Performance of the Services...................      26
     20.1.2.  Proprietary Rights Infringement...............      26
     20.1.3.  Authorizations and Approvals..................      26
     20.1.4.  Information Furnished to Client...............      27
  20.2  CLIENT'S REPRESENTATIONS, WARRANTIES, AND
     COVENANTS..............................................      27
     20.2.1.  Legal and Corporate Authority.................      27
     20.2.2.  Disclaimer....................................      27
  20.3.  WARRANTY DISCLAIMER................................      27
21. INDEMNIFICATION.........................................      27
  21.1.  TECHNOLOGY.........................................      27
     21.1.1.  Indemnity by Contractor.......................      28
     21.1.2.  Indemnity by Client...........................      28
  21.2.  THIRD-PARTY MATTERS................................      28
  21.3.  CONTRACTOR AND CLIENT EMPLOYEES....................      28
  21.4.  INJURY OR PROPERTY DAMAGE..........................      28
  21.5.  PROCEDURES.........................................      29
22. DISPUTE RESOLUTION......................................      29
  22.1.  ARBITRATION........................................      29
  22.2.  NO TERMINATION OR SUSPENSION OF SERVICES...........      30
  22.3.  NO LIMITATION ON REMEDIES..........................      30
23. USE OF AFFILIATES AND SUBCONTRACTORS....................      30
</Table>

                                        v
<PAGE>

<Table>
<Caption>
                                                              PAGE
                                                             -------
<S>                                                          <C>
24. MISCELLANEOUS...........................................      30
  24.1.  ENTIRE AGREEMENT...................................      30
  24.2.  CAPTIONS; SECTION NUMBERS..........................      30
  24.3.  ASSIGNMENT.........................................      31
  24.4.  BENEFIT OF AGREEMENT...............................      31
  24.5.  NOTICES TO A PARTY.................................      31
  24.6.  AMENDMENTS; WAIVERS................................      31
  24.7.  RELATIONSHIP BETWEEN AND LEGAL STATUS OF PARTIES...      32
  24.8.  SEVERABILITY.......................................      32
  24.9.  COUNTERPARTS.......................................      32
  24.10.  GOVERNING LAW; VENUE..............................      32
  24.11.  NO THIRD-PARTY BENEFICIARIES......................      32
  24.12.  EXPENSES..........................................      33
  24.13.  SURVIVAL..........................................      33
  24.14.  ORDER OF PRECEDENCE...............................      33
  24.15.  INCLUSIVE REFERENCE...............................      33
  24.16.  FURTHER ASSURANCES................................      33
  24.17.  NEITHER PARTY CONSIDERED DRAFTER..................      33
</Table>

                                        vi
<PAGE>

                         LIST OF EXHIBITS AND SCHEDULES

<Table>
<S>                                                           <C>
Exhibit 16.1.1..............................................  Form of Invoice
Schedule 2.7................................................  Assigned Contracts
Schedule 2.11...............................................  Client Software
Schedule 2.15...............................................  Contractor Account Manager
Schedule 2.28...............................................  Key Personnel
Schedule 2.30...............................................  Location
Schedule 8.1................................................  Fees
Schedule 10.2...............................................  Management Committee
Schedule 23.................................................  Subcontractors
</Table>

                                       vii
<PAGE>

                   INFORMATION TECHNOLOGY SERVICES AGREEMENT

     This Information Technology Services Agreement, dated as of September 1,
2001 (the "Effective Date"), is a contract between United States Fire Insurance
Company, a New York corporation ("Client") having its principal place of
business at 305 Madison Avenue, Morristown, New Jersey 07960, and Fairfax
Information Technology Services, Inc., a Delaware corporation ("Contractor"),
with its principal place of business at 5 Century Drive, Parsippany, New Jersey
07054, under which Contractor shall provide Client with certain information
technology ("IT") services on the terms and conditions set forth below.

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

1.   ENGAGEMENT

     Client hereby engages Contractor to perform all of the services described
in this Agreement, and Contractor hereby accepts such engagement. Both parties
promise to perform according to this Agreement. Contractor shall be the prime
contractor and, subject to the terms and conditions hereof, hereby assumes full
and total responsibility for identifying and managing all Contractor and Client
software, hardware, documentation, services, outsourcing agreements and vendors,
and other resources that it will need in order for it to be able to provide the
Services.

2.   DEFINITIONS

     The following words and phrases, when used in this Agreement, shall have
the indicated meanings. Terms capitalized within a particular definition have
been defined elsewhere within this Agreement.

  2.1.  ACCEPTANCE

     "Acceptance" shall have the meaning set forth in Section 5.2.

  2.2.  ACCEPTANCE CRITERIA

     "Acceptance Criteria" shall have the meaning set forth in Section 5.2.

  2.3.  ACCEPTANCE TESTING PERIOD

     "Acceptance Testing Period" shall have the meaning set forth in Section
5.2.

  2.4.  ACCEPTANCE TEST PROCEDURES

     "Acceptance Test Procedures" shall have the meaning set forth in Section
5.2.

  2.5.  AFFILIATE

     "Affiliate" shall mean, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by, or is under common control with, such
Person, whether through ownership of voting securities or otherwise. For this
purpose, and without limiting the foregoing, any Person that owns more than
twenty percent (20%) of the outstanding voting securities of any other Person
shall be deemed to control such other Person.

  2.6.  AGREEMENT

     "Agreement" shall mean this Information Technology Services Agreement
between Client and Contractor, including all attachments, Exhibits, and
Schedules hereto, as amended from time to time.

                                        1
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  2.7.  ASSIGNED CONTRACTS

     "Assigned Contracts" shall mean those written maintenance agreements,
service agreements, and subcontractor agreements under which Client receives
third-party IT services related to the Services, including those that are
identified on Schedule 2.7.

  2.8.  CLIENT

     "Client" shall have the meaning ascribed to it in the introduction to this
Agreement.

  2.9.  CLIENT COMPETITOR

     "Client Competitor" shall mean any Person engaged in performing activities
or functions or services for its customers as a substantial and not incidental
part of its business that are competitive with those performed by Client for its
customers on greater than an incidental basis.

  2.10.  CLIENT DATA

     "Client Data" shall mean, in or on any medium or form of any kind: (i) all
data or summaries or indices of data related to Client (regardless of whether or
not owned by Client, generated or compiled by Client, or provided by its
customers), including data that is in Client's databases or otherwise in
Client's possession on the Service Commencement Date or at any time from such
date through the last day of the Term; and (ii) all other Client records, data,
files, input materials, reports, forms, and other such items that may be
received, computed, developed, used, or stored by Contractor, or by any
Subcontractors, for Client in the performance of Contractor's duties under this
Agreement, but excluding in any event any internal data and information of
Contractor and its Subcontractors and any correspondence between the parties.

  2.11.  CLIENT SOFTWARE

     "Client Software" shall mean any software created by, or otherwise acquired
by, Client before or after the Service Commencement Date, and all supporting
documentation, media, and related materials, including any and all
modifications, enhancements, updates, replacements, and other derivative works
thereof, including the software set forth in Schedule 2.11.

  2.12.  CLIENT'S AUDITORS

     "Client's Auditors" shall mean such auditors as shall be designated by
Client from time to time in its sole discretion who have executed nondisclosure
agreements reasonably satisfactory to Contractor.

  2.13.  CLIENT'S CONTRACT MANAGER

     "Client's Contract Manager" shall mean the individual who is so designated
by Client and any subsequent holder of that position designated by Client.

  2.14.  CONFIDENTIAL INFORMATION

     "Confidential Information" shall mean:

     (a)   as to either party, all technical information, materials, data,
           reports, programs, documentation, diagrams, ideas, concepts,
           techniques, processes, inventions, knowledge, know-how, and trade
           secrets, whether in tangible or intangible form, whether disclosed or
           conveyed by visits to a party's facilities, whether or not marked or
           otherwise identified as confidential, and whether in written form or
           readable by machine, or disclosed orally, developed or acquired by
           such party, except for Work Product;

     (b)   as to either party, all information and data relating to such party's
           practices, customers, products, business, management information
           services, costs, or margins that is not generally known by others in
           the same line of business;

                                        2
<PAGE>

     (c)   as to either party, this Agreement and any information that such
           party identifies to the other as confidential by a stamp or other
           similar notice;

     (d)   as to either party, all other information relating to such party that
           a reasonably prudent person would expect not to be made available to
           third parties without restriction or payment; and

     (e)   as to Client, all Work Product.

     Confidential Information shall not include specific information to the
extent that a party can demonstrate was: (i) at the time of disclosure to such
party, available to the public as evidenced by generally available documents or
publications through no fault of such party; (ii) after disclosure to such
party, published or otherwise a part of the public domain through no fault of
such party; (iii) in the possession of such party at the time of disclosure to
it, if such party was not then under an obligation of confidentiality with
respect thereto; (iv) received after disclosure to such party from a third party
who is not known by such party, acting in good faith, to be under an obligation
of confidentiality regarding such Confidential Information; or (v) independently
developed by such party without reference to Confidential Information of the
other party. For purposes of this provision, information is in the public domain
if it is generally known (through no fault of the receiving party) to third
parties who are not subject to nondisclosure restrictions similar to those in
this Agreement.

  2.15.  CONTRACTOR ACCOUNT MANAGER

     "Contractor Account Manager" shall mean the individual who is so designated
in Schedule 2.15 hereto and any subsequent holder of that position designated
and approved (if necessary) under the terms and conditions of Section 10.1.

  2.16.  CONTRACTOR COMPETITOR

     "Contractor Competitor" shall mean any Person engaged in performing
activities or functions or services for its customers as a substantial and not
incidental part of its business that are competitive with those performed by
Contractor for its customers on greater than an incidental basis.

  2.17.  CONTRACTOR PERSONNEL

     "Contractor Personnel" shall mean all employees of Contractor, and all
employees of Subcontractors of Contractor, who are providing the Services at any
time during the Term. Contractor Personnel include the Key Personnel. Contractor
shall make available the number of Contractor Personnel necessary to properly
perform Contractor's obligations under this Agreement at performance levels at
least equal to the Service Levels. At any time and from time to time during the
Term (but no more than four (4) times during any calendar year during the Term),
upon the request of Client, Contractor shall provide Client with a list of
Contractor Personnel, which list shall include the positions occupied by each
such person.

  2.18.  DEFAULT

     "Default" shall mean the occurrence of any of the following:

     (a)   Contractor's failure to provide the Services in accordance with the
           Service Levels, if Contractor fails to use reasonable commercial
           efforts to correct such failure or if, notwithstanding Contractor's
           reasonable commercial efforts, Contractor fails to meet the same
           Service Level during more than three (3) of any five (5) consecutive
           measuring periods for such Service Level;

     (b)   a commission by either party of a breach of any obligation to the
           other party under Section 11 hereof or Section 18 hereof, provided
           that such breach, if curable, is not cured within ten (10) days after
           such breach;

     (c)   the existence of any material representation or material warranty
           made in this Agreement by either party that the party knew or should
           have known was materially false when made; provided, however, that if
           such misrepresentation is curable and such cure will fully and
           completely effect a resolution

                                        3
<PAGE>

           reasonably acceptable to the other party, there shall not be a
           Default if the misrepresentation is cured within ten (10) days after
           the party has been notified thereof;

     (d)   insolvency of a party; general failure of a party to pay its debts in
           the normal course; entrance of a party into receivership or any
           arrangement or composition with creditors generally; filing of a
           voluntary petition or an involuntary petition that is not dismissed
           within sixty (60) days for bankruptcy or reorganization or
           dissolution or winding -up of a party; a general assignment for the
           benefit of creditors of a party; or a seizure or a sale of a material
           part of a party's property by or for the benefit of any creditor or
           governmental agency;

     (e)   an assignment or attempted assignment in violation of Section 24.4;

     (f)   a failure by either party to observe and perform any other material
           obligation imposed upon it under this Agreement and, in cases where
           the breach does not involve a violation of law relating to or
           affecting the provision of Services: (i) the failure by the party to
           cure such material default within thirty (30) days after the party
           has received notice thereof; or (ii) if the failure is not one that
           could be corrected with use of reasonable commercial efforts within
           thirty (30) days, the failure by the party to adopt a plan to cure
           such material default within thirty (30) days and to cure within
           sixty (60) days, unless otherwise extended by written agreement; or

     (g)   notwithstanding Sections 2.18(d) and (g), a failure that relates to
           the nonpayment of non disputed invoices when Client has no less than
           three (3) outstanding monthly invoices for Contractor's Services that
           are not being properly withheld by the Client in accordance with the
           terms hereof.

  2.19.  DISPUTE REPORT

     "Dispute Report" shall mean a written report executed by both parties
describing a solution to any dispute under this Agreement.

  2.20.  END-USER

     "End-User" shall mean any employee of Client and any other Person who is
authorized by Client in its reasonable discretion to require access to any of
the Services and who is identified by Client in writing to Contractor as having
End-User status.

  2.21.  EXCEPTION REPORT

     "Exception Report" shall have the meaning set forth in Section 5.3.

  2.22.  FEES

     "Fees" shall mean the fees payable by Client to Contractor hereunder in
consideration of Contractor's provision of the Services.

  2.23.  FORCE MAJEURE EVENT

     "Force Majeure Event" shall mean a cause beyond the reasonable control of a
non-performing party, including but not limited to acts of God, act of
governmental body or military authority, fire, explosion, power failure, flood,
epidemic, riot or civil disturbance, war, sabotage, accidents, insurrections,
blockades, embargoes, storms, earthquakes, elements of nature, terrorism, or
similar event; provided, however, that "Force Majeure Event" expressly excludes
the following: any event that Contractor could reasonably have prevented by
testing, work-around, or other exercise of diligence; any strike, walkout, or
other labor shortage that could have been prevented by a reasonable amount of
automation of functions necessary to provide the Services; and any failure

                                        4
<PAGE>

of any systems, or facilities, that could have been prevented by a reasonable
amount of testing or by adequate hardware, back-up, disaster recovery or
redundancies systems.

