Document:

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               SECOND AMENDED AND RESTATED STOCK PLEDGE AGREEMENT

        THIS SECOND AMENDED AND RESTATED STOCK PLEDGE AGREEMENT (this
"Agreement") is made and given as of this 11th day of April, 2002, by CANDLEWOOD
HOTEL COMPANY, INC., a Delaware corporation (the "Pledgor"), for the benefit of
HPT CW PROPERTIES TRUST, a Maryland real estate investment trust (together with
its successors and assigns, the "Secured Party").

                              W I T N E S S E T H:

        WHEREAS, pursuant to an Second Amended and Restated Lease Agreement,
dated as of the date hereof (as amended from time to time, the "Second Amended
and Restated Lease"), the Secured Party leased to Candlewood Leasing No. 1,
Inc., a Delaware corporation (the "Tenant"), and the Tenant leased from the
Secured Party certain premises as more particularly described in and subject to
and upon the terms and conditions set forth in the Second Second Amended and
Restated Lease; and

        WHEREAS, the Pledgor owns all of the outstanding shares of capital stock
of the Tenant and shall derive direct substantial benefit from the transactions
contemplated by the Second Amended and Restated Lease;

        NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the mutual receipt and legal sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:

        SECTION 1. CERTAIN TERMS. Capitalized terms used and not otherwise
defined in this Agreement shall have the meanings ascribed to such terms in the
Second Amended and Restated Lease.

        SECTION 2. PLEDGE. The Pledgor hereby pledges to the Secured Party the
shares of capital stock of the Tenant (the "Pledged Stock") listed in Exhibit A
attached hereto (the Pledged Stock and any additional securities or collateral
pledged hereunder, collectively, the "Pledged Collateral"), and the Pledgor
hereby grants to the Secured Party a security interest in all of the Pledged
Collateral as security for the due and punctual payment and performance of the
Secured Obligations (as hereinafter defined).

<PAGE>
        SECTION 3. SECURED OBLIGATIONS. For purposes of this Agreement, the term
"Secured Obligations" shall mean the payment and performance of each and every
obligation of the Tenant to the Secured Party, under the Second Amended and
Restated Lease, whether now existing or hereafter arising, and including,
without limitation, payment of the Rent.

        SECTION 4. REPRESENTATIONS OF THE PLEDGOR. The Pledgor covenants that
the Pledged Stock is duly and validly pledged to the Secured Party in accordance
with law and the Pledgor shall warrant and defend the Secured Party's right,
title and security interest in and to the Pledged Stock against the claims and
demands of all persons whomsoever. The Pledgor represents and warrants to the
Secured Party that the Pledgor has good title to all the Pledged Stock, free and
clear of all claims, mortgages, pledges, liens, security interests and other
encumbrances of every nature whatsoever; that the Pledged Stock is not subject
to any restriction on transfer contained in the charter documents or by-laws of
the Tenant or in any agreement or instrument to which the Tenant or the Pledgor
are a party or by which the Tenant or the Pledgor is bound which would prohibit
or restrict the pledge of the Pledged Stock hereunder or the disposition thereof
upon default hereunder; that all of the Pledged Stock has been duly and validly
issued and is fully paid and nonassessable; and that the Pledged Stock
constitutes all of the presently issued and outstanding shares of the capital
stock of the Tenant. The Pledgor covenants and agrees that if any additional
shares of the capital stock of the Tenant are acquired by the Pledgor after the
date hereof the same shall constitute a part of the Pledged Collateral and shall
be pledged with the Secured Party as provided in Section 2 upon such
acquisition.

        SECTION 5. COVENANTS OF THE PLEDGOR. The Pledgor hereby covenants and
agrees that it shall not sell, convey or otherwise dispose of any of the Pledged
Collateral nor create, incur or permit to exist any pledge, mortgage, lien,
charge, encumbrance or any security interest whatsoever with respect to any of
the Pledged Collateral or the proceeds thereof, other than the liens on and
security interests in the Pledged Collateral created hereby. The Pledgor further
covenants and agrees that it shall not consent to or approve the issuance of any
additional shares of the capital stock of the Tenant.

<PAGE>

        SECTION 6. DISTRIBUTIONS, ETC. Upon the dissolution, winding up,
liquidation or reorganization of the Tenant, whether in bankruptcy, insolvency
or receivership proceedings or upon an assignment for the benefit of creditors
or any other marshalling of the assets and liabilities of the Tenant, if any sum
shall be paid or any property shall be distributed upon or with respect to any
of the Pledged Collateral, such sum shall be paid over to the Secured Party, to
be held as collateral security for the Secured Obligations. If any stock
dividend shall be declared on any of the Pledged Collateral, or any share of
stock or fraction thereof shall be issued pursuant to any stock split involving
any of the Pledged Collateral, or any distribution of capital (excluding cash
dividends) shall be made on any of the Pledged Collateral, or any property shall
be distributed upon or with respect to the Pledged Collateral pursuant to
recapitalization or reclassification of the capital of the Tenant, the shares or
other property so distributed shall be delivered to the Secured Party to be held
as collateral security for the Secured Obligations.

        SECTION 7. EVENT OF DEFAULT. For purposes of this Agreement, the term
"Event of Default" shall mean (a) the occurrence of an Event of Default under
the Second Amended and Restated Lease; (b) the failure of the Pledgor to comply
with any of its covenants or obligations under this Agreement and the
continuation thereof for a period of thirty 30 days after written notice
thereof; provided, however, that if such default is susceptible of cure but such
cure cannot be accomplished with due diligence within such period of time and if
in addition the Pledgor commences to cure or cause to be cured such default
within thirty (30) days after written notice thereof from the Secured Party and
thereafter prosecutes the curing of such default with all due diligence, such
period of time shall be extended to such period of time (not to exceed an
additional ninety (90) days in the aggregate) as may be necessary to cure such
default with all due diligence; or (c) any representation or warranty contained
herein or made by the Pledgor in connection herewith shall prove to have been
false or misleading in any material respect when made.

        SECTION 8. REMEDIES. (a) Upon the occurrence of an Event of Default, the
Secured Party may cause all or any of the Pledged Collateral to be transferred
into its name or into the

<PAGE>
name of its nominee or nominees, subject to the provisions of the Uniform
Commercial Code or other applicable law.

        (b) Upon the occurrence and during the continuance of an Event of
Default, the Secured Party shall be entitled to exercise the voting power with
respect to the Pledged Collateral, to receive and retain, as collateral security
for the Secured Obligations, any and all dividends or other distributions at any
time and from time to time declared or made upon any of the Pledged Collateral,
and to exercise any and all such rights of payment, conversion, exchange,
subscription or any other rights, privileges or options pertaining to the
Pledged Collateral as if it were the absolute owner thereof, including, without
limitation, all such rights under any shareholders agreement, and further
including, without limitation, the right to exchange, at its discretion, any and
all of the Pledged Collateral upon the merger, consolidation, reorganization,
recapitalization or other readjustment of the Tenant, upon the exercise of any
such right, privilege or option pertaining to the Pledged Collateral, and in
connection therewith, to deposit and deliver any and all of the Pledged
Collateral with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as the Secured Party may
determine.

        (c) Upon the occurrence and during the continuance of an Event of
Default, the Secured Party shall have all of the rights and remedies of a
secured party under the Uniform Commercial Code or other applicable law and
shall have the right to sell, resell, assign and deliver all or any of the
Pledged Collateral in one or more parcels at any exchange or broker's board or
at public or private sale. The Secured Party shall give the Pledgor at least ten
(10) days' prior written notice of the time and place of any public sale thereof
or of the time after which any private sale or any other intended disposition
thereof is to be made. Any such notice shall be deemed to meet any requirement
hereunder or under any applicable law (including the Uniform Commercial Code)
that reasonable notification be given of the time and place of such sale or
other disposition. Such notice may be given without any demand of performance or
other demand, all such demands being hereby expressly waived by the Pledgor to
the extent permitted by applicable law. All such sales shall be at such
commercially reasonable price or prices as the Secured Party shall deem best and
either for cash or on

<PAGE>
credit or for future delivery (without assuming any responsibility for credit
risk). At any such sale or sales, the Secured Party may purchase any or all of
the Pledged Collateral to be sold thereat upon such terms as the Secured Party
may deem best. Upon any such sale or sales, the Pledged Collateral so purchased
shall be held by the purchaser absolutely free from any claims or rights of any
kind or nature of the Pledgor, including any equity of redemption and any
similar rights, all such equity of redemption and any similar rights being
hereby expressly waived and released by the Pledgor to the extent permitted by
applicable law. In the event any consent, approval or authorization of any
governmental agency will be necessary to effectuate any such sale or sales, the
Pledgor shall execute, and hereby agrees to cause the Tenant to execute, all
such applications or other instruments as may be required. The proceeds of any
such sale or sales, together with any other additional collateral security at
the time received and held hereunder, shall be received and applied: first, to
the payment of all costs and expenses of such sale, including attorneys' fees;
and second, to the payment of the Secured Obligations in such order of priority
as the Secured Party shall determine; and any surplus thereafter remaining shall
be paid to the Pledgor or to whomever may be legally entitled thereto
(including, if applicable, any subordinated creditor of the Pledgor).

        The Pledgor recognizes that the Secured Party may be unable to effect a
public sale of all or a part of the Pledged Collateral by reason of certain
prohibitions contained in the Securities Act of 1933, and may be compelled to
resort to one or more private sales to a restricted group of purchasers who will
be obliged to agree, among other things, to acquire such Pledged Collateral for
their own accounts, for investment and not with a view to the distribution or
resale thereof. The Pledgor agrees that private sales so made may be at prices
and upon other terms less favorable to the seller than if such Pledged
Collateral were sold at public sales, and that the Secured Party shall have no
obligation to delay sale of any such Pledged Collateral for the period of time
necessary to permit such Pledged Collateral to be registered for public sale
under the Securities Act of 1933. The Pledgor agrees that private sales made
under the foregoing circumstances may be deemed to have been made in a
commercially reasonable manner. Nothing herein shall be deemed to require the
Pledgor to effect a registration of the Pledged Collateral under the Securities
Act of 1933.

<PAGE>
        (d) Upon the occurrence and during the continuance of any Event of
Default, the Secured Party, in its discretion, may demand, sue for and/or
collect any money or property at any time due, payable or receivable, to which
it may be entitled hereunder, on account of or in exchange for any of the
Pledged Collateral. Upon the occurrence and during the continuance of any Event
of Default, the Secured Party shall further have the right, for and in the name,
place and stead of the Pledgor, to execute endorsements, assignments, or other
instruments of conveyance or transfer with respect to all or any of the Pledged
Collateral.

        (e) The Secured Party shall not be obligated to do any of the acts
hereinabove authorized and in the event that the Secured Party elects to do any
such act, the Secured Party shall not be responsible to the Pledgor, other than
for gross negligence or willful misconduct.

        SECTION 9. RIGHTS OF SECURED PARTY. No course of dealing between the
Pledgor and the Secured Party nor any failure to exercise, nor any delay in
exercising, on the part of the Secured Party, any right, power or privilege
hereunder or under any of the Secured Obligations, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or thereunder preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. The rights and remedies
herein provided and provided under any of the Secured Obligations are cumulative
and are in addition to, and not exclusive of, any rights or remedies provided by
law, including, without limitation, the rights and remedies of a secured party
under the Uniform Commercial Code.

        SECTION 10. ASSIGNMENT, ETC. No waiver by the Secured Party or by any
other holder of Secured Obligations of any default shall be effective unless in
writing nor operate as a waiver of any other default or of the same default on a
future occasion. In the event of a sale or assignment by the Secured Party of
its interest under the Second Amended and Restated Lease, the Secured Party may
assign or transfer its rights and interest under this Agreement in whole or in
part to the purchaser or assignee of such interest, whereupon such purchaser or
purchasers shall become vested with all of the powers and rights given to the
Secured Party hereunder, and the Secured Party shall thereafter be forever
released and fully discharged

<PAGE>
from any liability or responsibility thereafter arising hereunder with respect
to the rights and interests so assigned.

        SECTION 11. DUTY OF SECURED PARTY. Beyond the exercise of reasonable
care to assure the safe custody of the Pledged Collateral while held hereunder,
the Secured Party shall have no duty or liability to collect any sums due in
respect thereof or to protect or preserve rights pertaining thereto, and shall
be relieved of all responsibility for the Pledged Collateral upon surrendering
the same to the Pledgor.

        SECTION 12. WAIVERS, ETC. To the extent permitted by applicable law, the
Pledgor, on its own behalf and on behalf of its successors and assigns, hereby
waives presentment, demand, payment, notice of dishonor, protest and, except as
otherwise provided herein, all other demands and notices in connection with this
Agreement or the enforcement of the rights of the Secured Party hereunder or in
connection with any Secured Obligations. The Secured Party may release,
supersede, exchange or modify any collateral security it may from time to time
hold and release, surrender or modify the liability of any third party without
giving notice hereunder to the Pledgor. The Secured Party shall be under no duty
to exhaust its rights against any such collateral security or any such third
party before realizing on the Pledged Collateral. Such modifications, changes,
renewals, releases or other actions shall in no way affect the Pledgor's
obligations hereunder.

        The Pledgor further waives any right it may have under the Constitution
of The Commonwealth of Massachusetts (or under the constitution of any other
state in which the any of the Pledged Collateral may be located), or under the
Constitution of the United States of America, to notice (except for notice
specifically required hereby) or to a judicial hearing prior to the exercise of
any right or remedy provided by this Agreement to the Secured Party, and waives
its rights, if any, to set aside or invalidate any sale duly consummated in
accordance with the foregoing provisions hereof on the grounds (if such be the
case) that the sale was consummated without a prior judicial hearing. THE
PLEDGOR'S WAIVERS UNDER THIS SECTION 12 HAVE BEEN MADE VOLUNTARILY,
INTELLIGENTLY AND KNOWINGLY AND AFTER THE PLEDGOR HAS BEEN APPRISED AND
COUNSELED BY ITS ATTORNEYS AS TO THE NATURE THEREOF AND ITS POSSIBLE ALTERNATIVE
RIGHTS.

<PAGE>
        SECTION 13. FURTHER ASSURANCES AS TO COLLATERAL; ATTORNEY-IN-FACT. From
time to time hereafter, the Pledgor shall execute and deliver, or will cause to
be executed and delivered, such additional instruments, certificates or
documents (including without limitation financing statements, renewal
statements, collateral assignments and other security documents), and shall take
all such actions, as the Secured Party may reasonably request, for the purposes
of implementing or effectuating the provisions of this Agreement or of more
fully perfecting or renewing the Secured Party's rights with respect to the
Pledged Collateral (or with respect to any additions thereto or replacements or
proceeds thereof or with respect to any other property or assets hereafter
acquired by the Pledgor which may be deemed to be a part of the Pledged
Collateral) pursuant hereto and thereto. The Secured Party is hereby appointed
the attorney-in-fact, with full power of substitution, of the Pledgor for the
purpose of carrying out the provisions of this Agreement and taking any action,
including, without limitation, executing, delivering and filing applications,
certificates, instruments and other documents and papers with governmental
authorities, and executing any instruments, including without limitation,
assignments, conveyances and transfers which are required to be taken or
executed by the Pledgor under this Agreement, on its behalf and in its name
which appointment is coupled with an interest, is irrevocable and durable and
shall survive the subsequent dissolution, disability or incapacity of the
Pledgor; provided, however, that the Secured Party shall not be entitled to take
any action required of the Pledgor under this Agreement unless the Secured Party
has made written demand on the Pledgor to take such action and the Pledgor,
having been afforded a reasonable time to take such action, fails to do so.

        SECTION 14. NOTICES. (a) Any and all notices, demands, consents,
approvals, offers, elections and other communications required or permitted
under this Agreement shall be deemed adequately given if in writing and the same
shall be delivered either in hand, by telecopier with written acknowledgment of
receipt, or by mail or Federal Express or similar expedited commercial carrier,
addressed to the recipient of the notice, postpaid and registered or certified
with return receipt requested (if by mail), or with all freight charges prepaid
(if by Federal Express or similar carrier).
<PAGE>
        (b) All notices required or permitted to be sent hereunder shall be
deemed to have been given for all purposes of this Agreement upon the date of
acknowledged receipt, in the case of a notice by telecopier, and, in all other
cases, upon the date of receipt or refusal, except that whenever under this
Agreement a notice is either received on a day which is not a Business Day or is
required to be delivered on or before a specific day which is not a Business
Day, the day of receipt or required delivery shall automatically be extended to
the next Business Day.

        (c)  All such notices shall be addressed,

        if to the Secured Party to:

               HPT CW Properties Trust
               c/o Hospitality Properties Trust
               400 Centre Street
               Newton, Massachusetts  02458
               Attn:  Mr. John G. Murray
               [Telecopier No. (617) 969-5730]

        with a copy to:

               Sullivan & Worcester LLP
               One Post Office Square
               Boston, Massachusetts  02109
               Attn:  Nancy S. Grodberg, Esq.
               [Telecopier No. (617) 338-2880]

        if to the Pledgor to:

               Candlewood Hotel Company, Inc.
               8621 E. 21st Street North, Suite 200
               Wichita, Kansas  67206
               Attn: Mr. Tim Johnson
               [Telecopier No. (316) 631-1382]

         with a copy to:

               Latham & Watkins
               233 South Wacker Drive, Suite 5800
               Chicago, Illinois 60606
               Attn:  Kenneth Crews, Esq.
               [Telecopier No. (312) 993-9767]

<PAGE>
        (d) By notice given as herein provided, the parties hereto and their
respective successor and assigns shall have the right from time to time and at
any time during the term of this Agreement to change their respective addresses
effective upon receipt by the other parties of such notice and each shall have
the right to specify as its address any other address within the United States
of America or to such other address as the party to whom such notice is directed
may have designated in writing to the other parties hereto.

        SECTION 15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns, and the term "Secured Party" shall be deemed to include any other
holder or holders of any of the Secured Obligations. Where the context so
permits or requires, terms defined herein in the singular number shall include
the plural, and in the plural number, the singular. This Agreement may be
executed in any number of counterparts and by the different parties on separate
counterparts, each of which, when so executed and delivered, shall be an
original and all of which shall together constitute one and the same agreement.

        SECTION 16. REINSTATEMENT. This Agreement shall continue to be
effective, or be reinstated, as the case may be, if at any time any amount
received by the Secured Party in respect of the Pledged Collateral is rescinded
or must otherwise be restored or returned by the Secured Party upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Pledgor or upon the appointment of any intervenor or conservator of, or trustee
or similar official for the Pledgor or any substantial part of its or property,
or otherwise, all as though such payments had not been made.

        SECTION 17. RESTRICTIONS ON TRANSFER. To the extent that any
restrictions imposed by any shareholders agreement, the Articles of
Incorporation or charter of the Tenant or any other document or instrument would
in any way affect or impair the pledge of the Pledged Collateral hereunder or
the exercise by the Secured Party of any right granted hereunder including,
without limitation, the right of the Secured Party to dispose of the Pledged
Collateral upon the occurrence of any Event of Default, the Pledgor hereby
waives such restrictions, and hereby agree that they will take any action which
the Secured Party may

<PAGE>
reasonably request in order that the Secured Party may obtain and enjoy the full
rights and benefits granted to the Secured Party by this Agreement free of any
such restrictions.

        SECTION 18. APPLICABLE LAW. This Agreement and any other instruments
executed and delivered to evidence, complete or perfect the transactions
contemplated hereby and thereby shall be interpreted, construed, applied and
enforced in accordance with the laws of The Commonwealth of Massachusetts
applicable to contracts between residents of Massachusetts which are to be
performed entirely within Massachusetts regardless of (i) where any such
instrument is executed or delivered; or (ii) where any payment or other
performance required by any such instrument is made or required to be made; or
(iii) where any breach of any provision of any such instrument occurs, or any
cause of action otherwise accrues; or (iv) where any action or other proceeding
is instituted or pending; or (v) the nationality, citizenship, domicile,
principal place of business, or jurisdiction of organization or domestication of
any party; or (vi) whether the laws of the forum jurisdiction otherwise would
apply the laws of a jurisdiction other than The Commonwealth of Massachusetts;
or (vii) any combination of the foregoing. Notwithstanding the foregoing, the
laws of the jurisdiction where any of the Pledged Collateral is situated or
otherwise has a situs will apply to the perfection, disposition and realization
upon such Pledged Collateral.

        To the maximum extent permitted by applicable law, any action to
enforce, arising out of, or relating in any way to, any of the provisions of
this Agreement may be brought and prosecuted in such court or courts located in
The Commonwealth of Massachusetts as may be provided by law; and the parties
consent to the jurisdiction of said court or courts located in The Commonwealth
of Massachusetts and to service of process by registered mail, return receipt
requested, or by any other manner provided by law.

        SECTION 19. SEVERABILITY. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby, but this
Agreement shall be reformed and construed and enforced to the maximum extent
permitted by applicable law.

<PAGE>
        SECTION 20. ENTIRE CONTRACT. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and shall supersede and take the place of any other instruments purporting to be
an agreement of the parties hereto relating to the subject matter hereof.

        SECTION 21. HEADINGS; COUNTERPARTS. Headings in this Agreement are for
purposes of reference only and shall not limit or otherwise affect the meaning
hereof. This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one
instrument, and in pleading or proving any provision of this Agreement, it shall
not be necessary to produce more than one of such counterparts.

        SECTION 22. NONLIABILITY OF TRUSTEES. THE DECLARATION OF TRUST
ESTABLISHING THE SECURED PARTY, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS
THERETO (THE "DECLARATION"), IS DULY FILED WITH THE DEPARTMENT OF ASSESSMENTS
AND TAXATION OF THE STATE OF MARYLAND, PROVIDES THAT THE NAME "HPT CW PROPERTIES
TRUST" REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES,
BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER,
EMPLOYEE OR AGENT OF THE SECURED PARTY SHALL BE HELD TO ANY PERSONAL LIABILITY,
JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF OR CLAIM AGAINST, THE SECURED PARTY.
ALL PERSONS DEALING WITH THE SECURED PARTY, IN ANY WAY, SHALL LOOK ONLY TO THE
ASSETS OF THE SECURED PARTY FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY
OBLIGATION.

        SECTION 23. AMENDMENT AND RESTATEMENT. This Agreement amends, restates
and replaces in its entirety that certain Amended and Restated Stock Pledge
Agreement, dated as of August 10, 2001, as the same may have been amended from
time to time, by and between the Pledgor and the Secured Party.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
<PAGE>
        WITNESS the execution hereof under seal as of the date above first
written.

                                            CANDLEWOOD HOTEL COMPANY, INC.

                                            By: /s/ Tim Johnson
                                                --------------------------------
                                                 Tim Johnson
                                                 Vice President-Treasurer
                                                 and Assistant Secretary

<PAGE>
                                    EXHIBIT A

                                  PLEDGED STOCK

                            [See attached photocopy.]<PAGE>

                                                                   EXHIBIT 10.40

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN REDACTED PROVISIONS OF
THIS AGREEMENT. THE REDACTED PROVISIONS ARE IDENTIFIED BY THREE ASTERISKS
ENCLOSED BY BRACKETS AND UNDERLINED. THE CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

                          CONFIDENTIAL AND PROPRIETARY

                               SERVICES AGREEMENT

                                 by and between

                                   EXULT, INC.

                                       and

                   THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

                          Dated as of January 11, 2002

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                           <C>
ARTICLE 1 DEFINITIONS AND INTERPRETATION...................................................... 1
        1.01   Definitions.................................................................... 1
        1.02   Interpretation................................................................. 8
ARTICLE 2 TERM................................................................................ 8
        2.01   Agreement Term................................................................. 8
        2.02   Renewals....................................................................... 9
ARTICLE 3 MANAGEMENT AND SERVICES............................................................. 9
        3.01   Services Generally............................................................. 9
        3.02   Provision of Methodologies/Technology; Benchmarking............................ 9
        3.03   Regulatory and Legal Compliance................................................10
        3.04   Service Locations..............................................................11
        3.05   Personnel......................................................................12
        3.06   Disaster Recovery..............................................................12
        3.07   Account Management and Steering Committee......................................12
        3.08   Operations Review..............................................................13
        3.09   Asset Transfer.................................................................13
ARTICLE 4 ACCEPTANCE..........................................................................13
        4.01   Services.......................................................................13
        4.02   Changes........................................................................13
ARTICLE 5 CONTRACT ADMINISTRATION.............................................................13
        5.01   Managed Agreements.............................................................13
        5.02   Managed Agreement Invoices.....................................................14
        5.03   Assigned Agreements............................................................14
        5.04   Assigned Agreement Invoices....................................................14
        5.05   Performance Under Agreements...................................................14
        5.06   Replacement; New Agreements....................................................14
ARTICLE 6 SERVICE LEVELS......................................................................15
        6.01   Service Levels.................................................................15
        6.02   New Service Levels.............................................................15
        6.03   Reporting......................................................................15
        6.04   Root-Cause Analysis............................................................15
        6.05   Continuous Improvement and Best Practices......................................15
        6.06   [***]*.........................................................................15
        6.07   Exclusions.....................................................................15
ARTICLE 7 [RESERVED]..........................................................................16
ARTICLE 8 CHANGES IN THE SERVICES.............................................................16
        8.01   Right To Make Changes..........................................................16
ARTICLE 9 TRANSITION PLAN.....................................................................16
ARTICLE 10 NEW SERVICES.......................................................................17
        10.01  Service Provider Opportunity...................................................17
        10.02  Cooperation with Third Party Service Providers.................................17
ARTICLE 11 CLIENT RESPONSIBILITIES............................................................18
        11.01  Client Executive...............................................................18
</TABLE>

----------

* Confidential information has been omitted.

<PAGE>

<TABLE>
<S>                                                                                           <C>
        11.02  Client Responsibilities........................................................18
        11.03  Client Resources...............................................................18
        11.04  Use of Client Facilities.......................................................18
ARTICLE 12 CONSENTS...........................................................................19
ARTICLE 13 SERVICE PROVIDER STAFF.............................................................20
        13.01  Service Provider Executive.....................................................20
        13.02  Key Personnel..................................................................20
        13.03  Project Staff..................................................................20
        13.04  Service Provider Representatives...............................................21
        13.05  Conduct of Service Provider Personnel..........................................21
        13.06  Non-Competition................................................................21
ARTICLE 14 SOFTWARE AND PROPRIETARY RIGHTS....................................................22
        14.01  Client Software................................................................22
        14.02  Service Provider Software......................................................22
        14.03  License Rights Upon Termination................................................22
        14.04  New Intellectual Property......................................................22
        14.05  Rights in Residuals............................................................22
        14.06  Escrow.........................................................................23
ARTICLE 15 PAYMENTS TO SERVICE PROVIDER.......................................................23
        15.01  Charges........................................................................23
        15.02  Reserved.......................................................................23
        15.03  Charge Dispute.................................................................23
        15.04  Expenses.......................................................................23
        15.05  Proration......................................................................23
        15.06  Reserved.......................................................................23
        15.07  Refundable Items; Prepaid Expenses.............................................23
        15.08  Taxes..........................................................................24
ARTICLE 16 AUDITS.............................................................................24
        16.01  Audits Generally...............................................................24
        16.02  Services.......................................................................24
        16.03  Charges........................................................................25
        16.04  External Audit Reports.........................................................25
        16.05  Audited Financial Statements...................................................25
        16.06  Record Retention...............................................................26
        16.07  Facilities.....................................................................26
        16.08  Information....................................................................26
ARTICLE 17 DATA AND REPORTS...................................................................26
        17.01  Ownership of Data..............................................................26
        17.02  Inspection of Reports..........................................................27
        17.03  Correction of Errors...........................................................27
        17.04  Use of Reports.................................................................27
        17.05  Return of Data.................................................................27
        17.06  Compilations...................................................................27
ARTICLE 18 CONFIDENTIALITY AND SECURITY.......................................................27
        18.01  General Obligations............................................................27
        18.02  Exclusions.....................................................................28
        18.03  Unauthorized Acts..............................................................29
</TABLE>

                                       ii
<PAGE>

<TABLE>
<S>                                                                                           <C>
        18.04  Costs..........................................................................29
        18.05  Injunctive Relief..............................................................29
        18.06  Publicity......................................................................29
ARTICLE 19 REPRESENTATIONS AND ADDITIONAL COVENANTS...........................................30
        19.01  By Service Provider............................................................30
        19.02  By Client......................................................................31
        19.03  Mutual.........................................................................32
        19.04  Disclaimers....................................................................33
ARTICLE 20 DISPUTE RESOLUTION.................................................................33
        20.01  Disputes.......................................................................33
        20.02  Continuity of Services.........................................................33
        20.03  Confidentiality................................................................33
ARTICLE 21 TERMINATION........................................................................34
        21.01  Termination for Convenience....................................................34
        21.02  Termination for Cause..........................................................34
        21.03  [***]*.........................................................................34
        21.04  [***]*.........................................................................34
        21.05  Termination Relating to Key Performance Indicators.............................34
        21.06  Bankruptcy.....................................................................35
        21.07  Other Terminations.............................................................35
        21.08  Termination Assistance.........................................................35
        21.09  Exit Rights....................................................................36
        21.10  Hiring of Project Staff........................................................36
ARTICLE 22 INDEMNITIES........................................................................37
        22.01  Indemnification by Service Provider for Infringement...........................37
        22.02  Other Indemnification by Service Provider......................................37
        22.03  Indemnification by Client......................................................38
        22.04  Indemnification Procedures.....................................................39
        22.05  Subrogation....................................................................40
ARTICLE 23 DAMAGES............................................................................40
        23.01  [***]*.........................................................................40
        23.02  [***]*.........................................................................40
        23.03  [***]*.........................................................................40
        23.04  [***]*.........................................................................40
ARTICLE 24 INSURANCE..........................................................................40
        24.01  Insurance......................................................................40
        24.02  Insurance Documentation........................................................42
        24.03  General Insurance Provisions...................................................42
        24.04  Risk of Loss...................................................................43
ARTICLE 25 RESERVED...........................................................................43
ARTICLE 26 MISCELLANEOUS PROVISIONS...........................................................43
        26.01  Notices........................................................................43
        26.02  Assignment and Third Party Beneficiaries.......................................44
        26.03  Relationship...................................................................44
</TABLE>

----------

* Confidential information has been omitted.

