<PAGE> 1
FORM 10-Q/A
AMENDMENT NO. 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended March 31, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For The Transition Period From _______ to ________
Commission File Number 0-26964
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Carnegie Group, Inc.
--------------------
Delaware 25-1435252
-------- ----------
(State or other Jurisdiction of (I.R.S Employer Identification Number)
Incorporation or Organization)
Five PPG Place, Pittsburgh, Pennsylvania 15222
- ---------------------------------------- -----
(Address of principal executive offices) (Zip Code)
(412) 642-6900
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter period that the registrant
was required to files such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock as of the latest practicable date:
Class Outstanding at April 30, 1997
----- -----------------------------
Common Stock, $.01 par value 6,287,784
<PAGE> 2
FORM 10-Q/A
CARNEGIE GROUP, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page Number
<S> <C>
PART 1 FINANCIAL INFORMATION
Item 1. Financial Statements
Carnegie Group, Inc. and Subsidiaries 3
Consolidated Statements
of Operations for the three months
ended March 31, 1997 and 1996
Carnegie Group, Inc. and Subsidiaries 4
Consolidated Balance Sheets
Carnegie Group, Inc. and Subsidiaries 5
Consolidated Statements of
Cash Flows
Note to Unaudited Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of 7
Financial Condition and Results of Operations
Item 3 Quantitative and Qualitative Disclosures about 11
Market Risks
PART 2 OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
CARNEGIE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
---------------------------------------
March 31, March 31,
1997 1996
---- ----
<S> <C> <C>
Revenue
Software services--Unrelated parties $ 5,499,732 $ 7,442,750
Software services--Related parties 1,007,108 750,649
------------- -------------
Total software services 6,506,840 8,193,399
Software licenses 625,078 129,941
------------- -------------
Total revenue 7,131,918 8,323,340
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Costs and expenses:
Cost of revenue - Unrelated parties 3,837,500 4,701,682
Cost of revenue - Related parties 581,745 362,511
------------- -------------
Total cost of revenue 4,419,245 5,064,193
Research and development 357,682 179,014
Selling, general and administrative 1,876,836 2,135,969
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Total costs and expenses 6,653,763 7,379,176
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Income from operations 478,155 944,164
Other income (expense):
Interest income 163,898 147,166
Other income 6,199 6,099
Interest expense (3,645) (4,857)
------------- -------------
Total other income 166,452 148,408
------------- -------------
Income before income taxes 644,607 1,092,572
Income tax provision (256,360) (409,387)
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Net income $ 388,247 $ 683,185
============= =============
Earnings per share of common stock $ .06 $ .10
============= =============
Weighted average number of common shares outstanding 6,952,814 7,176,127
============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 4
CARNEGIE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
---- ----
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 14,396,031 $ 14,691,765
Accounts receivable 3,312,839 2,751,316
Accounts receivable from related parties 553,671 769,223
Accounts receivable--unbilled 3,236,313 3,660,765
Accounts receivable related parties--unbilled 405,807 188,302
Deferred income taxes 2,155,072 2,179,426
Other current assets 479,586 403,508
------------- -------------
Total current assets 24,539,319 24,644,305
------------- -------------
Property and equipment, net of accumulated depreciation
and amortization 2,413,834 2,046,415
Deferred income taxes 1,571,674 1,775,480
Other assets 21,517 23,055
------------- -------------
Total assets $ 28,546,344 $ 28,489,255
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable $ 1,012,446 $ 614,458
Payables to related parties 437,147 1,034,608
Accrued compensation 600,279 706,965
Advance billings and deferred revenue 1,131,989 1,101,221
Accrued rent 446,124 538,641
Other accrued liabilities 862,419 821,752
Obligations under capital leases--current portion 18,627 33,242
------------- -------------
Total liabilities 4,509,031 4,850,887
------------- -------------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value; 20,000,000 shares authorized,
6,513,991 and 6,512,038 shares issued at March 31, 1997
and December 31, 1996 respectively 65,140 65,120
Capital in excess of par value 31,394,758 31,384,080
Accumulated deficit (6,947,585) (7,335,832)
Treasury stock, 190,000 shares at March 31, 1997 and
December 31, 1996 (at cost) (475,000) (475,000)
------------- -------------
Total stockholders' equity 24,037,313 23,638,368
------------- -------------
