Document:

Exhibit 10.38

 

PROMISSORY NOTE

 

	
  Principal

  	
   

  	
  Loan Date

  	
   

  	
  Maturity

  	
   

  	
  Loan No.

  	
   

  	
  Call / Coll

  	
   

  	
  Account

  	
   

  	
  Officer

  	
   

  	
  Initials

  	
   

  
	
  $

  	
  3,500,000.00

  	
   

  	
  10-01-2003

  	
   

  	
  10-01-2013

  	
   

  	
  7002125

  	
   

  	
  Stock

  	
   

  	
   

  	
   

  	
  ***

  	
   

  	
  /s/ [ILLEGIBLE]

  	
   

  
																	

 

References in the shaded area are for
Lender’s use only and do not limit the applicability of this document to any
particular loan or item. Any item above containing “***” has been omitted due
to text length limitations.

 

	
  Borrower:

  	
  Heritage Oaks Bancorp

  545 12th Street

  Paso Robles, CA  93446

  	
   

  	
  Lender:

  	
  PACIFIC COAST BANKERS’ BANK

  340 PINE STREET, SUITE 401

  SAN FRANCISCO, CA  94104

  

 

	
  Principal Amount:   
  $3,500,000.00

  	
  Initial Rate:  4.000%

  	
  Date of Note:  October 1, 2003

  

 

PROMISE TO PAY.  Heritage Oaks Bancorp (“Borrower”) promises to pay to PACIFIC
COAST BANKERS’ BANK (“Lender”), or order, in lawful money of the United States
of America, the principal amount of Three Million Five Hundred Thousand &
00/100 Dollars ($3,500,000.00) or so much as may be outstanding, together with
interest on the unpaid outstanding principal balance of each advance.  Interest shall be calculated from the date
of each advance until repayment of each advance.

 

PAYMENT. 
Borrower will pay this loan in accordance with the following payment
schedule:

 

Two years Revolving Line of Credit – 8
quarterly consecutive interest payments, beginning January 1, 2004, with
interest calculated on the unpaid principal balances at interest rate based on
the Prime Rate as published in the Western Edition of the Wall Street Journal
(currently 4.000%), resulting in an initial interest rate of 4.000%.  The Line of Credit will mature October 1,
2005 and then amortized over 8–years term loan.

 

Eight years Term Loan – 31 quarterly
consecutive principal and interest payments in the initial amount of
$128,635.23 each, beginning January 1, 2006, with interest calculated on the
unpaid balances at an interest rate based on the Prime Rate as published in the
Western Edition of the Wall Street Journal (currently 4.000%), resulting in an
initial interest rate of 4.000%; and one principal and interest payment of
$128,635.27 on October 1, 2013, with interest calculated on the unpaid
principal balances at an initial rate based on the Prime Rate as published in
the Western Edition of the Wall Street Journal (currently 4.000%), resulting in
an initial interest rate of 4.000%. 
This estimated final payment is based on the assumption that all
payments will be made exactly as scheduled and that the Index does not change;
the actual final payment will be for all principal and accrued interest not yet
paid, together with any other unpaid amounts under this Note

 

Unless otherwise agreed or required by
applicable law, payments will be applied first to any unpaid collection costs
and any late charges, then to any unpaid interest, and any remaining amount to
principal.  The annual interest rate for
this Note is computed on a 365/360 basis; that is, by applying the ratio of the
annual interest rate over a year of 360 days, multiplied by the outstanding
principal balance, multiplied by the actual number of days the principal
balance is outstanding.  Borrower will
pay Lender at Lender’s address shown above or at such other place as Lender may
designate in writing.

 

VARIABLE INTEREST RATE.  The interest rate on this Note is subject to
change from time to time based on changes in an independent index which is the
Prime Rate as published in the Western Edition of the Wall Street Journal (the
“Index”).  The Index is not necessarily
the lowest rate charged by Lender on its loans.  If the Index becomes unavailable during the term of this loan,
Lender may designate a substitute index after notice to Borrower. Lender will
tell Borrower the current index rate upon Borrower’s request. The interest rate
change will not occur more often than each Day. Borrower understands that
Lender may make loans based on other rates as well.  The Index currently is
4.000%.  The interest rate to be applied
to the unpaid principal balance of this Note will be at a rate equal to the
Index, resulting in an initial rate of 4.000%.  NOTICE: 
Under no circumstances will the interest rate on this Note be more than
the maximum rate allowed by applicable law.

 

PREPAYMENT.  Borrower agrees that all loan fees and other
prepaid finance charges are earned fully as of the date of the loan and will
not be subject to refund upon early payment (whether voluntary or as a result
of default), except as otherwise required by law.  Except for the foregoing, Borrower may pay without penalty all or
a portion of the amount owed earlier than it is due.  Early payments will not, unless agreed to by Lender in writing,
relieve Borrower of Borrower’s obligation to continue to make payments of
accrued unpaid interest.  Rather, early
payments will reduce the principal balance due.  Borrower agrees not to send Lender payments marked “paid in
full”, “without recourse”, or similar language.  If Borrower sends such a payment, Lender may accept it without
losing any of Lender’s rights under this Note, and Borrower will remain
obligated to pay any further amount owed to Lender.  All written communications concerning disputed amounts, including
any check or other payment instrument that indicates that the payment
constitutes “payment in full” of the amount owed or that is tendered with other
conditions or limitations or as full satisfaction of a disputed amount must be
mailed or delivered to:  PACIFIC COAST
BANKERS’ BANK, 340 PINE STREET, SUITE 401, SAN FRANCISCO, CA  94104.

 

LATE CHARGE.  If a payment is 10 days or more late,
Borrower will be charged 5.000% of the regularly
scheduled payment.

 

INTEREST AFTER DEFAULT.  Upon Borrower’s failure to pay all amounts
declared due pursuant to this section, including failure to pay upon final
maturity, Lender, at its option, may, if permitted under applicable law,
increase the variable interest rate on this Note to 5.000 percentage points
over the Index.

 

DEFAULT. Each of the
following shall constitute an event of default (“Event of Default”) under this
Note:

 

Payment Default.  Borrower fails to make any payment when due
under this Note.

 

Other Defaults.  Borrower fails to comply with or to perform
any other term, obligation, covenant or condition contained in this Note or in
any of the related documents or to comply with or to perform any term,
obligation, covenant or condition contained in any other agreement between
Lender and Borrower.

 

False Statements.  Any warranty, representation or statement
made or furnished to Lender by Borrower or on Borrower’s behalf under this Note
or the related documents is false or misleading in any material respect, either
now or at the time made or furnished or becomes false or misleading at any time
thereafter.

 

Insolvency.  The dissolution or termination of Borrower’s
existence as a going business, the insolvency of Borrower, the appointment of a
receiver for any part of Borrower’s property, any assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any proceeding
under any bankruptcy of insolvency laws by or against Borrower.

 

Creditor or Forfeiture Proceedings.  Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self–help, repossession or any
other method, by any creditor of Borrower or by any governmental agency against
any collateral securing the loan.  This
includes a garnishment of any of Borrower’s accounts, including deposit
accounts, with Lender.  However, this
Event of Default shall not apply if there is a good faith dispute by Borrower
as to the validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Borrower gives Lender written notice
of the creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount determined
by Lender, in its sole discretion, as being an adequate reserve or bond for the
dispute.

