EXHIBIT 10.35
SYSTEM DEVELOPMENT AND SERVICES AGREEMENT
BETWEEN
FRANKLIN/▇▇▇▇▇▇▇▇▇ INVESTOR SERVICES, INC
AND
SUNGARD SHAREHOLDER SYSTEMS, INC.
Table of Contents
Recitals...............................................................1
1. Definitions............................................................1
2. Deliverables...........................................................8
2.1 General................................................................8
2.2 Priority...............................................................9
2.3 Schedule...............................................................9
2.4 Investar and Investar*ONE..............................................9
(a) Investar...............................................................9
(b) Investar*ONE...........................................................9
2.5 Modification Process..................................................10
(a) General procedures....................................................10
(b) SRAs. ................................................................10
(c) SRA review process....................................................10
(d) SDS's.................................................................10
(e) SDS review process....................................................11
(f) Accepted SDS..........................................................11
(g) SDS Amendments........................................................11
(h) SDS Cancellation......................................................12
2.6 Specific Deliverables.................................................13
(a) Day One Class A Deliverables..........................................13
(b) Day One Class B Deliverables..........................................13
(i) Agreed-upon SRAs..................................................13
(ii) Interfaces and reports....... ....................................13
(a) Day One Deferred Deliverables and Day Two Deliverables...............14
(b) Requested Enhancements ..............................................14
(c) Eliminated subsystems................................................14
3. Scalability..........................................................14
3.1 Scalability Target...................................................14
(a) Completion of Initial Conversion.....................................14
(b) Subsequent scalability...............................................14
(c) Acquisitions.........................................................14
3.2 Performance Requirements.............................................15
3.3 Cost of Modifying the Software for Scalability Purposes...............15
4. Correction of Non-Conformities........................................16
4.1 General...............................................................16
4.2 Procedure.............................................................16
(a) Notification..........................................................16
(i) Discovery by FTIS.................................................16
(ii) Discovery by SunGard..............................................16
(b) SunGard response.......................................................16
(c) Class One Non-Conformities.............................................17
(d) Class Two Non-Conformities.............................................17
4.3 Fault Determination...................................................17
4.4 Compensation..........................................................17
5. SunGard Development...................................................18
5.1 DefinedDeliverables... ...............................................18
(a) Day One Class A Deliverables..........................................18
(b) Dedicated Developer Hours.............................................18
(c) Additional Developer Hours............................................18
5.2 FTIS Hours............................................................18
5.3 AdditionalServices.... ...............................................20
(a) In general............................................................20
(b) Rates for Additional Services.........................................20
(c) Increase in rates.....................................................20
5.4 Updates and enhancements..............................................20
(a) Development not requested by FTIS.....................................20
(b) Requested Enhancements................................................20
6. Delivery, Installation and Conversion...............................21
6.1 Testing by Third Party Vendors........................................21
6.2 Manner of Delivery....................................................21
6.3 Installation..........................................................21
(a) Acceptance testing....................................................21
(b) Installation..........................................................21
(c) Subsequent installation. .............................................22
(d) Installation prior to Completion of Initial Conversion................22
6.4 Conversion............................................................22
(a) Schedule..............................................................22
(b) Requirements..........................................................22
(c) Cost..................................................................22
(i) Initial Conversion....................................................22
(ii) Conversion necessitated by new Deliverables...........................22
(iii) Conversion necessitated by Acquired Accounts..........................22
6.5 Legacy System.........................................................23
7. Processing............................................................23
7.1 Operating Environment.................................................23
7.2 Modifications to the Operating Environment............................23
(a) Non-material modifications............................................23
(b) Material modifications................................................23
7.3 Operation.............................................................24
(a) Data center management................................................24
(b) Production control....................................................25
8. SunGard Services......................................................25
8.1 Training..............................................................25
(a) Prior to Completion of Initial Conversion.............................25
(b) Subsequent training...................................................25
8.2 Support...............................................................25
(a) Prior to Completion of Initial Conversion.............................25
(b) Subsequent support....................................................26
8.3 Disaster Recovery.....................................................26
9. Compensation..........................................................26
9.1 Initial Payment......................................................26
9.2 Account Fees..........................................................26
9.3 Modification of Account Fees..........................................26
9.4 Expenses..............................................................27
9.5 Taxes.................................................................28
9.6 Late Payment..........................................................28
10. Licenses and Ownership................................................28
10.1 License by SunGard....................................................28
(a) License rights regarding Software.....................................28
(b) License rights regarding Documentation................................29
(c) Term..................................................................29
(d) License limitations...................................................29
(e) FTIS liability........................................................29
10.2 License by FTIS.......................................................29
10.3 Ownership.............................................................30
(a) SunGard ownership.....................................................30
(b) FTIS ownership........................................................30
(c) Exceptions............................................................30
11. Confidentiality.......................................................30
11.1 Definition of Confidential Information................................30
11.2 Nondisclosure and Nonuse of Confidential Information..................31
11.3 Limitations on Confidentiality........................................31
11.4 Return of Tangible Materials..........................................32
12. FTIS Enhancements.....................................................32
12.1 In General............................................................32
12.2 Use of Deliverables...................................................32
12.3 Restrictions on FTIS Enhancement......................................32
12.4 Limitation of SunGard Obligations.....................................32
13. Certain FTIS Obligations..............................................32
13.1 Access to Facilities and Personnel....................................32
13.2 FTIS Resources........................................................33
13.3 Use of Software.......................................................33
13.4 Non-U.S. Processing Site..............................................33
13.5 Export Control........................................................33
13.6 Data Accuracy.........................................................33
13.7 Data Use..............................................................33
13.8 Backups...............................................................33
13.9 Review of Data and Discovery of Non-Conformities......................34
13.10 Account Purging.......................................................34
14. Term/Termination/Transition Services..................................34
14.1 Term..................................................................34
14.2 Termination for Material Breach.......................................34
14.3 Effect of Termination for Material Breach.............................35
(a) Termination by FTIS...................................................35
(b) Termination by SunGard................................................35
14.4 Transition Services...................................................35
14.5 Survival..............................................................36
15. Dispute Resolution....................................................36
15.1 Resolution by the Parties.............................................36
15.2 Arbitration...........................................................36
15.3 Abbreviated Arbitration Procedures....................................36
(a) Commencement..........................................................36
(b) Selection of Arbitrator...............................................36
(c) Procedures............................................................37
(d) Decision..............................................................37
15.4 General Arbitration Procedures........................................37
(a) Commencement..........................................................37
(b) Selection of arbitrator...............................................37
(c) Procedures............................................................37
(d) Decision..............................................................37
16. Remedies; Limitations of Liability....................................37
16.1 General...............................................................37
16.2 Attorneys' Fees and Costs.............................................37
16.3 Interlocutory Relief..................................................38
16.4 Limitations of Liability..............................................38
17. Audit Procedures......................................................39
17.1 Record Keeping........................................................39
17.2 Audit Right...........................................................39
18. Representations and Warranties........................................40
18.1 FTIS Representations and Warranties...................................40
18.2 SunGard Representations and Warranties................................40
18.3 Disclaimer ...........................................................41
19. Indemnification.......................................................41
19.1 SunGard's Indemnification.............................................41
19.2 FTIS' Indemnification.................................................41
19.3 SunGard-Caused Infringement...........................................42
19.4 FTIS-Caused Infringement..............................................42
20. Insolvency............................................................42
20.1 Right to Terminate....................................................42
20.2 License of "Intellectual Property"....................................43
21. Guarantee.............................................................43
21.1 By SunGard Data Systems...............................................43
21.2 By FRI................................................................43
22. SunGard Insurance.....................................................43
23. Miscellaneous.........................................................44
23.1 Cooperation...........................................................44
23.2 Assignment............................................................44
23.3 Modification..........................................................44
23.4 Entire Agreement......................................................44
23.5 Severability..........................................................44
23.6 Force Majeure.........................................................45
23.7 Waiver................................................................45
23.8 No Joint Venture or Agency............................................45
23.9 Notices...............................................................45
23.10 Applicable Law; Jurisdiction..........................................46
23.11 No Third Party Beneficiaries..........................................46
23.12 Counterparts; Facsimiles..............................................46
23.13 Prior Work............................................................46
23.14 Non-Solicitation......................................................46
Exhibit A:..Day One Class A Deliverables Exhibit B:..Day One Class B
Deliverables Exhibit C:..Day One Deferred Deliverables Exhibit D:..Day Two
Deliverables Exhibit E:..Investar Performance Requirements Exhibit F:..Initial
Conversion Schedule Exhibit G:..Operating Environment Exhibit H:..SunGard Data
Systems Insurance Policies Exhibit I:..SunGard Calling List Exhibit J:..SunGard
Payment Schedule Under Section 14.3(a) Exhibit K:..Excluded Transactions Exhibit
L:..Year 2000 Compliance Exhibit M:..Scheduled Rates
(EXHIBITS A THROUGH M INTENTIONALLY OMITTED)
THIS SYSTEM DEVELOPMENT AND SERVICES AGREEMENT ("Agreement") is made and entered
into as of the 29th day of August, 1997 (the "Effective Date") by and between:
(i) FRANKLIN/▇▇▇▇▇▇▇▇▇ INVESTOR SERVICES, INC., a California Corporation,
having a place of business at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
("FTIS"); and
(ii) SUNGARD SHAREHOLDER SYSTEMS, INC., a Delaware Corporation, having a
place of business at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("SunGard")
with reference to the following:
RECITALS
The following provisions form the basis for, and are hereby made a part
of, this Agreement:
A. SunGard is in the business of developing and distributing mutual fund
shareholder accounting systems, including Investar and Investar*ONE.
B. FTIS is in the business of providing transfer agency services to
clients receiving investment management services from affiliates of
Franklin Resources, Inc. ("FRI").
C. This Agreement sets forth the terms and conditions upon which FTIS will
engage SunGard to develop and deliver mutual fund shareholder accounting
systems.
AGREEMENT
Now, Therefore, in consideration of the promises and the mutual covenants herein
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereby agree as follows:
1. Definitions.
1.1 1981 Agreement. "1981 Agreement" shall mean the Stock Transfer
Data Processing Services Agreement between SunGard (f/k/a Applied
Financial Systems, Inc.) and FTIS (f/k/a Franklin Administrative
Services, Inc.), dated July 19, 1981, as amended.
1.2 Account. "Account" shall mean a unique combination of a company
number, a fund number of any FRI Client and an account number.
1.3 Account Fees. "Account Fees" shall mean per Account fees as
specified in Section 1.2
1.4 Acquired Accounts. "Acquired Accounts" shall mean Accounts relating
to assets under management by subsidiaries of FRI where such assets
became managed by FRI subsidiaries during the term of this Agreement
in connection with an acquisition by FRI or its subsidiaries of an
unrelated investment management company, a merger with an unrelated
investment management company or a similar transaction.
1.5 Additional Services. "Additional Services" shall mean services
provided to FTIS on a fee for service basis, as further specified
in Section 5.3.
1.6 Advance. "Advance" shall have the meaning specified in the Third
Amended MOU.
1.7 At No Additional Charge to FTIS. "At No Additional Charge to FTIS"
shall mean that services provided to FTIS are compensated through
payment of Account Fees and shall not be treated as FTIS Hours, or
as Additional Services, or Chargeable to FTIS, but shall be provided
without additional compensation by FTIS.
1.8 Audit Cost. "Audit Cost" shall mean, (i) if the audit is performed
by independent certified public accountants, the cost, including
reasonable expenses billed by such certified public accountants to
the auditing party for such audit; or (ii) if the audit is performed
by employees of the auditing party, all reasonable expenses incurred
during the course of such audit plus a reasonable allocation of each
such employee's salary reflecting the time spent on the audit.
1.9 Calling List. "Calling List" shall mean the list of
SunGard-designated personnel specified in Exhibit I, as such list
may be modified from time to time by SunGard.
1.10 Chargeable to FTIS. "Chargeable to FTIS" shall mean that services
provided to FTIS shall be treated as FTIS Hours, if available, or as
Additional Services if FTIS Hours are unavailable.
1.11 Claim. "Claim" shall mean any claim, action, suit, proceeding or
litigation and any loss, deficiency, damages, liabilities, costs and
expenses, including, without limitation, reasonable settlement costs
and reasonable attorneys' fees and all related costs and expenses,
payable as a result thereof or otherwise incurred in connection
therewith.
1.12 Class One Non-Conformity. "Class One Non-Conformity" shall mean a
Non-Conformity that (i) renders continued use of the Software either
impossible or substantially impractical or (ii) either materially
interrupts production by FTIS or makes continued production
substantially more costly for FTIS.
1.13 Class Two Non-Conformity. "Class Two Non-Conformity" shall mean
a Non-Conformity other than a Class One Non-Conformity.
1.14 Completion of Initial Conversion. "Completion of Initial
Conversion" shall mean successful completion of the last of the
Initial Conversions.
1.15 Confidential Information. "Confidential Information" shall have
the meaning specified in Section 11.1, below.
1.16 Conversion. "Conversion" shall mean conversion of Account data into
a format which allows processing of such data by the Software. At a
minimum, Conversion shall include (i) analysis of data transfer
results and tests for data integrity; (ii) conversion of all current
data for all Open Accounts and Zero Balance Accounts that are
included at the time of such conversion in the databases of the
system from which such data is being converted; (iii) conversion of
all historical data since and beginning with the beginning of the
preceding calendar year to the extent that such data exists on such
databases at the time of conversion; and (iv) conversion of certain
historical data since and beginning with the beginning of the tenth
preceding calendar year for all Open Accounts and Zero Balance
Accounts, such conversion to include data sufficient to allow FTIS
to generate reports used to establish the cost basis for assets held
in such Open Accounts and Zero Balance Accounts, to the extent that
such data exists on such databases at the time of such Conversion.
Notwithstanding the foregoing, with respect to the Initial
Conversion only, all historical data shall be converted since and
beginning with January 1, 1996 with respect to Titan data and
January 1, 1997 with respect to MPS data, as well as such additional
historical data as is required beginning with the twelfth preceding
calendar year to establish cost basis data as provided for above.
1.17 CPI. "CPI" shall mean the United States Consumer Price Index for
all Urban Consumers (CPI-U) All Items, U.S. City Average, as
published by the U.S. Department. of Labor, or, in the event that
such index is no longer published, such other index as most
closely substitutes for such index.
1.18 Customer Documentation. "Customer Documentation" shall mean that
user documentation provided by SunGard to its service bureau
customers.
1.19 Day One Class A Deliverables. "Day One Class A Deliverables"
shall mean those Deliverables specified in the attached Exhibit A.
1.20 Day One Class B Deliverables. "Day One Class B Deliverables"
shall mean those Deliverables specified in the attached Exhibit B.
1.21 Day One Deferred Deliverables. "Day One Deferred Deliverables"
shall mean those Deliverables specified in the attached Exhibit C.
1.22 Day Two Deliverables. "Day Two Deliverables" shall mean those
Deliverables specified in the attached Exhibit D.
1.23 Dedicated Developer Hours. "Dedicated Developer Hours" shall
mean Developer Hours which SunGard shall dedicate to development
and related tasks under this Agreement as specified in Section
5.1(b).
1.24 Deliverables. "Deliverables" shall mean the Software and the
Documentation.
1.25 Developer Hours. "Developer Hours" shall mean hours worked on
development and related tasks under this Agreement, including,
without limitation, hours spent by SunGard on design, development,
documentation and SunGard testing and hours spent on the SRA/SDS
process specified in Section 2.5.
1.26 Discloseable Items. "Discloseable Items" shall mean the following
information from the Deliverables: the End User Documentation, the
format and visual expression of all data input screens, data output
screens and data reports produced by the Software (but not including
the data contained on such screens or in such reports), and the
format and structure of all data extract files extracted from the
database used by the Software, including descriptions of the fields
of such data extract files.
1.27 Distribution. "Distribution" shall mean dividend distributions
counting ordinary income, short-term capital gains and long-term
capital gains separately.
1.28 Documentation. "Documentation" shall mean the Operating
Documentation, the Customer Documentation and the End User
Documentation.
