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Gap Inc · 10-K · For 1/28/06 · EX-10.18

Filed On 3/28/06 2:41pm ET · SEC File 1-07562 · Accession Number 1193125-6-64998

  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 3/28/06  Gap Inc                           10-K        1/28/06   13:1591                                   RR Donnelley/FA

Annual Report · Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Form 10-K for Year Ended 01/28/2006                 HTML    593K 
 2: EX-10.18    Master Services Agreement Between Registrant and    HTML  9,565K 
                          Ibm                                                    
 3: EX-10.43    Form of Nonqualified Stock Option Agreement         HTML     26K 
 4: EX-10.77    Summary of Non-Employee Director Compensation       HTML      8K 
 5: EX-10.81    Cash Payments in Connection With December 2005      HTML     25K 
                          Option Exchange                                        
 6: EX-12       Statement Regarding Computation of Ratios           HTML     21K 
 7: EX-13       Portions of Registrant's Annual Report              HTML    320K 
 8: EX-21       Subsidiaries of Registrant                          HTML     21K 
 9: EX-23       Consent of Deloitte & Touche Llp                    HTML      6K 
10: EX-31.1     Certification of Chief Executive Officer            HTML     12K 
11: EX-31.2     Certification of Chief Financial Officer            HTML     12K 
12: EX-32.1     Certification of Chief Executive Officer            HTML      7K 
13: EX-32.2     Certification of Chief Financial Officer            HTML      7K

EX-10.18 · Master Services Agreement Between Registrant and Ibm

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Master Services Agreement between Registrant and IBM

Exhibit 10.18

MASTER SERVICES AGREEMENT

BETWEEN

THE GAP, INC.

AND

INTERNATIONAL BUSINESS MACHINES CORPORATION

DATED: JANUARY 13, 2006

This document contains confidential and proprietary information of The Gap, Inc. Except with the express prior written permission of The Gap, Inc., this document and the information contained herein may not be published, disclosed, or used for any other purpose.

TABLE OF CONTENTS


1.	Definitions		2
	1.1	“Acceptance Test” and “Acceptance Tests”	2
	1.2	“Additional Resource Charge” or “ARC”	2
	1.3	“Affected Employees”	2
	1.4	“Affiliate”	2
	1.5	“Aggregated Service(s)”	2
	1.6	“Aggregate Withhold Amount”	3
	1.7	“Agreement”	3
	1.8	“Annual Services Charge”	3
	1.9	“Applications”	3
	1.10	“Approve” or “Approval”	3
	1.11	“Approved Reassignments”	3
	1.12	“Authorized Users”	3
	1.13	“Benchmark”	4
	1.14	“Benchmarker”	4
	1.15	“Benchmarking”	4
	1.16	“Best Practices”	4
	1.17	“Business Day(s)”	4
	1.18	“Business Objectives”	4
	1.19	“CAS”	4
	1.20	“Change”	4
	1.21	“Change Control Procedures”	4
	1.22	“Charges”	5
	1.23	“Consents”	5
	1.24	“Contract Year”	5
	1.25	“Damage Limit”	5
	1.26	“Data Center”	5
	1.27	“Days”	5
	1.28	“Deficiencies”	5
	1.29	“Deliverable”	5
	1.30	“Disabling Device(s)”	6
	1.31	“Disclosing Party”	6
	1.32	“Documentation”	6
	1.33	“Egregious Act Damage”	6
	1.34	“Egregious Acts”	6
	1.35	“Embedded Supplier Proprietary Documentation”	6
	1.36	“Embedded Supplier Proprietary Intellectual Property”	6
	1.37	“Embedded Supplier Proprietary Software”	7
	1.38	“Embedded Supplier Third Party Documentation”	7
	1.39	“Embedded Supplier Third Party Intellectual Property”	7
	1.40	“Embedded Supplier Third Party Software”	7
	1.41	“Employment Claim(s)”	7

Gap Confidential and Proprietary Information


1.42	“Equipment”	7
1.43	“Excluded Fields”	8
1.44	“Extended Term”	8
1.45	“Extraordinary Event”	8
1.46	“Finally Determined”	8
1.47	“Full-Time”	8
1.48	“Functional Service Area”	8
1.49	“Functional Service Area Statement(s) of Work”	8
1.50	“Gap”	9
1.51	“Gap Base Case”	9
1.52	“Gap Custom Documentation”	9
1.53	“Gap Custom Intellectual Property”	9
1.54	“Gap Custom Software”	9
1.55	“Gap Data”	9
1.56	“Gap Data Center”	10
1.57	“Gap Delay Claim”	10
1.58	“Gap Documentation”	10
1.59	“Gap Equipment”	10
1.60	“Gap Infrastructure Partnership Executive”	10
1.61	“Gap Infringement Claim(s)”	10
1.62	“Gap Infringement Exclusions”	10
1.63	“Gap Infringement Trigger”	10
1.64	“Gap Initiated Policy Change”	11
1.65	“Gap Intellectual Property”	11
1.66	“Gap IT Environment”	11
1.67	“Gap Licensed Property”	11
1.68	“Gap Modified Documentation”	11
1.69	“Gap Modified Intellectual Property”	11
1.70	“Gap Modified Software”	11
1.71	“Gap Owned Intellectual Capital”	11
1.72	“Gap Policies and Procedures”	12
1.73	“Gap Proprietary Documentation”	12
1.74	“Gap Proprietary Intellectual Property”	12
1.75	“Gap Proprietary Software”	12
1.76	“Gap Regulatory Requirements”	12
1.77	“Gap Service Locations”	12
1.78	“Gap Sites”	12
1.79	“Gap Software”	13
1.80	“Gap Systems”	13
1.81	“Gap Third Party Claim(s)”	13
1.82	“Gap Third Party Documentation”	13
1.83	“Gap Third Party Intellectual Property”	13
1.84	“Gap Third Party Software”	13
1.85	“Gap Third Party Vendor”	13

Gap Confidential and Proprietary Information


1.86	“Generally Available”	13
1.87	“GID”	14
1.88	“HIPAA”	14
1.89	“HVAC”	14
1.90	“Implementation Agreement(s)”	14
1.91	“Including”	14
1.92	“Income Tax”	14
1.93	“Initial Term”	14
1.94	“Initiation Date”	14
1.95	“insource”	15
1.96	“Intellectual Property”	15
1.97	“Interface(s)”	15
1.98	“”*	15
1.99	“Managed Strategic Supplier”	15
1.100	“Material Move”	15
1.101	“Migrated Service(s)”	16
1.102	“Monthly Baseline”	16
1.103	“Monthly Performance Review”	16
1.104	“Moral Rights”	16
1.105	“New Services”	16
1.106	“New Sourcing Line(s)”	16
1.107	“Non-Recurring Initiatives”	16
1.108	“Non-Referral Quarter”	16
1.109	“Notice of Failure”	17
1.110	“Object Code”	17
1.111	“Open Source Software”	17
1.112	“Parties” or “Party”	17
1.113	“Permitted Auditors”	17
1.114	“PHI”	17
1.115	“Primary Event”	17
1.116	“Procedures Manual”	17
1.117	“Project”	18
1.118	“Proprietary or Confidential Information”	18
1.119	“Provisioned”	18
1.120	“Quarterly Executive Meetings”	18
1.121	“Receiving Party”	18
1.122	“Reduced Resource Credit” or “RRC”	18
1.123	“Reference Date”	18
1.124	“Refresh”	18
1.125	“Release”	19
1.126	“Residual Knowledge”	19
1.127	“Resource Baseline”	19
1.128	“Resource Charge”	19
1.129	“Resource Unit”	19

*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

Gap Confidential and Proprietary Information

iii


1.130	“Revisions”	19
1.131	“Sarbanes-Oxley Reporting Requirements and Process”	19
1.132	“Service Levels”	19
1.133	“Service Level Agreement(s)”	19
1.134	“Service Locations”	20
1.135	“Service Taxes”	20
1.136	“Services”	20
1.137	“Shared Subcontractors”	21
1.138	“Software”	21
1.139	“Source Materials”	21
1.140	“Specifications”	21
1.141	“Statement(s) of Work”	21
1.142	“Stranded Costs”	21
1.143	“Subcontractor”	22
1.144	“Supplier”	22
1.145	“Supplier Assumed”	22
1.146	“Supplier Data Center”	22
1.147	“Supplier Documentation”	22
1.148	“Supplier Embedded Items”	23
1.149	“Supplier Equipment”	23
1.150	“Supplier Infringement Claims”	23
1.151	“Supplier Infringement Exclusions”	23
1.152	“Supplier Infringement Trigger”	23
1.153	“Supplier Intellectual Property”	23
1.154	“Supplier Key Employee”	23
1.155	“Supplier Modified Documentation”	23
1.156	“Supplier Modified Intellectual Property”	24
1.157	“Supplier Modified Items”	24
1.158	“Supplier Modified Software”	24
1.159	“Supplier’s Outsourcing Relationship Executive”	25
1.160	“Supplier Personnel”	25
1.161	“Supplier Proprietary Documentation”	25
1.162	“Supplier Proprietary Intellectual Property”	25
1.163	“Supplier Proprietary Software”	25
1.164	“Supplier Reference Intellectual Property”	25
1.165	“Supplier Regulatory Requirements”	26
1.166	“Supplier Service Locations”	26
1.167	“Supplier Shared Service Center”	26
1.168	“Supplier Software”	26
1.169	“Supplier Systems”	26
1.170	“Supplier Third Party Claim(s)”	26
1.171	“Supplier’s Remedial Acts”	26
1.172	“Supplier Third Party Documentation”	26
1.173	“Supplier Third Party Intellectual Property”	27

Gap Confidential and Proprietary Information


	1.174	“Supplier Third Party Software”	27
	1.175	“Supplier Tools”	27
	1.176	“Technology Change”	27
	1.177	“Term”	27
	1.178	“Termination Assistance Services”	27
	1.179	“Termination Transition Period”	27
	1.180	“Termination Transition Plan”	28
	1.181	“Third Party Service(s)”	28
	1.182	“Third Party Vendor”	28
	1.183	“third source”	28
	1.184	“Transition”	28
	1.185	“Transition Period”	28
	1.186	“Transitioned Employees”	28
	1.187	“Transition-In Plan” or “Transition Plan”	28
	1.188	“UPS”	29
	1.189	“Update”	29
	1.190	“VAT Taxes”	29
	1.191	“Version”	29
	1.192	“Virus(es)”	29

2.	Term		29
	2.1	Initial Term	29
	2.2	Options to Extend	30
	2.3	Fees During Extended Term	30

3.	Services		30
	3.1	Services	30
	3.2	Changes in Policies and Procedures	30
	3.3	Documentation	31
	3.4	Managed Network Services	31
	3.5	Cross Functional Services	31
	3.6	End User Support Services	32
	3.7	RESERVED	32
	3.8	Server Services	32
	3.9	Store Services	32
	3.10	Transition-In	32
	3.11	Equipment	33
	3.12	Replacement Services	33
	3.13	Technology Refresh Services	33
	3.14	Software Services	34
	3.15	Licenses and Permits	34
	3.16	Knowledge Transfer and Best Practices	34
	3.17	Strategic / Business Planning and Process Implementation	35
	3.18	Budgeting Services	35

Gap Confidential and Proprietary Information


	3.19	Reporting Services	35
	3.20	Data Protection and Privacy	36
	3.21	New Services	36

4.	Single Relationship Agreement		37

5.	Implementation Agreements		37
	5.1	Execution	37
	5.2	Order of Precedence	38
	5.3	Terms and Conditions	38
	5.4	Parental Guarantee	39
6.	Unapproved Work		39
	6.1	Gap Approval	39
	6.2	Right to Reject	40
	6.3	Failure to Obtain Approval	40
7.	Service Levels		41
	7.1	Service Level Agreements	41
	7.2	Reports	41
	7.3	Root-Cause Analysis and Resolution	41
	7.4	Cost and Efficiency Reviews	41
8.	Benchmarking		42
	8.1	Benchmarking Process	42
	8.2	Benchmark Adjustments	44

9.	Strategic Relationship Management		45
	9.1	Definitions	45
	9.2	Managed Strategic Supplier Services	45
	9.3	Appointment as Limited Agent	47
	9.4	Lease Management	47

10.	Service Locations		48
	10.1	Service Locations	48
	10.2	Shared Environment	48
	10.3	Safety Procedures	49
	10.4	Security Procedures	49
	10.5	Access To Gap Sites	51
	10.6	Furniture, Fixtures and Equipment	51
	10.7	Gap’s Responsibilities Regarding Utilities	51
	10.8	Supplier’s Responsibilities Regarding Facilities	52
	10.9	Physical Security	52
	10.10	Employee Services	52
	10.11	Use of Gap Sites	52

Gap Confidential and Proprietary Information


	10.12	Damage to Gap Facilities, Buildings, or Grounds	53
	10.13	Use of Supplier Service Locations	53

11.	Data Backup and Disaster Plan		54
	11.1	Data Backup	54
	11.2	Disaster Plan	54
	11.3	Disaster Avoidance	54
	11.4	Disaster Recovery	55
	11.5	Public Telecommunications Facilities	55

12.	Communications Systems and Access to Information		55

13.	Non-Exclusive Relationship		56
	13.1	Non-Exclusivity	56
	13.2	Multi-Vendor Environment	57

14.	Human Resources		57

15.	Statements of Work		57

16.	Gap Authorized User Satisfaction		57
	16.1	Baseline Gap Authorized User Satisfaction Survey	57
	16.2	Gap Authorized User Satisfaction Survey	58

17.	Gap Responsibilities		58
	17.1	Obligations	58
	17.2	Interfering Acts	58
	17.3	Strategic Control	59

18.	Services Team		59
	18.1	Supplier Outsourcing Relationship Executive	59
	18.2	Supplier Key Employees	60
	18.3	Conduct of Supplier Personnel	60
	18.4	Substance Abuse	61
	18.5	Union Agreements and WARN Act	62

19.	Management And Control		62
	19.1	Governance	62
	19.2	Meetings	62
	19.3	Gap Policies and Procedures	63
	19.4	Change Control Procedures	63
	19.5	Gap Infrastructure Partnership Executive	64
	19.6	Gap Personnel	64

20.	Data and Reports		65
	20.1	Provision of Data	65

Gap Confidential and Proprietary Information

vii


	20.2	Ownership of Gap Data	65
	20.3	Correction of Errors	65
	20.4	Return of Data	65
	20.5	Reports	65
	20.6	Safeguarding Client Data	66
	20.7	Data Retention	66

21.	Consents		66
	21.1	Obtaining Consents	66
	21.2	Consent Remedy	66
	21.3	Assignment of Existing Agreements	67

22.	Software, Documentation and Intellectual Property		67
	22.1	Gap Licenses to Supplier	67
	22.2	Gap Owned Intellectual Capital	68
	22.3	Joint Patent and Patent License Rights	70
	22.4	Supplier Embedded Items and Supplier Modified Items	71
	22.5	Supplier Proprietary Software and Supplier Third Party Software	72
	22.6	Supplier Proprietary Documentation and Supplier Third Party Documentation	72
	22.7	Supplier Proprietary Intellectual Property and Supplier Third Party Intellectual Property	73
	22.8	Supplier Reference Intellectual Property	73
	22.9	License Restriction	73
	22.10	Works Made For Hire	73

23.	Authority to License, Quiet Enjoyment, Proprietary Rights and Indemnity		74
	23.1	Authority to License and Non-Infringement	74
	23.2	Quiet Enjoyment	75
	23.3	Supplier’s Proprietary Rights Indemnity	75
	23.4	Gap’s Proprietary Rights Indemnity	78
	23.5	Conditions to Indemnity Obligations	80
	23.6	*	80

24.	Documentation		81

25.	Installation and Acceptance Tests		81
	25.1	General	81
	25.2	Installation Tests	81
	25.3	Additional Testing	82
	25.4	Failed Acceptance Testing	82

26.	Pricing		83
	26.1	General	83
	26.2	Non-Recurring Initiative Pricing	83

*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

Gap Confidential and Proprietary Information

viii


	26.3	Cost of Living Adjustment	83
	26.4	All Fees Stated	84
	26.5	Taxes	84
	26.6	Payment Does Not Imply Approval	87
	26.7	Withhold Remedy	87
	26.8	Technology Changes	88

27.	Invoices and Payments		88
	27.1	General	88
	27.2	Invoice Summary	89
	27.3	Billing Adjustments	90
	27.4	Billing Disputes And Reports	90

28.	Limitations of Liability and Damages		91
	28.1	Damage Recovery Exclusion	91
	28.2	Limitation of Liability Amount	91
	28.3	Exclusions	91
	28.4	Egregious Acts	92
	28.5	Direct Damages	93

29.	Representations, Warranties, and Covenants		94
	29.1	General	94
	29.2	Performance Warranty	94
	29.3	Service	94
	29.4	Litigation Warranty	94
	29.5	Licensed Users and Rights to Use Software	94
	29.6	Support Not to be Withheld	95
	29.7	Assignment of Warranties	95
	29.8	Viruses	95
	29.9	Disabling Devices	96
	29.10	Insurance Premiums	96
	29.11	Compliance with Laws	96
	29.12	Changes in Law and Regulations	97
	29.13	Inducements	97
	29.14	Technical Architecture and Product Standards	97
	29.15	Open Source Warranty	97
	29.16	Representations and Warranties Throughout Agreement	98
	29.17	Warranty Disclaimer	98

30.	Remedy Waiver		98

31.	Internal Dispute Resolution		99
	31.1	Intent	99
	31.2	Informal Resolution	99
	31.3	Fact Finding Report	99

Gap Confidential and Proprietary Information


	31.4	Dispute Resolution Mandatory	100
	31.5	Applicability To Disputes With Suppliers Other than Supplier	100

32.	[Reserved]		100

33.	Termination		100
	33.1	Change of Control	100
	33.2	Termination for Cause by Gap	101
	33.3	Termination for Cause by Supplier	101
	33.4	Termination for Insolvency	101
	33.5	Termination for Failure to Implement Benchmark Adjustments	102
	33.6	Termination for Convenience	102
	33.7	Termination Assistance	102
	33.8	Payment of Fees	102
	33.9	Cumulative Remedies	103

34.	Termination/Expiration Assistance Services		103
	34.1	Termination/Expiration Transition Plan	103
	34.2	Performance of Services	103
	34.3	Termination Transition Period	104
	34.4	Transition Services	105