 

 

Loan No: 7001967

 

Events Affecting Guarantor.  Any of the preceding events occurs with
respect to any guarantor, endorser, surety, or accommodation party of any of
the indebtedness or any guarantor, endorser, surety, or accommodation party
dies or becomes incompetent, or revokes or disputes the validity of, or
liability under, any guaranty of the indebtedness evidenced by this Note.  In the event of a death, Lender, at its
option, may, but shall not be required to, permit the guarantor’s estate to
assume unconditionally the obligations arising under the guaranty in a manner
satisfactory to Lender, and, in doing so, cure any Event of Default.

 

Change in Ownership.  Any change in ownership of twenty–five
percent (25%) or more of the common stock of Borrower.

 

Adverse Change.  A material adverse change occurs in
Borrower’s financial condition, or Lender believes the prospect of payment or
performance of this Note is impaired.

 

Cure Provisions.  If any default, other than a default in
payment or failure to satisfy Lender’s requirement in the Insufficient Market
Value of Securities section is curable and if Borrower has not been given a
notice of breach of the same provision of this Note within the preceding twelve
(12) months, it may be cured (and no event of default will have occurred) if
Borrower, after receiving written notice from Lender demanding cure of such
default:  (1) cures the default within
fifteen (15) days; or (2) if the cure requires more than fifteen (15) days,
immediately initiates steps which Lender deems in Lender’s sole discretion to
be sufficient to cure the default and thereafter continues and completes all
reasonable and necessary steps sufficient to produce compliance as soon as
reasonable practical.

 

LENDER’S RIGHTS.  Upon default, Lender may declare the entire
unpaid principal balance on this Note and all accrued unpaid interest
immediately due, and then Borrower will pay that amount.

 

ATTORNEYS’ FEES; EXPENSES.  Lender may hire or
pay someone else to help collect this Note if Borrower does not pay.  Borrower will pay Lender that amount.  This includes, subject to any limits under
applicable law, Lender’s attorneys’ fees and Lender’s legal expenses, whether
or not there is a lawsuit, including attorneys’ fees, expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), and appeals.  Borrower also
will pay any court costs, in addition to all other sums provided by law.

 

GOVERNING LAW.  This Note will be governed by, construed and enforced in
accordance with federal law and the laws of the State of California.  This Note has been accepted by Lender in the
State of California.

 

CHOICE OF VENUE.  If there is a lawsuit, Borrower agrees
upon Lender’s request to submit to the jurisdiction of the courts of SAN
FRANCISCO  County, State of
California.

 

RIGHT OF SETOFF.  To the extent permitted by applicable
law, Lender reserves a right of setoff in all Borrower’s accounts with Lender (whether
checking, savings, or some other account). 
This includes all accounts Borrower holds jointly with someone else and
all accounts Borrower may open in the future. 
However, this does not include any IRA or Keogh accounts, or any trust
accounts for which setoff would be prohibited by law.  Borrower authorizes Lender, to the extent permitted by applicable
law, to charge or setoff all sums owing on the indebtedness against any and all
such accounts.

 

COLLATERAL. 
Borrower acknowledges this Note is secured by
339,332 Shares of Heritage Oaks Bank Stock.

 

LINE OF CREDIT.  This Note evidences a revolving line of
credit.  Advances under this Note, as
well as directions for payment from Borrower’s accounts, may be requested
orally or in writing by Borrower or by an authorized person.  Lender may, but need not, require that all
oral requests be confirmed in writing. Borrower agrees to be liable for all
sums either: (A) advanced in accordance with the instructions of an authorized
person or (B) credited to any of Borrower’s accounts with Lender.  The unpaid principal balance owing on this
Note at any time may be evidenced by endorsements on this Note or by Lender’s
internal records, including daily computer print–outs.  Lender will have no obligation to advance funds
under this Note if: (A) Borrower or any guarantor is in default under the terms
of this Note or any agreement that Borrower or any guarantor has with Lender,
including any agreement made in connection with the signing of this Note; (B)
Borrower or any guarantor ceases doing business or is insolvent; (C) any
guarantor seeks, claims or otherwise attempts to limit, modify or revoke such
guarantor’s guarantee of this Note or any other loan with Lender; or (D)
Borrower has applied funds provided pursuant to this Note for purposes other
than those authorized by Lender.

 

OTHER
CONDITIONS. 1.               Approval
is contingent upon PCBB participating out $1,500,000 of the facility to other
banks.

2.       Loan to collateral value
not to exceed 50% during the term of the credit facility.  Collateral value based on the Tier 1 Capital
of Heritage Oaks Bank.

3.       PCBB to hold 51% of the
stock of Heritage Oaks Bank.

4.       PCBB to be provided with
a copy of minutes from the Board of Directors of Heritage Oaks Bank stating
that dividends will be declared in an amount necessary to service this debt.

5.       PCBB to be provided with
a copy of the minutes from the Board of Directors of Heritage Oaks Bancorp
authorizing the debt of $3.5MM with PCBB.

6.       Heritage
Oaks Bancorp will inform PCBB of any declaration of cash dividends.

7.       Cash flow of Heritage
Oaks Bank must be sufficient to service the proposed debt at a Debt Service
Ratio not less than 1.50X as calculated by PCBB.

8.       Heritage Oaks Bancorp
will not incur any additional debt over $2MM exclusive of inter–company debt
and existing debt (existing debt includes lines of credit, trust preferred,
etc.) without the prior written consent of PCBB which will not be unreasonably
withheld.

9.       Heritage Oaks Bancorp to
provide PCBB with immediate notification of any Regulatory Action relative to
Heritage Oaks Bank or any financial institution acquired by Heritage Oaks
Bancorp within compliance of regulatory requirements.

10.     Heritage Oaks Bank must be
“well” capitalized on an on–going basis as defined by Regulators.

11.     Heritage Oaks Bancorp to
provide PCBB with their Annual Report within 90 days of fiscal year end and
quarterly call reports within 30 days of each quarter.

12.     Heritage Oaks Bank to
provide PCBB with Call Reports, including all schedules (including past due
loans, OREO and non–accrual) within 30 days of each quarter end.

13.     Pacific Coast Bankers’
Bank reserves the right to conduct a review of the subsidiary bank(s) loan
portfolio.

 

SUCCESSOR INTERESTS.  The terms of this
Note shall be binding upon Borrower, and upon Borrower’s heirs, personal
representatives, successors and assigns, and shall inure to the benefit of
Lender and its successors and assigns.

 

NOTIFY US OF INACCURATE INFORMATION WE REPORT
TO CONSUMER REPORTING AGENCIES. Please notify us if we
report any inaccurate information about your account(s) to a consumer reporting
agency. Your written notice describing the specific inaccuracy(ies) should be
sent to us at the following address: PACIFIC COAST BANKERS’ BANK 340 PINE
STREET, SUITE 401 SAN FRANCISCO, CA 94104

 

GENERAL PROVISIONS.  Lender may delay or forgo enforcing any
of its rights or remedies under this Note without losing them. Borrower and any
other person who signs, guarantees or endorses this Note, to the extent allowed
by law, waive any applicable statute of limitations, presentment, demand for
payment, and notice of dishonor.  Upon
any change in the terms of this Note, and unless otherwise expressly stated in
writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability.  All such parties agree that Lender may renew
or extend (repeatedly and for any length of time) this loan or release any
party or guarantor or collateral; or impair, fail to realize upon or perfect
Lender’s security interest in the collateral; and take any other action deemed
necessary by Lender without the consent of or notice to anyone. All such
parties also agree that Lender may modify this loan without the consent of or
notice to anyone other than the party with whom the modification is made.  The obligations under this Note are joint
and several.