  2.24.  INDEMNITEES

     "Indemnitees" shall mean, with respect to a party entitled to
indemnification hereunder, such party and its Affiliates, officers, directors,
employees, agents, successors, and assigns.

  2.25.  INITIATIVE

     "Initiative" shall mean any IT project that is outside the scope of the
Services and that the parties agree, pursuant to a written agreement pursuant to
Section 9.1, is to be performed by Contractor for Client.

  2.26.  INTEREST

     "Interest" means interest accruing at the daily equivalent of an annual
rate equal to one hundred (100) basis points plus the "Prime Rate" published on
the first business day of each month in the "Money Rates" or similar column of
The Wall Street Journal, or at the maximum rate allowed by law, if less, as such
rate may change from time to time, with any change in said Prime Rate becoming
effective for purposes herein as soon as it is published.

  2.27.  IT

     "IT" shall have the meaning given to it in the introduction to this
Agreement.

  2.28.  KEY PERSONNEL

     "Key Personnel" shall mean those personnel of Contractor (and/or the
holders of those positions with Contractor) who hold mid-level management or
operational positions or above, as identified in attached Schedule 2.28.

  2.29.  LICENSES

     "Licenses" shall mean those written contractual arrangements under which
Client receives from third parties the right to use software related to the
Services.

  2.30.  LOCATION

     "Location" shall mean any present location at which Client conducts
business, including business offices and facilities and any other location where
Client, at any time during the Term, specifies to Contractor that it wishes to
receive Services. The Locations as of the Effective Date include those set forth
in Schedule 2.30 hereto.

  2.31.  MACHINES

     "Machines" shall mean computers and related equipment, including central
processing units and other processors, controllers, modems, communications or
telecommunications equipment, cables, storage devices, printers, terminals,
other peripherals and input and output devices, and other tangible mechanical
and electronic equipment intended for the processing, input, output, storage,
transmission and retrieval of information and data.

  2.32.  MANAGEMENT COMMITTEE

     "Management Committee" shall mean the joint body established under Section
10.2.

  2.33.  PERSON

     "Person" shall mean any natural person, corporation, limited liability
company, limited liability partnership, general partnership, limited
partnership, trust, association, governmental organization or agency, or other
legal person or legally constituted entity of any kind.
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<PAGE>

  2.34.  PROCEDURES MANUAL

     "Procedures Manual" shall mean the written manual referenced in Section
4.18.

  2.35.  REQUIRED CONSENTS

     "Required Consents" shall mean all third-party consents or approvals
required in connection with: (i) the sale or assignment to Contractor of the
Assigned Contracts; (ii) the right of Contractor to use the software that is
licensed to Client under the Licenses; and (iii) the re-sale or re-assignment to
Client of the Assigned Contracts in connection with Disentanglement.

  2.36.  RESIDUALS

     "Residuals" shall mean Contractor's general knowledge, skills, and
experience, and any ideas, concepts, know-how, and techniques that are within
the scope of Contractor's business practice and are used by it in the course of
providing the Services; provided, however, that Residuals shall not include any
Work Product and shall not include any of Client's Confidential Information.

  2.37.  ROOT-CAUSE ANALYSIS

     "Root-Cause Analysis" shall have the meaning given to it in Section 4.22.

  2.38.  SERVICE COMMENCEMENT DATE

     "Service Commencement Date" shall mean September 1, 2001.

  2.39.  SERVICE LEVEL

     "Service Level" shall mean the minimum acceptable service level for a task
or service to be performed by Contractor hereunder.

  2.40.  SERVICE REQUEST

     "Service Request" shall mean a request for the performance of work that is
not being performed at a particular time but that is within the scope of the
Services.

  2.41.  SERVICES

     "Services" shall have the meaning given to it in Section 4.1.

  2.42.  SUBCONTRACTOR

     "Subcontractor" shall mean any Person (including any Contractor Affiliate)
other than Contractor that provides Services to Client pursuant to an agreement
such Person has with Contractor.

  2.43.  SUBSIDIARY

     "Subsidiary" shall mean, with respect to a corporation, any Person in which
the corporation owns or controls at least a majority of the outstanding voting
securities or interests.

  2.44.  TERM

     "Term" shall mean the period during which Contractor shall be obligated to
provide the Services, as specified in Section 12.1.

  2.45.  UNDERLYING WORKS

     "Underlying Works" shall mean all tangible and intangible information and
developments that: (i) had already been conceived, invented, created, or
acquired by Contractor or third parties prior to the Effective Date
                                        6
<PAGE>

and were not conceived or created for Client's use or benefit in connection with
this Agreement; or (ii) were conceived, invented, created, or acquired, by
Contractor or third parties after the Effective Date, but only to the extent
such information and developments do not constitute Work Product hereunder. An
Underlying Work includes all intermediate and/or partial versions thereof,
including all source code and object code with respect thereto, and all designs,
specifications, inventions, discoveries, improvements, materials, program
materials, software, flow charts, notes, outlines, lists, compilations,
manuscripts, writings, pictorial materials, schematics, other creations, and the
like, whether or not patented or patentable or otherwise protectable by law.
"Contractor Underlying Works" are those conceived, invented, created, or
acquired by Contractor, rather than by a third party.

  2.46.  WORK PRODUCT

     "Work Product" shall mean all information and developments and all
intermediate and/or partial versions thereof, including all source code and
object code with respect thereto, and all designs, specifications, inventions,
discoveries, improvements, ideas, know-how, techniques, materials, program
materials, software, flow charts, notes, outlines, lists, compilations,
manuscripts, writings, pictorial materials, schematics, other creations, and the
like, whether or not patented or patentable, subject to copyright, or otherwise
protectable by law, created, invented or conceived: (i) for Client's use or
benefit in connection with this Agreement, by Client, by Contractor, or by any
other Person engaged by Client or Contractor; or (ii) by any Person who was a
Client employee before the Service Commencement Date and became an employee of
Contractor thereafter, in any case where, although creation or
reduction-to-practice is completed while the Person is an employee of
Contractor, any portion of same was created, invented, or conceived by such
Person while an employee of Client. Notwithstanding the foregoing, Work Product
shall not include any "Contractor Derivatives," as defined in Section 11.1.3.

  2.47.  Y2K COMPLIANT

     2.47.1.1 "Y2K Compliant" shall mean that at all times, before, during, and
after the year 2000, the relevant assets, resources, or systems shall, without
modification or human intervention, receive, enter, recognize, store, process,
exchange with other programs and networks and systems that exchange data with
them (provided, however, that if such other programs, networks, or systems are
not owned by Client or utilized by Contractor in providing the Services, they
must be capable of accurately exchanging necessary data with programs owned by
Client or utilized by Contractor in providing the Services), and output, data
containing dates in which the year is identified without committing or
sustaining any error, loss of functionality, or delay or interruption based on
the number of digits in which a year is expressed, the century in which the year
occurs, or the fact that the year is a leap year.

3.   TRANSFER OF RESOURCES

  3.1.  LICENSES

     Subject to Contractor's obtaining the applicable Required Consents, Client
hereby grants to Contractor and its Subcontractors the right to use, during the
Term, the software that is the subject of the Licenses.

  3.2.  REQUIRED CONSENTS

     With Client's cooperation, Contractor shall obtain, at Client's cost and
expense, all Required Consents. Client's cooperation shall include, at Client's
cost and expense, Client's performance of all obligations under the Licenses and
the Assigned Contracts to be performed by it prior to the Service Commencement
Date. In the event that any Required Consent is not obtained by Contractor
despite the use of reasonable commercial efforts, then, unless and until such
Required Consent is obtained, the parties shall cooperate with each other in
achieving a reasonable alternative arrangement under which Contractor may
perform the Services without causing a breach or violation of any agreement
under which a Required Consent is to be obtained. Such reasonable alternative
arrangements may include: (i) Contractor obtaining, at Client's cost and
expense, such consent to Contractor's usage of the assets and rights under the
Licenses and Assigned Contracts as the relevant third party will agree to
provide; or (ii) Contractor procuring, at Client's cost and expense, a suitable
replacement for the Licenses and Assigned Contracts, for which it is unable to
obtain the Required Consent. Notwithstanding the foregoing:

                                        7
<PAGE>

(A) Contractor's obligations under this Section 3.2 shall not be construed to
require Contractor to pay down any debts owing by Client in order to remove a
lien or a security interest in a License or an Assigned Contract or in an asset
subject to a License or an Assigned Contract; and (B) Client shall be required
to obtain, at its cost and expense, all Required Consents with respect to any
Licenses that are entered into by Client subsequent to the Service Commencement
Date (but shall not be required to pay any extra amounts that are due with
respect to Contractor's right to use under any such License to the extent
Contractor holds a master license with the licensor of the software that is the
subject of such License and such master license imposes extra amounts for a
Required Consent beyond what Client would otherwise pay).

  3.3.  DEDICATED RESOURCES

     Except as otherwise set forth in this Agreement, or as consented to in
writing by Client, the Client Software, Machines and any other assets provided
by Client in connection with the providing or receiving of the Services, shall
be accessed and used by Contractor exclusively for the provision of Services to
Client (until the same have been refreshed, replaced, or are no longer needed to
provide the Services) and not for Contractor's internal use or use for the
benefit of other customers.

4.   SERVICES

  4.1.  DEFINITION; AGREEMENT TO PERFORM SERVICES

     As used herein, "Services" shall mean all of the tasks and services
described in this Section 4. Contractor promises and agrees to perform all of
the Services, for the benefit of Client, in accordance with the terms of this
Agreement and the Schedules hereto. Contractor undertakes to provide only those
Services agreed to herein. Contractor shall not be obligated to provide other
Services or resources without additional charges to Client.

  4.2.  PRIME CONTRACTOR

     The Client authorizes the Contractor to be the prime contractor in
overseeing, managing and providing to the Client the information technology
services as further defined below. Client and Contractor acknowledge that
Contractor or Client may retain certain third party service providers to perform
certain of the Services pursuant to this Agreement. Contractor shall be
responsible for supervising the activities and performance of each such third
party service provider and shall be jointly and severally liable with each such
third party service provider for any act or failure to act by such third party
service provider. In addition, Contractor acknowledges that the Client has
entered into the Information Technology Services Agreement ("AITE Agreement")
between the Client and American International Technology Enterprises, Inc. dated
as of October 12, 2000 ("AITE"). Contractor agrees that the Services to be
provided pursuant to this Agreement shall include, but not be limited to, the
management and supervision of the provision of services by AITE pursuant to the
AITE Agreement.

  4.3.  SOFTWARE APPLICATION DEVELOPMENT

     Manager will be responsible for providing software application development
as mutually agreed between the parties.

  4.4.  RIGHT TO USE LICENSES

     Subject to obtaining the required consents, Client hereby grants to
Contractor and its subcontractors the right to use, during the term of this
Agreement, the software that is the subject of such consents and license. With
Client's cooperation, Contractor shall obtain, at Client's cost and expense, all
third party consents or approvals required in connection with (a) the sale or
assignment to Contractor or a third party vendor of assigned contracts; (b) the
right of Contractor or a third party vendor to use the software that is licensed
to Client under any such software licenses; and (c) the resale or re-assignment
to Client of any such assigned contracts in connection with the termination of
this Agreement as reflected on Schedule 2.7.

                                        8
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  4.5.  FACILITIES

     The Client will provide office space, including but not limited to office
furniture, telephones and telephone services, computer equipment, photocopiers
and telecopy machines and other equipment reasonably incident to appropriate
functioning of an office, to house Contractor's resources working on Client's
business. Contractor is responsible for the reasonable allocation of such office
costs.

  4.6.  VOICE SUPPORT

     Contractor will be responsible for providing voice support to the Client
including voice infrastructure, calling cards, pagers, and cell phones.

  4.7.  THIRD PARTY LICENSES

     Contractor will arrange for licenses for third party information technology
software and tools reasonably necessary to provide the Services other than
Assigned Contracts.

  4.8.  CAPACITY PLANNING

     Contractor will provide capacity planning and resource management tools
that will be used to optimize performance and planning for the Client.

  4.9.  BEST TERMS

     Contractor and Client will seek to license software and hardware products
based on the best terms available.

  4.10.  MANPOWER

     Contractor will be responsible for providing all manpower necessary to
provide the Services.

  4.11.  PROTECTION OF CLIENT'S DATA

     Contractor will ensure systems and procedures are instituted to provide for
the physical and logical protection of the Client's data as required by
regulation and legislation.

  4.12.  ASSET LIFECYCLE MANAGEMENT

     Contractor will be responsible for computer asset lifecycle management,
which will include the acquisition of hardware, software and accessories for the
Client, physical inventory management including date ordered, received,
deployed, lease expiration date and movement of the device during its'
lifecycle, lease tracking, hardware and software standards management,
technology refreshes and equipment return to the leasing company or recycling.

  4.13.  TECHNOLOGICAL ADVANCEMENTS

     The parties acknowledge that the Services will evolve and be supplemented,
modified, enhanced, and/or replaced in the normal course of business during the
Term to keep pace with and utilize technological advancements and improvements
in the method of delivering IT services.

  4.14.  STATEMENT OF WORK AND DISASTER RECOVERY PLAN

     On the Service Commencement Date, and at all times thereafter during the
Term, except as otherwise expressly stated herein, and subject to the
qualifications, limitations, and exclusions expressed elsewhere in this
Agreement, Contractor shall mange the tasks and results of the statements of
work and of the disaster recovery plan provided to Client by AITE pursuant to
the AITE Agreement.

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<PAGE>

  4.15.  Y2K COMPLIANT

     Contractor shall be responsible for ensuring that the Services provided to
Client under this Agreement and the AITE Agreement are Y2K Compliant.

  4.16.  DISABLING DEVICE

     Contractor shall not install any Disabling Device in resources utilized by
Contractor, Client, or any Subcontractor, in connection with the provision or
receipt of the Services. A "Disabling Device" is any virus, timer, clock,
counter, time lock, time bomb, or other limiting design, instruction, or routine
that would erase data or programming or cause any resource to become inoperable
or otherwise incapable of being used in the full manner for which such resource
was intended to be used. Contractor shall assist Client in reducing the effects
of any Disabling Device discovered in any resource related to the provision or
receipt of the Services.