Total liabilities and stockholders' equity $ 28,546,344 $ 28,489,255
============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
CARNEGIE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
-----------------------------------------
March 31, March 31,
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 388,247 $ 683,185
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Depreciation and amortization 283,841 224,679
Deferred income taxes 228,160 357,547
Changes in working capital component:
Accounts receivable (137,071) (826,576)
Accounts receivable - Related parties (1,953) (600,914)
Other assets (74,540) 18,329
Trade accounts payable 397,988 (205,253)
Payables to related parties (597,461) (341,358)
Accrued compensation (106,686) (281,844)
Accrued rent (92,517) (4,519)
Other accrued liabilities 40,667 805,515
Advance billings and deferred revenue 30,768 333,594
------------- -------------
Net cash (used in) provided by operating
activities 359,443 162,385
Cash flows from investing activities:
Proceeds from the sale of fixed assets, net -- --
Capital expenditures (651,259) (369,097)
------------- -------------
Net cash used in investing activities (651,259) (369,097)
Cash flows from financing activities:
Principal payments under capital lease obligations (14,615) (13,335)
Proceeds from sales of common stock, net 10,697 65,276
------------- -------------
Net cash (used in) provided by financing
activities (3,918) 51,941
------------- -------------
Net change in cash (295,734) (154,771)
Cash and cash equivalents:
Beginning of period 14,691,765 12,394,588
------------- -------------
End of period $ 14,396,031 $ 12,239,817
============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PRESENTATION
In the opinion of the management of Carnegie Group, Inc. (the
"Company"), these unaudited consolidated financial statements include all
adjustments, consisting only of normal recurring adjustments, considered
necessary for a fair presentation of operating results for the three month
period ended March 31, 1997. Results for the interim periods are not
necessarily indicative of results for the full year. The accompanying
statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and pursuant to the rules and
regulations of the Securities and Exchange Commission and therefore do not
include all information and footnotes required by generally accepted accounting
principles for complete financial statements. Accordingly, the information
contained in this Form 10-Q should be read in conjunction with the financial
statements and notes thereto contained in the Company's Form 10-K for the year
ended December 31, 1996 as filed with the Securities and Exchange Commission.
RECENT ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 128 "Earnings Per
Share." SFAS No. 128 establishes new standards for computing and presenting
earnings per share. The Company is required to adopt the provisions of SFAS No.
128 for its consolidated financial statements for the year ended December 31,
1997 and subsequent interim periods. Upon adoption, the standard also requires
the restatement of all prior period earnings per share information presented.
The adoption of SFAS No. 128 is not expected to have a material effect on the
Company's earnings per share computations or disclosures.
6
<PAGE> 7
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
General
Carnegie Group, Inc. ("Carnegie Group" or the "Company") provides
client/server software development services that integrate advanced
user-centered, intelligent software technologies with clients' existing
computing infrastructures to automate and enhance complex business processes.
The Company performs business and technical consulting, custom software
development, and systems integration services to improve clients' productivity
and market position in two business areas: customer interaction; and logistics,
planning and scheduling. Within these areas, the Company targets its services
to clients in the financial services, government, manufacturing and
telecommunications industries.
The Company's expertise encompasses a wide range of advanced software
technologies, including knowledge-based systems, object-oriented technology,
advanced graphical user interfaces, constraint-directed search and distributed
computing. The Company captures certain aspects of its business area experience
and advanced technology expertise in a portfolio of reusable software templates
that can be used as building blocks to create software solutions quickly and
effectively. In addition, Carnegie Group employs an iterative or "spiral"
approach to software design that begins with the construction of a prototype
and continues through testing of successive versions of the software against
project requirements. This iterative design facilitates rapid software
development, encourages client feedback and leads to greater congruence with
client needs and expectations.