                                      iii
<PAGE>

<TABLE>
<S>                                                                                           <C>
        26.04  Severability and Waivers.......................................................44
        26.05  Survival.......................................................................44
        26.06  Governing Law..................................................................44
        26.07  Sole and Exclusive Venue.......................................................44
        26.08  Force Majeure..................................................................45
        26.09  EEO Requirements...............................................................46
        26.10  OSHA Compliance................................................................46
        26.11  [***]*.........................................................................46
        26.12  Labor Laws and Prison Labor....................................................46
        26.13  Nonperformance.................................................................47
        26.14  Right to Provide Services......................................................47
        26.15  Further Assurances.............................................................47
        26.16  Solicitation...................................................................47
        26.17  Negotiated Terms...............................................................47
        26.18  Consents, Approvals and Requests...............................................47
        26.19  Conflict of Interest...........................................................47
        26.20  Entire Agreement; Amendments; Counterparts.....................................48
</TABLE>

----------

* Confidential information has been omitted.

                                       iv
<PAGE>

                               TABLE OF SCHEDULES

<TABLE>
<CAPTION>
Schedule       Topic
<S>            <C>
    A          Description of Services
    B          Service Levels
    C          Fees and Charges
    D          Third-Party Vendors & Contracts
    E          Client Hardware
    F          Client Proprietary Software and Client Third Party Software
    G          Transition Plan
    H          Reports
    I          Affected Employees
    J          Human Resources Provisions
    K          Change Control Management
    L          Key Personnel
    M          Form of Confidentiality Agreement
    N          [Reserved]
    O          System Access Protocols
    P          [Reserved]
    Q          Asset Transfer and Bill of Sale
    R           Disaster Recovery Services
    S          [Reserved]
    T          Termination Assistance Services
    U          Locations
    V          [Reserved]
    X          [Reserved]
    Y          In-Flight Projects
    Z          Escrow Agreement
    AA         Service Provider's Information Security Program
    AB         Client Competitors
    AC         Approved Service Provider Representatives
    AD         Client Logo
    AE         Disclosures
    AF         Benchmarking Process
    AG         Records Management
</TABLE>

<PAGE>

      This SERVICES AGREEMENT (this "AGREEMENT"), dated as of January 11, 2002
(the "EFFECTIVE DATE"), is by and between Exult, Inc., a Delaware corporation
with offices at 4 Park Plaza, Suite 1000, Irvine, California 92614 ("SERVICE
PROVIDER") and The Prudential Insurance Company of America, a New Jersey
corporation with offices at 751 Broad Street, Newark, New Jersey 07102 including
its subsidiaries and affiliates ("CLIENT").

      A. Client desires to engage Service Provider to provide human resources
administration, processing and various services pursuant to this Agreement; and

      B. Service Provider desires to provide such services pursuant to this
Agreement. NOW, THEREFORE, for and in consideration of the agreements set forth
below, Service Provider and Client hereby agree as follows:

                                    ARTICLE 1
                         DEFINITIONS AND INTERPRETATION

1.01 DEFINITIONS. The following defined terms used in this Agreement, including
in any schedule, exhibit or attachment to this Agreement, shall have the
meanings specified below:

"ACQUIRED GROWTH" means growth in the number of Service Users related to or
arising out of a merger(s), consolidation(s), acquisition(s) or other like
event.

"AFFECTED PROJECT STAFF MEMBER" has the meaning set forth in Section 21.10.

"AGREEMENT" means the terms and conditions of this Agreement, including all
schedules, exhibits and attachments attached hereto and Change Orders executed
by the Parties.

"ASSETS" means the assets set forth on Schedule E.

"ASSIGNED AGREEMENTS" means the Third-Party Vendor Contracts that are assigned,
in whole or in part, to Service Provider as set forth in Schedule D.

"BACKGROUND CHANGE" has the meaning set forth in Section 8.01.

"BANKRUPTCY CODE" has the meaning set forth in Section 21.06(a)(ii).

"BASELINE VOLUMES" has the meaning set forth in Schedule C.

"BENCHMARKER" means (i) Client's third party benchmarkers as of the Effective
Date; and (ii) in the event each such benchmarker is replaced the third party
agreed upon by Client and Service Provider from time to time to conduct the
Benchmarking Process.

"BENCHMARKING PROCESS" means (i) the process described in Schedule AF; and (ii)
any other objective measurement and comparison process, utilizing baselines and
industry standards provided by the Benchmarker and established by Client and
Service Provider.

"BENCHMARK RESULTS" means the final results of the Benchmarking Process
delivered by the Benchmarker in a written report to each of Client and Service
Provider, including any supporting documentation requested by Client or Service
Provider to analyze the results of the Benchmarking Process.

<PAGE>

"BENCHMARK REVIEW PERIOD" means the [***]* period following receipt by Client
and Service Provider of the Benchmark Results.

"CHANGE" means any change to the Services that would materially alter the
functionality, quality, performance standards, the manner in which the Services
are provided, the composition of the Services or the cost to Client of the
Services.

[***]*

"CHANGE CONTROL MANAGEMENT" means the written description of how Changes shall
be implemented under this Agreement as set forth in Schedule K.

"CHANGE ORDER" means a document agreed upon by the Parties (i) implementing a
Change or (ii) adding a New Service.

"CHARGES" has the meaning set forth in Section 15.01.

"CLIENT" has the meaning set forth in the Preamble.

"CLIENT DATA" means all data and information relating to Client or Service Users
(i) submitted to Service Provider or Service Provider Representatives by or on
behalf of Client, (ii) obtained, developed or produced by Service Provider or
Service Provider Representatives in connection with the Services provided under
this Agreement or (iii) to which Service Provider or Service Provider
Representatives have access in connection with the provision of the Services.
Client Data also includes any derivatives, extrapolations or summaries of any of
the foregoing.

"CLIENT EXECUTIVE" has the meaning set forth in Section 11.01.

"CLIENT INTELLECTUAL PROPERTY" means the Intellectual Property used in
connection with the provision of the Services that is (i) owned, acquired, or
developed by Client or for Client by a third party other than Service Provider
or a Service Provider Representative (except for Client New Intellectual
Property developed by Service Provider or a Service Provider Representative
pursuant to Section 0); or (ii) licensed or leased by Client from a third party,
including under a Managed Agreement or Retained Agreement. Any Intellectual
Property licensed or leased from Service Provider or under an Assigned Agreement
shall not be considered Client Intellectual Property.

"CLIENT MACHINES" means the Machines owned or leased by Client that are listed
in Schedule V, which will be modified from time to time during the Term to
reflect all Machines owned or leased by Client that are used by Client to
interface with the System or Services.

"CLIENT NETWORK" means the computing network operated by or on behalf of Client.

"CLIENT NEW INTELLECTUAL PROPERTY" has the meaning set forth in Section 0.

"CLIENT PROPRIETARY SOFTWARE" means the Software (including modifications and
derivatives thereof developed by Client, Service Provider or any third party)
owned by Client that is listed in Schedule F, as may be modified by agreement of
the Parties from time to time during the Term.

----------

* Confidential information has been omitted.

                                       2
<PAGE>

"CLIENT'S REGULATORY REQUIREMENTS" means the Laws to which Client is required to
submit or voluntarily submits from time to time.

"CLIENT REPRESENTATIVES" means the independent contractors, consultants and
designated agents of Client, excluding Service Provider.

"CLIENT SERVICE LOCATIONS" has the meaning set forth in Section 3.04(a).

"CLIENT SOFTWARE" means the Client Proprietary Software and the Client Third
Party Software, collectively.

"CLIENT THIRD PARTY SOFTWARE" means the Software (including modifications and
derivatives thereof) licensed or leased by Client from a third party that is
listed in Schedule F, as may be modified by agreement of the Parties from time
to time during the Term.

"COMPETITOR OF CLIENT" means any entity listed as a competitor on Schedule AB,
as may be amended annually by Client, in its sole but reasonable discretion.

"CONFIDENTIAL INFORMATION" has the meaning set forth in Section 18.01(c).

"CONSENTS" means all licenses, consents, permissions, authorizations and
approvals that are necessary to allow (i) Service Provider and Service Provider
Representatives to access and/or use, and for Client Assets transferred to
Service Provider, to own (a) Client's owned, licensed and/or leased assets, (b)
the services provided for the benefit of Client under Third-Party Vendor
Contracts, (c) the Client Intellectual Property, (d) the Service Provider
Intellectual Property and (e) any assets owned or leased by Service Provider,
(ii) Client to assign the Assigned Agreements to Service Provider pursuant to
Section 5.03 and Service Provider to manage and administer the Client
Third-Party Vendor Contracts pursuant to ARTICLE 5, (iii) Service Provider and
Service Provider Representatives to (a) use any third-party services retained by
Service Provider to provide the Services during the Term and the Termination
Assistance Period and (b) assign to Client the Client New Intellectual Property
and (iv) after the expiration, termination or partial termination of this
Agreement (a) Client and its designee(s) to use the Service Provider Software
and related documentation or, with respect to any Service Provider Software that
Service Provider has licensed, leased or otherwise obtained from third parties,
pursuant to Section 21.09 Service Provider to transfer, assign or sublicense
such Service Provider Intellectual Property, (b) Service Provider and Service
Provider Representatives assign the agreements and Service Provider Machines to
Client and its designee(s) pursuant to Section 21.09(b) and Section 21.09(d).

"CONTRACT YEAR" means each twelve (12) month period commencing, in the case of
the first Contract Year, on the Effective Date and thereafter upon the
completion of the immediately preceding Contract Year.

"CONTROL" means, with respect to any entity, the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such entity, whether through the ownership of voting securities (or
other ownership interest), by contract or otherwise.

"CUSTOMER INFORMATION" has the meaning set forth in Section 18.01(c).

"DATA SAFEGUARDS" has the meaning set forth in Section 3.04(c).

"DEFAULT CURE PERIOD" has the meaning set forth in Section 21.02(a).

                                       3
<PAGE>

"DEFAULT NOTICE" has the meaning set forth in Section 21.02(a).

"DESIGNATED EXECUTIVES" means the Client Executive and the Service Provider
Executive.

"DRP" has the meaning set forth in Section 3.06.

"EFFECTIVE DATE" has the meaning set forth in the Preamble.

"END DATE" has the meaning set forth in Section 21.09.

"ESCROW AGREEMENT" has the meaning set forth in Section 14.06.

"ESCROW MATERIAL" has the meaning set forth in Section 14.06.

"FORCE MAJEURE EVENT" has the meaning set forth in Section 26.08(a).

"FTE" has the meaning set forth in Schedule C.

"GOVERNMENTAL APPROVAL" means any license, consent, permit, approval, or
authorization of any person or entity, or any notice to any person or entity,
the granting of which is required by Law, including Client's Regulatory
Requirements, for the consummation of the transactions contemplated by this
Agreement.

"GOVERNMENTAL AUTHORITY" means any international, national, state, provincial,
municipal, local, territorial or other governmental department, regulatory
authority, judicial or administrative body, domestic, international or foreign.

"INDEMNIFIED PARTY" has the meaning set forth in Section 22.04.

"INDEMNIFYING PARTY" has the meaning set forth in Section 22.04.

"INITIAL AGREEMENT EXPIRATION DATE" has the meaning set forth in Section 2.01.

"INTEREST RATE" means [***]*

"INTELLECTUAL PROPERTY" means any (1) copyrights, (2) issued patents and
patentable processes, methodologies, and procedures, (3) trade secrets, and (4)
trademarks or service marks. Grants of licenses to Software under this Agreement
shall include a grant under the grantor's Intellectual Property relating to such
Software only to the extent necessary to permit the grantee to undertake the
activities authorized by the license grant. Allocations and assignments of
ownership rights in Software shall include rights under all of the assigning
Party's Intellectual Property relating specifically to the Software covered by
the assignment.

"KEY PERFORMANCE INDICATOR" or "KPI" means the performance levels described in
Schedule B as such.

"KEY PERSONNEL" means the Service Provider Executive and such other individuals
specified in Schedule L, collectively.

"LAW" means any declaration, decree, directive, legislative enactment, order,
ordinance, regulation, rule or

----------

* Confidential information has been omitted.

                                       4
<PAGE>

other binding requirement of or by any Governmental Authority.

"LOSSES" means any and all damages, fines, penalties, deficiencies, losses,
liabilities (including settlements and judgments) and expenses (including
interest, court costs, reasonable fees and expenses of attorneys, accountants
and other experts or other reasonable fees and expenses of litigation or other
proceedings or of any claim, default or assessment).

"MACHINES" means equipment used to provide the Services, including computers and
related equipment, such as central processing units and other processors,
controllers, modems, communications and telecommunications equipment (voice,
data and video), 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, manipulation,
communication, transmission and retrieval of information and data.

"MANAGED AGREEMENT INVOICE(s)" means any invoice submitted by third parties in
connection with the Managed Agreements.

"MANAGED AGREEMENTS" means the Third-Party Vendor Contracts for which Client
retains financial responsibility and that are set forth in Schedule D.

"NEW INTELLECTUAL PROPERTY" means the Client New Intellectual Property and
Service Provider New Intellectual Property.

"NEW SERVICE(s)" means any service that is not expressly included in Schedule A
and is provided pursuant to a Change Order or other subsequently executed
document.

"PARTIES" means Client and Service Provider, collectively.

"PARTY" means either Client or Service Provider, as the case may be.

"PROJECT STAFF" means the personnel of Service Provider and Service Provider
Representatives who provide the Services.

"RELATED DOCUMENTATION" means, with respect to Software, all materials,
documentation, specifications, technical manuals, user manuals, flow diagrams,
file descriptions and other written information that describes the function and
use of such Software, as applicable.

"REPORTING SERVICE LEVELS" means the quantitative and qualitative performance
levels for the Services as: (i) described in Schedule B; and (ii) as may be set
forth in an Assigned Agreement (or any replacement or successor thereto).

"REPRESENTATIVES" means Client Representatives or Service Provider
Representatives, as the case may be.

"REQUESTED CHANGES" has the meaning set forth in Section 8.01(b).

"RETAINED AGREEMENT" means an agreement between Client and a third party for a
product or service that is retained by Client and relates to a resource
necessary either for Service Provider's delivery of the Services or Client's
receipt of the Services.

                                       5
<PAGE>

"RETAINED SERVICES" has the meaning set forth in Section 3.01.

"RETENTION PERIOD" has the meaning set forth in Section 16.06.

"SERVICE LEVEL(s)" means the Reporting Service Levels and the Key Performance
Indicators, collectively.

"SERVICE LOCATION(s)" means any Client Service Location or Service Provider
Service Location, as applicable.

"SERVICE PROVIDER" has the meaning set forth in the Preamble.

"SERVICE PROVIDER AFFILIATE" means any entity that, directly or indirectly,
Controls, is Controlled by or is under common Control with Service Provider.

"SERVICE PROVIDER MACHINES" means all Machines and equipment leased or owned by
Service Provider and Service Provider Representatives that are used by Service
Provider and Service Provider Representatives to provide the Services.

"SERVICE PROVIDER EXECUTIVE" has the meaning set forth in Section 13.01.

"SERVICE PROVIDER INTELLECTUAL PROPERTY" means the Intellectual Property used in
connection with the Services or with Client Intellectual Property which is (1)
owned, acquired or developed by or on behalf of Service Provider or (2)
licensed, leased or otherwise obtained by Service Provider from a third party,
excluding in each case Client Intellectual Property.

"SERVICE PROVIDER NEW INTELLECTUAL PROPERTY" has the meaning set forth in
Section 14.04.

"SERVICE PROVIDER PROPRIETARY SOFTWARE" means the Software (including
modifications and derivatives thereof developed under this Agreement) owned or
developed by or on behalf of Service Provider that is used in connection with
the Services.

"SERVICE PROVIDER SERVICE LOCATION(s)" means any Service Provider service
location set forth in Schedule U and any other service location approved by
Client pursuant to Section 3.04(a).

"SERVICE PROVIDER REPRESENTATIVES" means the Service Provider Affiliates and the
Subcontractors, designated suppliers and designated agents of Service Provider
and Service Provider Affiliates, excluding Client.

"SERVICE PROVIDER SOFTWARE" means the Service Provider Proprietary Software and
the Service Provider Third Party Software, collectively.

"SERVICE PROVIDER THIRD PARTY SOFTWARE" means the Software or other Intellectual
Property (including modifications and derivatives thereof developed under this
Agreement) licensed or leased by Service Provider from a third party that is
used in connection with the Services.

"SERVICES" has the meaning set forth in Section 3.01.

"SERVICE USER" means a current or former employee, consultant, annuitant or
retiree of Client or other person participating in employee-related programs of
Client and whom Client authorizes, and any

                                       6
<PAGE>

beneficiary of a participant in an employee-related program.

"SOFTWARE" means the object and source code versions of any applications
programs, operating system software, computer software languages, utilities,
other computer programs and Related Documentation, in whatever form or media,
including the tangible media upon which such applications programs, operating
system software, computer software languages, utilities, other computer programs
and Related Documentation are recorded or printed.

"STEERING COMMITTEE" means the committee created in accordance with Section
3.07(b).

"SUBCONTRACTORS" means (a) with respect to Service Provider and Service Provider
Affiliates, any entity that is contractually obligated to provide or assist
Service Provider in the provision of Services, other than Client, and (b) with
respect to Client, any entity that is contractually obligated to provide or
assist in the provision of any services to Client or Client's customers, other
than Service Provider and Service Provider Affiliates.

"SYSTEMS" means the Software and the Machines, collectively, used to provide the
Services.

"TERM" has the meaning set forth in Section 2.01.

"TERMINATION ASSISTANCE PERIOD" means a period of time not to exceed three
hundred and sixty five (365) days designated by Client during which Service
Provider shall provide the Termination Assistance Services in accordance with
Section 21.08.

"TERMINATION ASSISTANCE SERVICES" means (i) the Services, to the extent Client
requests such Services during the Termination Assistance Period, (ii) Service
Provider's cooperation with Client or another service provider designated by
Client in the transfer of the processes that are terminated, insourced or
resourced to Client or such other service provider in order to provide the
ability of Client or another service provider to provide services to replace the
Services. Such cooperation shall be provided [***]* and (iii) any New Services
requested by Client in order to provide the ability of Client or another service
provider of services to replace the Services.

[***]*

"THIRD-PARTY VENDOR" means a third party that at any time during the Term
provides products or services under this Agreement or any Third Party Vendor
Contract.

"THIRD-PARTY VENDOR CONTRACT" means any agreement or purchase arrangement,
whether oral or written, between a Third-Party Vendor and Client or Service
Provider pursuant to which the Third-Party Vendor provides to Client or Service
Provider products or services that are within the scope of the Services under
this Agreement including as applicable any Assigned Agreement, Managed Agreement
or Retained Agreement.

"TIME AND MATERIALS RATES" means Service Provider's hourly rates set forth in
Schedule C.

"TRANSACTION TAXES" has the meaning set forth in Section 0.

----------

* Confidential information has been omitted.

                                       7
<PAGE>

"TRANSITION PERIOD" has the meaning set forth in the Transition Plan.

"TRANSITION PLAN" means the detailed description of the obligations of each
Party with respect to the transition of the Services pursuant to this Agreement
as set forth in Schedule G.

"USE" means the right to load, execute, store, transmit, display, copy,
maintain, modify, enhance, and create derivative works.

1.02 INTERPRETATION.

      (a) The Schedules to this Agreement shall be incorporated into and deemed
part of this Agreement.

      (b) The Article and Section headings, Table of Contents and Table of
Schedules are for reference and convenience only and shall not be considered in
the interpretation of this Agreement. References to Articles, Sections, and
Schedules are to the referenced portions of this Agreement unless otherwise
specified.

      (c) In the event of a conflict between the terms of this Agreement and the
terms of a Schedule, the provisions in the body of this Agreement shall prevail.
In the event the Parties mutually agree in writing after the Effective Date to
amend a Schedule such that it conflicts with the terms of this Agreement, such
amendment shall control only if it expressly references a conflicting provision
of this Agreement and expresses an intent to override the conflicting Agreement
provision.

      (d) References to any Law shall mean references to such Law in changed or
supplemented form or to a newly adopted Law replacing a previous Law.

      (e) For purposes of this Agreement, (i) the terms "including" and "e.g."
shall mean "including, without limitation" and (ii) references to days or time
periods shall be to calendar days or calendar time periods unless otherwise
expressly stated.

      (f) For purposes of this Agreement, any payment required to be made by
Client to Service Provider shall be deemed to have been made and the making of
such payment shall not be disputed by Service Provider if Client either (i)
makes such payment to Service Provider; or (ii) makes payment into escrow
pursuant to Section 15.03.

      (g) For purposes of this Agreement, any activity set forth in this
Agreement requiring the mutual agreement of the Parties must be reduced to
writing and signed by an authorized representative of each Party in order to
become effective.

                                    ARTICLE 2
                                      TERM

2.01 AGREEMENT TERM.

The term of this Agreement (the "TERM") shall commence on the Effective Date and
continue until the date

                                       8
<PAGE>

[***]* (the "INITIAL AGREEMENT EXPIRATION DATE"), unless otherwise renewed
pursuant to Section 2.02 or terminated pursuant to ARTICLE 21.

2.02 RENEWALS.

This Agreement is renewable by Client for up to [***]* each (each a "RENEWAL
PERIOD") in accordance with this Section. Notwithstanding the foregoing, Client
may not renew this Agreement unless Client is current in all payments then due
and payable to Service Provider. Unless this Agreement is terminated earlier
pursuant to ARTICLE 21, Client shall notify Service Provider at least [***]*
prior to the Initial Expiration Date, or if in the first Renewal Period at least
[***]* prior to the expiration of the first Renewal Period, whether Client
desires to renew this Agreement. If Client fails to provide such notice or at
any time notifies Service Provider that it does not desire to renew this
Agreement, this Agreement shall expire on the Initial Agreement Expiration Date
or the expiration date of the first Renewal Period, as applicable. If Client has
not chosen not to renew this Agreement, then the Term shall extend only to the
extent Client requests Termination Assistance Services in accordance with
Section 21.08.

                                    ARTICLE 3
                             MANAGEMENT AND SERVICES

3.01 SERVICES GENERALLY.

      (a) Commencing as of the Effective Date and continuing throughout the
Term, in consideration of Client's payment of the Charges, Service Provider
shall provide to Client the services and deliverables described in this
Agreement including Schedule A and the services to be provided under Assigned
Agreements (and any replacements or successors thereto) (the "SERVICES"), all
upon and subject to the terms and conditions set forth in this Agreement and the
Assigned Agreements (subject to Section 5.03). Client shall be responsible to
perform the tasks allocated to Client in Schedule A, retained by Client under
Assigned Agreements as may be set forth in the assignment or novation by and
among Client, Service Provider and Third Party Vendor, and as otherwise mutually
agreed in writing, including tasks not otherwise transferred to Service Provider
by written agreement in accordance with the terms of this Agreement ("RETAINED
SERVICES").

      (b) Provided that Service Provider is not in breach of this Agreement,
Service Provider will be Client's [***]* third party provider of the Services
during the Term; [***]*

3.02 PROVISION OF METHODOLOGIES/TECHNOLOGY; BENCHMARKING.

      (a) In providing the Services to Client, Service Provider shall use
commercially reasonable efforts to advise Client during Steering Committee
meetings of potential opportunities to reduce costs or increase benefits through
mutually agreed implementation of proven methodologies and technology.

      (b) The Benchmarking Process shall be conducted by the Benchmarker. In the
event (i) a Benchmarker is no longer providing the services required to conduct
the Benchmarking Process, (ii) Client

----------

* Confidential information has been omitted.

                                       9
<PAGE>

and Service Provider agree that the Benchmarker should be replaced or (iii)
Client and Service Provider determine that another Benchmarker would be needed
to take advantage of another system or methodology utilized by such Benchmarker
to conduct the Benchmarking Process, Client and Service Provider shall promptly
agree upon and designate a replacement Benchmarker. The fees and expenses
charged by the replacement Benchmarker shall be paid [***]*

      (c) The Benchmarker shall conduct the Benchmarking Process no more
frequently than [***]* in respect of each Contract Year. Within [***]* after the
beginning of each Contract Year, or as otherwise agreed upon by the Parties,
Client and Service Provider shall (i) agree upon the period during which the
Benchmarking Process shall be conducted in such Contract Year and (ii) review
the Benchmarking Process used during the preceding Contract Year and adjust the
Benchmarking Process as may be agreed upon by the Parties in writing for the
current Contract Year. Client and Service Provider shall review the Benchmark
Results during the Benchmark Review Period and shall adjust the Charges in
accordance with Schedule AF.

3.03 REGULATORY AND LEGAL COMPLIANCE

      (a) As part of the Services, Service Provider will obtain and maintain all
Governmental Approvals applicable to Service Provider in the conduct of its
business and identify, interpret and comply in all material respects with the
Laws applicable to Service Provider's business and operations, including all
Laws affecting Service Provider's performance under this Agreement relating to
Service Provider's employment of its employees, its qualifications and ability
to do business and to provide the Services contracted for herein, and its
operation of owned and leased facilities. Further, Service Provider shall be
responsible for all loss and liability arising from the criminal acts of Service
Provider's employees or Service Provider Representatives. In addition, Service
Provider will identify, interpret and comply with Laws relating to payroll
matters within the scope of Services, including without limitation wage and hour
laws, and tax withholding and garnishments, provided that where compliance with
any such Law or change in Law would require a change in the Services, Service
Levels, or Charges during the Term, Service Provider will implement such changes
subject to Client's good faith cooperation and compliance by Client to the
extent necessary. Service Provider shall be responsible for maintaining its
infrastructure and operations to comply with all applicable data privacy Laws.

      (b) Client will identify, interpret, obtain and maintain all Government
Approvals, and comply in all material respects with the Laws applicable to
Client's business and operations, including without limitation all employment
benefits, employee rights and discrimination laws, and other human
resources-related Laws, and all fiduciary obligations arising under such Laws.
Client shall be responsible for maintaining its infrastructure and operations to
comply with all applicable data privacy Laws. Client shall notify Service
Provider of changes in such Laws and shall work with Service Provider to
identify the impact of such changes on how Service Provider delivers and Client
uses the Services. Further, Client shall be responsible for all loss and
liability arising from the criminal acts of Client's employees or Client
Representatives.

      (c) Each Party shall endeavor in good faith to identify the current and
changing state of Laws as they pertain to the provision and receipt of the
Services. To the extent set forth in Schedule A (Services Schedule), Service
Provider will reasonably assist Client in satisfying Client's Regulatory
Requirements. If either Party receives an official charge of non-compliance from
a governmental entity with respect to the performance of either Party's
obligations under this Agreement, the Party receiving such notice will promptly
notify the other Party of such charge in writing. The Parties acknowledge that
they each have responsibility for ensuring that the Services comply with all
applicable data privacy Laws and they shall cooperate in good faith to achieve
such compliance according to the respective allocations set forth in

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                                       10
<PAGE>

Sections 3.03(a) and (b) above.

      (d) Service Provider shall be responsible for any fines and penalties
imposed on Service Provider and Client arising from any noncompliance by Service
Provider, its agents, subcontractors or third party product or service providers
with such Government Approvals, Laws and regulations for which Service Provider
is responsible under this Section 3.03 unless such noncompliance was caused by
Client or its agents. Client shall be responsible for any fines and penalties
imposed on Service Provider and Client arising from any noncompliance by Client
or its agents or third party product or service providers with such Government
Approvals, Laws and regulations for which Client is responsible under this
Section 3.03 unless such noncompliance was caused by Service Provider, its
affiliates, agents or subcontractors.

      (e) Where any change in Law requires a Change in the Services, Client
shall be responsible for additional Charges associated with Service Provider's
implementation of such Changes for Laws that are Client's responsibility under
Section 3.03(b) above, provided that Service Provider shall not impose any
additional Charges for Changes for Laws that are Service Provider's
responsibility under Section 3.03(a). For Changes in any other Laws, and to
document Changes to the Services resulting from any change in Law, the Parties
shall use Change Control Management.