35.	Insurance and Indemnity		107
	35.1	Required Insurance Coverage	107
	35.2	Claims Made Coverages	108
	35.3	Certificates Of Insurance	108
	35.4	Subcontractors To Be Insured	109
	35.5	Cancellation Or Lapse Of Insurance	109
	35.6	Other Insurance Requirements	110
	35.7	General Indemnity	110
	35.8	Damage to Gap Facilities, Buildings, or Grounds	112
	35.9	Indemnities Throughout Agreement	113

36.	Confidentiality		113
	36.1	Definition of Proprietary or Confidential Information	113
	36.2	Exclusions	113
	36.3	Non-Disclosure and Non-Use	114
	36.4	Treatment of Gap Data	115
	36.5	Compelled Disclosures	115
	36.6	Return of Proprietary or Confidential Information	116
	36.7	Solicitation of Gap Customers	116
	36.8	Nonexclusive Equitable Remedy	116
	36.9	Residual Knowledge	117

Gap Confidential and Proprietary Information



37.	Audit, Inspection, and Examination of Records		117
	37.1	Maintenance of Books and Records	117
	37.2	Audits Authorized by Gap	117
	37.3	Audit Settlements	118
	37.4	Internal Audits	119

38.	Bankruptcy and Liquidation		120

39.	Assignment and Merger		121
	39.1	Assignment	121
	39.2	Separation	121
	39.3	Acquisitions and Mergers by Gap	122

40.	Extraordinary Events		122
	40.1	Defined	122
	40.2	Extraordinary Event Pricing	123

41.	Use of Reduced Resource Credits		123
	41.1	Business Impacts	123
	41.2	Third Source and Insource Limits on RRCs	123
	41.3	RRCs To Include IT Tower Pricing	124

42.	Amendment of Agreement		124

43.	Waiver		124

44.	Independent Contractor		124

45.	Subcontractors		125
	45.1	Approval Required	125
	45.2	Request for Approval	125
	45.3	Review of Request	126
	45.4	Supplier Obligations Remain Unchanged	126
	45.5	Approval of Subcontractor Personnel/Termination	126

46.	Interpretation of Agreement		126
	46.1	Conflict Between Agreement and Exhibits	126
	46.2	Choice of Law	127
	46.3	Venue and Jurisdiction	127
	46.4	Agreement Drafted by All Parties	128
	46.5	Terminology	128
	46.6	Section Headings	128
	46.7	Counterparts	128
	46.8	Appointment of Agent for Service of Process	128

Gap Confidential and Proprietary Information



47.	Notices		129

48.	Entire Agreement		130

49.	Severability		130

50.	Electronic Transfer of Intellectual Property		130

51.	Force Majeure		130

52.	Liens		131

53.	Demonstrations and Promotions		131
	53.1	Promotions Referring to Gap	131
	53.2	Demonstration and Promotions Not Warranties	131
	53.3	*	132

*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

Gap Confidential and Proprietary Information

xii

MASTER SERVICES AGREEMENT

This Master Services Agreement, dated for reference purposes as of January 13, 2006 (“Reference Date”), is entered into between The Gap, Inc., a Delaware corporation, and International Business Machines Corporation, a New York corporation.

RECITALS

A.	Gap desires to contract with Supplier, and Supplier desires to contract with Gap, to provide the Services (as defined below) in accordance with the Service Levels (as defined below), the Business Objectives (as defined below), and the other requirements of this Agreement.

Gap’s strategic and business objectives, to be accomplished through this Agreement, include: (1) implementing the standardized, strategic architecture as quickly as possible without major disruption to Gap’s business; (2) obtaining a dramatic reduction in Gap’s overall operating expense to reduce Gap’s total cost of ownership; (3) improving deployment of new Authorized User (as defined below) equipment; (4) reducing downtime to Authorized Users; (5) supporting the old and new Gap IT infrastructures during migration; (6) receiving reliable & flexible Services from Supplier; (7) obtaining an end state that results in a best-in-class solution for all aspects of Gap’s IT infrastructure; (8) dramatically reducing complexity as compared to Gap’s current IT infrastructure; (9) improving overall management of Gap’s IT infrastructure; (10) achieving flexibility to quickly expand and contract the Services and the Gap IT infrastructure to meet Gap’s business requirements, address changes in the global marketplace, and/or facilitate moving toward a strategic architecture; (11) creating an IT infrastructure which allows Gap IT to instantly react to business requests for functionality without requiring the time and expense of implementing a totally new IT environment for each request (e.g., functionality, capacity, or reduction on demand); (12) defining and implementing key statistics, metrics, and monitoring for the Gap IT infrastructure to facilitate proactive IT management rather than reactive IT management; (13) Gap retention of overall strategic responsibility for the IT infrastructure; (14) Supplier’s compliance with Gap’s Policies and Procedures (as defined below), including Gap’s IT delivery model; (15) obtaining highly-motivated Supplier Personnel (as defined below) that will provide high-quality services at a competitive cost; (16) utilizing Gap strategic business partner’s products within the Gap IT infrastructure; (17) increasing the level of customer service and satisfaction; (18) compliance with the Sarbanes-Oxley Corporate Reform Act and Gap’s Sarbanes-Oxley Reporting Requirements and Process (as defined in Section 1.131 below); and (19) proactive management of the Services to improve overall business value, performance, availability, and reliability ((1) – (19) are collectively referred to herein as the “Business Objectives”).

C.	Both Parties acknowledge that a principal objective of Gap in entering into this Agreement is to insure that the Services enable Gap to achieve the Business Objectives stated above.

The Parties also intend for this Agreement to provide a contractual infrastructure to facilitate the acquisition of new sourcing service lines by Gap from Supplier such as logistics and supply chain management, supply chain applications, and human resources support; it being understood that Gap’s decisions to introduce such services and which supplier it will utilize are in its sole discretion.

AGREEMENT

In consideration of the foregoing Recitals (which are incorporated herein) and the mutual covenants and agreements contained herein, the Parties hereto agree as follows:

Definitions

The following terms, when used in this Agreement, shall have the following meanings:

1.1

“Acceptance Test” and “Acceptance Tests”

“Acceptance Test” and “Acceptance Tests” shall have the meaning specified in Section 25.3 (Additional Testing).

1.2

“Additional Resource Charge” or “ARC”

“Additional Resource Charge” or “ARC” shall have the meaning specified in Exhibit C (Fees and Resource Baselines).

1.3

“Affected Employees”

“Affected Employees” shall have the meaning specified in Exhibit H (Human Resources).

1.4

“Affiliate”

“Affiliate” as to Supplier or Gap, shall mean any corporation, partnership, limited liability company, or other domestic or foreign entity (a) of which a controlling interest is owned directly or indirectly by a Party, or (b) controlled by, or under common control with, a Party.

1.5

“Aggregated Service(s)”

“Aggregated Service(s)” shall have the meaning specified in Section 8.1A (Benchmarking Process).

Gap Confidential and Proprietary Information

1.6

“Aggregate Withhold Amount”

“Aggregate Withhold Amount” shall have the meaning specified in Section 26.7 (Withhold Remedy).

1.7

“Agreement”

“Agreement” shall mean this Master Services Agreement, together with the Exhibits, Schedules, Documentation, future Gap-Approved Statements of Work, and all other materials incorporated herein by reference.

1.8

“Annual Services Charge”

“Annual Services Charge” shall have the meaning specified in Exhibit C (Fees and Resource Baselines).

1.9

“Applications”

“Applications” shall mean those items of Software owned, licensed, leased, or otherwise obtained by Gap as are identified in Exhibit D.8 (Existing Agreements) as amended from time to time by Gap in its sole discretion. All Applications shall be implemented in accordance with Section 19.4 (Change Control Procedures) of the Agreement.

1.10

“Approve” or “Approval”

“Approve” or “Approval” shall mean (1) the written authorization by Gap’s Chief Information Officer (or his or her designee) or the Gap Infrastructure Partnership Executive (or his or her designee) for any consent, authorization, amendment, and/or other approval required from Gap under this Agreement, and (2) with respect to any consent, authorization, amendment, and/or approval requiring the authorization of payment, or imposing an obligation on Gap for any fees, costs, or other expenses, the written authorization of the applicable Gap Infrastructure Partnership Executive.

1.11

“Approved Reassignments”

“Approved Reassignments” shall have the meaning specified in Section 18.1 (Supplier Outsourcing Relationship Executive).

1.12

“Authorized Users”

“Authorized Users” shall mean any individual or entity authorized by Gap to use the Services under this Agreement, whether on-site or accessing remotely.

Gap Confidential and Proprietary Information

1.13

“Benchmark”

“Benchmark” shall have the meaning specified in Section 8.1D (Benchmarking Process).

1.14

“Benchmarker”

“Benchmarker” shall have the meaning specified in Section 8.1A (Benchmarking Process).

1.15

“Benchmarking”

“Benchmarking” shall have the meaning specified in Section 8.1D (Benchmarking Process).

1.16

“Best Practices”

“Best Practices” shall mean (whether or not capitalized) established procedures or processes developed or used by Supplier, utilizing its accumulated knowledge as a world class technology service provider, to deliver Services in a high quality, effective and efficient manner.

1.17

“Business Day(s)”

“Business Day(s)” shall mean Gap’s designated business days for Gap or the Gap Affiliate in the specific country in which the Services are being provided by Supplier.

1.18

“Business Objectives”

“Business Objectives” shall have the meaning specified in the Recitals.

1.19

“CAS”

“CAS” shall have the meaning specified in Section 10.4G (Security Procedures).

1.20

“Change”

“Change” shall have the meaning specified in Exhibit A.1 (Glossary).

1.21

“Change Control Procedures”

“Change Control Procedures” shall have the meaning specified in Section 19.4 (Change Control Procedures).

Gap Confidential and Proprietary Information

1.22

“Charges”

“Charges” shall have the meaning specified in Exhibit C (Fees and Resource Baselines)

1.23

“Consents”

“Consents” shall have the meaning specified in Section 21.1 (Obtaining Consents).

1.24

“Contract Year”

“Contract Year” shall have the meaning specified in Exhibit C (Fees and Resource Baselines).

1.25

“Damage Limit”

“Damage Limit” shall have the meaning specified in Section 28.2 (Limitation of Liability Amount).

1.26

“Data Center”

“Data Center” shall mean Supplier Data Center(s) and the Gap Data Center(s).

1.27

“Days”

“Days” shall mean (whether or not capitalized) calendar days.

1.28

“Deficiencies”

“Deficiencies” or “Deficiency” shall mean and include: (1) defect(s) in design, materials, services, or workmanship; (2) Incidents (as defined in Exhibit A.1 (Glossary to the Statements of Work)) and Problems (as defined in Exhibit A.1 (Glossary to the Statements of Work)); and (3) error(s), omission(s),or deviation(s) from any of the Specifications which result in the Services not performing, or the Services not being performed, in accordance with the provisions of this Agreement.

1.29

“Deliverable”

“Deliverable” shall mean (whether or not capitalized) an item and/or a service to be provided by Supplier under this Agreement identified as a deliverable in a Statement of Work, Exhibit, or Schedule.

Gap Confidential and Proprietary Information

1.30

“Disabling Device(s)”

“Disabling Device(s)” shall have the meaning specified in Section 29.9 (Disabling Devices).

1.31

“Disclosing Party”

“Disclosing Party” shall have the meaning specified in Section 36.2 (Exclusions).

1.32

“Documentation”

“Documentation” shall mean all written or electronic policies and procedures relating to Services, training course materials (including computer-based training programs or modules), technical manuals, logical and physical designs, application overviews, functional diagrams, data models, production job run documents, specifications, reports, or other written materials used to provide Services under this Agreement or developed under this Agreement (as to each, whether in hard or soft copy).

1.33

“Egregious Act Damage”

“Egregious Act Damage” shall have the meaning specified in Section 28.4 (Egregious Acts).

1.34

“Egregious Acts”

“Egregious Acts” shall have the meaning specified in Section 28.4 (Egregious Acts).

1.35

“Embedded Supplier Proprietary Documentation”

“Embedded Supplier Proprietary Documentation” shall mean all Documentation: (1) developed or otherwise acquired and owned by Supplier, or (2) developed by a third party for, and owned by Supplier, to the extent embedded or incorporated by Supplier into a Deliverable, the Gap Intellectual Property, the Gap Software, or the Gap Documentation during the Term pursuant to performance of the Services.

1.36

“Embedded Supplier Proprietary Intellectual Property”

“Embedded Supplier Proprietary Intellectual Property” shall mean all Intellectual Property: (1) developed or otherwise acquired and owned by Supplier, or (2) developed by a third party for, and owned by Supplier, to the extent embedded or incorporated by Supplier into a Deliverable, the Gap Intellectual Property, the Gap Software, or the Gap Documentation during the Term pursuant to performance of the Services.

Gap Confidential and Proprietary Information

1.37

“Embedded Supplier Proprietary Software”

“Embedded Supplier Proprietary Software” shall mean Software and related Documentation: (1) developed or otherwise acquired and owned by Supplier, or (2) developed by a third party for, and owned by Supplier, to the extent embedded or incorporated by Supplier into a Deliverable, the Gap Intellectual Property, the Gap Software, or the Gap Documentation during the Term pursuant to performance of the Services.

1.38

“Embedded Supplier Third Party Documentation”

“Embedded Supplier Third Party Documentation” shall mean all Documentation (excluding any and all such Documentation that is Generally Available and/or provided with Software that is Generally Available) licensed, leased, or otherwise obtained (unless it is otherwise Provisioned by Supplier for Gap, in which case it will be deemed Gap Documentation) from a Third Party Vendor by Supplier to the extent embedded or incorporated by Supplier into a Deliverable, the Gap Intellectual Property, the Gap Software, or the Gap Documentation during the Term pursuant to performance of the Services.

1.39

“Embedded Supplier Third Party Intellectual Property”

“Embedded Supplier Third Party Intellectual Property” shall mean Intellectual Property (excluding any and all such Intellectual Property that is Generally Available) licensed, leased, or otherwise obtained (unless it is otherwise Provisioned by Supplier for Gap, in which case it will be deemed Gap Intellectual Property) from a Third Party Vendor by Supplier to the extent embedded or incorporated by Supplier into a Deliverable, the Gap Intellectual Property, the Gap Software, or the Gap Documentation during the Term pursuant to performance of the Services.

1.40

“Embedded Supplier Third Party Software”

“Embedded Supplier Third Party Software” shall mean all Software (excluding any and all such Software that is Generally Available) licensed, leased, or otherwise obtained (unless it is otherwise Provisioned by Supplier for Gap, in which case it will be deemed Gap Software) from a Third Party Vendor by Supplier to the extent embedded or incorporated by Supplier into a Deliverable, the Gap Intellectual Property, the Gap Software, or the Gap Documentation during the Term pursuant to performance of the Services.

1.41

“Employment Claim(s)”

“Employment Claim(s)” shall have the meaning specified in Section 44 (Independent Contractor).

1.42

“Equipment”

“Equipment” shall mean the Gap Equipment and Supplier Equipment.

Gap Confidential and Proprietary Information

1.43

“Excluded Fields”

“Excluded Fields” shall have the meaning specified in Section 22.3C (Joint Patent and Patent License Rights).

1.44

“Extended Term”

“Extended Term” shall have the meaning specified in Section 2.2 (Options to Extend).

1.45

“Extraordinary Event”

“Extraordinary Event” shall have the meaning specified in Section 40.1 (Defined).

1.46

“Finally Determined”

“Finally Determined” shall mean when a claim or dispute has been finally determined by a court of competent jurisdiction, arbitration, mediation, or other agreed-upon governing party.

1.47

“Full-Time”

“Full-Time” shall mean a forty (40) hour work week providing services solely and exclusively for Gap.

1.48

“Functional Service Area”

“Functional Service Area” shall mean a reference to the aggregation of Services and Deliverables to be performed pursuant to a Functional Service Area Statement of Work.

1.49

“Functional Service Area Statement(s) of Work”

“Functional Service Area Statement(s) of Work” shall mean the following statements of work: Cross Functional Services Statement of Work attached hereto as Exhibit A.2 (as amended from time to time in accordance with this Agreement); Store Services Statement of Work attached hereto as Exhibit A.3 (as amended from time to time in accordance with this Agreement); End User Support Services Statement of Work attached hereto as Exhibit A.4 (as amended from time to time in accordance with this Agreement); Managed Network Services Statement of Work attached hereto as Exhibit A.5 (as amended from time to time in accordance with this Agreement); and Server Services Statement of Work attached hereto as Exhibit A.6 (as amended from time to time in accordance with this Agreement). Whether provided in a Statement of Work or not, the Glossary to the Statements of Work attached hereto as Exhibit A.1 shall be incorporated into the above-mentioned Statements of Work.

Gap Confidential and Proprietary Information

1.50

“Gap”

“Gap” shall mean The Gap, Inc., a Delaware corporation, and its Affiliates and all Gap facilities and departments receiving Services under this Agreement.

1.51

“Gap Base Case”

“Gap Base Case” shall mean that information set forth in Exhibit C (Fees and Resource Baselines).

1.52

“Gap Custom Documentation”

“Gap Custom Documentation” shall mean any Documentation developed specifically for Gap by, or on behalf of, Supplier (or jointly with others) as part of the Services (i) in accordance with Gap’s requirements, and (ii) which is specific to Gap’s business operations. Gap Custom Documentation does not include any Supplier Documentation or Supplier Modified Documentation. Gap Custom Documentation shall be identified as a Deliverable.

1.53

“Gap Custom Intellectual Property”

“Gap Custom Intellectual Property” shall mean any Intellectual Property developed specifically for Gap by, or on behalf of, Supplier (or jointly with others) as part of the Services (i) in accordance with Gap’s requirements, and (ii) which is specific to Gap’s business operations. Gap Custom Intellectual Property does not include any Supplier Intellectual Property or Supplier Modified Intellectual Property. Gap Custom Intellectual Property shall be identified as a Deliverable.

1.54

“Gap Custom Software”

“Gap Custom Software” shall mean any Software developed specifically for Gap by, or on behalf of, Supplier (or jointly with others) as part of the Services (i) in accordance with Gap’s requirements, and (ii) which is specific to Gap’s business operations. Gap Custom Software does not include any Supplier Software or Supplier Modified Software. For purposes of clarity, Software developed by Supplier to facilitate the efficient delivery of Services, including software interfaces, shall be Supplier Proprietary Software. Gap Custom Software shall be identified as a Deliverable.

1.55

“Gap Data”

“Gap Data” shall mean all of the Gap data, records, and information to which Supplier has access, or otherwise is provided to Supplier, that is entered into, is transmitted by, or is transmitted through the Gap IT Environment (including, but not limited to, any modifications to any such data, records and information, and any derivative works created therefrom,) under this Agreement in connection with providing the Services. Gap Data shall

Gap Confidential and Proprietary Information

exclude Supplier Confidential Information, Supplier Documentation, Supplier Software, Supplier Modified Documentation, Supplier Modified Software, Supplier Modified Intellectual Property or other Supplier Intellectual Property.