1.29 Effective Date. "Effective Date" shall mean the date first
written above.
1.30 End User Documentation. "End User Documentation" shall mean that
portion of the Customer Documentation that is identified by SunGard
as non-confidential and that shall be reasonably sufficient to allow
End Users to provide input to and receive output from the Software,
including a reasonable explanation of (a) data input and output
screens (including commands available from such screens), (b) data
reports, and (c) the format and structure of data extract files
extracted by the Software from the database used by the Software.
1.31 End Users. "End Users" shall mean FRI Clients, investors in FRI
Clients, vendors to FRI Clients, distributors for FRI Clients, and
other individuals and entities to whom FTIS may reasonably choose to
disclose information in the ordinary course of its business.
1.32 First Amended MOU. "First Amended MOU" shall mean the First
Amended Memorandum of Understanding executed by the parties
effective January 24, 1997.
1.33 Force Majeure Event. "Force Majeure Event" shall mean, with respect
to a party, any event beyond such party's reasonable control,
including but not limited to, any war, riot, labor strike or other
labor problem, any act of God or natural disaster, any disruption or
outage of power, communications or other utility, any act of any
third party for whom the party in question does not have
responsibility under this Agreement, or any law, regulation,
ordinance or other act or order of any court, government or
governmental agency, excluding any such law, regulation, ordinance
or other act or order as to which such party has indemnified the
other party.
1.34 FTIS-Caused Infringement. "FTIS-Caused Infringement" shall mean any
infringement by FTIS, FRI or any FRI Affiliate of any third party
Intellectual Property Right, but shall not include any
SunGard-Caused Infringement.
1.35 FRI. "FRI" shall mean Franklin Resources, Inc.
1.36 FRI Affiliate. "FRI Affiliate" shall mean any company controlled by
or under common control with FRI, including, without limitation, any
direct or indirect parent, sibling or direct or indirect FRI
subsidiary, but only during such time as such relationship exists.
1.37 FRI Client. "FRI Client" shall mean any individual or entity to whom
FRI, or any FRI Affiliate, provides investment management or
investment advisory services, including any such entity that
constitutes an open or closed end investment company, unit
investment trust, real estate investment trust or similar investment
entity, but only during such time as such relationship exists..
1.38 FTIS. "FTIS " shall mean Franklin/▇▇▇▇▇▇▇▇▇ Investor Services,
Inc.
1.39 FTIS Enhancements. "FTIS Enhancements" shall mean enhancements to
the Software created pursuant to Section 12 by FTIS or for FTIS by a
third party other than SunGard.
1.40 FTIS Hours. "FTIS Hours" shall mean hours of SunGard employees and
individual contractors when providing services to FTIS hereunder, as
further specified in Section 5.2.
1.41 FTIS Trainers. "FTIS Trainers" shall mean employees and/or
individual contractors of FTIS, FRI or any FRI Affiliate designated
by FTIS to perform training on the Software.
1.42 FTIS Unrelated Party. "FTIS Unrelated Party" shall mean any
individual or entity other than FRI, FRI Affiliates, FRI Clients or
End Users.
1.43 Increase in the CPI. "Increase in the CPI" shall mean the net
increase in the CPI for the immediately preceding twelve (12) month
period, or the closest available approximation of such period.
1.44 Incremental Accounts. "Incremental Accounts" shall mean the
number of Processed Open Accounts which exceeds the number of
Processed Open Accounts in existence as of the seventh
anniversary of the Completion of Initial Conversion.
1.45 Initial Conversion. "Initial Conversion" shall mean completion of
Conversion of Accounts to Investar as specified in the schedule
attached hereto as Exhibit F, including any modifications to such
schedule as may be agreed in writing by the parties under the terms
of this Agreement.
1.46 Initial Payment. "Initial Payment" shall have the meaning
specified in Section 9.1, below.
1.47 Intellectual Property Right. "Intellectual Property Right" shall
mean any intellectual property right, whether arising inside or
outside the United States, and whether arising under the laws of the
United States or of any foreign jurisdiction, including patent
rights, copyright rights, trade secret rights and any other similar
intellectual property rights.
1.48 Investar. "Investar" shall mean the production version of the mutual
fund shareholder accounting system marketed by SunGard under the
name "Investar," current as of the date initially installed in a
production environment at FTIS.
1.49 Investar*ONE. "Investar*ONE" shall mean the production version of
the mutual fund shareholder accounting systems marketed by SunGard
under the name "Investar*ONE," current as of the date initially
installed in a production environment at a Processing Site.
1.50 MOU. "MOU" shall mean the Memorandum of Understanding executed
by the parties effective January 3, 1997.
1.51 Non-Conformity. "Non-Conformity" shall mean a failure of Software to
correctly perform the functionality specified in the associated SDS,
a Software bug, or a failure to meet a Performance Requirement. In
the event that the requirements of an SDS conflict with the
Performance Requirements, for purposes of determining whether a
Non-Conformity exists, the Performance Requirements shall govern
(except that the foregoing shall not prevent the parties from
agreeing in an accepted SDS to modify one or more Performance
Requirements for particular functionality or reports).
1.52 Normal Processing. "Normal Processing" shall mean processing
which occurs on business days (excluding weekends and holidays),
but excluding the six (6) hour period of time following the
commencement of "F Day Processing."
1.53 Open Account. "Open Account" shall mean an Account that carries
a positive balance.
1.54 Operating Documentation. "Operating Documentation" shall mean (i)
prior to Completion of Initial Conversion, such documentation as
SunGard uses internally for operation of the Software; and (ii)
within a reasonable time period following Completion of Initial
Conversion, reasonably current and reasonably complete documentation
which is reasonably sufficient to allow trained FTIS, FRI and FRI
Affiliate personnel to operate the Software in the Operating
Environment and in the ordinary course of business.
1.55 Operating Environment. "Operating Environment" shall mean the
hardware and software environment specified in the attached
Exhibit G, including amendments as may from time to time be
agreed by the parties.
1.56 Performance Requirements. "Performance Requirements" shall mean
those standards specified in the attached Exhibit E, including
any modifications to such standards as may be agreed by the
parties in writing under the terms of this Agreement.
1.57 POA. "POA" shall mean Processed Open Account.
1.58 Processed Open Account. "Processed Open Account" shall mean an
Account that is running "live" on Investar and/or Investar*ONE and
that is an Open Account for at least one day during a calendar
month. A Processed Open Account running "live" on both Investar and
Investar*ONE during the same month will be counted as a single
Processed Open Account.
1.59 Processing Sites. "Processing Sites" shall mean those sites of
FTIS, FRI or any FRI Affiliate designated by FTIS. Each
Processing Site shall contain a full, operational Operating
Environment.
1.60 Proprietary Item. "Proprietary Item" shall mean the Software
(including the object code and source code for the Software), the
Documentation, the ideas, methods, algorithms, formulae and concepts
used in developing and/or incorporated in the Software or
Documentation, including, but not limited to, the visual expressions
and other design features of the Software, and all revisions,
modifications, refinements, releases, versions, enhancements and
improvements of the Software or Documentation, but shall exclude
Discloseable Items.
1.61 Reasonable Transition Period. "Reasonable Transition Period" shall
mean a period of not less than one year which is reasonably
sufficient to allow FTIS to convert processing to a replacement
system following expiration or termination of this Agreement,
including reasonable time for (i) investigation of alternative
systems; (ii) negotiation with other vendors; (iii) development
work; and (iv) account conversion.
1.62 Reimbursable Expenses. "Reimbursable Expenses" shall mean (a) the
following reasonable out-of-pocket expenses incurred by SunGard's
employees and individual contractors in the course of traveling to
or from an FTIS facility or a third party facility to which travel
is required under this Agreement or in the course of traveling to or
from a SunGard facility for a meeting with FTIS personnel or with
third party personnel if such meeting is requested by FTIS: (i)
ground transportation expenses; (ii) air travel in coach class;
(iii) lodging and meal expenses reasonably incurred during such
travel, or during the visit to such FTIS or third party facility;
(b) the cost of data communication lines necessary in order to allow
SunGard to provide services required under this Agreement; and (c)
reasonable delivery charges.
1.63 Requested Enhancements. "Requested Enhancements" shall mean
Deliverables requested by FTIS during the term of this Agreement,
excluding Day One Class A Deliverables, Day One Class B
Deliverables, Day One Deferred Deliverables and Day Two
Deliverables.
1.64 Response Time. "Response Time" shall mean host response time as
measured in the IMS log.
1.65 Scalability Target. "Scalability Target" shall mean the number
of Processed Open Accounts calculated pursuant to Exhibit E.
1.66 SDS. "SDS" shall mean a System Design Specification in substantially
the same format as those currently in use by the parties. Each SDS
shall specify (i) the functional design to be used to implement the
functionality specified in one or more SRAs, (ii) a schedule for
delivery, testing, installation of Software, conversion of data (if
applicable) and preparation of Documentation, and (iii) a budget
specified in terms of Developer Hours.
1.67 Second Amended MOU. "Second Amended MOU" shall mean the Second
Amended Memorandum of Understanding executed by the parties
effective April 30, 1997.
1.68 Software. "Software" shall mean Investar and Investar*ONE and
that computer software developed and/or delivered by SunGard
pursuant to this Agreement.
1.69 SRA. "SRA" shall mean a Systems Requirement Analysis document in
substantially the same form as those currently in use by the
parties. An SRA shall specify one or more functional requirements
requested by FTIS.
1.70 SunGard Affiliate. "SunGard Affiliate" shall mean any company
controlled by or under common control with SunGard Data Systems,
including, without limitation, any direct or indirect parent,
sibling or direct or indirect SunGard Data Systems subsidiary, but
only during such time as such relationship exists.
1.71 SunGard-Caused Infringement. "SunGard-Caused Infringement" shall
mean infringement by any Deliverable of any third party Intellectual
Property Right, but shall not include (i) infringement to the extent
attributable to an SRA, unless (a) a non-infringing implementation
was reasonably available or (b) SunGard knew that such SRA required
such infringement but failed to inform FTIS; or (ii) infringement to
the extent attributable to (a) any unauthorized or improper use or
modification of any Deliverable, (b) any authorized modification of
any Deliverable made by FTIS or on behalf of FTIS by any individual
or entity other than SunGard, (c) any unauthorized combination of
any Deliverable with any other software, documentation or other
item, or (d) any breach of any provision of this Agreement by FTIS
or any FRI Affiliate, FRI Client, End User or Third Party Vendor.
1.72 SunGard-Caused Non-Conformity. "SunGard-Caused Non-Conformity" shall
mean a Non-Conformity caused by (i) a failure of Software caused
other than by a Force Majeure Event; or (ii) a failure of SunGard
personnel to properly carry out production control requirements
during such time as SunGard is responsible for production control.
1.73 SunGard Data Systems. "SunGard Data Systems" shall mean SunGard
Data Systems, Inc., the ultimate corporate parent of SunGard.
1.74 SunGard Unrelated Party. "SunGard Unrelated Party" shall mean any
individual or entity other than SunGard Data Systems, SunGard
Affiliates or customers of SunGard, SunGard Data Systems or SunGard
Affiliates.
1.75 Termination Date. "Termination Date" shall mean the effective
date of a termination for material breach by FTIS pursuant to
Section 14.2.
1.76 Testing Period. "Testing Period" shall mean the period of time
during which FTIS shall complete testing of delivered Software. The
Testing Period will be that period provided by SunGard to its
service bureau customers for testing such Software prior to
installation of such Software at the SunGard service bureau data
center, or, if FTIS determines in its reasonable discretion that the
magnitude of such Software delivery is such that parallel processing
is necessary in which such Software would be tested on a test
database made up of duplicates of a large subset or the entirety of
Open Accounts, the Testing Period shall be a reasonable time for
completion of such parallel processing testing.
1.77 Third Amended MOU. "Third Amended MOU" shall mean the Third
Amended Memorandum of Understanding executed by the parties
effective June 30, 1997.
1.78 Third Party Vendors. "Third Party Vendors" shall mean third party
companies and consultants providing computer hardware and/or
software products, services or consultation to FTIS, FRI or any FRI
Affiliate or any company or consultant under consideration for
provision of such products, services or consultation.
1.79 Year 2000 Compliant. "Year 2000 Compliant," with respect to
Software, shall mean that such Software is capable of accurately
accounting for 20th and 21st century dates and processing the fact
that year 2000 is a leap year, and normal operation will not be
impaired by the advent of the year 2000, including accurately
recognizing and accommodating the rollover to the year 2000.
1.80 Zero Balance Accounts. "Zero Balance Accounts" shall mean
Accounts with a balance of zero.
2. Deliverables.
2.1 General. SunGard shall use commercially reasonable efforts to
deliver Software that is free from Non-Conformities, including
testing Software prior to delivery, in accordance with SunGard's
past practices and normal and reasonable industry standards, unless
FTIS requests that Software be delivered prior to completion of
testing, in which event SunGard shall comply with such request. In
addition, SunGard shall maintain a System Development Life Cycle
methodology which meets current industry standards, including
controls regarding the integrity, auditability and compatibility of
all Software. Such methodology shall be consistent with SunGard's
past practices, but in any event will meet current industry
standards.
2.2 Priority. The successful implementation of the Day One Class A
Deliverables, Day One Class B Deliverables, Day One Deferred
Deliverables and Day Two Deliverables shall be SunGard's highest
customer priority.
2.3 Schedule. SunGard shall deliver and install Deliverables, and
convert Accounts (if relevant), pursuant to the schedule specified
in the SDS associated with such Deliverables. In addition, SunGard
shall meet all dates specified in Exhibit F, including all Initial
Conversion dates.
2.4 Investar and Investar*ONE.
(a) Investar. SunGard has delivered and installed Investar at the
FTIS Processing Center in St. Petersburg, Florida and shall
undertake Initial Conversion of Accounts pursuant to the
schedule attached as Exhibit F. SunGard has also delivered the
Documentation for Investar.
(b) Investar*ONE. During the term of this Agreement, FTIS may
evaluate Investar*ONE to determine whether, in FTIS'
reasonable, good faith judgment, Investar*ONE is suitable
for FTIS applications. If FTIS reaches a preliminary
conclusion that Investar*ONE may be suitable for FTIS
applications, FTIS shall communicate such conclusion to
SunGard and shall act reasonably in response to any request
by SunGard that the schedule for Investar Year 2000
Compliance be extended pending a final FTIS determination
on Investar*ONE. If FTIS reaches a final conclusion that
Investar*ONE is suitable for FTIS applications, the parties
shall negotiate regarding Performance Requirements
applicable to Investar*ONE, and SunGard shall specify the
Operating Environment required for Investar*ONE. If FTIS
agrees to install SunGard's Operating Environment
specification, and if the parties reach agreement on the
Performance Requirements for Investar*ONE, then the
Operating Environment and Performance Requirements
specified by this Agreement shall be amended and SunGard
shall install Investar*ONE at all then-existing Processing
Sites. If FTIS determines that Investar*ONE is not
suitable for FTIS applications, or if FTIS determines that
it is unwilling to install the Investar*ONE Operating
Environment specified by SunGard, or if the parties are
unable to agree on Investar*ONE Performance Requirements,
then FTIS shall have no obligation to accept Investar*ONE,
and the Performance Requirements, including any applicable
Year 2000 requirements (including any extension in the Year
2000 schedule agreed upon pursuant to this Section), shall
continue to apply to Investar. If Franklin accepts
Investar*ONE by using it in production, then, irrespective
of whether the parties agree on Performance Requirements,
SunGard should have no further obligation to render
Investar Year 2000 Compliant.
2.5 Modification Process. The parties contemplate a definition process
leading to agreement on defined functionality, a schedule and a
budget for modifications to Investar and Investar*ONE. This process
has been partially completed for Day One Class A Deliverables, Day
One Class B Deliverables, Day One Deferred Deliverables and Day Two
Deliverables. This definition process encompasses the steps outlined
below, which may be waived by mutual agreement.