 

2

 

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND
UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST
RATE PROVISIONS.  BORROWER AGREES TO THE
TERMS OF THE NOTE.

 

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED
COPY OF THIS PROMISSORY NOTE.

 

BORROWER:

 

 

HERITAGE OAKS BANCORP

 

 

	
  By:

  	
  /s/ 
  Lawrence Ward      10-3-03

  	
   

  	
  By:

  	
  /s/ 
  Margaret Torres

  	
   

  
	
   

  	
  Lawrence Ward, President/CEO of Heritage Oaks Bancorp

  	
   

  	
   

  	
  Margaret Torres, Executive Vice President
  of Heritage Oaks Bancorp

  	
   

  

 

3EXHIBIT 10.1

 

OUTSOURCING AGREEMENT FOR

MANAGED SERVICES

 

BETWEEN

 

FEI Company

5350 NE Dawson Creek Drive

Hillsboro, Oregon 97124

 

AND

 

ATOS ORIGIN, INC.

430 Mountain Avenue

Murray Hill, New Jersey 07974

 

 

THIS AGREEMENT, effective as of 1st day of
July, 2003 (“Effective Date”), sets forth the terms and conditions under which
Atos Origin, Inc., a Delaware corporation (“Atos Origin”) shall provide FEI
Company, an Oregon corporation (“Customer”), enterprise life cycle management,
midrange and mainframe data processing and other services as more fully defined
in the attached and future Descriptions of Services (the “Services”).

 

GENERAL
TERMS AND CONDITIONS

 

1.                                       Entire Agreement And Conflicts

 

These
terms and conditions, the initial and any subsequent Description of Services
and each and every attendant Schedule together form the entire agreement and
understanding between Atos Origin and Customer regarding the subject matter of
this Agreement and are intended to supersede all previous agreements and
understandings between Atos Origin and Customer regarding the subject
matter.  Except for the sole purpose of
initiating or authorizing the performance of Services by Atos Origin under a
Description of Services, Atos Origin and Customer agree that any and all terms
and conditions set forth in a Customer purchase order, to the extent
inconsistent with this Agreement, shall be void and have absolutely no force or
effect for purposes of this Agreement and any interpretation thereof.   This Agreement, or any part thereof, may
not be amended, or waived other than by in writing signed by all Parties
hereto.

 

2.                                       DEFINITIONS

 

a.                                       General

 

Unless
otherwise expressly defined herein, all referenced terms in this Agreement
shall have the common meaning applied to them within the information technology
services industry.

 

b.                                      Specific

 

The following
words and terms shall have the following meanings when used in this Agreement
and such definitions shall apply to both singular and plural forms of any such
words and terms:

 

“Acceptance
Testing” means the continuous testing, consistent with industry practice, to be
performed by Customer to reasonably establish that the software functions in
accordance with its Design as set forth at Schedule 1 attached hereto.

 

“Agreement”
means these terms and conditions, the Description of Services plus any
additional Description of Services and any other additional Schedule(s) as
specifically agreed to in writing between Atos Origin and Customer.

 

 

“Business
Day” means each Monday, Tuesday, Wednesday, Thursday and Friday, except where
any such day occurs on any federal or state statutory holiday observed by Atos
Origin.

 

“Confidential
Information” means the confidential and proprietary data or information
developed or acquired by either Party and as further described in Section 8.

 

“Description
of Services” means that document as referenced throughout this Agreement which
will reasonably specify those services, activities and goods to be provided by
Atos Origin to Customer in addition to identifying the estimated time frames,
charges and expenses payable to Atos Origin by Customer, together with such
other agreements that may be entered into between Atos Origin and Customer.

 

“Design” means an elaboration of a functional
specification prepared by Atos Origin and approved or accepted by Customer,
which enumerates and describes the screens and reports that will be included in
software.

 

“Party” or
“Parties” when used in the singular means either Atos Origin or Customer and if
used in the plural means both Atos Origin and Customer.

 

“Schedule(s)”
means any one or more supplementary document(s) relating to this Agreement and
which both Parties have signed.

 

“Supplied
Software” means Atos Origin or third party developed software provided in
accordance with an Atos Origin prepared or implemented design that is not
Customized Software.

 

3.                                       Term

 

This
Agreement shall commence on the Effective Date of this Agreement and shall
continue until 30 June 2008 (unless terminated earlier pursuant to the terms of
this Agreement) (“Initial Term”); thereafter, this Agreement shall
automatically renew for additional one (1) year terms (each a “Renewal Term”)
until terminated by either Party upon giving written notice of termination to
the other Party no less than one hundred twenty (120) days prior to the end of
the then- term.

 

4.                                       Content

 

This
Agreement consists of these general terms and conditions and the attached
Schedules.  In the event of conflict
between the general terms and conditions and any term within a Schedule, the general
terms and conditions shall prevail, unless otherwise expressly stated in such
Schedule.

 

5.                                       Charges and Payments

 

5.1                                 So long as the invoice is mailed by Atos
Origin on the invoice date, payment shall be due and payable within thirty (35)
days from the date of invoice.  Charges
for fractional parts of a month shall be prorated based on a thirty (30) day
month.  Fixed monthly charges for
equipment and processing, if any, shall be invoiced monthly in advance.  Time and Materials charges, if any, shall be
invoiced in the month following service except for the minimum variable charge
payments set forth in the applicable Schedule which shall be invoiced monthly
in advance.  Invoice amounts are not
subject to cash discounts.

 

5.2                                 In the event any invoice amounts are not
received within forty-five (45) days of the invoice date, and upon five (5)
Business Days prior written notice of such delinquent payment(s), Atos Origin
may immediately suspend service hereunder until such delinquent payment(s) is
made; provided, however, that Atos Origin shall not suspend service if
Customer’s failure to pay arises from a good faith dispute over the payment or
over whether Atos Origin has failed to meet its obligations under this
Agreement so long as the basis and details for such dispute is provided in
advance and in writing.  If payment of
all amounts owed (including all amounts invoiced but not past due) is

 

 

not received
within ten (10) days of the delinquency notice, Atos Origin, in addition to its
other rights hereunder, may, at its sole option, immediately terminate this
Agreement for cause.  So long as there
is no good faith dispute relating to nonpayment that Atos Origin has been
informed of in advance with the specific details in writing, Customer shall not
obtain ownership rights in any related Software unless and until payment is
received in full for all amounts due hereunder.  Regardless, unless and until Customer’s payments for related
Services are past due, Customer shall maintain a fully paid, worldwide license
for such impacted Software.