1.56

“Gap Data Center”

“Gap Data Center” shall mean Gap’s data centers specified in Exhibit D.22 (Gap Data Centers) or as otherwise agreed in writing by the Parties.

1.57

“Gap Delay Claim”

“Gap” Delay Claim” shall have the meaning specified in Section 3.10.B (Failure to Comply with the Transition-In Plan).

1.58

“Gap Documentation”

“Gap Documentation” shall mean all the Gap Proprietary Documentation, Gap Modified Documentation and Gap Third Party Documentation.

1.59

“Gap Equipment”

“Gap Equipment” shall mean the hardware, machines, and other equipment owned, leased or otherwise obtained by Gap as of the Reference Date and utilized by Supplier to provide the Services.

1.60

“Gap Infrastructure Partnership Executive”

“Gap Infrastructure Partnership Executive” shall have the meaning specified in Section 19.5 (Gap Infrastructure Partnership Executive).

1.61

“Gap Infringement Claim(s)”

“Gap Infringement Claim(s)” shall have the meaning specified in Section 23.4A (Gap’s Proprietary Rights Indemnity).

1.62

“Gap Infringement Exclusions”

“Gap Infringement Exclusions” shall have the meaning specified in Section 23.4D (Gap’s Proprietary Rights Indemnity; Gap Infringement Exclusions).

1.63

“Gap Infringement Trigger”

“Gap Infringement Trigger” shall have the meaning specified in Section 23.4A (Gap’s Proprietary Rights Indemnity; Indemnification).

Gap Confidential and Proprietary Information

1.64

“Gap Initiated Policy Change”

“Gap Initiated Policy Change” shall have the meaning specified in Section 3.2 (Changes in Policies and Procedures).

1.65

“Gap Intellectual Property”

“Gap Intellectual Property” shall mean *.

1.66

“Gap IT Environment”

“Gap IT Environment” shall mean Supplier Systems used to deliver the Services and Gap Systems.

1.67

“Gap Licensed Property”

“Gap Licensed Property” shall have the meaning specified in Section 22.1A (Gap Licenses to Supplier).

1.68

“Gap Modified Documentation”

“Gap Modified Documentation” shall mean any item of Gap Documentation that has been modified, enhanced, or otherwise altered by Supplier, after the Reference Date, pursuant to the performance of the Services.

1.69

“Gap Modified Intellectual Property”

“Gap Modified Intellectual Property” shall mean any item of Gap Intellectual Property that has been modified, enhanced, or otherwise altered by Supplier, after the Reference Date, pursuant to the performance of the Services.

1.70

“Gap Modified Software”

“Gap Modified Software” shall mean any item of Gap Software that has been modified, enhanced, or otherwise altered by Supplier, after the Reference Date, pursuant to the performance of the Services.

1.71

“Gap Owned Intellectual Capital”

“Gap Owned Intellectual Capital” shall mean *.

*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

Gap Confidential and Proprietary Information

1.72

“Gap Policies and Procedures”

“Gap Policies and Procedures” shall mean the Gap Documentation, policies, procedures, and guidelines as set forth in Exhibit D.1 (Gap Policies and Procedures), and as such Documentation, policies, procedures, and guidelines are amended, modified, and/or replaced by Gap from time to time and made available to Supplier during the Term of this Agreement.

1.73

“Gap Proprietary Documentation”

“Gap Proprietary Documentation” shall mean Documentation (1) developed and owned by Gap, or (2) developed by a third party for, and owned by, Gap, and which is used by Supplier in connection with providing the Services.

1.74

“Gap Proprietary Intellectual Property”

“Gap Proprietary Intellectual Property” shall mean Intellectual Property (1) developed and owned by Gap, or (2) developed by a third party for, and owned by, Gap, and which is used by Supplier in connection with providing the Services.

1.75

“Gap Proprietary Software”

“Gap Proprietary Software” shall mean Software (1) developed and owned by Gap, or (2) developed by a third party for, and owned by, Gap, and which is used by Supplier in connection with providing the Services, excluding, the Applications.

1.76

“Gap Regulatory Requirements”

“Gap Regulatory Requirements” shall have the meaning specified in Section 29.11 (Compliance with Laws).

1.77

“Gap Service Locations”

“Gap Service Locations” shall mean the premises that are occupied, owned, operated, or leased by Gap from which Supplier is authorized to provide Services.

1.78

“Gap Sites”

“Gap Sites” shall mean the premises occupied, owned, operated or leased by Gap from which Supplier may provide Services, and/or to which Supplier provides the Services, as set forth in Exhibit D.17 (Gap Sites), as such Exhibit may be amended from time to time by Gap.

Gap Confidential and Proprietary Information

1.79

“Gap Software”

“Gap Software” shall mean the Gap Proprietary Software, Gap Modified Software, Gap Third Party Software, and the Applications.

1.80

“Gap Systems”

“Gap Systems” shall mean the Gap Equipment, Gap Software, Gap Intellectual Property, and Gap Owned Intellectual Capital.

1.81

“Gap Third Party Claim(s)”

“Gap Third Party Claim(s)” shall have the meaning specified in Section 35.7B (General Indemnity; Gap’s Indemnity).

1.82

“Gap Third Party Documentation”

“Gap Third Party Documentation” shall mean any Documentation licensed, leased, or otherwise obtained from a Third Party Vendor by Gap and used by Supplier in connection with providing the Services.

1.83

“Gap Third Party Intellectual Property”

“Gap Third Party Intellectual Property” shall mean all Intellectual Property licensed, leased, or otherwise obtained from a Third Party Vendor by Gap and which is used by Supplier in connection with providing the Services.

1.84

“Gap Third Party Software”

“Gap Third Party Software” shall mean all Software licensed, leased, or otherwise obtained from a Third Party Vendor by Gap and which is used by Supplier in connection with providing the Services, excluding, the Applications.

1.85

“Gap Third Party Vendor”

“Gap Third Party Vendor” shall mean any Third Party Vendor (other than Supplier or any Supplier Third Party Vendor) contracting directly or indirectly with Gap to provide any products or services.

1.86

“Generally Available”

“Generally Available” shall mean available as a non-development product, licensed, or available for purchase, in the general commercial marketplace (e.g., Microsoft Word, SAP, OS/390, DB2).

Gap Confidential and Proprietary Information

1.87

“GID”

“GID” shall mean Gap Inc. Direct.

1.88

“HIPAA”

“HIPAA” shall have the meaning specified in Section 0 (Treatment of Gap Data).

1.89

“HVAC”

“HVAC” shall have the meaning specified in Section 10.7 (Gap’s Responsibilities Regarding Utilities).

1.90

“Implementation Agreement(s)”

“Implementation Agreement(s)” shall mean agreements to be executed by Gap or Gap Affiliates and Supplier or Supplier Affiliates in various countries other than the United States, that (1) incorporate by reference this Agreement in its entirety; (2) include modifications to this Agreement required to comply with specific foreign national, provincial, state, and local laws, rules, directives, and regulations; and (3) address identified tax and related issues as directed by Gap.

1.91

“Including”

“Including,” and its derivatives (such as “include” and “includes”), shall mean “including without limitation.” This term is as defined, whether or not capitalized in the Agreement.

1.92

“Income Tax”

“Income Tax” shall have the meaning specified in Section 26.5A (Taxes; Definitions).

1.93

“Initial Term”

“Initial Term” shall have the meaning specified in Section 2.1 (Initial Term).

1.94

“Initiation Date”

“Initiation Date” shall mean the hire date by Supplier of the Transitioned Employees and shall be the date on which Supplier is responsible for provision of all Services.

Gap Confidential and Proprietary Information

1.95

“insource”

“insource” shall have the meaning specified in Section 41.2 (Third Source and Insource Limits on RRCs).

1.96

“Intellectual Property”

“Intellectual Property” shall mean all inventions (whether or not subject to protection under patent laws) works of authorship and other expressions fixed in any tangible or electronic medium (whether or not subject to protection under copyright laws), Moral Rights, trademarks, trade names, trade dress, trade secrets, publicity rights, know-how, ideas (whether or not subject to protection under trade secret laws), and all other subject matter subject to protection under patent, copyright, Moral Right, trademark, trade secret or other laws, including, all new or useful art, configurations, Documentation, methodologies, best practices, operations, routines, combinations, discoveries, formulae, manufacturing techniques, technical developments, artwork, Software, programming, applets, scripts, designs, or other business processes.

1.97

“Interface(s)”

“Interface(s)” when used as a noun, shall mean either a computer program developed by, or licensed to, Gap or Supplier to (1) translate or convert data from a Gap or Supplier format into another format used by Supplier at Gap as a standard format, or (2) translate or convert data in a format used by Supplier or a Third Party Vendor to a format supported by Supplier at Gap or vice versa. “Interface” when used as a verb, shall mean to operate as described above.

1.98

“*”

“*” shall have the meaning specified in Section 23.6 (*).

1.99

“Managed Strategic Supplier”

“Managed Strategic Supplier” shall have the meaning specified in Section 9.1 (Definitions).

1.100

“Material Move”

“Material Move” shall have the meaning specified in Section 10.11 (Use of Gap Sites).

*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

Gap Confidential and Proprietary Information

1.101

“Migrated Service(s)”

“Migrated Service(s)” shall have the meaning specified in Section 13 (Non-Exclusive Relationship).

1.102

“Monthly Baseline”

“Monthly Baseline” shall have the meaning specified in Section 3 (Definitions) of Exhibit C (Fees and Resource Baselines).

1.103

“Monthly Performance Review”

“Monthly Performance Review” shall have the meaning specified in Section 19.2B (Meetings; Monthly Performance Reviews).

1.104

“Moral Rights”

“Moral Rights” shall mean any personal or non-economic right to a work, including rights of attribution, integrity of the work, any right to object to any distortion or other modification of a work, and any similar right existing under the law of any country in the world or under any treaty.

1.105

“New Services”

“New Services” shall mean those services that are materially different in purpose from, and in addition to, the Services. All New Services require Gap Approval.

1.106

“New Sourcing Line(s)”

“New Sourcing Line(s)” shall have the meaning specified in Section 3.21C (New Services; New Sourcing Lines).

1.107

“Non-Recurring Initiatives”

“Non-Recurring Initiatives” shall mean a discrete unit of non-recurring work that is not (1) an inherent, necessary, or customary part of the day-to-day Services in any Functional Service Area, and (2) required to be performed by Supplier to meet the existing Service Levels (other than Service Levels related to Non-Recurring Initiative performance). All Non-Recurring Initiatives require Gap Approval.

1.108

“Non-Referral Quarter”

“Non-Referral Quarter” shall have the meaning specified in Section 0 (Mandatory References).

Gap Confidential and Proprietary Information

1.109

“Notice of Failure”

“Notice of Failure” shall have the meaning specified in Section 25.4 (Failed Acceptance Testing).

1.110

“Object Code”

“Object Code” shall mean the form of computer software resulting from the compiling, assembly, or other translation or processing of the Source Materials of such software by a computer into machine language or intermediate code, which is not convenient to human understanding of the program logic, but which is appropriate for execution or interpretation by a computer.

1.111

“Open Source Software”

“Open Source Software” shall mean any Intellectual Property that is subject to the GNU General Public License, GNU Library General Public License, Artistic License, BSD License, Mozilla Public License, or any similar license, including, those licenses listed at www.opensource.org/licenses.

1.112

“Parties” or “Party”

“Parties” or “Party” shall mean Gap and Supplier in the plural and Gap or Supplier, as the case may be, in the singular.

1.113

“Permitted Auditors”

“Permitted Auditors” shall have the meaning as specified in Section 37.2 (Audits Authorized by Gap).

1.114

“PHI”

“PHI” shall have the meaning as specified in Section 0 (Treatment of Gap Data)

1.115

“Primary Event”

“Primary Event” shall mean (whether or not capitalized) an event upon which a cause of action, claim or other liability can be based.

1.116

“Procedures Manual”

“Procedures Manual” shall mean the procedures manual set forth in Exhibit D.1 (Gap’s Policies and Procedures).

Gap Confidential and Proprietary Information

1.117

“Project”

“Project” shall mean any Services provided pursuant to Gap or, as applicable, Supplier project management methodology then in place, including those Services provided in connection with a Non-Recurring Initiative. For the avoidance of doubt, for purposes of this Agreement, the use of the term Project alone shall not be deemed to be a Non-Recurring Initiative.

1.118

“Proprietary or Confidential Information”

“Proprietary or Confidential Information” shall have the meaning set forth in Section 36.1 (Definition of Proprietary or Confidential Information).

1.119

“Provisioned”

“Provisioned” shall mean items licensed, leased, or otherwise obtained by Supplier at the request of and on behalf of Gap for which Gap is financially responsible as set forth on the Financial Responsibility Matrix (Exhibit C.7).

1.120

“Quarterly Executive Meetings”

“Quarterly Executive Meetings” shall have the meaning specified in Section 19.2C (Meetings; Quarterly Executive Meetings).

1.121

“Receiving Party”

“Receiving Party” shall have the meaning specified in Section 36.2 (Exclusions).

1.122

“Reduced Resource Credit” or “RRC”

“Reduced Resource Credit” or “RRC” shall have the meaning specified in Exhibit C (Fees and Resource Baselines).

1.123

“Reference Date”

“Reference Date” shall have the meaning set forth in the introductory paragraph.

1.124

“Refresh”

“Refresh” shall have the meaning specified in Section 3.13 (Technology Refresh Services).

Gap Confidential and Proprietary Information

1.125

“Release”

“Release” shall mean a redistribution of Software that contains new features, new functionality, and/or performance improvements.

1.126

“Residual Knowledge”

“Residual Knowledge” shall have the meaning specified in Section 36.9 (Residual Knowledge).

1.127

“Resource Baseline”

“Resource Baseline” shall have the meaning specified in Exhibit C (Fees and Resource Baselines).

1.128

“Resource Charge”

“Resource Charge” shall have the meaning specified in Exhibit C (Fees and Resource Baselines).

1.129

“Resource Unit”

“Resource Unit” shall have the meaning specified in Exhibit C (Fees and Resource Baselines).

1.130

“Revisions”

“Revisions” shall mean Updates, Releases, and Versions.

1.131

“Sarbanes-Oxley Reporting Requirements and Process”

“Sarbanes-Oxley Reporting Requirements and Process” shall be as attached hereto as Exhibit O (Sarbanes-Oxley Reporting Requirements and Process).

1.132

“Service Levels”

“Service Levels” shall mean those Supplier performance criteria as set forth in the Service Level Agreement.

1.133

“Service Level Agreement(s)”

“Service Level Agreement(s)” shall mean the service level agreement(s) attached hereto as Exhibit B (Service Level Agreements).

Gap Confidential and Proprietary Information

1.134

“Service Locations”

“Service Locations” shall have the meaning specified in Section 10.1 (Service Locations).

1.135

“Service Taxes”

“Service Taxes” shall have the meaning specified in Section 26.5 (Taxes; Definitions).

1.136

“Services”

“Services” shall mean all functions, responsibilities, tasks, subtasks, Deliverables, goods, and other services: (1) identified in the Statements of Work, or Specifications; (2) identified in this Agreement as being part of the required services; (3) identified in the Transition-In Plan; (4) routinely performed during the thirteen (13) month period prior to the Reference Date by the Gap personnel and third party contractors transitioned to Supplier, displaced, or whose functions were displaced, as a result of this Agreement, even if not specifically described in the Agreement, provided, however, such services, functions or responsibilities (i) shall not include services, functions or responsibilities that were discontinued (such as through reorganizations) by Gap prior to the Reference Date, or were discontinued in accordance with the delivery solution of the Services and (ii) shall relate to information technology and business processes performed by such Gap personnel and third party contractors; (5) of a nature and type, consistent with Supplier’s best practices, that would generally be performed by the information technology department/group of a multinational Fortune 200 company, even if not specifically described in the Agreement to support the Resource Baselines; (6) necessary to keep pace with technological advances and advances in the methods of delivering services, to enable Gap to stay competitive in the field of corporate information technology delivery; (7) to support the Monthly Baselines and reflected in Supplier Assumed component of Gap’s Base Case even if not specifically described in the Agreement, identified within fifteen (15) months after the Reference Date; and (8) otherwise necessary to comply with the terms of this Agreement. Without increasing the scope of the Services, if any component task, subtask, service, or function is; (A) an inherent or necessary part of the Services defined in subparts (1), (2), (3), (4), (5), (6), (7) or (8) of this Section; or (B) a customary part of the Services defined in subparts (1), (2), (3), (4), (5), (6), (7) or (8) of this Section, and not in conflict with Supplier’s established methods of providing services; and, as to a service(s) within either subpart (A) or (B) of this sentence above, is not specifically described in this Agreement, then such service or function shall be deemed to be part of the Services. Any hardware and/or software provided to Gap by Supplier pursuant to this Agreement shall be deemed part of the Services.

Gap Confidential and Proprietary Information

1.137

“Shared Subcontractors”

“Shared Subcontractors” shall have the meaning specified in Section 45.1 (Approval Required).

1.138

“Software”

“Software” shall mean individually each, and collectively all, of the computer programs and/or software, licensed by Gap or Supplier from a Third Party Vendor, or otherwise provided by Supplier or Gap under this Agreement, including any: (1) embedded and/or re-marketed Third Party Vendor software and/or computer programs, (2) Interfaces, (3) Source Materials, and/or (4) Object Code. Software shall include any and all Revisions thereto, and any and all programs provided by a Third Party Vendor, Supplier, or Gap in the future under this Agreement. Notwithstanding anything in this Agreement to the contrary, Supplier shall have no obligation to provide Gap any Software that is Source Materials other than where the Source Material is Gap Custom Software and/or Gap Modified Software.

1.139

“Source Materials”

“Source Materials” shall mean, with respect to Software, the source code of such Software and all related compiler command files, build scripts, scripts relating to the operation and maintenance of such Software, application programming interface (API), graphical user interface (GUI), object libraries, all relevant instructions on building the Object Code of such Software, and all Documentation relating to the foregoing.

1.140

“Specifications”

“Specifications” shall mean (1) the Statements of Work, as attached and as modified and appended, including all documents incorporated therein; (2) all other performance requirements included or incorporated by reference into this Agreement, including: Gap’s Policies and Procedures (Exhibit D.1) and the Service Level Agreement (Exhibit B); and (3) to the extent it is not inconsistent with the above, the Documentation.