(a) General procedures. The parties will cooperate in defining
the nature of development to be accomplished. Such
cooperation will include, but not be limited to, meetings
among project personnel on a weekly basis, such meetings to
include discussions of progress and of functionality which
may be requested by FTIS. In addition, the parties will
exercise reasonable discretion in responding to any request
to extend the deadlines for response specified in this
Section. All notices specified in this Section shall be in
writing and shall be given in accordance with Section 23.9
except that faxes and electronic mail shall not require
confirmation.
(b) SRAs. Once FTIS has defined functionality which it wishes
to request, FTIS shall describe that functionality in an
SRA, which shall be delivered to an appropriate SunGard
representative. Each SRA shall contain sufficient
information to define the nature of the FTIS functional
requirements and shall specify a date for SunGard to
complete its review process pursuant to subsection (c)
hereof, such date to be seven (7) business days from the
date of delivery of the SRA unless another reasonable date
is specified (the "review period"). In the event that
SunGard reasonably believes such dates are unreasonable
under the circumstances, the parties shall discuss
modifying such dates.
(c) SRA review process. Once it has received an SRA from FTIS,
SunGard shall review that SRA within the review period in
order to determine whether the FTIS requirements are
described in a reasonably complete and unambiguous manner.
If SunGard determines, in its reasonable discretion, that
the SRA is either not reasonably complete or contains
ambiguities, SunGard shall request additional information
from FTIS, in which event the parties shall reasonably work
together to clarify the SRA. This process shall continue
in an iterative fashion until (i) SunGard has notified FTIS
that the SRA is reasonably complete and unambiguous, or
(ii) FTIS has withdrawn the SRA. Neither party shall have
any further obligation hereunder with respect to an SRA
which has been withdrawn by FTIS, except that FTIS shall be
responsible for any Developer Hours incurred by SunGard
during the response and evaluation process.
(d) SDS's. Once SunGard has notified FTIS that an SRA is
reasonably complete and unambiguous, SunGard shall provide
FTIS with one or more SDS's, within a thirty (30) day
period, or such longer or shorter period as the parties may
agree, detailing the manner in which SunGard proposes to
implement the functionality specified in such SRA. Each
such SDS shall include (i) a detailed description of the
functionality which SunGard proposes to provide, (ii) a
schedule for delivery, testing and installation of
Software, conversion of data, if applicable, and
preparation of Documentation, (iii) a budget specifying the
number of Development Hours required to implement the SDS,
(iv) an explanation, if applicable, of the impact of such
SDS on other SDS's, the Initial Conversion schedule, or
Performance Requirements, and (v) a date by which the SDS
shall be deemed withdrawn if not accepted, such date to be
thirty (30) days from the date of delivery of such SDS
unless another reasonable date is specified (the "response
period").
(e) SDS review process. Once it has received an SDS from
SunGard, FTIS shall review that SDS within the response
period. Within the response period, FTIS shall notify
SunGard that (i) the SDS is accepted, (ii) the SDS is
rejected, or (iii) FTIS requires further clarification or
wishes to further discuss the terms of the SDS. If FTIS
does not provide any such notice within such time period,
the SDS shall be deemed rejected. In the event that FTIS
rejects the SDS or it is deemed rejected, neither party
shall have any further obligation with respect to the SDS
or the associated SRA(s), subject to FTIS' right to submit
a similar SRA to SunGard, thereby again triggering the SRA
review process, except that FTIS shall remain responsible
for any Developer Hours incurred by SunGard during the
response and evaluation process. In the event that FTIS
requests further clarification or discussion, such
clarification or discussion shall take place, after which
SunGard shall either submit a new SDS or resubmit the
original SDS, either event again triggering a new response
period for response by FTIS. If the duration of the SDS
review process renders the proposed schedule unrealistic,
SunGard may propose a revision to the schedule, in which
event FTIS may, in its reasonable discretion (a) promptly
accept the revised schedule in writing; (b) discuss the
necessity of the revised schedule, and possible
alternatives with SunGard, or (c) reject the SDS in writing
or fail to respond within the response period, in which
event the SDS shall be deemed rejected.
(f) Accepted SDS. Once FTIS has accepted an SDS in writing,
SunGard shall deliver corresponding Deliverables pursuant
to the schedule and within the budget specified in the
SDS. The Developer Hours actually incurred by SunGard with
respect to such SDS, capped at the budget specified in the
SDS, shall be subtracted from the Dedicated Developer
Hours, if available, or shall be Chargeable to FTIS, if
Dedicated Developer Hours are unavailable. In the event
that FTIS authorizes SunGard to begin work on an SDS prior
to formal acceptance of the SDS, this will be deemed an
acceptance of the SDS.
(g) SDS amendments. Either party may request an amendment to
any SDS previously accepted by FTIS by submitting a written
request to the other party describing the nature of the
requested change. In such event, the parties shall discuss
the nature of the amendment in order to determine whether,
in the reasonable judgment of both parties, the amendment
would have a material effect on the schedule or budget for
the SDS to be amended, any other related SDS, the
Performance Requirements or the Initial Conversion
schedule. If the parties determine that the amendment
would have no such material effect, then the parties shall
cooperate to define an amended SDS. If the parties
determine that the amendment would have a material effect,
then the parties shall negotiate the terms upon which the
SDS, and/or other SDS's and/or the Initial Conversion,
schedule and/or the Performance Requirements, would be
amended, and the parties shall determine whether SunGard
should suspend work on such other SDS's during such
negotiations. Such terms may include a modification of the
Initial Conversion schedule, the schedule or budget for the
SDS('s), or such other terms as may be agreeable to the
parties. If the parties agree in writing on one or more
amended SDS's, such amended SDS's shall be substituted for
the original SDS's, and both parties will be bound by the
terms of the amended SDS's. If the parties fail to agree
on one or more amended SDS's, the original SDS's will
remain in effect unless canceled by FTIS as provided below
(provided that any period during which such work was
suspended shall be added to the schedule under such SDS's).
(h) SDS cancellation. At any point after acceptance of an SDS,
FTIS shall have the right, in its reasonable discretion, to
cancel such SDS, by providing written notice of
cancellation to SunGard. Once SunGard receives such notice
of cancellation, SunGard may request that the parties
discuss the nature of the cancellation in order to
determine whether, in the reasonable judgment of both
parties, the cancellation would have a material effect on
the schedule or budget for other SDS's or the Initial
Conversion schedule. Otherwise, SunGard shall promptly
unwind and discontinue work on the SDS and shall notify
FTIS of the Developer Hours and Reimbursable Expenses
expended with respect to such SDS prior to and after
receipt of such cancellation notice. For purposes of
compensation and/or allocation, such Developer Hours and
Reimbursable Expenses shall then be treated as if such SDS
had been completed and the associated Deliverable delivered
and accepted, as of the date SunGard completes the
unwinding and discontinuance of work on such SDS. If the
parties determine that the cancellation would have a
material effect on other SDS's or the Initial Conversion
schedule, then the parties shall reasonably negotiate the
terms upon which the other SDS's or the Initial Conversion
schedule would be amended, and FTIS shall have the right to
authorize SunGard to suspend work on such other SDS's
during such negotiations. Such terms may include a
modification of the schedule or budget for the other SDS's,
or such other terms as may be agreeable to the parties. If
the parties agree in writing on one or more amended SDS's,
such amended SDS's shall be substituted for the original
SDS's, and both parties will be bound by the terms of the
amended SDS's. If the parties fail to agree on one or more
amended SDS's, the original SDS's will remain in effect,
provided that any period during which work was suspended
shall be added to the schedule under such SDS's.
2.6 Specific Deliverables.
(a) Day One Class A Deliverables. With respect to the Day One
Class A Deliverables, the parties have agreed on the SRAs
specified in Exhibit A as well as the accompanying
schedule, and SunGard has proposed SDS's corresponding to
such SRAs, but FTIS has not yet accepted all of such
SDS's. FTIS shall promptly provide responses to all such
SDS's not already accepted as of the Effective Date.
SunGard shall deliver the Day One Class A Deliverables with
functionality corresponding to the SRAs specified in
Exhibit A pursuant to the schedule specified in such
Exhibit and pursuant to the Initial Conversion schedule.
If FTIS' responses require a change to one or more SDS's
not accepted as the Effective Date and such change requires
a material increase in the Developer Hours budgeted by
SunGard for such SDS, then SunGard shall have the right to
refuse to implement such change unless FTIS also agrees to
a modification of the schedule for such SDS (which may
include treating the modification as a Day One Class B
Deliverable or a Day One Deferred Deliverable) or a
modification of the Initial Conversion schedule. In such
event, both parties will act reasonably in attempting to
meet such schedules and in negotiating alterations if
necessary.
(b) Day One Class B Deliverables. The Day One Class B
Deliverables are specified in Exhibit B hereto.
(i)Agreed-upon SRAs. With respect to the Day One Class B
Deliverables, the parties have agreed on the SRAs
specified in Exhibit B as well as the accompanying
schedule, and SunGard has proposed partial SDS's
corresponding to such SRAs, but without complete
specification of all budget information. Promptly after
the Effective Date, SunGard shall provide FTIS proposed
amended SDS's corresponding to the Day One Class B
Deliverable SRAs identified in Exhibit B. Each such
amended SDS shall specify the same functionality and
schedule as the original corresponding SDS, but shall
also specify a budget, in terms of Developer Hours, for
development. Each such proposed amended SDS shall be
treated, for purposes of the SDS review and acceptance
procedure specified above, as if such proposed amended
SDS constituted an SDS newly delivered to FTIS. If FTIS
requires a change to one or more SDS's not accepted as
of the Effective Date and such change requires a
material increase in the Developer Hours budgeted by
SunGard for such SDS, then SunGard shall have the right
to refuse to implement such change unless FTIS also
agrees to a modification of the schedule for such SDS or
a modification of the Initial Conversion schedule. In
such event, both parties will act reasonably in
attempting to meet such schedules and in negotiating
alterations if necessary.
(ii) Interfaces and reports. In addition to the SRAs
specified in Exhibit B, the Day One Class B Deliverables
shall also include certain interface and report
functionality. Certain of such interface and report
functionality is specified in Exhibit B. Promptly after
the Effective Date, FTIS will supplement the Exhibit B
description of such functionality with a complete
description, and will provide SunGard with a reasonable
prioritization list for such interface and report
functionality. SunGard's obligation to provide such
interface and report functionality pursuant to the Day
One Class B schedule shall be limited to providing 3,000
hours for interface functionality and 2,000 hours for
report functionality. Prior to the delivery dates
specified in such schedule, SunGard shall devote such
hours to such functionality, following the
prioritization order provided by FTIS. Any such
functionality not complete within such budget shall
become a Day One Deferred Deliverable, and shall be
delivered according to a schedule and budget to be
agreed upon by the parties.
(c) Day One Deferred Deliverables and Day Two Deliverables.
FTIS has provided SunGard with SRAs corresponding to
requested Day One Deferred and Day Two Deliverables.
SunGard's response to such SRAs shall be delivered to FTIS
within sixty (60) days after Completion of Initial
Conversion. In responding to such SRAs, SunGard shall
prioritize delivery of Day One Deferred Deliverables over
Day Two Deliverables.
(d) Requested Enhancements. FTIS has not yet provided SRAs to
SunGard corresponding to Requested Enhancements. Such
SRAs may be provided at any time during the term of this
Agreement. SunGard shall have no obligation to provide any
response to any SRA proposing a Requested Enhancement until
sixty (60) days following the Completion of Initial
Conversion, with the exception of SRAs seeking modification
of interfaces between Investar and FTIS subsystems designed
to modify the output of dates from Investar to the
subsystems in such a manner as to adequately handle dates
during and after the year 2000. SunGard shall respond to
any such SRAs within the normal response time provided
above. Any such response shall specify that work shall be
completed within four (4) months of the acceptance of the
SDS.
(e) Eliminated subsystems. By December 31, 1997, SunGard will
provide to FTIS a list of existing FTIS subsystems that will
be eliminated through incorporation of subsystem functionality
into the Software prior to January 1, 2000.
3. Scalability.
3.1 Scalability Target. The Scalability Target shall be calculated
as follows:
(a) Completion of Initial Conversion. The Scalability Target as
of the Completion of Initial Conversion shall be as
specified in Exhibit M.
(b) Subsequent scalability. At the end of each calendar quarter
after the first full calendar quarter following the
Completion of Initial Conversion, the Scalability Target
will be set as specified in Exhibit M
(c) Acquisitions. FTIS shall provide notice of any acquisition
of Acquired Accounts as follows: six (6) months notice of
any acquisition involving an increase of POAs of six
percent (6%) or less and twelve (12) months notice of any
acquisition involving an increase of POAs of greater than
six percent (6%). For these purposes, the percentage
increase of POAs shall be calculated by comparing the
number of Accounts to be acquired with the number of POAs,
both numbers calculated as of the date of such notice.
Providing that proper notice has been given, the
Scalability Target shall be increased by the number of POAs
given in such notice, such increase to take effect as of
the date of closing of such acquisition or as of the date
when such notice runs, whichever is later, such increase to
be added to the existing Scalability Target as of the date
such increase takes effect.
3.2 Performance Requirements. Subject to the requirements of this
Agreement, including Sections 7.1and 7.2, the Software will be
required to meet all Performance Requirements when running with
actual Processed Open Accounts, if the number of Processed Open
Accounts is equal to or less than the Scalability Target. The
Software shall not be required to meet the Performance Requirements
if running with actual Processed Open Accounts in excess of the
Scalability Target; provided, however, that during any such period
the Software shall continue to be able to meet the Performance
Requirements if running with a number of Processed Open Accounts
which equals the Scalability Target. In any period during which the
number of Processed Open Accounts exceeds the Scalability Target,
SunGard will undertake commercially reasonable good faith efforts to
render the Software capable of continuing to meet the Performance
Requirements. Nothing herein contained shall require the Software to
meet the Performance Requirements for a volume of Processed Open
Accounts which exceeds the number actually in existence.
3.3 Cost of Modifying the Software for Scalability Purposes. In general,
SunGard shall be solely responsible for any work required in order
to modify the Software as may be required to meet the Scalability
Target, and such work shall be At No Additional Cost to FTIS.
Notwithstanding the foregoing, FTIS shall be responsible for any
incremental cost required for tuning for any acquisition of Acquired
Accounts involving an increase of POAs of greater than 10% (ten
percent), such percentage to be calculated at the time of giving
notice of such acquisition, as specified in Section 3.1(c). In such
event, tuning required in order to meet the Scalability Targets in
effect during the notice period shall be At No Additional Charge to
FTIS, but tuning required in order to meet scalability required for
such Acquired Accounts shall be Chargeable to FTIS. The parties
recognize that it may be difficult to differentiate costs incurred
in order to meet Scalability Targets during the notice period and
costs incurred in order to meet the requirements of the additional
Acquired Accounts, and the parties will negotiate reasonably in
attempting to determine the cost to be borne by FTIS. If the parties
are unable to agree on such cost, the matter will be submitted to
the dispute resolution process specified in Section 15. FTIS will
make any payment required hereunder within thirty (30) days of
conversion of the Acquired Accounts, unless the parties are unable
to agree on the amount of such payment, in which event the timing of
the payment shall be specified pursuant to the dispute resolution
process.
4. Correction of Non-Conformities.
4.1 General. During the term of this Agreement, SunGard shall use
commercially reasonable efforts to correct Non-Conformities pursuant
to the procedures specified in this Section. FTIS shall use
commercially reasonable efforts to cooperate in such SunGard
correction efforts, including but not limited to, promptly providing
to SunGard (i) all documentation, examples, source data and other
information regarding each Non-Conformity as is reasonably possible
for FTIS to provide and (ii) all potentially relevant information
regarding data center management and system performance and, (iii)
if FTIS was responsible for production control during any period
when the Non-Conformity occurred, all potentially relevant
information regarding production control.
4.2 Procedure.
(a) Notification. Each party shall use commercially reasonable
efforts to discover Non-Conformities, and shall inform the
other of any Non-Conformities promptly once discovered.