  4.17.  BEST PRACTICES

     Contractor shall use industry best practices to identify, screen, and
prevent any Disabling Device in resources utilized by Contractor or Client in
connection with the Services.

  4.18.  PROCEDURES MANUAL

     On the Service Commencement Date, and at all times thereafter during the
Term, except as otherwise expressly stated herein, and subject to the
qualifications, limitations, and exclusions expressed elsewhere in this
Agreement, Contractor shall mange the tasks and results of the procedures manual
provided to Client by AITE pursuant to the AITE Agreement.

  4.19.  ADDITIONAL SERVICES

     Although the parties have attempted to delineate the specific services to
be provided by Contractor, the parties acknowledge that some items may not have
been specifically identified in such Sections. Accordingly, if additional
services are required, Contractor and Client will mutually agree to the terms
and conditions of such additional services.

  4.20.  INTEGRATION

     Contractor shall be responsible for ensuring that all Services, equipment,
networks, software, and other resources (collectively, the "Provided Resources")
utilized by Contractor or approved by Contractor for utilization by Client in
connection with the Services, including but not limited to those services
provided by AITE pursuant to the AITE Agreement, shall be successfully
integrated and interfaced. At all times during the Term, Contractor shall
cooperate with other service providers of Client to coordinate its provision of
the Services with the services and systems of such other service providers.

  4.21.  SERVICE LEVELS

     On the Service Commencement Date, and at all times thereafter during the
Term, except as otherwise expressly stated herein, and subject to the
qualifications, limitations, and exclusions expressed elsewhere in this
Agreement, Contractor shall mange the tasks and results of the service levels
provided to Client by AITE pursuant to the AITE Agreement.

  4.22.  ROOT CAUSE ANALYSIS

     Upon Contractor's discovery of, or, if earlier, Contractor's receipt of a
notice from Client in respect of, Contractor's failure to provide any of the
Services in accordance with this Agreement, Contractor shall promptly (and in
any event within five (5) days) perform a root-cause analysis (a "Root-Cause
Analysis") to identify the cause of such failure. Contractor shall promptly and,
in any event, within five (5) days after completion of the Root-Cause Analysis:
(A) correct such failure (regardless of whether caused by Contractor); and (B)
provide Client with reasonable evidence that such failure will not recur. The
correction of any such failure shall be
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performed entirely at Contractor's expense unless it has been determined, by
mutual agreement of the parties or through dispute resolution, that Contractor
was not a material contributing cause of the failure and Contractor could not
have worked around the material contributing cause of the failure without
expending a material amount of additional time and/or resources, in which event
Contractor shall be entitled to Service Level compliance relief.

  4.23.  ADJUSTMENT TO SERVICE LEVELS

     The parties shall review and discuss possible adjustments to the Service
Levels from time to time, but not less frequently than at the end of each
anniversary of the Service Commencement Date. The Service Levels may be adjusted
at the end of each year of the Term for the benefit of Client. Contractor shall
continuously evaluate ways to improve its performance and shall promptly make
these improvements available to Client.

  4.24.  NONEXCLUSIVITY

     Nothing in this Agreement shall prevent: (a) Client from obtaining any type
of Services, or any other services, from itself or any other provider during the
Term; or (b) Contractor from providing any type of Services to third parties
during the Term.

5.   ACCEPTANCE

     Unless otherwise agreed in writing by Client, Client's Contract Manager, or
his designee, on behalf of Client, shall have the right to review any
deliverable or component of the Services to be provided by Contractor to Client
under this Agreement or pursuant to any Initiatives hereunder upon formal
notification by Contractor to Client that such deliverable or component is ready
for review, and shall have the right to either accept or reject such component
or deliverable pursuant to the methodology, which will be mutually agreed
between the parties. Payment for any such deliverable or component shall be made
as agreed after Acceptance in accordance with Schedule 8.1 and Section 8 hereof.

  5.1.  ACCEPTANCE PROCESS

     The methodology by which the process described in this Section 5 shall be
implemented through the delivery of control documents, the preparation of
deliverable acceptance documents, the tracking of accepted deliverables, the
maintenance of all deliverables and deliverable acceptance documents, and the
development of other documents and processes.

  5.2.  ACCEPTANCE TESTING

     Upon Contractor's notification to Client that Contractor has completed any
component or deliverable identified in this Agreement or in any Initiative or
that is developed by Contractor under this Agreement or any Initiative, Client
shall begin testing the component or deliverable using the test procedures and
standards as are mutually agreed upon in writing ("Acceptance Test Procedures"),
to determine whether such component or deliverable meets, in all material
respects, the specifications or acceptance criteria (the "Acceptance Criteria").
After Client has completed such testing (the "Acceptance Testing Period"),
Client shall notify Contractor in writing either that: (i) the component or
deliverable meets the Acceptance Criteria and that acceptance of such component
or deliverable has occurred ("Acceptance"); or (ii) the Acceptance Criteria have
not been met. Notwithstanding anything to the contrary contained herein, in no
event shall an Acceptance be deemed a waiver of any right or remedy available to
Client at law or in equity as a result of any defect in a component or
deliverable not discovered by Client during the Acceptance Testing Period.

  5.3.  CURE

     If Client determines that a component or deliverable does not conform in
all material respects with the applicable Acceptance Criteria and so notifies
Contractor within ninety (90) days following the expiration of the applicable
Acceptance Testing Period, Client shall promptly thereafter deliver to
Contractor an exception report describing the nonconformity (the "Exception
Report"). Contractor shall promptly investigate the alleged
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nonconformity and shall correct such nonconformity in all material respects
within thirty (30) days of receipt of the Exception Report or, if the
nonconformity is incapable of cure within such thirty (30) day period,
Contractor shall present Client, within such thirty (30) day period, a mutually
agreeable plan to cure such nonconformity within a reasonable amount of time.
Upon Contractor's notice to Client that Contractor has so cured such
nonconformity, Client shall re-test the defective component or deliverable in
accordance with the applicable Acceptance Test Procedures and Acceptance
Criteria for an additional testing period of up to thirty (30) days or such
other mutually agreed upon period, at the end of which period the process
described above in Section 5.2 shall be repeated.

6.   PROVISION OF RESOURCES BY CLIENT

  6.1.  OFFICE SPACE AND FURNISHINGS

     Client shall provide at no charge to Contractor, throughout the Term,
office space, network access, utilities (i.e., HVAC, electrical power and water,
and ordinary, daily janitorial services), parking, furniture, furnishings, and
storage space (collectively, "Furnishings") available to Contractor's on-site
personnel performing Services. Client shall maintain such space in areas and at
a level similar to that which it maintains generally for its own employees of
similar grade level from time to time. Furnishings installed or operated on
Client premises are for the exclusive use of the Contractor Personnel and are to
be used exclusively for performance of the Services. Client shall also provide
such reasonably unencumbered access to such Client facilities as is reasonably
required for Contractor to provide the Services. Any other furnishings, as well
as hardware/software equipment shall be provided by Contractor, at its sole
expense.

  6.2.  CLIENT SOFTWARE

     Client hereby grants, and Contractor hereby accepts, a limited,
non-exclusive, non-transferable, royalty-free right to use, and to permit its
Subcontractors (as permitted or approved pursuant to this Agreement) to use,
during the Term, the Client Software in source code and object code form, solely
to provide the Services to Client under the terms and conditions of this
Agreement.

7.   CLIENT-RETAINED AUTHORITY

     Client shall have the exclusive right and authority to set Client's IT
applications and related processes; to determine, alter, and define any or all
of Client's business processes; and to assess Contractor's quality and
performance. With respect to the Services, Client shall have the right to
approve or reject any and all proposed decisions with respect to major
infrastructure design, technical platform, architecture, project management, and
standards, that apply to Client's applications or related processes or that
could reasonably be expected to materially increase the Fees payable by Client
or to materially increase the costs incurred by Client in operating its
business, and shall have the right and authority to cause Contractor at any time
to change any or all of the foregoing. Client shall also have the exclusive
right and authority: (i) to order move, add, and change activity with respect to
resources used in connection with Contractor's provision, and Client's receipt,
of the Services; and (ii) to designate Client's requirements for applications
development or enhancement activities and for Initiatives. Moreover, Contractor
shall be required to obtain the prior, written authorization of Client before
undertaking any activity that is within the exclusive authority of Client to
order, request, or designate, pursuant to the terms hereof. However, this
Section 7 does not grant Client any rights to direct or dictate the operations
of the Contractor's business operations or its data center.

8.   FINANCIAL TERMS

     As the sole and entire financial consideration for all of the Services to
be performed by Contractor and for all of the other tasks, services, and
obligations of Contractor under this Agreement, Client shall pay to Contractor
the amounts set forth in this Agreement, including those set forth in this
Section 8.

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  8.1.  FEES

     Client shall pay the specified Fees during the Term in accordance with the
terms and conditions of this Agreement and as set forth in Schedule 8.1.

  8.2.  PRICING AUDIT

     Contractor shall, at Client's request, allow Client's Auditors to fully
audit Contractor's records to the extent necessary to verify any amounts payable
by Client hereunder, but no more than twice per year during the term of this
Agreement. Contractor shall provide Client's Auditors with reasonable access to
such information relating to this Agreement and Contractor's business as may be
necessary to confirm the accuracy of Contractor's invoices, documents, other
information supporting such invoices, and pricing adjustment computations for
any given year. All such audits shall be conducted during business hours, with
reasonable advance notice, in compliance with Contractor's security
requirements. Such audits shall include access to proprietary or Confidential
Information of Contractor only to the extent necessary to comply with the
provisions of this Section 8.2. If any of the foregoing audits reveals that
Contractor has overcharged Client during the period to which the audit relates,
then Contractor shall promptly refund such overcharges to Client. If any such
audit reveals that Contractor has undercharged Client during the period to which
the audit relates, then Client shall promptly pay such undercharges to
Contractor.

  8.3.  TAXES

     Contractor shall pay, out of the fees payable by Client to Contractor under
this Agreement, any and all taxes that may be due during the Term and that were
imposed as of the Effective Date by any domestic or foreign taxing authority in
respect of the provision of the Services hereunder, including any sales, use,
excise, value-added, services, consumption, or other tax (collectively, "Sales
Taxes"), except, however, that Client shall not be responsible for, and such
fees shall not include, any personal property taxes on property Contractor owns
or leases, for franchise and privilege taxes on Contractor's business, gross
receipts taxes to which Contractor is subject, and for income taxes based on
Contractor's net income. In the event that a Sales Tax becomes effective after
the Effective Date and is assessed on the provision of Services by Contractor
that are within scope as of the Effective Date or on Contractor's charges to
Client under this Agreement related thereto, however levied or assessed, Client
shall be responsible for and pay any such Sales Tax. The Parties shall cooperate
with each other to enable each to more accurately determine its own tax
liability and to minimize such liability to the extent legally permissible.
Contractor's invoices shall separately state the amounts of any taxes Contractor
is properly collecting from Client pursuant to the terms hereof.

  8.4.  INITIATIVES

     For Initiatives, Client shall pay Contractor such amounts as may be
determined through the provisions of Section 9 hereof.

  8.5.  LATE PAYMENTS

     Except for payments reasonably disputed in good faith, which shall be
governed by the provisions of Section 8.7, payments received by Contractor after
the respective due dates shall be subject to Interest.

  8.6.  SET-OFF

     Client may set-off against any and all amounts otherwise to be paid to
Contractor pursuant to any of the provisions of this Agreement: (i) any and all
amounts owed by Contractor to Client under the provisions of Section 21; and
(ii) other amounts claimed in good faith to be owed to Client by Contractor in
respect of this Agreement. Within fifteen (15) days of any set-off by Client,
Client shall provide to Contractor a detailed written accounting of such set-off
and a written statement of the reasons therefor.

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<PAGE>

  8.7.  DISPUTED AMOUNTS

(a)  Client may withhold payment of Contractor charges otherwise due under this
     Agreement to the extent it disputes such charges in good faith, and
     provided that Client, within thirty (30) days from the time it knew that
     the basis for a dispute exists, shall have informed Contractor of such
     basis. In such case, Client shall provide to Contractor a reasonably
     detailed written explanation of the basis for the dispute, and shall
     continue to make payments of undisputed charges as otherwise provided in
     this Agreement. If any disputed amounts are later determined to have been
     improperly withheld (i.e., properly charged by Contractor), then Client
     shall be obligated to pay the withheld amount plus Interest thereon from
     the original due date until paid in full. If any paid amounts are later
     disputed by Client and determined to have been improperly paid (i.e.,
     improperly charged by Contractor), then Contractor shall be obligated to
     pay the improperly paid amount plus Interest thereon from the original date
     paid until Client is reimbursed in full. The failure of Client to withhold
     payment shall not waive any other rights Client may have with respect to
     disputed amounts or overpayments.

(b)  The failure of Client to pay a disputed invoice or the disputed part of an
     invoice, to the extent permitted under clause (a) of this Section 8.7,
     shall not constitute a breach or Default by Client, provided that
     Contractor shall have been given notice of the subject of the dispute and
     that the procedures of Section 22 hereof have been initiated.

9.   INITIATIVES

  9.1.  INITIATIVE BIDDING REQUIREMENTS AND PROCESS

     Client may at any time, and from time to time, propose an Initiative to
Contractor and request that Contractor submit a bid to perform it. Contractor
shall submit bids for the performance of each Initiative proposed by Client,
within ten (10) business days after the submission of the Proposal by Client,
unless the scope of the Initiative is such that ten (10) business days would be
insufficient, in which case within a reasonable time thereafter. Contractor's
bid for each Initiative shall be based upon the best rates Contractor is
offering to other major customers (other than Contractor's Affiliates) for
services of a similar nature and scope. Each such bid shall be in writing and
shall be responsive to the bid document. In the event Client accepts
Contractor's bid or the parties otherwise reach agreement on the terms and
conditions of any Initiative, the obligations of Contractor with respect to the
Initiative shall be deemed "Services" under this Agreement and the Initiative
shall be governed by all the terms and conditions of this Agreement, to the
extent that such terms are not inconsistent with those agreed to by the parties
with respect to such Initiative.