1.141

“Statement(s) of Work”

“Statement(s) of Work” shall mean the Functional Service Area Statement(s) of Work and such other statements of work that Gap and Supplier may enter into from time to time to document and authorize additional Services (including Non-Recurring Initiatives) and/or New Services.

1.142

“Stranded Costs”

“Stranded Costs” shall mean (i) all substantiated fees payable to third parties for Approved non-cancelable contracts entered into, or as to those portions of existing agreements amended by Supplier with Approval on or after the Reference Date, to provide the

Gap Confidential and Proprietary Information

Services, including leases and service contracts, and all reasonable termination or assignment fees payable in connection with the termination or assignment to Gap of any such contracts (“Stranded Contracts”), (ii) the substantiated cost of any assets, less depreciation, purchased by or placed into service by Supplier after the Reference Date solely for use in the performance of the Services (“Stranded Assets”), (iii) actual and substantiated salary, redeployment and severance costs paid, not to exceed * compensation (salary and benefits), for Supplier Personnel during the period they are not re-deployed as a result of termination under this Agreement, and (iv) those Transition Fees and Unrecovered Transition Costs (as defined in Exhibit C (Fees and Resource Baselines)) incurred through the effective date of termination, but not yet billed by Supplier and paid by Gap. For the avoidance of doubt, as to the Affected Employees, for a of period * (*) * from the Reference Date, the following shall be deemed included in Unrecovered Transition Costs: (a) severance costs (as defined in Exhibit H (Human Resources)) and (b) as to term employees (as defined in Exhibit H (Human Resources)), salary and benefits for the balance of the Affected Employee’s term commitment (as set forth in Exhibit H (Human Resources)) remaining at the time of the termination.

1.143

“Subcontractor”

“Subcontractor(s)” shall mean any person, entity, or organization to which Supplier proposes to delegate or has delegated any of its obligations hereunder in accordance with Section 45 (Subcontractors).

1.144

“Supplier”

“Supplier” shall mean International Business Machines Corporation, a New York corporation (“IBM”), and any Affiliates, Subcontractors, employees, consultants, agents, contractors, or other third parties providing services on behalf of Supplier under this Agreement.

1.145

“Supplier Assumed”

“Supplier Assumed” shall mean those expenses designated as Supplier’s responsibility in Exhibit C (Fees and Resource Baselines).

1.146

“Supplier Data Center”

“Supplier Data Center” shall mean Supplier’s operations monitoring and data centers specified in Exhibit D.20 (Supplier Locations) or as otherwise agreed in writing by the Parties.

1.147

“Supplier Documentation”

“Supplier Documentation” shall mean Supplier Proprietary Documentation, Supplier Modified Documentation, Embedded Supplier Proprietary

*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

Gap Confidential and Proprietary Information

Documentation, Supplier Third Party Documentation, and Embedded Supplier Third Party Documentation.

1.148

“Supplier Embedded Items”

“Supplier Embedded Items” shall have the meaning specified in Section 22.4 (Supplier Embedded Items and Supplier Modified Items).

1.149

“Supplier Equipment”

“Supplier Equipment” shall mean the hardware, machines, and other equipment owned or leased by Supplier after the Reference Date and used by Supplier to perform the Services.

1.150

“Supplier Infringement Claims”

“Supplier Infringement Claims” shall have the meaning specified in Section 23.3A (Supplier’s Proprietary Rights Indemnity).

1.151

“Supplier Infringement Exclusions”

“Supplier Infringement Exclusions” shall have the meaning specified in Section 23.3D (Supplier Infringement Exclusions).

1.152

“Supplier Infringement Trigger”

“Supplier Infringement Trigger” shall have the meaning specified in Section 23.3A (Supplier’s Proprietary Rights Indemnity).

1.153

“Supplier Intellectual Property”

“Supplier Intellectual Property” shall mean *.

1.154

“Supplier Key Employee”

“Supplier Key Employee” shall have the meaning specified in Section 18.2 (Supplier Key Employees).

1.155

“Supplier Modified Documentation”

“Supplier Modified Documentation” shall mean any item of Supplier Documentation (other than any Supplier Documentation that constitutes Supplier Reference Intellectual Property) that has been modified, enhanced, or otherwise altered by Supplier, after

*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

Gap Confidential and Proprietary Information

the Reference Date, pursuant to the performance of the Services. Supplier Modified Documentation shall not include any such Supplier Documentation that is modified, enhanced or otherwise altered by Supplier: (1) specifically for any of its other customers concurrently with, or prior to, the same modification, enhancement, or other alteration of any such Supplier Documentation for Gap, or (2) for general use in connection with the performance by Supplier of services for customers receiving services similar to the Services (to the extent such modification, enhancement or other alteration is not first made for Gap pursuant to the performance of the Services), such Documentation identified in (1) and (2) shall be Supplier Documentation. The rights of Gap to Supplier Modified Documentation do not expand or alter the rights of Gap to the underlying Supplier Documentation as set forth in this Agreement.

1.156

“Supplier Modified Intellectual Property”

“Supplier Modified Intellectual Property” shall mean any item of Supplier Intellectual Property (other than any Supplier Intellectual Property that constitutes Supplier Reference Intellectual Property) that has been modified, enhanced, or otherwise altered by Supplier, after the Reference Date, pursuant to the performance of the Services. Supplier Modified Intellectual Property shall not include any such Supplier Intellectual Property that is modified, enhanced or otherwise altered by Supplier: (1) specifically for any of its other customers concurrently with, or prior to, the same modification, enhancement, or other alteration of any such Supplier Intellectual Property for Gap, or (2) for general use in connection with the performance by Supplier of services for customers receiving services similar to the Services (to the extent such modification, enhancement or other alteration is not first made for Gap pursuant to the performance of the Services), such Intellectual Property identified in (1) and (2) shall be Supplier Intellectual Property. The rights of Gap to Supplier Modified Intellectual Property do not expand or alter the rights of Gap to the underlying Supplier Intellectual Property as set forth in this Agreement.

1.157

“Supplier Modified Items”

“Supplier Modified Items” shall have the meaning specified in Section 22.4 (Supplier Embedded Items and Supplier Modified Items).

1.158

“Supplier Modified Software”

“Supplier Modified Software” shall mean any item of Supplier Software (other than any Supplier Software that constitutes Supplier Reference Intellectual Property) that has been modified, enhanced, or otherwise altered by Supplier, after the Reference Date, pursuant to the performance of the Services. Supplier Modified Software shall not include any such Supplier Software that is modified, enhanced or otherwise altered by Supplier: (1) specifically for any of its other customers concurrently with, or prior to, the same modification, enhancement, or other alteration of any such Supplier Software for Gap, or (2) for general use in connection with the performance by Supplier of services for customers receiving services similar to the Services (to the extent such modification, enhancement or other alteration is not first made

Gap Confidential and Proprietary Information

for Gap pursuant to the performance Services), such Software identified in (1) and (2) shall be Supplier Software. The rights of Gap to Supplier Modified Software do not expand or alter the rights of Gap to the underlying Supplier Software as set forth in this Agreement.

1.159

“Supplier’s Outsourcing Relationship Executive”

“Supplier’s Outsourcing Relationship Executive” shall have the meaning specified in Section 18.1 (Supplier Outsourcing Relationship Executive).

1.160

“Supplier Personnel”

“Supplier Personnel” shall mean the employees, agents, contractors, subcontractors, or representatives of Supplier, Supplier Subcontractors, and Supplier Affiliates who perform any Services under this Agreement.

1.161

“Supplier Proprietary Documentation”

“Supplier Proprietary Documentation” shall mean all Documentation: (1) developed and owned by Supplier, or (2) developed by a third party for, and owned by Supplier, which is used for the performance of the Services, excluding the Embedded Supplier Proprietary Documentation.

1.162

“Supplier Proprietary Intellectual Property”

“Supplier Proprietary Intellectual Property” shall mean all Intellectual Property: (1) developed and owned by Supplier, or (2) developed by a third party for, and owned by Supplier, which is used in the performance of the Services, excluding, the Embedded Supplier Proprietary Intellectual Property.

1.163

“Supplier Proprietary Software”

“Supplier Proprietary Software” shall mean Software and related Documentation: (1) developed and owned by Supplier, or (2) developed by a third party for, and owned by Supplier, which is used for the performance of the Services, excluding, the Embedded Supplier Proprietary Software.

1.164

“Supplier Reference Intellectual Property”

“Supplier Reference Intellectual Property” shall mean Supplier Documentation, Supplier Software and Supplier Intellectual Property (a) which is used by Supplier to assist in the delivery or development of the Services, (b) which is generally used by Supplier in connection with the performance of services for, and/or provision of tangible property to, customers, and (c) which is not embedded or otherwise incorporated into a Deliverable.

Gap Confidential and Proprietary Information

1.165

“Supplier Regulatory Requirements”

“Supplier Regulatory Requirements” shall have the meaning specified in Section 29.11 (Compliance with Laws).

1.166

“Supplier Service Locations”

“Supplier Service Locations” shall mean the premises occupied, owned, operated, or leased by Supplier to provide the Services.

1.167

“Supplier Shared Service Center”

“Supplier Shared Service Center” shall mean a Supplier Service Location from which Supplier performs, for other customers, services similar to the Services.

1.168

“Supplier Software”

“Supplier Software” shall mean Supplier Proprietary Software, Supplier Modified Software, Embedded Supplier Proprietary Software, Supplier Third Party Software, and Embedded Supplier Third Party Software.

1.169

“Supplier Systems”

“Supplier Systems” shall mean Supplier Equipment, Supplier Intellectual Property, Supplier Modified Software, Supplier Modified Intellectual Property, and Supplier Software.

1.170

“Supplier Third Party Claim(s)”

“Supplier Third Party Claim(s)” shall have the meaning specified in Section 35.7A (General Indemnity; Supplier’s Indemnity).

1.171

“Supplier’s Remedial Acts”

“Supplier’s Remedial Acts” shall have the meaning specified in Section 23.4C (Gap’s Proprietary Rights Indemnity; Remedial Acts).

1.172

“Supplier Third Party Documentation”

“Supplier Third Party Documentation” shall mean all Documentation (excluding any and all such Documentation that is Generally Available and/or provided with Software that is Generally Available) licensed, leased, or otherwise obtained (unless it is otherwise Provisioned by Supplier for Gap, in which case it will be deemed Gap Documentation) from a Third Party Vendor by Supplier which is used for the performance of the Services, excluding, the Embedded Supplier Third Party Documentation.

Gap Confidential and Proprietary Information

1.173

“Supplier Third Party Intellectual Property”

“Supplier Third Party Intellectual Property” shall mean Intellectual Property (excluding any and all such Intellectual Property that is Generally Available) licensed, leased, or otherwise obtained (unless it is otherwise Provisioned by Supplier for Gap, in which case it will be deemed Gap Intellectual Property) from a Third Party Vendor by Supplier which is used in the performance of the Services, excluding, the Embedded Supplier Third Party Intellectual Property.

1.174

“Supplier Third Party Software”

“Supplier Third Party Software” shall mean all Software (excluding any and all such Software that is Generally Available) licensed, leased, or otherwise obtained (unless it is otherwise Provisioned by Supplier for Gap, in which case it will be deemed Gap Software) from a Third Party Vendor by Supplier which is used for the performance of the Services, excluding, the Embedded Supplier Third Party Software.

1.175

“Supplier Tools”

“Supplier Tools” shall have the meaning specified in Section 22.9 (License Restriction).

1.176

“Technology Change”

“Technology Change” shall have the meaning specified in Section 26.8 (Technology Changes).

1.177

“Term”

“Term” shall mean the Initial Term and the Extended Term, if any.

1.178

“Termination Assistance Services”

“Termination Assistance Services” shall mean those transition, information technology, and related services provided by Supplier to Gap upon the termination or expiration of this Agreement for any reason as set forth in the Termination Transition Plan or in Section 34 (Termination/Expiration Assistance Services) of this Agreement (as applicable). The Termination Assistance Services shall be deemed part of the Services.

1.179

“Termination Transition Period”

“Termination Transition Period” shall have the meaning specified in Section 34.3 (Termination Transition Period).

Gap Confidential and Proprietary Information

1.180

“Termination Transition Plan”

“Termination Transition Plan” shall mean an integrated plan developed by Gap and Supplier to effectuate a seamless transition of the Services, from Supplier to Gap (or another vendor) in the event of termination or expiration of this Agreement for any reason and as further set forth in Section 34.1 (Termination/Expiration Transition Plan).

1.181

“Third Party Service(s)”

“Third Party Service(s)” shall have the meaning specified in Section 13 (Non-Exclusive Relationship).

1.182

“Third Party Vendor”

“Third Party Vendor” shall mean any person or entity (excluding Gap or Supplier) contracting directly or indirectly with Gap or Supplier to provide Equipment, Intellectual Property, Services or other products or services that are used or provided under this Agreement.

1.183

“third source”

“third source” shall have the meaning specified in Section 41.2 (Third Source and Insource Limits on RRCs).

1.184

“Transition”

“Transition” means the transition described in Section 3.10 (Transition-In) and in Exhibit D.15 (Transition-In Plan).

1.185

“Transition Period”

“Transition Period” means the period of time commencing on the Reference Date and ending one hundred and eighty (180) Days thereafter, unless otherwise agreed by the Parties in writing.

1.186

“Transitioned Employees”

“Transitioned Employees” shall have the meaning specified in Exhibit H (Human Resources).

1.187

“Transition-In Plan” or “Transition Plan”

“Transition-In Plan” or “Transition Plan” shall mean the timeline and services relating to the transition of responsibility for the Services from Gap or Gap’s current third party vendors to Supplier as set forth in Exhibit D.15 (Transition-In Plan). The Transition-In Plan and all reports or other Documentation developed by Supplier pursuant to the Transition-

Gap Confidential and Proprietary Information

In Plan shall automatically become a part of this Agreement immediately upon their creation or delivery, as the case may be. The Transition-In Plan shall include, at a minimum: (a) all of the transition tasks required to be performed by Supplier, (b) all of the tasks required to be performed by Gap (any responsibility not explicitly allocated to Gap is deemed to be a transition task to be performed by Supplier), (c) the specific resources to be provided by Gap, (d) the completion date for each transition task, (e) the acceptance criteria (and, if appropriate, testing) to be applied by Gap in evaluating transition deliverables, (f) a complete description of any one-time or other charges to Gap which are associated with the Transition-In Plan, including deliverable criteria and timing for payment(s), other than the Charges, (g) Supplier’s proposed migration strategy for Transitioned Employees and the Gap IT Environment, and (h) all other pertinent details.

1.188

“UPS”

“UPS” shall have the meaning specified in Section 10.7 (Gap’s Responsibilities Regarding Utilities).

1.189

“Update”

“Update” shall mean a redistribution of Software that corrects an error as well as addressing common functional and performance issues.

1.190

“VAT Taxes”

“VAT Taxes” shall have the meaning specified in Section 26.5 (Taxes; Cooperation; Invoices).

1.191

“Version”

“Version” shall mean any delivery of Software that is a Release and/or a collection of Updates.

1.192

“Virus(es)”

“Virus(es)” shall have the meaning specified in Section 29.8 (Viruses).

Term

2.1

Initial Term

This Agreement shall be effective as of the Reference Date and shall continue in effect for ten (10) years after the Initiation Date (the “Initial Term”), unless earlier terminated as provided herein.

Gap Confidential and Proprietary Information

2.2

Options to Extend

Gap may elect to extend the term of this Agreement for up to three (3) additional terms each of which, at Gap’s sole discretion, may range in length from thirty (30) days to one (1) year (“Extended Term”). If Gap does not exercise its option to extend at the end of the Initial Term, the extension option shall automatically lapse. Gap shall exercise its extension option by providing Supplier written notice no later than one hundred twenty (120) days prior to the expiration of the Initial Term. Such notice shall include the length of the Extended Term.

2.3

Fees During Extended Term

The fees to be paid by Gap during the Extended Term(s) of this Agreement shall be the applicable fees set forth in Section 26 (Pricing), adjusted for COLA in accordance with Exhibit C (Fees and Resource Baselines), and pursuant to the benchmarking process set forth in Section 8 (Benchmarking).

Services

3.1

Services

As of the Reference Date, Supplier shall provide Transition Services, and as of the Initiation Date and continuing throughout the Term, Supplier shall provide the Services to Gap and the Authorized Users as such Services may evolve or are otherwise supplemented, enhanced, modified or replaced in accordance with this Agreement. Except as specifically set forth in this Agreement, Supplier shall provide all Supplier Equipment, Supplier Intellectual Property, Supplier Third Party Intellectual Property, Supplier Personnel, and other resources necessary to provide the Services in accordance with the Service Levels and other performance requirements of this Agreement. Supplier shall provide the Services to Gap as an integrated service offering in accordance with this Agreement and without regard to the lines of business, intra-Affiliate relationships, or geographic locations within Supplier’s organization from which such Services are offered, or the internal profit center within Supplier’s organization to which the financial accounting for a Service is ultimately attributed. To the extent specific Equipment, Intellectual Property, tools, policies, procedures, and/or guidelines are identified, referenced, or referred to in the Agreement or any Exhibits, such Equipment, Intellectual Property, tools, policies, procedures, and/or guidelines shall include any amendments, modifications, updates, and/or replacements to such Equipment, Intellectual Property, tools, policies, procedures, and/or guidelines by Gap from time to time during the Term of this Agreement.

3.2

Changes in Policies and Procedures

If Supplier determines that its compliance with (i) a Gap Initiated Policy Change, (ii) an additional reporting requirement pursuant to Section 3.19 (Reporting Services) or (iii) complying with architectural or technical standards as provided in Section 17.3 (Strategic Control), will increase Supplier’s actual cost of delivering the Services by an amount equal to or

Gap Confidential and Proprietary Information

greater than $* during the remainder of the Term, Supplier shall notify Gap in writing within three (3) months of implementing such change, and shall provide Gap with supporting documentation and data necessary to substantiate Supplier’s estimated actual cost increase. Upon validation by Gap of Supplier supporting documentation and data, Gap shall have the option of either (a) rescinding the particular Gap Initiated Policy Change or additional reporting request; or (b) (i) in the event there is no Resource Charge applicable to the increase in Supplier’s actual cost and such actual cost increase is between $* and $*, by adjusting the fees to be paid hereunder to Supplier to offset the demonstrated increased cost to Supplier, (ii) in the event there is no Resource Charge applicable to the increase in Supplier’s actual cost and such actual cost increase exceeds $*, as agreed by the parties through Change Control Procedures or (iii) in the event there is a Resource Charge applicable to the increase in Supplier’s actual cost, through an ARC. In the event Supplier is required to implement multiple changes as a result of a single Gap Initiated Policy Change or an additional reporting requirement, such multiple changes may be aggregated by Supplier for purposes of calculating the increase in Supplier’s actual cost of delivering the Services under this Section (Changes to Policies and Procedures).