Since inception, Carnegie Group has emphasized relationships with leading
corporations in its targeted industries. These relationships have provided the
Company with opportunities for growth through the provision of additional
services to existing clients and through references to other companies within
the Company's targeted industries. Carnegie Group's clients include U S WEST
Communications, Inc., the United States Transportation Command, U.S. Army,
Caterpillar Inc., BellSouth Telecommunications, Inc., First USA Bank, Highmark
Blue Cross Blue Shield and Philips Medical Systems.
The Company only includes in backlog signed contracts that either have
milestones yet to be attained or for which the Company can make a reasonable
estimate of work yet to be performed. The Company's backlog was $17.3 million
at March 31, 1997 compared to $14.1 million at March 31, 1996. Backlog at March
31, 1997 increased from backlog of $9.6 million at December 31, 1996. This
increase reflected large contract closures resulting from expanded business
development capabilities. As most of the contracts in backlog are terminable by
the Company or the client upon short notice, there can be no assurance that
contracts reflected in backlog are a reliable measure of future revenue.
7
<PAGE> 8
Comparison of Quarters Ended March 31, 1997 and March 31, 1996.
Revenue. Total revenue was $7.1 million in the first quarter of 1997
compared to $8.3 million in the first quarter of 1996, a decrease of $1.2
million or 14.3%. This decrease resulted principally from volume decreases in
sales of software services.
Total software services revenue was $6.5 million in the first quarter of
1997 compared to $8.2 million in the first quarter of 1996, a decrease of $1.7
million or 20.6%. A significant fixed-price contract was renegotiated in the
second quarter of 1996. The impact of that renegotiated contract resulted in
lower quarterly revenue and earnings levels for the second, third and fourth
quarters of 1996, and for the first quarter of 1997, but not the first quarter
of 1996. Revenue from software services-unrelated parties was $5.5 million in
the first quarter of 1997 compared to $7.4 million in the first quarter of
1996, a decrease of $1.9 million or 26.1%. This decrease was primarily
attributable to the renegotiated contract described above. Revenue from
software services-related parties increased by 34.2 % to $1.0 million in the
first quarter of 1997 compared to $.8 million in the first quarter of 1996.
This increase was primarily attributable to an increase in customer contact
engagements for a telecommunications industry client.
Revenue from software licenses was $625,000 in the first quarter of 1997
compared to $130,000 in the first quarter of 1996, an increase of $495,000 or
381.0%. This increase was attributable to increased sales of reusable software
templates.
Cost of Revenue. Cost of revenue consists primarily of salaries and
related benefits for personnel, and also includes an allocated portion of rent,
building services and computer equipment services and expenses. Total cost of
revenue was $4.4 million in the first quarter of 1997, compared to $5.1 million
in the first quarter of 1996, a decrease of $.7 million or 12.7%. This decrease
was primarily attributable to a decrease in the cost of consultant labor. Cost
of revenue-unrelated parties was $3.8 million in the first quarter of 1997
compared to $ 4.7 million in 1996, a decrease of $.9 million or 18.4%. This
decrease was primarily attributable to the decreased volume of software
services performed. Cost of revenue-related parties was $.6 million in the
first quarter of 1997 compared to $.4 million in the first quarter of 1996, an
increase of $.2 million or 60.5%. This increase was primarily attributable to
an increase in customer contact engagements for a telecommunications industry
client.
Research and Development. Research and development expenses were $358,000
in the first quarter of 1997 compared to $179,000 in the first quarter of 1996,
an increase of $179,000 or 99.8%. This increase was primarily due to the
Company's decision to increase the investment in template and methodology
development.
Selling, General and Administrative. Selling, general and administrative
expenses include costs of proposal development and proposal writing, marketing
communications and advertising, sales and management staff, and corporate
services functions including accounting, human resources and legal services,
along with corporate executive staff. Selling, general and administrative
expenses were $1.9 million in the first quarter of 1997 compared to $2.1
million in the first quarter of 1996, a decrease of $.2 million or 12.1%.