  9.2.  COOPERATION AND COORDINATION

     With respect to each Initiative as to which Contractor is not selected to
be the sole or principal provider, Contractor shall at all times cooperate and
coordinate with the selected provider in every respect to facilitate the
successful accomplishment of the Initiative or work; provided that such
third-party provider complies in all material respects with Contractor's
reasonable technical and confidentiality requirements and to the extent that the
personnel otherwise assigned to perform the delivery of Services under this
Agreement can reasonably do so without materially and adversely affecting the
Service Levels or other aspects of the Services delivered; and Client shall pay
for all resources utilized in this effort at the rates set forth in Schedule
8.1. Such cooperation shall include, but not be limited to: (i) providing
information concerning any or all of the systems, data, computing environment,
and technology direction used in providing the Services; (ii) cooperating with
such third party in the implementation and integration of the Initiative in
Client's environment; (iii) providing access to and use of Contractor resources,
as mutually agreed upon and at the rates set forth in Schedule 8.1 (Fees); and
(iv) performing tasks assigned to Contractor in connection with the Initiative.
Contractor acknowledges that Client has the right to solicit or accept bids on
any Initiative from any other provider and may award any Initiative to any such
bidder for any reason; provided that Contractor's performance under this
Agreement shall be excused to the extent that such other source adversely
affects Contractor's ability to provide the Services and/or to meet the Service
Levels, on the condition that Contractor notifies Client as soon as it becomes
aware Contractor's ability is being so adversely affected.

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10. RELATIONSHIP MANAGEMENT

  10.1.  PARTIES' PERSONNEL

     10.1.1.  Key Personnel

     Without Client's prior written consent, which consent shall not be
unreasonably withheld, Contractor shall not reassign any individual designated
as Key Personnel during the thirty-six (36) month period beginning on the date
stated in the Transition Plan in which respect Contractor has fully and
successfully transitioned all of Client's data center operations to Contractor's
data center Contractor shall obtain Client's prior written consent thirty (30)
days, or such shorter time as agreed by the parties, in advance of any
assignment of any Key Personnel individual resulting in the alteration or
reduction of time expended by such individual in performance of Contractor's
duties under this Agreement. If any one of the Key Personnel is reassigned,
becomes incapacitated, or ceases to be employed by Contractor and therefore
becomes unable to perform the functions or responsibilities assigned to him or
her, Contractor shall promptly replace such person with another person who is at
least as well qualified as the person who initially performed that person's
functions.

     10.1.2.  Contractor's Account Manager

     Contractor represents that Contractor's Account Manager shall be an
experienced manager who shall be knowledgeable as to Client's activities and
shall direct the efforts in fulfilling Contractor's obligations under this
Agreement. In addition, Contractor's Account Manager shall have overall
responsibility for directing all of Contractor's activities hereunder, and shall
be vested with all necessary authority to fulfill that responsibility.
Contractor shall not, without Client's prior written consent, which consent
shall not be unreasonably withheld: (a) designate any such Account Manager; or
(b) replace the initial Contractor's Account Manager during the thirty-six (36)
month period beginning on the Date stated in the Transition Plan in which
respect Contractor has fully and successfully transitioned all of Client's data
center operations to Contractor's data center.

     10.1.3.  Client's Contract Manager

     Client's Contract Manager shall act as the primary liaison between Client
and Contractor's Account Manager and shall have overall responsibility for
directing all of Client's activities hereunder and shall be vested with all
necessary authority to fulfill that responsibility.

     10.1.4.  Minimum Proficiency Levels

     The Contractor Personnel, including the Key Personnel, and all
Subcontractors, shall have or promptly obtain experience, training, and
expertise at least equal to the highest commercial standards applicable to such
personnel for their responsibilities in the business in which Contractor is
engaged and shall have or promptly obtain sufficient knowledge of the relevant
aspects of the Services and shall have or promptly obtain sufficient knowledge
of Client's practices and areas of expertise to enable them to properly perform
the duties and responsibilities assigned to them in connection with this
Agreement. In addition, the Services shall conform to reasonable commercial
standards applicable to such Services in the business in which Client is
engaged.

     10.1.5.  Training

     Throughout the Term, Contractor shall provide, and cause its Subcontractors
to provide, all such training to the Contractor Personnel (including employees
of its Subcontractors) as may be necessary for them to perform all of
Contractor's duties under this Agreement.

     10.1.6.  Security and Background Checks

     Either prior to assigning, or as promptly as possible thereafter (and, in
any event, within thirty (30) days thereafter), an individual to work on a
full-time permanent basis at a Client facility under this Agreement (a "Resident
Contractor Person") Contractor shall, subject to any prohibitions or limitations
imposed by applicable law, commence and complete a prescreening/qualification
verification of such individual, including performance reference checks. In
addition, and as part of such verification, Contractor shall perform a security
background
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<PAGE>

check that shall include investigation of any and all state and federal
misdemeanor and felony convictions or pending criminal charges for such
individual for the seven (7) years prior to the start of such assignment.
Contractor shall not assign any Resident Contractor Person based upon a finding
that such individual has a state or federal misdemeanor, felony conviction, or
pending criminal charge for the seven (7) years prior to the start of such
assignment for Client.

     10.1.7.  Replacement of Personnel

     Notwithstanding Sections 10.1.1 and 10.1.2, if Client believes that the
performance or conduct of any person employed or retained by Contractor to
perform Contractor's obligations under this Agreement, including Contractor's
Account Manager, is unsatisfactory for any reason or is not in compliance with
the provisions of this Agreement, Client shall so notify Contractor and
Contractor shall either promptly address the performance or conduct of such
person, or, at Client's request, immediately replace such person with another
person acceptable to Client with sufficient knowledge and expertise to perform
the Services in accordance with this Agreement. Contractor shall not charge
Client for the costs associated with educating any individuals replacing any
Contractor Personnel. Provided the replaced individual remains in the employ of
Contractor, such individual shall continue to be available by telephone to
answer any Services-related questions, at no cost to Client.

     Contractor covenants that it, its employees, agents, and Subcontractors
shall comply with Client's policies and, prospectively after notice, such
additional policies as may be provided by Client to Contractor in writing from
time to time, and Contractor shall cooperate with Client to facilitate Client's
compliance with such policies:

     10.1.8.  Security

     Contractor shall establish and maintain safeguards against the unintended
disclosure, destruction, loss or alteration of Client's data and data files in
the possession of Contractor. Contractor further covenants to comply with all
government laws, ordinances, regulations and orders applicable to the
installation, use, possession or operation of any equipment or service supplied
by Client hereunder.

     10.1.9.  Computer Information and Access

     Prior to performing any services pursuant to this Agreement, Contractor's
personnel who will access Client computer data and software, including the
Client Data, shall execute Client's standard forms concerning access protection
and data/software security. Contractor covenants that at all times during the
Term, it, its employees, agents, and Subcontractors, shall, as communicated by
Client to Contractor: (i) comply with all applicable Client policies and
procedures regarding data access and security and those policies and procedures
prohibiting or restricting remote access to Client's systems and data; (ii)
comply with applicable Client network connectivity procedures; and (iii) use all
resources that, under Section 3.3, are not required to be dedicated exclusively
to the use or benefit of Client, in a manner that complies with such applicable
Client policies and procedures. Contractor shall issue to the Contractor
Personnel access mechanisms including access IDs, passwords, and access cards
that are to be used only by such personnel to whom they are issued. Contractor
shall provide to such personnel only such level of access as is required to
perform the tasks and functions for which such personnel are responsible. The
Client Data shall be used by Contractor Personnel only in connection with
Contractor's obligations hereunder, and shall not be commercially exploited by
Contractor. Failure of Contractor to comply with these rules may result in
Client restricting offending personnel from access to Client computer systems.
Contractor shall maintain and ensure the confidentiality and security of the
Client Data in accordance with the terms of this Agreement and in no event shall
any Contractor action or inaction result in any situations that are less secure
than either the security Client maintained as of the Service Commencement Date
or the security Contractor then maintains for its own similar systems and data.

  10.2.  MANAGEMENT COMMITTEE

     The parties shall establish a Management Committee (and such subcommittees
as the Management Committee deems appropriate) and shall address matters of
governance and administration of their relationships under this Agreement, in
accordance with Schedule 10.2 hereto.

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11. PROPRIETARY RIGHTS

  11.1.  OWNERSHIP OF UNDERLYING WORKS AND WORK PRODUCT

     11.1.1.  Intellectual Property Protection

     Contractor shall promptly and fully disclose and deliver all Work Product
to Client in writing and (with respect to computer software) in both source code
and object code form and with all available user manuals and other
documentation, as requested by Client. Contractor shall execute and deliver any
and all patent, copyright, or other applications, assignments, and other
documents that Client reasonably requests for protecting the Work Product,
whether in the United States or any other country. Client shall have the full
and sole power to prosecute such applications and to take all other action
concerning the Work Product, and Contractor shall cooperate fully and in a
lawful manner, at the expense of Client, in the preparation and prosecution of
all such applications and in any legal actions and proceedings concerning the
Work Product.

     11.1.2.  Ownership of Residuals

     Notwithstanding anything to the contrary provided in this Agreement,
Contractor shall retain all right, title, and interest in all Residuals, and
Contractor hereby grants to Client a perpetual, fully-paid, non-exclusive,
royalty-free, worldwide license to use any such Residuals that are embedded in
the Work Product, with a right to sublicense third-party service providers the
right to use such Residuals that are embedded in the Work Product solely to
provide services to Client. Client shall be responsible for ensuring that such
third-party service providers comply with such sublicenses, including
restrictions on use and the confidentiality provisions contained in this
Agreement.

     11.1.3.  Derivative Works

     Notwithstanding anything to the contrary provided in this Agreement,
Contractor shall be the sole and exclusive owner of all Contractor Underlying
Works, and all derivatives thereof that do not contain functions or features
that were designed primarily or specifically for Client's use or benefit and do
not pertain primarily to Client's business, products, or systems ("Contractor
Derivatives"). Contractor hereby grants to Client a perpetual, non-exclusive,
royalty-free, fully-paid, worldwide license to use, copy, modify, exploit, and
sublicense, each Contractor Underlying Work and Contractor Derivative in
connection with the conduct of Client's business, with a right to sublicense
third-party service providers to use such Residuals that are embedded in the
Work Product solely to provide services to Client. Client shall be responsible
for ensuring that such third-party service providers comply with such
sublicenses, including restrictions on use and the confidentiality provisions
contained in this Agreement.

     11.1.4.  Third-Party Underlying Works

     Notwithstanding anything to the contrary provided in this Agreement, the
sole and exclusive owner of any third party's Underlying Works, and of all
derivative works thereof that are created, invented, or conceived of by
Contractor or by such third party (such derivatives collectively, with the third
party's Underlying Works, the "Third-Party Works"), shall be the applicable
third party; provided, however, that Contractor shall not implement or utilize
any Third-Party Works in the provision of any Services unless Contractor shall
have caused such third party to grant to Client a, royalty-free, fully paid-up,
license to use, copy, modify, exploit, and sublicense the Third-Party Works in
connection with the conduct of Client's business, except for Third-Party Works
that do not contain functions or features that were designed primarily or
specifically for Client's use or benefit and do not pertain primarily to
Client's business, products, or systems, with respect to which Contractor shall
only be required to have obtained for Client a non-exclusive, royalty-free,
paid-up, license, assuming the third party makes such a license generally
available (but in any event, a fully-paid up, royalty-free license that is
sufficient for Contractor's provision, and Client's receipt and use, of the
Services). In any event, Contractor shall cause such third parties to grant to
Client a right to sublicense third-party service providers the right to use such
Third-Party Works solely to provide services to Client. Client shall be
responsible for ensuring that such third-party service providers comply with
such sublicenses, including restrictions on use and the confidentiality
provisions contained in this Agreement.
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  11.2.  RIGHTS AND LICENSES

     Contractor shall obtain from third parties all rights and licenses required
to perform the Services. Contractor's obligation in this regard shall commence
upon Contractor having knowledge of the need for such right or license. With
respect to all technology used and to be used by Contractor to perform the
Services hereunder, whether proprietary to Contractor or to any other Person,
Contractor hereby grants and agrees to grant to Client, or cause to be granted
by the licensor thereof, as the case may be, without additional charge, such
licenses and sublicenses as may be necessary in order for Client, and its
authorized representatives, including third-party service providers of Client,
to use, or receive the benefit of the use by Contractor of, such technology in
connection with the Services or in connection with any other services that are
related to, or come into contact with, the Services. In addition to the
foregoing, Contractor shall obtain advance written consents from Contractor's
licensors and lessors to the conveyance or assignment of all licenses and leases
related to the Services to Client upon Disentanglement. If such advance consents
cannot be obtained, Contractor shall promptly notify Client's Contract Manager
and Client shall have the option to enter into the applicable license or lease
in its own name. Contractor further agrees that any licenses granted, or
obtained, by Contractor under this Section 11.2, shall extend to any assignee of
substantially all of the assets or business of Client.

  11.3.  CLIENT DATA

     Client shall permit Contractor and its Subcontractors to have access to the
Client Data solely to the extent required to provide the Services as
contemplated by this Agreement. Contractor may only access and process the
Client Data in connection herewith or as directed by Client in writing and may
not otherwise modify the Client Data, merge it with other data, commercially
exploit it, or do any other thing that may in any manner adversely affect the
integrity, security, or confidentiality of such data, other than as specified
herein or as directed by Client in writing. Contractor understands and agrees
that Client owns all right, title, and interest in the Client Data and in any
modification, compilation, or derivative work therefrom (collectively, "Data and
Modified Data"), and also owns all copyright, trademark, trade secrets, and
other proprietary rights in the Data and Modified Data. Contractor agrees that
all copyrightable aspects of such Data and Modified Data shall be considered
"work made for hire" within the meaning of the Copyright Act of 1976, as
amended. Contractor hereby assigns to Client exclusively all right, title, and
interest in and to all copyright or other proprietary rights in and to the Data
and Modified Data that it may have or obtain, without further consideration,
free from any claim, lien for balance due, or rights of retention thereto on the
part of Contractor. Contractor also acknowledges that the parties do not intend
Contractor to be a joint author of the Data and Modified Data within the meaning
of the Copyright Act of 1976, as amended, and that in no event shall Contractor
be deemed a joint author of the Data and Modified Data.