“Gap Initiated Policy Change” shall mean a change to Gap Policies and Procedures that is initiated by Gap, but shall not include changes made to address regulatory compliance issues (which changes are addressed in Section 29.12 (Changes in Law and Regulations)) or changes made to address a Supplier failure to provide Services in accordance with this Agreement.

3.3

Documentation

Supplier shall provide the Services required with respect to all Documentation in accordance with Section 0 (Documentation) and the Functional Service Area Statements of Work and as otherwise provided under this Agreement. In addition, at no additional charge to Gap, Supplier shall provide Gap with at least three (3) copies of Documentation developed for Gap under this Agreement (or otherwise required to be provided to Gap under this Agreement and which Supplier is authorized to provide) to enable Gap to fully utilize as permitted under this Agreement the Services, Equipment, and Software.

3.4

Managed Network Services

Supplier shall provide the managed network services set forth in Exhibit A.5 (Managed Network Services), and as otherwise provided under this Agreement.

3.5

Cross Functional Services

Supplier shall provide the cross functional services set forth in Exhibit A.2 (Cross Functional Services), and as otherwise provided under this Agreement.

*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

Gap Confidential and Proprietary Information

3.6

End User Support Services

Supplier shall provide the end user support services set forth in Exhibit A.4 (End User Support Services), and as otherwise provided under this Agreement.

3.7

RESERVED

3.8

Server Services

Supplier shall provide the mainframe services and application and utility server services set forth in Exhibit A.6 (Server Services), and as otherwise provided under this Agreement.

3.9

Store Services

Supplier shall provide the store services set forth in Exhibit A.3 (Store Services), and as otherwise provided under this Agreement.

3.10

Transition-In

A. Transition-In Plan

Supplier shall provide to Gap the transition-in services described in Exhibit D.15 (Transition-In Plan) and in accordance with the transition schedule set forth in Exhibit D.15 (Transition-In Plan). Supplier shall provide the transition-in services without materially (i) disrupting or adversely impacting the business or operations of Gap or Gap Authorized Users, (ii) degrading the Services being provided, or (iii) interfering with the ability of Gap or Gap Authorized Users to obtain the benefit of the Services, except as may be otherwise provided in the Transition-In Plan. Unless otherwise stated in the Agreement, the transition-in services shall not defer any obligations or liabilities of Supplier under this Agreement.

B. Failure to Comply with the Transition-In Plan

In the event Supplier fails to meet the Transition Complete date as set forth in Exhibit D.15 (Transition-In Plan), unless modified or extended by the written agreement of the Parties, Gap may elect to terminate this Agreement for convenience pursuant to Section 33.6 (Termination for Convenience) and without payment of the Termination for Convenience charges scheduled therein. Notwithstanding the preceding sentence, Gap shall be responsible for Stranded Costs pursuant to Section 34.4(D) (Transition Services).

Supplier shall, upon the occurrence of acts or omissions by Gap which have been determined by Supplier to, or are likely to, adversely impact its ability to deliver or meet a Transition-In Plan Critical Deliverable by the date set forth in the Transition-In Plan (“Gap Delay Claim”), advise Gap’s Infrastructure Partnership Executive of such Gap Delay Claim in writing promptly, but in no event longer than five (5) business days, of Supplier having

Gap Confidential and Proprietary Information

knowledge of such occurrence, of the facts surrounding such claim and time impact, and Gap shall provide a response and/or resolution plan to Supplier within two (2) days thereafter. If Gap determines that the Gap Delay Claim was a primary cause for a delay of Supplier in delivering a Transition-In Plan Critical Deliverable, the time for Supplier to meet that Transition-In Plan Critical Deliverable shall be extended to adjust for the impact of such occurrence as well as those Transition-In Plan Critical Deliverables directly dependant upon the extended Transition-In Plan Critical Deliverable. If Supplier does not agree with Gap’s decision, Supplier shall submit the Gap Delay Claim to the Dispute Resolution Process described in Section 31 (Internal Dispute Resolution). If, at the conclusion of the Dispute Resolution Process, it is determined that the delay was caused by Gap’s acts or omissions, the time for Supplier to meet the Transition-In Plan Critical Deliverable will be extended to account for the Gap delay. Supplier’s failure to advise Gap of a Gap Delay Claim as provided above shall preclude it from raising such acts or omissions as a basis for avoiding a credit under this Section.

3.11

Equipment

Supplier shall provide the Services using, or through access to, the Equipment that is either (1) Supplier Equipment, or (2) Gap Equipment. The Parties financial responsibilities with respect to Equipment (including any updates or refresh of such Equipment) are set forth in Exhibit C.7 (Financial Responsibility Matrix). Gap shall be responsible for the risk of loss of, and damage to, Gap Equipment (unless such Gap Equipment is in Supplier’s custody). Supplier shall be responsible for the risk of loss of, and damage to, Supplier Equipment unless such Supplier Equipment is located in a Gap Store or in a Gap location at which there are no Supplier Personnel assigned full time and the loss or damage is not caused by Supplier.

3.12

Replacement Services

As more specifically described in the Statements of Work, Supplier shall, upon Gap’s Approval, and at no additional cost to Gap other than any applicable ARCs and the terms of any New Services, replace, upgrade, and provide additional Supplier Equipment as may be necessary for Supplier to perform the Services in accordance with the Service Levels and as provided in this Agreement.

3.13

Technology Refresh Services

A. Supplier shall provide all Services required to implement this Section 3.13 at no additional charge to Gap except to the extent included in Exhibit C (Fees and Resource Baseline) or as otherwise Approved in a Statement of Work. Supplier will upgrade and replace the Equipment and Software in accordance with the technical architecture and standards required pursuant to any Functional Service Area Statement of Work and timeframes in accordance with Exhibit D.18 (Refresh Schedule). The Services provided pursuant to this Section 3.13 are collectively referred to as “Refresh” and require Gap’s Approval prior to

Gap Confidential and Proprietary Information

implementation. Supplier will implement the Refresh requirements in accordance with the schedule set forth in Exhibit D.18 (Refresh Schedule).

B. In performing all Refresh Services and unless otherwise required pursuant to a Functional Service Area Statement of Work or otherwise agreed to by the Parties in writing, Supplier shall first replace the oldest Equipment and Software based on the in-service date or age of each such item. The Refresh schedule for each Functional Service Area shall be determined in accordance with the timeframe and/or events specified in the applicable Functional Service Area Statement of Work, or as otherwise Approved by Gap. All Refresh Services shall be performed in accordance with the schedule, technical architecture standards and product catalogs required pursuant to the Functional Service Area Statements of Work. Gap reserves the right to Approve and modify the Refresh schedule based on its business requirements, subject to the Change Control Procedures set forth in Section 5 (Change Management) of Exhibit A.2 (Cross Functional Services).

C. The financial responsibility of the Parties for Equipment and Software used in conjunction with the Services, including Refresh, shall be as set forth in Exhibit C.7 (Financial Responsibility Matrix).

D. Supplier shall perform the Refresh in accordance with Exhibit D.18 (Refresh Schedule).

3.14

Software Services

Supplier shall procure any additional software required by Supplier to provide the Services, meet Service Levels, or otherwise comply with this Agreement (the “New Software”), subject to ARCs, RRCs, and, as applicable, New Services.

3.15

Licenses and Permits

Supplier is responsible for obtaining all licenses, approvals, permits and authorizations required by applicable federal, state, or local laws or regulations that Supplier is required to have in order to perform the Services and, except as otherwise agreed to in writing by the Parties or as otherwise provided in this Agreement, Supplier is financially responsible for all fees, costs and taxes associated with such licenses, approvals, permits and authorizations. Supplier shall provide to Gap all such licenses, approvals, permits and authorizations within three (3) Business Days after Supplier’s receipt of Gap’s request.

3.16

Knowledge Transfer and Best Practices

Supplier shall implement the knowledge transfer process set forth in this Agreement to ensure that Supplier Personnel share the knowledge they have gained while performing the Services with Gap and the Gap Authorized Users. The knowledge transfer process shall ensure that important knowledge, information, and practices pass from Supplier and Supplier Personnel to Gap and Gap Authorized Users. At a minimum, such knowledge transfer

Gap Confidential and Proprietary Information

processes will include Supplier meeting with Gap and designated Gap Authorized Users at least once every twelve (12) months, or more frequently as Gap may request, to (a) explain how the Gap IT Environment operates in connection with the provision of the Services; (b) explain how the Services are provided; and (c) provide such training, Documentation and other materials as Gap may require for Gap to understand and operate the Gap IT Environment and understand and provide the Services after the expiration or termination of the Agreement.

As part of the Monthly Performance Reviews, Supplier shall report to the Gap Infrastructure Partnership Executive on Supplier observed opportunities for the introduction of best practices into Gap’s information technology processes. Beginning in the second year of the Agreement, and annually thereafter, Supplier shall work with Gap’s Infrastructure Partnership Executive to develop and present a yearly forum/briefing to Gap (1) to recommend best practice improvements to the Services, (2) to assist Gap in understanding how the use of such best practices is intended to align Gap’s technology investments with its Business Objectives, and (3) to assist Gap in analyzing return on its technology investments related to the Services.

3.17

Strategic / Business Planning and Process Implementation

Supplier shall provide the strategic and other business planning and process implementation services as required pursuant to the applicable Functional Service Area Statements of Work.

Supplier will provide business and technology intelligence and recommendations to support Gap’s optimization of its Equipment and Software refresh strategy. Supplier shall provide Gap with prioritized availability and knowledge of Supplier’s new technology developments that have been discussed publicly at no additional cost (for avoidance of doubt, the reference to ‘no additional cost’ refers only to the prioritized availability and knowledge, not provision of the actual technology) to the extent Supplier has made such developments Generally Available.

3.18

Budgeting Services

Supplier shall provide the budgeting services as required pursuant to applicable the Functional Service Area Statements of Work.

3.19

Reporting Services

In order to monitor the status, performance, and quality of the Services provided to Gap, Supplier shall provide Gap with various written reports described in Exhibit D.13 (Management Reports), as such reports may be amended from time to time by Gap. The nature and time frame of the reports shall be determined by Gap.

Unless stated otherwise in a Statement of Work or as directed by Gap, each of such reports shall be comprised of three (3) hard copies and (1) electronic copy to be

Gap Confidential and Proprietary Information

delivered to each of Gap’s Infrastructure Partnership Executive and the applicable Program Manager, together with a formal transmittal letter executed by Supplier’s Outsourcing Relationship Executive and the applicable Program Manager. If no time period is designated by Gap, after the reports have been defined and Approved by Gap, reports are due five (5) days from the end of the reporting period, or issue occurring.

3.20

Data Protection and Privacy

Supplier shall comply with Gap’s Data Protection and Privacy Procedures as set forth in the Exhibit D.1 (Gap Policies and Procedures). In addition, subject to mandatory compliance with applicable law, Supplier shall perform a reference and criminal background investigation on all Supplier Personnel with access to Gap Data and/or the Gap IT Environment. Notwithstanding the foregoing, *. Within five (5) days of any investigation, Supplier shall notify Gap of adverse results of any such reference and criminal background investigation to the extent permitted by law. Supplier shall not permit any Supplier Personnel who Supplier knows has been convicted of a crime of dishonesty, breach of trust, or money laundering to provide Services under this Agreement, or to have access to any Gap Proprietary or Confidential Information or Gap Data.

3.21

New Services

A. New Services Proposal

If Gap requests that Supplier perform any New Services, Supplier shall promptly prepare a New Services proposal for Gap’s consideration. Supplier shall prepare New Services proposals at no additional charge to Gap and shall deliver such proposal to Gap within a timeframe that is reasonable based on the nature and scope of the proposed New Services and, in event the proposed New Services are being competitively bid, in compliance with the competitive bidding requirements. A New Services proposal shall include, among other things, (i) a reasonably detailed project plan and a price estimate for the New Service; (ii) a reasonably detailed breakdown of such price or estimate, (iii) a reasonably detailed description of the service levels to be associated with such New Service; (iv) a schedule for commencing and completing the New Service; (v) a description of the new hardware or software to be provided by Supplier in connection with the New Service; (vi) a description of the software, hardware and other resources, including Resource Unit utilization, necessary to provide the New Service; and (vii) additional facilities, hardware, software or labor resources to be provided by Gap in connection with the proposed New Services. If Gap accepts Supplier’s proposal, the Parties will negotiate a mutually agreed to Statement of Work. Upon execution of the applicable Statement of Work, the scope of the Services included in the Charges will be expanded and this Agreement will be modified to include such New Services. Notwithstanding any provision to the contrary, the

*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

Gap Confidential and Proprietary Information

pricing proposed by Supplier shall be reasonable and shall be no less favorable to Gap than the pricing and labor rates set forth herein for the same or substantially similar resources in the same country and shall take into account the existing and future volume of business between Gap and Supplier. All New Services must be Approved by Gap’s Chief Information Officer in accordance with Section 6.1 (Gap Approval).

B. Competing Bids

Gap may elect to solicit and receive bids from third parties to perform any New Services; provided, however, that Gap shall not disclose any Confidential and Proprietary Information provided by Supplier to Gap in any proposal for New Services. If Gap elects to use third parties to perform New Services, (i) such New Services shall not be deemed “Services” under the provisions of this Agreement and (ii) Supplier shall cooperate with such third parties as provided in Section 9 (Strategic Relationship Management).

C. New Sourcing Lines

In the event Gap elects to utilize Supplier to provide a new line of sourcing services (e.g., logistics and supply chain management, supply chain applications, and human resources support) (individually and collectively referred to as “New Sourcing Line(s)”), such services will be treated as New Services under this Agreement, provided that each New Sourcing Line will include in the proposal a unique Exhibit C (Fees and Resource Baselines); Statement(s) of Work; Service Level Agreement attachments, and as applicable, supporting exhibits. To the extent any provisions of this Agreement are deemed by the Parties to be inapplicable to such New Sourcing Line(s) or it is agreed that new provisions are required, such modifications will be addressed through an amendment to this Agreement, unless the Parties otherwise agree that a stand alone agreement that leverages the terms agreed to herein as applicable will facilitate the provision or management of the services.

Single Relationship Agreement

All Services provided by Supplier shall be governed by this Agreement, and to the extent separate Implementation Agreements are approved in writing by Gap, such Implementation Agreements shall not change, alter, or modify any term of this Agreement, except as required by the law of the country in which Services are to be provided under such Implementation Agreement or as set forth in Section 5.3 (Terms and Conditions).

Implementation Agreements

5.1

Execution

In each country in which Services shall be provided, Supplier Affiliate shall, before commencement of the Services, sign an Implementation Agreement. In the event Supplier Affiliate refuses to execute an Implementation Agreement, Supplier shall be responsible for (a) contracting with a third party as a Subcontractor under this Agreement to provide the

Gap Confidential and Proprietary Information

Services required under such Implementation Agreement, and (b) all costs (i) related to obtaining the services from such Subcontractor in excess of those costs that would have been charged by Supplier Affiliate and (ii) related to integrating such Subcontractor services into the Services.

5.2

Order of Precedence

Except for those country-specific terms and conditions set forth in Section 5.3 (Terms and Conditions) below, all the terms and conditions of this Agreement shall be incorporated in full and remain in full force and effect in all Implementation Agreements. Except for those country specific terms and conditions set forth in Section 5.3 (Terms and Conditions) below, in the event of any conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of an Implementation Agreement, the terms and conditions of this Agreement shall prevail.

5.3

Terms and Conditions

Each Implementation Agreement shall contain only the following country specific terms and conditions. There shall be no additional terms and conditions included in any Implementation Agreement except as set forth in this Section 5.3 (Terms and Conditions).

A. Any requirements specifically mandated by the laws, rules, regulations, directives, and/or statutes of the country of Supplier Affiliate and Gap Affiliate, including: (i) any country specific human resource requirements in relation to the Transitioned Employees, and (ii) any data protection requirements.

B. Those provisions necessary to allow both parties to operate within their respective tax structures and implement their respective internal payment processes. In the event the two structures are in conflict, Gap’s tax structure and payment processes shall take precedence, provided, however, in the event Supplier demonstrates that compliance with the above precedence requirement will create a material adverse impact as to Supplier, the Parties shall work cooperatively to reach a commercially reasonable and mutually beneficial resolution. Notwithstanding the foregoing, nothing in this paragraph B is intended to alter the agreement of the Parties as to the allocation of taxes set forth in Section 26.5 (Taxes).

C. Any provision necessary to establish jurisdiction and venue as to Supplier Affiliate as provided in Section 46.3 (Venue and Jurisdiction).

D. To the extent there are additional provisions not addressed above which are proposed to be included in an Implementation Agreement, such proposed provisions must be approved by Gap Corporate Counsel and Supplier Corporate Counsel. In the event the Parties are unable to agree upon such proposed additional provisions, such proposed additional provisions shall not be incorporated into the Implementation Agreement.

Gap Confidential and Proprietary Information

5.4

Parental Guarantee

Each Party shall provide a parental guarantee simultaneously with the execution of an Implementation Agreement. Each Party’s provision of a parental guarantee for any Affiliate executing an Implementation Agreement under this Agreement shall be made in the same or substantially similar form as that of Exhibit N.1 (Supplier Guarantee) and Exhibit N.2 (Gap Guarantee), as applicable.

Unapproved Work

6.1

Gap Approval

A. When Gap’s consent, authorization, amendment, and/or other approval is expressly required under this Agreement, such consent, authorization, amendment, and/or other approval must be obtained by Supplier in writing from Gap’s Chief Information Officer or Gap’s Infrastructure Partnership Executive. Notwithstanding the foregoing, any consent, authorization, amendment, and/or other approval requiring the authorization of payment, or imposing an obligation on Gap for any fees, cost, or other expenses, must be obtained by Supplier in writing from Gap’s Chief Information Officer subject to the following exceptions:

(1) any consent, authorization, amendment, and/or other approval in an amount less than * per entire Statement of Work or authorized activity) can be approved by Gap’s Infrastructure Partnership Executive; and

(2) any consent, authorization, amendment, and/or other approval in an amount less than * per entire Statement of Work or authorized activity) can be approved by a Gap Program Manager.