3.04 SERVICE LOCATIONS.

      (a) The Services shall be provided (i) from the Client Service Locations,
and (ii) from the Service Provider Service Locations as amended from time to
time in writing; provided however, that Service Provider may not provide the
Services from any Service Provider Service Locations that Client reasonably
believes, and advises Service Provider of that belief in writing, would have a
material adverse effect on Client's reputation or otherwise results in
additional expenditures or tax payments by Client. In connection with the
foregoing, Service Provider agrees that it will provide Client with all
reasonably requested information concerning any current or prospective Service
Provider Service Locations. Service Provider and Service Provider
Representatives may not provide or market services to a third-party from a
Client Service Location. Schedule U lists Client's physical facilities and
locations at which it is contemplated that the Services will be provided (the
"CLIENT SERVICE LOCATIONS"). Change of a Service Location at Client's request
and any associated Charges shall be addressed through Change Control Management.

      (b) Service Provider shall observe at the Client Service Locations
Client's safety and security procedures of which Service Provider has prior,
written notice, as may be reasonably amended by Client from time to time during
the Term with reasonable notice to Service Provider. Each Party, while on the
other Party's premises, shall (i) comply with the reasonable requests, standard
rules and regulations of such Party regarding safety and health and personal and
professional conduct generally applicable to such premises (and of which such
Party has received prior notice) and (ii) otherwise conduct itself in a
businesslike manner.

      (c) Service Provider shall establish and maintain safeguards against the
destruction, loss or alteration of the Client Data in the possession of Service
Provider (the "DATA SAFEGUARDS") in accordance with Schedule O. Material changes
to the Data Safeguards will be addressed using Change Control Management. Client
shall be responsible for enforcing the Data Safeguards as relates to Service
Users and Client Representatives. In the event either Party discovers or is
notified of a breach or potential breach of security relating to the Client
Data, the discovering Party shall immediately notify the other's Designated
Executive of such breach or potential breach. Each Party shall investigate the
source and cause of the breach or potential breach and remediate the effects of
the breach or potential breach. Any changes to the Services that the Parties
mutually agree to implement to avoid a reoccurrence of such breach or potential
breach will be addressed using Change Control Management.

                                       11
<PAGE>

      (d) Service Provider will be given access to the Client Network in
connection with performance of the Services and Service Provider shall comply
with Client's system security policies, which are attached hereto as Schedule O,
as may be revised by Client from time to time and will not tamper with,
compromise or circumvent any security or audit measures employed by Client.
Client will provide Service Provider with reasonable prior notice of changes to
Schedule O. Service Provider may be required to execute a separate system access
agreement attached hereto as Schedule O. Service Provider shall require that
only those Service Provider employees and Service Provider Representatives, who
are specifically authorized to gain access to the Client Network and Client
Software, gain such access and will use commercially reasonable efforts to
prevent unauthorized destruction, alteration or loss of information contained
therein. If at any time Client or Service Provider determines that any person
has sought to circumvent or has circumvented Client's or Service Provider's
security regulations or that an unauthorized person has accessed or may access
the System, Client Network and Client Software or a person has engaged in
activities that may lead to the unauthorized access, destruction or alteration
or loss of data, information or software, Service Provider or Client as the case
may be shall immediately make all reasonable efforts to terminate any such
person's access, immediately notify the other Party, promptly correct the
circumstances that permitted or may have permitted such access or loss so as to
prevent its reoccurrence. [***]*

      (e) If (i) Service Provider provides the Services to Client from a Service
Location that is shared with a third party or third parties or (ii) any part of
the business of Service Provider or any such third party is now or is in the
future a Competitor of Client, then Service Provider shall develop a process,
subject to Client's written prior approval to restrict access in any such shared
environment to Client's Confidential Information so that Service Provider's
employees or Service Provider Representatives providing services to such
Competitor of Client do not use Client's Confidential Information except to
provide Services to Client.

3.05 PERSONNEL.

The arrangements with respect to certain employees of Client set forth on
Schedule I shall be effected in accordance with the terms of Schedule J.

3.06 DISASTER RECOVERY. Service Provider shall provide disaster recovery
services in accordance with Schedule R (the "DRP").

3.07 ACCOUNT MANAGEMENT AND STEERING COMMITTEE.

      (a) Throughout the Term, the Designated Executives shall meet
periodically, at such intervals as they may deem advisable and in any event at
least monthly, to review their respective performance of this Agreement. All
such meetings shall take place at mutually agreeable locations, or if mutually
agreed, by telephone conference call or video conference, and the results of
such meetings shall be communicated to the Steering Committee at its next
meeting following such meeting.

      (b) Within [***]*, the Parties shall form a joint committee (the "STEERING
COMMITTEE") consisting of the Designated Executives and two other individuals
selected by each Party. Client shall designate one of its representatives on the
Steering Committee to act as the chairperson of the Steering Committee. The
Steering Committee shall meet [***]* (or at such other intervals as it may
determine) and at any time upon at least [***]* prior notice by either Party.
Meetings may be conducted in person or by video or telephone conference and,
unless otherwise agreed, shall take place at Client or Service Provider premises
on an alternating basis. The Steering Committee shall (i) review periodic
performance reports, (ii) advise with respect to Client's strategic and tactical
decisions regarding the establishment, budgeting and

----------

* Confidential information has been omitted.

                                       12
<PAGE>

implementation of Client's priorities and plans for the Services (iii) review
the Parties' overall performance of this Agreement, (iv) attempt to resolve any
outstanding issues in accordance with ARTICLE 20, (v) set policy for performance
of the Agreement, (vi) review long-term planning and (vii) consider such other
issues as either Party may from time to time desire.

3.08 OPERATIONS REVIEW.

As part of the Services, upon Client's request no more than [***]* at mutually
agreeable times, Service Provider shall meet with key process supervisors of
Client in order to (i) explain and generally review the operation of the
Systems, (ii) explain and generally review the processes and procedures used to
provide the Services and (iii) explain and generally review such training and
documentation as Service Provider is then using to train its personnel engaged
to operate the Systems and provide the Services. Upon Client's request no more
than [***]*, Service Provider shall permit Client's senior management to conduct
a reasonable walk-through of the Service Locations, subject to such Client
employees complying with Service Provider's on-site safety, security and
confidentiality rules and regulations. Client and Service Provider agree to use
good faith efforts to provide for the continuity of their respective
Representatives participating in this operations review program.

3.09 ASSET TRANSFER.

In accordance with the Transition Plan, Service Provider shall acquire from
Client the Assets pursuant to Schedule E. [***]* In accordance with the
Transition Plan and provided that Service Provider has obtained all necessary
Consents, the Parties shall execute Schedule Q. [***]*

                                    ARTICLE 4
                                   ACCEPTANCE

4.01 SERVICES.

Successful completion of initial migration of Services to Service Provider, and
acceptance thereof, shall be determined in accordance with Schedule G
(Transition Planning).

4.02 CHANGES.

Acceptance of Changes shall be determined in accordance with Schedule K (Change
Control Management).

                                    ARTICLE 5
                             CONTRACT ADMINISTRATION

5.01 MANAGED AGREEMENTS.

Service Provider shall [***]* the Managed Agreements as well as perform such
further responsibilities set forth in Schedule A (Services Schedule). Service
Provider shall provide Client with reasonable notice of any [***]* with respect
to the Managed Agreements. Service Provider shall not [***]*, any Managed
Agreements without the written consent of and unless directed by the appropriate
entity or unit of Client and Client will respond promptly to requests by Service
Provider. Any fees or charges or other liability or obligation imposed upon
Client in connection with any such [***]*, the Managed Agreements, obtained or

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* Confidential information has been omitted.

                                       13
<PAGE>

given by Service Provider or a Service Provider Representative without Client's
consent, shall be paid or discharged, as applicable, [***]*.

5.02 MANAGED AGREEMENT INVOICES.

For each Managed Agreement, Client shall notify the Third-Party Vendor that, as
of a date to be agreed upon between Client and Service Provider, such
Third-Party Vendor shall be required to submit its original invoices to Client
with a copy of each invoice sent to Service Provider at the same time. Client
shall place each such Managed Agreement Invoice into Client's accounts payable
system for timely payment. Service Provider shall (i) receive all such copies of
Managed Agreement Invoices, and (ii) to the extent described in Schedule A,
review and notify Client of any errors in any such Managed Agreement Invoices
within a reasonable period of time prior to the due date or, if a discount for
payment is offered, the date on which Client may pay such Managed Agreement
Invoice with a discount and without late fees or interest. Client shall pay the
Managed Agreement Invoices in the ordinary course unless Service Provider
notifies Client of any error or other reason Client should consider delaying,
correcting or withholding payment. [***]* Service Provider's management and
administration activities in connection with the Managed Agreement Invoices
shall be considered within the scope of Services covered by the Discounted
Baseline Charges. [***]* Client shall reasonably and timely assist Service
Provider in Service Provider's review of Managed Agreement Invoices and Service
Provider's attempts to secure a refund or credit of any inaccurate payment.

5.03 ASSIGNED AGREEMENTS.

As of the effective date of an assignment to Service Provider of an Assigned
Agreement, Service Provider shall assume [***]*, except as provided by the terms
of assignment or novation of such Assigned Agreement. Client shall have the
right, in its sole discretion, to reject the assignment of any agreement to
Service Provider or any novation related thereto at any time prior to the actual
assignment of the agreement. As long as the quality of the Services or Service
Levels, or Charges to Client are not adversely impacted, Service Provider may,
to the extent permitted by the Assigned Agreements, renew, modify, terminate or
cancel, or request or grant any consents or waivers under, any such Assigned
Agreements. [***]*

5.04 ASSIGNED AGREEMENT INVOICES.

[***]*

5.05 PERFORMANCE UNDER AGREEMENTS.

Service Provider shall promptly notify Client of any breach of, or misuse or
fraud in connection with, any Managed Agreements, Assigned Agreements or
Retained Agreements of which Service Provider becomes aware and shall cooperate
with Client to prevent or stay any such breach, misuse, or fraud. Service
Provider shall comply with all confidentiality and security requirements imposed
on Client pursuant to any Managed Agreement or Retained Agreement.

5.06 REPLACEMENT; NEW AGREEMENTS. Service Provider agrees that all contracts
entered into by Service Provider after the Effective Date with a Third Party
Vendor that replace an expired, cancelled or terminated Assigned Agreement will
be subject to Section 13.04. Except as otherwise agreed, neither the quality or
performance of the Services or Service Levels shall be diminished nor the
Charges payable by Client increased in the event Service Provider replaces an
expired, cancelled or terminated Assigned Agreement. Additionally, Service
Provider will use commercially reasonable efforts to obtain in each such
replacement or new agreement the following provisions: [***]*

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* Confidential information has been omitted.

                                       14
<PAGE>

                                    ARTICLE 6
                                 SERVICE LEVELS

6.01 SERVICE LEVELS.

Service Provider shall perform the Services in accordance with Schedule B
(Service Levels) and the service levels set forth in the Assigned Agreements (or
any replacements or successors thereto).

6.02 NEW SERVICE LEVELS.

Service Provider will provide the New Services in accordance with the Service
Levels established for such New Services.

6.03 REPORTING.

Service Provider shall provide to Client, in a form acceptable to Client, the
reports set forth in Schedule H.

6.04 ROOT-CAUSE ANALYSIS.

Upon receipt of a notice from Client with respect to Service Provider's failure
to provide the Services in accordance with the applicable Service Levels,
Service Provider shall, as soon as reasonably practicable, (i) perform a
root-cause analysis to identify the cause of such failure, (ii) provide Client
with a report detailing the cause of, and with respect to KPIs a procedure for
correcting, such failure, and (iii) with respect to KPIs implement such
procedure.

6.05 CONTINUOUS IMPROVEMENT AND BEST PRACTICES.

Service Provider shall, on a continuous basis (i) as part of its total quality
management process, [***]* and (ii) identify and offer to Client proven
techniques from other installations within its operations that could benefit
Client either operationally or financially. Service Provider shall, from time to
time, include updates with respect to such [***]* techniques in the reports
provided to Client pursuant to Section 6.03.

6.06 [***]*

6.07 EXCLUSIONS.

Degradations or failures of Service Provider's performance shall not constitute
Service Provider's Default or failure to meet applicable Service Levels to the
extent that any such failure or degradation is attributable to any one or more
of the following causes:

      (a) Service or resource reductions requested or approved by Client and
agreed by the Parties through Change Control Management; or

      (b) Client's failure to fulfill its material obligations under this
Agreement or to take corrective action within material tasks allocated to Client
in Schedule A or other Retained Services or failures of Third-Party Vendors
under Managed Agreements or Retained Agreements, and identified by Service
Provider in writing to Client as soon as reasonably possible as necessary to
maintain Service Levels or prevent any Default by Service Provider; or

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* Confidential information has been omitted.

                                       15
<PAGE>

      (c) Force Majeure Events as described in and subject to Section 26.08.

      Service Provider and Client shall take commercially reasonable efforts to
mitigate the effects of the foregoing circumstances.

                                    ARTICLE 7
                                   [RESERVED]

                                    ARTICLE 8
                             CHANGES IN THE SERVICES

8.01 RIGHT TO MAKE CHANGES.

      (a) Service Provider may make changes to [***]* (each, a "BACKGROUND
CHANGE"); provided, however, that (i) any such Background Change by Service
Provider under this Section 8.01 shall not [***]* and (ii) no such Background
Change shall [***]*

      (b) Notwithstanding anything to the contrary set forth in Schedule K,
Client may, from time-to-time, request (i) on [***]* written notice, and Service
Provider shall provide the number of FTEs reasonably requested by Client to
perform nondiscretionary Changes or New Services (collectively, "REQUESTED
CHANGES") using the [***]* unless otherwise agreed. Such requests shall be
managed through Change Control Management, provided that Service Provider cannot
withhold its consent to proceed with a Requested Change using the [***]*. In
furtherance thereof, Client will undertake reasonable efforts to include Service
Provider in Client's continuous and annual planning processes related to the
Services.

      (c) With respect to all Changes, Service Provider shall (i) schedule
Changes so as not to unreasonably interrupt Client's business operations, (ii)
prepare and deliver to Client [***]* a rolling schedule for ongoing and planned
Changes for the [***]* period and (iii) monitor the status of Changes against
the applicable schedule.

                                    ARTICLE 9
                                 TRANSITION PLAN

Each of the Parties shall be responsible for the transition obligations and
milestones described as its responsibility in the Transition Plan. Transitioning
of certain employees of Client to Service Provider shall be effected in
accordance with the terms and conditions set forth in Schedule J. The Parties
shall cooperate to minimize disruption to Client's business during the
transition. Client shall be responsible for providing its facilities during all
In-Situ Periods and Service Provider shall procure facilities for the provision
of the Services following migration of Services to Service Provider. The Party
responsible for supplying facilities shall provide or be responsible for
providing all utilities, security, telephone, office equipment and supplies for
such facilities.

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                                       16
<PAGE>

                                   ARTICLE 10
                                  NEW SERVICES

10.01 SERVICE PROVIDER OPPORTUNITY.

      If Client desires to obtain any New Service from Service Provider,
Customer and Service Provider shall negotiate and attempt to enter into a Change
Order or a new agreement with respect thereto. Client will not be required to
obtain from Service Provider, and, except for Requested Changes, Service
Provider will not be required to provide to Client, any New Service except
pursuant to a signed mutually agreed Change Order or Agreement. [***]* Where
Client elects to perform or have a Third Party perform any New Services that
involve the development or implementation of Software, then such Software shall
be subject to the same development, coding and documentation standards adhered
to by Service Provider for Service Provider's own software development as well
as Service Provider's reasonable acceptance testing procedures and reasonable
approval before being put into production, provided Service Provider has given
copies of such testing procedures to Client in advance. Service Provider shall
perform such verification and acceptance testing [***]* provided however, that
where such verification and acceptance testing places an extra burden on normal
staffing levels, such verification and acceptance testing shall be performed
through the Change Control Management process. Where applicable, the Parties
shall use Change Control Management to adjust the Services and Service Levels
where affected by the deployment of any such new Software.

10.02 COOPERATION WITH THIRD PARTY SERVICE PROVIDERS

      (a) If Client in accordance with Section 10.01 selects a third party to
provide a New Service or elects to provide a New Service for itself or to the
extent necessary for Service Provider to efficiently perform the Services, upon
Client's request and reasonable notice or as reasonably necessary, Service
Provider shall cooperate in good faith with Client and any such third party, to
the extent reasonably required by Client by providing the following:

(1) in writing requirements, standards and policies as may be required to
integrate third party systems or services with the Services;

(2) meeting with third parties at Service Locations or via telephone; and

(3) access to the Systems and Service Provider's processes and procedures, to
the extent that such access is required for the New Service and does not
materially and adversely affect Service Provider's ability to perform its
obligations pursuant to this Agreement.

      (b) [***]*

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* Confidential information has been omitted.

                                       17
<PAGE>

                                   ARTICLE 11
                             CLIENT RESPONSIBILITIES

11.01 CLIENT EXECUTIVE.

During the Term, Client shall maintain an individual (the "CLIENT EXECUTIVE")
who shall serve as the primary Client representative under this Agreement and
will have overall responsibility for managing and coordinating the performance
of Client's obligations under this Agreement.

11.02 CLIENT RESPONSIBILITIES.

During the Term and in connection with Service Provider's performance of the
Services, Client shall, at its expense: (a) be responsible for the Retained
Services, including the obligations and responsibilities set forth as Client's
responsibility in Schedule A or that are allocated to Client through transition
planning, Change Control Management, or development by Service Provider and
Client of operating procedures, or by other mutual agreement; (b) [***]*; (c)
provide to Service Provider to the best of Client's knowledge complete and
accurate information regarding Client's business requirements in respect of any
Services; (d) [***]*; (e) provide reasonable cooperation to Service Provider;
(f) promptly notify Service Provider of any (i) third party claims of which it
is aware that may have an impact on this Agreement and (ii) invalid, expired or
terminated licenses of which it is aware that may have an impact on this
Agreement; (g) fulfill all legal and fiduciary duties of Client to Service Users
and other persons, including without limitation under all benefit plans, ERISA,
and employment and collective bargaining laws and regulations; (h) ensure that
all policies and procedures that Client requires Service Provider to follow in
performance of the Services are in compliance with applicable laws and
regulations; (i) inform Service Provider as soon as reasonably practicable upon
learning of any events or circumstances that would reasonably be expected to
affect Client's or Service Provider's ability to meet its performance
requirements under this Agreement; (j) provide, to the best of Client's
knowledge, accurate data to Service Provider or Service Provider Representatives
regarding Service Users, Client, and Client Representatives; (k) avoid
transmission to Service Provider or Service Provider Representatives of data
that Client does not reasonably believe to be necessary or appropriate for
performance of the Services; and (l) perform all other obligations of Client
described in this Agreement.

11.03 CLIENT RESOURCES.

Commencing on the Effective Date and continuing for so long as Service Provider
requires the same for the performance of the Services, including during the
In-Situ Periods, Client shall provide to Service Provider, [***]* and subject to
Section 11.04 the use of the space in Client's premises that Service Provider
may from time to time reasonably require for members of the Project Staff who
are directly involved in the provision or coordination of Services at Client
Service Locations, in connection with the performance of the Services, together
with office furnishings, telephone equipment and services, janitorial services,
utilities and office-related equipment, supplies and duplicating services
reasonably necessary in connection with the performance of the Services.

11.04 USE OF CLIENT FACILITIES.

      (a) Client will provide Service Provider with reasonable access to, and
use of, the Client Machines,

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* Confidential information has been omitted.

                                       18
<PAGE>

the Client Network and the Client Software to the extent reasonably necessary
and for the sole purposes of performing the Services, subject to Client's access
terms set forth in Schedule O, confidentiality and security conditions. Service
Provider shall use the Client Service Locations for the sole and exclusive
purpose of providing the Services. Use of such facilities by Service Provider
does not constitute a leasehold interest in favor of Service Provider or any of
Service Provider's customers.

      (b) Service Provider shall use the Client Service Locations in a
reasonably efficient manner. To the extent Client believes that Service Provider
operates the space in a manner that unnecessarily increases facility costs
incurred by Client, Client shall notify Service Provider of such concerns and
the parties shall work together to reduce such costs, [***]*

      (c) Service Provider and Service Provider Representatives shall keep the
Client Service Locations in good order, not commit or permit waste or damage to
such facilities (normal wear and tear excepted), not use such facilities for any
unlawful purpose or act and comply with all of Client's standard policies and
procedures as in effect from time to time, including procedures for the physical
security of the Client Service Locations.

      (d) Service Provider shall permit Client and Client Representatives to
enter into those portions of the Client Service Locations occupied by Service
Provider's staff at any time to perform facilities-related services.

      (e) Service Provider shall not make any improvements or changes involving
structural, mechanical or major electrical alterations to the Client Service
Locations without Client's approval.

      (f) When the Client Service Locations are no longer required for
performance of the Services, Service Provider shall return such locations to
Client in substantially the same condition as when Service Provider began using
such locations, normal wear and tear excepted.

                                   ARTICLE 12
                                    CONSENTS

With the reasonable cooperation of Client, Service Provider, at its own cost,
shall obtain, maintain and comply with all of the Consents necessary to enable
the provision and delivery of the Services, including Consents related to Third
Party Vendor Contracts. Upon the termination, in whole or part, or expiration of
the Agreement, Client, at its own cost and with the reasonable cooperation of
Service Provider, shall obtain, maintain and comply with all of the Consents
necessary for the repatriation of the Third Party Vendor Contracts. If any
Consents are necessary or desirable once the initial assignment/novation of a
Third Party Vendor Contract has occurred, the Parties shall use Change Control
Management to address additional Consents for such Third Party Vendor Contract
and any costs or charges associated therewith.

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                                       19
<PAGE>

                                   ARTICLE 13
                             SERVICE PROVIDER STAFF

13.01 SERVICE PROVIDER EXECUTIVE.

Service Provider shall appoint an individual (the "SERVICE PROVIDER EXECUTIVE")
who from the Effective Date shall serve, on a full-time basis, as the primary
Service Provider representative under this Agreement. Service Provider's
appointment of any Service Provider Executive shall be subject to Client's prior
written approval. The Service Provider Executive shall (i) have overall
responsibility for managing and coordinating the performance of Service
Provider's obligations under this Agreement and (ii) be authorized to act for
and on behalf of Service Provider with respect to all matters relating to this
Agreement.

13.02 KEY PERSONNEL.

With respect to the Key Personnel set forth in Schedule L, the Parties agree as
follows:

      (a) Each Key Personnel shall be dedicated to the Client account on a
full-time basis during the Transition Period and on a substantially full-time
basis thereafter.

      (b) Before assigning an individual to a Key Personnel position, whether as
an initial assignment or as a replacement, Service Provider shall (i) notify
Client of the proposed assignment, (ii) introduce the individual to appropriate
representatives of Client, (iii) provide Client with a resume and any other
information regarding the individual that may be reasonably requested by Client
and (iv) obtain Client's approval for such assignment. Service Provider shall
only assign an individual to a Key Personnel position who is approved by Client.

      (c) Service Provider shall not replace or reassign (i) the Service
Provider Executive for [***]* from the Effective Date or (ii) the other Key
Personnel for [***]* from the Effective Date, unless [***]*

      (d) If Client decides that any Key Personnel should not continue in that
position, then Client may with good reason and after articulating its reasons to
Service Provider, conferring with Service Provider, and attempting in good faith
to have such reasons addressed in a reasonable way, require removal of such Key
Personnel. Service Provider shall, as soon as reasonably practicable, replace
such Key Personnel in a manner designed to minimize disruption to Client's
operations.

      (e) Service Provider shall maintain backup procedures and conduct the
replacement procedures for the Key Personnel in such a manner so as to assure an
orderly succession for any Key Personnel who is replaced.

13.03 PROJECT STAFF.

Service Provider shall appoint individuals with suitable training and skills to
perform the Services to the Project Staff. Upon request, Service Provider shall
provide Client with a list of all Service Provider personnel dedicated full-time
to the Project Staff on [***]*. Except as otherwise approved by Client, those
Service Provider personnel located on Client's premises may only provide
services on such premises which support Client's operations. Service Provider
shall notify Client as soon as possible after dismissing or reassigning any
member of the Project Staff whose normal work location is at a Client Service
Location. If

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                                       20
<PAGE>

Client decides that any Project Staff member should not continue in that
position, then Client may in its sole but reasonable discretion and upon notice
to Service Provider require removal of such Project Staff member. Service
Provider shall, as soon as reasonably practicable, replace such Project Staff
member in a manner designed to minimize disruption to Client's operations.

13.04 SERVICE PROVIDER REPRESENTATIVES.

      (a) Service Provider must obtain Client's prior written approval of any
agreement or any amendment, modification or supplement to an agreement with a
Service Provider Representative, if one or more of the following conditions
exist: [***]*. Notwithstanding the foregoing, Client specifically consents to
the Service Provider Representatives listed in Schedule AC performing the
Services listed in Schedule AC. At each Steering Committee meeting, Service
Provider shall notify Client of the Service Provider Representatives that
Service Provider may replace or other significant changes in Service Provider's
agreements with Service Provider Representatives.

      (b) No contracting with Service Provider Representatives shall release
Service Provider from its responsibility for its obligations under this
Agreement, [***]*

      (c) Service Provider shall promptly pay for all services, materials,
equipment and labor used by Service Provider in providing the Services and
Service Provider shall keep Client's premises free of all liens. [***]*

13.05 CONDUCT OF SERVICE PROVIDER PERSONNEL.

Service Provider shall cause the Project Staff to maintain and enforce the
confidentiality provisions of this Agreement. In the event that Client
determines that a particular member of the Project Staff is not conducting
himself or herself in accordance with this Section, Client may notify Service
Provider of such conduct. Upon receipt of such notice, Service Provider shall
promptly (i) investigate the matter and take appropriate action which may
include removing the applicable person from the Project Staff and providing
Client with prompt notice of such removal and replacing the applicable person
with a similarly qualified individual or (ii) take other appropriate
disciplinary action to prevent a recurrence. In the event there are repeat
violations of this Section by a particular member of the Project Staff, Service
Provider shall promptly remove the individual from the Project Staff as set
forth above.

13.06 NON-COMPETITION.

      (a) Service Provider shall not assign Key Personnel to the account of any
Competitor of Client without Client's prior consent (i) while such Key Personnel
is assigned to the Client account and (ii) for a period of [***]* following the
date that such Key Personnel ceases to provide Services in their capacity as Key
Personnel in connection with the Client account.

      (b) Service Provider shall not assign members of the Project Staff
performing solely Transition Plan support functions and having access to
Client's Confidential Information designated by Client as "strategic" to the
account of any Competitor of Client without Client's prior consent while such
member of the Project Staff is assigned to the Client account during the
Transition Period.

----------

* Confidential information has been omitted.

                                       21
<PAGE>

                                   ARTICLE 14
                         SOFTWARE AND PROPRIETARY RIGHTS

14.01 CLIENT SOFTWARE.

Client has developed or licensed at considerable expense the Client Software.
All Client Software shall be and shall remain the exclusive property of Client
or its licensor and Service Provider shall have no rights or interests in the
Client Software except as expressly set forth in this Agreement. [***]*. Service
Provider shall manage the operation of the Client Software only if and to the
extent described in Schedule A. With the exception of Assigned Agreements,
[***]*. Notwithstanding the foregoing, Client may, in its sole discretion, with
prior notice to Service Provider, discontinue maintenance or terminate its
license for any Client Software. The Parties shall use Change Control Management
to either: (i) adjust the Services and Service Levels where affected by Client's
decision to discontinue maintenance or terminate its license for any Client
Software; or (ii) provide, at Client's cost, for continued access to support via
the most appropriate mutually agreed knowledgeable source.

14.02 SERVICE PROVIDER SOFTWARE.

Service Provider has developed or licensed at considerable expense the Service
Provider Software. All Service Provider Software, including Service Provider
Software developed, licensed or put in service during the Term, shall be and
shall remain the exclusive property of Service Provider or its licensor and
Client shall have no rights or interests in the Service Provider Software except
for the license rights granted in this ARTICLE 14 or as expressly set forth in
this Agreement. [***]*

14.03 LICENSE RIGHTS UPON TERMINATION.

Effective upon termination or expiration of this Agreement, [***]* Upon Client's
request, Service Provider shall provide Client with a list of all Service
Provider Third Party Software being used to provide the Services as of the date
of such request.

14.04 NEW INTELLECTUAL PROPERTY.

      [***]*

14.05 RIGHTS IN RESIDUALS.

Nothing contained in this Agreement shall restrict either Party from the use of
any ideas, concepts, know-how, methodologies, processes, technologies,
algorithms or techniques relating to the Services which either Party,
individually or jointly, owns prior to the Effective Date, or develops or
discloses under this Agreement, or develops or obtains independently during the
Term, provided that in doing so such Party does not breach its obligations of
confidentiality. Except for the license rights contained in this Article,
neither this Agreement nor any disclosure made hereunder grants any license to
either Party under any Intellectual Property of the other Party. Each Party
reserves all rights in its ideas, concepts, know-how, methodologies, processes,
technologies, algorithms, techniques and other Intellectual Property of every
kind and description (except as otherwise expressly agreed in writing) and no
provision of this Agreement shall be construed to transfer any of such Party's
rights in such Intellectual Property.

----------

* Confidential information has been omitted.