  11.4.  INFRINGEMENT

     Each of the parties covenants to perform its responsibilities under this
Agreement in a manner that does not infringe, or constitute an infringement or
misappropriation of, any patent, trade secret, copyright, or other intellectual
property right of any third party, or a violation of the other party's software
license agreements or intellectual property rights disclosed to or known by such
party.

  11.5.  COOPERATION

     If at any time either party brings, or investigates the possibility of
bringing, any claim against any third party for infringement of any patent,
trademark, copyright, or similar property right of such party, including
misappropriation of trade secrets and misuse of confidential information, then
the other party, upon the request and at the expense of the requesting party,
shall cooperate with and assist such party in the investigation or pursuit of
such claim, and provide such party with any information in its possession that
may be of use to such party in the investigation or pursuit of such claim.

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12. TERM

  12.1.  INITIAL TERM; RENEWALS

     The period during which Contractor shall be obligated to provide the
Services under this Agreement shall commence on the Service Commencement Date
and end on the fifth (5th) anniversary of the Service Commencement Date (the
"Initial Term"). Contractor shall notify Client, on the fourth (4th) anniversary
of the Service Commencement Date, (i) if Contractor desires to extend the
Initial Term, and (ii) of the proposed pricing and other terms and conditions to
govern the provision of Services during any such extension. At any time within
the nine (9) months following such fourth (4th) anniversary, Client may notify
Contractor if it desires to extend the Initial Term, which notice shall not be
deemed an acceptance of Contractor's proposal unless it explicitly states that
Client accepts such proposal. The parties shall then commence negotiations
regarding the pricing and other terms and conditions applicable during any such
extension. Notwithstanding the foregoing, Client may, in its sole discretion,
extend the Initial Term or any extended Term for any number of successive
renewal periods of one (1) year each, under the then-current pricing and other
terms and conditions, by providing written notice delivered to Contractor at
least ninety (90) days before the end of the then-current Term.

  12.2.  EARLY TERMINATION

     12.2.1.  For Convenience

     Client shall have the right to terminate the Services, in whole or in part,
for its convenience or to end the Term for its convenience effective at 11:59
p.m. on the intended date of termination (the "Termination Date") by delivering
to Contractor a written notice of termination specifying the Termination Date
(the "Termination Notice") at least one hundred eighty (180) days before said
Termination Date.

     12.2.2.  Change in Control of Contractor

     In the event of a change in control of Contractor resulting from a single
transaction or series of related transactions, Client shall have the right to
end the Term by sending Contractor a Termination Notice at least ninety (90)
days before the Termination Date specified in such Termination Notice, provided
that Client shall have delivered such notice to Contractor not later than one
hundred eighty (180) days following the effective date of such change in
control. Solely for purposes of this Section 12.2.2 and Section 24.4, "control"
shall mean the legal, beneficial, or equitable ownership, direct or indirect, of
more than fifty percent (50%) of the aggregate of all voting or equity interests
in Contractor; "change in control" shall mean any change in the legal,
beneficial, or equitable ownership, direct or indirect, such that control of
Contractor is no longer with the same entity or entities as on the Effective
Date.

  12.3.  TERMINATION FOR DEFAULT

     Section 22 hereof notwithstanding, the Term may be ended: (i) by Client, by
delivering a Termination Notice to Contractor, if Contractor commits a Default;
or (ii) by Contractor, only as follows: in the event that Client has more than
three (3) monthly invoices remaining unpaid, Contractor will send a notice of
potential default ("PDN"). The PDN will identify the invoices which triggered
the PDN and notify Client that if additional unpaid invoices exceed another
three (3) months (six months of unpaid invoices in total), Services will cease
as of the date specified in the PDN. Except for Contractor's right to terminate
Services as provided above, Termination shall be effective at 11:59 p.m. on the
Termination Date, subject to the provisions of Section 22.2 hereof; in the event
of such a termination by either Client or Contractor, Contractor shall fully
perform its Disentanglement obligations. Termination shall not constitute a
party's exclusive remedy for a Default, and a party shall not be deemed to have
waived any of its rights accruing hereunder prior to such Default. If a party
ends the Term as a result of a claimed Default by the other party pursuant to
the terms hereof, and the other party does not agree that a Default was
committed, then the other party shall have the right to avail itself of all
remedies available to it under the law.

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  12.4.  TERMINATION FOR FORCE MAJEURE EVENT

     If a delay or interruption of performance by Contractor resulting from its
experiencing a Force Majeure Event exceeds seven (7) days, then Client may
terminate the Term, by delivering to Contractor a Termination Notice specifying
the Termination Date; in the event of such a termination, Contractor shall fully
perform its Disentanglement obligations hereunder.

  12.5.  EXTENSION OF TERMINATION DATE

     Except for termination by Contractor of this Agreement for Client Default,
Client may, at its sole option and discretion, extend the effective date of any
expiration or termination of the Term for up to four (4) successive periods of
ninety (90) days each, upon at least thirty (30) days' notice to Contractor, or
any lesser notice if Contractor has designated an effective date of any
expiration or termination of the Term less than forty-five (45) days in advance
of such notice.

  12.6.  EFFECT OF ENDING OF TERM

     The expiration or termination of the Term shall not constitute a
termination of this Agreement, which shall continue in effect until all other
duties and obligations of the parties have been performed, discharged, or
excused.

13.  DISENTANGLEMENT

  13.1.  DISENTANGLEMENT PROCESS

     The Disentanglement process shall begin on the earlier of the following
dates: (i) ninety (90) days prior to the end of any initial or extended term
that Client has not elected to extend pursuant to Section 12.1; or (ii) the date
a Termination Notice is delivered pursuant to Section 12. Subject to Section
12.5, Contractor's obligation to perform Services, and Client's obligation to
pay for Services (other than for Services previously performed and not yet paid
for in accordance with the terms hereof), shall expire: (A) at the end of the
initial or extended term set forth in Section 12.1; or (B) on the applicable
Termination Date specified pursuant to Section 12 (with the date on which
Contractor's obligation to perform the applicable Services expires being
referred to herein as the "Expiration Date"); Contractor and Client shall
discuss in good faith a plan for determining the nature and extent of
Contractor's Disentanglement obligations and for the transfer of Services in
process, provided, however, that Contractor's obligations under this Agreement
to provide all Disentanglement services reasonably requested by Client shall not
be lessened in any respect.

  13.2.  GENERAL OBLIGATIONS

     Contractor shall take all actions necessary to accomplish, on the
Expiration Date, a complete transition of responsibility for the Services being
terminated from Contractor to Client, or to any replacement provider designated
by Client, including the performance by Contractor of all of the obligations
imposed upon it pursuant to this Section 13, with no material interruption of or
adverse impact on the Services or any other services provided by third parties
(collectively, a "). Contractor shall use its best efforts to cooperate with
Client and any new service provider and otherwise promptly take all steps
required to assist Client in effecting a complete Disentanglement. Contractor
shall provide all information regarding the Services or as otherwise needed for
Disentanglement. Contractor shall provide for the prompt and orderly conclusion
of all work, as Client may reasonably direct, including completion or partial
completion of some projects, documentation of work in process, and other
measures to ensure an orderly transition to Client or Client's designee.
Contractor's obligation to perform the Disentanglement shall not cease until a
Disentanglement satisfactory to Client, including the performance by Contractor
of all asset transfers and other obligations of Contractor provided in this
Section 13, has been completed. For Disentanglement services to be provided
after the Expiration Date, Contractor may charge Client its then current Fees
for providing the Services. In the event Client elects to terminate any
Service(s) pursuant to the terms hereof, Contractor shall perform its
Disentanglement obligations hereunder to the extent applicable to the Service or
Services being terminated.

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  13.3.  SPECIFIC OBLIGATIONS

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

     13.3.1.  Full Cooperation and Information

     Upon Disentanglement, the parties shall cooperate fully with one another to
facilitate a smooth transition of Services from Contractor to Client or Client's
designated replacement provider. Such cooperation shall include the provision
(both before and after the cessation of Contractor's providing of all or any
part of the Services) by Contractor to Client of sufficient information
(including all information then being utilized by Contractor) to enable Client's
personnel (or that of third parties) who are reasonably skilled in the provision
of services similar to the Services, to fully assume and continue the provision
of the Services.

     13.3.2.  Transfer of Leases, Licenses, and Contracts

     Contractor, at Client's expense, shall convey or assign to Client (or its
designee) all leases, licenses, and other agreements, except facility and
financing leases, that were purchased on behalf of Client, (or cause to be
conveyed or assigned any of the same held by any Affiliate of Contractor) and
are used by Contractor, Client, or any third party, in connection with the
provision or receipt of the Services (the "Essential Agreements").

     13.3.3.  License to Proprietary Technology

     Contractor shall provide a fully-paid, perpetual, royalty-free, license to
Client (or its designee), at no charge, to use, copy, and modify, all Contractor
Underlying Works and Contractor Derivatives that would be needed in order to
allow Client (or its designee) to continue to perform the Services as the same
might exist at the time of Disentanglement. Contractor shall provide Client with
a copy of all Contractor Underlying Works and all Contractor Derivatives in such
media as requested by Client, together with object code, source code, and
documentation. Contractor shall also offer to Client the right to receive
maintenance (including all enhancements and upgrades) and support with respect
to such Contractor Underlying Works and Contractor Derivatives for so long as
Client requires it, at the best rates and terms Contractor is offering to other
major customers for services of a similar nature and scope.

     13.3.4.  Delivery of Documentation

     Contractor shall deliver to Client or Client's designee, at Client's
request, all documentation and data related to Client, including the Client
Data, which was maintained by Contractor during the Term of this Agreement,
except for documents and data that are legally privileged in the hands of
Contractor, and Contractor shall destroy all copies thereof not turned over to
Client, all at no charge to Client.

     13.3.5.  No Interruptions or Adverse Impacts

     Contractor shall cooperate with Client and all of Client's other service
providers to ensure a smooth transition at the time of Disentanglement, with no
interruption of Services, no material adverse impact on the provision of
Services or Client's activities, no interruption of any services provided by
third parties, and minimal impact on the provision of services provided by third
parties.

  13.4.  PREPARATION FOR DISENTANGLEMENT

     13.4.1.  Up-to-Date Documentation

     Contractor shall provide to Client documentation and other information
("Documentation") for all software and hardware, maintained by Contractor, or
updated or developed as part of an Initiative during the Term of this Agreement.
Contractor shall also provide such Documentation for all applications developed
as part of the Services, upgrades or replacement software or hardware
concurrently with the installation thereof that is sufficient to enable Client,
or another reasonably competent service provider, to assume the provision of the
Services to Client. If the Documentation relates to Third-Party Works,
Contractor shall provide Documentation that is of a type generally created in
the industry for such software or hardware and allows a reasonably
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competent service provider to understand the use of such hardware or software.
If the Documentation relates to proprietary Contractor software, Contractor
shall provide the then-available Documentation. If such then-available
Documentation is insufficient to allow persons who meet the standards required
of Contractor Personnel in this Agreement to understand and operate such
proprietary Contractor software, then Contractor shall create sufficient
additional Documentation in a timely manner and provide it to Client at no
charge.

     13.4.2.  Maintenance of Assets

     Contractor shall maintain all of its hardware, software, systems, networks,
technologies, and other assets utilized in providing Services to Client
(including leased and licensed assets) in good condition and in such locations
and configurations as to be readily identifiable and transferable back to Client
or its designees in accordance with the provisions of this Agreement; in
addition, Contractor shall insure such assets in accordance with the
requirements of Section 15.

14. DEFAULT

  14.1.  REMEDIES

     14.1.1.  Parties Remedies

     If a party commits a Default under this Agreement, the other party, subject
to Section 22 hereof, shall be entitled to cause a termination of this Agreement
as set forth in Section 12.3 and shall have all the remedies that may be
available to it under law or in equity, none of which is exclusive and any or
all of which may be pursued, except as otherwise provided in this Agreement,
including the limitations and exclusions with reference to liability set forth
in Section 14.1.2.

     14.1.2.  Limitation of Liability and Disclaimers

     Subject to the express provisions and limitations of this Section 14.1.2,
the parties intend that each party shall be liable to the other party for all
damages incurred as a result of the breaching party's failure to perform its
obligations.

     THE AGGREGATE CUMULATIVE MONETARY LIABILITY OF CLIENT FOR ALL CLAIMS
ARISING UNDER OR RELATING TO THIS AGREEMENT, NOTWITHSTANDING THE FORM (e.g.,
CONTRACT, TORT, OR OTHERWISE) IN WHICH ANY ACTION IS BROUGHT, SHALL BE LIMITED
TO THE AMOUNT OF MONEY SHOWN TO BE OWED FOR SERVICES RENDERED AND UNPAID. THE
LIMITATIONS CONTAINED IN THIS AGREEMENT UPON THE TYPES AND AMOUNTS OF CLIENT'S
LIABILITY SHALL NOT APPLY TO: (i) CLAIMS SUBJECT TO INDEMNIFICATION BY CLIENT
(SECTION 21); (ii) CLAIMS WITH RESPECT TO A BREACH OF CONFIDENTIALITY (SECTION
18); AND (iii) LOSSES ARISING OUT OF THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE
OF CLIENT.