(i)Discovery by FTIS. When and if FTIS discovers a Class
One Non-Conformity, FTIS shall immediately report such
Class One Non-Conformity to SunGard using the Calling
List. If the first person on the Calling List is not
available when FTIS attempts to contact such person, or
if SunGard fails to respond to such call, then FTIS
shall continue calling the persons on the Calling List
(in the order listed) until contact is made and SunGard
responds to the call. When and if FTIS discovers a Class
Two Non-Conformity, FTIS shall report such Class Two
Non-Conformity using written reporting procedures
consistent with the parties' past practices, unless FTIS
determines, in its reasonable judgment, that such Class
Two Non-Conformity is sufficiently important to be
reported to SunGard by telephone, in which case FTIS
shall use the Calling List procedure set forth above,
but shall identify the Non-Conformity as a Class Two
Non-Conformity.
(ii) Discovery by SunGard. When and if SunGard discovers a
Class One Non-Conformity, SunGard shall immediately
report such Class One Non-Conformity to the president of
FTIS, or, in the event such individual is unavailable,
to the most senior representative of FTIS available on
immediate notice. When and if SunGard discovers a Class
Two Non-Conformity, SunGard shall report such Class Two
Non-Conformity using written reporting procedures
consistent with the parties' past practices, unless
SunGard determines, in its reasonable judgment, that
such Class Two Non-Conformity is sufficiently important
to be reported to FTIS by telephone, in which event
SunGard shall promptly report such Class Two
Non-Conformity to the appropriate FTIS personnel.
(b) SunGard response. SunGard shall use commercially
reasonable efforts to respond to FTIS reports of
Non-Conformities through off-site telephone consultation,
assistance and advice within fifteen (15) minutes for Class
One Non-Conformities and within one (1) hour for Class Two
Non-Conformities that are reported by FTIS by telephone,
but, in any event, SunGard shall respond within no more
than one (1) hour to reports of Class One Non-Conformities
and within no more than four (4) hours to reports of Class
Two Non-Conformities that are reported by FTIS by
telephone.
(c) Class One Non-Conformities. Upon detecting or being
notified of a Class One Non-Conformity, SunGard shall
immediately assemble the appropriate personnel to analyze
the problem, identify potential solutions and determine the
best plan of action. FTIS shall participate in this
process as reasonably necessary. Once an appropriate plan
of action is determined, SunGard shall take all reasonably
necessary steps to supply a reasonable work-around or
correction as soon as possible. This shall include
assigning qualified, dedicated staff to work on the
Non-Conformity 24 hours a day, seven days per week, at
either the SunGard site or a Processing Site as necessary.
SunGard personnel shall be dedicated to resolving the
Non-Conformity until an acceptable work-around or
correction is supplied or until FTIS determines in its
reasonable judgment after consultation with SunGard that a
work-around or correction cannot be produced. A SunGard
representative shall keep FTIS regularly informed of the
status of the Non-Conformity correction process.
(d) Class Two Non-Conformities. For any Class Two
Non-Conformities, SunGard shall work with FTIS to document
the Non-Conformity through mutually established procedures
consistent with the parties' past practices. Class Two
Non-Conformities shall be resolved according to priorities
reasonably established by SunGard after consultation with
FTIS. SunGard personnel shall be dedicated to resolving
Class Two Non-Conformities through SunGard's normal
software support procedures.
4.3 Fault Determination. The parties will cooperate reasonably to
investigate any suspected or confirmed Non-Conformity to determine
if the Non-Conformity is a SunGard-Caused Non-Conformity. If the
parties are unable to agree whether a Non-Conformity is a
SunGard-Caused Non-Conformity, such dispute will be subject to the
dispute resolution procedures of Section 15. In any such
arbitration, FTIS shall have the burden to establish, by a
preponderance of the evidence, that any Non-Conformity first
manifested while FTIS was responsible for production control is a
SunGard-Caused Non-Conformity, whether or not such Non-Conformity is
similar to a Non-Conformity previously reported.
4.4 Compensation. SunGard's investigation and correction of
SunGard-Caused Non-Conformities shall be At No Additional Charge to
FTIS and SunGard shall not be entitled to reimbursement of
Reimbursable Expenses incurred in connection therewith. SunGard's
investigation and correction of Non-Conformities other than
SunGard-Caused Non-Conformities shall be Chargeable to FTIS. In the
event the parties agree that the ultimate responsibility for a
Non-Conformity is unclear or is shared, the parties may agree to any
allocation of the cost of investigation and correction that the
parties determine to be reasonable.
5. SunGard Development.
5.1 Defined Deliverables.
(a) Day One Class A Deliverables. SunGard shall devote sufficient
resources to ensure timely completion of the Day One Class A
Deliverables and agrees that the Day One Class A Deliverables
shall be completed without the imposition of any hourly
development charges to FTIS.
(b) Dedicated Developer Hours. SunGard shall provide Dedicated
Developer Hours for development of Day One Class B
Deliverables, Day One Deferred Deliverables, Day Two
Deliverables or Requested Enhancements. Such Dedicated
Developer Hours shall be provided to FTIS without the
imposition of any hourly development charges. The number
of Dedicated Developer Hours to be provided by SunGard
shall be calculated by taking the number of Developer Hours
used by SunGard from July 1, 1997 through the Effective
Date, other than Developer hours used during such period
related to Day One Class A Deliverables, and subtracting
that number from 44,325. For purposes of calculation of
the Dedicated Developer Hours, within seven (7) days of the
Effective Date, SunGard shall notify FTIS of the number of
Developer Hours used by SunGard from July 1, 1997 through
the Effective Date, other than Developer Hours used during
such period related to Day One Class A Deliverables.
(c) Additional Developer Hours. To the extent that Day One Class B
Deliverables, Day One Deferred Deliverables, Day Two
Deliverables or Requested Enhancements require Developer Hours
in excess of the Dedicated Developer Hours, such excess
Developer Hours shall be Chargeable to FTIS.
5.2 FTIS Hours.
(a) After Completion of Initial Conversion and throughout the
remainder of the term of this Agreement, SunGard shall
provide FTIS a pool of hours for services ("FTIS Hours").
Such services shall include: (i) assistance in the
operation of the Software; (ii) help desk support; (iii)
training; (iv) new conversions, representing customers of
FRI Clients newly managed by FRI or any FRI Affiliate; (v)
custom development; and (vi) maintenance, support and other
services provided by SunGard hereunder to the extent that
FTIS Hours are used therefor in accordance with this
Agreement.
(b) In assigning personnel to tasks using FTIS Hours, SunGard
shall use reasonable efforts to maintain continuity of
personnel. Notwithstanding the foregoing, SunGard shall
have the right, in its reasonable discretion, to assign
tasks using FTIS Hours to various SunGard employees and
individual contractors, so long as such employees and
individual contractors are qualified for such tasks, it
being understood that both parties will benefit if SunGard
personnel who have responsibilities for multiple customers
are sometimes assigned to tasks using FTIS Hours.
(c) On a monthly basis, FTIS and SunGard shall consult
regarding the types of tasks being performed using FTIS
Hours, as well as the types of tasks anticipated by the
parties. SunGard shall provide personnel suited to the
anticipated tasks. FTIS shall act reasonably in any
request that the mix of tasks be altered in such a manner
as to require the assignment of different personnel by
SunGard, and shall provide SunGard at least three (3)
months notice prior to requiring any such alteration.
(d) Beginning the first complete month after Completion of
Initial Conversion, SunGard shall provide FTIS with two
thousand eight hundred thirty-three (2,833) FTIS Hours per
month. SunGard shall provide FTIS with an additional one
hundred forty-two (142) hours per month for each seven
hundred fifty thousand (750,000) Processed Open Accounts
by which the Processed Open Accounts exceeds five million
(5,000,000). Such additional hours shall be provided
beginning three (3) months following the month in which
such 750,000 Processed Open Accounts came into existence.
In the event that Processed Open Accounts grow to a level
requiring additional hours per month, but later sink below
that level, SunGard's requirement to provide such
additional hours shall terminate three (3) months following
the month in which such Processed Open Accounts sank below
such level. Notwithstanding the foregoing, SunGard's
requirement to provide FTIS Hours shall never decrease
below 2,833 FTIS Hours per month, subject to FTIS' right to
require a lower amount, as specified below. All FTIS Hours
shall be provided monthly on a non-cumulative basis with no
carry-forward of unused hours to subsequent months.
(e) After completion of the first twelve (12) month period
following the Completion of Initial Conversion, FTIS shall
have the right to decrease (in increments of 1,700 hours
per year) the number of FTIS Hours below SunGard's current
minimum requirement (as based on the number of Processed
Open Accounts), or to increase such number (in increments
of 1,700 hours per year) up to the current minimum (as
based on the number of Processed Open Accounts), if the
number had previously been reduced. FTIS' right to alter
the number of FTIS Hours shall be exercisable on three (3)
months' notice to SunGard, and shall be exercisable no more
than once in any twelve (12) month period.
(f) For each twelve (12) month period during which the FTIS
Hours are reduced below the current SunGard minimum
requirement (as based on the number of Processed Open
Accounts), FTIS shall receive a credit of $100,000 for each
such reduction of 1,700 FTIS Hours. Such credit shall be
applied against compensation otherwise due SunGard pursuant
to this Agreement. In the event that such a reduction
applies for a period of less than twelve months, FTIS shall
receive a pro-rated credit.
(g) SunGard shall maintain records sufficient to show the FTIS
Hours worked each month, and shall report such information to
FTIS on a monthly basis.
5.3 Additional Services.
(a) In general. If, following the Completion of Initial
Conversion, the maintenance, support, development and other
requirements of FTIS exceed that which can be provided through
the use of FTIS Hours, FTIS may, after reasonable consultation
with SunGard, require that SunGard assign additional personnel
to such requirements, subject to the terms and conditions of
this Section.
(b) Rates for Additional Services. For work performed through
the end of 1998, such personnel shall be billed at a rate
not to exceed the rate specified in Exhibit M.
(c) Increase in rates. Increases in rates for Additional Services
shall take place no more than once annually, with the earliest
such increase to take place no earlier than January 1, 1999.
Any such increase shall be calculated in accordance with the
formula specified in Exhibit M.
5.4 Updates and Enhancements.
(a) Development not requested by FTIS. During the term of this
Agreement, and consistent with SunGard's past practices,
SunGard shall continue to devote resources to maintenance
and updating of Investar and/or Investar*ONE. Accordingly,
from time to time, at its own cost and expense, and in
accordance with its past practice, SunGard shall develop
updates and enhancements to such products. SunGard shall
provide such updates and enhancements to FTIS. If SunGard
charges other SunGard customers for such updates and
enhancements, the parties shall negotiate regarding whether
a charge shall be imposed on FTIS for such updates and
enhancements. Both parties shall be reasonable in such
negotiations, which shall conform generally to the past
practices of the parties with respect to charges for
updates and enhancements. If the parties agree that a
charge should be imposed on FTIS, FTIS shall have the
right, at its option, to apply available FTIS Hours to such
charge, with such FTIS Hours to be valued at the
then-current cost for Additional Services. No charge for
updates or enhancements not requested by FTIS shall be
imposed if FTIS notifies SunGard that FTIS has no need of
the new functionality incorporated in such update or
enhancement. In such event, FTIS shall install such update
or enhancement, subject to the other provisions of this
Agreement, but shall pay no update or enhancement charge
until and unless FTIS uses any material part of such new
functionality.
(b) Requested Enhancements. If SunGard incorporates a
Requested Enhancement into a new enhancement to software
made available to third parties, and if SunGard charges
third parties for such enhancement, then SunGard shall
provide FTIS with a credit reflecting a reasonable
allocation of the amount of such charges to third parties,
such credit to take the form of a credit against Account
Fees, and to be capped at the amount of the payment made by
FTIS for such enhancement, calculated either by the dollar
amount paid by FTIS for Additional Services or by an
attributed dollar amount for FTIS Hours used for such
development, calculated by multiplying the number of such
hours used by the then-current hourly rate for Additional
Services.
6. Delivery, Installation and Conversion.
6.1 Testing by Third Party Vendors. At FTIS' request set forth in an
SRA, SunGard shall cooperate reasonably with FTIS in providing
Software to Third Party Vendors for testing in accordance with
reasonable test plans and procedures set forth by such vendors, such
delivery to occur sufficiently in advance of the scheduled delivery
date for such Software to allow for completion of reasonable testing
and revision of the Software in light of testing results (if
necessary) prior to such scheduled delivery date.
6.2 Manner of Delivery. SunGard shall deliver Software by providing the
following to FTIS at each Processing Site designated by FTIS: (i)
two (2) executable copies of such Software, and (ii) two (2) source
code versions of such Software. SunGard shall deliver Documentation
by delivering ten (10) hard copies and one machine-readable copy of
associated Documentation.
6.3 Installation.
(a) Acceptance testing. Following delivery of Software by
SunGard, SunGard shall install such Software in a test
environment maintained by FTIS at a single Processing Site
reasonably designated by FTIS, following which FTIS shall
perform initial testing to determine whether such Software
appears to contain material Non-Conformities. Such testing
will be completed within the Testing Period, and SunGard
shall have the right to observe and reasonably participate
in such testing. If FTIS discovers material
Non-Conformities during such testing, FTIS shall have the
right to reject such Software until and unless such
material Non-Conformities have been substantially
corrected. In the event of such a rejection, such Software
will be deemed non-delivered until and unless conforming
Software has been delivered. If the parties disagree
regarding whether Software contains material
Non-Conformities, such dispute may be submitted to the
arbitration procedures specified in this Agreement.
Neither such FTIS initial testing, nor any statement by
FTIS that the Software does not appear to contain
Non-Conformities, shall waive or otherwise affect SunGard's
obligation to correct Non-Conformities in accordance with
the terms of this Agreement.
(b) Installation. If FTIS notifies SunGard that delivered
Software does not appear to contain material
Non-Conformities, or if the Testing Period passes with no
identification of actual or suspected material
Non-Conformities by FTIS, or if FTIS authorizes SunGard to
install the Software in a production environment, then FTIS
will be deemed to have accepted such Software. In such
event, SunGard shall install such Software in production
environments in such Processing Sites as may be reasonably
designated by FTIS. This Section 6.3(b) shall not apply to
any delivery of Investar*ONE which takes place prior to
acceptance and installation of Investar*ONE pursuant to the
provisions of Section 2.4(b). Such delivery shall be
governed by the provisions of such section.
(c) Subsequent installation. Following initial installation at
Processing Sites designated by FTIS, and throughout the
term of this Agreement, FTIS shall have the right, upon
reasonable notice, to designate additional Processing Sites
for installation of previously delivered and installed
Software. In such event, SunGard shall undertake such
installation pursuant to terms and conditions to be agreed
by the parties and such SunGard services shall be
Chargeable to FTIS.
(d) Installation prior to Completion of Initial Conversion.
Notwithstanding any of the foregoing provisions, prior to
the Completion of Initial Conversion, SunGard shall be
responsible for installation at the FTIS Processing Site
located in St. Petersburg, Florida and at the FTIS
Processing Site in Rancho Cordova, California. Prior to
Completion of Initial Conversion, the sole use made of the
Software at the Rancho ▇▇▇▇▇▇▇ Processing Site shall be for
scalability testing and to perform read-only functions and
prepare reports during that time period. Notwithstanding
the foregoing, in the event that a disaster adversely
affects processing at the St. Petersburg Processing Site
prior to Completion of Initial Conversion, SunGard shall
reasonably cooperate with FTIS in shifting installation and
processing to the Rancho ▇▇▇▇▇▇▇ Processing Site.
Subsequent to the Completion of Initial Conversion, FTIS
shall have the right, upon reasonable notice, to require
that SunGard install the Software at additional Processing
Sites chosen by FTIS, subject to the other provisions of
this Agreement.
6.4 Conversion.
(a) Schedule. SunGard shall meet the deadlines specified in the
Initial Conversion schedule and shall meet any other
Conversion deadlines which may be specified in SDS's agreed to
by the parties.
(b) Requirements. Conversion shall take place pursuant to
procedures mutually agreed by the parties, which procedures
shall minimize any necessary disruption to the operations of
FTIS, FRI or any FRI Affiliate.