B. After Supplier has obtained the consent, authorization, amendment, and/or other approval as set forth in this Section, Supplier is not required to obtain a consent, authorization, amendment, and/or other approval for the tasks related to the day to day execution of the applicable matter, unless additional consents, authorizations, amendments, and/or other approvals are specifically provided for in the Agreement.

C. For purposes of this Agreement, the writings constituting any consent, authorization, amendment, and/or other approval shall be (i) as to New Services, a signed and numbered Service Request, Change Request, or Statement of Work, as applicable; and (ii) as to Non-Recurring Initiatives, a signed and numbered Statement of Work. Supplier’s monthly invoices shall detail separately Charges for New Services, with reference to the specific numbered Service Request, Change Request, or Statement of Work constituting the consent, authorization, amendment, and/or other approval. Each calendar month, Gap’s Infrastructure

*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

Gap Confidential and Proprietary Information

Partnership Executive (or his or her designee) and Supplier’s Outsourcing Relationship Executive shall meet to review the Services invoiced to Gap in the previous calendar month, including the status of issues, if any, relating to Charges for New Services. Gap will make a good faith attempt to raise any disputes relating to any consent, authorization, amendment, and/or other approval of the Services performed promptly upon discovery of such dispute; provided that in no event shall Gap be permitted to dispute such consent, authorization, amendment, and/or other approval of the Services performed (and invoiced as provided in this Section) more than * (*) days after the date of the original invoice for such Service(s) and, thereafter, any such Charges shall be deemed to have Gap’s consent, authorization, amendment, and/or other approval.

6.2

Right to Reject

Gap reserves the right to reject any Services not Approved by Gap pursuant to Section 6.3 (Failure to Obtain Approval) or other provisions of this Agreement. Gap Approval is not required for those Services, other than Non-Recurring Initiatives, included in the Charges, including any ARCs or RRCs as to such Services.

6.3

Failure to Obtain Approval

A. Unless otherwise specified in Section 6.1 (Gap Approval) or otherwise specifically set forth in this Agreement, any consents, authorizations, amendments, or other approvals required under this Agreement must be obtained from Gap’s Chief Information Officer or Gap’s Infrastructure Partnership Executive.

B. If Supplier provides Services (or services other than those specified in this Agreement) to Gap without obtaining Gap Approvals in writing, as set forth in this Section, such Services (or other services) shall be deemed to be a gratuitous effort on the part of Supplier and Supplier shall have no claim whatsoever against Gap therefor (it being understood by the Parties that Supplier shall have no obligation to continue to provide such gratuitous Services (or other services) unless Approved by Gap in which case Gap shall compensate Supplier in accordance with this Agreement). Any services other than those specified under this Agreement that are Approved by Gap under the preceding sentence shall become a part of the Services and shall be subject to the terms and conditions of this Agreement.

C. If Supplier provides Services (or services other than those specified in this Agreement) that are deemed to be a gratuitous effort pursuant to subparagraph B above, constituting Equipment, Supplier Proprietary Software or commercially available off-the-shelf Supplier Third Party Software (e.g., Microsoft NT, Sun Solaris, HP Open View) and unless otherwise Approved, Gap shall permit Supplier to remove such Equipment, Supplier Proprietary Software or commercially available off-the-shelf Supplier Third Party Software at Supplier’s sole cost and expense and at Gap’s reasonable convenience.

*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

Gap Confidential and Proprietary Information

D. If Supplier provides Services (or services other than those specified in this Agreement) that are deemed to be a gratuitous effort pursuant to subparagraph B. above, constituting Gap Custom Software, Gap shall be entitled to retain and use such Gap Custom Software free of Charge, except that such Gap Custom Software shall not be deemed to be part of the Services subject to this Agreement and shall be provided to Gap by Supplier on an “AS IS” basis.

E. Gap shall provide Supplier with notice of any such gratuitous effort to the extent such gratuitous effort is known by Gap’s Governance Team as detailed in Section 19.1 (Governance).

Service Levels

7.1

Service Level Agreements

Supplier shall provide all Services in accordance with the Service Levels.

7.2

Reports

Supplier shall collect all data and maintain all records and documentation required by this Agreement, the Statements of Work and to comply with the Service Levels. Supplier shall provide regular performance reports to Gap in accordance with Section 3.16 (Reporting Services) and Section 19.1 (Governance).

7.3

Root-Cause Analysis and Resolution

Within ten (10) days (or as otherwise agreed to by the Parties in writing) of receipt of a notice from Gap of Supplier’s failure to provide the Services in accordance with the Service Levels, Supplier shall (a) provide such services necessary to identify the cause of such failure, (b) provide Gap with a written report detailing the cause of, and procedures for correcting, such failure, and (c) provide Gap with reasonable evidence that applicable corrective steps have been taken. The foregoing does not limit other remedies available to Gap under this Agreement for such Service Level failures.

7.4

Cost and Efficiency Reviews

Supplier shall perform, on an annual basis, cost and efficiency reviews of the Services it provides and make recommendations to Gap for reducing the cost to Gap of the Services. Supplier’s recommendations shall include methods to efficiently utilize resources chargeable to Gap under the Agreement, including, but not limited to:

(1) Tuning or optimizing the Gap IT Environment used to perform the Services;

Gap Confidential and Proprietary Information

(2) Use and analysis of the results of predictive modeling, trend analysis, and monitoring tools;

(3) Analysis and isolation of Application and infrastructure design, configuration, and implementation flaws;

(4) Recommendations for aligning technology processes, tools, skills and organizational changes with Gap’s business requirements; and

(5) Employing new technologies in general use by Supplier to replace existing technologies used by Supplier to provide the Services, even if the use of such new technologies will result in a reduction in monthly revenues to Supplier under the Agreement. For example, in a circumstance in which manual tape mounts were a Resource Unit, it is required that Supplier would recommend use of automated tape mounts, if appropriate, even if implementation of such solution would result in a RRC under the Agreement.

In the event Supplier fails to include in its annual recommendations employment of new technologies (made Generally Available by Supplier to other customers for at least six (6) months) to replace existing technologies used by Supplier to provide the Services, and (1) Gap demonstrates through the Internal Dispute Resolution process that employment of such new technologies would result in a reduction to Gap of the Charges of the Services, and (2) if Gap elects to implement a subject new technology in accordance with this Agreement, it shall receive a $50,000.00 credit off of any Charge associated with the implementation of any such new technology by Supplier.

Benchmarking

8.1

Benchmarking Process

A. After the * anniversaries of the Reference Date, Gap may initiate a benchmark analysis of (1) *, (2) *, (3) *, and/or (4) * (individually each, and collectively all, referred to as “Aggregated Service(s)”). For purposes of this Section 8 (Benchmarking), *. Supplier will provide, as reasonably requested by Gap in order to facilitate a meaningful and effective benchmark analysis, a detailed charge(s) breakdown of the Aggregated Services subject to the benchmark

*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

Gap Confidential and Proprietary Information

analysis into the elements of *. Additionally, as may be required to normalize the benchmark analysis, the fixed price component of the Annual Services Charge set forth in Table C-1 (Annual Services Charge) shall be allocated on a prorated basis to each of the Aggregated Service(s). Such allocation will be accomplished by dividing the then current Contract Year Charges for the applicable Aggregated Service(s) subject to the benchmark analysis by the total Annual Services Charge for the then current Contract Year to obtain the percentage of the fixed price Annual Services Charge to add to the Aggregated Service(s) in order to establish the then current total price for the Aggregated Service(s) subject to the benchmark analysis. Gap agrees not to duplicate a benchmarking for Aggregated Services within any * period. Gap will select and contract with an independent third party that routinely provides benchmarking as identified on Exhibit D.21 (Approved Benchmarkers) or as otherwise mutually agreed to in writing by the Parties (the “Benchmarker”) to objectively perform such benchmarking.

B. Each Party shall have the right to review the benchmarking procedures to be utilized by the Benchmarker. If and to the extent Gap and Supplier agree on specific directions, processes or methodologies to be provided to or applied by the Benchmarker, the Benchmarker shall be provided such directions and instructed to apply such processes or methodologies. Otherwise, the Benchmarker shall be instructed to use its professional judgment as to the appropriate processes and methodologies to be applied.

C. The Benchmarker shall execute an appropriately protective confidentiality agreement consistent with the terms of this Agreement that contains standard non-disclosure agreement protections, provided that Supplier shall have no obligation hereunder to (i) provide the Benchmarker any proprietary information or data relating to Supplier’s agreements with other customers or (ii) disclose to the Benchmarker Supplier’s cost of delivering the Services under this Agreement.

D. The Benchmarker shall have no financial incentive in the outcome of its analysis. The Benchmarker shall compare (using data from a representative sampling of contracts) the quality, resource utilization, and charges of the Aggregated Service(s) against the quality, resource utilization and charges of information technology service providers performing similar services to ensure that Gap is obtaining pricing and levels of service that are competitive with market prices and service levels, given the nature, volume, performance standards and type of Aggregated Service(s) provided by Supplier hereunder (“Benchmarking”). The prices established as a result of the Benchmarking shall be the “Benchmark”. In making this comparison, the Benchmarker shall insure its comparison accounts for vendor financing and other factors including: (i) whether vendor transition-in charges are paid by the customer as incurred or amortized over the term of the agreement; (ii) the extent to which vendor pricing includes the purchase of customer’s existing assets and on what basis; and (iii) the extent to which vendor pricing includes the cost of acquiring future assets. The Benchmarker shall identify such factors considered and the methodology used to account for such factors in its comparison.

*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

Gap Confidential and Proprietary Information

8.2

Benchmark Adjustments

A. The Benchmarker shall issue a preliminary written report reflecting its findings. The Parties will review the preliminary benchmark analysis report and provide any comments in writing to the Benchmarker and the other Party within fifteen (15) days of receipt of the analysis. The Benchmarker will be instructed to consider any such comments received within such fifteen (15) day period and, after such consideration and making any appropriate adjustments, to issue a final written report. The Benchmarker may accept or reject the comments of either Party in its sole discretion.

B. In the event that the Parties agree to the Benchmark result and Supplier’s prices for the Aggregated Service(s) is priced higher than the Benchmark, then Supplier shall either:

(1) in the event Supplier’s prices for the Aggregated Service(s) exceed the Benchmark by * or less, then Supplier shall reduce its prices for the Aggregated Service(s) down to the * in the next billing cycle. “*” shall mean the amount equal to * over Supplier’s prices for the Aggregated Service(s). For example, if the Benchmark for the Aggregated Services exceeds the then current Supplier Charges for the Aggregated Services by *, then Supplier shall reduce its prices for the Aggregated Services down by *; or

(2) in the event Supplier’s prices for the Aggregated Service(s) exceed the Benchmark by more than *, Supplier shall reduce its prices for the Aggregated Service(s) (i) down by * in the next billing cycle (ii) *. Within * of receiving the Benchmarking with a Benchmark triggering the pricing discussion requirement, Supplier shall provide Gap with a written proposal on *. The proposal shall *. Supplier’s proposal must be accompanied with sufficient detail to demonstrate to Gap what specific pricing metrics will be affected and how and may include discussion of technology architecture issues. The Parties shall structure and support the pricing discussions to proceed rapidly with the objective of completing such discussions within * of the date of receiving the Benchmarking. Failure of the Parties to agree on all pricing adjustments to be implemented within * of the date of receiving the Benchmarking, shall be deemed a rejection of Supplier’s proposal to reduce prices by Gap, unless the Parties otherwise agree in writing.

C. Should the Parties agree to adjust pricing as provided herein, such adjustments shall be *.

*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

Gap Confidential and Proprietary Information

D. If (1) Supplier fails to adjust its pricing as required under subpart B above, or (2) Gap (in its sole discretion) does not accept Supplier’s proposal to reduce its prices to the Benchmark as set forth in subpart B(2) above, Gap may terminate this Agreement in accordance with Section 33.5 (Termination for Failure to Implement Benchmark Adjustments).

E. All third party costs of the benchmarking shall be shared equally by the Parties.

Strategic Relationship Management

9.1

Definitions

For purposes of this Section 9 (Strategic Relationship Management), the term “Managed Strategic Supplier” shall mean those Third Party Vendors identified by Gap as having responsibility under a separate agreement with Gap for the delivery of a critical service segment that must integrate with the Services. As of the Reference Date, Exhibit D.12 (Managed Strategic Suppliers) lists the Managed Strategic Suppliers. The listing of Managed Strategic Suppliers contained in Exhibit D.12 (Managed Strategic Suppliers) shall be updated from time to time by the written agreement of the Parties either through the Change Control Procedures or by a signed amendment to the Agreement.

9.2

Managed Strategic Supplier Services

A. Supplier’s obligations with regard to Managed Strategic Suppliers shall be as set forth in the applicable Statements of Work and include the following:

(1) work with Gap to plan the scope, requirements and specifications as to all Managed Strategic Suppliers for any particular project or engagement; provided, however, Gap will provide Supplier with a copy of the applicable agreements with its Managed Strategic Suppliers as needed to identify Supplier’s obligations under this Section;

(2) assume primary responsibility for properly fulfilling Gap’s operational, management, and administrative obligations under any agreement with a Managed Strategic Supplier; provided, however, nothing under this subpart obligates Supplier to accept financial or other liability as between it and the Managed Strategic Supplier;

(3) working with Gap to identify its business needs and assuming primary responsibility for incorporating those business needs in the design and development of specifications for the Managed Strategic Supplier’s services;

(4) act as Gap’s limited agent and coordinate the implementation of all projects and performance;

*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

Gap Confidential and Proprietary Information

(5) assume responsibility for managing the relationship and monitoring the Managed Strategic Supplier’s continuing performance under the terms of the agreement with the Managed Strategic Supplier and bring all performance issues under the applicable service levels to resolution in accordance with the terms of the agreement with the Managed Strategic Supplier, including but not limited to managing the Managed Strategic Supplier’s development and implementation of corrective action plans;

(6) monitor the Managed Strategic Supplier’s continuing timeliness under the terms of the agreement with the Managed Strategic Supplier, including, but not limited to managing the Managed Strategic Supplier’s development and implementation of corrective action plans;

(7) monitor and assess the Managed Strategic Supplier’s ability to efficiently and effectively deliver the agreed services under the terms of the agreement with the Managed Strategic Supplier; and

(8) review and verify the accuracy and compliance with the terms of the agreement with the Managed Strategic Supplier, including applicable statements of work and project agreements, of all invoices received by Gap from Managed Strategic Supplier and pursue all credits to which Gap may be entitled.

B. In the event of any failure of a Managed Strategic Supplier to achieve the service levels under the applicable service level agreement, Supplier shall promptly advise Gap’s Infrastructure Partnership Executive and the appropriate Program Manager of any performance or other issues. In addition to providing the Services set forth in Section 9.2A.(5), within ten (10) days of receipt of a corrective action plan and/or a root cause analysis of a service level failure from the Managed Strategic Supplier, Supplier shall provide Gap with a written analysis of the Managed Strategic Supplier’s corrective action plan and root cause analysis and an identification of mitigation measures that are determined by Supplier to minimize the likelihood of a recurrence of the failure. If further investigation into the root cause of the failure is required, then Supplier shall, as applicable, manage the Managed Strategic Supplier’s efforts with regard to such further investigation and/or perform such investigation. Supplier shall provide a report to Gap of relevant information discovered in the further investigation and such other information regarding the failure as Gap may reasonably request. Upon becoming aware of acts or omissions of a Managed Strategic Supplier that Supplier reasonably believes are likely to cause a failure to achieve a service level under the applicable Service Levels, Supplier will provide Gap with prompt written notice of such acts or omissions.

C. Gap shall be responsible for the payment of all invoices issued by the Managed Strategic Supplier for services rendered.

D. Supplier has to the right to approve any changes to any agreement with a Managed Strategic Supplier which would materially change or increase the level of Services provided by Supplier under this Section 9 (Strategic Relationship Management).

Gap Confidential and Proprietary Information

9.3

Appointment as Limited Agent

Gap hereby appoints Supplier as Gap’s limited agent for managing any agreements covering services or systems provided to Gap by a Managed Strategic Supplier. Gap agrees promptly to notify all appropriate third parties in writing of the nature and scope of such appointment of Supplier. Supplier’s appointment as Gap’s limited agent shall not include the authority to obligate Gap to pay any fees, costs or other expenses without obtaining in advance a Gap Approval. Supplier’s appointment as Gap’s limited agent as to a Managed Strategic Supplier or as to a specific applicable agreement between Gap and a Managed Strategic Supplier may be terminated by Gap. Any change by Gap to an existing Managed Strategic Supplier relationship or termination of Supplier’s status as limited agent as to such Managed Strategic Supplier shall be subject to an appropriate modification to Supplier’s rights and obligations under this Agreement. Gap agrees to cooperate with Supplier in its role as Gap’s limited agent with respect to a Managed Strategic Supplier. As of the Reference Date, Gap is not aware of any material breach under any Managed Strategic Supplier agreement nor are there any disputes pending in dispute resolution.

9.4

Lease Management

A. Definitions

For purposes of this Section 9.4 (Lease Management), the term “Gap Selected Lease Supplier” shall mean those third parties selected and identified by Gap as having responsibility under a separate agreement with Gap for the leasing of certain Gap Equipment. As of the Reference Date, Exhibit D.11 (Gap Selected Lease Agreements) lists the Gap Selected Lease Suppliers and the applicable agreements. The listing of Gap Selected Lease Agreements contained in Exhibit D.11 (Gap Selected Lease Agreements) shall be updated from time to time by the written agreement of the Parties either through the Change Control Procedures or by a signed amendment to the Agreement.

B. Lease Management Supplier Services

(1) Supplier’s obligations with regard to a Gap Selected Lease Supplier shall be as set forth below:

(a) work with Gap to plan the scope, requirements and specifications as to all Gap Equipment; provided, however, Gap will provide Supplier with a copy of the applicable agreements with its Gap Selected Lease Suppliers as needed to identify Supplier’s obligations under this Section;

(b) assume primary responsibility for properly fulfilling Gap’s operational, management, and administrative obligations under any agreement with a Gap Selected Lease Supplier; provided, however,

Gap Confidential and Proprietary Information

nothing under this subpart obligates Supplier to accept financial or other liability as between it and the Gap Selected Lease Supplier;

(c) working with Gap to identify its business needs and assuming primary responsibility for incorporating those business needs in the design and development of specifications for the Gap Equipment;

(d) act as Gap’s limited agent and coordinate the implementation of all Gap Equipment;

(e) assume responsibility for managing the relationship and monitoring the Gap Selected Lease Supplier’s performance under the terms of the agreement with the Gap Selected Lease Supplier; and

(f) review and verify the accuracy and compliance of all invoices received by Gap from a Gap Selected Lease Supplier with the terms of the agreement with the Gap Selected Lease Supplier, and pursue all credits to which Gap may be entitled.