     EXCEPT AS OTHERWISE EXPRESSLY PROVIDED BELOW, CONTRACTOR'S AGGREGATE
CUMULATIVE MONETARY LIABILITY FOR ALL CLAIMS ARISING UNDER OR RELATING TO THIS
AGREEMENT, NOTWITHSTANDING THE FORM (e.g., CONTRACT, TORT, OR OTHERWISE) IN
WHICH ANY ACTION IS BROUGHT, SHALL BE LIMITED TO THE LESSER OF: (i) AN AMOUNT,
CALCULATED AT THE TIME OF PRESENTATION OF ANY CLAIM, EQUAL TO THE AGGREGATE
AMOUNT OF THE FEES PAYABLE BY CLIENT UNDER THIS AGREEMENT DURING THE TWELVE (12)
MONTHS IMMEDIATELY PRECEDING THE OCCURRENCE OF THE EVENT GIVING RISE TO SUCH
CLAIM; OR (ii) ACTUAL DAMAGES SUSTAINED BY THE CLIENT.

     NEITHER PARTY SHALL BE LIABLE FOR LOST PROFITS, LOST REVENUES, OR
EXEMPLARY, PUNITIVE, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, EVEN IF
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE REASONABLE COSTS THAT CLIENT IS
REQUIRED TO EXPEND TO PROCURE SERVICES FROM AN ALTERNATIVE SOURCE AS A RESULT OF
A DEFAULT BY CONTRACTOR, TO THE EXTENT IN EXCESS OF CONTRACTOR'S CHARGES UNDER
THIS AGREEMENT, AND ANY AMOUNT OF MONEY UNPAID BY CLIENT TO CONTRACTOR FOR
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SERVICES RENDERED, SHALL BE CONSTRUED AS DIRECT DAMAGES AND NOT AS INDIRECT,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES. THE LIMITATIONS CONTAINED IN THIS
AGREEMENT UPON THE TYPES AND AMOUNTS OF CONTRACTOR'S LIABILITY SHALL NOT APPLY
TO: (i) CLAIMS SUBJECT TO INDEMNIFICATION BY CONTRACTOR (SECTION 21); (ii)
CLAIMS WITH RESPECT TO A BREACH OF CONFIDENTIALITY (SECTION 18); (iii) LOSSES
ARISING OUT OF THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF CONTRACTOR; AND
(iv) CLAIMS BASED UPON A BREACH OF SECTION 22.2 HEREOF OR UPON ANY REPUDIATION
OF THIS AGREEMENT BY CONTRACTOR OR CONTRACTOR'S REFUSAL TO PERFORM ITS DUTIES
AND OBLIGATIONS HEREUNDER.

  14.2.  FORCE MAJEURE EVENTS

     If a Force Majeure Event is the material contributing cause of a party's
failure to perform any of its obligations hereunder, such obligations, after
notification by such party to the other party, shall be deemed suspended to the
extent such obligations are directly affected by such Force Majeure Event, until
the Force Majeure Event has ended and a reasonable period of time for overcoming
the effects thereof has passed; provided, however, that if a Force Majeure Event
results in Contractor being unable to perform during any period any or all of
the Services in accordance with the terms hereof, Client shall: (i) not be
required to pay for any such Services that Contractor is unable to perform; (ii)
be entitled to engage an alternate provider, on an interim basis, to perform the
Services that Contractor is unable to perform as a result of the Force Majeure
Event until such time as Contractor is able again to perform the Services in
accordance with the terms hereof; and (iii) have the right to terminate this
Agreement in accordance with the terms of Section 12.4. Both parties shall use
their best efforts to minimize delays that occur due to a Force Majeure Event;
provided, however, that this Section shall not be construed so as to require
Contractor to provide disaster recovery services beyond those described in the
Statement of Work as such Plan may be revised from time to time by agreement of
the parties.

  14.3.  BREACH

     The parties acknowledge that the failure of a Default to constitute a basis
for termination of this Agreement pursuant to Section 14.1.1 shall not preclude
the aggrieved party from seeking other remedies available to it under law for
such Default.

15. INSURANCE

  15.1.  GENERAL REQUIREMENTS

     Without limiting either parties' undertaking to defend, hold harmless, and
indemnify the other party as provided in Section 21 hereof, Contractor shall
purchase and maintain insurance to protect Contractor from claims of the type
set forth below that arise out of or result from Contractor's operations,
services, or performance under this Agreement and for which Contractor may be
liable, whether such operations, services, or performance are provided by
Contractor or by any of Contractor's agents, consultants, suppliers, or
Subcontractors or by anyone directly employed by any of them, or by anyone for
whose acts Contractor may be liable.

  15.2.  COVERAGES

     Contractor, at its own expense, shall at all times during the term of this
Agreement maintain (a) workers compensation insurance in compliance with
applicable state and federal laws; (b) employer's liability insurance with a
limit of liability not less than $100,000; (c) commercial general liability
insurance with a combined single limit of not less than $1,000,000 per
occurrence and $3,000,000 annual aggregate covering bodily injury, property
damage, personal injury and advertising liability including premises operations,
completed operations and blanket contractual liability; and (d) a fidelity
(employee dishonesty) bond with a limit of liability not less than $100,000.

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16. INVOICES AND REPORTS

  16.1.  INVOICES

     16.1.1.  General

     Contractor shall furnish Client with a single monthly invoice for Services
performed by Contractor in the preceding month. Each invoice shall include an
itemized accounting of the Fees and be accompanied by information and data that
support such Fees in accordance with Schedule 8.1. Each monthly invoice, and the
supporting information and data relating thereto, shall be presented in the
format indicated in Exhibit 16.1.1.

     16.1.2.  Initiatives

     Invoicing with respect to Initiatives shall be consistent with the
requirements approved for each Initiative. Contractor shall identify all
Initiative activity invoicing by Initiative and by Client account code (cost
center), appropriation number, or other code as identified by Client in writing
from time to time.

  16.2.  REPORTS

     Contractor shall furnish Client with reports in the form, with the
frequency, and covering the information, as requested by Client from time to
time. Contractor shall furnish all reports to Client in an electronic form.
Contractor shall promptly inform Client of any known and material deficiencies,
omissions, or irregularities in Client's requirements or in Contractor's
performance of the Services that may come to Contractor's Account Manager's
attention.

17. RECORDKEEPING AND AUDIT RIGHTS

  17.1.  RECORDKEEPING

     Contractor shall maintain complete and accurate records of account with
respect to this Agreement utilizing generally accepted accounting principles
("GAAP"), consistently applied and complying in all respects with all applicable
laws. Such records of account shall be maintained by Contractor at a principal
business office and Client, upon prior written notice, may examine and copy
parts thereof to the extent necessary for Client to verify the accuracy of
Contractor's invoices, at any reasonable time during normal business hours.

     Contractor shall retain for a period of four (4) years from the end of each
calendar year during the Term, or such longer period as may be required by law,
all records and information required to verify amounts invoiced under this
Agreement for such calendar year. Client or Client's Auditors shall be granted
access to the aforesaid records for the purpose of verifying the accuracy of
Contractor's invoicing, during normal business hours upon reasonable notice to
Contractor. All verifications shall be conducted during business hours, with
reasonable advance notice and, notwithstanding anything to the contrary in this
Agreement, shall not include access to proprietary or Confidential information
except to the extent necessary to confirm the accuracy of Contractor's invoices.

  17.2.  OPERATIONAL AUDIT RIGHTS

     Client or Client's Auditors shall have the right, at any time, upon
reasonable notice (except that no notice shall be required with respect to a
security audit), to perform, in a reasonable manner, an operational audit with
respect to Contractor's performance of the Services. For purposes of such audit,
Contractor shall grant Client or Client's Auditors full and complete access,
during normal business hours and upon reasonable notice, to the relevant portion
of Contractor's records, documents, data, or information, as they relate to this
Agreement, or as they may be required in order for Client to ascertain any facts
relative to Contractor's performance hereunder. Contractor shall provide Client
or Client's Auditors such information and assistance as reasonably requested in
order to perform such audits; provided, however, that the parties shall endeavor
to arrange such assistance in such a way that it does not interfere with the
performance of Contractor's duties and obligations hereunder.

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18. CONFIDENTIALITY

  18.1.  PROTECTION OF CONFIDENTIAL INFORMATION

     Each of the parties shall:

        (a)   maintain the confidentiality of the Confidential Information of
              the other party;

        (b)   take steps to minimize the dissemination or copying of the
              Confidential Information of the other party except to the extent
              necessary to perform its obligations under this Agreement;

     (c)   use the same care to prevent disclosure of the Confidential
           Information of the other party to third parties as it employs to
           avoid disclosure, publication, or dissemination of its own
           information of a similar nature, but in no event less than a
           reasonable standard of care;

     (d)   use the Confidential Information of the other party solely for the
           purpose of performing its obligations under this Agreement;

     (e)   not acquire any express or implied right or license under any patent,
           copyright, trade secret, or other right or assert any lien against
           Confidential Information of the other party;

     (f)   promptly return, or provide a copy of, as the requesting party
           directs, Confidential Information upon the request of the other party
           (provided that Contractor may retain such Confidential Information as
           it requires in order to perform the Services for so long as it is
           required to perform such Services); and

     (g)   use its best efforts to inform its employees, agents, and
           subcontractors who perform duties with respect to this Agreement
           about these restrictions.

Each party may disclose Confidential Information of the other party to its
employees, agents, and subcontractors who have: (i) a need to know such
Confidential Information in order to perform their duties; and (ii) a legal duty
to protect the Confidential Information. A party receiving Confidential
Information of the other party assumes full responsibility for the acts or
omissions of its subcontractors and employees with respect to such Confidential
Information.

  18.2.  REQUIRED DISCLOSURE

     Either party may disclose Confidential Information to the extent disclosure
is based on the good faith written opinion of such party's legal counsel that
disclosure is required by law or by order of a court or governmental agency;
provided, however, that the party that is the recipient of such Confidential
Information shall use its best efforts to maintain the confidentiality of the
Confidential Information by means of a protective order or other similar
protection and shall give the owner of such Confidential Information prompt
notice in order that it have every opportunity to intercede in such process to
contest such disclosure and shall use its best efforts to cooperate with the
owner of such Confidential Information to protect the confidentiality of such
Confidential Information. The owner of such Confidential Information reserves
the right to obtain a protective order or otherwise protect the confidentiality
of such Confidential Information. Each party shall be responsible for its own
costs with respect to the performance of its obligations under this Section
18.2. Either party may disclose the existence of this Agreement, and either
party may disclose the terms of this Agreement to the extent required to enforce
its terms or the rights of such party hereunder or thereunder.

  18.3.  NOTIFICATION

     In the event of any disclosure or loss of Confidential Information, the
receiving party shall notify the disclosing party as soon as possible.

  18.4.  INJUNCTIVE RELIEF

     Each party acknowledges that any breach of any provision of this Section 18
by either party, or its personnel, agents, or subcontractors, may cause
immediate and irreparable injury to the other party, and in the event of such

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breach, the injured party shall be entitled to injunctive relief, without bond
or other security, and to any and all other remedies available at law or in
equity.

  18.5.  RETURN OF CONFIDENTIAL INFORMATION

     Unless it is expressly authorized by this Agreement to retain the other
party's Confidential Information, a party shall promptly return or destroy, at
the other party's option, the other party's Confidential Information, including
materials prepared in whole or in part based on such Confidential Information to
the extent containing Confidential Information, and all copies thereof, at the
other party's request, and an officer of such party shall certify to the other
party that it no longer has in its possession or under its control any
Confidential Information in any form whatsoever, or any copy thereof.

  18.6.  CONFIDENTIALITY OBLIGATIONS

     Contractor shall ensure that each of its employees, agents, or
Subcontractors providing Services to Client hereunder are subject to a
confidentiality provision within their respective employee manual or directives,
under which such employees, agents, or Subcontractors shall protect Client's
Confidential Information.

19. LEGAL COMPLIANCE

     Both Contractor and Client shall at all times perform their obligations
hereunder in compliance in all material respects with all applicable foreign,
domestic, state, and local laws and regulations, and in such a manner as not to
cause the other to be in material violation of any applicable laws or
regulations including any applicable requirements of any foreign, domestic,
state, or local authority regulating health, safety, employment, the
environment, exportation, or telecommunications. In addition, except for
governmental approvals required to be obtained by Client, Contractor agrees to
obtain and maintain, at its own expense, all approvals, permissions, permits,
licenses, and other forms of documentation required by Contractor in order to
comply with all existing foreign or domestic statutes, ordinances, regulations,
or other laws, applicable to Contractor's performance of Services.

20. REPRESENTATIONS, WARRANTIES, AND COVENANTS

  20.1.  CONTRACTOR'S REPRESENTATIONS, WARRANTIES, AND COVENANTS

     20.1.1.  Performance of the Services

     Contractor represents that it: (i) has had adequate opportunity to inspect
all material components, workings, capabilities, procedures, and capacities of
the networks, hardware, and software associated with the provision of the
Services, and for full and complete analysis of Client's requirements in
connection therewith (as specified in this Agreement); (ii) has received answers
to all questions that it has presented to Client regarding the scope and
substance of the Services; and (iii) is capable in all respects of providing
Services in accordance with this Agreement. Contractor warrants that all
Services shall be performed in a timely, professional, workman like manner and
that no amendment to this Agreement, or additional cost or expense, shall be
required by Client during the Term in order for Contractor to be able to perform
the Services in accordance with the Service Levels.

     20.1.2.  Proprietary Rights Infringement

     Contractor covenants that at no time during the Term shall the use of any
services, techniques, or products provided or used by Contractor infringe upon
any third party's patent, trademark, copyright, or other intellectual-property
right, nor make use of any misappropriated trade secrets.

     20.1.3.  Authorizations and Approvals

     Contractor represents and warrants that: (i) it is a Delaware corporation;
(ii) it is qualified and registered to transact business in all locations where
the performance of its obligations hereunder would require such qualification;
(iii) it has all necessary rights, powers, and authority to enter into and
perform this Agreement, (iv) the execution, delivery, and performance of this
Agreement by Contractor have been duly authorized by all
                                        26
<PAGE>

necessary corporate action; and (v) the execution and performance of this
Agreement by Contractor shall not violate any domestic or foreign law, statute,
or regulation and shall not breach any agreement, covenant, court order,
judgment, or decree to which Contractor is a party or by which it is bound.
Contractor represents and warrants that it has, and covenants that it shall
maintain in effect, all governmental licenses and permits necessary for it to
provide the Services contemplated by this Agreement. Contractor represents and
warrants that Contractor owns or leases and covenants that it shall own or
lease, or have a right to use, free and clear of all liens and encumbrances,
other than lessors' interests or security interests of Contractor's lenders,
appropriate right, title, or interest in and to the tangible property that
Contractor intends to use or uses to provide the Services.