 

5.3                                 Intentionally omitted.

 

5.4                                 In addition to all other charges made
hereunder, Customer shall pay to Atos Origin all taxes that are applicable to
this Agreement or are measured directly by the payments made under it and are
required to be collected by Atos Origin or paid by Atos Origin to tax
authorities.  This provision includes
sales, use, value-added, excise and other taxes, but does not include personal
property taxes or taxes on Atos Origin’s net income.

 

5.5                                 Atos Origin shall provide the Services as
provided in this Agreement according to the base rates and rate structure shown
in the applicable Schedule and, except for any changes (directly or indirectly)
to the Services or contract amendments, the monthly recurring charge (as more
fully defined in the Descriptions of Services) shall be fixed for the duration
of this Agreement.  In the event
additional services outside the scope of the Services are requested by Customer
(in advance and in writing) and a rate structure is not provided herein, the
Parties shall agree in writing to the rate(s) to be applied prior to such
additional services being performed, otherwise Atos Origin’s then current
standard rate(s) shall apply.  In the event
an additional service is provided without prior written agreement, the Parties
agree to promptly negotiate an equitable rate in good faith.

 

5.6                                 Except as otherwise provided for in the
Description of Services, all expenses incurred as a result of the project which
is the subject of the Description of Services, will be charged to Customer at
actual cost.  This includes, but is not
limited to, travel, meals, lodging, and reproduction of documentation.  Travel shall be consistent with Atos
Origin’s travel policies, as provided to Customer prior to the commencement of
this Agreement, as may reasonably be amended. 
Travel in a private automobile, outside of normal daily travel to and
from work, shall be charged to Customer at a rate which shall be the greater of
32 cents per mile traveled or the rate allowed by the US Internal Revenue
Service as a business mileage deduction under Section 162 of the US Internal
Revenue Code of 1954, as amended, at the date of execution of this Agreement.

 

6.                                       System Security

 

Atos Origin
shall establish and maintain reasonable safeguards against the destruction,
loss or alteration of Customer’s data in the possession of Atos Origin that are
no less rigorous then those generally maintained by similarly situated service
providers for customers of comparable size and under similar conditions and are
consistent with industry standards. 
Customer, at its own expense and to the extent it does not interfere
with Atos Origin’s business, shall have the right to establish backup security
for data and to keep backup data and data files if it chooses.

 

7.                                       Performance Location & Shipments

 

For services
provided at any one or more Customer location(s), Customer shall be responsible
for the allocation of appropriate work space, telephone access, supplies,
computers, equipment, supervision and technical information required to enable
Atos Origin to perform services under a Description of Services.  All shipments to and from Atos Origin of
data, information, reports, materials and equipment shall be transported F.O.B.
at the appropriate Atos Origin facility. 
Customer shall be responsible for all transportation charges and
expenses including but not limited to all carrier and insurance costs.  In no event shall Atos Origin be liable to
Customer for any loss or other harm caused in the event a shipment is damaged
or lost, unless such loss arises from the negligence of Atos Origin or its
agents.

 

 

8.                                       Confidential Information

 

8.1                                 The Parties acknowledge that each Party
possesses and will continue to possess information that has been developed or
received by a Party, has commercial value in the Party’s business or that of
its customers and is not in the public domain.

 

Except as
otherwise specifically agreed in writing by the Parties, including within this
Agreement, Customer’s “Confidential Information” shall include all third party
software, Customer software, Customer data, Customer lists, Customer
information, account information and business information regarding business
planning and operations of Customer and its affiliates, or other information or
data stored on magnetic media or otherwise and transmitted, processed, stored,
archived or maintained by Atos Origin under this Agreement and in particular
such information that is identified by Customer as Confidential Information
either at the time such information is provided to Atos Origin or its
affiliates or agents pursuant to this Agreement or upon Atos Origin being
advised that such information is Confidential Information.

 

8.2                                 Except as otherwise specifically agreed
in writing by the Parties, Atos Origin’s “Confidential Information” shall
include (i) any information relating to the operations of the Atos Origin data
center that Atos Origin holds in confidence, including but not limited to Atos
Origin’s methods of operations, practices and procedures, general controls, and
security practices and procedures, (ii) subject to all rights herein, all third
party software provided by Atos Origin and being utilized by Atos Origin in
providing the Services and additional services, if any, and excluding any
work-for-hire and Customized Software owned or jointly owned by Customer (iii)
all information regarding the business, affairs and procedures of Atos Origin
which Customer or its affiliates or agents acquire pursuant to any audit of
Atos Origin hereunder, and (iv) all information regarding the business, affairs
and procedures of Atos Origin, and in particular such information that is
identified by Atos Origin as Confidential Information either at the time such
information is provided to Customer or its affiliates or agents pursuant to
this Agreement or upon Customer being advised that such information is
Confidential Information.

 

8.3                                 The
receiving Party will keep all Confidential Information in confidence for a
period of not less than three (3) years subsequent to expiration or termination
of this Agreement and will not disclose any item of Confidential Information to
any person other than its employees, agents or contractors who need to know the
same in the performance of their duties. The receiving Party will protect and
maintain the confidentiality of all Confidential Information with the same
degree of care as it employs to protect its own Confidential Information, but
at least with a reasonable degree of care. 
The receiving Party will be liable to the disclosing Party for any
non-compliance by its agents or contractors to the same extent it would be
liable for non-compliance by its employees. 
Except as otherwise set forth in this Agreement, no program or
other item or material which has been specifically designed for the Customer,
or plans, designs, or specifications for producing the same or otherwise
related thereto that contain Confidential Information shall be duplicated or
furnished to others without prior written consent of the Customer.  Neither Party shall make any use of copies
of the other Party’s Confidential Information except with the prior written
consent of the disclosing Party.

 

8.4                                 The terms and conditions of this
Agreement shall be for Confidential Information of both Atos Origin and
Customer except that Atos Origin shall be free to use the form or provisions of
this Agreement so long as the pricing information contained in this Agreement
is not disclosed without Customer’s prior consent and so long as Customer
cannot reasonably be identified from the form or provisions used.  The foregoing notwithstanding, in the event
that public disclosure of the Agreement is necessary under applicable law,
either Party may disclose the information contained in the Agreement.

 

8.5                                 The term “Confidential Information” does
not include any particular information which the recipient of such information
can demonstrate: (i) was, at the time of disclosure to it, in the public
domain; (ii) after disclosure to it, is published or otherwise becomes part of
the public domain

 

 

through no
fault of the recipient; (iii) was in the possession of the recipient prior to
the time of disclosure; (iv) was received after disclosure from a third party
who had a lawful right to disclose such information to it; or (v) was
independently developed by it without reference to the Confidential Information
of the discloser.  In addition, the
recipient shall not be considered to have breached its obligations under
Section 8.3 for disclosing Confidential Information as required to satisfy any
legal requirement of a competent governmental body provided that, immediately
upon receiving any such request and to the extent that it may legally do so,
the recipient advises the discloser promptly and prior to making such disclosure
so the discloser may object to such disclosure, take action to assure
confidential handling of the Confidential Information or take such other
actions as the discloser reasonably deems appropriate to protect the
Confidential Information.