                                       22
<PAGE>

14.06 ESCROW.

Within [***]* after Process Take-On, Service Provider will place all source
code, and documentation related to the Service Provider Proprietary Software for
that Process (the "ESCROW MATERIAL") in escrow pursuant to the escrow agreement
attached hereto as Schedule Z (the "ESCROW AGREEMENT"). Notwithstanding anything
to the contrary set forth in the Escrow Agreement, the Escrow Agreement will be
kept in effect during the Term of this Agreement. Service Provider agrees that
it shall continually and promptly update the Escrow Material to correspond with
the most recent version of the Service Provider Software. [***]* Any Escrow
Materials released to Client pursuant to the Escrow Agreement shall remain
Service Provider Intellectual Property and shall be Used by Client for Client's
internal Use only.

                                   ARTICLE 15
                          PAYMENTS TO SERVICE PROVIDER

15.01 CHARGES.

In consideration of Service Provider providing the Services, Client shall pay to
Service Provider the Charges set forth in Schedule C (the "CHARGES") in
accordance with the terms and conditions of this Agreement.

15.02 RESERVED.

15.03 CHARGE DISPUTE.

If Client believes in good faith that any charges on any invoice are subject to
correction for a manifest error or Client otherwise disputes the accuracy of any
amounts on an invoice, then Client shall notify Service Provider promptly in
writing on or before the due date of such invoice, including Client's complete
explanation of the reasons Client believes such amounts to be incurred. Client
shall pay all undisputed amounts when due. [***]*

15.04 EXPENSES.

[***]*

15.05 PRORATION.

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

15.06 RESERVED.

15.07 REFUNDABLE ITEMS; PREPAID EXPENSES.

In the event Service Provider receives any refund, credit or other rebate
(including deposits) in connection with a Third-Party Vendor Contract or the
Assets that is attributable to periods prior to the Effective Date or for which
Client retained financial responsibility after the Effective Date, then Service
Provider shall promptly (i) notify Client of such refund, credit or rebate and
(ii) pay to Client the portion of such refund, credit or rebate allocatable to
periods prior to the Effective Date. Service Provider shall reimburse Client

----------

* Confidential information has been omitted.

                                       23
<PAGE>

for all prepaid amounts related to the Services.

15.08 TAXES.

      (a) [***]* Service Provider agrees to cooperate reasonably with Client as
necessary to assist Client in any such determination, including, without
limitation, assisting Client in obtaining any exemption certificates or other
documentation necessary to avoid the application of a Transaction Tax. In the
event that a Transaction Tax is levied or assessed against Service Provider by a
tax authority with respect to any transaction contemplated by this Agreement,
Service Provider shall advise Client on a timely basis of such levy or
assessment and shall permit Client to contest such levy or assessment in its
sole discretion. Service Provider agrees to cooperate reasonably with Client as
necessary to assist Client in any such contest. [***]*

      (b) [***]*

      (c) [***]*

      (d) Client and Service Provider shall cooperate to segregate the Charges
into the following separate payment streams: [***]* In addition, each of Client
and Service Provider shall reasonably cooperate with the other to more
accurately determine a Party's tax liability and to minimize such liability, to
the extent legally permissible. Each of Client and Service Provider shall
provide and make available to the other any resale certificates, information
regarding out-of-state sales or use of equipment, materials or services, and any
other exemption certificates or information requested by a Party.

      (e)[***]*

                                   ARTICLE 16
                                     AUDITS

16.01 AUDITS GENERALLY.

      Service Provider shall assist Client in meeting its regular audit and
regulatory requirements, as they relate to Service Provider and the Services, to
enable Client and its Representatives to conduct appropriate audits as required
by Law and in accordance with this Agreement.

16.02 SERVICES.

Upon notice from Client, Service Provider shall (i) provide Client, Client's
authorized auditors, and any of Client's regulators with reasonable access to
and reasonable assistance (including reports) that they may require with respect
to the Service Locations and the Systems and related processes and procedures
used by Service Provider for the purpose of performing audits or inspections of
the Services and the business of Client relating to the Services; and (ii)
permit Client, Client's authorized auditors, and any of Client's regulators to
examine and make copies of that portion of any Service Provider's relevant
external audit

----------

* Confidential information has been omitted.

                                       24
<PAGE>

opinions (including, but not limited to, the external auditor's management
letter and reports prepared in accordance with Statement of Auditing Standards
No. 70 or other reports) which relates to Service Provider's provision of
Services under this Agreement and Service Provider's compliance with information
security provisions as set forth in this Agreement. For the purposes hereof, an
"authorized auditor" means an auditor assigned by a designated by a regulatory
authority having jurisdiction over Client or a financial or operational auditor
of Client who is not a direct competitor of Service Provider, provided in every
case Client shall use reasonable efforts to require such auditors accessing a
Service Provider Service Location to execute a confidentiality and
non-disclosure agreement in the form attached as Schedule M. If any audit by an
authorized auditor results in Service Provider being notified that Service
Provider or Service Provider Representatives are not in compliance with any Law
or audit requirement applicable to Service Provider, Service Provider shall, and
shall cause Service Provider Representatives to, promptly take actions to comply
with such audit. [***]*

16.03 CHARGES.

      (a) Upon notice from Client, no more than [***]*, Service Provider shall
provide Client and Client's authorized auditors with access to such financial
records and supporting documentation as may be reasonably requested by Client
and its Representatives in order to permit Client and Client's authorized
auditors to audit the Charges charged to Client to determine if such Charges are
accurate and in accordance with Schedule C of this Agreement.

      (b) If, as a result of such audit, the auditor reports that Service
Provider has overcharged or undercharged Client, Client shall notify Service
Provider of the amount of such overcharge or undercharge. Client and the Client
Representatives shall provide Service Provider with access to information
reasonably required for Service Provider to verify the audit results, and the
parties shall cooperate in good faith to resolve any discrepancies. Upon
verification of the audit results, Service Provider shall promptly pay to Client
the amount of the overcharge, plus interest thereon at the Interest Rate
calculated from the date of receipt by Service Provider of the overcharged
amount until the date of payment to Client. In the event of an undercharge,
Service Provider shall invoice and Client shall pay the amount of the
undercharge, plus interest thereon at the Interest Rate calculated from the date
of the undercharged amount until the date of payment by Client.

      (c) In addition to Client's rights set forth in Section 16.03(b), in the
event any such audit reveals an overcharge to Client of [***]* or more of the
aggregate Charges during the period of the audit, Service Provider shall, at
Client's option, issue to Client a credit against the Charges or reimburse
Client for the reasonable cost of such audit.

16.04 EXTERNAL AUDIT REPORTS.

If, at the request of Client, Service Provider creates any external audit
opinion, external auditor's management letter, external auditors' Statement of
Auditing Standards No. 70 or other report by an external auditor and provides
all or part of that report to Service Provider's other customers, Service
Provider shall charge Client for such report(s) on a pro rata basis, considering
the charges to the other customers of Service Provider. If no other customers of
Service Provider receive the external audit report(s) that Client requests,
Service Provider shall charge Client on an equitable basis.

16.05 AUDITED FINANCIAL STATEMENTS.

----------

* Confidential information has been omitted.

                                       25
<PAGE>

      Service Provider publicly releases its results for each fiscal year,
including such financial statements and information as Service Provider includes
in its public company filings with the Securities and Exchange Commission
("SEC"), which are available to Client through the SEC's EDGAR service. If the
SEC no longer requires Service Provider to submit public company filings, as
soon as practicable after the end of each fiscal year and in any event within
[***]* thereafter, the Service Provider will provide to Client consolidated
balance sheets, consolidated statements of operations and consolidated
statements of cash flows, all audited by independent public accountants.

16.06 RECORD RETENTION.

The Parties will address records management and retention of records containing
Client Data in accordance with Schedule AG. With respect to Service Provider's
records relating to the Charges, Service Provider and its Representatives shall
maintain complete and accurate records in accordance with generally accepted
accounting principles during the term of this Agreement and will retain such
records for a period of at least [***]* following the date of termination of
this Agreement (the "RETENTION PERIOD"); provided, however, that in the event of
any dispute arising under or with respect to this Agreement, the Retention
Period shall last until the resolution of such dispute becomes final and
non-appealable and all obligations of the Parties hereto have been satisfied in
full.

16.07 FACILITIES.

At Client's request, Service Provider shall either (i) provide to Client,
Client's authorized auditors and Client's regulators, on Service Provider's
premises (or, if the audit is being performed of a Service Provider
Representative, the Service Provider Representative's premises if necessary),
space, office furnishings (including lockable cabinets), telephone and facsimile
services, utilities, and office-related equipment and duplicating services; or
(ii) forward copies of applicable documentation as Client or such Client's
authorized auditors may reasonably require to perform the audits described in
this Article.

16.08 INFORMATION.

No copies of Confidential Information or trade secrets of Service Provider, or
extracts or derivatives therefrom or summaries or analyses reflecting same, may
be retained by Client, Client Representatives or any auditor (other than
auditors assigned by a regulatory authority having jurisdiction over Client)
after completion of the audit, except as may be reasonably included in archival
auditor workpapers. Any such portions of such workpapers shall be maintained in
confidence by its preparer as Service Provider's Confidential Information and
may not be used for any purposes other than the audit.

                                   ARTICLE 17
                                DATA AND REPORTS

17.01 OWNERSHIP OF DATA.

As between the Parties all Client Data is, or will be, and shall remain the
property of Client and shall be deemed Confidential Information of Client.
Without Client's approval (in its sole discretion), the Client Data shall not
be, (i) used by Service Provider or Service Provider Representatives other than
in connection with providing the Services, (ii) disclosed, sold, assigned,
leased or otherwise provided to third parties by Service Provider or Service
Provider Representatives or (iii) commercially exploited by or on behalf of

----------

* Confidential information has been omitted.

                                       26
<PAGE>

Service Provider or Service Provider Representatives. Service Provider hereby
irrevocably assigns, transfers and conveys, and shall cause Service Provider
Representatives to assign, transfer and convey, to Client without further
consideration all of its and their right, title and interest in and to the
Client Data. Upon request by Client, Service Provider shall execute and deliver,
and shall cause Service Provider Representatives to execute and deliver, any
financing statements or other documents that may be necessary or desirable under
any Law to preserve, or enable Client to enforce, its rights hereunder with
respect to the Client Data.

17.02 INSPECTION OF REPORTS.

Client shall use reasonable efforts to inspect and review reports and provide
Service Provider with notice of any errors or inaccuracies in accordance with
this Agreement.

17.03 CORRECTION OF ERRORS.

Upon notice from Client and at Service Provider's expense, Service Provider
shall promptly correct any errors or inaccuracies in Client Data and reports
prepared by Service Provider as part of the Services to the extent caused by
Service Provider or Service Provider Representatives. Upon notice from Client
and at Client's expense using the Time and Materials Rates, Service Provider
shall promptly correct any other errors or inaccuracies in Client Data and
reports prepared by Service Provider as part of the Services.

17.04 USE OF REPORTS.

Client shall own all right, title and interest in all reports, including all
Client Data contained therein, prepared by Service Provider as part of the
Services and no rights shall be retained by Service Provider, except that
Service Provider shall own all right, title and interest in and to the templates
and processes for creating the templates developed by Service Provider and
utilized to provide the reports.

17.05 RETURN OF DATA.

Upon request by Client at any time upon expiration or termination of this
Agreement, Service Provider shall (i) promptly return to Client all or any part
of the Client Data in the format and on the media in which Service Provider
routinely stores such data and (ii) erase or destroy all or any part of the
Client Data in Service Provider's possession, in each case to the extent so
requested by Client. Service Provider and Service Provider Representatives will
use any archival tapes containing Client Data solely for back-up purposes and as
otherwise agreed. As Client may reasonably request from time to time during the
Term, Service Provider shall promptly provide Client a copy of all or any part
of the Client Data in the format and on the media in which Service Provider
routinely stores such data.

17.06 COMPILATIONS.

[***]*

                                   ARTICLE 18
                          CONFIDENTIALITY AND SECURITY

18.01 GENERAL OBLIGATIONS.

      (a) All Confidential Information relating to or obtained from Client or
Service Provider shall be held in confidence by the recipient using commercially
reasonable efforts but in at least the same manner as the recipient protects its
own similar confidential or proprietary information.

----------

* Confidential information has been omitted.

                                       27
<PAGE>

      (b) Neither Client nor Service Provider shall disclose, publish, release,
transfer or otherwise make available Confidential Information of, or obtained
from, the other in any form to, or for the use or benefit of, any person or
entity without the disclosing Party's consent. Each of Client and Service
Provider shall, however, be permitted to disclose relevant aspects of the
other's Confidential Information to its officers, directors, employees and
Representatives (including the Benchmarker and authorized auditors), to the
extent that such disclosure is not restricted under this Agreement, or any
governmental approvals and only to the extent that such disclosure is reasonably
necessary for the performance of its duties and obligations under this
Agreement; provided, however, that the recipient shall be responsible for
ensuring that such officers, directors, employees and Representatives use such
Confidential Information solely in connection with, and for purposes permitted
under, this Agreement, and that such officers, directors, employees and
Representatives hold Confidential Information in confidence consistent with
Section 18.01(c) of this Agreement.

      (c) For purposes of this Agreement, "CONFIDENTIAL INFORMATION" shall mean
(i) with respect to Client, (a) information relating to Client's planned or
existing systems and systems architecture, including hardware, software, source
code, object code, specifications, documentation, methods of processing and
operational methods, (b) Service User data, (c) policyholder data, financial
data and information, customer lists, sales, profits, organizational
restructuring, new business initiatives, financial information and product
pricing strategies, (d) information that describes Client`s insurance and
financial products, including actuarial calculations, product designs and how
such products are administered and managed, (e) information that describes
Client's product strategies, business strategies, human resources or other
corporate plans and strategies, tax interpretations, tax positions and treatment
of any item, (f) confidential information, software and data of third parties
with which Client conducts business; (g) all information provided by or at the
direction of Client or to which Service Provider has access about customers,
employees and agents of Client or any Client affiliate including, but not
limited to, name address, telephone number, email address, account or policy
information, any list or grouping of customers or employees, and employment
related data including, but not limited to, salary, benefits, taxes, and other
data provided by employees or Client ("CUSTOMER INFORMATION") and (h) any
information marked confidential, restricted or proprietary, (ii) with respect to
Service Provider: (a) any information marked confidential, restricted or
proprietary; (b) software of Service Provider or third parties provided to
Client by Service Provider; (c) any information regarding Service Provider's
business customers, vendors, service delivery methods, business strategies and
practices and finances; and (d) any information disclosed verbally by Service
Provider during a joint planning session with Client provided such information
was identified by Service Provider as Confidential Information when disclosed;
and (iii) with respect to each Party, the terms of this Agreement.

18.02 EXCLUSIONS.

The obligations in Section 18.01 shall not restrict any disclosure pursuant to
any applicable Law or by order of any court or Governmental Authority (provided
that the recipient shall (i) notify the disclosing Party of any actual or
threatened legal compulsion of disclosure and any actual legal obligation of
disclosure immediately upon becoming so obligated and (ii) cooperate with the
disclosing Party's reasonable, lawful efforts to resist, limit or delay
disclosure at the disclosing Party's expense) and, except to the extent that
applicable Law provides otherwise, shall not apply with respect to information
that (a) is independently developed by the recipient without violating the
disclosing Party's proprietary rights as shown by the recipient's written
records, (b) is or becomes publicly known (other than through unauthorized
disclosure), (c) is disclosed by the owner of such information to a third party
free of any obligation of confidentiality, (d) is already known by the recipient
at the time of disclosure, as shown by the recipient's written records, and the
recipient has no obligation of confidentiality other than pursuant to this
Agreement or any confidentiality agreements entered into before the Effective
Date between Client and Service Provider or (e) is rightfully received by a
Party free of any obligation of confidentiality. The foregoing exceptions do not
apply to the disclosure of Customer Information, which may not be disclosed
without Client's prior

                                       28
<PAGE>

written consent. [***]*

18.03 UNAUTHORIZED ACTS.

Without limiting either Party's rights in respect of a breach of this Article,
each Party shall:

      (a) promptly notify the other Party of any unauthorized possession, use or
knowledge, or attempt thereof, of the other Party's Confidential Information by
any person or entity that may become known to such Party, including any
incidents involving a breach of security and any incidents that might indicate
or lead to a threat to, or weakness in, security and any attempt to make
unauthorized use of the Services or the systems used to provide them;

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

      (c) provide reasonable cooperation to the other Party in any litigation
and investigation against third parties deemed necessary by the other Party to
protect its proprietary rights; and

      (d) promptly use commercially reasonable efforts to prevent a recurrence
of any such unauthorized possession, use or knowledge, or attempt thereof, of
Confidential Information.

18.04 COSTS.

[***]*

18.05 INJUNCTIVE RELIEF.

Except as expressly set forth in this Section, each Party recognizes that its
inappropriate disclosure or use of Confidential Information of the other Party
may give rise to irreparable injury to such Party and acknowledges that remedies
other than injunctive relief may not be adequate. Accordingly, each Party has
the right to seek equitable and injunctive relief to prevent the unauthorized
possession, use, disclosure or knowledge of any Confidential Information.

18.06 PUBLICITY.

      (a) Neither Party shall use the other Party's logo, trademarks, name or
refer to the other Party directly or indirectly, without such Party's prior
written consent in any media release, public announcement or public disclosure
except for: (i) any disclosure required by Law, (ii) [***]*; (iii) Client may
disclose publicly that Service Provider is performing services for Client.

      (b) PRUDENTIAL and the Prudential Rock Financial logo (attached as
Schedule AD) are registered service marks of Client. Service Provider
acknowledges that any use of the Prudential name and logo pursuant to this
Agreement shall inure to the benefit of Client. Service Provider acknowledges
Client's rights in the Client name and logo and the goodwill pertaining thereto,
and agrees that it shall not challenge the validity of Client's ownership
thereof. Subject to the terms and conditions of this

----------

* Confidential information has been omitted.

                                       29
<PAGE>

Agreement, [***]*

                                   ARTICLE 19
                    REPRESENTATIONS AND ADDITIONAL COVENANTS

19.01 BY SERVICE PROVIDER. Service Provider represents and warrants that:

      (a) Service Provider is either the owner of or authorized to use in the
manner contemplated by this Agreement all of the Service Provider Software,
Service Provider Machines and other assets of Service Provider to be used in
delivery of the Services;

      (b) no investigations, legal, administrative or arbitration proceedings
seeking to limit Service Provider's ability to deliver the Services are pending
or, to Service Provider's knowledge, threatened;

      (c) it has implemented and currently maintains an effective information
security program designed to protect Client's Customer Information, which
program includes administrative, technical, and physical safeguards that are
designed (i) to ensure the security and confidentiality of Customer Information;
(ii) to protect against any anticipated threats or hazards to the security or
integrity of such Customer Information; and (iii) to protect against
unauthorized access to or use of Customer Information which could result in
substantial harm or inconvenience to Client or to Client's customers. Service
Provider's information security program specifications are described in Schedule
AA. Further, that Service Provider requires Service Provider Representatives and
each of Service Provider's employees to have entered into written non-disclosure
agreements with Service Provider which are consistent with Service Provider's
obligations pursuant to ARTICLE 18.

      (d) Service Provider shall comply with all Laws applicable to Service
Provider under Section 3.03 and shall obtain all applicable permits and licenses
required of Service Provider in connection with its obligations under Section
3.03 of this Agreement;

      (e) the Service Provider Software, Services and any New Software created
by Service Provider or Service Provider Representatives and used in the
performance of the Services do not and will not infringe upon the Intellectual
Property rights of any third party;

      (f) the Services will be performed in a professional and workmanlike
manner by qualified personnel in accordance with the descriptions set forth in
the Agreement including the Service Levels;

      (g) Service Provider shall determine and appoint a sufficient number of
qualified staff to provide the Services;

      (h) Service Provider shall use commercially reasonable efforts to ensure
that no viruses or similar items are coded or introduced into the Systems or
Client Network, such efforts to include, without limitation, utilizing
commercially available anti-virus software at its current release level. Service
Provider agrees that, in the event a virus or similar item is found to have been
introduced into the Systems or Client Network, Service Provider shall provide
reasonable assistance to Client in eliminating the virus or similar item from
the Systems or Client Network and restoring any data required to provide the
Services that are

----------

* Confidential information has been omitted.

                                       30
<PAGE>

lost as a result of the virus or similar item;

      (i) without the consent of Client, Service Provider shall not insert into
the Client Software any code which would have the effect of disabling or
otherwise shutting down all or any portion of the Client Software. Service
Provider further represents and warrants that, with respect to any disabling
code that may be part of the Service Provider Software, Service Provider shall
not invoke such disabling code except as may be required to enforce security and
access restrictions and as otherwise mutually agreed by the Parties; and

      (j)[***]*

19.02 BY CLIENT. Client represents and warrants that:

      (a) it is either the owner of each Client Machine and the Client Software
or is authorized by its owner to include it under this Agreement;

      (b) it is authorized to permit Service Provider access to and use of the
Client Service Locations used in connection with performing the Services, and
Service Provider is performing the Services at the Client Service Locations at
Client's request;

      (c) except as otherwise disclosed in Schedule AE, as of the Effective
Date, no investigations, legal, administrative or arbitration proceedings are
pending or, to Client's knowledge, threatened, concerning Client's present
performance of services similar to the Services;

      (d) Client shall comply with all Laws applicable to Client under Section
3.03 and shall obtain all applicable permits and licenses required of Client in
connection with its obligations under Section 3.03 of this Agreement;

      (e) as of the Effective Date, no investigations, legal, administrative or
arbitration proceedings are pending or, to Client's knowledge, threatened
concerning or relating to the employees presently engaged in performance of
services similar to the Services;

      (f) to Client's knowledge, Schedule D lists all material Managed
Agreements, all material Retained Agreements and all material Assigned
Agreements and, except as otherwise prohibited by the terms of such Managed
Agreements, Retained Agreements and Assigned Agreements, Client will use all
reasonable efforts to provide Service Provider complete copies, including all
amendments, of the Third-Party Vendor Contracts listed on Schedule D, all of
which are in full force and effect. During the Transition Period, the Parties
shall review and revise the categorization of each Third-Party Vendor Contract
as a Managed Agreement, Retained Agreement or Assigned Agreement, mutually agree
on any additions or deletions of any Third-Party Vendor Contract, and revise
Schedule D as appropriate;

      (g) as of the Effective Date, Client's relationship with the Third Party
Vendors listed on Schedule D are not subject to any material disputes regarding
payment or performance, Client is not anticipating any material changes in any
such relationships other than as specified by this Agreement, no legal,
administrative or arbitration proceedings are pending or, to Client's knowledge,
threatened concerning any of the Third-Party Vendor Contracts listed on Schedule
D, no defaults have occurred under any of these

----------

* Confidential information has been omitted.

                                       31
<PAGE>

agreements, and no circumstances exist that would permit declaration of default
under any of these agreements with notice or lapse of time, or both, and Client
has paid all outstanding balances due such Third-Party Vendors through and
including the Effective Date of this Agreement, except for those amounts set
forth in Schedule D, which remain Service Provider's responsibility;

      (h) Client shall use commercially reasonable efforts to ensure that no
viruses or similar items are coded or introduced into the Systems or Client
Network, such efforts to include, without limitation, utilizing commercially
available anti-virus software at its current release level. Client agrees that,
in the event a virus or similar item is found to have been introduced into the
Systems or Client Network, Client shall provide reasonable assistance to Service
Provider in eliminating the virus or similar item from the Systems or Client
Network and restoring any data required to provide the Services that are lost as
a result of the virus or similar item; and

      (i) Client requires Client Representatives to have entered into written
non-disclosure agreements which Client which are consistent with Client's
obligations pursuant to ARTICLE 16 and ARTICLE 18, and as a condition of
employment, Client requires its employees to comply at all times with Client's
employment policies which are consistent with Client's obligations pursuant to
ARTICLE 16 and ARTICLE 18.

19.03 MUTUAL. Each Party hereby represents and warrants that:

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

      (b) the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby and thereby by the Party
(i) have been duly authorized by all requisite corporate action on the part of
such Party and (ii) do not violate the terms of any law, regulation, or court
order to which such Party is subject or the terms of any material agreement to
which the Party or any of its assets may be subject;

      (c) this Agreement has been duly executed and delivered by such Party and
(assuming the due authorization, execution and delivery hereof by the other
Party) is a valid and binding obligation of such Party, enforceable against it
in accordance with its terms;

      (d) its entry into this Agreement does not and will not violate or
constitute a breach of any of its contractual obligations with third parties;

      (e) it shall perform its responsibilities under this Agreement in a manner
that does not, to the knowledge of the applicable Party, infringe, or constitute
an infringement or misappropriation of, any patent, trade secret, copyright or
other intellectual property right of any third party;

      (f) it is not subject to any pending or threatened litigation or
governmental action which could interfere with such Party's performance of its
obligations hereunder; and

      (g) it is in good standing under the laws of its state of formation and
is, or will timely be, qualified to do business as a foreign corporation in each
other states where such qualification is necessary in order for it to comply
with its obligations under this Agreement, except where failure to be so
qualified would not have a material adverse effect upon its ability to perform
under this Agreement.

                                       32
<PAGE>

19.04 DISCLAIMERS.

EXCEPT AS SPECIFIED IN SECTION 19.01, SECTION 19.02 OR SECTION 19.03 OF THIS
AGREEMENT, NEITHER CLIENT NOR SERVICE PROVIDER MAKES ANY OTHER WARRANTIES,
INCLUDING WITH RESPECT TO THE SERVICES OR THE SYSTEMS, AND EACH EXPLICITLY
DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A SPECIFIC PURPOSE, TITLE OR
NONINFRINGEMENT.

                                   ARTICLE 20
                               DISPUTE RESOLUTION

20.01 DISPUTES.

Any dispute arising under this Agreement ("Dispute") shall: (1) be discussed and
negotiated in good faith by the Designated Executives within [***]* of receipt
of a notice from either Party specifying the nature of the Dispute; (2) if the
Dispute cannot be resolved by the good faith negotiations of the Designated
Executives within [***]* of referral of the dispute, the Dispute shall then be
considered and negotiated in good faith by the Steering Committee; (3) if the
Dispute cannot be resolved by the Steering Committee within [***]* of referral
of the Dispute, the Dispute shall then be considered and negotiated in good
faith by the [***]* of Service Provider and the [***]* of Client; and (4) if the
Dispute is not resolved by the [***]* of Service Provider and the [***]* of
Client within [***]* of referral of the Dispute, then Service Provider or Client
may commence legal proceedings hereunder. Notwithstanding anything to the
contrary contained in this Agreement, the Dispute resolution process described
in this Article must be commenced and completed within the applicable Default
Cure Period (unless the Steering Committee mutually agrees in writing to extend
such Default Cure Period). The use of the foregoing procedure is a condition
precedent to the commencement of legal proceeding hereunder. Notwithstanding the
foregoing, neither Service Provider nor Client shall be prevented from seeking
injunctive relief to protect its interests pending resolution of a Dispute,
including any Dispute relating to ARTICLE 14, Section 17.01 or ARTICLE 18.
Continuity of Services.

20.02 CONTINUITY OF SERVICES.

In the event of a Dispute between Client and Service Provider, each Party shall
continue to so perform its obligations under this Agreement in good faith during
the resolution of such Dispute unless and until this Agreement is terminated in
accordance with the provisions hereof. Notwithstanding anything to the contrary,
should Client fail to make payments into escrow as required pursuant to Section
15.03, Service Provider shall have the right to terminate this Agreement
pursuant to Section 21.02(a) notwithstanding any Dispute.

20.03 CONFIDENTIALITY.

Communications, proposals and counter proposals made by either Party during
consultations and review in accordance with Section 20.01 shall be privileged
and confidential offers of compromise within the meaning of Rule 408 of the
Federal Rules of Evidence and comparable rules of other states, and shall be
inadmissible for any purpose (but this shall not require exclusion of otherwise
admissible evidence, such as

----------

* Confidential information has been omitted.

                                       33
<PAGE>

records of prior performance, merely because it is presented in the course of
settlement negotiations).

                                   ARTICLE 21
                                   TERMINATION

21.01 TERMINATION FOR CONVENIENCE.

Client shall have the right to terminate this Agreement for convenience
effective as of any time on or after [***]* following the Effective Date by
giving Service Provider notice of the termination at least [***]* prior to the
termination date specified in the notice. [***]* Notwithstanding the foregoing,
Client may not terminate this Agreement for convenience unless Client is current
in all payments then due and payable to Service Provider.

21.02 TERMINATION FOR CAUSE.

      (a) If Service Provider defaults in the performance of any of its material
obligations under this Agreement (except as provided in Section 21.05), and does
not cure such default within [***]* of receipt (the "DEFAULT CURE PERIOD") of a
written notice of default (the "DEFAULT NOTICE"), then Client may, by giving
notice to Service Provider, terminate this Agreement without further liability
as of the termination date specified in the notice.

      (b) If Client fails to make payments in accordance with this Agreement and
does not cure such default within the Default Cure Period, then Service Provider
may, by giving notice to Client, terminate this Agreement as of the Termination
Date specified in the notice.