(c) Cost.
(i) Initial Conversion. Initial Conversion shall be
performed by SunGard At No Additional Charge to
FTIS.
(ii) Conversion necessitated by new Deliverables. Any
Conversion necessitated by the delivery of new
Deliverables by SunGard (other than Initial Conversion)
shall be accomplished within the budget specified in the
associated SDS(s).
(iii) Conversion necessitated by Acquired Accounts. In the
event that FRI or any FRI Affiliate acquires Acquired
Accounts which require Conversion in order to run on
Software previously installed by SunGard, SunGard shall
undertake such Conversion pursuant to terms and
conditions to be agreed by the parties, and such
conversion services shall be Chargeable to FTIS.
6.5 Legacy System. For a period of thirty (30) days following the
Initial Conversion of any Account previously serviced by SunGard
pursuant to the 1981 Agreement, SunGard shall At No Additional
Charge to FTIS maintain existing data as of the time of such
Conversion and legacy systems for such Account, so as to allow
processing for such Account to be shifted back if necessary, it
being understood that, if processing is shifted back, data changes
made since the date of such Conversion may need to be reinput. In
the event such a reversion becomes necessary, the parties shall
negotiate regarding payment for the cost of such reversion and of
processing under such legacy system, and shall submit such dispute
to arbitration if no agreement is reached. In any such dispute, the
parties' relative fault shall be taken into account in setting such
costs. Notwithstanding the foregoing, there shall be a rebuttable
presumption that SunGard shall be paid for processing pursuant to
the most recent prices paid by FTIS for MPS processing under the
1981 Agreement, if the reversion to the legacy system is not due to
any fault of SunGard.
7. Processing.
7.1 Operating Environment. It shall be FTIS' responsibility, at its
expense, to procure and maintain an operational Operating
Environment for each Processing Site in sufficient time to allow
SunGard to meet the schedules required under this Agreement.
7.2 Modifications to the Operating Environment. SunGard shall have the
right to propose modifications to the Operating Environment. SunGard
shall not propose any such modifications unless SunGard has
implemented such modifications in its own processing center, or will
implement such modification as of the effective date of the
modification proposed by SunGard, or such modification is, in
SunGard's reasonable judgment, necessary to meet Performance
Requirements related to scalability or otherwise to handle growth in
Account volume processed under this Agreement.
(a) Non-material modifications. If proposed Operating Environment
modifications do not impose a material cost on FTIS, Exhibit G
shall be amended to incorporate such modification, and FTIS
shall implement such modification within a time period which
is reasonable under the circumstances.
(b) Material modifications. SunGard shall consult with FTIS
prior to proposing a modification to the Operating
Environment which imposes a material cost on FTIS. Any
such material modification shall not be imposed on less
than one (1) years' notice or such shorter period as may be
reasonable under the circumstances. If SunGard proposes a
material modification to the Operating Environment, FTIS
shall, within a reasonable time period, determine whether
it is willing to implement such modification. If FTIS
determines that it is willing to implement such
modification, Exhibit G shall be amended to incorporate
such modification and FTIS shall implement such
modification within the notice period. If FTIS determines
that it is not willing to implement such modification, FTIS
shall so notify SunGard. In such event, SunGard shall
propose a percentage increase in the amount of Account Fees
(the "proposed increase"). If FTIS agrees to the proposed
increase, then (i) the Account Fees shall be increased
through the remaining term of this Agreement by the
proposed increase, (ii) such modification to the Operating
Environment shall not take effect, and (iii) SunGard shall
continue to perform all of its obligations under this
Agreement, except that SunGard's obligations under Section
5.4 to develop periodic updates and enhancements of the
Software shall apply only to the version of the Software
maintained by SunGard in its service bureau environment,
and SunGard shall have no liability for any failure to meet
the Performance Requirements to the extent caused by the
failure to modify the Operating Environment. If FTIS
refuses to agree to the proposed increase, then (i) the
proposed increase shall be treated as a percentage decrease
in the Account Fees, which decreased Account Fees shall
remain in effect through the remaining term of this
Agreement, (ii) SunGard shall continue to perform all of
its obligations under this Agreement, except that SunGard's
obligation under Section 5.4 to develop periodic updates
and enhancements of the Software as used by FTIS shall
apply only to the version of the Software maintained by
SunGard in its service bureau environment, SunGard shall
have no liability for any failure to meet the Performance
Requirements to the extent caused by the failure to modify
the Operating Environment and SunGard shall have no further
liability for Non-Conformities other than to use reasonable
efforts to investigate and correct Non-Conformities in
accordance with Section 4.2, provided that all such
investigations and corrections shall be Chargeable to FTIS,
and (iii) the then current minimum requirement for FTIS
Hours shall be reduced by a percentage equal to the amount
of the proposed increase.
7.3 Operation.
(a) Data center management. FTIS shall be responsible for
data center management. In accordance with normal industry
standards, FTIS shall monitor the performance of the system
on an ongoing basis and will implement reasonable hardware
tuning or improvements, including, without limitation, disk
cache increases, in order to maximize throughput and
minimize I/O time. Such changes shall not include any
changes to the Operating Environment. Although FTIS shall
not be contractually obligated to meet the following
requirements, the Performance Requirements shall be waived
for any period during which any of the following
requirements are not met:
(i) a reasonable number of message regions must be
allocated to support IMS message activity;
(ii) a reasonable number of initiators must be allocated
to achieve optimum throughput for production jobs;
(iii) Investar has the highest application priority, which may
be shared only with other critical applications as
agreed, and provided that Investar never has less than
60 MIPS available to it; or
(iv) average daily system utilization of the MVS LPAR in
which Investar production executes will not exceed 90%
during both on-line production and batch processing.
(b) Production control. During the period prior to Completion
of Initial Conversion, SunGard shall provide production
control from SunGard's facility in San Mateo At No
Additional Charge to FTIS. Following Completion of Initial
Conversion, SunGard shall continue to provide production
control from such facility, or from such other SunGard
facility as SunGard may reasonably designate, with such
production control services to be Chargeable to FTIS, until
FTIS assumes responsibility for production control. FTIS
shall provide reasonable notice once it intends to assume
responsibility for production control. At such time,
SunGard and FTIS shall cooperate in transferring such
responsibility from SunGard to FTIS.
8. SunGard Services.
8.1 Training. FTIS Trainers shall have primary responsibility for
End-User training. Pursuant to the terms and conditions of this
Section, SunGard shall train such FTIS Trainers. Such training shall
take place in a professional manner in accordance with standard
industry practices. The parties will cooperate in scheduling any
training required of SunGard hereunder, and FTIS will provide
reasonable notice of training requests to SunGard. If, in SunGard's
reasonable judgment, a proposed FTIS Trainer is unable or unwilling
to be properly trained, SunGard shall notify FTIS of such judgment,
and FTIS shall replace such proposed FTIS Trainer.
(a) Prior to Completion of Initial Conversion. Prior to
Completion of Initial Conversion, SunGard shall provide
training to a reasonable number of FTIS Trainers sufficient
to provide such FTIS Trainers with a thorough understanding
of the Deliverables and to allow such FTIS Trainers to
adequately train other personnel regarding use of such
Deliverables. Such training shall take place At No
Additional Charge to FTIS.
(b) Subsequent training. Following Completion of Initial
Conversion, training of FTIS Trainers shall be Chargeable to
FTIS. In addition, FTIS may request training other than
training of FTIS Trainers, in which event SunGard shall
provide such training on reasonable notice, and such training
shall be Chargeable to FTIS.
8.2 Support. Pursuant to the terms and conditions specified below in
this Section, SunGard shall provide reasonable support for operation
of the Software, including help desk support and reasonable
consultation.
(a) Prior to Completion of Initial Conversion. Prior to
Completion of Initial Conversion, SunGard shall provide
reasonable support to FTIS At No Additional Charge to
FTIS.
(b) Subsequent support. Following Completion of Initial
Conversion, SunGard support shall be Chargeable to FTIS.
8.3 Disaster Recovery. FTIS shall be solely responsible for disaster
recovery. Notwithstanding the foregoing, in the event of a
disaster, SunGard shall provide reasonable support to FTIS to
assist FTIS in resuming full operation, including providing
additional copies of the Deliverables as may be necessary. Any
such support shall be Chargeable to FTIS.
9. Compensation.
9.1 Initial Payment. Pursuant to the First Amended MOU, the Second
Amended MOU and the Third Amended MOU, FTIS has paid to SunGard an
Advance in the amount of three million two hundred fifty thousand
dollars ($3,250,000). Upon execution of this Agreement, FTIS shall
pay SunGard the additional amount of four million two hundred fifty
thousand dollars ($4,250,000). The cumulative total of seven million
five hundred thousand dollars ($7,500,000) shall be referred to
herein as the "Initial Payment." The Initial Payment is being made
and has been made due to the significant development, installation
and conversion costs being incurred by SunGard prior to the
Completion of Initial Conversion.
9.2 Account Fees. During the term of this Agreement, and subject to
Section 1.1, FTIS shall pay SunGard a fee based on the number of
Processed Open Accounts. Such fee shall be calculated as specified
in Exhibit M, subject to a minimum of five hundred thousand dollars
($500,000) per month, which shall apply beginning the first full
month after the Completion of Initial Conversion, such minimum to be
calculated before application of Section 9.3. Such fee shall be paid
within thirty (30) days of the end of the month to which the fee
pertains.
9.3 Modification of Account Fees. Account Fees otherwise due and
owing to SunGard pursuant to pursuant to Section 9.1 may be
modified as follows:
(a) Account Fees otherwise due and owing to SunGard shall be
reduced by one hundred fifty-five thousand, six hundred
eighty-seven dollars and sixty-seven cents ($155,687.67)
per month for each of the first sixty (60) months following
the Completion of Initial Conversion. In addition, the
Account Fees due and owing for the first full month
following the Completion of Initial Conversion shall be
reduced by an amount equal to fifty-six thousand two
hundred and fifty dollars ($56,250.00) multiplied by the
number of months (full and partial) between the Effective
Date and the Completion of Initial Conversion, and, if the
amount of such total reduction for such first month
following the Completion of Initial Conversion exceeds the
Account Fees for such month, then any balance shall serve
as a reduction in the Account Fees due and owing for each
subsequent month until such balance is reduced to zero.
(b) If SunGard misses an Initial Conversion Date, or Software
contains a Class One Non-Conformity which constitutes a
SunGard-Caused Non-Conformity, the parties agree that the
value of the Software to FTIS will be reduced during such
period. In such event, the Account Fees payable by FTIS
shall be reduced by 10%. Such reduction will apply to the
Account Fees payable for the entirety of any month if such
condition existed during any portion of such month, if the
condition constituted (i) a failure to meet an Initial
Conversion Date, (ii) a Class One Non-Conformity which was
not promptly corrected, or (iii) repeated Class One
Non-Conformities during the month, even if each such
Non-Conformity was promptly corrected. Such reduction will
apply only to Account Fees payable for any day(s) during
which such condition existed, if the failure constituted a
Class One Non-Conformity which was promptly corrected,
unless repeated Class One Non-Conformities occurred during
such month. Such a reduction shall not be imposed
unilaterally by FTIS, but shall be imposed only by an
arbitrator following an arbitration in which the burden
shall be on FTIS to establish the existence and duration of
the condition justifying such reduction by a preponderance
of the evidence. In such event, the amount of any damages
which would otherwise be awarded to FTIS based on or
arising out of such condition shall be reduced by the
amount of such reduction in Account Fees.
(c) If SunGard misses an SDS schedule other than an Initial
Conversion schedule and such schedule miss is material, or
Software contains a Class Two Non-Conformity which
constitutes a SunGard-Caused Non-Conformity and which is
both material and not promptly corrected, the parties agree
that the value of the Software to FTIS may be reduced
during such period, and an arbitrator may reduce Account
Fees payable for a month by up to 5% if such a condition
existed during some or all of such month. If such
condition existed for less than an entire month, any such
reduction shall be applied pro rata for a reasonable
portion of such month, taking into account the severity of
the problem, provided that such period may be longer or
shorter than the actual period of such condition. Such a
reduction shall not be imposed unilaterally by FTIS, but
shall be imposed only by an arbitrator following an
arbitration in which the burden shall be on FTIS to
establish the existence and duration of the condition
justifying such reduction by a preponderance of the
evidence. In such event, the amount of any damages which
would otherwise be awarded to FTIS based on or arising out
of such condition shall be reduced by the amount of such
reduction in Account Fees.
(d) On the seventh, eighth and ninth anniversaries of the
Completion of Initial Conversion, SunGard shall have the right
to increase the Account Fees applicable to Incremental
Accounts by the Increase in the CPI, plus two percent (2%).
9.4 Expenses. FTIS shall reimburse SunGard for Reimbursable Expenses
incurred by SunGard in the course of the SRA/SDS process, and in
providing development, training and related services from December
1, 1996 through the Effective Date, and FTIS shall reimburse SunGard
for Reimbursable Expenses incurred by SunGard in the course of
providing services under this Agreement, except as this Agreement
may expressly provide to the contrary. SunGard shall provide an
invoice, copies of receipts and other supporting documentation
within two (2) months of the date of such expense, except that such
documentation for expenses incurred before the Effective Date shall
be provided within two (2) months after the Effective Date. FTIS
shall reimburse SunGard for such Reimbursable Expenses within thirty
(30) days of receipt of such documentation.
9.5 Taxes. The fees and other amounts payable by FTIS to SunGard under
this Agreement do not include any taxes of any jurisdiction that may
be assessed or imposed upon the copies of the Software and
Documentation delivered to FTIS, the license granted under this
Agreement or the services provided under this Agreement, or that may
be otherwise assessed or imposed in connection with the transactions
contemplated by this Agreement, including sales, use, excise, value
added, personal property, export, import and withholding taxes,
excluding only taxes based upon SunGard's net income and taxes
similar to or in lieu of income taxes that are based upon SunGard's
revenues. FTIS shall directly pay any such taxes assessed against
it, and FTIS shall promptly reimburse SunGard for any such taxes
payable or collectable by SunGard.
9.6 Late Payment. If FTIS fails to make any payment required hereunder,
FTIS shall not be in breach of this Agreement for such failure
unless FTIS fails to make such payment within seven (7) business
days after receipt of SunGard's notice that such payment was not
made by the date required hereunder (the "due date"). If FTIS
disputes whether a payment is required hereunder, FTIS shall be
entitled to withhold such payment pending resolution of such dispute
pursuant to the provisions of Section 15, and such act of
withholding shall not constitute a breach of this Agreement unless
FTIS continues to withhold such payment in violation of an
arbitration decision. If the arbitrator(s) assigned to such dispute
determines that FTIS' position was incorrect but reasonable, FTIS
shall be ordered to pay the amount due plus reasonable interest
(which shall be no lower than SunGard's then most recent cost of
funds rate) from the due date. If the arbitrator(s) assigned to such
dispute determines that FTIS' position was incorrect and
unreasonable, FTIS shall be ordered to pay the amount due plus
reasonable interest (which shall be no lower than SunGard's then
most recent cost of funds rate) from the due date plus liquidated
damages of two percent (2%) of such disputed amount, multiplied by
the number of months (full or partial) between the due date and the
date of payment, the parties being in agreement that in such event
the actual damages would be difficult or impossible to calculate and
such liquidated damages would be a reasonable measure of such
damages.
10. Licenses and Ownership.
10.1 License by SunGard. SunGard grants FTIS, FRI and FRI Affiliates (the
"licensees") a limited, world-wide, non-exclusive license under all
relevant SunGard Intellectual Property Rights which inhere in or are
relevant to any of the Deliverables, and which are necessary to
exercise the rights set forth in Subsections (a) and (b) of this
Section 10.1, subject to the terms and conditions of this Agreement.