 

8.6                                 At any time requested by the disclosing
Party pursuant to the terms of this Agreement and at the disclosing Party’s
expense, the receiving Party shall return or destroy, as the disclosing Party
may reasonably direct, all documentation in any medium that contains, refers
to, or relates to the Confidential Information and retain no copies, except as
may be required for a proper business purpose and subject to a continuing
confidential obligation and disclosed as such to the disclosing Party.

 

8.7                                 Atos Origin agrees to receive and
maintain any information it receives from Customer in a manner consistent with
the laws relating to privacy and regulation of confidential information set out
in European Union Data Protection Directive and such other member-state
implementing laws as may be in effect as well as other privacy laws in effect
in the jurisdictions where Services are delivered during the course of the
Agreement.

 

8.8                                 The provisions of this Section 8 shall
amend and replace all prior written and oral agreement relating to Confidential
Information by and between the Parties and shall survive the termination or
expiration of this Agreement.

 

9.                                       Proprietary Rights

 

9.1                                 Atos Origin and Customer agree that all
work originated and specifically prepared for Customer as a result of services
performed by Atos Origin under a Description of Services shall be deemed
customized software (hereinafter “Customized Software”) and be jointly owned by
Customer and Atos Origin.  To the extent
that such title to any such work may not, by operation of law, vest in
Customer, all such right, title and interest therein are, or when they come
into existence, are by this Agreement, irrevocably assigned to Customer.  Customer acknowledges and agrees that the
rights granted to it shall not in any way prevent or preclude Atos Origin, or
in any way be deemed to prevent or preclude Atos Origin, from using its
knowledge, experience, know-how and expertise to perform work for others which
may result in the creation of software, works and related materials having
formats, organization, structure and sequence similar to the work originated
and prepared for Customer.

 

Atos Origin
agrees to provide Customer with reasonable assistance to perfect its rights and
title to such jointly owned works, at Customer’s request and expense.  Customer agrees to compensate Atos Origin
for such assistance at Atos Origin’s rates in effect when the assistance is
rendered.

 

9.2                                 All right, title, and interest in and to
any data relating to Customer’s business that contain Confidential Information
are and shall remain the property of Customer, whether or not supplied to Atos
Origin.  Nothing is this Agreement shall
permit Atos Origin to disclose Customer’s Confidential Information in performing
work for others, whether using Customized Software or otherwise.

 

9.3                                 Atos Origin hereby grants Customer a
non-transferable, non-exclusive, perpetual (subject to timely payment of
associated fees) right to use the object code version of that Supplied Software
provided to Customer, throughout Customer’s organization.  Customer may make additional

 

 

copies of the
object code version of Supplied Software solely for use and installation
internally by Customer and any back-up copies as may be required by
Customer.  Atos Origin, at Customer’s
expense (if any), shall pass through to Customer any warranties provided on any
Supplied Software.

 

9.4                                 Customer’s only rights to Supplied
Software are the rights offset forth in this Section 9.  Customer agrees that any contribution by
Customer or its employees and/or agents to the Supplied Software, including all
copyright interests shall upon their creation, be owned exclusively by Atos
Origin in the course of performing services, provided however than Customer
shall have a perpetual license to use and create derivate works based on such
Customer contributions.

 

To the extent
that title to any such work may not, by operation of law, vest in Atos Origin,
Customer hereby agrees to assign and, upon their creation, hereby assigns to
Atos Origin, without restriction, the ownership of all copyright interests in
Supplied Software, without the necessity of any further consideration.  Furthermore, Customer shall, as requested by
Atos Origin at any time and from time to time, at Atos Origin’s expense,
whether before or after the expiration of this Agreement, execute and deliver,
or cause to be executed and delivered, such additional or further documents,
assignments, consents and other instruments as Atos Origin may reasonably
request for the purpose of effecting copyright applications and renewals as
well as trade secret and such other intellectual property protection as
determined by Atos Origin.  Customer’s
obligation to assist Atos Origin in obtaining and enforcing copyright, trade
secret and other intellectual property protection shall continue after the
termination of this Agreement, but Atos Origin shall compensate Customer at a
reasonable rate before and after such termination for time actually spent at
Atos Origin’s request on such assistance.

 

9.6
                              Customer agrees that it will not
decompile, disassemble or otherwise reverse engineer any of Supplied Software
or knowingly contribute to their decompilation, disassembly, or reverse
engineering by a third party.

 

10.                                 Intentionally Omitted

 

11.                                 Customer Obligation & Progress
Reports 

 

11.1                           Customer agrees to appoint upon execution
of this Agreement and update as necessary and make available a qualified person
for each Description of Services who will:

 

i.             Have full authority to make binding
decisions for Customer; and

 

ii.          Reasonably and promptly provide access to
Customer employees and/or agents who can provide all reasonable information
needed by Atos Origin in connection with its performance of a Description of
Services.

 

11.2                           Customer agrees to undertake and
reasonably promptly perform all of the obligations described in “Customer
Obligations” which may be incorporated in a Description of Services.

 

11.3                           If Customer does not materially comply
with the obligations set forth in this Section 11 or with Customer Obligations
incorporated in a Description of Services and such failure directly or
indirectly results in an increase in the time required for Atos Origin to
perform any work required in a Description of Services, or otherwise materially
affects any other provision of this Agreement, Atos Origin may submit a written
claim for an equitable adjustment to the payments or time required.  Customer shall have twenty (20) days to
consider such a claim and decide whether to dispute the claim.

 

11.4                           Except as otherwise provided in the
Description of Services, upon request and at Customer’s expense, Atos Origin
shall submit a monthly progress report, no later than ten (10) days after the
close of each calendar month during which work is done.  Each such progress report shall describe
Atos Origin’s

 

 

performance
since the preceding report, including the Services delivered, the hours
expended by each employee, a description of all authorized travel and a general
description, if applicable, of the progress expected to be made in the current
billing period.  Each such report shall
describe Atos Origin’s activities by reference to the tasks described in the
Description of Services.

 

12.                                 Accuracy and Adequacy of Customer Data

 

The accuracy
and adequacy and completeness of Customer’s programs, files, and input data
shall be the sole responsibility of Customer. 
After Customer receives the data from Atos Origin, Customer shall be
responsible for reviewing output data and the data processing deemed accepted
unless the Customer notifies Atos Origin in writing of any Atos Origin caused
errors within thirty (30) days after receipt of the data.

 

13.                                 Intentionally Omitted

 

14.                                 Changes

 

14.1                           Atos Origin shall have the right to make
system changes subject to the following procedures:

 

14.1.1                              In the event of a system change that, in
Atos Origin’s opinion, shall have no effect on Customer’s utilized access or of
the Services, Atos Origin shall be under no obligation to provide notice to
Customer of the system change.

 

14.1.2                              In the event a certain system change
affects Customer’s conversion schedule, systems or application access or causes
similar circumstances and the system change has no significant affect on
Customer’s application software, Atos Origin shall provide reasonable advance
written notice of the system change.  If
Atos Origin believes the system change may cause Customer to expend resource
time to accommodate the change, Atos Origin shall notify Customer, in writing,
and the Parties agree to cooperate in good faith to consider, schedule and
implement these system changes in a reasonable manner.