C. Upon becoming aware of acts or omissions of a Gap Selected Lease Supplier that Supplier reasonably believes are likely to cause a failure to achieve a service level under the applicable Service Levels, Supplier will provide Gap with prompt written notice of such acts or omissions.

D. Gap shall be responsible for the payment of all invoices issued by the Gap Selected Lease Supplier for services rendered.

10.

Service Locations

10.1

Service Locations

The Services shall be provided from (1) the Gap Sites, (2) Supplier Service Locations, and (3) any other data center or location designated by Gap or Supplier; provided, however, that any such other data center or location must be Approved by Gap in writing and in advance ((1), (2), and (3) collectively, the “Service Locations”).

10.2

Shared Environment

Prior to migrating or relocating any of the Services to a Supplier Shared Service Center (other than those contemplated as of the Reference Date), Supplier shall provide to Gap, for Gap’s Approval, a proposal for the migration or relocation of such Services, including benefits, savings, or risks to Gap during the Term and upon the expiration or termination of this Agreement. Gap agrees to evaluate such migration or relocation proposals in good faith, acknowledging the potential that such relocation, while achieved at no additional cost

Gap Confidential and Proprietary Information

or savings to Gap, may enable Supplier to optimize its financial and delivery commitments under this Agreement.

10.3

Safety Procedures

A. Supplier shall maintain and enforce at Supplier Service Locations safety procedures that are at least (1) equal to industry standards for such Supplier Service Locations and (2) as rigorous as those procedures in effect at Supplier Service Locations as of the Reference Date.

B. At all Gap Service Locations, Supplier shall comply with Gap’s safety procedures provided in writing to Supplier or generally posted at a Gap Service Location. Supplier shall observe and comply with all Gap rules (disclosed to Supplier or Supplier Personnel in writing or by other means generally used by Gap to disseminate such information to employees or contractors) with respect to safety, health, facility security, and the environment and shall take all action necessary to avoid injury, property damage, spills or emissions of hazardous substances, materials or waste, and other dangers to persons, property or the environment. To the extent required by Gap, Supplier Personnel shall receive prescribed training from Gap without charge prior to entering certain Gap Sites or Gap Service Locations.

10.4

Security Procedures

As more specifically required pursuant to Section 2 (Security) of Exhibit A.2 (Cross Functional Services), Supplier shall adopt security measures for itself and its employees which shall include, but not be limited to:

A. Prohibition of the disclosure of Proprietary or Confidential Information within Supplier’s organization except to individuals requiring access to such information to perform Supplier’s obligations or exercise its rights under this Agreement;

B. Precluding access to Proprietary and Confidential Information by any Supplier employee, representative, agent or Subcontractor until such individual has been trained with regard to the handling of the Proprietary or Confidential Information, use of security measures identified herein, and (1) with respect to Supplier’s employees, has completed Supplier’s applicable * (or its successors) (provided, however, for purposes of this Agreement and with respect to Supplier’s employees providing Services under this Agreement, * (or its successors) shall be deemed to apply to and include all of the Gap Systems), and (2) with respect to Supplier’s representatives, agents, or Subcontractors, Supplier has included provisions comparable to *;

C. Requiring all (1) new employees to complete Supplier’s applicable *

*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

Gap Confidential and Proprietary Information

* (or its successors) (provided, however, for purposes of this Agreement and with respect to Supplier’s employees providing Services under this Agreement, * (or its successors) shall be deemed to apply to and include all of the Gap Systems), and (2) representatives, agents, or Subcontractors, to execute Subcontractor, agent, or other agreements with provisions comparable to *;

D. Providing each individual authorized to electronically access Proprietary or Confidential Information with a unique access code and notifying such individual that disclosure of any password, access code, or security device shall result in disciplinary action, including termination;

E. Promptly canceling any password or security access code when an individual is terminated, transferred, or on a leave of absence and providing prompt notice of such event to Gap as agreed in the Gap Policies and Procedures and consistent with Gap System security requirements;

F. In the event employment is terminated involuntarily, ensuring that the individual’s access to Proprietary or Confidential Information is blocked prior to notifying the individual of the involuntary termination;

G. Requiring that Gap procedures (provided in writing to Supplier or generally posted at the Gap Service Locations) are followed by Supplier Personnel to physically safeguard all telecommunication switches, computer rooms, and tape libraries, as well as restricting access to such sites to authorized personnel through card access system (“CAS”) badges where such systems are utilized;

H. Requiring that audit trails are established and maintained with regard to Trusted Identifications created by Supplier and provide such audit trails to Gap upon Gap’s request. Without limitation, *; and

I. Requiring, to the extent consistent with Gap Polices and Procedures (Exhibit D.1), that the Equipment and the Gap IT Environment have the firewalls, segmentation, encryption, or other safeguards designed to (1) protect the transmission of Gap Data and Proprietary or Confidential Information, (2) properly authenticate users, and (3) prohibit the unauthorized access to Gap Data or Confidential or Proprietary Information or the

*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

Gap Confidential and Proprietary Information

Gap IT Environment, all as set forth in Section 2 (Security) of Exhibit A.2 (Cross Functional Services).

10.5

Access To Gap Sites

Gap shall provide Supplier with access to and use of the Gap Sites (or equivalent space) as necessary for Supplier to comply with the terms of this Agreement. All Gap owned or leased assets provided for the use of Supplier under this Agreement shall remain in Gap Sites unless Gap otherwise agrees in writing. Supplier shall have no tenancy, or any other property or other rights, in Gap Sites. In addition, all leasehold improvements made by or for Supplier during the Term shall be and remain part of the Gap Site. All such improvements shall be made: (i) only with Gap’s prior written Approval; and (ii) at Supplier’s sole cost and expense. Supplier acknowledges and agrees that, as of the Reference Date, the Gap Sites are sufficient, together with Supplier Service Locations, to enable Supplier to provide the Services as required by this Agreement. All Gap Sites are provided hereunder on an “as is, where is” basis.

10.6

Furniture, Fixtures and Equipment

The facilities provided by Gap for the use of Supplier will be generally comparable to the standard space then occupied by similarly-situated Gap employees. Gap shall provide, for the use of Supplier Personnel occupying space at Gap Sites, office furniture and fixtures generally comparable to the furniture and fixtures provided to similarly-situated Gap employees. Supplier Personnel using the facilities provided by Gap will be accorded reasonable access to the communications wiring in such facilities (including fiber, copper, and wall jacks) and the use of, certain shared office equipment and services such as photocopiers, local and long distance telephone service for Gap-related calls, mail service, office support service (e.g., janitorial), heat, light, and air conditioning. Supplier shall be responsible for providing all other office, data processing and computing equipment, and services needed by Supplier or Supplier Personnel to provide the Services, and for upgrades, improvements, replacements, and additions to such equipment or services provided that those affected Gap employees may continue to utilize their current workstations until such time that the workstation is scheduled for refresh or otherwise requires replacement. At that time, Supplier shall replace such workstation with Supplier Equipment.

10.7

Gap’s Responsibilities Regarding Utilities

Gap shall provide, or shall cause Supplier to be provided with, site maintenance, site management, site administration and similar services for Gap Sites used by Supplier or Supplier Personnel to provide the Services and maintain at historical levels the building and property electrical systems; water, sewer, lights, heating, ventilation, and air conditioning (“HVAC”) systems; physical security services; general custodial/landscape services, including monitoring and maintaining the uninterruptible power supply (“UPS”) system; and air handlers and water chillers; and shall pay for electrical power, water, natural gas

Gap Confidential and Proprietary Information

used or consumed by Supplier or Supplier Personnel at such Gap Sites. Gap shall maintain the account relationship with power utility, the water utility, and the natural gas utility companies.

10.8

Supplier’s Responsibilities Regarding Facilities

Except as provided in Sections 10.5 (Access to Gap Sites), 10.6 (Furniture Fixtures and Equipment), and 10.7 (Gap’s Responsibilities Regarding Utilities), Supplier shall be responsible for providing all furniture, fixtures, equipment, space, tools, vehicles and other facilities required to perform the Services and all upgrades, improvements, replacements and additions to such furniture, fixtures, equipment, space, tools, and facilities. Without limiting the foregoing, Supplier shall: (i) provide all site maintenance, site management, site administration and similar services at Supplier Service Locations, other than Gap Sites; and (ii) provide all necessary emergency power supply and uninterrupted power supply services at Supplier Service Locations, other than Gap Sites; and (iii) provide such other services as required pursuant to Gap’s Policies and Procedures. To the extent Supplier identifies methods of optimizing use of Gap facilities with regard to Supplier’s use of such facilities for delivering the Services (e.g., more efficient use of floor space, more efficient usage of power and air conditioning) it will advise Gap of such recommendations.

10.9

Physical Security

Gap is responsible for the physical security of the Gap Sites; provided, that Supplier will be responsible for access and control of the areas that Supplier is using in performance of this Agreement and as more specifically required pursuant to the Gap Policies and Procedures. Supplier shall not authorize any person to have access to, or control of, any such area unless such access or control is permitted in accordance with control procedures Approved by Gap.

10.10

Employee Services

Subject to applicable security requirements that are provided in writing to Supplier or posted at a Gap Site, Gap will permit Supplier Personnel to use all employee facilities (e.g., parking, cafeteria, and common facilities) at the Gap Sites that are generally made available to the employees of Gap or Gap Authorized Users. Supplier Personnel will not be permitted to use such employee facilities designated by Gap for the exclusive use of certain Gap or Gap Authorized User employees.

10.11

Use of Gap Sites

Unless Supplier obtains Gap’s prior written agreement, which may be withheld by Gap in its sole discretion, Supplier shall use the Gap Sites, and the Gap Equipment and Software located therein, only to provide the Services to Gap and the Authorized Users. Gap reserves the right in its sole discretion to relocate a Gap Site (or the space within a Gap Site) from which the Services are then being provided by Supplier to another location; provided that, in such event, Gap will provide Supplier with ninety (90) days advance written notice and with

Gap Confidential and Proprietary Information

comparable space in the new location. In advance of a Material Move, Supplier and Gap shall identify one-time or recurring additional or reduced costs or expense associated with such relocation, and agree upon methods of mitigating and equitable allocation of such cost and/or expenses. The Parties agree that a “Material Move” for purposes of this Section 10.11 (Use of Gap Sites) is one that creates an additional commute for Supplier Personnel of * or more miles. When the Gap Sites are no longer required for the performance of the Services, Supplier shall return such Gap Sites to Gap in substantially the same conditions as when Supplier began use of the Gap Sites, subject to reasonable wear and tear. Nothing in this Section 10.11 (Use of Gap Sites) is intended to pre-determine whether Supplier services relating to a Material Move constitute a Non-Recurring Initiative or are included within the Services.

Gap also reserves the right to direct Supplier to cease using all or part of the space in a Gap Site from which the Services are then being provided by Supplier and to thereafter use such space for its own purposes. In such event, Gap shall reimburse Supplier for any reasonable incremental costs incurred by Supplier as a result of such direction; provided that such direction is not expressly contemplated in this Agreement and that Supplier notifies Gap of such additional incremental costs and uses commercially reasonable efforts to minimize such costs.

10.12

Damage to Gap Facilities, Buildings, or Grounds

Supplier shall repair, or cause to be repaired, at its own cost, any and all damage to Gap Sites caused by Supplier or Supplier Personnel. Such repairs shall be made immediately after Supplier has become aware of such damage, but in no event later than thirty (30) days after the occurrence. If Supplier fails to make timely repairs, Gap may make any necessary repairs. All costs incurred by Gap, as determined by Gap, for such repairs shall be repaid by Supplier by cash payment upon demand, or without limitation of all Gap’s other rights and remedies provided by law or under this Agreement, Gap may deduct such costs from any amounts due to Supplier from Gap under this Agreement.

10.13

Use of Supplier Service Locations

During the Term, Supplier will provide to Gap at no charge (i) temporary access to and reasonable use of Supplier Service Locations, and (ii) temporary access to reasonable work/conference space at Supplier Service Locations for Gap to exercise its rights under this Agreement, subject to Gap’s compliance with Supplier’s posted security policies and procedures while at such facilities. The facilities provided by Supplier for the use of Gap will be generally comparable to the standard space then occupied by similarly-situated Supplier employees.

*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

Gap Confidential and Proprietary Information

11.

Data Backup and Disaster Plan

11.1

Data Backup

Supplier shall back-up all Gap Data as provided in the applicable Functional Service Area Statements of Work.

11.2

Disaster Plan

Supplier shall maintain and implement disaster avoidance procedures as required pursuant to Section 3 (Disaster Recovery Services) of Exhibit A.2 (Cross Functional Services). The Disaster and Recovery Plan for Supplier Service Locations shall be reviewed and updated during the Term to conform with ISO 9000 standards. Supplier shall notify Gap of the completion of the ISO 9000 annual compliance certification or audit, and make such certification or audit available to Gap or its designee for review. Recommendations of new technology by Supplier’s or Gap’s communications, equipment, and uninterruptible power supply vendors shall also be reviewed on a regular basis and be included in Supplier’s planning process as appropriate.

11.3

Disaster Avoidance

As to those Supplier Service Locations (other than Gap Sites), Supplier shall maintain disaster avoidance procedures designed to safeguard the Gap Data and the availability of the Services, throughout the Term. Such disaster avoidance procedures include, but are not limited to, the following:

A. Physical Security

Access to Supplier Service Locations shall be strictly controlled by Supplier. An electronic badge system or other appropriate systems will be maintained and utilized by Supplier to control access to Supplier Service Locations. *. In addition, Supplier shall, on a twenty-four (24) hours a day, seven (7) days a week basis, monitor Supplier Service Locations access. Supplier shall also (to the extent such acts do not violate any union agreement) maintain, to the extent Supplier deems necessary, operational video cameras to monitor the main entrance, parking facilities, and critical areas within Supplier Service Locations twenty-four (24) hours a day, seven (7) days a week.

B. Fire Protection

As to Supplier Data Center(s), fire detection, containment, and fire suppression systems and processes shall meet Supplier, Industrial Risk Insurers (IRI), and National Fire Protection Association (NFPA) requirements and shall be regularly reviewed and updated.

*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

Gap Confidential and Proprietary Information

C. Power Supply

As to Supplier Data Center(s), Supplier shall maintain two levels of power backup designed to provide uninterrupted operation of Supplier Data Center(s) and equipment located in such Supplier Data Center(s) in the event of a loss of power. Supplier Data Center(s) will also have EPS generation as a second source of backup power.

D. Equipment/Air Conditioning

As to Supplier Data Center(s), Supplier shall maintain two (2) levels of protection against loss of cooling, including a primary backup system and a secondary backup system that shall be capable of providing continuous cooling during a power outage.

E. Hardware and Software Changes

Supplier shall strictly comply with the Change Management procedures as set forth in Section 5 (Change Management) of Exhibit A.2 (Cross Functional Services), and shall ensure that Supplier Personnel are familiar with such procedures and that such procedures are used for both hardware and software Changes.

As to the Gap Data Centers occupied by Supplier, Supplier shall be vigilant of the Disaster avoidance services and systems provided by Gap or third party suppliers on behalf of Gap; and report in writing to Gap issues known by Supplier to create a physical risk to the Data Center of the personnel working therein.

11.4

Disaster Recovery

Supplier shall maintain disaster recovery plans to be used in the event of any unplanned interruption of the operations of, or accessibility to, the Gap IT Environment throughout the Term in accordance with Section 3 (Disaster Recovery Services) of Exhibit A.2 (Cross Functional Services).

11.5

Public Telecommunications Facilities

Except as to the obligations of Supplier contained in this Agreement, Supplier shall not be responsible for corruption, damage, loss or mistransmission of data during transmission via a network transport carrier, nor shall it be responsible for the security of data during transmissions via a network transport carrier.

12.

Communications Systems and Access to Information

Supplier understands that Supplier may receive access to Gap’s computers and electronic communications systems, including voicemail, email, customer databases, and internet and intranet systems (for purposes of this paragraph, “systems”). Such systems are intended for legitimate business use related to Gap’s business. Supplier acknowledges that Supplier does not

Gap Confidential and Proprietary Information

have any expectation of privacy as between Supplier and Gap in the use of or access to Gap’s systems and that all communications made with such systems by or on behalf of Supplier are subject to Gap’s scrutiny, use and disclosure (subject to the protections of Proprietary or Confidential Information herein), in Gap’s sole discretion. Gap reserves the right, for business purposes, to monitor, review, audit, interpret, access, archive and/or disclose (subject to the protections of Proprietary or Confidential Information herein) materials sent over, received by or from, or stored in any of its systems. This includes, without limitation, email communications sent by users across the internet and intranet from and to any and all domain names maintained by Gap. Gap reserves the right to override any security passwords to obtain access to Gap’s Systems. Subject to the Policy and Procedures Manual provisions regarding coordination of investigations set forth in Exhibit D.1 (Gap Policies and Procedures), Supplier also acknowledges that Gap reserves the right, for legitimate business purposes related to investigations of wrongful use of Gap’s systems, to search all work areas at Gap Sites (for example, offices, cubicles, desks, drawers, cabinets, computers, computer disks and files), or in cooperation with Supplier and subject to Supplier’s consent, at Supplier’s sites, and all personal items brought onto Gap property.

13.

Non-Exclusive Relationship

13.1

Non-Exclusivity

Notwithstanding anything else to the contrary, this Agreement shall be non-exclusive in nature, and Gap shall at all times have the right to perform any of the Services itself or to contract with a third party to perform any service included in the Services or other obligations of Supplier in this Agreement (“Migrated Service(s)”). In the event Gap contracts with a third party to perform any Migrated Service or performs such Migrated Service itself, Supplier shall reasonably cooperate with Gap and any such third party, including providing: (1) the necessary information related to the Migrated Services that Gap reasonably requests to enable Gap to draft a request for proposal(s) relating to the Migrated Services and to provide existing information to support due diligence for recipients of such request for proposal; (2) access to Supplier Service Locations being used by Supplier to provide the Services as necessary for Gap or a third party to survey the current environment being used to deliver the Migrated Service(s); (3) existing written requirements, standards, and policies for systems operations so that any developments of such third party may be operated by Supplier; (4) assistance and support services to Gap or such third party to the extent related to the Services; (5) to the extent permitted by the applicable third party agreements, access to the Gap IT Environment in connection with such Migrated Service; and (6) such information regarding the operating environment, system constraints and other operating parameters related to the Services as a person with reasonable commercial skills and expertise would find reasonably necessary for Gap or a third party to perform the Migrated Service. Gap shall require any such third party to comply with Supplier’s reasonable requirements regarding operations, confidentiality, and security and Supplier shall not be required to disclose any confidential information other than as necessary to comply with the obligations of this Section, but in no event shall Supplier be

Gap Confidential and Proprietary Information

required to disclose information of a Supplier customer (other than Gap) or any Supplier cost data.