(a) License rights regarding Software. The license to Software
shall include and be limited to the following rights: (i)
the right to execute the Software only for the purpose of
providing shareholder accounting processing and related
services for FRI Clients and providing related services to
End Users, including the right to make any copies
necessarily made in the course of such execution, such
right limited to execution at Processing Sites; (ii) the
right to make one backup/archive copy; (iii) the right to
disclose Discloseable Items to FRI Clients, End Users and
Third Party Vendors, whether or not located at Processing
Sites; (iv) the right, subject to the requirements of
Section 12, to create or have created FTIS Enhancements;
and (v) the right to disclose the Software to Third Party
Vendors approved by SunGard pursuant to Section 11 on a
need-to-know basis.
(b) License rights regarding Documentation. The license to
Documentation shall include the following rights: (i) the
right to make copies of Documentation; (ii) the right to
modify Documentation; (iii) the right to provide End User
Documentation to FRI Clients, End Users and Third Party
Vendors; (iv) the right to provide Customer Documentation
to employees and individual contractors of FTIS, FRI and
FRI Affiliates on a need-to-know basis and subject to the
non-disclosure obligations of Section 11; and (v) the right
to disclose the Customer Documentation to Third Party
Vendors approved by SunGard pursuant to Section 11 on a
need-to-know basis.
(c) Term. The licenses extended hereunder shall terminate at
the later of: (i) the expiration or termination of this
Agreement, or (ii) the expiration of any Reasonable
Transition Period.
(d) License limitations. Except as otherwise permitted
pursuant to this Agreement, or with the prior written
consent of SunGard, the licensees will not, nor will they
permit any FRI Client, End User or third party to, (i) use
any Proprietary Item for any purpose, at any location or in
any manner, (ii) license, sublicense, market, sell or
otherwise distribute any Proprietary Item, (iii) make or
retain any copy of any Proprietary Item, (iv) refer to or
use any Proprietary Item as part of any effort to develop a
program having functional attributes, visual expressions or
other features similar to those of the Software or to
otherwise compete with SunGard, (v) modify, adapt,
translate or create derivative works based upon any
Proprietary Item, or combine or merge any part of any
Proprietary Item with or into any other software or
documentation, or (vi) remove, erase or tamper with any
copyright or other proprietary notice printed or stamped
on, affixed to, or encoded or recorded in any Proprietary
Item.
(e) FTIS liability. FTIS shall be liable for any breach of the
provisions of this Section 10.1 or of Section 11 by any FRI
Affiliate, FRI Client, Third Party Vendor or End User to which
FTIS has disclosed or made available any information subject
to such provisions.
10.2 License by FTIS. FTIS grants SunGard a limited, perpetual,
world-wide, non-exclusive, royalty-free license under all relevant
FTIS Intellectual Property Rights which inhere in or are relevant to
any of the ideas, methods, algorithms, formulae and concepts
incorporated in SRAs conveyed to SunGard and which are necessary to
allow SunGard to (i) use such ideas, methods, algorithms, formulae
and concepts, and (ii) incorporate such ideas, methods, algorithms,
formulae and concepts into materials, including computer programs,
and documentation, to be provided by SunGard to third parties, and
to exploit such ideas, methods, algorithms, formulae and concepts
for SunGard's commercial purposes.
10.3 Ownership.
(a) SunGard ownership. Title to all Proprietary Items and all
Discloseable Items will remain exclusively in SunGard.
(b) FTIS ownership. The provisions of Subsection (a) of this
Section shall not apply to any ideas, methods, algorithms,
formulae and concepts which are currently owned by and used
in the course of business of FTIS, FRI or FRI Affiliates,
or to those ideas, methods, algorithms, formulae and
concepts which may be disclosed by FTIS, FRI or any FRI
Affiliate to SunGard pursuant to this Agreement. Title to
all such ideas, methods, algorithms, formulae and concepts
will remain exclusively in FTIS, FRI or FRI Affiliates.
(c) Exceptions. Notwithstanding the provisions of Subsections
(a) and (b) of this Section, (i) nothing herein contained
shall limit either party's right to use any ideas, methods,
algorithms, formulae or concepts which are owned by such
party, in the public domain or owned by any third party
(subject to such third party's rights), including ideas,
methods, algorithms, formulae or concepts incorporated in
the Proprietary Items, (ii) nothing herein contained shall
limit any disclosure right expressly granted to FTIS
pursuant to this Agreement, including the right to disclose
Discloseable Items.
11. Confidentiality.
11.1 Definition of Confidential Information. This Confidentiality Section
shall apply to any information conveyed by one party hereunder to
the other party, or learned by either party from the other during
the course of dealings between the parties. Such information shall
constitute Confidential Information if (1) the information is
specifically identified as confidential when conveyed or learned, or
(2) the information is of a type that the other party should
reasonably recognize as confidential, or is conveyed under
circumstances which the other party should reasonably recognize as
denoting confidentiality. Without limitation of the foregoing, (1)
FTIS acknowledges that Proprietary Items (subject to the limitations
contained in Sections 10.3(b) and (c)) are trade secrets,
Confidential Information and proprietary property of SunGard, having
great commercial value to SunGard, and that the development and
design of the Proprietary Items have involved and will involve the
expenditure by SunGard of substantial amounts of time and money and
the use by SunGard of skilled experts; (2) information regarding the
business or financial condition of either party constitutes
Confidential Information; (3) information regarding the business or
technical plans or prospects of either party constitutes
Confidential Information; and (4) the terms of this Agreement
constitute Confidential Information. Notwithstanding the foregoing,
or anything else in this Agreement, Discloseable Items shall not
constitute Confidential Information.
11.2 Nondisclosure and Nonuse of Confidential Information. The receiving
party will undertake reasonable precautions to avoid inadvertent
disclosure of Confidential Information, such precautions to be at
least as extensive as those taken to protect confidential
information belonging to the receiving party. The receiving party
will not disclose, publish, or disseminate Confidential Information
to anyone other than the following individuals, each of whom must
have a need to know in order to carry out the receiving party's
rights or obligations under this Agreement, and each of whom must
have been informed of and agreed to be bound by the receiving
party's obligations relating to disclosure and use restrictions
hereunder: (1) employees, (2) individual contractors engaged by the
receiving party (directly or through an agency) who sign written
non-disclosure agreements, and (3) Third Party Vendors (other than
agencies providing individual contractors) engaged by FTIS, but only
to the extent that SunGard authorizes disclosure to each such Third
Party Vendor in writing, such authorization to be not unreasonably
withheld. The receiving party agrees to take reasonable precautions
to prevent any unauthorized use, disclosure, publication, or
dissemination of Confidential Information. The receiving party
agrees to accept Confidential Information for the sole purpose of
carrying out the receiving party's rights and obligations under this
Agreement. The receiving party agrees not to use Confidential
Information otherwise for its own or any third party's benefit
without the prior written approval of an authorized representative
of the disclosing party in each instance. The receiving party shall
have the right to disclose Confidential Information as strictly
necessary for compliance with legal or regulatory requirements,
including subpoenas. Prior to any such disclosure, the receiving
party shall provide reasonable notice to the disclosing party, and
shall cooperate in any effort by the disclosing party to petition
the authority compelling such disclosure for an order that such
disclosure not occur or that such disclosure occur pursuant to terms
and conditions designed to ensure continued confidentiality.
11.3 Limitations on Confidentiality. The receiving party's obligations
hereunder with respect to any Confidential Information shall
terminate when the receiving party can document that: (a) such
Confidential Information has become generally available to the
public through no fault on the part of the receiving party; (b) the
conveying party has made such Confidential Information available to
other parties without any obligation of confidentiality; (c) the
receiving party rightfully had such Confidential Information in its
possession, free of any obligation of confidentiality to the
disclosing party, prior to disclosure by the disclosing party; (d)
such Confidential Information was independently developed by the
receiving party independently of and without reference to any
Confidential Information; (e) the receiving party rightfully
obtained such Confidential Information from a third party with the
right to transfer or disclose it without any obligation of
confidentiality; or (f) such Confidential Information does not
constitute a Proprietary Item and was first conveyed to the
receiving party more than seven (7) years previously.
11.4 Return of Tangible Materials. Upon expiration or termination of this
Agreement, and following a Reasonable Transition Period, within
thirty (30) business days of receipt of written request by the
disclosing party, the receiving party will return to the disclosing
party all documents, records and copies thereof containing
Confidential Information and will certify in writing to the
disclosing party that all copies of Confidential Information have
been permanently deleted or destroyed, including copies installed in
computer memory, on computer disks, tapes or other media. For
purposes of this section, the term "documents" includes all
information fixed in any tangible medium of expression, in whatever
form or format.
12. FTIS Enhancements.
12.1 In General. Subject to the restrictions contained in this Section,
nothing herein contained shall be deemed to restrict FTIS' right to
develop FTIS Enhancements, or to have FTIS Enhancements developed by
third parties. FTIS shall refrain from developing any FTIS
Enhancement, or having any FTIS Enhancement developed, unless and
until FTIS has proposed an SRA corresponding to such FTIS
Enhancement, and such SRA has been withdrawn by FTIS after receipt
of a response from SunGard or has resulted in an SDS which has been
rejected or canceled by FTIS.
12.2 Use of Deliverables. FTIS may make use of Documentation and
Discloseable Items in creating FTIS Enhancements, and may disclose
such information to Third Party Vendors for the purpose of having
FTIS Enhancements developed, subject to the nondisclosure procedure
of Section 11, provided, however, that, if Proprietary Items are to
be disclosed to Third Party Vendors for such purpose, such Third
Party Vendors must be approved in advance by SunGard pursuant to the
provisions of Section 11.2.
12.3 Restrictions on FTIS Enhancements. FTIS Enhancements shall not
incorporate or modify the Software source or object code or modify
the database structure, data structures or file structures used by
the Software. Notwithstanding the foregoing, nothing contained in
this Section 12.3 shall limit FTIS' right to develop FTIS
Enhancements which modify the structure or organization of data
which has been output from the database used by the Software, as
long as such data is not reinput into such database, or to develop
FTIS Enhancements which translate data into the format used by the
Software, in order to facilitate storage of such data in the
database used by the Software.
12.4 Limitation of SunGard Obligations. FTIS acknowledges that
modifications and additions to input and output of the Software
could affect compliance of the Software with the Performance
Requirements. SunGard shall have no liability for any
Non-Conformities to the extent attributable to any FTIS Enhancement.
13. Certain FTIS Obligations.
13.1 Access to Facilities and Personnel. FTIS shall provide SunGard
access to the Processing Sites and to FTIS' equipment and personnel,
and shall otherwise cooperate with SunGard as reasonably necessary
for SunGard to perform its installation, testing, conversion,
training, maintenance, support and other obligations under this
Agreement.
13.2 FTIS Resources. FTIS shall devote such facilities, personnel and
other resources as are reasonably necessary, in FTIS' good faith
judgment, to test and install the Software.
13.3 Use of Software. Except as may be otherwise expressly provided for
herein, FTIS shall use the Software in production to process those
Accounts identified in the Initial Conversion Schedule, as well as
new Accounts generated through the normal expansion of business.
Notwithstanding the foregoing, FTIS shall have no obligation to use
the Software to process Acquired Accounts, unless FTIS has given
SunGard notice pursuant to Section 3.1(c), in which event FTIS shall
use the Software in production to process those Acquired Accounts
actually acquired in connection with such transaction, beginning as
soon as is reasonably practicable after closing of such transaction.
13.4 Non-U.S. Processing Site. If FTIS designates a Processing Site
located in a country other than the United States, FTIS shall be
solely responsible for compliance with all laws and regulations of
(i) the United States which apply to export of any of the
Deliverables to such country; and (ii) such other country, including
those relating to compliance with import and export requirements,
requirements of registration of this Agreement or the Deliverables,
and laws and regulations related to possession, use or remote use of
the Deliverables. This Section 13.4 shall not limit SunGard's
responsibility for SunGard-Caused Infringement, except to the extent
that such SunGard-Caused Infringement would not have occurred had
FTIS complied with all laws and regulations of such country other
than laws or regulations conveying an Intellectual Property Right to
the third party seeking to enforce such Intellectual Property Right
against FTIS.
13.5 Export Control. FTIS shall not export any of the Deliverables,
or authorize any other party to export any of the Deliverables:
(i) into (or to a national resident of) any country to which the
U.S. has embargoed goods, (which currently include Cuba, Iraq,
Libya, Sudan, North Korea, Iran and Syria); or (ii) to anyone on
the U.S. Treasury Department's list of Specially Designated
Nationals or the U.S. Commerce Department's Table of Denial
Orders.
13.6 Data Accuracy. FTIS shall be exclusively responsible for, and
SunGard shall have no liability with respect to, the accuracy of
data and other information which is input into the Software by
anyone other than SunGard, including, without limitation, data
generated, obtained or gathered by FTIS or any FRI Affiliate, FRI
Client, End User or Third Party Vendor, and any errors in data
output or Non-Conformities caused by the input of erroneous data
shall be FTIS' sole responsibility.
13.7 Data Use. SunGard shall have no responsibility for nor any liability
for any loss or damage resulting from any use or misuse of the
results obtained from the use of any Software or services provided
under this Agreement, provided, however, that this Section 13.7
shall not apply to any damage resulting from use of inaccurate data
resulting from a Non-Conformity (to the extent that such damages
constitute direct damages to FTIS).
13.8 Backups. Consistent with normal industry standards, FTIS shall
establish and maintain appropriate control and backup procedures
designed to reduce any loss of information that could result from
any interruption or delay in processing or from any Non-Conformity.
Such procedures shall include maintaining duplicate copies of data
and such other measures as may be reasonably consistent with normal
industry practices.
13.9 Review of Data and Discovery of Non-Conformities. Consistent with
normal industry standards, FTIS shall establish and maintain
appropriate procedures to reasonably review data output from the
Software and the operation of the Software. In the event that FTIS
discovers Non-Conformities, FTIS shall promptly inform SunGard of
such Non-Conformities. In the event that FTIS fails to inform
SunGard of a Non-Conformity after discovery, or after FTIS
reasonably should have discovered such Non-Conformity in the
exercise of reasonable care, SunGard shall have no liability to FTIS
for any damages or losses incurred following the date of such
discovery or the date on which FTIS reasonably should have made such
discovery, whichever is earlier; provided, however, that this
Section 13.9 shall not affect SunGard's obligation to correct any
such Non-Conformity in accordance with the terms of this Agreement.
13.10 Account Purging. FTIS shall periodically purge Account data and
closed Accounts from the database used by the Software in a manner
consistent with the parties' past practices and normal industry
practices.
14. Term/Termination/Transition Services.
14.1 Term. Subject to the terms and conditions of the Agreement, the
Agreement shall be effective from the date of execution and continue
for a period of ten (10) years from and after Completion of Initial
Conversion.
14.2 Termination for Material Breach. Subject to the terms and conditions
of the Agreement, either party ("terminating party") may provide
written notice of material breach to the other party ("breaching
party"). The terminating party may then terminate the Agreement for
material breach by providing written notice of termination, if such
breach remains uncured for a period of thirty (30) days following
such notice of breach; provided, however, that (i) such right to
terminate shall lapse if the breaching party cures such breach prior
to exercise of such right to terminate, and (2) if, following
receipt of the notice of breach, the breaching party promptly begins
and diligently prosecutes a reasonable cure of such breach, then the
breaching party may dispute the materiality of the breach, and the
grounds for termination, under Section 15 of this Agreement. In the
event of such a dispute, the termination will not take effect until
an arbitrator has determined that the agreement is in material
breach, although, in such event, the termination will be deemed to
have taken effect as of the date of the original notice of
termination. In particular, and without limitation of the foregoing,
this Agreement may be declared in material breach if (a) SunGard
misses an Initial Conversion Date or Software contains a Class One
Non-Conformity which constitutes a SunGard-Caused Non-Conformity and
SunGard fails to promptly provide a reasonable correction or
work-around; (b)(i) SunGard fails to meet an SDS schedule or
Software contains a Class Two Non-Conformity which constitutes a
SunGard-Caused Non-Conformity, (ii) such failure is material and is
particularly egregious or damaging, and (iii) SunGard fails to
promptly cure such failure within a reasonable period under the
circumstances; (c) FTIS fails to make payment to SunGard, subject to
the provisions of Section 9.6; or (d) FTIS fails to process Accounts
on the Software as contemplated by Section 13.3, and such failure is
particularly egregious or damaging and FTIS fails to promptly cure
such failure within a reasonable period under the circumstances.