8
<PAGE> 9
Other Income (Expense). Other income (expense) was $167,000 in the first
quarter of 1997 compared to $148,000 in the first quarter of 1996, an increase
of $19,000 or 12.2%. This income primarily represents interest income earned on
net proceeds received in December 1995 from the Company's initial public
offering, which remain invested in an interest-bearing account.
Income Tax Provision. An income tax provision of $257,000 was recorded in
the first quarter of 1997, based on the Company's estimate of the effective tax
rate for the year.
SFAS No. 109, "Accounting for Income Taxes," requires a valuation
allowance when it is "more likely than not that some portion or all of the
deferred tax assets will not be realized." It further states that "forming a
conclusion that a valuation allowance is not needed is difficult when there is
negative evidence such as cumulative losses in recent years." The ultimate
realization of the Company's deferred income tax asset depends on its ability
to generate sufficient taxable income in the future. The Company has weighed
the positive evidence of sustained profitability over the last three years and
future income expectations within the Company's three year strategic planning
horizon against the negative evidence of dependence upon a limited number of
customers and other uncertainties and has concluded that retaining a valuation
allowance related to net operating losses is no longer necessary.
In estimating the amount of its realizable deferred tax asset, the Company
gives substantial weight to recent historical results. Significant changes in
circumstances or in enacted tax laws which affect the valuation allowance are
recorded when they occur. The Company's annual strategic business planning
process takes place in the fourth quarter of the year, and the valuation
allowance is adjusted for future years' income expectations resulting from that
process. When preparing subsequent interim and annual financial statements, the
Company reevaluates whether there has been any significant change in the
assumptions underlying its plan and adjusts the valuation allowance as
necessary.
9
<PAGE> 10
Liquidity and Capital Resources
The Company has funded its operations in recent years primarily through
cash generated from operations, the use of cash reserves, and in part by
borrowing under available lines of credit. The Company has also funded its
operations through the net proceeds of the initial public offering of its
Common Stock consummated in December 1995.
During the first quarter of 1997, the Company generated $359,000 in
positive cash flow from its operating activities. Overall, the Company had a
net use of cash of $296,000. The net use of cash resulted from a significant
investment in capital equipment. In the first quarter of 1997, capital
expenditures totaled $651,000.
The Company's net accounts receivable decreased by $139,000 for the
quarter ended March 31, 1997. Invoicing of amounts to clients generally occurs
within 45 days of time and materials cost incurrence, unless a specific
schedule is agreed upon, and payment follows invoicing in accordance with
customary terms. The Company has not experienced any significant write-downs of
receivables, nor does the Company expect that payments are doubtful;
accordingly, the Company has not made any allowance for doubtful accounts.
Advance billings and deferred revenue increased $31,000 at March 31, 1997
when compared to December 31, 1996. Advanced billings and deferred revenue
balances will normally change from period to period. Any increase reflects
billings in advance of revenue earned, but which were billed in accordance with
established or agreed billing schedules. These amounts are recorded as deferred
revenue until earned. The timing and magnitude of such advance billings vary
from contract to contract and from client to client.
The Company currently has a committed line of credit agreement in the
amount of $3.5 million in place with PNC Bank, N.A. (the "Bank"). Borrowings
under this agreement are collateralized by accounts receivable. The line of
credit bears interest at the Bank's prime interest rate and the Bank charges a
0.15% fee per annum on the unused portion of that line of credit. The Bank's
prime interest rate was 8.50% at March 31, 1997 compared to 8.25% at December
31, 1996. No borrowings were outstanding against the line of credit at March
31, 1997 or December 31, 1996.
The Company believes that its current cash balances, together with cash
generated from operations and borrowing available under its line of credit,
will satisfy the Company's working capital and capital expenditure requirements
during fiscal year 1997 and the foreseeable period thereafter. In the longer
term, the Company may require additional sources of liquidity to fund future
growth. Such sources of liquidity may include additional equity offerings or
debt financings. Capital expenditures are typically made for computing
equipment, software, physical plant, and furniture and fixtures in order to
seek enhancements in the productivity of the Company's employees and to support
growth.