     20.1.4.  Information Furnished to Client

     The parties have provided, and may continue to provide to each other
certain material information utilized in the development of the monthly base
charges and additional volume charges payable under this Agreement that has not
been independently verified by the recipient party. Each party believes that the
information it provided is accurate and contains no material omissions. If any
such information is false or misleading in any material respect, then the
parties shall negotiate in good faith to agree upon adjustments to the
provisions of this Agreement, as the parties deem mutually appropriate under the
circumstances.

  20.2.  CLIENT'S REPRESENTATIONS, WARRANTIES, AND COVENANTS

     20.2.1.  Legal and Corporate Authority

     Client represents and warrants that it is a corporation duly formed and in
good standing under the laws of New York and is qualified and registered to
transact business in all locations where the performance of its obligations
hereunder would require such qualification; that it has all necessary rights,
powers, and authority to enter into and perform this Agreement; that the
execution, delivery, and performance of this Agreement by Client have been duly
authorized by all necessary corporate action; and that the execution and
performance of this Agreement by Client shall not violate any law, statute, or
regulation and shall not breach any agreement, covenant, court order, judgment,
or decree to which Client is a party or by which it is bound.

     20.2.2.  Disclaimer

     Client does not make any representation or warranty, express or implied,
with respect to the Services or any component thereof. All hardware, software,
networks, and other IT-related assets made available or conveyed by Client to
Contractor under this Agreement are made available or conveyed to Contractor "AS
IS, WHERE IS" and there are no warranties of any kind with respect to the
condition, capabilities, or other attributes of such items, except as otherwise
expressly stated in this Agreement.

  20.3.  WARRANTY DISCLAIMER

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

21. INDEMNIFICATION

  21.1.  TECHNOLOGY

     21.1.1.  Indemnity by Contractor

     Contractor shall defend or, at its option, settle, and shall indemnify and
hold the Client Indemnitees harmless from, and shall pay all final damages and
costs awarded against any of them arising out of, any claim brought by any third
party against any of them for actual or alleged infringement of any patent,
trademark, copyright, or similar property right including misappropriation of
trade secrets, based upon technology used by Contractor in providing the
Services (collectively, "Infringement Claim"); and Contractor shall defend,
indemnify, and hold the Client Indemnitees harmless from and against any and all
liabilities, losses, costs, damages, and expenses,
                                        27
<PAGE>

including reasonable attorneys' fees, associated with any such claim or action
incurred by any of them in connection with any Infringement Claim that involves
technology provided or developed by Contractor. Contractor may, in its
reasonable discretion, either procure a license to enable Client to continue to
use such technology or develop or obtain a non-infringing substitute reasonably
acceptable to Client. Contractor shall have no obligation with respect to any
claim or action to the extent that it is based upon: (i) modification of a
program or machine (not otherwise approved by Contractor) by Client, or any
third-party contractor to Client, or any agent of Client; (ii) Client's
combination, operation, or use with apparatus, data, or programs neither
furnished nor approved by Contractor; (iii) the use by Client of any software or
other technology provided by any third party other than in accordance with
relevant licenses whether or not such license agreements are provided to
Contractor; or (iv) the use, in accordance with the applicable license
agreement, of software owned by or licensed to Client by a party other than
Contractor and supplied by Client to Contractor.

     21.1.2.  Indemnity by Client

     Client shall defend or, at its option, settle and shall indemnify and hold
Contractor Indemnitees harmless from, and shall pay all final damages and costs
awarded against any of them arising out of, any claim brought by any third party
against any of them for actual or alleged infringement of any patent, trademark,
copyright, or similar property right including misappropriation of trade
secrets, based upon the Client Software. Client may, in its reasonable
discretion, either procure a license to enable Contractor to continue to use any
such infringing technology or develop or obtain a non-infringing substitute.
Client shall have no obligation with respect to any claim or action to the
extent that it is based upon: (i) modification of a program or machine by
Contractor, any third-party contractor to Contractor, or any agent of Contractor
(other than modifications directed by Client with respect to which Contractor
notified Client in writing of the infringement risk prior to commencing the
modification); (ii) Contractor's combination, operation, or use with apparatus,
data, or programs not furnished by Client; (iii) the use by Contractor of any
software provided by any third party other than in accordance with relevant
software licenses whether or not such licenses are provided to Client; or (iv)
the use, in accordance with the applicable license agreement, of software owned
by or licensed to Contractor by a party other than Client and supplied by
Contractor to Client.

  21.2.  THIRD-PARTY MATTERS

     Each party shall defend, indemnify, and hold the other party's Indemnitees
harmless from and against any and all liabilities, losses, costs, damages, and
expenses, including attorneys' fees in the case of litigation or arbitration,
related to claims by third parties based upon an alleged breach by the
indemnifying party of any agreement with such third party.

  21.3.  CONTRACTOR AND CLIENT EMPLOYEES

     The parties shall indemnify, defend, and hold harmless the other party from
and against any claim, and any and all loss, liability, damages, costs, and
expenses, including attorneys' fees, sustained or incurred by such indemnified
party, by any of the indemnifying party's employees (including Contractor
Personnel) to the extent based upon or resulting from any act by the
indemnifying party and/or its employees.

  21.4.  INJURY OR PROPERTY DAMAGE

     Without limiting Contractor's obligations with respect to insurance as
provided in Section 15 hereof, Contractor shall indemnify, defend, and hold the
Client Indemnitees harmless with respect to any third-party claim alleging
bodily injury, including death, or damage to tangible personal or real property,
to the extent that such injury or damage arises from physical acts or omissions
that constitute negligence, willful misconduct, or violations of law by
Contractor or its personnel, agents, or Subcontractors. Client shall indemnify,
defend, and hold Contractor Indemnitees harmless with respect to any third-party
claim alleging bodily injury, including death, or damage to tangible personal or
real property, to the extent that such injury or damage arises from physical
acts or omissions that constitute negligence, willful misconduct, or violations
of law by Client or its personnel, agents, or subcontractors.

                                        28
<PAGE>

  21.5.  PROCEDURES

     If any legal action governed by this Section 21 is commenced against an
Indemnitee, prompt written notice thereof shall be given to the indemnifying
party; provided, however, that failure to give prompt notice shall not reduce
the indemnifying party's obligations under this Section 21 except to the extent
it is prejudiced thereby. After such notice, if the indemnifying party shall
acknowledge in writing to such Indemnitee that the right of indemnification
under this Agreement applies with respect to such claim, then the indemnifying
party shall be entitled, if it so elects, in a written notice delivered to the
Indemnitee no later than ten (10) days prior to the date on which a response to
such claim is due, to take control of the defense and investigation of such
claim and to employ and engage attorneys of its sole choice, and reasonably
satisfactory to the indemnified party, to handle and defend same, at the
indemnifying party's expense. The Indemnitee shall cooperate in all reasonable
respects with the indemnifying party and its attorneys in the investigation,
trial, and defense of such claim and any appeal arising therefrom; provided,
however, that the Indemnitee may, at its own expense, participate, through its
attorneys or otherwise, in such investigation, trial, and defense of such claim
and any appeal arising therefrom. No settlement of a claim that involves a
remedy other than the payment of money by the indemnifying party shall be
entered into by the indemnifying party without the prior written consent of the
Indemnitee, which consent may be given or withheld in the Indemnitee's sole
discretion, to the extent that it concerns equitable remedies or the
Indemnitee's Confidential Information or proprietary technology. After notice by
the indemnifying party of its election to assume full control of the defense of
any such claim, the Indemnitee shall not be liable to the indemnifying party for
any legal expenses incurred thereafter by such indemnifying party in connection
with the defense of that claim. If the indemnifying party does not assume full
control over the defense of a claim subject to such defense as provided in this
Section, the indemnifying party may participate in such defense, at its expense,
and the Indemnitee shall have the right to defend and settle the claim in such
manner as it may deem appropriate, at the expense of the indemnifying party.

22. DISPUTE RESOLUTION

  22.1.  ARBITRATION

     Any dispute or difference arising with reference to the applicable
interpretation or effect of this Agreement, or any part thereof shall be
referred to a Board of Arbitration (the "Board") of two (2) arbitrators and an
umpire.

     The members of the Board shall be U.S. citizens and shall be active or
retired disinterested officers of insurance or reinsurance companies.

     One arbitrator shall be chosen by the party initiating the arbitration and
designated in the letter requesting arbitration. The other party shall respond,
within fifteen (15) days, advising of its arbitrator. The umpire shall
thereafter be chosen by the two (2) arbitrators. In. the event either party
fails to designate its arbitrator as indicated above, the other party is hereby
authorized and empowered to name the second arbitrator, and the party which
failed to designate its arbitrator shall be deemed to have waived its right to
designate an arbitrator and shall not be aggrieved thereby. The two (2)
arbitrators shall then have thirty (30) days within which to choose an umpire.
If they are unable to do so, the umpire shall be chosen by the manager of the
American Arbitration Association who shall be a person meeting the
qualifications set forth above.

     Each party shall submit its case to the Board within one (1) month from the
date of the appointment of the umpire, but this period of time may be extended
by unanimous written consent of the Board. The sittings of the Board shall take
place in Morristown, New Jersey, unless otherwise agreed in writing by the
parties. The Board shall make its decision with regard to the custom and usage
of the insurance and reinsurance business. The Board is released from all
judicial formalities and may abstain from the strict rules of law. The written
decision of a majority of the Board shall be rendered within sixty (60) days
following the termination of the Board's hearings, unless the parties consent to
an extension. Such majority decision of the Board shall be final and binding
upon the parties both as to law and fact, and may not be appealed to any court
of any jurisdiction. Judgment may be entered upon the final decision of the
Board in any court of proper jurisdiction.

     Each party shall bear the fees and expenses of the arbitrator selected by
or on its behalf, and the parties shall bear the fees and expenses of the umpire
as determined by the Board.

                                        29
<PAGE>

  22.2.  NO TERMINATION OR SUSPENSION OF SERVICES

     Notwithstanding anything to the contrary contained herein, and even if any
dispute arises between the parties and regardless of whether or not it requires
at any time the use of the dispute resolution procedures described above, in no
event nor for any reason shall Contractor interrupt the provision of Services to
Client or any obligations related to Disentanglement, disable any hardware or
software used to provide Services, or perform any other action that prevents,
impedes, or reduces in any way the provision of Services or Client's ability to
conduct its activities (other than minimal, routine interruptions necessary in
order for Contractor to provide the Services), unless: (i) authority to do so is
granted by Client or conferred by a court of competent jurisdiction; or (ii) the
Term has expired or has been terminated pursuant to Section 12 and a
Disentanglement has occurred in accordance with Section 13.

  22.3.  NO LIMITATION ON REMEDIES

     The procedures described in this Section 22 shall not be deemed to limit
either party's rights under Sections 12 or 14.

23. USE OF AFFILIATES AND SUBCONTRACTORS

     Except for the day-to-day management and operation of Contractor's data
center, Contractor shall not perform the Services through the use of
Contractor-selected entities, including hardware and software vendors, without
the prior written consent of Client, which consent may be withheld in Client's
sole discretion, and the execution by any such entity of a Confidentiality
Agreement in accordance with Section 18.6 hereof, and Contractor shall not be
relieved of its obligations under this Agreement by use of any such entities,
except that: (i) Contractor may subcontract for goods and services that are
incidental to the performance of the Services and do not involve the anticipated
expenditure under this Agreement of more than one hundred thousand dollars
($100,000) within any ninety (90) day period; (ii) Contractor may subcontract
for goods and services with Subcontractors identified in Schedule 23 or in
Initiative proposals (that are accepted by Client); and (iii) Contractor may
subcontract for the goods and services governed by the Licenses or by the
Assigned Contracts. Any consent of Client shall be given or withheld in writing
in Contractor's reasonably requested timeframe, and shall, if withheld, contain
the reasons for such withholding as well as suggested alternative
Subcontractors. Contractor shall be responsible for supervising the activities
and performance of each Subcontractor and shall be jointly and severally
responsible with each Subcontractor for any act or failure to act of such
Subcontractor. If Client determines in good faith and in a commercially
reasonable manner that the performance or conduct of any Subcontractor is
unsatisfactory, Client may notify Contractor of its determination in writing,
indicating the reasons therefor, in which event Contractor shall promptly take
all necessary actions to remedy promptly the performance or conduct of such
contractor or to replace such contractor by another third party or by Contractor
personnel.

24. MISCELLANEOUS

  24.1.  ENTIRE AGREEMENT

     This Agreement, including the Schedules and Exhibits hereto, constitutes
the entire understanding and agreement between the parties with respect to the
transactions contemplated herein and supersedes all prior or contemporaneous
oral or written communications with respect to the subject matter hereof, all of
which are merged herein. No usage of trade, or other regular practice or method
of dealing between the parties or others, may be used to modify, interpret,
supplement, or alter in any manner the express terms of this Agreement.

  24.2.  CAPTIONS; SECTION NUMBERS

     Captions, Tables of Contents, Indices of Definitions, and Section,
Schedule, and Exhibit titles are used herein for convenience only and may not be
used in the construction or interpretation of this Agreement. Except as
otherwise specifically identified in this Agreement, any reference herein to a
particular Section, Schedule, or Exhibit (e.g., Schedule 3.3 (Certain
Operational Services)) shall be deemed a reference to the Section hereof or the
Schedule or Exhibit hereto that bears the same number. Any reference herein to a
particular Section number
                                        30
<PAGE>

(e.g., "Section 2"), shall be deemed a reference to all Sections of this
Agreement that bear sub-numbers to the number of the referenced Section (e.g.,
Sections 2.1, 2.1.1, etc.).