14.3 Effect of Termination for Material Breach.
(a) Termination by FTIS. If FTIS terminates this Agreement for
material breach, in addition to any other rights and
remedies FTIS might otherwise have, SunGard shall be
required to pay to FTIS those sums specified in Exhibit J.
SunGard shall be entitled to retain any Account Fees
previously paid by FTIS and other amounts previously paid
or then owing by FTIS. This Section 14.3(a) shall not
limit the ability of an arbitrator or arbitration panel to
enter any additional award against SunGard.
(b) Termination by SunGard. If SunGard terminates the
Agreement for material breach, in addition to any other
rights and remedies SunGard might otherwise have, SunGard
shall be entitled to retain the Initial Payment as well as
any Account Fees and other amounts previously paid or then
owing by FTIS. This Section 14.3(b) shall not limit the
ability of an arbitrator or arbitration panel to enter any
additional award against FTIS.
14.4 Transition Services.
(a) For a Reasonable Transition Period after the expiration or
termination of this Agreement, including termination for
material breach by either party, SunGard shall continue to
(i) to the extent applicable, provide data processing
services to FTIS in accordance with the terms of the 1981
Agreement for any MPS Accounts not successfully converted
as of the date of such expiration or termination, and (ii)
to the fullest extent possible under the circumstances,
perform all obligations under this Agreement with respect
to Accounts successfully converted as of the date of such
expiration or termination, subject to performance by FTIS
of its obligations under this Agreement, including its
obligations to pay Account Fees and other amounts due
hereunder. All such processing and/or services shall be
subject to the payment terms and conditions of the 1981
Agreement and/or this Agreement, as applicable.
(b) In connection with the expiration or termination of the
Agreement, including termination for material breach by
either party, SunGard shall comply with FTIS' reasonable
directions to effect the orderly transition and migration
of all or any of the Accounts to an alternative system
designated by FTIS. The parties shall jointly develop and
follow a transition plan setting forth the respective tasks
to be accomplished by each party in connection with such
orderly transition and migration and a schedule pursuant to
which the tasks are to be completed, with such SunGard
services to be Chargeable to FTIS. During a Reasonable
Transition Period following such expiration or termination,
SunGard shall continue to perform its obligations under
this Agreement, subject to performance by FTIS of its
obligations under this Agreement, including its obligation
to pay Account Fees and other amounts due hereunder.
Notwithstanding the foregoing, if the transition assistance
provided by SunGard shall require resources beyond those
otherwise then being provided by SunGard under this
Agreement, FTIS shall compensate SunGard for such
additional resources as Additional Services.
(c) Nothing herein contained shall serve to limit FTIS' right to
disclose Discloseable Items to third parties whom FTIS is
considering or has decided to select as a replacement for
SunGard.
14.5 Survival. The following Sections shall survive termination or
expiration of this Agreement: 9, 10, 11, 14, 15, 16, 17, 19, 21,
23.
15. Dispute Resolution.
15.1 Resolution by the Parties. Prior to submitting any dispute for
resolution in accordance with Section 15.3 or 15.4, the parties
shall make a good faith attempt to resolve such dispute through
negotiation involving the project managers. If the project managers
are unable to resolve such dispute, the dispute shall be submitted
for negotiations involving more senior management at the following
levels: for FTIS: the President; for SunGard: the Chief Executive
Officer of SunGard's Trust & Shareholder Systems Group or of SunGard
Data Systems. If such negotiations fail to reach a resolution within
seven (7) business days, either party shall be free to initiate
arbitration proceedings.
15.2 Arbitration. All disputes arising out of or relating to this
Agreement shall be settled by binding arbitration, to be carried out
in San Mateo County, California, or in such other jurisdiction as
the parties may mutually designate. Either party shall have seven
(7) business days to seek reconsideration of any arbitration
decision. If neither party seeks reconsideration, or if
reconsideration is denied, the arbitration decision shall become
final and binding on both parties and shall be enforceable in any
court of law. All arbitration proceedings, results and all documents
prepared in connection with any arbitration shall be confidential
and shall not be disclosed to any person other than the parties to
the proceedings, their counsel, witnesses and experts, the
arbitrator(s), the special master (if any), or, if involved, the
court and court staff. All documents filed with the arbitrators or
with a court shall be filed under seal, unless the court denies
permission to file documents under seal.
15.3 Abbreviated Arbitration Procedures. If a dispute arises which cannot
be resolved pursuant to Section 15.1, the parties may agree to an
abbreviated arbitration procedure before a single neutral arbitrator
jointly selected by the parties. If the parties are unable to agree
to use the abbreviated arbitration procedure, the dispute shall be
resolved pursuant to the full arbitration procedure specified in
Section 15.4.
(a) Commencement. An abbreviated arbitration shall be
commenced by written notification from one party to the
other party specifying the nature of the dispute and
proposing abbreviated arbitration. If the other party
agrees to the abbreviated arbitration procedure, or if the
other party fails to respond within seven (7) days of
receipt of such notice, the abbreviated arbitration
procedure shall be used.
(b) Selection of arbitrator. The parties shall promptly agree on
appointment of a single neutral arbitrator. In the event the
parties are unable to agree upon an arbitrator within thirty
(30) days of commencement of the arbitration, either party
shall have the right to convert the arbitration to a full
arbitration under Section 15.4.
(c) Procedures. An abbreviated arbitration shall be handled in an
informal manner and without discovery, but shall include a
cooperative sharing by the parties of clearly relevant
information. Procedures shall be by mutual agreement of the
parties or, failing mutual agreement, shall be as specified by
the arbitrator.
(d) Decision. The decision of the arbitrator shall be provided
to the parties within sixty (60) days of commencement of
the arbitration.
15.4 General Arbitration Procedures.
(a) Commencement. A general arbitration shall be commenced by (i)
written notification from one party to the other party
specifying the nature of the dispute and demanding general
arbitration, or (ii) as specified in Section 15.3.
(b) Selection of arbitrator. Disputes shall be decided by a
panel of three (3) neutral arbitrators selected by mutual
agreement of the parties. If within sixty (60) days of
initiation of the arbitration procedure, the parties have
not agreed upon a panel of neutral arbitrators, either
party may petition the Superior Court of the State of
California in and for the County of San Mateo or the
District Court for the Northern District of California for
the appointment of such panel. If, in their opinion it
would be useful to do so, the arbitrators may select a
special master with the appropriate qualifications to
understand and review any technical and/or business issues
raised by the claim(s).
(c) Procedures. If requested by a party, or otherwise deemed
necessary by the arbitrators, the parties will conduct
discovery of a scope and nature as agreed upon by the
parties, or, if the parties are unable to agree, as
specified by the arbitrators. Hearings and other
proceedings shall be subject to procedures agreed upon by
the parties, or if the parties are unable to agree, as
specified by the arbitrators.
(d) Decision. A written decision of the arbitrators shall be
rendered within thirty (30) days after the conclusion of the
arbitration hearings and shall set forth in detail the reasons
for such decision, which shall be based on applicable law.
16. Remedies; Limitations of Liability.
16.1 General. In any arbitration arising out or related to this
Agreement, the arbitrator(s) shall have the power to award equitable
relief and damages as provided by law for the particular claim(s)
asserted.
16.2 Attorneys' Fees and Costs. In any litigation or arbitration arising
out or related to this Agreement, reasonable costs and attorneys'
fees shall be awarded to the prevailing party. For purposes of this
provision, the "prevailing" party shall be that party the positions
of which have been substantially vindicated, even if the other party
has nominally prevailed in the dispute. The award of attorneys' fees
and costs may be reduced or eliminated if, taking into account the
significance of the issues at stake, and the overall cost of the
dispute resolution, the prevailing party is deemed to have acted
unreasonably in bringing the claims or in defending against them.
16.3 Interlocutory Relief. Notwithstanding the requirement that all
disputes be resolved by binding arbitration, either party may
request a temporary restraining order or other interlocutory relief
from any court with jurisdiction. Neither the making of such a
request, nor the granting of interlocutory relief, shall serve to
waive either party's right to seek arbitration.
16.4 Limitations of Liability.
(a) EXCEPT FOR THE PARTIES' RESPECTIVE INDEMNIFICATION
OBLIGATIONS AS PROVIDED IN SECTIONS 19.1 AND 19.2 HEREOF,
NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY
INCIDENTAL, CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES OF
ANY KIND OR NATURE, INCLUDING, WITHOUT LIMITATION, SUCH
DAMAGES ARISING FROM ANY BREACH OF THIS AGREEMENT OR ANY
TERMINATION OF THIS AGREEMENT, WHETHER SUCH LIABILITY IS
ASSERTED ON THE BASIS OF CONTRACT, TORT (INCLUDING
NEGLIGENCE OR STRICT LIABILITY), OR OTHERWISE, EVEN IF THE
OTHER PARTY HAS BEEN ADVISED OR WAS AWARE OF THE
POSSIBILITY OF SUCH LOSS OR DAMAGES. THE LIMITATIONS OF
LIABILITY OF THIS SECTION 16.4(a) SHALL NOT EXTEND TO
LIABILITY ARISING OUT OF ACTIONS WHICH ARE WILLFUL,
DELIBERATE OR RECKLESS.
(b) EXCEPT FOR FTIS' OBLIGATIONS UNDER SECTION 9, AND EXCEPT
FOR THE PARTIES' RESPECTIVE INDEMNIFICATION OBLIGATIONS AS
PROVIDED IN SECTIONS 19.1 AND 19.2 HEREOF, NEITHER PARTY
SHALL BE LIABLE TO THE OTHER PARTY FOR DIRECT DAMAGES IN AN
AMOUNT EXCEEDING FIVE MILLION DOLLARS ($5,000,000) PER
TWELVE (12) MONTH PERIOD AND TWENTY MILLION DOLLARS
($20,000,000) IN THE AGGREGATE DURING THE ENTIRE TERM OF
THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, DIRECT
DAMAGES ARISING FROM ANY BREACH OF THIS AGREEMENT OR ANY
TERMINATION OF THIS AGREEMENT, WHETHER SUCH LIABILITY IS
ASSERTED ON THE BASIS OF CONTRACT, TORT (INCLUDING
NEGLIGENCE OR STRICT LIABILITY) OR OTHERWISE. IN THE EVENT
THAT THIS AGREEMENT IS TERMINATED FOR MATERIAL BREACH, AND
THE OTHER PARTY ACCEPTS SUCH TERMINATION OR AN ARBITRATOR
DETERMINES THAT THE AGREEMENT WAS MATERIALLY BREACHED AND
WAS PROPERLY TERMINATED, THE FOREGOING FIVE MILLION DOLLAR
($5,000,000) ANNUAL LIMITATION SHALL NOT APPLY TO ANY
LIABILITY ASSESSED FOR SUCH BREACH, BUT THE TWENTY MILLION
DOLLAR ($20,000,000) AGGREGATE LIMITATION SHALL APPLY
THERETO. THE LIMITATIONS OF LIABILITY OF THIS SECTION
16.4(b) SHALL NOT EXTEND TO LIABILITY ARISING OUT OF
ACTIONS WHICH ARE WILLFUL, DELIBERATE OR RECKLESS.
(c) THE PARTIES HAVE FREELY AND OPENLY NEGOTIATED THIS AGREEMENT,
INCLUDING BUT NOT LIMITED TO THE PRICING TERMS HEREOF, WITH
THE KNOWLEDGE THAT THE LIABILITY OF THE PARTIES IS TO BE
LIMITED IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT.
(d) SunGard shall have no liability with respect to any failure
to meet a schedule, including any Initial Conversion
schedule, failure to meet a Performance Requirement,
Non-Conformity, claim of infringement or other matter to
the extent attributable to (i) any unauthorized or improper
use or modification of any Deliverable, (ii) any authorized
modification of any Deliverable made by FTIS or on behalf
of FTIS by any individual or entity other than SunGard,
(iii) any unauthorized combination of any Deliverable with
any other software, documentation or other item, or (iv)
any breach of any provision of this Agreement by FTIS or
any FRI Affiliate, FRI Client or End User.
17. Audit Procedures.
17.1 Record Keeping. During the term of this Agreement, and for a period
of three (3) years thereafter, each party shall maintain accurate
and complete records relating to and documenting each party's
performance hereunder, including, without limitation of the
foregoing, records on the following subjects: (i) for SunGard: (a)
Developer Hours used, (b) Additional Services performed; (c)
Reimbursable Expenses submitted; (d) terms of agreements with third
parties entered into by SunGard which relate to delivery of any
Deliverables to such third party; and (e) FTIS Hours used; (ii) for
FTIS, with respect to each Processing Site: (a) the number of
Accounts, including Processed Open Accounts being processed each
month; (b) data center management; (c) production control; and (d)
computer hardware, software and infrastructure used for processing
hereunder. Such records will be maintained for a minimum of three
(3) years and in a manner consistent with normal industry practices
for the maintenance of significant records.
17.2 Audit Right. From time to time during the term of this Agreement,
each party shall have the right to appoint either its own employees
or individual contractors or an independent firm of certified public
accountants reasonably acceptable to the other party to audit the
other party's books and records relating to obligations under this
Agreement, and/or review the other party's operations and facilities
pertaining to its obligations under this Agreement. Any such auditor
must agree to execute the audited party's standard form of
non-disclosure agreement requiring that information learned be held
in strict confidence, except as may be necessary to report
conclusions to the auditing party and to explain the basis for such
conclusions. Audits shall occur no more frequently than annually and
shall be conducted in a manner that does not interfere unreasonably
with the audited party's business activities. An audit may cover any
period within the preceding two (2) years unless such period has
been previously audited. The Audit Cost shall be borne by the
auditing party unless such audit results in a finding of a
discrepancy the reasonable value of which exceeds one hundred fifty
percent (150%) of the Audit Cost, in which event the Audit Cost
shall be borne by the audited party. If an audit reveals a
discrepancy, the audited party shall promptly cure such discrepancy,
unless the audited party disputes the existence or extent of such
discrepancy, in which event the audited party shall have the right
to invoke the dispute resolution procedures of this Agreement. In
such dispute resolution procedures, the cost of the audit shall be
treated as an expense for purposes of reimbursement to the
prevailing party.
18. Representations and Warranties.
18.1 FTIS Representations and Warranties. FTIS hereby represents and
warrants to SunGard that:
(a) FTIS has the full corporate right, power and authority to
enter into this Agreement and to perform the acts required of
it hereunder, and to grant the rights granted by it hereunder;
(b) the execution of this Agreement by FTIS, and the
performance by FTIS, FRI and FRI Affiliates of their
obligations and duties hereunder, do not and will not
violate any agreement by which any of them is bound, and
FTIS shall not enter into any agreement of any nature
whatsoever that would: (i) prohibit FTIS from performing
its obligations to SunGard hereunder; or (ii) constitute a
breach of any of FTIS' representations, warranties or
covenants hereunder;
(c) FTIS is not aware of any material claim, or threat of material
claim, by any third party that any of the ideas, methods,
algorithms, formulae and concepts referred to in Section 10.2
hereof or any FTIS Enhancements violate any Intellectual
Property Right of any third party; and
(d) FTIS has obtained or will obtain all third party licenses,
permits and authorizations necessary for FTIS to use and
operate the Operating Environment at all Processing Sites.
18.2 SunGard Representations and Warranties. SunGard hereby
represents and warrants to FTIS that:
(a) SunGard has full corporate right, power and authority to enter
into this Agreement, to perform the acts required of it
hereunder, and to grant the rights granted by it hereunder;
(b) the execution of this Agreement by SunGard, and the
performance by SunGard of its obligations and duties
hereunder, do not violate any agreement to which SunGard is
a party or by which it is otherwise bound, and SunGard
shall not enter into any agreement of any nature whatsoever
that would: (i) prohibit SunGard from performing its
obligations to FTIS hereunder; or (ii) constitute a breach
of any of SunGard's representations, warranties or
covenants;
(c) SunGard is not aware of any material claim, or threat of
material claim, by any third party that any of the
Deliverables violate any Intellectual Property Right of any
third party.