      (c) If either Party reasonably believes that repeated, continuous or
persistent non-material breaches by the other Party have, in the aggregate,
caused a material adverse affect upon the non-breaching Party, then such
non-breaching Party shall provide to the breaching Party a detailed, written
notice of such breaches and an explanation of such material adverse affect. The
Parties shall consider such notice at the next regular or special meeting of the
Steering Committee. Following such meeting, unless otherwise agreed, the
breaching Party shall prepare and implement a plan so as to remedy the breach.

      (d) If a breach cannot reasonably be cured by the Party allegedly in
breach within such [***]* Default Cure Period, the Default Cure Period shall be
[***]* from the Default Notice but only if the Party allegedly in breach has
provided the non-breaching Party a plan to cure such breach and promptly
implements such plan. If the breach is not cured within the applicable Default
Cure Period, the non-breaching Party may terminate the Agreement.
Notwithstanding the foregoing, Client may not terminate this Agreement unless
Client is current in all payments then due and payable to Service Provider.

21.03 [***]*

21.04 [***]*

21.05 TERMINATION RELATING TO KEY PERFORMANCE INDICATORS.

----------

* Confidential information has been omitted.

                                       34
<PAGE>

[***]* Nothing in this Section shall be deemed to limit or obviate Client's
right to terminate this Agreement pursuant to Section 21.02.

21.06 BANKRUPTCY.

      (a) If either Client or Service Provider:

            (i) admits in writing its inability to, or is generally unable to,
      pay its debts as such debts become due; or

            (ii) (1) applies for or consents to the appointment of, or the
      taking of possession by, a receiver, custodian, trustee, examiner or
      liquidator of itself or of all or a substantial part of its property or
      assets, (2) makes a general assignment for the benefit of its creditors,
      (3) commences a voluntary case under Title 11 of the United States Code,
      11 U.S.C. Sections 101-1330, as amended from time to time (the "BANKRUPTCY
      CODE"), (4) files a petition seeking to take advantage of any other law
      relating to bankruptcy, insolvency, reorganization, liquidation,
      dissolution, arrangement or winding-up, or composition or readjustment of
      debts, (5) takes any corporate action for the purpose of effecting any of
      the foregoing;

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

      (b) If:

            (i) a proceeding or case shall be commenced, without the application
      or consent of either Client or Service Provider, as applicable, in any
      court of competent jurisdiction, seeking (1) its reorganization,
      liquidation, dissolution, arrangement or winding-up, or the composition or
      readjustment of its debts, (2) the appointment of a receiver, custodian,
      trustee, examiner, liquidator or the like of such Party or of all or any
      substantial part of its property or assets or (3) similar relief in
      respect of such Party under any law relating to bankruptcy, insolvency,
      reorganization, winding-up, or composition or adjustment of debts, and
      such proceeding or case shall continue undismissed, or an order, judgment
      or decree approving or ordering any of the foregoing shall be entered and
      continue unstayed and in effect, for a period of [***]*; or

            (ii) an order for relief against such Party shall be entered in an
      involuntary case under the Bankruptcy Code;

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

21.07 OTHER TERMINATIONS.

In addition to the provisions of this Article, this Agreement may be terminated
as provided in Section, Section 22.01, Section 26.08(a) and Schedule R.

21.08 TERMINATION ASSISTANCE.

----------

* Confidential information has been omitted.

                                       35
<PAGE>

Service Provider shall, upon Client's request during the Termination Assistance
Period, if all payments due to Service Provider under this Agreement have been
paid, provide the Termination Assistance Services in consideration for Client's
continued payment of all [***]* then in effect for the Services immediately
prior to the expiration, termination or partial termination of this Agreement.
The quality and level of performance during the Termination Assistance Period
shall not be materially degraded, but to the extent Client requests any
reallocation of resources or transitions portions of the Services that impact
KPIs and RSLs the Parties will use Change Control Management to address any
necessary adjustments to the Service Levels. After the expiration of the
Termination Assistance Period, Service Provider shall (i) answer questions from
Client regarding the terminated, insourced or resourced Services on an "as
needed" basis [***]* and (ii) deliver to Client any remaining Client-owned
reports and documentation relating to the terminated, insourced or resourced
Services still in Service Provider's possession. Client shall allow Service
Provider to use, [***]* for the benefit of Client only, those Client facilities
and Client assets (including the Client Software and the Client Machines) being
used to perform the Termination Assistance Services for as long as Service
Provider is providing the Termination Assistance Services.

21.09 EXIT RIGHTS. Upon the later of (i) the expiration or termination of this
Agreement; or (ii) the last day of the Termination Assistance Period (the "END
DATE"):

      (a) The limited rights granted to Service Provider and Service Provider
Representatives in Section 14.01 shall immediately terminate and Service
Provider shall, and shall cause Service Provider Representatives to, (i) deliver
to Client, at no cost to Client, a current copy of the Client Software or
tangible materials constituting Client Intellectual Property in the form in use
by Service Provider or Service Provider Representatives as of the End Date and
(ii) destroy or erase all other copies of the Client Software or materials
constituting Client Intellectual Property, Client New Intellectual Property or
Client Confidential Information in Service Provider's or Service Provider
Representatives' possession. Service Provider shall, upon Client's request,
certify to Client that all such copies have been destroyed or erased.

      (b) Upon Client's request, with respect to any (i) contracts for
maintenance, disaster recovery services and other necessary third party services
being used by Service Provider solely to perform the Services as of the End
Date, (ii) Assigned Agreements, Service Provider shall use commercially
reasonable efforts to, transfer or assign such agreements to Client or its
designee, and Client shall assume same, [***]*

      (c) [***]*

      (d) Upon Client's request, Service Provider shall sell to Client or its
designee(s) (i) the Service Provider Machines that are used by Service Provider
or Service Provider Representatives solely to perform the Services as of the End
Date; and (ii) any assets transferred by Client to Service Provider or Service
Provider Representatives (not otherwise covered in Section 21.09(d)(i)), free
and clear of all liens, security interests, or other encumbrances [***]*. Unless
agreed otherwise by Client in advance, Service Provider must be contractually
authorized to transfer to Client any assets, including Software, acquired,
licensed or leased by Service Provider after the Effective Date that are used
solely in performance of the Services.

21.10 HIRING OF PROJECT STAFF.

Upon the occurrence of the delivery to Service Provider by Client of a notice of
intent to terminate this Agreement, with respect to each then-current member of
the Project Staff dedicated to Client's account on

----------

* Confidential information has been omitted.

                                       36
<PAGE>

at least a [***]* basis and performing the portion of the Services that are
being terminated (each an "AFFECTED PROJECT STAFF MEMBER"), Service Provider
shall (a) not terminate, reassign or otherwise remove from the Project Staff any
Affected Project Staff Member prior to the termination date (ordinary course
terminations for cause excepted) and (b) to the extent not prohibited by
applicable Law, no sooner than [***]* prior to the termination date: (i) provide
Client with the name of each Affected Project Staff Member's position and a
description of job responsibilities, in accordance with Service Provider's
standard employment policies, (ii) provide Client access to such Affected
Project Staff Members, and (iii) allow Client to meet with, solicit and offer to
hire such Affected Project Staff Members. Service Provider shall waive any
restrictions that may prevent Affected Project Staff Members from being hired by
Client pursuant to this Section.

                                   ARTICLE 22
                                   INDEMNITIES

22.01 INDEMNIFICATION BY SERVICE PROVIDER FOR INFRINGEMENT.

Service Provider shall indemnify, defend and hold Client, and its directors,
officers and employees harmless from and against any and all claims and Losses
incurred by Client arising from any third party claim (including claims by
Service Users, Client personnel, Client Representatives, Service Provider
personnel and Service Provider Representatives) that the Services or the
materials for providing the Services, including without limitation, New
Intellectual Property created by Service Provider or Service Provider
Representatives, Service Provider Intellectual Property, Service Provider
Software, Software or Services provided under Assigned Agreements, any
enhancements or modifications to the Client Intellectual Property made by
Service Provider or Service Provider Representatives, or any other resources or
items provided to Client by Service Provider or Service Provider
Representatives, infringe upon the Intellectual Property rights of any third
party. Notwithstanding the foregoing, Service Provider shall have no liability
under this Section 22.01 with respect to any Losses arising under this Section
22.01 to the extent the same arise out of or in connection with (i) a
modification made Client, where the infringement would not have occurred but for
the modification; or (ii) Client's or Client Representatives' combination,
operation or use with devices, data or programs not furnished by Service
Provider or Service Provider Representatives, except that both Parties agree and
understand that it shall not be considered a modification to utilize the
Services or such materials for their intended purposes. In addition to, and not
in lieu of Service Provider's obligations pursuant to this Section 22.01, in the
event the Services or materials, in Service Provider's opinion, are likely to or
do become the subject of a claim of infringement, Service Provider shall have
the right at its sole option and expense to (i) modify the Services or materials
to eliminate the use of such infringing materials or modify the materials to be
non-infringing, or (ii) [***]*. Such termination on the part of Client shall in
no way relieve Service Provider of its obligations under this Section 22.01,
including inter alia its obligations to indemnify, defend and hold Client
harmless with respect to damages for past infringements.

22.02 OTHER INDEMNIFICATION BY SERVICE PROVIDER.

      In addition to the indemnity obligations of Service Provider under Section
22.01, Service Provider shall indemnify, defend and hold harmless Client, and
its directors, officers and employees from and against any and all claims and
Losses arising from any third party claim (including claims by Service Users,
Client personnel, Client Representatives, Service Provider personnel and Service
Provider Representatives) based

----------

* Confidential information has been omitted.

                                       37
<PAGE>

upon or resulting from:

      (a) Claims by Service Provider Representatives resulting from any breach
or default by Service Provider in the performance of Service Provider's
obligations under agreements with Service Provider Representatives;

      (b)Claims by Third Party Vendors under Assigned Agreements or Managed
Agreements resulting from any breach of Service Provider's duties or obligations
accruing on or after the Effective Date arising out of or in connection with the
Assigned Agreements or Managed Agreements;

      (c) Service Provider's breach of its obligations under [***]* of this
Agreement;

      (d) any amounts, including taxes, interest and penalties, assessed against
Client that are the obligation of Service Provider pursuant to [***]*;

      (e) bodily injury (including death) or loss or damage to tangible property
resulting from Service Provider's or Service Provider Representative's willful
or negligent acts or omissions;

      (f) a claim that Service Provider used or disclosed, or caused or
permitted to be used or disclosed, Client Confidential Information or Service
Provider Confidential Information, contrary to the terms of this Agreement; or
that Service Provider failed to maintain an effective information security
program to protect the security and confidentiality of Client Confidential
Information as required by this Agreement; or that Service Provider failed to
comply with the terms of this Agreement regarding Client Confidential
Information;

      (g) all claims asserted by any Designated Employee or any third party,
including any governmental entity, arising out of Service Provider's unlawful
hiring decisions, or breach of [***]* which affects any Designated Employee; and
for all claims asserted by any of the Transitioned Employees arising out of
their employment or separation of employment with Service Provider; and

      (h) (1) a claim that any of Service Provider's employees or any Service
Provider Representative is a Client employee and not Service Provider's employee
or an independent contractor, including, but not limited to; (a) the cost of any
employee benefits Client is required to provide to or pay for on behalf of
Service Provider's employees or any person Service Provider provides to Client
under this Agreement; and (b) any claim, lawsuit, or proceeding brought by
Service Provider's employees or any person Service Provider provides to Client
under this Agreement against Client based upon the employer-employee
relationship; and/or (2) breach by any Service Provider Representatives of any
of the provisions of this Agreement, including, but not limited to, the
provisions regarding Service Provider Representatives looking only to Service
Provider for payment for services which may be rendered.

22.03 INDEMNIFICATION BY CLIENT.

Client shall indemnify, defend and hold harmless Service Provider, and its
directors, officers and employees from and against any and all claims and Losses
arising from any third party claim (including claims by Service Users, Client
personnel, Client Representatives, and Service Provider personnel and Service

----------

* Confidential information has been omitted.

                                       38
<PAGE>

Provider Representatives) based upon or resulting from:

      (a) Claims by Client Representatives resulting from any breach or default
by Client in the performance of Client's obligations under agreements with
Client Representatives;

      (b) Claims by Third Party Vendors under Assigned Agreements or Managed
Agreements resulting from any breach of Client's duties or obligations arising
out of or in connection with the Assigned Agreements and Managed Agreements;

      (c) Client's breach of its obligations under [***]* of this Agreement;

      (d) a claim of Intellectual Property infringement asserted against Service
Provider caused by use by Service Provider in accordance with this Agreement of
the Client Intellectual Property (except for New Intellectual Property), Client
Software, the Client Machines and any other tangible materials provided by
Client or Client Representatives; provided, however, that Client shall have no
obligation with respect to any Losses to the extent the same arise out of or in
connection with Service Provider's or Service Provider Representative's
modification of the Client Proprietary Software or the Client Third Party
Software or Service Provider's or Service Provider Representatives combination,
operation or use with devices, data or programs not furnished by Client or
Client Representatives.

      (e) any amounts, including taxes, interest and penalties, assessed against
Service Provider that are the obligation of Client pursuant to [***]*;

      (f) bodily injury (including death) or loss or damage to tangible property
resulting from Client's or Client Representative's willful or negligent acts or
omissions;

      (g) all claims that Client used or disclosed, or caused or permitted to be
used or disclosed Service Provider's Confidential Information or Client Data or
Client Confidential Information, contrary to the terms of this Agreement; or
that Client failed to maintain an effective information security program to
protect the security and confidentiality of Service Provider Confidential
Information, Client Data and Client Confidential Information as required by this
Agreement; or that Client failed to comply with the terms of this Agreement
regarding Service Provider Confidential Information, Client Data or Client
Confidential Information; and

      (h) all claims asserted by any Transitioned Employees arising out of their
employment or separation of employment with Client; all claims by any Client
employees arising from Client's breach of [***]*, or Client's breach of its
employment policies or plans.

22.04 INDEMNIFICATION PROCEDURES.

If any third party claim is commenced against a Party entitled to
indemnification under this Agreement (the "INDEMNIFIED PARTY"), notice thereof
shall be given to the Party that is obligated to provide indemnification (the
"INDEMNIFYING PARTY") as promptly as practicable. If, after such notice, the
Indemnifying Party acknowledges that this Section applies with respect to such
claim, then the Indemnifying Party shall be entitled, if it so elects, in a
notice promptly delivered to the Indemnified Party, but in no event less than
[***]* prior to the date on which a response to such claim is due, to
immediately

----------

* Confidential information has been omitted.

                                       39
<PAGE>

take control of the defense and investigation of such claim and to employ and
engage attorneys reasonably acceptable to the Indemnified Party to handle and
defend the same, at the Indemnifying Party's sole cost and expense. The
Indemnified Party shall cooperate, at the cost of the Indemnifying Party, 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 Indemnified Party may, at its own cost and 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 pursuant to this Section that involves a remedy other than the payment of
money by the Indemnifying Party shall be entered into without the consent of the
Indemnified Party. After notice by the Indemnifying Party to the Indemnified
Party of its election to assume full control of the defense of any such claim,
the Indemnifying Party shall not be liable to the Indemnified Party for any
legal expenses incurred thereafter by such Indemnified 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 sole
cost and expense, and the Indemnified Party shall have the right to defend the
claim in such manner as it may deem appropriate, at the cost and expense of the
Indemnifying Party.

22.05 SUBROGATION.

The Indemnifying Party shall, upon payment of such indemnity in full, be
subrogated to all rights of the Indemnified Party with respect to the claims and
defenses to which such indemnification relates.

                                   ARTICLE 23
                                     DAMAGES

[***]*

                                   ARTICLE 24
                                    INSURANCE

24.01 INSURANCE.

Service Provider shall procure the following required insurance coverages and
name Client, its parent, subsidiaries of whatever tier, directors, officers and
employees as an additional insured as their interests may appear on the policies
listed except for Workers Compensation and Property Insurance, Employment
Practices Liability Insurance, and Professional Liability Insurance. All
policies of insurance shall be with an insurance company with a current [***]*
Rating of [***]* or better. All policies shall contain a minimum of [***]*
notice of cancellation or non-renewal of any required coverage. Such insurance
coverage shall be maintained during the Term of this Agreement, Termination
Assistance Period and extended reporting provisions for not less than [***]*
thereafter.

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* Confidential information has been omitted.

                                       40
<PAGE>

<TABLE>
<CAPTION>
<S>                                                 <C>
WORKER'S COMPENSATION                               Statutory

EMPLOYER'S LIABILITY (INCLUDING OCCUPATIONAL
DISEASE)
  Bodily injury by disease per person               [***]*
  Bodily injury by accident policy limit            [***]*
  Bodily injury by disease policy limit             [***]*

COMPREHENSIVE GENERAL LIABILITY INSURANCE
INCLUDING, BROAD FORM CONTRACTUAL, BROAD FORM
PROPERTY DAMAGE, PERSONAL INJURY, COMPLETED
OPERATION AND PRODUCTS COVERAGE.
  General Aggregate                                 [***]*
  Products/Completed                                [***]*
  Each Occurrence                                   [***]*
  Personal & Advertising Injury                     [***]*
  Medical Payments                                  [***]* per person

COMPREHENSIVE AUTO LIABILITY INCLUDING, OWNED       Not less than [***]* combined single limit
NON-OWNED AND HIRED CAR COVERAGE

UMBRELLA/EXCESS LIABILITY
  General Aggregate                                 [***]*
  Each Occurrence                                   [***]*

PROFESSIONAL LIABILITY INSURANCE
  General Aggregate                                 [***]*
  Each Occurrence                                   [***]*

EMPLOYMENT PRACTICES LIABILITY INSURANCE
  General Aggregate                                 [***]*
  Each Occurrence                                   [***]*

FIDELITY BOND (TO INCLUDE COMPUTER CRIME)
  General Aggregate                                 [***]*
  Each Occurrence                                   [***]*
  Coverage for specific Client losses               [***]*

PROPERTY INSURANCE (BUILDING/CONTENT/COMPUTER       All Risks Coverage with Replacement Cost
EQUIPMENT)                                          Valuation
</TABLE>

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* Confidential information has been omitted.

                                       41
<PAGE>

24.02 INSURANCE DOCUMENTATION.

To the extent third-party insurance is obtained or maintained pursuant to
Section 24.01, Service Provider shall furnish to Client certificates of
insurance on standard ACORD form 25 (including evidence of renewal of insurance)
evidencing all coverages referenced in Section 24.01 and, if and to the extent
applicable, naming Client as an additional insured prior to work commencing and
provide renewal certificates within [***]* of expiration of each policy. The
certificate of insurance shall indicate whether coverage is written on a Claims
Made or Occurrence basis and shall specify any applicable deductible(s). Service
Provider agrees to provide at least [***]* written notice to Client prior to
coverage cancellation or material alteration of the coverage. Such cancellation
or material alteration shall not relieve Service Provider of its continuing
obligation to maintain insurance coverage in accordance with this Article.

24.03 GENERAL INSURANCE PROVISIONS

      (a) Insurance coverages as outlined in Section 24.01 other than umbrella,
crime, professional liability/errors and omissions are deemed primary and
Service Provider must notify Client in writing as soon as there is a claim paid
under each policy aggregating to [***]* of each such policy's limits shown in
this ARTICLE 24.

      (b) During the Transition Period Service Provider's Workers' Compensation
Policy shall contain an Alternate Employer endorsement to protect Client from
claims brought by Service Provider employees.

      (c) Insurance carriers providing coverage must be authorized to do
business in the State in which the Services are performed.

      (d) Notice of any material reduction in insurance coverages below the
amounts specified in this ARTICLE 24 will require written notification to and
acceptance by Client. If Service Provider changes the carrier of insurance, it
must provide written notification to Client as soon as possible, but in no event
later than [***]* after the effective date of such change.

      (e) With respect to the Property Insurance (Building/Content/Computer
Equipment) coverage, it must include a waiver of subrogation in favor of Client,
its parent(s), subsidiaries of whatever tier, affiliates, directors, officers
and employees. It is agreed that such waivers shall be subject to the written
approval of Service Provider's underwriters prior to the loss. If such approval
is not obtained, service provider must advise Client in writing of that fact.

      (f) Fidelity Bond for Client specific losses shall protect Client, its
parent(s) and subsidiaries of whatever tier against the dishonest acts of
Service Provider employees or Service Provider Representatives whether acting
alone or in collusion with others who are not employees of Client or any
affiliate of Client. During the [***]* period following the Effective Date,
Service Provider will use commercially reasonable efforts to obtain additional
Fidelity Bond insurance applicable to Client to increase such amount
substantially above the [***]* required coverage for Client-specific losses.

      (g) Either Party may request a change in the required insurance using
Change Control Management.

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* Confidential information has been omitted.

                                       42
<PAGE>

24.04 RISK OF LOSS.

Service Provider is responsible for the risk of loss of, or damage to, any
property of Client at a Service Provider Service Location, unless such loss or
damage was caused by the direct, negligent acts or omissions of Client or a
Client Representative. Client is responsible for the risk of loss of, or damage
to, any property of Service Provider at a Client Service Location, unless such
loss or damage was caused by the acts or omissions of Service Provider or a
Service Provider Representative.

                                   ARTICLE 25
                                    RESERVED

                                   ARTICLE 26
                            MISCELLANEOUS PROVISIONS

26.01 NOTICES.

Except as otherwise specified in this Agreement, all notices, requests,
consents, approvals, agreements, authorizations, acknowledgements, waivers and
other communications required or permitted under this Agreement shall be in
writing and shall be deemed given when sent by facsimile to the facsimile number
specified below and receipt is verified, or delivered by hand to the address
specified below. A copy of any such notice shall also be sent by express air
mail on the date such notice is transmitted by facsimile to the address
specified below:

In the case of Client:                          In the case of Service Provider:
        [***]*                                         [***]*
        The Prudential Insurance Company of            Exult, Inc.
        America                                        4 Park Plaza, Suite 1000
        751 Broad Street                               Irvine, California 92614
        Newark, New Jersey 07102                       [***]*
        [***]*

With a copy to:                                 With a copy to:
        The Prudential Insurance Company of            Exult, Inc.
        America                                        4 Park Plaza, Suite 1000
        80 Livingston Avenue,                          Irvine, California 92614
        Roseland, New Jersey 07068                     [***]*
        [***]*

Either Party may change its address or facsimile number for notification
purposes by giving the other Party ten (10) days' notice of the new address or
facsimile number and the date upon which it shall become effective. Email
transmissions will not constitute written notice under this Agreement.

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* Confidential information has been omitted.

                                       43
<PAGE>

26.02 ASSIGNMENT AND THIRD PARTY BENEFICIARIES.

Except as set forth herein, neither Party may, without the consent of the other
(which consent may be withheld for any reason or no reason), assign this
Agreement or any of its rights under this Agreement, in whole or in part. Any
such purported assignment or delegation in contravention of this Section shall
be null and void. [***]*

26.03 RELATIONSHIP.

The Parties intend to create an independent contractor relationship and nothing
contained in this Agreement shall be construed to make either Client or Service
Provider or their respective Representatives partners, joint venturers,
principals, representatives or employees of the other. No officer, director or
employee of Service Provider or Service Provider Representatives or any Service
Provider Representative retained by Service Provider to perform work on Client's
behalf under this Agreement shall be deemed to be an employee of Client or a
Client Representative. Neither Party shall have any right, power or authority,
express or implied, to bind the other. Service Provider shall have the sole
right to supervise, manage, contract, direct, procure, perform or cause to be
performed, all work to be performed by Service Provider or Service Provider
Representatives under this Agreement.

26.04 SEVERABILITY AND WAIVERS.

If any provision of this Agreement is held by a court of competent jurisdiction
to be contrary to Law, then the remaining provisions of this Agreement, if
capable of substantial performance, shall remain in full force and effect. No
delay or omission by either Party to exercise any right or power it has under
this Agreement shall impair or be construed as a waiver of such right or power.
A waiver by any Party of any breach or covenant shall not be construed to be a
waiver of any succeeding breach or any other covenant. All waivers must be
signed by the Party waiving its rights. All remedies available to a Party for
breach of this Agreement under this Agreement, at law or in equity, are
cumulative and may be exercised concurrently or separately, and the exercise of
any one remedy shall not be deemed an election of such remedy to the exclusion
of other remedies.

26.05 SURVIVAL.

The terms of ARTICLE 1, Section ERROR! REFERENCE SOURCE NOT FOUND., Section
13.06, ARTICLE 14, ARTICLE 15, ARTICLE 16, ARTICLE 17, ARTICLE 18, ARTICLE 20,
ARTICLE 21, ARTICLE 22, ARTICLE 23, ARTICLE 24, and ARTICLE 26 shall survive the
expiration or termination of this Agreement. The terms of ARTICLE 19 shall
survive the expiration or termination of this Agreement for [***]*.

26.06 GOVERNING LAW.

This Agreement and the rights and obligations of the Parties under this
Agreement shall be governed by and construed in accordance with the Laws of New
York, without giving effect to the principles thereof relating to the conflicts
of Laws.

26.07 SOLE AND EXCLUSIVE VENUE.

----------

* Confidential information has been omitted.

                                       44
<PAGE>

Subject to ARTICLE 18 and ARTICLE 20, each Party irrevocably agrees that any
legal action, suit or proceeding brought by it in any way arising out of this
Agreement must be brought solely and exclusively in the United States District
Court for the Southern District of New York or in the state courts of the State
of New York and irrevocably accepts and submits to the sole and exclusive
jurisdiction of each of the aforesaid courts in personam, generally and
unconditionally with respect to any action, suit or proceeding brought by it or
against it by the other Party; provided, however, that this Section shall not
prevent a Party against whom any legal action, suit or proceeding is brought by
the other Party from seeking to remove such legal action, suit or proceeding,
pursuant to applicable federal law, to the district court of the United States
of America for the district and division embracing the place where the action is
pending in the state courts of New York, and in the event an action is so
removed each Party irrevocably accepts and submits to the jurisdiction of the
aforesaid district court. Each Party hereto further irrevocably consents to the
service of process from any of the aforesaid courts by mailing copies thereof by
registered or certified mail, postage prepaid, to such Party at its address
designated pursuant to Section 26.01, with such service of process to become
effective [***]* after such mailing.

26.08 FORCE MAJEURE.

      (a) If and to the extent that a Party's performance of any of its
obligations pursuant to this Agreement is prevented, hindered or delayed by
fire, flood, earthquake, elements of nature or acts of God, acts of war,
terrorism, riots, civil disorders, rebellions, action or inaction of any
governmental entity, revolutions, strikes, labor disputes, any acts or omissions
by a third party, any third party products or services or any other cause beyond
the reasonable control and without negligence of such Party, including failures
or fluctuations in electrical power, heat, light, air conditioning or
telecommunications equipment, data processing systems or ACH or other systems
maintained by third parties or governmental or regulatory bodies and utilized in
the performance of the Services (each, a "FORCE MAJEURE EVENT"), then the
non-performing, hindered or delayed Party shall be excused for such
non-performance, hindrance or delay, as applicable, of those obligations (except
for monetary payment obligations) affected by the Force Majeure Event for as
long as such Force Majeure Event continues and such Party continues to use
commercially reasonable efforts to recommence performance whenever and to
whatever extent possible without delay, including through the use of alternate
sources, workaround plans or other means. The Party whose performance is
prevented, hindered or delayed by a Force Majeure Event shall immediately notify
the other Party of the occurrence of the Force Majeure Event and describe in
reasonable detail the nature of the Force Majeure Event. If any Force Majeure
Event prevents, hinders or delays performance of the Services for more than
[***]*, unless Service Provider has procured alternate means of delivery
reasonably acceptable to Client, Client may (i) procure such Services from an
alternate source agreed upon by the Parties and commencing on the [***]* after
the commencement of the Force Majeure Event, Service Provider shall reimburse
Client for the costs and expenses incurred by Client in procuring such Services,
to the extent that those costs and expenses exceed the Charges paid to Service
Provider for such Services; or (ii) terminate the portion or portions of the
Services under this Agreement that are affected by the Force Majeure Event or
those Services that are otherwise related, dependent or intertwined with such
affected Services without regard to Section 21.02. If the Agreement is
terminated in part as a result of a Force Majeure Event, the Parties will use
Change Control Management to agree upon appropriate and equitable adjustments to
the Charges. The occurrence of a Force Majeure Event does not limit or otherwise
affect Service Provider's obligation to implement the DRP.

      (b) Whenever a Force Majeure Event or a disaster causes Service Provider
to allocate limited resources between or among Service Provider customers at the
affected Service Locations, Client shall

----------

* Confidential information has been omitted.

                                       45
<PAGE>

receive at least the same priority as Service Provider's other customers in
respect of such allocation.

      (c) If Service Provider fails to offer the Services in accordance with
this Agreement due to the occurrence of a Force Majeure Event, the Charges shall
be reduced in an equitable manner such that Client is not responsible for the
payment of any Charges for Services that Service Provider fails to provide.