  24.3.  ASSIGNMENT

     Except for subcontracting permitted under the terms of Sections 23 hereof
neither this Agreement, nor any interest herein, nor any of the rights and
obligations of Contractor hereunder, may be directly or indirectly assigned,
delegated, or otherwise disposed of by Contractor, in whole or in part, without
the prior written consent of Client, which may not be unreasonably withheld.
However, Client shall be entitled to assign, sell, or dispose of, this
Agreement, its interest herein and its rights and obligations hereunder, to any
Client Affiliate or successor of Client who receives the Services.

  24.4.  BENEFIT OF AGREEMENT

     Notwithstanding anything to the contrary, all rights and benefits granted
hereunder to Client may be exercised and enjoyed by any Client Affiliate.
Further, for purposes of calculating discounts (if any) available under this
Agreement that are based on volume, quantity or other measurement factor, the
total volume of all Client's Affiliates shall be counted to determine whether
the applicable volume, quantity or other measurement factor has been achieved.

  24.5.  NOTICES TO A PARTY

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

     Notices to Client shall be addressed as follows:

       United States Fire Insurance Company
        305 Madison Avenue
        Morristown, NJ 09760
        Attention: Nikolas Antonopoulos

     with a copy to the attention of Client's counsel addressed as follows:

       United States Fire Insurance Company
        305 Madison Avenue
        Morristown, NJ 09760
        Attention: Valerie Gasparik

     Notices to Contractor shall be addressed as follows:

       Fairfax Information Technology Services, Inc.
        5 Century Drive
        Parsippanny, New Jersey 07054
        Attention: Raymond Roy

  24.6.  AMENDMENTS; WAIVERS

     This Agreement may not be modified, amended, or in any way altered except
by a written document duly executed by both of the parties hereto, provided that
only the Client's Director of Information Technology may execute, modify or
amend any Statement of Work on behalf of the Client. No waiver of any provision
of this
                                        31
<PAGE>

     Agreement, nor of any rights or obligations of any party hereunder, shall
be effective unless in writing and signed by the party waiving compliance, and
such waiver shall be effective only in the specific instance, and for the
specific purpose, stated in such writing. No waiver of breach of, or default
under, any provision of this Agreement shall be deemed a waiver of any other
provision, or of any subsequent breach or default of the same provision, of this
Agreement.

  24.7.  RELATIONSHIP BETWEEN AND LEGAL STATUS OF PARTIES

     This Agreement shall not be construed to constitute either party as a
representative, agent, employee, partner, or joint venturer of the other.
Contractor shall be an independent contractor for the performance under this
Agreement. Neither party shall have the authority to enter into any agreement,
nor to assume any liability, on behalf of the other, nor to bind or commit the
other in any manner, except as provided hereunder. Contractor's employees who
provide services pursuant to this Agreement shall remain employees of
Contractor, and Contractor shall have sole responsibility for such employees,
including responsibility for payment of compensation to such personnel and for
injury to them in the course of their employment. Contractor shall be
responsible for all aspects of labor relations with such employees, including
their hiring, supervision, evaluation, discipline, firing, wages, benefits,
overtime, and job and shift assignments, and all other terms and conditions of
their employment, and Client shall have no responsibility therefor. Contractor
shall defend, indemnify, and hold harmless Client Indemnitees from and against
any and all claims, liabilities, losses, costs, damages, and expenses, including
attorneys' fees in the case of litigation or arbitration, based upon or related
to a claim that Contractor's or its Subcontractors' employees are employees of
Client. Client shall defend, indemnify, and hold harmless Contractor Indemnitees
from and against any and all claims, liabilities, losses, costs, damages, and
expenses, including attorney's fees in the case of litigation or arbitration,
based upon or related to a claim that Client's or its subcontractors' employees
are employees of Contractor.

  24.8.  SEVERABILITY

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

  24.9.  COUNTERPARTS

     This Agreement may be executed in duplicate counterparts. Each such
counterpart, if executed by both parties, shall be an original and all such
counterparts together shall constitute but one and the same document. This
Agreement shall not be deemed executed unless and until at least one counterpart
bears the signature of each party's designated signatory.

  24.10.  GOVERNING LAW; VENUE

     This Agreement and the performance of the parties hereunder shall be
governed and construed in accordance with the substantive laws of the State of
New York without regard to its conflicts of laws provisions. All actions or
proceedings arising out of, or related to, this Agreement shall be brought only
in an appropriate federal or state court in Newark, NJ and the parties hereby
consent to the jurisdiction of such courts over themselves and the subject
matter of such actions or proceedings.

  24.11.  NO THIRD-PARTY BENEFICIARIES

     Except as otherwise provided in Sections 24.4 and 22.1, this Agreement is
an agreement between the parties, and confers no rights upon any of the parties'
employees, agents, or contractors or upon any other Person.

                                        32
<PAGE>

  24.12.  EXPENSES

     Each party shall be responsible for, and shall pay, all expenses paid or
incurred by it in connection with the planning, negotiation, and consummation of
this Agreement.

  24.13.  SURVIVAL

     The provisions of Sections 8.2, 8.3, 8.6, 8.7, 11, 13, 14, 15, 16.1, 17,
18, 20, 21, 22, and 24, and any other sections of this Agreement that by their
nature may reasonably be presumed to have been intended to survive any
termination or expiration of this Agreement, shall survive any termination or
expiration of this Agreement.

  24.14.  ORDER OF PRECEDENCE

     In the event of conflict in substance or impact between Sections 1 through
24 of this Agreement and any Schedule, Attachment, or Exhibit, such Sections
shall control.

  24.15.  INCLUSIVE REFERENCE

     As used herein, the term "including" shall be interpreted as meaning
"including but not limited to."

  24.16.  FURTHER ASSURANCES

     Each party agrees to execute and deliver any and all additional documents
and instruments, and take all other actions, that may be necessary to give
effect to this Agreement and the transactions contemplated hereby.

  24.17  NEITHER PARTY CONSIDERED DRAFTER

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

     The parties have executed this Agreement as of the Effective Date set forth
above.

<Table>
<S>                                            <C>

UNITED STATES FIRE INSURANCE COMPANY           FAIRFAX INFORMATION TECHNOLOGY
                                               SERVICES, INC.
By:       /s/ NIKOLAS ANTONOPOULOS
    ----------------------------------------   By:       /s/ RAYMOND A. ROY
                                               ----------------------------------------
Name:   Nikolas Antonopoulos
-------------------------------------          Name:   Raymond A. Roy
                                               -------------------------------------
Title:    President
---------------------------------------        Title:    President
                                               ---------------------------------------

By:       /s/ VALERIE GASPARIK
    ----------------------------------------
Name:   Valerie Gasparik
-------------------------------------
Title:    Secretary
---------------------------------------
</Table>

                                        33
<PAGE>

                                 EXHIBIT 16.1.1
                                FORM OF INVOICE

                                        1
<PAGE>

                                  SCHEDULE 2.7
                               ASSIGNED CONTRACTS

     As of the execution of the agreement, there are no Assigned Contracts.

                                        1
<PAGE>

                                 SCHEDULE 2.11

                                CLIENT SOFTWARE

<Table>
<Caption>
USAGE                  PLATFORM    PRODUCT     VENDOR    DESCRIPTION COMMENTS
-----                  --------    -------    --------   --------------------
<S>                    <C>         <C>        <C>        <C>
Appl.                  Desktop     UMB        Customer   Cues
Appl.                  Desktop     WCA        Customer   Claims Assist (CFI)
Appl.                  Mainframe   ACT        Customer   Loss Actuarial (All except FCRM, Risk History,
                                                         Des)
Appl.                  Mainframe   AGE        Customer   Agency Automation
Appl.                  Mainframe   ALS        Customer   Automated Legal System
Appl.                  Mainframe   ANS        Customer   Annual Statement
Appl.                  Mainframe   BUD        Customer   Budget Collection
Appl.                  Mainframe   CBS        Customer   Bureau (CSP, DesktopSP, MassAuto, II W.Comp., NCCI
Appl.                  Mainframe   CFA        Customer   Loss Financial
Appl.                  Mainframe   CIS        Customer   Common Functions
Appl.                  Mainframe   CML        Customer   Customer Info. System- (Obsolete)
Appl.                  Mainframe   CMS        Customer   Client Management System
Appl.                  Mainframe   CPF        Customer   Consolidated Premium File
Appl.                  Mainframe   EAS        Customer   Expense Allocation
Appl.                  Mainframe   EUS        Customer   End User Support/Extr. Proc.
Appl.                  Mainframe   EXP        Customer   Expiration Control (includes Desktop AA)
Appl.                  Mainframe   FLS        Customer   File Search System
Appl.                  Mainframe   IIM        Customer   II MIS Systems
Appl.                  Mainframe   LOS        Customer   Loss Control
Appl.                  Mainframe   MDB        Customer   Management Database
Appl.                  Mainframe   MMP        Customer   CFI Medical Management Reporting System
Appl.                  Mainframe   MRS        Customer   Managent Reporting System
Appl.                  Mainframe   MUN        Customer   Municipal Tax System
Appl.                  Mainframe   NTS        Customer   Novation Tracking System
Appl.                  Mainframe   NWC        Customer   National Workers Comp. NCCI
Appl.                  Mainframe   OEI        Customer   OE#1 Support (AIM,OEI, PTA< CSM)
Appl.                  Mainframe   OTS        Customer   Opportunity Tracking -- (Obsolete)
Appl.                  Mainframe   PAI        Customer   Premium Audit Inventory
Appl.                  Mainframe   PDB        Customer   Premium Database
Appl.                  Mainframe   PER        Customer   Producer Experience
Appl.                  Mainframe   PIC        Customer   Policy Info Coding syste incl Agragate Lim
                                                         Interface
Appl.                  Mainframe   PMS        Customer   Premium Monitoring System
Appl.                  Mainframe   PPR        Customer   Probable & Potential Rpt
Appl.                  Mainframe   PRE        Customer   Premium Front End
Appl.                  Mainframe   PRI        Customer   Price Monitoring
Appl.                  Mainframe   QAP        Customer   CFI Quality Assurance (Runoff)
Appl.                  Mainframe   RAS        Customer   Reinsurance Accounting
Appl.                  Mainframe   REI        Customer   Reinsurance Management System
Appl.                  Mainframe   RMS        Customer   Risk Management
Appl.                  Mainframe   RRS        Customer   Retro Rating System
App                    Mainframe   UST        Customer   Workers Comp Unit Stat
Appl.                  Mainframe   WAR        Customer   PASWAR
Appl.                  Mainframe   WCS/MSCS   Customer   Workers Compensation
Appl.                  Mainframe   XCS        Customer   Xerox Colose Support Systems
Appl.                  Midrange    ABR        Customer   Aagency Bill -- VAX
Appl.                  Midrange    CAA        Customer   Cash & Accounts System
Appl.                  Midrangae   MDC        Customer   Mini-Data Collection
Appl.                  Multiple    APD        Customer   Automated Policy Delivery -- Mainframe/PC
Appl.                  Multiple    FIS        Customer   Fishnet/TRGJI/9LIS/COREFIN.Mainframe-P/C
</Table>

                                END OF SCHEDULE

                                        2
<PAGE>

                                 SCHEDULE 2.15

                           CONTRACTOR ACCOUNT MANAGER

     The Client Account Manager is Dave McDonough.

                                        1
<PAGE>

                                 SCHEDULE 2.28

                                 KEY PERSONNEL

<Table>
<Caption>
NAME                                                          TITLE
----                                                          -----
<S>                                                           <C>
Ray Roy.....................................................  President
Charles Fillizola...........................................  Senior Vice President
David McDonough.............................................  Senior Vice President
Jeff Paige..................................................  Senior Vice President
Chris Bardusch..............................................  Vice President
John Chevalier..............................................  Vice President
Nash Dhanani................................................  Vice President
Michael Wright..............................................  Vice President
Mike Burke..................................................  Vice President
Chris Houghton..............................................  Vice President
Clive Timothy...............................................  Vice President
</Table>

                                        1
<PAGE>

                                 SCHEDULE 2.30

                                    LOCATION

                                        1
<PAGE>

                                  SCHEDULE 8.1

                                      FEES

1.   Client shall reimburse Contractor's expenses incurred relating to the
     Services as a service fee ("Service Fee"). Contractor's expenses shall be
     based on an annual budget prepared by Contractor and mutually agreed among
     the parties. The Service Fee shall be paid by Client to Contractor in
     monthly installments, which monthly installments shall be due and payable
     by the fifteenth (15th) day of the month in which the Services are to be
     provided. Client shall pay Contractor the Service Fee by Client check or
     wire transfer into Contractor's operating account pursuant to instructions
     provided by Contractor. Contractor shall reconcile expenses to budgeted
     expenses within thirty (30) days after the end of each calendar quarter.
     The Client and Contractor will review actual costs and recasted budgets on
     a quarterly basis within forty-five (45) days after the end of each
     calendar quarter for changes in ongoing expenses and as a result of such
     review the monthly payments will be adjusted accordingly. If the expenses
     of Contractor are less than the budgeted amount, Contractor shall refund to
     Client the appropriate amount as a credit to the current month's Service
     Fee. If the expenses of Contractor are greater than the budgeted amount,
     the Client shall pay such amount by the first day of the month following
     the reconciliation of the budget. All costs and expenses shall be allocated
     in accordance with the provisions of New York Insurance Department
     Regulation 30.

2.   The Services Fees paid hereunder shall be full compensation for all
     Services rendered by Contractor pursuant to this Agreement.

3.   Direct costs incurred in connection with any third party service providers
     engaged by Contractor on behalf of Client or in furtherance of Services
     shall be paid by Client either directly to the third party service provider
     or Contractor at Contractor's election at the cost to Contractor. If
     Contractor elects to pay for such third party service provider, such fees
     shall be added to the Service Fee. Any such direct costs must be approved
     by Client prior to their being incurred.

                                        1
<PAGE>

                                 SCHEDULE 10.2

                              MANAGEMENT COMMITTEE

     The Management Committee shall initially consist of Nick Antonopoulos, Ray
Roy, Dave McDonough and Jeff Paige.

                                        1
<PAGE>

                                  SCHEDULE 23
                                 SUBCONTRACTORS

                                        1

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