10
<PAGE> 11
ITEM 3
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable
- -------------------------------------------------------------------------------
To the extent that this report on Form 10-Q contains forward looking
statements with respect to anticipated future results including statements with
respect to growth in the Company's business and client engagements, such
statements involve a number of risks and uncertainties that could materially
and adversely affect future results. Such risks include, among others, the
potential variability of the Company's quarterly operating results, in part due
to significant client concentrations and relatively large projects. For a more
detailed discussions of risk factors affecting the Company, please refer to the
risk factors set forth in the Company's Annual Report of Form 10-K for the year
ended December 31, 1996.
11
<PAGE> 12
PART II - OTHER INFORMATION
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The exhibits listed below are filed or incorporated by reference as part of this
quarterly report on Form 10-Q:
10.01 Development Agreement, dated as of December 31, 1996, by and between
U S WEST Business Resources, Inc., as agent for U S WEST Advanced
Technologies, Inc. and U S WEST Communications, Inc., and Carnegie
Group, Inc. (confidential treatment with respect to certain information
in this exhibit has been requested of the Commission pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as amended).
10.02 Development Agreement, dated as of January 24, 1997, by and between
U S WEST Advanced Technologies, Inc., U S WEST Communications, Inc.,
and Carnegie Group, Inc. (confidential treatment with respect to
certain information in this exhibit has been requested of the Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934,
as amended).
10.03 Letter Agreement, dated as of March 25, 1997, by and between
U S WEST Business Resources, Inc., as agent for U S WEST Advanced
Technologies, Inc. and U S WEST Communications, Inc., and Carnegie
Group, Inc. (confidential treatment with respect to certain information
in this exhibit has been requested of the Commission pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as amended).
10.04 Letter Agreement, dated as of March 6, 1997, by and between
U S WEST Business Resources, Inc., as agent for U S WEST Advanced
Technologies, Inc. and U S WEST Communications, Inc., and Carnegie
Group, Inc. (confidential treatment with respect to certain information
in this exhibit has been requested of the Commission pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as amended).
11.1 Statement regarding computation of Per Share Earnings
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the quarter ended March
31, 1997.
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Date: June 26, 1997 CARNEGIE GROUP, INC.
/s/ DENNIS YABLONSKY
----------------------------
Dennis Yablonsky
President and Chief Executive Officer
/s/ JOHN W. MANZETTI
----------------------------
John W. Manzetti
Executive Vice President,
Chief Financial Officer and
Treasurer
13
<PAGE> 14
EXHIBIT INDEX
Exhibit No. Description
10.01 Development Agreement, dated as of December 31, 1996, by and between
U S WEST Business Resources, Inc., as agent for U S WEST Advanced
Technologies, Inc. and U S WEST Communications, Inc., and Carnegie
Group, Inc. (confidential treatment with respect to certain information
in this exhibit has been requested of the Commission pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as amended).
10.02 Development Agreement, dated as of January 24, 1997, by and between
U S WEST Advanced Technologies, Inc., U S WEST Communications, Inc.,
and Carnegie Group, Inc. (confidential treatment with respect to
certain information in this exhibit has been requested of the
Commission pursuant to Rule 24b-2 under the Securities Exchange Act
of 1934, as amended).
10.03 Letter Agreement, dated as of March 25, 1997, by and between
U S WEST Business Resources, Inc., as agent for U S WEST Advanced
Technologies, Inc. and U S WEST Communications, Inc., and Carnegie
Group, Inc. (confidential treatment with respect to certain information
in this exhibit has been requested of the Commission pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as amended).
10.04 Letter Agreement, dated as of March 6, 1997, by and between
U S WEST Business Resources, Inc., as agent for U S WEST Advanced
Technologies, Inc. and U S WEST Communications, Inc., and Carnegie
Group, Inc. (confidential treatment with respect to certain information
in this exhibit has been requested of the Commission pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as amended).