26.09 EEO REQUIREMENTS.

The following clauses shall apply to Service Provider only if required by
applicable law with respect to the performance of this Agreement and if this
Agreement is not otherwise exempt under federal law or applicable regulations:

      (a) Service Provider represents that it is an equal opportunity employer,
as described in Section 202 of Executive Order 11246, dated September 24, 1976,
as amended, and as such agrees to comply with the provisions of said Executive
Order and its implementing regulations during the performance of this Agreement;

      (b) Service Provider agrees to comply with the affirmative action
requirements of Part 60-741.4 Title 41, Code of Federal Regulations, with
respect to individuals with disabilities during the performance of this
Agreement;

      (c) Service Provider agrees to comply with the affirmative action
requirements of Part 60-250.4 Title 41, Code of Federal Regulations, with
respect to Disabled Veterans and Veterans of the Vietnam Era during the
performance of this Agreement; and

      (d) Service Provider agrees to comply with the provisions of Executive
Order 11625 and its implementing regulations with respect to the utilization of
minority business enterprises during the performance of this Agreement.

26.10 OSHA COMPLIANCE.

All products supplied by Service Provider pursuant to this Agreement shall
conform to and satisfy the requirements of The Occupational Safety and Health
Act of 1970 (or any state statutes passed in lieu thereof) and all amendments
thereto and all standards and regulations issued thereunder.

26.11 [***]*

[***]* If any Project Staff member has ever been convicted of a felony involving
a crime of dishonesty or breach of trust, Service Provider agrees that it shall
withdraw that Project Staff member from any proposed Client assignment and shall
not permit such person to provide any Services hereunder. In addition, if any
Project Staff member has been convicted of a job-related crime, he or she shall
not be assigned to provide Services to Client.

26.12 LABOR LAWS AND PRISON LABOR.

Service Provider and Service Provider Representatives will comply with all
applicable Laws regarding minimum wage, living conditions, overtime, working
conditions, and the applicable labor and

----------

* Confidential information has been omitted.

                                       46
<PAGE>

environmental laws. Service Provider and Service Provider Representatives
further agree not to use any child labor, prison inmates, convicted felons or
criminals, nor shall it contract with any prison system to perform any Services
required under this Agreement.

26.13 NONPERFORMANCE.

If either Party's performance of the Services requires or is contingent upon the
other Party's performance of an obligation under this Agreement, and the other
Party delays or withholds such performance beyond the agreed-upon time period
(or beyond [***]*, if a time period is not specified), the time for the
performance shall be extended for the period of such delay in, or withholding
of, performance.

26.14 RIGHT TO PROVIDE SERVICES.

Service Provider personnel providing services to Client under this Agreement may
perform similar services for others and this Agreement shall not prevent Service
Provider from using the personnel and equipment provided to Client under this
Agreement for such purposes.

26.15 FURTHER ASSURANCES.

After the execution and delivery of this Agreement and without any additional
consideration, each of the Parties shall execute and deliver any further legal
instruments and perform any actions which are or may become necessary to
effectuate the purposes of this Agreement.

26.16 SOLICITATION.

Except as provided in this Agreement, during the Term and for [***]* after the
expiration or termination of this Agreement, neither Party shall directly
solicit any employees of the other Party without such Party's consent; this
shall not preclude the indirect solicitation of employees through general
advertisements or recruiting efforts conducted by persons who were not directly
involved in management of the performance or receipt of the Services and are not
acting under the direction of persons so involved, and either Party may discuss
employment with, and hire, such persons who respond to such indirect
solicitations, initiate such discussions on their own.

26.17 NEGOTIATED TERMS.

The Parties agree that the terms and conditions of this Agreement are the result
of negotiations between the Parties and that this Agreement shall not be
construed in favor of or against any Party by reason of the extent to which any
Party or its professional advisors participated in the preparation of this
Agreement.

26.18 CONSENTS, APPROVALS AND REQUESTS.

Except as specifically set forth in this Agreement, all consents, approvals,
notices, requests, and similar actions to be given or taken by either Party
under this Agreement shall not be unreasonably withheld or delayed and each
Party shall make only reasonable requests under this Agreement.

26.19 CONFLICT OF INTEREST.

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* Confidential information has been omitted.

                                       47
<PAGE>

Service Provider shall not pay any salaries, commissions, fees, or make any
payments or rebates to any employee of Client, or to any designee of such
employee, or favor any employee of Client, or any designee of such employee,
with gifts or entertainment of significant cost or value or with services or
goods sold at less than full market value. Service Provider agrees that its
obligation to Client under this Section shall also be binding upon Service
Provider Representatives. Service Provider further agrees to require each
Service Provider Representative to comply with this Section.

26.20 ENTIRE AGREEMENT; AMENDMENTS; COUNTERPARTS.

This Agreement represents the entire agreement between the Parties with respect
to the subject matter hereof, and there are no other representations,
understandings or agreements between the Parties relative to such subject
matter. No amendment to, or change, waiver or discharge of, any provision of
this Agreement shall be valid unless signed by an authorized representative of
each of the Parties. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one single agreement between the Parties.

IN WITNESS WHEREOF, each of Client and Service Provider has caused this
Agreement to be signed and delivered by its duly authorized representative.

                                        THE PRUDENTIAL INSURANCE COMPANY
                                        OF AMERICA

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                        EXULT, INC.

                                        By:
                                            ------------------------------------
                                            Name: [***]*
                                                  Title: [***]*

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* Confidential information has been omitted.

                                       48
<PAGE>

PROPRIETARY AND CONFIDENTIAL                                  PRUDENTIAL / EXULT
--------------------------------------------------------------------------------

                               SERVICES AGREEMENT

                                   SCHEDULE A

                             DESCRIPTION OF SERVICES

                                      FINAL

--------------------------------------------------------------------------------
Sch. A - Final                                                             EXULT

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                   <C>
1    INTRODUCTION.................................................................... 1

2    DESCRIPTION OF SERVICES......................................................... 2

     2.1    TOTAL COMPENSATION (COMPENSATION, BENEFITS AND PAYROLL) SERVICES......... 2
            2.1.1  Compensation...................................................... 2
            2.1.2  Benefits.......................................................... 2
            2.1.3  Payroll........................................................... 2

     2.2    ACCOUNTS PAYABLE......................................................... 2

     2.3    EMPLOYEE DATA AND RECORDS MANAGEMENT..................................... 3
            2.3.1  Employee Data and Records Management.............................. 3
            2.3.2  EO Diversity and Compliance Reporting............................. 3

     2.4    ORGANIZATION DEVELOPMENT AND PERFORMANCE MANAGEMENT...................... 3
            2.4.1  Organizational Development........................................ 3
            2.4.2  Performance Management............................................ 3

     2.5    TRAINING................................................................. 3

     2.6    RECRUITING/STAFFING...................................................... 4

     2.7    SEVERANCE/SEPARATION BENEFITS............................................ 4

     2.8    SUPPLIER MANAGEMENT ..................................................... 4

     2.9    INFORMATION TECHNOLOGY AND INFORMATION SERVICES.......................... 4
</TABLE>

                                       i
<PAGE>

                                   SCHEDULE A

                             DESCRIPTION OF SERVICES

1     INTRODUCTION

      This Schedule A describes the responsibilities of Exult (Service Provider)
      and of Prudential (Client) in performing the listed Processes and
      sub-processes of the Services.

      The following categories of HR Processes are covered in this Schedule A
      and within the Scope of Services:

      [***]*

      The descriptions of Processes and sub-processes in this Schedule A are
      intended to provide a high-level allocation of responsibilities between
      Service Provider and Client. Various lesser-included subtasks are intended
      to be included within such Processes and sub-processes according to the
      following assumptions and principles, unless otherwise agreed or
      specified: [***]*

      Except where specifically set out in the applicable Transition Plan, from
      the Process Take On Date, Service Provider shall perform each of its
      agreed-upon tasks within each Process included in the Services. The
      initial manner of Service Provider's performance of its assumed
      responsibilities shall be [***]*, provided that, Service Provider shall
      have control over the manner of its delivery of Services in accordance
      with Service Provider's standard procedures and practices, subject to
      specifically committed delivery obligations as outlined in Schedule B,
      Service Levels, reporting requirements, and any other specifically agreed
      written requirements.

      In support of the Services listed below, Exult shall operate a Call Center
      with hours of operation as follows:

      [***]*

      During the Transition Period, the Parties shall determine and mutually
      agree upon the baseline amount of ad-hoc reporting that is included in the
      scope of Services, and the amount of ad hoc reporting covered by the
      Discounted Baseline Charges.

      The following legend applies for all tables in this Schedule A:

<TABLE>
                        ----------------------------------------
                                     Table Legend
                        --------- ------------------------------
<S>                               <C>
                            X        Performs Responsibility
                        --------- ------------------------------
                            A               Approves
                        --------- ------------------------------
</TABLE>

----------

* Confidential information has been omitted.

                                       1
<PAGE>

2     DESCRIPTION OF SERVICES

      2.1   TOTAL COMPENSATION (COMPENSATION, BENEFITS AND PAYROLL) SERVICES

      This Section describes the Total Compensation (Compensation, Benefits and
      Payroll) Services, including the tasks and sub-processes that Service
      Provider and Client will perform for such Processes.

            2.1.1 COMPENSATION

            Compensation is the development of [***]*. The function administers
            the specific compensation programs that range from [***]*.
            Additionally, the function determines the appropriate competitive
            level and mix of [***]*.

            [***]*

            2.1.2 BENEFITS

            Benefits include [***]* to Service Users. This function determines
            the appropriate competitive level and mix of benefits for Client,
            including [***]*.

            [***]*

            [***]*

            2.1.3 PAYROLL

            Payroll processes include the collection and entry of time and
            attendance data, management of employee earnings and deductions. It
            also includes calculation of Gross-to-Net, processing employee
            payments, responding to and resolving employee issues and inquiries.
            Additionally the payroll function will compute and distribute
            deductions withheld and perform the accounting transactions
            necessary to reconcile Gross and Net accounts, and distribute labor
            costs to the general ledgers.

            [***]*

            [***]*

      2.2   ACCOUNTS PAYABLE

            Accounts Payable responsibilities include the set of activities that
            must be performed to ensure that Client's legitimate financial
            obligations to its suppliers and to its employees for reimbursable
            business expenses incurred are fulfilled in a timely and accurate
            manner.

            These activities include [***]*.

            [***]*

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* Confidential information has been omitted.

                                       2
<PAGE>

      2.3   EMPLOYEE DATA AND RECORDS MANAGEMENT

            2.3.1 EMPLOYEE DATA AND RECORDS MANAGEMENT

            Employee Data and Records Management responsibilities include all
            activities necessary to capture, track, modify and report Service
            Users related electronic and physical data. For the purposes of this
            document, HR indicative data includes all data elements relating to
            employee personal information and their relationship to Client.
            Employee Data includes data on Service Users.

            [***]*

            [***]*

            2.3.2 EO DIVERSITY AND COMPLIANCE REPORTING

            [***]*

      2.4   ORGANIZATION DEVELOPMENT AND PERFORMANCE MANAGEMENT

            2.4.1 ORGANIZATIONAL DEVELOPMENT

            Organization Development is a set of strategies and techniques aimed
            at improving organizational effectiveness and performance. The
            emphasis is on solving both immediate organizational work issues and
            on long-term development of an effective organization.

            [***]*

            [***]*

            2.4.2 PERFORMANCE MANAGEMENT

            Performance Management develops models to establish performance
            goals for the organization and the tools needed to assess
            employee/group performance against these goals. Management of the
            performance feedback process and reporting on the process outcomes
            are also responsibilities.

            [***]*

            [***]*

      2.5   TRAINING

            Training encompasses establishing training strategies, training
            needs assessments, course/materials development, administration and
            logistics coordination, delivery of training, and training
            effectiveness assessments.

            [***]*

            [***]*

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* Confidential information has been omitted.

                                       3
<PAGE>

      2.6   RECRUITING/STAFFING

            Recruiting/ Staffing includes development of Recruitment and
            Workforce Planning strategies, creating and maintaining candidate
            pools, assessing and selecting candidates, and managing the
            administration of the staffing process.

            [***]*

            [***]*

      2.7   SEVERANCE/SEPARATION BENEFITS

            Severance/Separation Benefits responsibilities include development
            of successful programs/policies/practices to transition employees
            from Client, policy definition, program development, financial
            impact modeling and program administration, selection of third party
            vendors for outplacement, and managing the cost of
            severance/separation benefits programs.

            [***]*

            [***]*

      2.8   SUPPLIER MANAGEMENT

            The Supplier Management Process refers to the selection and
            management of Third Party Vendor Contracts. [***]*

            [***]*

      2.9   INFORMATION TECHNOLOGY AND INFORMATION SERVICES

            The Information Technology or IT Process refers to the information
            technology environment within which the HR Processes operate and
            which support the HR Processes. This section specifically refers to
            the hardware, software, and networks that support the Processes and
            sub-processes addressed elsewhere within this Schedule A.

            [***]*

            The language used in developing, operating and supporting all
            applications, documentation and web content under Service Provider
            responsibility shall be English.

            The table below specifies the IT related responsibilities for Client
            and Service Provider.

            [***]*

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* Confidential information has been omitted.

                                       4
<PAGE>

PROPRIETARY AND CONFIDENTIAL                                  PRUDENTIAL / EXULT
--------------------------------------------------------------------------------

                               SERVICES AGREEMENT

                                   SCHEDULE B

                                 SERVICE LEVELS

                                      FINAL

--------------------------------------------------------------------------------
Sch. B - Final

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                               <C>
1     INTRODUCTION............................................... 1

2     PRINCIPLES GOVERNING SERVICE LEVELS........................ 1

3     PROCESS.................................................... 1

4     ANNUAL SERVICE LEVEL REVIEW................................ 2
</TABLE>

                                       i
<PAGE>

                                   SCHEDULE B

                                 SERVICE LEVELS

1     INTRODUCTION

      This Schedule describes the principles and parameters governing the
      Service Levels that will be measured. This Schedule also describes certain
      principles for how changes to Service Levels shall be established.

      There are two types of Service Levels that shall be measured and reported:

      1.1   Key Performance Indicators (KPIs) - [***]*; and

      1.2   Reporting Service Levels (RSLs) - These measure Service Provider's
            performance of the Services using a range of quantitative and
            qualitative Service Levels. [***]*

2     PRINCIPLES GOVERNING SERVICE LEVELS

      2.1   Service Levels shall be used to measure Service Provider's
            performance of the Services set out in Schedule A of this Agreement.

      2.2   Service Levels are, and new Service Levels or changes to Service
            Levels shall be, based on objective and clearly defined measurable
            criteria.

      2.3   Certain Service Levels have been designated as KPIs as mutually
            agreed by the Parties.

      2.4   Service Levels are mutually agreed performance levels designed to
            measure quality and timeliness that are clearly identifiable by
            Client business users as critical to the business.

      2.5   Service Provider shall have no liability for a failure to achieve a
            KPI that is not achieved due to any of the causes set forth in
            Section 6.07 of this Agreement.

3     PROCESS

      Prior to the Effective Date, the Parties agreed on certain KPI Service
      Level measurements, metrics and target metrics as well as the RSL
      measurements identified below. Other new Service Level metrics will be
      determined following the Effective Date using the Change Control
      Management process and the procedures below.

      3.1   Measurement

      [***]*

      3.2   KPI Metric Validation

      For new or changed KPIs, for which insufficient relevant Client historical
      performance data is available, the Parties will establish KPI target
      metrics. The identified KPI target metrics shall be measured,

----------

* Confidential information has been omitted.

                                       1
<PAGE>

      reported and validated during a period of [***]* following the Effective
      Date. Within [***]* following the [***]* validation period, the parties
      shall agree on revised KPI metrics. These new KPI metrics shall then be
      implemented and reported on a [***]* basis.

      3.3   Key Performance Indicator Table

      These KPIs shall be applicable to Service Provider's performance of
      Services for such Process beginning with the [***]* following the Process
      Take-On Date for such Process unless otherwise agreed. There are [***]*
      KPIs, certain of which include multiple process measures that are weighted
      as shown in the table below.

      [***]*

      [***]*

      3.4   RSLs

            Table 3.4.1 below contains the RSLs that have been agreed upon
            between the Parties as of the Effective Date. Such RSLs shall be
            applicable to Service Provider's performance of Services for such
            Process beginning with [***]* following the Process Take-On Date for
            such Process unless otherwise agreed.

            3.4.1 Reporting Service Level Table

            [***]*

      Any requests for additional RSLs following Effective Date shall be subject
      to Change Control Management.

4     ANNUAL SERVICE LEVEL REVIEW

      The Executive Steering Committee (1) shall review the Service Levels
      annually, (2) use Change Control Management with respect to changing any
      Service Levels as a result of this annual review or are no longer
      appropriate because of an increase, decrease or change to the Services and
      (3) with respect to all other Service Levels, review the Service Levels
      for the subsequent Contract Year. In addition, either Party may, at any
      time upon notice to the other Party, initiate negotiations to review and,
      upon the Parties' mutual agreement using Change Control Management
      process, adjust any Service Level. [***]*

      [***]*

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* Confidential information has been omitted.

                                       2
<PAGE>

PROPRIETARY AND CONFIDENTIAL                                  PRUDENTIAL / EXULT
--------------------------------------------------------------------------------

                               SERVICES AGREEMENT

                                   SCHEDULE C

                                FEES AND CHARGES

                                      FINAL

--------------------------------------------------------------------------------
Schedule C - Final                                                         Exult

<PAGE>

1.    Introduction

2.    Definitions

3.    Verification

4.    Charging Methodology

5.    Third Party Costs

6.    Invoicing

7.    Reserved

8.    Termination

9.    Cost of Living Adjustment

10.   Project Charges/Rate Chart

11.   Transfer of Know-How

                                      - i -
<PAGE>

1.    INTRODUCTION

This Schedule describes the methodology for determining the Charges to be paid
by Client to Service Provider for the performance by Service Provider of its
obligations under the Agreement as well as the associated processes for
invoicing Client for such Charges.

2.    DEFINITIONS

Unless otherwise specified, any capitalized terms that are not defined in this
Schedule shall have the meanings assigned to them in the Agreement. The
following terms shall have the meanings set out below:

"ACTIVE EMPLOYEES" means the number of current, active Client employees,
eligible to receive Services from Service Provider, measured monthly by Resource
Unit Categories listed in Table 4.2.1.1, on the last business day of the month.

"ACTUAL RESOURCE UNITS" means the actual volumes of Services delivered with
respect to a Resource Unit Category in a Volume Measurement Period, calculated
in accordance with Section 4.2 of this Schedule.

"ADDITIONAL RESOURCE CHARGE" or "ARC" means the incremental charge payable by
Client in addition to the charges set forth in Section 4.1.1 for a particular
Resource Unit Category for a particular Volume Measurement Period when Service
Provider delivers Service volumes that exceed the upper Band limit for that
Resource Unit Category during that Volume Measurement Period.

"ALLOCATED COSTS" means charges billed to Service Provider by the Client for the
provision of Check Printing and Distribution.

"BAND" means, with respect to each Resource Unit Category, the range of volumes
of Services [***]* greater than or [***]* less than the Baseline Volume related
to such Resource Unit Category within which the monthly charges are not adjusted
by ARCs or RRCs. The Band measurements as of the Effective Date are set forth in
Table 4.2.1.1 of this Schedule and are subject to verification and adjustment as
set forth herein.

"BASELINE CHARGES" means the base amount as described in Section 4.1 of this
Schedule C [***]*

"BASELINE VOLUME" means [***]* as set forth in Table 4.2.1 of this Schedule and
subject to verification and adjustment as set forth herein.

"CHARGES" means all amounts and categories of amounts that are or may become
payable by Client to Service Provider under the Agreement.

"CONTRACT YEAR" has the meaning set forth in Section 1.01 of the Agreement.

"CLIENT BASELINE SPEND" means [***]*

[***]*

"FEES AT RISK" means the amount available for possible Service Credits subject
to the calculation [***]* as described in Section [***]* of Schedule C and
Schedule B.

"FULL-TIME EQUIVALENT" or "FTE" means [***]* of work per year by a Service
Provider employee, independent contractor or agent (or more than one (1) such
employee, independent contractor or agent where the combination

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* Confidential information has been omitted.

                                      - 1 -
<PAGE>

of such persons equals [***]* per week) working full time (defined as [***]* per
week), exclusive of training days, vacation, holidays, sick days or any legally
required temporary absence.

"IN-SITU PERIOD" means, with respect to any Process, the period following the In
Situ Process Take-On Date and before the Process Take On Date for such Process
when Service Provider performs such Process using Client personnel at Client's
site(s) under Service provider's management and supervision.

"IN SITU PROCESS TAKE ON DATE" means the date when the In Situ Period begins.

"IT" means the Information Technology and Information Services specified in
Section [***]* of Schedule A of the Agreement.

"MAJOR ENHANCEMENT" means application changes with an estimated effort of more
than [***]*.

"MINOR ENHANCEMENT" means application changes with an estimated effort of
[***]*.

"PROCESS TAKE-ON DATE" means, with respect to any Process, the date on which
Service Provider assumes management of and becomes responsible for providing
designated Services for such Process.

"RECURRING THIRD PARTY COSTS" means Third Party Costs that are payable on a
recurring basis, or are otherwise predictable.

"REDUCED RESOURCE CHARGE" or "RRC" means the incremental credit to Client that
accrues when Service Provider delivers Service volumes for a particular Resource
Unit Category for a particular Volume Measurement Period that are less than the
lower Band limits for that Resource Unit Category during that Volume Measurement
Period.

"RESOURCE UNIT CATEGORY" means each Service line item for which (i) there is a
Baseline Volume and (ii) Actual Resource Units are measured, as identified in
Table 4.2.1.1.

"SERVICE CREDIT" means an amount to be credited or paid to Client, at the
Client's option, in the event of an unexcused failure by Service Provider to
achieve a Key Performance Indicator as specified in Schedule B.

"THIRD PARTY VENDOR" is defined in Section 1.01 of the Agreement.

"THIRD PARTY VENDOR CONTRACT" is defined in Section 1.01 of the Agreement.

"THIRD PARTY COSTS" means amounts payable by Service Provider to Third Party
Vendors for Services delivered pursuant to Assigned Agreements and replacements
and successors thereof.

"VOLUME MEASUREMENT PERIOD" means [***]*

3. VERIFICATION During the period of [***]* following the Effective Date, the
Parties shall verify Third Party Costs, Baseline Volume, Client historical
achievement of service level targets, and Client Baseline Spend for each
Process. This process shall involve, among other things, (i) discussions with or
otherwise questioning knowledgeable members of Client's HR and IT staff
concerning Client's detailed day-to-day operations and responsibilities, (ii)
validation of rates and associated charges from Client, and (iii) confirmation
of the numbers of Client employees or full time equivalents engaged in the
performance of the Services. Upon completion of any verification and agreement
by the Parties upon the results thereof, this Schedule will be amended by mutual

----------

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                                     - 2 -
<PAGE>

agreement to adjust this Schedule C for discrepancies in the Client Baseline
Spend and/or Baseline Volume, as appropriate, and the Parties shall use Change
Control Management to assess the impact on any other Schedule of any such
adjustment. The amount of annualized adjustments resulting from such
verification shall be limited to two and one half percent (2.5%) of the annual
Client Baseline Spend. [***]*

4. CHARGING METHODOLOGY

4.1 [***]* RECURRING THIRD PARTY COSTS

      [***]* shall commence on the Process Take-On Date as identified in
Schedule G. Service Provider invoicing for Third Party Costs shall commence upon
assignment of Assigned Agreements.

[***]* Recurring Third Party Costs will be invoiced [***]* in advance as
outlined in Section 6 of this Schedule [***]*:

      -     [***]*

      -     Recurring Third Party Costs [***]*

      -     [***]*

      In addition to the above, Service Provider will invoice Client for Third
Party Costs other than Recurring Third Party Costs as outlined in Section 6.
During the Termination Assistance Period, Service Provider will invoice for the
amount of [***]* set forth in Table 4.1.1 until Client has advised Service
Provider in writing that it has completed its transition or repatriation of all
of the Services.

      4.1.1 Baseline Charges [***]* for each Contract Year are as follows:

      [***]*

      4.1.2 New Projects

      Fees under Change Orders will be invoiced in accordance with the Rate
Chart set forth in Section 10 below, unless otherwise determined in accordance
with Change Control Management.

      4.1.3 Software Maintenance

      Client is responsible for paying for support and maintenance as applicable
for all third party software products under agreements designated as Managed
Agreements or Retained Agreements. Client may elect not to maintain such support
and maintenance, as provided under Section 14.01 of this Agreement.

      4.1.4 Changes to Service Levels

      If Client requests the support of Service Levels solely for Client's
benefit that are higher than Service Levels currently agreed to in Schedule B,
[***]* and Service Provider agrees to meet such higher Service Levels, then the
equipment, tools and resources required to support such enhanced Service Levels,
and any associated fees and costs must be approved through Change Control
Management.

      4.1.5 [***]*

      4.1.6 Plan Chargeable Costs

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                                     - 3 -
<PAGE>

      Service Provider will provide Client with reasonable breakdowns of
Charges, including ARCs and RRCs, as requested by Client to enable Client to
account for costs that are chargeable to Client's employee retirement and
pension plans.

      4.1.7 Enhancements and Projects; Software Currency

      [***]* Additional resources for Minor Enhancements, as well as for Major
Enhancements and projects under Section 8.01(c) of this Agreement, shall be
mutually agreed pursuant to Change Control Management at the [***]* unless
otherwise agreed. Without limiting the foregoing, in consideration of [***]*,
Service Provider will maintain software currency with new releases of software
being supported by Service Provider as part of the Services, within support time
restrictions imposed by the provider of such software, in accordance with
Service Provider's normal timing and schedule for installing such new releases.
If Client wishes to have Service Provider install such new releases in advance
of Service Provider's normal schedule, the Parties shall use Change Control
Management to define and agree upon a project and Charges for such accelerated
installation. Client shall be responsible for installation activities and
upgrades to the Client Machines and Client Network, including to accommodate
software currency and Enhancements.

4.2 ARCS/RRCS

      4.2.1 Baseline Volumes and Actual Resource Units

      Actual Resource Units for each Resource Unit Category shall be tracked by
Service Provider on a [***]* basis. Provider will prepare a detailed
supplementary invoice for the net amount to be paid by or credited to Client for
each [***]* Volume Measurement Period, including calculations of all ARCs and
RRCs, which shall be paid by Client within [***]* after receiving Service
Provider's invoice, or credited to Client on Service Provider's next regular
invoice. The upper and lower Band limits with respect to the Resource Unit
Categories are calculated as [***]*, of the related Baseline Volumes. Baseline
Volumes and Band limits (except for those measured by Active Employees) are
expressed in [***]* terms, as included in Table 4.2.1.1, and will be divided by
[***]* for purposes of comparing Actual Resource Units to Baseline Volumes and
calculating ARCs and RRCs for any Volume Measurement Period.

                                  TABLE 4.2.1.1

[***]*

      4.2.2 Calculation of ARCs and RRCs

            [***]*

                                  TABLE 4.2.2.3

            [***]*

            4.2.2.4 Sample ARC/RRC Calculation-Payroll

                                  TABLE 4.2.2.4

            [***]*

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                                     - 4 -
<PAGE>

            4.2.2.5 Additional Charges Arising from Volume Changes. If the
            Actual Resource Units increase or decrease outside the ranges set
            forth in Table 4.2.2.3, the Parties shall use Change Control
            Management to determine the applicable ARC and RRC rates for the
            applicable volumes. Pending agreement on such ARC and RRC rates, for
            volumes outside the ranges in Table 4.2.2.3, Service Provider shall
            invoice and Client shall pay ARCs or credit RRCs using the rates at
            the highest or lowest of the ranges in Table 4.2.2.3 as applicable
            subject to adjustment pursuant to the Change Order. The Parties will
            also use Change Control Management to determine the additional
            non-recurring Charges for transitions, implementations and
            conversions of systems, facilities and any Changes in the scope of
            Services related to and necessary for extra Project staff and
            resources to accommodate changes in Actual Resource Unit volumes.

4.3 SERVICE CREDITS

      4.3.1 Service Credits

      In the event of [***]* specified in Schedule B, Service Provider shall be
liable for Service Credits as follows:

      1.    Any Service Credit payment will be reported, calculated, and paid or
            credited [***]*.

      2.    [***]*

      3.    Service Credits shall be calculated in accordance with Schedule B,
            and paid by Service Provider or credited as incurred against the
            next succeeding invoice at Client's option.

      4.    During the first [***]* after moving Services to operations under
            the DRP, in the event Service Provider fails to provide a Service at
            [***]*, Client shall be entitled to receive [***]* of the applicable
            Service Credit. After [***]* of operating under the DRP, the regular
            Service Levels and full Service Credits described in Schedule C
            shall apply. Notwithstanding the foregoing, Service Provider shall
            not be excused for failure to meet any Service Levels specifically
            set forth in the DRP.

      The Parties understand and intend that Fees at Risk are liquidated damages
as set forth in Section 6.07 of the MSA and agree that the amounts of the Fees
at Risk are reasonable.

5. THIRD PARTY COSTS

      5.1 INVOICING.

      Following assignment and/or novation of Third Party Vendor Contracts,
Service Provider will review and pay third party invoices under such Third Party
Vendor Contracts. Recurring Third Party Costs shall be invoiced [***]* in
accordance with Section 4.1 and Section 6 of this Schedule and a true-up based
upon the actual invoice amount will be either billed (if actual invoice is
greater) or credited (if actual invoice is less) in the subsequent [***]*. The
remaining Third Party Costs shall be invoiced as received by Service Provider.
All invoices are due and payable within [***]* of receipt of invoice unless
otherwise agreed.