 

14.1.3                              In the event a certain system change is
expected to materially affect Customer’s application software (such as
operating system upgrades) or require significant resource effort by Customer;
Atos Origin shall make reasonable efforts (which shall be deemed to include
contacting Customer’s CIO by e-mail and office phone number and any other
personnel set forth in a Description of Services by the same means of contact)
to obtain Customer’s written prior consent. 
The Parties agree to cooperate in good faith to consider, schedule and
implement these system changes in a reasonable manner.

 

14.1.4                              In the event that a system change alters
computer resource consumption, Atos Origin may revise its rates so long as the
revision does not materially increase overall charges to Customer as compared
to pre-system charges, provided, however, except where the system change can
reasonably be deemed an emergency (by Atos Origin in its exclusive discretion
so long as consistent with its standard practices and procedures), Atos Origin
shall obtain Customer’s prior written consent concerning the proposed change.
In the event of an emergency system change, the Parties will promptly, but in
no event later than thirty (30) days subsequent to the change, discuss the long
term impact on pricing and the overall performance of the Services. In the
event a price change due to such event exceed fifteen (15%) of the fees for
Services described in Schedule A, Customer shall have thirty (30) days from
such notice of a price increase to provide notice of termination of the
Services subject to the price increase and such Services shall be deemed
terminated on the earlier of expiration of the impacted Descriptions of
Services or one hundred eighty (180) days thereafter. Subject to the foregoing,
neither Party may use a system change event to alter or diminish its

 

 

obligations
pursuant to the terms of this Agreement and it is specifically understood that
a system change subject to the terms in this paragraph 14 shall not include any
changes in scope or functional requirement (e.g. a change in resource
consumption).

 

14.2                           If Customer requests, in writing, a
non-system change to a Description of Services, Atos Origin agrees to prepare a
proposal identifying or describing the additional work, services and/or changes
to be performed, an estimate of the amount or rates Atos Origin will charge to
perform the work, services or changes and a revised schedule of performance for
the Description of Services (“Non-System Change Notice”). Unless otherwise
reasonably agreed, Atos Origin agrees to deliver the Non-System Change Notice
within ten (10) Business Days of receipt of the request from Customer.  Upon receipt of authorization from Customer
to pay the charges thereof and agreeing to the revised schedule of performance,
Atos Origin agrees to perform the additional work, service and/or changes
identified in the Non-System Change Notice.

 

15.                                 Termination

 

15.1                           Unless otherwise provided, this Agreement
may be terminated in the following manner and for the following reasons:

 

15.1.1                                    Except as provided in Subsection 15.1.1
below, either Party may terminate this Agreement upon material default of the
other Party pursuant to the terms of this Agreement.  In order to terminate for default, the terminating Party must
give written notice detailing and specifying the event of default claimed.  Such grounds for default may include
multiple defaults which individually may not be construed as material, but collectively
operating in the aggregate, without cure, would be deemed a material
default.  For example, multiple delays
of performance (without fault of the other Party) which individually do not
erode the quality of the Services, but collectively constitute a material
default as the Services are materially impacted.  Upon receipt of notice of default, the defaulting Party must
either (i) cure such default within five (5) Business Days; or (ii) devise a
mutually satisfactory plan to cure such default within thirty (30) days and
provide the plan to the other Party within five (5) Business Days.  If such default is not cured within such
thirty (30) day period, and the terminating Party intends to terminate, the
terminating Party must immediately give thirty (30) days written notice of
termination.  The thirty (30) day
pre-termination period shall begin running upon receipt of notice of
termination by the defaulting Party. 
Notwithstanding the foregoing, Atos Origin shall not terminate for
breach based on a claim of payment or amounts except as set forth in the
Section below.

 

15.1.2                                    As provided in Section 5 of this
Agreement, Atos Origin may terminate this Agreement if a payment is forty-five
(45) or more days delinquent, and, payment is not received within ten (10) days
after such notice of delinquency is received by Customer.  Delinquency shall mean forty-five (45) days
after the invoice date.  Except as
otherwise expressly stated in a Description of Services, in the event of such
termination, the greater of the fixed monthly amounts or monthly minimum
service amounts for the duration of the initial term or the current renewal
term shall be immediately due and payable. 
Such liquidated damages shall be capped at the lesser of such payment
for one (1) year of such Services or the remaining term.  Termination under this Section 15.2 shall
not apply if lack of payment or partial payment is due to a good faith dispute
over amounts owed, provided that and subject to all uncontested amounts being
timely paid.  Such good faith dispute
must be resolved pursuant to Section 24 of this Agreement within thirty (30)
days or payment shall immediately become due and payable pursuant to the terms
of this Section 15.2.

 

15.1.3                                    Customer may terminate this Agreement or
the applicable Schedule by providing one (1) year’s notice in the event that
(a) Atos Origin does not meet the service level agreements set forth in a
Schedule for any four months in a twelve month period, or

 

 

(b) Atos
Origin does not meet the service level agreements set forth in a Schedule for
any three consecutive months.

 

15.1.4                                    Either Party may terminate the Agreement
in the event that either Party (i) files for bankruptcy; (ii) becomes or is
declared insolvent, or is the subject of any proceedings related to its
liquidation, insolvency or the appointment of a receiver or similar officer for
it; (iii) makes an assignment for the benefit of all or substantially all of
its creditors; or (iv) upon six (6) months’ prior written notice, in the event
that either Party is subject to a change of control transaction or similar
transaction or arrangement involving the transfer or sale of all or
substantially all of the assets of such Party.

 

15.1.5                                    At the end of the Initial Term or any
Renewal Term, either Party may terminate this Agreement, upon written notice to
the other Party no less than one hundred twenty (120) days prior to the end of
the then current term.

 

15.1.6                                    The Parties may terminate as otherwise
set forth in this Agreement.

 

15.2                            Cumulative Remedies:  In the event of termination of this
Agreement, either Party may exercise any of the remedies available under this
Agreement and each Party hereby expressly agrees that nothing contained herein
shall prevent either Party from obtaining injunctive relief against the
other.  Termination by a Party of this
Agreement and/or any Description of Services shall not prevent that Party from
pursuing any remedies available in law or in equity, against the other.

 

16.                                 Third Party Communication Liability

 

Atos Origin
shall have no liability for loss, delay, damage or harm to Customer which is by
failure or fault of a third party telecommunication service provider, so long
as Atos Origin has used reasonable commercial practices in selecting the
service provider and to the extent that Atos Origin is not otherwise at fault
for the failure.

 

17.                                 Warranty and Disclaimer – Limitations of
Liability

 

17.1                           Atos Origin represents and warrants that
the services performed for Customer shall be performed in a good and
workmanlike manner. Both Parties represent and warrant they will comply with
all governmental laws, rules and regulations, including but not limited to
those relating to the privacy of confidential employee records released to the
other Party.  Except as otherwise agreed
in a Description of Service, Atos Origin warrants for a period of one hundred
and eighty (180) days from the delivery date that the Customized Software,
including any updates, will perform in all material respects consistent with
the functions and specifications agreed to by Atos Origin in any Description of
Services. Atos Origin does not warrant that the Customized Software or update
is or will be free of errors or “bugs”.