11.1 Statement regarding computation of per share earnings
14
<PAGE> 1
EXHIBIT 10.01
-------------
Confidential treatment with respect to certain information in this exhibit has
been requested of the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended. The bracketed portions
of this exhibit have been omitted from material filed in accordance with Rule
24b-2 and have been filed separately with the Commission.
<PAGE> 2
US WEST AGREEMENT # 9600050389
TASK ORDER # 3
DEVELOPMENT AGREEMENT NO. 35-001-97
CALL HANDLING - 1997
This Development Agreement is entered into on the 31ST day of DECEMBER,
1996 by and between U S WEST Business Resources, Inc. as agent for U S WEST
Advanced Technologies, Inc., a Colorado corporation ("USW-Technologies"), U S
WEST Communications, Inc., a Colorado corporation ("USW-Communications"),
(hereinafter USW-Technologies, USW-Communications and their Affiliates will be
collectively referred to as "Licensee"), and Carnegie Group, Inc., a Delaware
corporation with a principal place of business at Five PPG Place, Pittsburgh, PA
15222 ("CGI").
ARTICLE 1 - RECITALS
--------------------
1.1 Licensee and CGI entered into a General License Agreement (the
"GLA") on December 17, 1992 in which the parties committed to enter into a
series of Artificial Intelligence ("AI") technology research, experimentation
and development agreements ("Development Agreements") over a period beginning
on the Effective Date, as defined in the GLA, and ending on the fourth
anniversary of the Effective Date, and extended by mutual consent through March
15, 1997.
1.2 Licensee and CGI now desire to enter into this Development
Agreement pursuant to which the parties, as contemplated by the GLA, will
commit to a continuing project of specific research, experimentation and
development as stated herein.
NOW, THEREFORE, in consideration of the mutual covenants set forth in
this Development Agreement, Licensee and CGI agree as follows:
ARTICLE 2 - DEFINITIONS
-----------------------
2.1 Defined terms used in this Development Agreement shall have the
meanings set forth in Article 2 of the GLA, unless different meanings are
specifically set forth in this Development Agreement.
2.2 "Project" means the specific research, experimentation and
development which CGI will perform for Licensee under this Development
Agreement.
CALL HANDLING 35-001-97 1 DECEMBER 31, 1996
<PAGE> 3
US WEST AGREEMENT # 9600050389
TASK ORDER # 3
2.3 "Project Description" means a detailed written description of
the Project, including but not limited to:
(a) any Deliverable Performance Specifications; and
(b) a listing which identifies and describes, as to the Project:
(i) any Deliverables intended to be created in the course of
the Project; and
(ii) any Licensee Specific Technology intended to be created
in the course of the Project; and
(iii) any Licensee Proprietary Information or Licensee
Confidential Information to be made available to CGI in
the course of the Project; and
(iv) any Generic Research Technology intended to be created in
the course of the Project.
2.4 "Projected Cost" means that projected cost referred to in Article
9 of the GLA and set forth in Article 5 hereof.
2.5 "Projected Date" means the projected date for completion of the
Project agreed upon by the parties and set forth in Article 6 hereof, including
any Agreed Completion Date.
ARTICLE 3 - EFFECT OF THE GLA
-----------------------------
This Development Agreement is subject in all respects to the terms and
conditions of the GLA. Ownership of Generic Research Technology developed
hereunder is vested in U S WEST, in accordance with Article 3.3 of the GLA and
the payment of ALLIANCE rates by Licensee to CGI as provided in Exhibit 2,
attached hereto.
ARTICLE 4 - PROJECT DESCRIPTION
-------------------------------
4.1 The Project Description is set forth in Exhibit 1 attached hereto.
CALL HANDLING 35-001-97 2 DECEMBER 31, 1996
<PAGE> 4
US WEST AGREEMENT # 9600050389
TASK ORDER # 3
4.2 CGI shall use its best efforts to complete the Project in
accordance with the Project Description. Except for the warranties set forth in
Article 8 of the GLA regarding any Deliverable Performance Specifications set
forth in Exhibit 1 of this Development Agreement, CGI hereby disclaims any
express or implied warranty that all or any portion of the Project intended to
be created or developed pursuant to this Development Agreement will perform in
accordance with the Project Description or any other criteria.