13.2

Multi-Vendor Environment

Supplier acknowledges that it will be delivering the Services in a multi-vendor environment, with Gap and the Gap Third Party Vendor(s) providing services relating to the Gap IT Environment. Effective operation of such an environment requires not only the cooperation among all service providers, including Supplier, but also collaboration in addressing service-related issues that may cross over from one service area or provider to another and related to the Services (“Cross-Over Issues”). As part of the Services, Supplier will actively provide and support tasks associated with operating and maintaining a collaborative approach to Cross-Over Issues in the same manner as if the Supplier Service relevant to the Cross-Over Issue was being provided in-house by Gap rather than by Supplier.

Supplier shall use commercially reasonable efforts to identify all work efforts and deliverables of which Supplier has knowledge, whether performed by Supplier, Subcontractors, Supplier Third Party Vendors, Gap, or the Gap Third Party Vendor(s) that may impact the delivery of the Services (the “Service Interdependency”).

14.

Human Resources

As to the United States and Canada, the terms and conditions relating to human resources and transitioned employees are as set forth in Exhibit H (Human Resources). For all other countries, the terms and conditions relating to human resources and transitioned employees shall be as set forth in that country’s Implementation Agreement.

15.

Statements of Work

Supplier and Gap shall execute a Statement of Work containing, at a minimum, the information set forth on Exhibit I (Form of Project Statement of Work) for any Project.

16.

Gap Authorized User Satisfaction

16.1

Baseline Gap Authorized User Satisfaction Survey

In the time frames set forth in Exhibit B.2 (Critical Deliverables), an independent third party selected by Gap shall conduct a baseline Gap Authorized User satisfaction survey for affected users at each Gap Service Location and/or Gap Site Approved by Gap measuring their satisfaction with their receipt of the Services. This Gap Authorized User Satisfaction Survey shall be mutually agreed upon by the Parties, and shall be administered as determined by the selected organization and shall be the initial baseline for measurement of user satisfaction improvement described in Section 16.2 (Gap Authorized User Satisfaction Survey).

Gap Confidential and Proprietary Information

16.2

Gap Authorized User Satisfaction Survey

Every six (6) months during the first four (4) years of the Term and annually thereafter (unless otherwise agreed in writing by the Parties), an independent third party selected by Gap shall conduct a Gap Authorized User Satisfaction Survey for each Gap Service Location and/or Gap Site. The survey shall, at a minimum, cover at least the following classes of users: (1) sample of end users of the Services and (2) all senior management of Gap. The content, scope, and method of the survey shall be consistent with the baseline Gap Authorized User Satisfaction Survey conducted pursuant to Section 16.1 (Baseline Gap Authorized User Satisfaction Survey) and the timing of the above surveys are subject to Gap’s Approval. It is the goal of Supplier to increase Gap Authorized User satisfaction for each class of Gap Authorized Users. The baseline for determining the initial gap shall be the results of the surveys conducted pursuant to Section 16.1 (Baseline Gap Authorized User Satisfaction Survey). The baseline for determining subsequent gaps will be the results of the Gap Authorized User Satisfaction Survey compared to the immediately prior Gap Authorized User Satisfaction Survey. Supplier agrees that increasing measured Gap Authorized User satisfaction shall be a key performance incentive for compensation for key executives assigned to Gap’s account. The costs for all Gap Authorized User Satisfaction Surveys shall be borne solely by Gap. Notwithstanding the foregoing, in the event that any Gap Authorized User Satisfaction Survey fails to meet the applicable Service Level, the cost of all surveys following such failure shall be borne solely by Supplier until the Service Level failure has been remedied by Supplier (after a survey Service Level failure is remedied Gap again shall bear the costs of the subsequent survey); provided, however, that the first Gap Authorized User Satisfaction Survey immediately following any Service Level failure shall be conducted no earlier than six (6) months, and no later than seven (7) months, after such failure.

17.

Gap Responsibilities

17.1

Obligations

During the Term, Gap shall on a timely basis and at no charge to Supplier:

A. Maintain the Gap Infrastructure Partnership Executive in accordance with Section 19.5 (Gap Infrastructure Partnership Executive).

B. Cooperate with Supplier to the extent reasonably necessary in the performance by Supplier of Supplier’s obligations to offer employment to and hire the Transitioned Employees.

17.2

Interfering Acts

Supplier shall be excused from its responsibility to perform a specific obligation under this Agreement if and only to the extent such non-performance of the specific obligation is caused by Gap’s breach of its performance obligation(s) under the Agreement; provided that upon the occurrence of acts or omissions by Gap in breach of Gap’s performance

Gap Confidential and Proprietary Information

obligation(s) under the Agreement which have been determined by Supplier to be likely to adversely impact its ability to deliver or meet such specific obligation, Supplier shall advise Gap’s Infrastructure Partnership Executive of such occurrence in writing promptly and identify the reason for Supplier’s inability to perform its obligation as a result of Gap’s failure to perform its obligation(s) under this Agreement. Nothing in the forgoing shall (1) relieve Supplier of any portion of liability Finally Determined by a court to be Supplier’s arising from a breach of contract claim as to such failure to perform (2) preclude Gap from asserting such failure by Supplier to perform an obligation under this Agreement as a basis for Gap to terminate the Agreement for cause if subsequently discovered facts demonstrate the failure was not caused by Gap’s failure to perform its obligations under this Agreement; or (3) preclude Gap from asserting such failure by Supplier to perform an obligation under this Agreement as a basis for Gap to terminate the Agreement for cause if Supplier conduct, not caused by Gap’s failure to perform its obligation(s) under this Agreement, contributing to the failure is determined to be one of numerous breaches of its duties or obligations under the Agreement which in the aggregate are material as provided in Section 33.2(iii) (Termination For Cause By Gap).

17.3

Strategic Control

Gap shall retain strategic control of all aspects of the services, products and processes used in Gap’s business, including decisions concerning the Services, Gap IT Environment, architecture, and technical standards. In connection with implementing such strategic control, Gap shall: (i) establish processes and designate decision-makers to exercise strategic control over the Services; and (ii) establish procedures to consult with Supplier and other suppliers when and to the extent Gap determines it to be appropriate. As part of the Services, Supplier shall provide business intelligence and analysis to Gap in connection with strategy development, assessment, and implementation strategy. All final decisions on matters relating to strategic control over the Services shall be made by Gap.

18.

Services Team

18.1

Supplier Outsourcing Relationship Executive

Supplier shall (1) present three (3) candidates from which Gap will select an individual who (from the Reference Date) shall be in charge of implementing the Services on a Full-Time basis and (2) replace this individual when required or permitted pursuant to this Section 18.1 (Supplier Outsourcing Relationship Executive) or Section 18.3 (Conduct of Supplier Personnel). Supplier’s appointment of any Supplier Outsourcing Relationship Executive shall be subject to Gap’s written consent. The initial Supplier Outsourcing Relationship Executive shall be *. Unless otherwise agreed by the Parties, Supplier Outsourcing Relationship Executive shall be located at 850 Cherry Avenue, San Bruno, CA 96066. Supplier shall not reassign or replace any Supplier Outsourcing Relationship Executive or Supplier Key Employees, during the * of his or her assignment unless, but in no event sooner than * from the Reference Date: (1) Supplier obtains Gap’s consent in writing (with respect to Supplier Key Employees which such consent shall not be unreasonably

*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

Gap Confidential and Proprietary Information

withheld) to such reassignment or replacement; or (2) the individual (a) voluntarily resigns from Supplier, or (b) is dismissed by Supplier for (i) misconduct (e.g., fraud, drug abuse, theft) or (ii) unsatisfactory performance in respect of his or her duties and responsibilities to Gap or Supplier, or (c) is removed from Supplier Personnel pursuant to Section 18.3 (Conduct of Supplier Personnel), or (d) is unable to work due to his or her death or disability, or (e) as to Supplier Key Employees (excluding Supplier Outsourcing Relationship Executive) the individual requests reassignment under compassionate circumstances (e.g. relocation of a spouse) (subparts (1) and (2) are collectively referred to as “Approved Reassignments”); provided, however, that even for Approved Reassignments, Supplier shall not reassign or replace any Supplier Technology executive or Supplier Key Employee if such reassignment or replacement would materially disrupt Gap’s operation, until the completion or Gap Approved transition of any Projects to which Supplier Outsourcing Relationship Executive or Supplier Key Employee is assigned. No Approved reassignment shall occur without at least thirty (30) days (or reasonably practical under the circumstances) prior written notice to Gap.

18.2

Supplier Key Employees

As of the Initiation Date and from time to time as Gap and Supplier may agree during the Term, but no less frequently than annually, Gap and Supplier shall designate certain employees of Supplier as key employees (collectively, the “Supplier Key Employees,” and individually, each a “Supplier Key Employee”). Supplier Key Employees shall be dedicated to the Gap account Full-Time. The initial Supplier Key Employees are those individuals listed in Exhibit H.2 (Critical Support Personnel) and Exhibit M (Key Employees). Except for a replacement or reassignment of Supplier Key Employees due to the occurrence of an Approved Reassignment, Supplier shall not reassign or replace any Supplier Key Employee, if such reassignment or replacement would materially disrupt Gap’s operations, until the completion of any Projects to which Supplier Key Employee is assigned. No Approved Reassignment of a Supplier Key Employee shall occur without at least thirty (30) days (or as reasonably practical under the circumstances) prior written notice to Gap. *.

18.3

Conduct of Supplier Personnel

While at the Gap Service Locations, Supplier Personnel shall (1) comply with reasonable requests, standard rules, and regulations of Gap communicated to Supplier regarding personal and professional conduct (including the wearing of a particular uniform or identification badge and adhering to Gap regulations and general safety practices or procedures) generally applicable to such Gap Service Locations, and (2) otherwise conduct themselves in a businesslike manner.

Gap’s Chief Information Officer or the Gap Infrastructure Partnership Executive shall have the right to Approve or request the removal of any member of Supplier’s

*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

Gap Confidential and Proprietary Information

Personnel at a Gap Service Location (including, but not limited to, Supplier Outsourcing Relationship Executive, Supplier HR Representative, Supplier Key Employees, and Project Staff) assigned to perform under this Agreement. Should Gap, in its sole discretion, be dissatisfied with the performance, competence, responsiveness, capabilities, cooperativeness, or fitness for a particular task of any person assigned by Supplier to perform Services at a Gap Service Location under this Agreement (including, but not limited to, Supplier Outsourcing Relationship Executive, Supplier HR Representative, Supplier Key Employees, and Project Staff) Gap may request the replacement of that person; provided, however, before Supplier shall be required to remove such individual, Supplier shall have a reasonable opportunity to remedy such situation with Gap’s Chief Information Officer or the Gap Infrastructure Partnership Executive. Supplier shall make reasonable efforts to furnish a qualified replacement within fifteen (15) business days. In the event Supplier should ever need to remove any member of Supplier’s Personnel from performing services under this Agreement at a Gap Service Location, Supplier shall provide Gap with adequate notice, except in circumstances in which such notice is not possible, and shall work with Gap on a mutually agreeable transition plan so as to provide an acceptable replacement and ensure project continuity.

Supplier agrees that all Supplier Personnel assigned to performing this Agreement must have experience or suitable training and skills in the areas in which they are responsible for performing the tasks to which they will be assigned under this Agreement. In the event that the actions or inactions of Supplier Personnel create additional work in connection with the performance of the Services that would have otherwise been unnecessary in the absence of such action or inaction, Supplier shall perform all such additional work at no additional charge to Gap, unless such action or inaction is demonstrated by Supplier to be at the direction of Gap. In addition, Supplier agrees that it will take all commercially reasonable steps to assure continuity over time of the membership of the group constituting Supplier Personnel. Supplier shall promptly fill any vacancy on a Non-Recurring Initiative for which Gap is paying on a time and materials basis with personnel having qualifications comparable in the area of the Non-Recurring Initiative to those of Supplier Personnel being replaced.

18.4

Substance Abuse

Supplier agrees to immediately remove any Supplier Personnel who engage in substance abuse while on Gap Service Locations, in a Gap vehicle, or while performing Services. Substance abuse includes the sale, attempted sale, possession or use of illegal drugs, drug paraphernalia, or alcohol, or the misuse of prescription or non-prescription drugs. Supplier shall adhere strictly to its own substance abuse policy in the event of any suspected substance abuse by any Supplier Personnel. Supplier represents and warrants that Supplier and Supplier Affiliates have and will maintain a substance abuse policy and that such policy will be applicable to all Supplier or Supplier Affiliate Personnel performing Services under this Agreement. Supplier also represents and warrants that each of its Subcontractors has and will maintain a substance abuse policy and that such policy will be applicable to all employees of such Subcontractor performing Services under this Agreement.

Gap Confidential and Proprietary Information

18.5

Union Agreements and WARN Act

Supplier shall provide Gap not less than ninety (90) days written notice of the expiration of any collective bargaining agreement with unionized Supplier Personnel if the expiration of such agreement or any resulting labor dispute could potentially interfere with or disrupt the business or operations of Gap or an Authorized User or impact Supplier’s ability to timely perform its duties and obligations under this Agreement, and shall meet with Gap on a weekly basis (or such other timeframe as designated by Gap) thereafter to jointly develop an appropriate contingency/risk mitigation plan.

Supplier shall not, for a period of * after the Initiation Date, cause any of the Transitioned Employees to suffer “*” as that term is construed pursuant to the WARN Act, if * could create any liability for Gap or the Gap Authorized Users, unless Supplier delivers notices under the WARN Act in a manner and at a time such that Gap or the Gap Authorized Users bear no liability with respect thereto.

* shall be responsible for any liability, cost, claim, expense, obligation or sanction attributable to any breach by * of this Section that results in * being in violation of the WARN Act or the regulations promulgated thereunder.

19.

Management And Control

19.1

Governance

Supplier shall comply with Gap’s governance model as set forth on Exhibit D.2 (Governance).

19.2

Meetings

Weekly Operational Meeting

Every week, Gap’s Infrastructure Partnership Executive and Supplier’s Outsourcing Relationship Executive shall meet to discuss ongoing operational issues, including, any Service Level issues.

Monthly Performance Reviews

Every month, Gap and Supplier shall meet to discuss the status of the Agreement (the “Monthly Performance Reviews”). All Monthly Performance Reviews shall, at a minimum, address the issues set forth in the Monthly Performance Review Agenda attached hereto as Exhibit L (Monthly Performance Review - Standing Agenda). Gap and Supplier shall be entitled to designate specific members of its staff to attend the Monthly Performance Reviews; provided, however, the Gap Infrastructure Partnership Executive and Supplier’s Outsourcing Relationship Executive shall be required to attend all Monthly Performance Reviews in person at the Gap Site designated by Gap prior to such meeting. Supplier shall

*	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

Gap Confidential and Proprietary Information

prepare a written report addressing the standing agenda issues and be prepared to discuss the reports and the variances, if any, from the Gap view of the same issues.

Quarterly Executive Meetings

One (1) time every calendar quarter, Gap’s Chief Information Officer, Infrastructure Partnership Executive and invited executives and subject matter experts and Supplier’s Industry Vice President, Outsourcing Relationship Executive, and invited executives and subject matter executives shall meet at a time and place designated by Gap (the “Quarterly Executive Meetings”). The agenda for all Quarterly Executive Meetings shall include, at a minimum, the following information: (1) a summary report of the Monthly Performance Reviews occurring since the last Quarterly Executive Meeting, (2) key items for discussion and major issues for resolution, and (3) relationship “next steps” (i.e., specific items relating to relationship management and proposed methods to derive new and/or additional value out of Supplier’s and Gap’s relationship).

Meetings Cumulative

The meetings set forth in this Section 19.2 (Meetings) are in addition to, and cumulative with, all other meetings set forth in a Statement of Work or otherwise requested by Gap from time to time.

19.3

Gap Policies and Procedures

Supplier shall provide all Services under this Agreement in accordance with Gap’s Policies and Procedures, and to the extent it is not inconsistent with Gap’s Policies and Procedures, Supplier’s best practices.

19.4

Change Control Procedures

Within ninety (90) days after the Reference Date, Supplier shall deliver to Gap, for Gap’s Approval, a written description of the change control procedures required pursuant to Section 5 (Change Management) of Exhibit A.2 (Cross Functional Services) (the “Change Control Procedures”).

All Changes to the Gap IT Environment that would materially alter the functionality or technical environment of the Gap IT Environment shall be made pursuant to the Change Control Procedures. No Change shall be implemented without Gap’s Approval except as may be necessary on a temporary basis to maintain the continuity of the Services. Supplier shall (1) schedule all Non-Recurring Initiatives and Changes so as not to unreasonably interrupt Gap’s business operations, (2) prepare and deliver to Gap each month a rolling schedule for ongoing and planned Changes for the next three (3) month period, (3) monitor the status of Changes against the applicable schedule, and (4) document and provide to Gap notification (which may be given orally provided that such oral notice is confirmed in writing to Gap within

Gap Confidential and Proprietary Information

two (2) business days) of all Changes performed on a temporary basis to maintain the continuity of the Services no later than the next business day after the Change is made.

In the event information contained in any Documentation developed by Supplier under this Agreement is no longer accurate or current due to the implementation of a Change, Supplier shall, within one (1) month of the Change, revise the impacted Documentation and provide revised Documentation to Gap. The Change Control Procedures shall be included in the Procedures Manual.

19.5

Gap Infrastructure Partnership Executive

A. Gap’s Infrastructure Partnership Executive for this Agreement shall be as set forth below (or his or her designee):

B. Gap shall notify Supplier in writing of any change in the name or address of Gap’s Infrastructure Partnership Executive.

C. Gap’s Infrastructure Partnership Executive shall be responsible for Gap’s performance of its tasks under the Statements of Work.

D. Gap’s Infrastructure Partnership Executive shall meet or confer with Supplier Outsourcing Relationship Executive on a regular basis.

E. Gap Infrastructure Partnership Executive shall have the right to inspect any and all Services provided by or on behalf of Supplier.

19.6

Gap Personnel

Gap Inc · 10-K · For 1/28/06 · EX-10.18

Filed On 3/28/06 2:41pm ET · SEC File 1-07562 · Accession Number 1193125-6-64998

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