 

17.2                                         EXCEPT AS SET
FORTH HEREIN AND IN A DESCRIPTION OF SERVICES, ATOS ORIGIN MAKES NO REPRESENTATION
OR WARRANTIES NOR ARE THERE ANY CONDITIONS, EXPRESSED OR IMPLIED, INCLUDING
IMPLIED WARRANTIES OR CONDITIONS OF MERCHANTABILITY, MERCHANTABLE QUALITY, OR
FITNESS FOR A PARTICULAR PURPOSE AND THOSE ARISING BY STATUTE OR OTHERWISE IN
LAW OR FROM A COURSE OF DEALING OR USE OF TRADE.

 

17.3                                         Atos Origin
agrees that prior to recommending or requiring the use of Supplied Software it
will have first made a determination, exercising the standard of care set out
above, that such Supplied Software is appropriate.  In addition to the above, no warranties are made with respect to
any software program available through Atos Origin, whether developed by Atos
Origin or licensed, purchased, or otherwise obtained by Atos Origin from the
developer or other third party, nor shall any warranty be implied, and Atos
Origin shall not be liable for any defects or inadequacies

 

 

therein even
if such defects or inadequacies are caused by the negligence, in whole or in
part, of Atos Origin.

 

17.
4                      Intentionally Omitted.

 

17.5                           Notwithstanding any other provision
hereof: (i) Customer’s exclusive remedy arising out of any breach by Atos
Origin of warranty under this Section 17 shall be, at Atos Origin’s option,
correction of the breach or default, and/or payment by Atos Origin of the
amount of any actual losses, expenses or damages, but such payment shall not
exceed the prior four months revenue actually received by Atos Origin from
Customer while this Agreement is in effect with with respect to the particular
work or work product which directly gave rise to the losses or damages.

 

17.6                           IN NO EVENT SHALL EITHER PARTY BE LIABLE
FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES, INCLUDING LOST PROFITS,
LOSS OF COMPUTER TIME, FAILURE TO REALIZE EXPECTED SAVINGS, AND ANY OTHER COMMERCIAL
OR ECONOMIC LOSS OF ANY KIND AND ARISING IN CONSEQUENCE OF PERFORMANCE, FAILURE
TO PERFORM, OR OTHER BREACH UNDER THIS AGREEMENT EVEN IF SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF ANY OF THESE DAMAGES. THIS LIMITATION AND ANY
OTHER LIMITATIONS ON DAMAGES CONTAINED HEREIN SHALL NOT APPLY TO THE
OBLIGATIONS SET FORTH IN THE SECTION RELATING TO INFRINGMENT OF INTELLECTUAL
PROPERTY RIGHTS OR RELATING TO BREACH OF CONFIDENTIALITY OBLIGATIONS IN THE
EVENT SUCH BREACH IS CAUSED BY THE WILFUL MISCONDUCT, GROSS NEGLIGENCE OR FRAUD
OR EITHER PARTY. IN NO EVENT SHALL EITHER PARTY’S LIABILITY UNDER THIS
AGREEMENT EXCEED US$7,000,000.

 

17.7                           Intentionally omitted.

 

17.8                           THE TERMS OF THIS SECTION 17 SHALL APPLY
IRRESPECTIVE OF THE NATURE OF THE CAUSE OF ACTION UNDERLYING A CLAIM, DEMAND OR
ACTION BY EITHER PARTY, INCLUDING BREACH OF CONTRACT OR TORT.

 

18.                                 Indemnification

 

18.1                                                                           (a)                                  In the event of any claim, action,
proceeding or suit by  a third party against Customer alleging
direct, or contributory, infringement of any patent, copyright, trademark or
misappropriation of a trade secret worldwide, resulting solely from the
services performed under a Description of Services or for Customized Software
by Atos Origin under this Agreement, Atos Origin will defend, indemnify and
hold Customer harmless against any such claim, action, proceeding or suit,
subject to the conditions and exceptions stated in Paragraphs (b), (c), (d),
and (e) below, against such allegations. 
Atos Origin will reimburse Customer for costs, expenses or reasonable
attorneys’ fees incurred at Atos Origin’s written request or authorization, and
shall indemnify Customer against any liability assessed against Customer by
final judgment or agreed to in a written settlement agreement on account of such
infringement.

 

(b)                                 If Customer’s use is enjoined or in Atos
Origin’s opinion is likely to be enjoined, Atos Origin shall, at its expense,  use
its reasonable efforts to either (i) replace the enjoined item furnished
pursuant to this Agreement with a substitute free of any infringement
(hereinafter “Item” shall mean any item furnished to Customer hereunder); (ii)
modify the Item so that it will be free of the infringement; or (iii) procure
for Customer a license or other right to use the Item.  If none of the foregoing options is
achievable through reasonable efforts, Atos Origin shall remove the enjoined
Item and refund or credit to Customer any amounts paid to Atos Origin directly
relating to such Item.  In no event,
however, shall Atos Origin’s liability under this Section 18.1(b) exceed the
amount(s) paid by Customer to Atos Origin during the course of the Agreement.

 

(c)                                  Customer shall give Atos Origin
reasonably prompt written notice of all such claims, actions, proceedings or
suits alleging infringement or violation and Atos Origin shall have full and
complete authority to assume the sole defense thereof, including appeals, and
to settle

 

 

same.
Customer shall, upon Atos Origin’s request, furnish all information and
assistance available to Customer and cooperate in every reasonable way to
facilitate the defense and/or settlement of any such claim, action, proceeding
or suit, provided, that Atos Origin shall reimburse Customer for any third
party (i.e., not including internal) expenses related thereto.

 

(d)                                 No undertaking of Atos Origin under
this clause shall extend to any such alleged infringement or violation if the
infringement arises solely from any of the following, unless such case arises
by a requirement or request of Atos Origin: (1) Design modifications,
specifications, drawings, or instructions which Atos Origin received from
Customer; (2) adherence to Customer’s instructions to apply Customer’s
trademark, trade name or other company identification; (3) equipment or
software which is furnished by Customer to Atos Origin for use under this
Agreement  unless such software is
Supplied Software, or is requested or required by Atos Origin; (4) use of an
Item provided by Atos Origin in combination with any item not furnished
directly by Atos Origin; or (5) a modification made by Customer of any item; or
(6) use of any Item in a manner for which it was not designed.  In the foregoing cases numbered (1) through
(6), Customer shall defend and save Atos Origin harmless.

 

(e)                                  The liability of Atos Origin and Customer
with respect to any and all claims, actions, proceedings or suits by third
parties alleging infringement of patents, trademarks or copyrights or violation
of trade secrets or proprietary rights worldwide because of, or in connection
with, any services performed hereunder shall be limited to the specific
undertakings contained in this Agreement.

 

18.2
                        Both Parties agree to defend, reimburse,
indemnify, and hold the other Party harmless, from any liabilities, damages or
expenses including reasonable attorneys and/or solicitors fees and other
expenses incurred by the other Party resulting from, to the extent permitted by
law, that portion of any loss, or suit or cause of action resulting from injury
to any n employee, agent, consultant, representative or third party, or damage
to any  employee, agent, consultant,
representative or third party’s property in any way connected with the
performance of services hereunder.

 

19.                                 Force Majeure

 

Each Party
shall not be liable for and shall be excused from any failure to perform its
respective obligations hereunder due to any cause beyond its reasonable
control, including, but not limited to, acts of nature, government actions,
fire, labor actions, transportation problems, interruptions of electrical power
or telecommunication services or other similar events; provided, however, if
service is interrupted due to such force majeure for a period of 90 days,
either Party may terminate this Agreement immediately.