5.2 [***]*

5.3 [***]*

5.4 [***]*

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* Confidential information has been omitted.

                                     - 5 -
<PAGE>

5.5 INSOURCING.

      Service Provider may in its discretion from time to time provide directly,
using its own resources and affiliates to provide, any Services to Client
previously provided by Third Parties under Assigned Agreements or replacements
and successors thereto (such provision of Services called "Insourcing" and such
Services called "Insourced Services"). In such event, Service Provider will
invoice to Client and Client will pay for Insourced Services, [***]*

5.6 [***]*

5.7 [***]*

5.8 ACCESS; UNAPPROVED THIRD PARTY USE

[***]*

5.9 INDEXING

In establishing [***]* for purposes of [***]*, cost of living adjustments
("COLA") shall be handled as follows. Where a Third Party Vendor Contract
includes a provision for index-based increases or other COLA, such provision
shall be incorporated into the [***]* calculation. By way of example, if a Third
Party Vendor Contract contains a unit price of [***]* If such Third Party Vendor
Contract prohibits the supplier from increasing prices over a specified term,
then no COLA shall be included in the [***]*. If a Third Party Vendor Contract
does not specifically provide for or prohibit COLA, then the [***]* shall
establish in advance how COLA shall be handled in the applicable [***]*.

6. INVOICING Service Provider shall deliver a correct and detailed invoice on or
about [***]* for the [***]*, and Recurring Third Party Costs with respect to the
Services to be performed during such [***]* and each such correct and detailed
invoice shall be due in immediately available funds [***]* of receipt by Client
of such invoice. Any sum due Service Provider pursuant to this Agreement for any
Charges other than the [***]* and Recurring Third Party Costs shall be billed
[***]* after the completion of the applicable Services and payment shall be due
and payable [***]* after receipt by Client of a correct and detailed invoice
from Service Provider. All invoices shall be submitted to Client to the
attention of [***]*. Interest for late payments will be charged [***]*. Service
Provider agrees [***]*

7. RESERVED

8. TERMINATION

8.1 TERMINATION FOR CONVENIENCE

      As described in Section 21.01 of the Agreement, in the event of a
termination for convenience, Client will pay Service Provider the full amount
set forth in Table 8.1 for the month within which the effective date of the
termination occurs. Client will pay [***]* of fee when Service Provider begins
to perform Termination Assistance and [***]* on the Termination Date (the date
that Client has transitioned the last Process from Service Provider). The fee
set forth in Table 8.1 includes recognition for Service Provider's set up and
direct installation costs in the event of a termination under Section 21.01 of
the Agreement. [***]*

                                    TABLE 8.1

[***]*

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                                     - 6 -
<PAGE>

8.2 [***]*

8.2.1 [***]*

8.2.2 [***]*

9. COST OF LIVING ADJUSTMENT

      9.1   Beginning [***]* and other fees and charges of Service Provider will
            be increased by a factor equal to [***]*. If [***]* is no longer
            maintained by [***]*, then a successor index maintained by [***]*
            that most closely approximates [***]* will be used. If a transition
            is made from [***]* to a successor index, then for the year in which
            the transition takes place, the parties will use the applicable
            translation or conversion methodology published by [***]*, and in
            the absence thereof the Parties will base adjustments for the year
            in which the transition takes place upon a comparison of the
            successor index with such index for the prior year. The Parties may
            change the index by mutual agreement through a Change Order. In
            other words, any increases in [***]* index in excess of [***]* for
            any adjustment period will result in a percentage increase in
            Service Provider's fees and charges hereunder [***]*.

      9.2   If Client notifies Service Provider that it desires to renew this
            Agreement then the Term shall be extended on the same terms and
            conditions for the next Renewal Period, except that beginning on the
            first day of each Renewal Period, the Charges will be subject to
            [***]* for the calendar year immediately preceding the calendar year
            during which an increase in the Charges is sought.

10. PROJECT CHARGES / RATE CHART

            [***]*

11. TRANSFER KNOW-HOW

11.1 BACKGROUND

      Client possesses various intangible: (a) methods, (b) procedures, (c)
techniques and (d) know-how to perform the various activities covered by the
Services (collectively, the "KNOW-HOW")

11.2 TRANSFER

      [***]*

11.3 PAYMENT

      [***]*

11.4 NO WARRANTY

      THE WARRANTY DESCRIBED IN THIS SECTION 11 IS WITHOUT ANY WARRANTY,
INCLUDING THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE
OR TITLE OR INFRINGEMENT.

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                                     - 7 -
<PAGE>

11.5 EFFECT

      [***]*

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                                      - 8 -
<PAGE>

PROPRIETARY AND CONFIDENTIAL                                  PRUDENTIAL / EXULT
--------------------------------------------------------------------------------

                               SERVICES AGREEMENT

                                   SCHEDULE D

                              THIRD PARTY CONTRACTS

                                DRAFT VERSION 2.3

--------------------------------------------------------------------------------
Sch. D -  Draft Version 2.3                                                Exult
Draft Dated - Nov. 15, 2001

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                               <C>
A.    INTRODUCTION..............................................  1

B.    THIRD PARTY CONTRACTS.....................................  1
</TABLE>

                                       i
<PAGE>

A.    INTRODUCTION

This Schedule I sets forth the Third Party Contracts and designates whether each
such agreement is intended to be a "Managed Agreement", "Assigned/Novated
Agreement" or a "Conditional Assigned/Novated" Agreement.

B.    THIRD PARTY CONTRACTS

[***]*

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                                       1
<PAGE>

PROPRIETARY AND CONFIDENTIAL                                  PRUDENTIAL / EXULT
--------------------------------------------------------------------------------

                               SERVICES AGREEMENT

                                   SCHEDULE E

                                CLIENT EQUIPMENT

   THE PARTIES ACKNOWLEDGE THAT THIS SCHEDULE E IS SUBJECT TO FURTHER REVISION
                     WITHIN 30 DAYS FROM THE EFFECTIVE DATE

--------------------------------------------------------------------------------
Sch E - Draft V2.1                                                         Exult
Draft Dated - Jan. 11, 2002

<PAGE>

                                   SCHEDULE E

                                CLIENT EQUIPMENT

This Schedule E sets forth the Client Equipment which: [***]* The lists below
shall include details necessary to identify the equipment, including as
appropriate, make, model, equipment description, and quantity.

1     CLIENT EQUIPMENT ASSETS TO BE PURCHASED BY SERVICE PROVIDER

[***]*

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                                       1
<PAGE>

PROPRIETARY AND CONFIDENTIAL                                  PRUDENTIAL / EXULT
--------------------------------------------------------------------------------

                               SERVICES AGREEMENT

                                   SCHEDULE F

                     IT PROPRIETARY AND THIRD PARTY SOFTWARE

                                      FINAL

--------------------------------------------------------------------------------
Sch. F - Final

<PAGE>

                                   SCHEDULE F
                      PROPRIETARY AND THIRD PARTY SOFTWARE

This Schedule F sets forth the Customer Software and Customer Tools, which may
be used by or managed, or assigned to Service Provider to provide the Services.
This Schedule F shall be updated by the Parties from time to time to incorporate
any Customer Software and Customer Tools not listed on this Schedule F.

Each line item of Table F-1.1 - Prudential Third Party Software includes an
indicator showing its ownership status. These indicators are:

      [***]*

                         PRUDENTIAL THIRD PARTY SOFTWARE

                                   TABLE F-1.1

      [***]*

                          CUSTOMER PROPRIETARY SOFTWARE

                                  PRUDENTIAL HR

                                   TABLE F-2.1

[***]*

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                                       2
<PAGE>

PROPRIETARY AND CONFIDENTIAL                                  PRUDENTIAL / EXULT
--------------------------------------------------------------------------------

                               SERVICES AGREEMENT

                                   SCHEDULE G

                               TRANSITION PLANNING

                                      FINAL

--------------------------------------------------------------------------------
Schedule G - Final                      1-                                 Exult

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                               <C>
1    INTRODUCTION................................................ 1

2    TRANSITION PLANNING PRINCIPLES.............................. 1

3    CONTRACTING/HIGH LEVEL DUE DILIGENCE........................ 1

4    TRANSITION APPROACH......................................... 1

5    OVERALL TRANSITION ACTIVITIES............................... 1

6    ADDITIONAL TRANSITION COMMITMENTS........................... 2

7    SAMPLE HIGH-LEVEL TRANSITION PLAN........................... 2

8    STANDARD PROCESS TRANSITION STEPS........................... 2

9    READINESS ASSESSMENT PLAN................................... 2
</TABLE>

                                       i
<PAGE>

                                   SCHEDULE G

                               TRANSITION PLANNING

1     INTRODUCTION

      This Schedule sets forth the Transition approach and initial Transition
      Plan for conducting the transfer of services, people and facilities from
      Client to Service Provider and the transition approach that shall be
      followed. The specific deliverables and milestones for the transition
      approach shall be as identified in the attached exhibits to this schedule
      with minor adjustments to be mutually agreed during the [***]* period
      following the Effective Date.

2     TRANSITION PLANNING PRINCIPLES

      2.1   Transition is a joint responsibility. Service Provider is
            responsible for management of the overall transition program and
            Client has responsibility for providing the appropriate level of
            participation and involvement of their team in data gathering and
            requirements definition, gap analysis, knowledge sharing and
            readiness assessment. In addition, the Client has a responsibility
            to lead change management within Client organization, stakeholder
            communication (internal and external) and to provide the appropriate
            level of involvement from senior management to address transition
            issues that arise. The Service Provider will provide resources and
            methodology to assess the Client's operations, define the gap and
            develop an appropriate migration strategy and plan.

      2.2   The Transition Plan shall be primarily determined based on the
            in-scope Processes and people, and certain dependencies for
            transferring Client systems.

      2.3   The Service Provider and Client will staff their transition teams
            with the appropriate level and quantity of dedicated project
            resources to support the delivery of the agreed to transition plan.

3     CONTRACTING/HIGH LEVEL DUE DILIGENCE

      A contracting/high level due diligence phase has been completed prior to
      the Effective Date, pertaining to the in-scope Processes, people, and
      facilities. This included:

      [***]*

4     TRANSITION APPROACH

      [***]*

5     OVERALL TRANSITION ACTIVITIES

      [***]*

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                                       1
<PAGE>

6     ADDITIONAL TRANSITION COMMITMENTS

      [***]*

7     SAMPLE HIGH-LEVEL TRANSITION PLAN

      See attached Sample Transition Plan

8     STANDARD PROCESS TRANSITION STEPS

      See attached document for the standard steps to be executed for each
      Process transition.

9     READINESS ASSESSMENT PLAN

      See attached Readiness Plan for standard items that must be in-place
      before a Process may migrate from the Client to Service Provider.

      [***]*

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                                       2
<PAGE>

PROPRIETARY AND CONFIDENTIAL                                  PRUDENTIAL / EXULT
--------------------------------------------------------------------------------

                               SERVICES AGREEMENT

                                   SCHEDULE H

                                     REPORTS

                                      FINAL

--------------------------------------------------------------------------------
Schedule H - Final                                                         Exult

<PAGE>

                                   SCHEDULE H

                                     REPORTS

1.    INTRODUCTION

   This Schedule identifies Service Provider's and Client's responsibilities in
   connection with providing reports ("REPORTS").

2     GENERAL

      [***]*

3     DESCRIPTION OF THE MONTHLY REPORT

   The monthly Reports required from Service Provider shall be provided to the
   Client on a monthly basis, and shall contain the following:

      [***]*

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* Confidential information has been omitted.

<PAGE>

                             EXHIBIT A TO SCHEDULE H

                                  SAMPLE REPORT

[***]*

[***]*

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<PAGE>

PROPRIETARY AND CONFIDENTIAL                                  PRUDENTIAL / EXULT
--------------------------------------------------------------------------------

                               SERVICES AGREEMENT

                                   SCHEDULE I

                        ASSIGNED AND DESIGNATED EMPLOYEES

                                      FINAL

--------------------------------------------------------------------------------
Sch. I - Final                                                             Exult

<PAGE>

                                   SCHEDULE I

                        Assigned and Designated Employees

[***]*

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<PAGE>

Proprietary and Confidential                                  Exult / Prudential

                               SERVICES AGREEMENT

                                   SCHEDULE J

                              EMPLOYEE ARRANGEMENTS

                                      FINAL

--------------------------------------------------------------------------------
Schedule J - Final                      1

<PAGE>

1.0 DEFINITIONS

For the purposes of this Schedule J:

"DESIGNATED EMPLOYEE" means any employee of Client or Client Affiliates
(collectively, "CLIENT") listed on Schedule I.

"TRANSITIONED EMPLOYEE" means a Designated Employee who accepts Service
Provider's offer of employment and becomes an employee of Service Provider

"EXCLUDED EMPLOYEE" means any employee of Client who is not a Designated
Employee.

"EMPLOYMENT DATE" means the date a Transitioned Employee commences employment
with Service Provider.

"SEPARATION DATE" of a Designated Employee means the date such Designated
Employee's employment with Client terminates.

2.0 EMPLOYMENT TERMS

2.1 Background; Offer of Employment. With respect to the Processes to be assumed
by Service Provider, as of the Effective Date of this Agreement, Client is
performing such Processes using the Designated Employees and certain Excluded
Employees. [***]*

2.2 General Terms of Employment. [***]*

2.3 Salaries. [***]*

2.4 Titles and Responsibilities. [***]*

2.5 Designated Employee Application Procedures. [***]*

2.6 Client Re-Hires. [***]*

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                                       2
<PAGE>

3.0 BENEFIT PROGRAMS

3.1 Service Credits. [***]*

3.2 [***]*

3.3 Deductibles. [***]*

3.4 Vacation. [***]*

4.0 CERTAIN OBLIGATIONS

4.1 Accrued Obligations. [***]*

4.2 Severance. [***]*

4.3 Client Obligations. [***]*

4.4 No Implied Beneficiaries: This Agreement should inure to the sole benefit of
    the parties and their respective successors and permitted assignees. Nothing
    in this Agreement, expressed or implied, is intended to confer on any person
    other than the Parties to this Agreement and their respective successors and
    permitted assignees, any rights remedies, obligations or liabilities under
    this Agreement.

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                                       3
<PAGE>

PROPRIETARY AND CONFIDENTIAL                                  PRUDENTIAL / EXULT
--------------------------------------------------------------------------------

                               SERVICES AGREEMENT

                                   SCHEDULE K

                            CHANGE CONTROL MANAGEMENT

                                      FINAL

--------------------------------------------------------------------------------
Schedule K - Final                                                         Exult

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                      <C>
1.    INTRODUCTION...................................................... 1

2.0   CHANGE CONTROL MANAGEMENT......................................... 1

3.0   EFFECTIVENESS OF A CHANGE......................................... 4

4.0   CHANGE MANAGEMENT REPORTING REQUIREMENTS.......................... 4

5.0   FAILURE TO AGREE.................................................. 5

6.0   EMERGENCY CHANGE PROCESS; COMPULSORY CHANGES...................... 5

7.0   CHANGE REQUEST LOG................................................ 5
</TABLE>

                                       i
<PAGE>

                                   SCHEDULE K

                            CHANGE CONTROL MANAGEMENT

1.    INTRODUCTION

      This Change Control Schedule describes the process (the "Change Control
      Management ") to be followed by Client and Service Provider when either
      Party wishes to make a change to the Services, software, hardware,
      systems, activities, processes, provisions, operations or any other terms
      and conditions under the Agreement (each a "Change"). The Parties may by
      joint written agreement amend or waive any part of the Change Control
      Management process including, but not limited to, where the relevant
      Parties agree that shorter or longer timeframes are more appropriate,
      provided that any Changes made to the Agreement are recorded in a Change
      Proposal (as such term is defined in Section 2.3(b)) and such Change
      Proposal is allocated a unique number by Service Provider and is signed by
      duly authorized representatives of Client and Service Provider.

1.1   The purposes and objectives of Change Control Management are as follows:

                  (a)   to review each request for a Change (a "Change Request")
                        to determine whether such Change is appropriate;

                  (b)   to determine whether a Change is within the scope of the
                        Services or constitutes a New Service

                  (c)   to prepare a more detailed proposal to implement a
                        Change Request (such proposal, a "Change Proposal")

                  (d)   to prioritize all Change Requests and Change Proposals;

                  (e)   to minimize the risk of exceeding both time and cost
                        estimates associated with the requested Change by
                        identifying, documenting, quantifying, controlling,
                        managing and communicating: (i) Change Requests, (ii)
                        the preparation of Change Proposals), and (iii) their
                        disposition; and

                  (f)   to identify the different roles, responsibilities and
                        actions that shall be assumed and taken by the Parties
                        to define and implement the Changes to the Services and
                        to the Agreement.

1.2   Each Party shall be responsible for all costs and expenses incurred by its
      employees, agents and subcontractors with respect to its participation in,
      and responsibilities and obligations under, Change Control Management,
      unless expressly agreed otherwise in writing by both Parties.

2.0   CHANGE CONTROL MANAGEMENT

2.1       Either Service Provider or Client may initiate a Change Request by
          delivering to the other's Designated Executive or his/her nominated
          representative a writing that describes the Change and sets forth the
          reasons for it. Service Provider shall assign a unique number to any
          such request and shall register the Change Request in the Change
          Request Log as described in Section 7.1. Each Change Proposal that may
          be prepared for a Change Request shall be tracked by reference to the
          Change Request to which it relates.

                                       1
<PAGE>

2.2       Each Party's respective Designated Executive or his/her nominated
          representatives shall be responsible for reviewing and considering any
          Change Request, and shall approve it for further investigation, if
          deemed necessary. If the Parties agree that the Change Request
          requires further investigation, the Designated Executives shall
          authorize such investigation, which shall be performed as required by
          Service Provider and/or Client. In accordance with Section 7.2, the
          Designated Executives shall be responsible for keeping up to date the
          status of each Change Request in the Change Request Log as the status
          of the Change Request changes through Change Control Management.

2.3       For each Change Request that the Parties have approved for further
          investigation, regardless of which Party has proposed or investigated
          the Change, Service Provider shall prepare and submit to Client within
          [***]* (or as otherwise agreed), with Client's reasonable cooperation
          and provision of any information reasonably requested by Service
          Provider, a preliminary written report containing the following
          information and analysis:

            (a)   Such preliminary report shall contain:

                  (i)   the estimated costs associated with the Change;

                  (ii)  the timeframe for implementing the Change (including any
                        timing constraints);

                  (iii) the preliminary technical or business case for making
                        the Change, as well as any changes or additions to
                        policies, standards and procedures in accordance with
                        which the Change is to be implemented;

                  (iv)  an initial analysis of the potential risks (if any) to
                        Client or Service Provider if the Change is not
                        implemented;

                  (v)   an estimate of the costs and expenses associated with
                        preparing a comprehensive Change Proposal containing the
                        information and analysis set forth in Section 2.3(b)
                        below (the "Estimate").

          Service Provider shall bear the costs of preparing the preliminary
          report and Estimate as set forth in this Section 2.3(a), and shall
          provide such report as part of the Services.

----------

* Confidential information has been omitted.

                                       2
<PAGE>

            b     Client and Service Provider shall review the preliminary
                  report and Client shall, within [***]* after delivery of such
                  preliminary report, the Client Executive shall, in writing,
                  either (1) instruct Service Provider to prepare a
                  comprehensive Change Proposal as set forth in this Section
                  2.3(b), or (2) notify the Service Provider that it does not
                  wish to proceed with the Change. Where Client has instructed
                  Service Provider to prepare a comprehensive Change Proposal,
                  [***]* (or as otherwise agreed) after receiving such
                  instruction, Service Provider shall prepare a Change Proposal
                  including the following elements of the Agreement, to the
                  extent relevant:

            [***]*

2.4       Once submitted by Service Provider, Client shall review the Change
          Proposal and as soon as reasonably practicable, and in any event not
          more than [***]* (or as otherwise agreed) after receipt of the Change
          Proposal, either:

            (a)   the Parties may approve the Change Proposal in which case the
                  Change Proposal shall be signed by the Designated Executives
                  and the Change incorporated in accordance with Section 3.0
                  below;

            (b)   Client may notify Service Provider that it does not wish to
                  proceed with the Change, in which case no further action shall
                  be taken in respect of the Change Proposal; provided, however,
                  that Service Provider shall be entitled to charge Client for
                  its reasonable costs associated with preparing the Change
                  Proposal provided that there would not be a charge if the
                  Change Proposal had been completed by Service Provider's
                  then-current normal Project Staff. In any case, the charges
                  shall not exceed the Estimate (and shall not include any costs
                  incurred in preparing the preliminary report or Estimate
                  described in Section 2.3(a) above); or

            (c)   either Party may request that it and the other Party meet to
                  discuss the Change Proposal (such meeting to be referred to as
                  the "Change Proposal Meeting").

            (d)   The Time and Materials Rates shall apply to Changes unless
                  otherwise agreed.

          In the event that a Change Proposal covers multiple clients of Service
          Provider and Service Provider is able to recoup portions of the costs
          for the associated Change from one or more of its other clients, then
          Service Provider shall offer to perform the Change Proposal for Client
          [***]*

2.5       At the Change Proposal Meeting, the Parties shall use reasonable
          endeavors to agree to either:

            (a)   take no further action in respect of the proposed Change, in
                  which case no further action shall be taken in respect of the
                  Change Proposal;

            (b)   acquire further information before deciding whether to proceed
                  with the Change;

            (c)   amend some or all of the contents of the Change Proposal,
                  which Service Provider will incorporate into a revised version
                  of the Change Proposal; or

            (d)   proceed with the Change as detailed in the Change Proposal in
                  which case the Change Proposal shall be signed and the Change
                  incorporated in accordance with Section 3.0.

----------

* Confidential information has been omitted.

                                       3
<PAGE>

2.6       In the event that the Parties agree to proceed in accordance with one
          of the options detailed in Section 2.5(b) or 2.5(c) above, then the
          Parties shall gather any necessary information and/or Service Provider
          shall prepare a revised version of the relevant Change Proposal, upon
          which the Parties shall decide whether to proceed in accordance with
          Section 2.5(a)-(d) above. The Parties shall continue to go through the
          process detailed above until such time as a final resolution is made
          by the Parties. The Parties shall act in good faith at all times
          during such process.

2.7       If the Parties' Designated Executives agree to a Change prior to any
          investigation conducted by either Party, Service Provider shall in any
          event prepare a Change Proposal in accordance with Section 2.3 and
          submit such Change Proposal for review and approval in accordance with
          Section 2.4.

3.0       EFFECTIVENESS OF A CHANGE

3.1       Upon the signature of a Change Proposal by both Designated Executives
          in respect of a Change, the contents of such Change Proposal shall be
          deemed to be agreed and incorporated into the Agreement on the date of
          signature or as the Parties may otherwise agree. No part of the
          discussions or interchanges between the Parties shall obligate the
          Parties to approve any Change or shall constitute an amendment or
          waiver of the Agreement unless and until reflected in a Change
          Proposal and adopted in accordance with this Change Control Schedule.

3.2       Neither Party shall have any obligation to commence or comply with any
          Change, perform Services that would be covered by any Change, or pay
          any Charges that would be covered by any Change, until such time as
          the Parties' Designated Executives have signed the appropriate Change
          Order. Disputes regarding a Change shall be subject to the Dispute
          Resolution process set forth in Article 20 of this Agreement, provided
          that Disputes relating to a Change Proposal (but not Disputes
          regarding Service Provider's claim for extra Charges) may not be
          escalated to litigation under Section 20.01.

3.3       Client's acceptance of, and payment for, work under a Change Order
          will be subject to Client's approval that such work materially
          complies with the mutually agreed objective acceptance criteria during
          an acceptance period designated in the Change Order (or if no such
          acceptance period is specified in the Change Order, [***]*). If
          Service Provider's work under a Change Order does not comply with the
          applicable acceptance criteria for such Change Order, Service Provider
          will correct such work and resubmit the Change for Client's
          acceptance. If, following one or more resubmissions, Service Provider
          fails to fulfill its obligations to meet the Change Order acceptance
          criteria within a time period specified in the Change Order (or if no
          such period is specified in the Change Order, [***]*), Client may
          terminate such Change Order in accordance with the payment and
          termination provisions of such Change Order (or if not otherwise
          provided in the Change Order, Client shall be entitled to relief from
          further payments under such Change Order and a credit or refund ( at
          client's option) for any advance payments previously made under the
          Change Order).

4.0       CHANGE MANAGEMENT REPORTING REQUIREMENTS

4.1       Service Provider shall provide Client as part of the monthly Report, a
          summary specifying the status of all pending Change Requests and
          Change Proposals.

----------

* Confidential information has been omitted.

                                       4
<PAGE>

5.0       FAILURE TO AGREE

5.1       In the event that the Party requesting a Change believes that the
          requested Change is required or necessary, the requesting Party shall
          inform the other Party in writing of the reasons why the Change is
          required and the impact if it is not implemented. In the event that
          the other Party does not agree to implement the Change, the requesting
          Party shall be entitled to consider the other Party's failure to agree
          to implement the Change as a dispute, and the requesting Party may
          escalate such dispute for resolution in accordance with Section 3.2 of
          this Schedule K.

6.0       EMERGENCY CHANGE PROCESS

In the event that either Party requires a Change in order to respond to an
emergency and such Change would, in the reasonable opinion of the requesting
Party, if it was not implemented until Change Control Management had been
followed, have a detrimental effect on the requesting Party's ability to meet
its obligations pursuant to this Agreement, the requesting Party shall make all
reasonable efforts to contact the other Party's Designated Executive, and if the
requesting Party is unable to contact the other Party's Designated Executive
after reasonable efforts, the requesting Party shall, where appropriate and
practical, make all reasonable efforts to contact the other Party's designated
member of the Executive Steering Committee. If the requesting Party is unable to
contact either the other Party's Designated Executive or the other Party's
designated Executive Steering Committee member, the requesting Party may make
temporary Changes to the Services without the prior consent of the other Party.
The requesting Party shall notify the other Party as soon as practicable but no
later than [***]* after the event of such Change and shall, as soon as
reasonably practicable (but no later than [***]* thereafter) document and report
in writing on such Changes to the other Party. Any agreed Change as a result
shall be agreed in accordance with Change Control Management. Disputes regarding
any extra Charges for Changes under this Section 6 are subject to Section 20.01
of the Agreement.

7.0       CHANGE REQUEST LOG

7.1       Each entry made in the Change Request Log shall consist of the
          following fields:

          (a)   serial number of the Change Request;

          (b)   name of the originating party;

          (c)   a brief description of the Change;

          (d)   the current status of the Change; and

          (e)   the date of registration of the Change Request in the Change
                Request Log.

7.2       The status of the Change Request at any stage in Change Control
          Management shall be one of the following:

          (a)   raised (i.e., that the Change Request has been entered in the
                Change Request Log, but no Change Proposal has been issued);

          (b)   pending (i.e., that the Change Request has been raised and the
                Change Proposal has been issued);

          (c)   approved (i.e., awaiting implementation);

          (d)   closed (i.e., all implementation tasks have been completed); or

----------

* Confidential information has been omitted.

                                       5
<PAGE>

          (e)   rejected (i.e., closed and not implemented).

                                       6
<PAGE>

PROPRIETARY AND CONFIDENTIAL                                  PRUDENTIAL / EXULT
--------------------------------------------------------------------------------

                               SERVICES AGREEMENT

                                   SCHEDULE L

                                  KEY PERSONNEL

                                      FINAL

--------------------------------------------------------------------------------
Sch. L - Final

<PAGE>

                                   SCHEDULE L

                                  KEY PERSONNEL

1     INTRODUCTION

      This schedule sets forth the Key Personnel of Service Provider and Client
      for the purposes of Section 13.02 of the Agreement and as otherwise
      provided.

2     KEY PERSONNEL

      Key Personnel for Service Provider

      -     Service Provider Designated Executive

      -     Service Provider Transition Lead

      -     Service Provider Delivery Lead

      -     Service Provider IT Delivery Lead

      -     Service Provider Commercial/Financial Lead

      Key Personnel for the Client:

      -     Prudential Designated Executive

      For each of the Client and Service Provider, the responsibilities for the
      Key Personnel shall include the following:

      [***]*

      Each Key Personnel will serve in their positions (unless otherwise agreed
      by the parties) for a minimum of [***]*. At anytime after [***]* from the
      Effective Date one of the parties may request to reassign a Key Personnel.
      Reassignment may take place with a minimum of [***]* notice and agreement
      between the parties. The parties will make a reasonable effort to
      accommodate and achieve the reassignment and the timing of the
      reassignment as requested.

      At anytime after [***]* from the Effective Date either of the parties may
      reassign a Key Personnel with [***]* notice without any additional
      agreement requirements.

3     KEY PERSONNEL FULFILLING ROLES IDENTIFIED ABOVE

      SERVICE PROVIDER:

      [***]*

----------

* Confidential information has been omitted.