18.3 Disclaimer. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, NEITHER
PARTY HAS MADE OR IS MAKING, DIRECTLY OR INDIRECTLY, ANY WARRANTIES
OR REPRESENTATIONS, ORAL OR WRITTEN, EXPRESS OR IMPLIED. IN
PARTICULAR, AND WITHOUT LIMITATION, SUNGARD MAKES NO SUCH WARRANTIES
OR REPRESENTATIONS REGARDING ANY SOFTWARE OR OTHER DELIVERABLE, ANY
SERVICES PROVIDED HEREUNDER, OR ANY OTHER MATTER PERTAINING TO THIS
AGREEMENT, INCLUDING BUT NOT LIMITED TO ANY EXPRESS OR IMPLIED
WARRANTIES OR REPRESENTATIONS REGARDING SUITABILITY, DURABILITY,
MERCHANTABILITY, QUALITY, CONDITION, FITNESS FOR A PARTICULAR
PURPOSE, OR CONFORMITY TO ANY REPRESENTATION OR DESCRIPTION.
19. Indemnification.
19.1 SunGard's Indemnification. SunGard shall indemnify, defend and hold
harmless FTIS, FRI and FRI Affiliates, and each of their respective
officers, directors, employees and individual contractors from and
against any and all Claims by any party other than an FRI Affiliate
arising from or in connection with (i) any willful misconduct of
SunGard in the performance of this Agreement; (ii) SunGard's failure
to comply with federal, state or local law; and (iii) any
SunGard-Caused Infringement. SunGard shall indemnify, defend and
hold harmless FTIS, FRI and FRI Affiliates, and each of their
respective officers, directors, employees and individual contractors
from and against any and all Claims by any FTIS Unrelated Party
arising from or in connection with: (i) a material breach by SunGard
of this Agreement or the covenants, representations or warranties of
SunGard provided herein; (ii) any negligent act, or negligent
omission of SunGard in the performance of this Agreement. FTIS shall
give SunGard prompt written notice of the assertion of any such
Claim. SunGard shall assume defense of such Claim at its own expense
and with counsel of its own choosing. At SunGard's expense, FTIS
shall render assistance in this defense as reasonably requested by
SunGard. FTIS shall be entitled to participate in any such action or
proceeding at its own expense with counsel of its own choosing.
Nothing in this Section 19.1 shall serve to limit any obligation
SunGard might otherwise have pursuant to this Agreement to
compensate FTIS for direct damages suffered by FTIS, including
damages suffered as a result of any claim brought against FTIS by
any other party, to the extent that such damages constitute direct
damages to FTIS.
19.2 FTIS' Indemnification. FTIS shall indemnify, defend and hold
harmless SunGard, SunGard Data Systems and SunGard Affiliates, and
each of their respective officers, directors, employees and
individual contractors, harmless from and against any and all Claims
by any party other than a SunGard Affiliate arising from or in
connection with (i) any willful misconduct of FTIS in the
performance of this Agreement; (ii) FTIS' failure to comply with
federal, state or local law; (iii) any violation of any law or
regulation of any non-United States jurisdiction in which FTIS
locates a Processing Site caused by operation of the Software, with
the exception of laws or regulations relating to SunGard-Caused
Infringement; and (iv) any Franklin-Caused Infringement. FTIS shall
indemnify, defend and hold harmless SunGard, SunGard Data Systems
and SunGard Affiliates, and each of their respective officers,
directors, employees and individual contractors from and against any
and all Claims by any SunGard Unrelated Party arising from or in
connection with: (i) a material breach by FTIS of this Agreement or
the covenants, representations or warranties of FTIS provided
herein; (ii) any negligent act, or negligent omission of FTIS in the
performance of this Agreement. SunGard shall give FTIS prompt
written notice of the assertion of any such Claim. FTIS shall assume
the defense of such Claim at its own expense with counsel of its own
choosing. SunGard shall render assistance in this defense as
reasonably requested by FTIS. SunGard shall be entitled to
participate in any such action or proceeding at its own expense with
counsel of its own choosing. Nothing in this Section 19.2 shall
serve to limit any obligation FTIS might otherwise have pursuant to
this Agreement to compensate SunGard for direct damages suffered by
SunGard, including damages suffered as a result of any claim brought
against SunGard by any other party, to the extent that such damages
constitute direct damages to SunGard.
19.3 SunGard-Caused Infringement. If any SunGard-Caused Infringement is
found to exist, in addition to any indemnity obligations which may
arise, SunGard shall promptly (1) procure, at SunGard's expense, the
right of FTIS to continue to use the affected Deliverables or (2)
alter such Deliverables so as to render such Deliverables
non-infringing, such alteration to be At No Additional Charge to
FTIS. If SunGard believes in its reasonable good faith judgment that
such a finding is likely, SunGard may take such steps in the
exercise of its reasonable, good faith discretion.
19.4 FTIS-Caused Infringement. If any FTIS-Caused Infringement involving
any Deliverables is found to exist, in addition to any indemnity
obligations which may arise, at FTIS' reasonable option, SunGard
shall promptly (1) procure, at FTIS' expense, the right of SunGard
and FTIS to continue to use the affected Deliverables or (2) alter
such Deliverables so as to render such Deliverables non-infringing,
which may, at FTIS' reasonable option, include an alteration to
remove that portion of such Deliverables which caused such
infringement, such alteration to be Chargeable to FTIS. If FTIS
believes in its reasonable good faith judgment that such a finding
is likely, FTIS may require such steps in the exercise of its
reasonable, good faith discretion.
20. Insolvency.
20.1 Right to Terminate. If SunGard institutes or is made a defendant in
any proceeding for its protection (if not dismissed within one
hundred eighty (180) days) under any bankruptcy, insolvency,
reorganization or receivership law or makes an assignment for the
benefit of creditors or is unable to meet its debts as they become
due for a period exceeding one hundred eighty (180) days, FTIS may
elect to terminate this Agreement and any licenses granted hereunder
immediately, by written notice to SunGard, without prejudice to any
right or remedy that FTIS may have including, but not limited to,
damages, to the extent that the same may be recoverable.
20.2 License of "Intellectual Property". All rights and licenses granted
under or pursuant to this Agreement by the parties with respect to
the Deliverables are, and shall otherwise be deemed to be, for
purposes of Section 365(n) of Title 11 of the United States Code
(the "Bankruptcy Code"), licenses of rights to "intellectual
property" as defined under Section 101 of the Bankruptcy Code. The
parties agree that if FTIS does not terminate this Agreement for
material breach by SunGard, FTIS, as a licensee of such rights and
licenses, shall retain and may fully exercise, provided it abides by
the terms of this Agreement, all of its rights and elections under
the Bankruptcy Code, including without limitation any and all rights
to upgrades of, and improvements made by SunGard whether such
upgrades and improvements arise prior or subsequent to the
commencement of a case under the Bankruptcy Code. The parties
further agree that, in the event that any proceeding shall be
instituted by or against SunGard (if not dismissed within one
hundred eighty (180) days) seeking to adjudicate it bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or
its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking an entry of an order
for relief or the appointment of a receiver, trustee or other
similar official for it or any substantial part of its property, or
SunGard shall take any action to authorize any of the foregoing
actions (each a "Proceeding"), FTIS shall have the right, in the
event it has not terminated this Agreement hereunder, to retain and
enforce its rights under this Agreement, including, but not limited
to, the following rights; provided it abides by the terms of this
Agreement:
(a) the right to continue to use the Deliverables in accordance
with the terms and conditions of this Agreement; and.
(b) the right to access to all Deliverables as provided in this
Agreement, and the Deliverables, if not already in FTIS'
possession, shall be promptly delivered to FTIS upon any such
commencement of a Proceeding upon written request therefor by
FTIS, unless SunGard elects to continue to perform its
obligations under this Agreement.
21. Guarantee.
21.1 By SunGard Data Systems. SunGard's ultimate parent company, SunGard
Data Systems, Inc. guarantees the payment of all credits,
reimbursements, damages, indemnities and other amounts owed by
SunGard to FTIS under this Agreement and shall assume full
responsibility for payment of such amounts in the event that SunGard
is unable to pay such amounts.
21.2 By FRI. FTIS' parent company, FRI, guarantees the payment of all
fees, reimbursements, damages, indemnities and other amounts owed by
FTIS to SunGard under this Agreement and shall assume full
responsibility for payment of such amounts in the event that FTIS is
unable to pay such amounts.
22. SunGard Insurance. SunGard represents that Exhibit H is an accurate
list of the insurance policies maintained by SunGard Data Systems as of
the Effective Date for the benefit of SunGard Data Systems and all of
its direct and indirect subsidiaries, including SunGard. Promptly
after the Effective Date, FTIS shall be named as an additional insured
on SunGard Data Systems' liability insurance policies, and SunGard
shall deliver appropriate certificates of insurance to FTIS. SunGard
shall promptly notify FTIS of any material decrease in coverage or
other material adverse change with respect to SunGard Data Systems'
insurance policies. If FTIS reasonably determines that any such change
will require FTIS to incur a materially greater risk, then FTIS shall
give written notice to SunGard of such determination, explaining the
reasons therefor and requesting specific changes in SunGard Data
Systems' insurance policies. Any changes in SunGard Data Systems'
insurance policies that are agreed to by the parties shall be promptly
implemented. If the parties are unable to agree on changes to SunGard
Data Systems' insurance policies, then their dispute shall be resolved
in accordance with the provisions of Section 15 of this Agreement.
23. Miscellaneous.
23.1 Cooperation. Each party shall use commercially reasonable efforts to
cooperate with the other party in connection with the performance of
this Agreement including, without limitation, executing and
delivering such documents and taking such actions as reasonably
necessary and appropriate to carry out the intent and purposes of
this Agreement.
23.2 Assignment. Neither party may assign its rights, or delegate its
duties, under this Agreement in whole or in part without the express
written consent of the other party, such consent not to be
unreasonably withheld. Any attempted or purported assignment without
such required consent shall be null and void and a material breach
of this Agreement. Subject to the foregoing, this Agreement shall be
binding upon and inure to the benefit of the successors and
permitted assigns of the parties hereto.
23.3 Modification. This Agreement, including all terms and conditions
contained herein or in any other schedule or attachment hereto, may
be amended, modified or supplemented only in writing, signed by each
party hereto.
23.4 Entire Agreement. This Agreement, including all schedules and
attachments hereto, sets forth the entire understanding between the
parties with respect to the subject matter hereof, and supersedes
all prior or contemporaneous understandings, communications or
agreements, whether written or oral, regarding the subject matter
hereof. In particular, and without limitation of the foregoing, this
Agreement supersedes the Third Amended MOU, the Non-Disclosure
Agreement entered into by the parties effective May 31, 1996 and the
Software Evaluation Agreement entered into by the parties effective
January 24, 1997. In addition, upon Completion of Initial
Conversion, the 1981 Agreement shall terminate.
23.5 Severability. If any provision of this Agreement or the application
thereof to any party or circumstance shall at any time or to any
extent be determined to be invalid or unenforceable, such provision
(or part thereof) shall be enforced to the extent possible
consistent with the stated intentions of the parties, or, if
incapable of such enforcement, shall be deemed deleted from this
Agreement, while the remainder of this Agreement shall remain in
full force and effect.
23.6 Force Majeure. Neither party hereto shall be responsible for any
failure to perform or delay in performing its obligations under this
Agreement that is caused by a Force Majeure Event, and neither party
shall be considered in breach of or in default under this Agreement
as a result of any such failure or delay caused by a Force Majeure
Event. Without limiting the foregoing, SunGard shall not be
responsible for any failure to meet any schedule, any failure to
meet Performance Requirements or any other Non-Conformities caused
by any Force Majeure Event. Obligations hereunder, however, shall in
no event be permanently excused but shall be suspended only until
the cessation of any Force Majeure Event, at which time the parties
shall consult with each other in order to determine whether any
schedule changes should be made. In the event that a Force Majeure
Event obstructs performance of this Agreement for more than one (1)
month, the parties hereto shall consult with each other to determine
whether this Agreement should be modified or terminated. A party
experiencing a Force Majeure Event shall use commercially reasonable
efforts under the circumstances in order to remedy that situation as
well as to minimize its effects and shall notify the other party as
soon as possible after its occurrence.
23.7 Waiver. Any of the provisions of this Agreement may be waived by the
party entitled to the benefit thereof. Neither party shall be
deemed, by any act or omission, to have waived any of its rights or
remedies hereunder unless such waiver is in writing and signed by
the waiving party, and then only to the extent specifically set
forth in such writing. A waiver with reference to one event shall
not be construed as continuing or as a bar to or waiver of any right
or remedy as to a subsequent event.
23.8 No Joint Venture or Agency. Nothing herein shall be construed or
deemed to create any relationship of joint venture, partnership,
master-servant or principal-agent between the parties. Except as
expressly provided herein, neither party shall have authority to
commit or bind the other with respect to any third party.
23.9 Notices. Any notice or other communication to be given hereunder
shall be in writing and shall be (as elected by the party giving
such notice): (i) personally delivered; (ii) transmitted by postage
prepaid first class registered or certified airmail, return receipt
requested; (iii) deposited prepaid with a nationally recognized
overnight courier service; or (iv) delivered by facsimile
transmission or e-mail, with confirmation provided under options
(i)-(iii). Unless otherwise provided herein, all notices shall be
deemed to have been duly given on: (a) the date of receipt (or if
delivery is refused, the date of such refusal) if delivered
personally or by courier; or (b) five (5) days after the date of
posting if transmitted by mail. Notice hereunder shall be directed
to the following addresses or at such other addresses as either
party may designate from time to time:
FTIS: SUNGARD:
Franklin ▇▇▇▇▇▇▇▇▇ Investor Services, Inc. SunGard
Shareholders Systems, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President Attn: President
cc: cc:
Franklin Resources, Inc. SunGard Data Systems,
Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Suite 300
Attn: General Counsel ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
23.10 Applicable Law; Jurisdiction. This Agreement shall be governed by
the laws of the State of California applicable to agreements made
and to be wholly performed therein (without reference to conflict of
laws). The parties agree that the only proper venues for any action
to enforce this agreement shall be the Superior Court of the State
of California in and for the County of San Mateo or the United
States District Court for the Northern District of California.
23.11 No Third Party Beneficiaries. Nothing express or implied in this
Agreement is intended to confer, nor shall anything herein confer,
upon any person other than the parties and the respective successors
or permitted assigns of the parties, any rights, remedies,
obligations or liabilities whatsoever.
23.12 Counterparts, Facsimiles. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered
shall be deemed an original, and such counterparts together shall
constitute one and the same instrument. For purposes hereof, a
facsimile copy of this Agreement, including the signature pages
hereto, shall be deemed to be an original. Notwithstanding the
foregoing, the parties shall each deliver original execution copies
of this Agreement to one another as soon as practicable following
execution thereof.
23.13 Prior Work. Development, design and other work done by SunGard prior
to the Effective Date under the MOU, the First Amended MOU, the
Second Amended MOU and the Third Amended MOU shall fall within the
scope of this Agreement as if such work had been done after the
Effective Date.
23.14 Non-Solicitation. During the term of this Agreement and any
Reasonable Transition Period, without the other party's prior
written consent, neither party shall employ, engage, or solicit for
employment or engagement, any person who then is an employee or
individual contractor of the other party or was an employee or
individual contractor of the other party within the previous six (6)
months.
IN WITNESS WHEREOF, the undersigned parties have caused this Agreement to be
executed by its duly authorized representatives as of the day and year first
above written.
FRANKLIN ▇▇▇▇▇▇▇▇▇ INVESTOR SERVICES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President
SUNGARD SHAREHOLDER SYSTEMS, INC.
By: /s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President and Chief Operating Officer
GUARANTEED IN ACCORDANCE WITH SECTION 21
SUNGARD DATA SYSTEMS, INC.
By: /s/▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President & General Counsel
FRANKLIN RESOURCES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President