 

20.                                 Notices

 

All notices,
requests, demands, and determinations under this Agreement (other than routine
operational communications), shall be in writing and shall be deemed duly
delivered (i) when delivered by hand, (ii) one (1) day after being deposited
with a nationally recognized over-night delivery service with a reliable system
for tracking delivery, (iii) when sent by confirmed facsimile with a copy sent
by another means specified in this Section 20, or (iv) upon actual receipt when
mailed by United States mail, registered or certified mail and addressed as
follows:

 

In case of
Atos Origin:

 

Atos Origin,
Inc.

430 Mountain
Avenue

Murray Hill,
New Jersey 07974

Attn: Chief
Financial Officer

Facsimile
No.: (908)771-3006

 

 

In case of
Customer:

 

FEI Company

5350
NE Dawson Creek Drive

Hillsboro,
Oregon  97124

Attn.: Chief
Information Officer

cc: General
Counsel

Facsimile
No.: (503) 726-7509

 

A Party may
from time to time change its address or designee for notification purposes by
giving the other prior written notice of the new address and designee and the
date upon which it will become effective.

 

21.                                 Media Releases

 

All media
releases, public announcements, and public disclosures by either Party relating
to this Agreement or the subject matter of this Agreement, including without
limitation, promotional or marketing material (both internal and external), but
not including announcements intended solely for internal distribution or to
meet legal or regulatory requirements, shall be coordinated with and approved
by the other Party prior to release. 
Notwithstanding the foregoing, without Customer’s prior approval, Atos
Origin may list Customer as a customer and describe in general terms the
services provided by Atos Origin under this Agreement in proposals and other
marketing materials.

 

22.                                 Assignment

 

Neither Party
shall assign this Agreement or any of its rights and obligations hereunder
without the prior written consent of the other Party.  Notwithstanding any term or provision to the contrary, including
the foregoing provisions of this Section 22, either Party may, upon written
notice to the other Party, assign its right and obligations under this
Agreement without the approval of the other Party to an entity which acquires
all or substantially all of the assets of such Party or to any subsidiary or
affiliate or successor in a merger or acquisition of such Party; provided,
however, that in no event shall such assignment relieve such Party of its
obligations to pay or otherwise perform this Agreement.  This Agreement shall be binding on the
Parties hereto and their respective successors and permitted assigns.

 

23.                                 Sole Source

 

During the
term of this Agreement, including any renewal term, Atos Origin shall be
Customer’s sole source for and exclusive provider of all Services provided
hereunder. In the event that Customer is interested in contracting with an
outside vendor for out of scope services similar to the Services but not
included under this Agreement (changes in technology that result in a
requirement for services similar to the Services under this agreement shall be
deemed to be subject to this Agreement), Customer agrees to timely consider
Atos Origin to provide such services.

 

24.                                 Dispute Resolution

 

Any dispute
between Customer and Atos Origin including, but not limited to, those relating
to the interpretation of any provision of this Agreement and with respect to
performance of this Agreement shall be resolved promptly as follows:

 

(a)                                                              Every effort shall be made to resolve all
disputes at the lowest level of authority escalating up to and including the
Chief Executive Officer of both Atos Origin and Customer.

 

(b)                                                             If the Parties fail to agree through
normal channels and procedures of dispute resolution, then the Parties shall
attempt to resolve any disputes arising hereunder in the following manner:

 

 

(c)                                                              If either Party elects not to resolve the
dispute through the use of a mediator or if the dispute cannot be resolved
within thirty (30) days of the appointment of the mediator, then either Party
may elect to proceed with binding arbitration before one arbitrator in New York
City in accordance with the rules of the American Arbitration Association as
supplemented by the Federal Rules of Civil Procedure.

 

25.                                 Independent Contractor

 

Atos Origin
is an independent contractor.  Nothing
in this Agreement shall be construed to create a partnership, joint venture or
agency relationship between the Parties.

 

26.                                 Mutual Non Solicitation and Non Hire
Agreement

 

During the term of this Agreement and for
twelve (12) months thereafter, Atos Origin shall not solicit, hire or contract
for the services of any Customers’ employees. 
Customer shall not solicit, hire or contract for the services of any of
Atos Origin’s employees who have been assigned to perform services for Customer
until twelve (12) months after such services of employee are completed or
terminated.

 

27.                                 Survival

 

The following
Sections shall survive cancellation or termination of this Agreement; Sections
1 (“Entire Agreement and Conflicts”), 2 (“Definitions”), 5 (“Charges and
Payments”), 8 (“Confidential Information”), 9 (“Proprietary Rights”), 15
(‘Termination”), 17 (“Warranty and Disclaimer – Limitations of Liability”), 18
(“Indemnification”), 20 (“Notices”), 24 (“Dispute Resolution”), 26 (“Mutual Non
Solicitation and Non Hire Agreement”), 27 (“Survival”), and 34 (“State Law”).

 

28.                                 Headings

 

The Section
headings used herein are for reference and convenience only and shall not enter
into the interpretation hereof.

 

29.                                 Third Party Beneficiaries

 

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

 

30.                                 Execution of Subsequent Documents

 

Each
of the Parties hereto agree, at any time and from time to time, upon the
request of the other Party hereto, to do, execute, acknowledge and deliver, or
cause to be done, executed, acknowledged and delivered, all such further acts,
documents and instruments as may be required to effect any of the transactions
contemplated by this Agreement.

 

31.                                 Waiver of Default

 

A delay or
omission by either Party hereto to exercise any right or power under this
Agreement shall not be construed to be a waiver thereof.  A waiver by either of the Parties hereto of
any of the covenants to be performed by the other or any breach thereof shall
not be construed to be a waiver of any succeeding breach thereof or of any
other covenant herein contained.  All
remedies provided for in this Agreement shall be cumulative and in addition to
and not in lieu of any other remedies available to either Party at law, in
equity or otherwise, except where this Agreement specifically provides
otherwise.

 

32.                                 Severability

 

In the event
that any provision of this Agreement conflicts with the law under which this
Agreement is to

 

 

be construed
or if any such provision is held invalid by an arbitrator or a court with
jurisdiction over the Parties, such provision shall be deemed to be restated to
reflect as nearly as possible the Atos Origin intentions of the Parties in
accordance with applicable law.  The
remainder of this Agreement shall remain in full force and effect.

 

33.                                 Modification

 

This
Agreement may be modified only by a written instrument duly executed by an
authorized representative of the Parties hereto.

 

34.                                 State Law

 

This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York without reference to its conflicts of law provisions.

 

The terms of this Agreement are hereby
agreed to by both Parties:

 

	
  Atos Origin, Inc.

  	
  FEI Company

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Lorie L. Page

  	
   

  	
  By:

  	
  /s/ David M. O’Brien

  	
   

  
	
   

  	
   

  
	
  Title: VP Managed Services NA

  	
  Title: Sr. Vice President, CIO

  
	
   

  	
   

  
	
  Date: July 7, 2003

  	
  Date: July 3, 2003

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00058-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00058-of-00352.parquet"}]]