<PAGE>

PROPRIETARY AND CONFIDENTIAL                                  PRUDENTIAL / EXULT
--------------------------------------------------------------------------------

                               SERVICES AGREEMENT

                                   SCHEDULE O

                             SYSTEM ACCESS PROTOCOLS

                                      FINAL

                                   SCHEDULE O

                             SYSTEM ACCESS PROTOCOLS

1     PRINCIPLES

      a.    Overview. During the Term Client will make available to Service
            Provider access to the Client Networks and Client's information
            technology systems as necessary for Service Provider to perform the
            Services, and Service Provider will make available to Client access
            to Service Provider's information technology systems as necessary
            for Client's performance and receipt of Services under the Agreement
            (the systems of each Party, for the purposes of this Schedule O
            shall be called the "Systems"). The Parties desire to take
            reasonable mutual precautions to safeguard the security of their
            respective Systems.

      b.    Compliance with Policies. Each Party agrees to comply with the
            reasonable System access and security policies of the other.
            Client's Information Security Requirements as of the Effective Date
            are attached as Attachment A to this Schedule O. Client agrees it
            will follow the same procedures for its permitted access to Service
            Provider's Systems, unless Service Provider submits an alternative
            set of procedures prior to the Effective Date or in accordance with
            Section 1.c below. With respect to Service Provider's access to
            Client Networks and Systems, Section 3.04(d) of the Agreement shall
            also be applicable.

      c.    Changes to Policies. Each Party reserves the right to make
            reasonable changes and amendments to its System access policies from
            time to time and shall provide the other Party with reasonable
            advance written notice of any changes or amendments. If any such
            changes or amendments materially change the Services, the Parties
            shall address the impact of such Changes through Change Control
            Management.

2     PROTECTION OF CONFIDENTIAL INFORMATION

      a.    Service Provider Employees and Contractors. Service Provider agrees
            that its employees and subcontractors having access to Client
            Networks and Systems will be subject to written non-disclosure
            agreements consistent with Service Provider's confidentiality
            obligations under Section 18 of the Agreement.

      b.    Client Employees and Contractors. Client agrees that its employees
            are subject to Client policies including confidentiality and
            non-disclosure obligations with respect to third party confidential
            material. Any contractors of Client with whom Service Provider is
            obligated to provide access to certain Service Provider Systems
            shall have signed with Client or Service Provider a confidentiality
            agreement in which they agree to maintain third party

--------------------------------------------------------------------------------
Schedule O - Final                                                         EXULT

<PAGE>

            material confidential.

3     CLIENT SYSTEM SECURITY POLICIES

      Table O-1 below sets forth the Client System Security Policies that shall
      be followed by the Client and the Service Provider when accessing the
      Client Network and which are hereby incorporated by reference into this
      Agreement and which may be modified from time to time by Client. Client
      will provide Service Provider with written notice of Client's
      modifications of such Policies prior to the effectiveness of such policies
      to Service. [***]*

                        CLIENT SYSTEM SECURITY POLICIES

                                   TABLE O-1

[***]*

4.    RECORDS.

      Service Provider and Client shall follow Client's record management
      guidelines as described in Schedule AG.

----------

* Confidential information has been omitted.

                                       2
<PAGE>

                                  ATTACHMENT A

                        INFORMATION SECURITY REQUIREMENTS

This Attachment A outlines the Information Security Requirements in effect for
all personnel being provided access to Client or Service Provider Systems.

1. SYSTEM ACCESS. System access may be dependent upon the dial-up services or
dedicated telephone lines that connect the site with the applicable data
processing centers. Regulations regarding System access are as follow:

[***]*

2. USER ACCESS. The protection of the System is dependent upon the ability to
control access to the System. It is the User's responsibility to be certain that
computer accessibility is properly secured.

[***]*

3. PASSWORDS. Passwords are critical to the security of the System as they
verify that anyone signing on has the authority to do so.

[***]*

4. VIRUS PROTECTION. Anti-virus measures are essential to assure protection
against outside infection. All personnel must familiarize themselves with
anti-virus protection requirements (stated below) and take, at a minimum, the
following steps to assure compliance.

[***]*

----------

* Confidential information has been omitted.

                                       3
<PAGE>

PROPRIETARY AND CONFIDENTIAL                                  PRUDENTIAL / EXULT
--------------------------------------------------------------------------------

                               SERVICES AGREEMENT

                                   SCHEDULE Q

                       GENERAL ASSIGNMENT AND BILL OF SALE

                                      FINAL

--------------------------------------------------------------------------------
Schedule Q - Final                                                         EXULT

<PAGE>

                       GENERAL ASSIGNMENT AND BILL OF SALE

THIS GENERAL ASSIGNMENT AND BILL OF SALE is entered into this ___day of ______,
2002, by and between Exult, Inc., a Delaware corporation with offices at 4 Park
Plaza, Suite 1000, Irvine California 92614 ("SERVICE PROVIDER") and The
Prudential Insurance Company of America, a New Jersey corporation with offices
at 751 Broad Street, Newark, New Jersey 07102 ("CLIENT").

                              W I T N E S S E T H:

WHEREAS, Service Provider and Client are entering into a Master Services
Agreement dated January 11, 2002 ("AGREEMENT");

WHEREAS, pursuant to the Agreement and this Schedule Q, Client has agreed to
transfer and assign, and Service Provider has acquire to purchase the assets
identified in this Schedule Q including as listed in Exhibit A attached hereto
(the "PURCHASED ASSETS") on such date for closing (the "CLOSING") as the Parties
may agree ("CLOSING DATE"); and

WHEREAS, subject to the Agreement and this Schedule Q, Client desires to
transfer and assign the Purchased Assets and Service Provider desires to accept
the transfer and assignment thereof.

NOW THEREFORE, in consideration of the mutual covenants, contained herein, a
payment of [***]* and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Client and Service Provider agree
to the transfer and assignment of the Purchased Assets pursuant to the terms and
conditions of the Agreement and the terms and conditions set forth below:

Section 1. Purchased Assets.

      (a) The Purchased Assets shall include the items listed on Exhibit A
hereto.

Section 2. General Provisions

      (a) Unless otherwise specified, any capitalized terms that are not defined
in this Schedule shall have the meanings assigned to them in the Agreement.

      (b) Client hereby sells, transfers, conveys, and assigns to Service
Provider all of Client's right, title and interest in the Purchased Assets.

      (c) Service Provider hereby accepts the sale, transfer, conveyance, and
assignment of the Purchased Assets as granted herein.

      (d) At any time or from time to time after the date hereof, at Service
Provider's request and cost, Client shall execute such other instruments of
transfer, conveyance, assignment, and confirmation, provide such materials and
information and take such other actions as Service Provider may reasonably deem
necessary or desirable in order to more effectively transfer, convey, and assign
to Service Provider, and confirm Service Provider's title to, all of the
Purchased Assets, except in the case of software included in the Assets, a right
to use, and, to the full extent permitted by law and subject to any required
Consents, to put Service Provider in actual possession and operating control of
the Assets and to assist Service Provider in exercising all rights with respect
thereto.

----------

* Confidential information has been omitted.

                                       2
<PAGE>

      (e) This General Assignment and Bill of Sale may be executed in any number
of counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.

      (f) Client represents and warrants to the best of its knowledge and belief
that: (i) Client owns or has a license to, and will convey to Service Provider
at the Closing, all of Client's right, title and interest to all of the
Purchased Assets free and clear of any security interests, pledges, liens,
charges, encumbrances, equities, claims and options of whatever nature; and (ii)
Client has not transferred or purported to transfer any interest in any of the
Purchased Assets to any third party, and to the best of Client's knowledge, no
party other than Client has any right, title or interest in or to any of the
Purchased Assets; and (iii) the Purchased Assets constitute all of the assets
used by Client in its performance of the imaging functions included within
Schedule A of the Agreement. [***]*

      (g) If any third party asserts a claim of security interests, pledges,
liens, charges, encumbrances, equities, claims and options of whatever nature,
or that any third party has any right, title or interest in or to any of the
Purchased Assets, Client will indemnify Service Provider against such claim
pursuant to the terms of Section 22.03 of the Agreement.

      (h) Nothing in this General Assignment or Bill of Sale shall negate or
alter Service Provider's obligation to pay for Consents (pursuant to Article 12
of the Agreement)

IN WITNESS WHEREOF, the undersigned have caused their duly authorized officers
to execute this General Assignment and Bill of Sale on the date first written
above.

EXULT, INC.                                       THE PRUDENTIAL
                                                  INSURANCE COMPANY OF
                                                  AMERICA

By:                                               By:
   ---------------------------                       ---------------------------

Title:                                            Title:
      ------------------------                          ------------------------

Date:                                             Date:
     -------------------------                         -------------------------

----------

* Confidential information has been omitted.

                                       3
<PAGE>

                                    EXHIBIT A
                       GENERAL ASSIGNMENT AND BILL OF SALE

                                Purchased Assets

      (i)   The Client Equipment that is listed in Schedule E of the Agreement.

      (ii)  [***]*

----------

* Confidential information has been omitted.

                                       4
<PAGE>

PROPRIETARY AND CONFIDENTIAL                                  PRUDENTIAL / EXULT
--------------------------------------------------------------------------------

                               SERVICES AGREEMENT

                                   SCHEDULE R

                           DISASTER RECOVERY SERVICES

                                      FINAL

--------------------------------------------------------------------------------
Sch. R - Final                                                             EXULT

<PAGE>

                                   SCHEDULE R

                           DISASTER RECOVERY SERVICES

      1. GENERAL PROVISIONS

      Client shall be responsible for its allocated tasks under the DRP. As
      required under the DRP, Service Provider shall [***]*, (i) periodically
      update and test and certify to Client the operability of the DRP in
      conformance with the standards set forth in the DRP, but in no event less
      than [***]* period of the Term, and (ii) implement the DRP upon the
      occurrence of a disaster (as such term is defined in the DRP).
      Notwithstanding any cure period set forth in Section 21.02 of the
      Agreement, Service Provider shall reinstate the Payroll Process and call
      center functions within [***]* of the occurrence of a disaster, and shall
      restore all other business functions that are part of the Services within
      [***]* of the occurrence of a disaster, unless a different recovery
      schedule is set forth in this Agreement. If Service Provider fails to
      reinstate all or a material portion of the Services in accordance with the
      foregoing sentence then Client shall have the right to: (i)
      notwithstanding Section 3.01 of the Agreement, perform for itself or
      secure from a Third Party any portion of the Services not reinstated; and
      (ii) recover from Service Provider the costs of cover in providing or
      securing from a Third Party any portion of the Services not reinstated,
      for up to [***]* after such disaster. [***]* Any additional disaster
      recovery services requested by Client and the fees payable therefore will
      be determined in accordance with Change Control Management. Service
      Provider will provide a data backup plan including procedures and
      implementation to provide Client periodic backups and to maintain recovery
      procedures for all data and network information pertaining to
      configuration in the event of server crashes or data corruption.

      2. DISASTER RECOVERY PLAN REQUIREMENTS

      As a part of the Agreement, within [***]* after the Effective Date,
      Service Provider and Client shall prepare a mutually acceptable Disaster
      Recovery Plan ("DRP Plan") for the recovery of the Service Provider ESC
      operation, the Services provided to the Client from the ESC, and the IT
      services provided by the Client in support of the Services. The DRP Plan,
      must, at a minimum, contain all of the following elements. [***]* Until
      such time as the DRP Plan is developed and agreed to, the Parties agree to
      operate their respective disaster recovery plans, as they exist on the
      Effective Date. The DRP Plan must include the development, documentation,
      and implementation of a plan of action that will guide the Parties in the
      return of essential business operations, and eventually to a full business
      recovery, following an emergency or disaster occurrence affecting the
      Service Provider or Client, or the ability of each of the Parties to
      fulfill their obligations under this Agreement. Toward that end, the
      requirements to be included in each Party's section of the DRP Plan are as
      follows:

            -     Identify the management and membership of the disaster
                  response teams;

            -     Identify the executive and emergency response agenda elements
                  which must be addressed during an emergency

            -     Identify and document the required recovery actions, identify
                  and ensure the availability of required resources, and compile
                  this information as the DRP Plan;

----------

* Confidential information has been omitted.

                                       1
<PAGE>

            -     Develop and implement processes for communicating, both
                  internally and externally, following the loss of existing
                  telecommunications and/or facility access, such as in a
                  regional disaster

            -     Train the recovery teams in the performance of their specific
                  tasks;

            -     Identify and verify vendor recovery support capability;

            -     Identify and ensure that all third party support arrangements
                  involving Client have adequate disaster back-up and recovery
                  plans.

            -     Identify information and record requirements, protection, and
                  recoverability status;

            -     Identify Staff Departments recovery support and response
                  capabilities;

            -     Develop a DRP Plan testing and maintenance program.

      The recovery locations shall be at least fifty (50) miles from the primary
      site.

      Each Party shall have the opportunity to be present during tests of the
      DRP Plan and shall upon completion of all tests of the DRP Plan provide a
      written report to the other detailing the result of the tests. In the
      event the results reveal unreasonable risks as to the ability of the
      Parties to transition to performance under the DRP Plan, both Parties
      shall meet to discuss and agree upon a solution for correcting any defects
      in the DRP Plan and shall agree to revise the DRP Plan in a manner
      acceptable to Client.

      The DRP Plan must be made up of a series of individual functional Action
      Plans. The Action Plans must contain the following elements for each of
      Service Provider, Client, and interconnections between the Parties and
      their operations:

      [***]*

----------

* Confidential information has been omitted.

                                       2
<PAGE>

PROPRIETARY AND CONFIDENTIAL                                  PRUDENTIAL / EXULT
--------------------------------------------------------------------------------

                               SERVICES AGREEMENT

                                   SCHEDULE T

                         TERMINATION ASSISTANCE SERVICES

                                      FINAL

--------------------------------------------------------------------------------
Sch. T - Final

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                              <C>
1    INTRODUCTION............................................... 1

2    SERVICE PROVIDER TERMINATION ASSISTANCE PLAN SERVICES...... 1
</TABLE>

                                       i
<PAGE>

                                   SCHEDULE T

                         TERMINATION ASSISTANCE SERVICES

1     INTRODUCTION

      Subject to and in accordance with Section 21.08 of this Agreement, upon
      expiration or any termination of this Agreement for any reason, Service
      Provider will provide the Termination Assistance Services and assist the
      Client's undertaking to transition the functions and processes of the
      Services to Client or another provider.

2     SERVICE PROVIDER TERMINATION ASSISTANCE PLAN SERVICES

      Subject to and in accordance with Section 21.08 of this Agreement, Service
      Provider shall provide the following Termination Assistance Services, and
      in accordance with the Termination Assistance Plan:

      [***]*

----------

* Confidential information has been omitted.

                                       1
<PAGE>

PROPRIETARY AND CONFIDENTIAL                                  PRUDENTIAL / EXULT
--------------------------------------------------------------------------------

                               SERVICES AGREEMENT

                                   SCHEDULE U

                                    LOCATIONS

                                      FINAL

--------------------------------------------------------------------------------
Sch. U - Final                                                             Exult

<PAGE>

                                   SCHEDULE U

                                    LOCATIONS

1     INTRODUCTION

      This schedule identifies the initial Client and Service Provider locations
      that Service Provider shall use to perform the services, which may be
      supplemented or revised from time to time in accordance with Section 3.04
      of the Agreement. Included in this list may be both Client and Service
      Provider sites as agreed.

2     LOCATIONS

      [***]*

----------

* Confidential information has been omitted.

<PAGE>

PROPRIETARY AND CONFIDENTIAL                                  PRUDENTIAL / EXULT
--------------------------------------------------------------------------------

                               SERVICES AGREEMENT

                                   SCHEDULE W

                              REPATRIATION PLANNING

                                      FINAL

--------------------------------------------------------------------------------
Schedule  W - Final                                                        Exult

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                    <C>
1    INTRODUCTION..................................................... 1

2    REPATRIATION PLANNING PRINCIPLES................................. 1

3    ON GOING ACTIVITIES:............................................. 1

4    END OF CONTRACT ACTIVITIES:...................................... 1
</TABLE>

                                       i
<PAGE>

                                   SCHEDULE W

                              REPATRIATION PLANNING

1     INTRODUCTION

      In anticipation of the requirements necessary to repatriate the Services
      either in house or to an alternative third party supplier, a general
      Repatriation Plan (the "Plan") will be developed jointly by Service
      Provider and Client. Upon the expiration or any termination of this
      Agreement, Service Provider will assist the Client, using commercially
      reasonable efforts, in the development of a specific Plan, based on the
      actual circumstances at that time, and according to Exhibit 1, as
      reasonably necessary to assist Client's migration from the Services
      performed by Service Provider to the assumption of processes and tasks by
      Client or a third party provider of services.

2     REPATRIATION PLANNING PRINCIPLES

      2.1   [***]*

      2.2   The Repatriation approach is based on the Service Provider providing
            on-going knowledge sharing opportunities to the Client as defined in
            Section 3.08 of the Agreement, end of term planning and assistance
            activities defined in Schedule T (Termination Assistance), and a DRP
            Plan as outlined in Schedule R.

      2.3   During the first [***]* following the Effective Date, the Parties
            will establish and document through Change Control Management, a
            generic Plan consisting of the detailed activities, procedures,
            documentation, training, and location of Client Data and licensed
            software available to the Client at end of term as provided for in
            the Agreement. A high-level repatriation plan is attached for
            reference. [***]*

3     ON GOING ACTIVITIES:

      On an ongoing basis, Service Provider shall update the plan based on then
      current conditions. In the event that Client requests major changes to the
      plan, such change shall be handled through the Change Control Management
      Process [***]*

      [***]*

4     END OF CONTRACT ACTIVITIES:

      During the Termination Assistance Period, Service Provider will assist
      Client as part of Termination Assistance, to develop a specific Plan based
      on the circumstances that then exist. The Service Provider will make
      appropriate resources available as reasonably requested by Client to
      assist the Client in developing the specific Plan following the process
      steps as outlined in the attached Exhibit 1.

5     REPATRIATION PLAN

      See the attached Repatriation Plan as Exhibit 1 below.

----------

* Confidential information has been omitted.

                                       1
<PAGE>

PROPRIETARY AND CONFIDENTIAL                                  PRUDENTIAL / EXULT
--------------------------------------------------------------------------------

                               SERVICES AGREEMENT

                                   SCHEDULE Y

                          IN-FLIGHT AND OTHER PROJECTS

                                      FINAL

--------------------------------------------------------------------------------
Sch. Y - Final

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                     <C>
1    IN-FLIGHT PROJECTS IDENTIFIED AS IN-SCOPE......................... 1

2    OTHER PROPOSED PROJECTS........................................... 1
</TABLE>

                                       i
<PAGE>

                                   SCHEDULE Y

                          IN-FLIGHT AND OTHER PROJECTS

1     IN-FLIGHT PROJECTS IDENTIFIED AS IN-SCOPE

      As of the Effective Date, Exult and Prudential have identified the
      following 2001 In-Flight Projects.

      [***]*

      1.1   In-Flight Projects Table Assumptions

            [***]*

      1.2   For any In-Flight Projects identified in the table above that do not
            have a complete and agreed project statement, including the
            information identified in Section 2.2 of this Schedule, Customer and
            Service Provider shall complete and agree to a project statement
            within [***]* after the Effective Date.

2     OTHER PROPOSED PROJECTS

      2.1   The terms applicable to a project shall be established through the
            Change Control Process and shall be included in a mutually agreed
            project statement.

      2.2   Content of Project statement

            -     Scope of work

            -     Service Level Impact

            -     Impact analysis including priority

            -     Deliverables (as applicable)

            -     Intellectual Property ownership and licenses

            -     Acceptance criteria, timeframe & process [as applicable]

            -     Project timetable (including start and end dates, activity
                  duration and critical dependencies

            -     Responsibilities

            -     Staffing (implementation and ongoing)

----------

* Confidential information has been omitted.

                                       1
<PAGE>

            -     Assumptions

            -     Charges and payment terms

            -     Project manager contacts

            -     Other terms and conditions, to detail variations and/or
                  additions to this Agreement, and/or Schedules applicable in
                  relation to the Project.

                                       2
<PAGE>

PROPRIETARY AND CONFIDENTIAL                                  PRUDENTIAL / EXULT
--------------------------------------------------------------------------------

                               SERVICES AGREEMENT

                                   SCHEDULE Z

                                ESCROW AGREEMENT

                                      FINAL

The Parties agree to execute with [***]* an escrow agreement in the form
included in this Schedule Z, including Exhibit C attached, within [***]* after
the Effective Date of this Master Services Agreement. If [***]* objects to any
of the terms in Exhibit C, the Parties will cooperate in good faith to negotiate
reasonable terms with [***]*, and if necessary, will execute a replacement
escrow agreement with another provider of escrow services within [***]* of the
Effective Date of this Master Services Agreement.

----------

* Confidential information has been omitted.

--------------------------------------------------------------------------------
Schedule Z - Final

<PAGE>

                                   SCHEDULE Z

                                ESCROW AGREEMENT

                                    EXHIBIT C

                                    PRODUCER

The undersigned, Exult, Inc. ("Producer"), hereby acknowledges and agrees to be
bound by the terms of this Two-Party Licensee Escrow Agreement ("Agreement") by
and between The Prudential Insurance Company of America, (referred to under this
Agreement as "Licensee") and [***]*being dated October 10, 1998, as amended by
the terms of this Exhibit C.

This Exhibit C is effective when signed by each of Producer, Licensee and [***]*

Please list a primary contact person, company name, and address, as well as
telephone and facsimile numbers. Notices to Producer required under this
Agreement shall be given in the form and manner set forth in Section 12(i) of
this Agreement delivered to:

         Exult, Inc.
         [***]*

  With a copy to:

         Exult, Inc.
         [***]*

The following terms and conditions, and modifications to this Agreement shall
apply with respect to Producer:
[***]*

      IN WITNESS WHEREOF, Producer has caused its duly authorized officer to
execute this Agreement as of the latest of the execution dates indicated below.

<TABLE>
<S>                               <C>                               <C>
[***]*                            THE PRUDENTIAL INSURANCE          EXULT, INC.
                                  COMPANY OF AMERICA

By:                               By:                               By:
   --------------------------        --------------------------        --------------------------

    [Printed name and title]          [Printed name and title]        [Printed name and title]

Dated: __________________, 2002   Dated: __________________, 2002   Dated: __________________, 2002
</TABLE>

----------

* Confidential information has been omitted.

                                       i
<PAGE>

PROPRIETARY AND CONFIDENTIAL                                  PRUDENTIAL / EXULT
--------------------------------------------------------------------------------

                               SERVICES AGREEMENT

                                   SCHEDULE AA

                     SERVICE PROVIDER SYSTEM SECURITY POLICY

                                      FINAL

--------------------------------------------------------------------------------
Sch. AA - Final                         1                                  EXULT

<PAGE>

                                   SCHEDULE AA
                     SERVICE PROVIDER SYSTEM SECURITY POLICY

1     SERVICE PROVIDER SYSTEM SECURITY POLICY

      This Schedule AA defines the Service Provider System Security Policies
      that shall be followed by the Customer and the Service Provider when
      accessing the Service Provider IT Domain in accordance with this
      Agreement. Changes to these policies will be handled by following the
      Change Control Management procedure defined in Schedule K. The Master
      Services Agreement, as may be amended from time to time, shall take
      precedence and govern any conflict or discrepancy that arise between a
      policy defined in this schedule and the terms and conditions contained in
      the Master Services Agreement.

                    SERVICE PROVIDER SYSTEM SECURITY POLICIES

                                   TABLE AA-1

        [***]*

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* Confidential information has been omitted.

<PAGE>

PROPRIETARY AND CONFIDENTIAL                                  PRUDENTIAL / EXULT
--------------------------------------------------------------------------------

                               SERVICES AGREEMENT

                                   SCHEDULE AB

                               CLIENT COMPETITORS

                                      FINAL

--------------------------------------------------------------------------------
Sch. AB - Final

<PAGE>

                                   SCHEDULE AB

                               CLIENT COMPETITORS

                              PRUDENTIAL FINANCIAL

      [***]*

----------

* Confidential information has been omitted.

                                       1
<PAGE>

PROPRIETARY AND CONFIDENTIAL                                  PRUDENTIAL / EXULT
--------------------------------------------------------------------------------

                               SERVICES AGREEMENT

                                   SCHEDULE AC

                    APPROVED SERVICE PROVIDER REPRESENTATIVES

                                      FINAL

--------------------------------------------------------------------------------
Sch. AC - Final

<PAGE>

                                   SCHEDULE AC

                    APPROVED SERVICE PROVIDER REPRESENTATIVES

      This schedule sets forth the Approved Service Provider Representatives
      identified as of the Effective Date and in accordance with Section 13.04
      of the Agreement:

      [***]*

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* Confidential information has been omitted.

<PAGE>

PROPRIETARY AND CONFIDENTIAL                                  PRUDENTIAL / EXULT
--------------------------------------------------------------------------------

                               SERVICES AGREEMENT

                                   SCHEDULE AD

                                   CLIENT LOGO

                                      FINAL

--------------------------------------------------------------------------------
Sch. AD - Final

<PAGE>

                                   SCHEDULE AD

                                   CLIENT LOGO

      This schedule sets forth the Client Logo for Service Provider use, for
      publicity purposes, in accordance with Section 6.01 of the Agreement:

      [***]*

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* Confidential information has been omitted.

<PAGE>

PROPRIETARY AND CONFIDENTIAL                                  PRUDENTIAL / EXULT
--------------------------------------------------------------------------------

                               SERVICES AGREEMENT

                                   SCHEDULE AE

                                   DISCLOSURES

                                      FINAL

--------------------------------------------------------------------------------
Sch. AE - Final

<PAGE>

                                   SCHEDULE AE

                                   DISCLOSURES

      [***]*

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* Confidential information has been omitted.

                                       1
<PAGE>

PROPRIETARY AND CONFIDENTIAL                                  PRUDENTIAL / EXULT
--------------------------------------------------------------------------------

                               SERVICES AGREEMENT

                                   SCHEDULE AG

                               RECORDS MANAGEMENT

                                      FINAL

--------------------------------------------------------------------------------
Sch. AG - Final

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                <C>
1     INTRODUCTION................................................ 2

2     RECORDS TRANSITION.......................................... 2

3     HISTORICAL RECORDS.......................................... 2

4     AD HOC RETRIEVALS........................................... 2

5     RECORD RETENTION............................................ 3

6     RECORDS DESTRUCTION......................................... 3

7     CHANGES..................................................... 3
</TABLE>

                                       1
<PAGE>

                                   SCHEDULE AG

                               RECORDS MANAGEMENT

1     INTRODUCTION

      As part of the Transition, Service Provider and Client shall prepare a
      written plan ("Records Plan") that details an overall approach for records
      management within 120 days of the Effective Date. This Records Plan shall
      detail which types of records will be retained by Client, which types of
      records will be maintained by Service Provider, and will establish the
      disposition of records in existence prior to the Effective Date. This
      Records Plan shall also outline any specific cost distribution between
      Client and Service Provider for tasks not identified below.

2     RECORDS TRANSITION

      During the Transition Period, Client will provide records inventory
      details to Service Provider. These inventory details will include, but not
      be limited to the types, media, location, and organization methodology for
      all records that are relevant to Service Provider's Services to Client.
      Based on this inventory, Service Provider will identify all Client's
      records that must be transferred or maintained on-site at Service Provider
      Locations in order to ensure proper delivery of Services to Client. Client
      and Service Provider will jointly review the records selected for
      relocation to Service Provider and agree on records to be moved. Service
      Provider will provide project management for the packaging and
      transportation of agreed upon records. Client will be responsible for
      providing all labor associated with the packing of records identified for
      movement to Service Provider, as well as all costs associated with the
      disposition, movement, storage or destruction of records that are not
      moving to Service Provider. Service Provider will be responsible for all
      costs for packaging materials and transportation of records to the Service
      Provider Locations.

3     HISTORICAL RECORDS

      Client will make historical records (i.e., those that have not been moved
      to Service Provider) available to Service Provider for research and other
      ongoing activities related to the Services. Client will provide access to
      historical records via one of two methods:

      3.1   Provide Service Provider with detailed historical records archive
            information and indexes to such extent that Service Provider may
            request and retrieve appropriate historical records as required from
            Client's records archives; or

      3.2   Provide a list of contact persons to Service Provider for the
            purpose of enabling or requesting archived historical records.

4     AD HOC RETRIEVALS

      From time to time, Service Provider may require physical access to
      historical records that are archived by Client and are relevant to the
      Services. The cost of movement of historical records to

                                       2
<PAGE>

      and from Client archive locations to Service Provider in support of
      research requests or other Schedule A activities [***]*

5     RECORD RETENTION

      [***]*

6     RECORDS DESTRUCTION

      From time to time, Service Provider will identify records under its
      control that have reached their retention limit and notify Client in
      writing. Within [***]* of such notification, Client will authorize
      destruction or other disposition as noted in the retention guidelines in
      writing to Service Provider. If Service Provider does not receive
      disposition or authorization from Client within the [***]* notification
      period referenced in this Section, the documents will be returned to the
      identified Client owner at Client's expense. [***]*

7     CHANGES

      Changes to matters covered by the Schedule AG shall be handled using
      Change Control Management.

----------

* Confidential information has been omitted.

                                       3

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