ARTICLE 5 - PROJECTED COST; PAYMENT
-----------------------------------
5.1 CGI's Projected Cost for the Project is $[ ]. An itemized
account of the Projected Cost including person-year rates applied as Alliance,
Technology and/or Co-Development Rates as defined in the GLA is set forth in
Exhibit 2 attached hereto. Modifications to the Projected Cost (and any payments
under Section 5.2) shall be governed by Sections 9.4 and 14.7 of the GLA.
5.2 Licensee shall pay to CGI, in consideration for CGI's performance
of its obligations under this Development Agreement, the sum of $ * in
accordance with the payment schedule set forth in Article 5 of the GLA.
"*" REPRESENTS TIME AND MATERIAL COSTS IN ACCORDANCE WITH EXHIBIT 2 OF THIS
DEVELOPMENT AGREEMENT
ARTICLE 6 - PROJECTED DATE
--------------------------
6.1 The Projected Date for completion of the Project is DECEMBER 31,
1997. A time schedule listing projected dates for completion of interim stages
of the Project is set forth in Exhibit 3 attached hereto.
6.2 CGI shall use its best efforts to complete the Project by the
Projected Date. Except for the obligations set forth in Article 9 of the GLA
regarding any Agreed Completion Date set forth in Exhibit 3 of this Development
Agreement, CGI hereby disclaims any express or implied warranty that all or any
portion of the Project intended to be created or developed pursuant to this
Development Agreement will be completed on any date certain, including the
Projected Date.
ARTICLE 7 - TERMS OF DELIVERY AND RISK OF LOSS
----------------------------------------------
7.1 CGI will deliver, at its expense, to Licensee any Deliverables and
Licensee Specific Technology in accordance with the Exhibits hereto.
CALL HANDLING 35-001-97 3 DECEMBER 31, 1996
<PAGE> 5
US WEST AGREEMENT # 9600050389
TASK ORDER # 3
7.2 CGI will bear the risk of loss or destruction of such Deliverables
and Licensee Specific Technology until the delivery of such items to Licensee
at the location designated by Licensee. For the purposes hereof, "delivery"
shall mean physical delivery to a facility and shall not include installation.
ARTICLE 8 - INSTALLATION
------------------------
8.1 CGI will provide, at Licensee's request and expense, technical
assistance to Licensee sufficient for the proper installation of Deliverables
and Licensee Specific Technology in Licensee facilities. Such assistance may
include, if deemed necessary by Licensee, the presence of one or more CGI
employees at Licensee facilities to assist in such installation. Licensee will
pay, in accordance with the GLA, travel, room and board expense incurred by
such employees of CGI.
8.2 Licensee will bear the risk of loss or destruction of the
Deliverables, Licensee Specific Technology or any other items delivered to
Licensee facilities during and after installation.
ARTICLE 9 - OPERATIONAL TRAINING
--------------------------------
CGI will provide, in accordance with Article 6 of the GLA, adequate
training to no more than 0 Licensee employees regarding the proper operation
and use of Deliverables, Licensee Specific Technology and Generic Research
Technology created in the course of the Project.
ARTICLE 10 - MAINTENANCE
------------------------
CGI will perform maintenance and repair services on Deliverables,
Licensee Specific Technology and Generic Research Technology in accordance with
the GLA.
ARTICLE 11 - MODIFICATIONS AND AMENDMENTS
-----------------------------------------
Any modifications to the Project or to this Development Agreement,
including but not limited to modifications to the Project Description, the
Projected Costs, or the Projected Date, to which the parties agree after the
date of execution of the Development Agreement,
CALL HANDLING 35-001-97 4 DECEMBER 31, 1996
<PAGE> 6
US WEST AGREEMENT # 9600050389
TASK ORDER # 3
will be evidenced by a written supplement to this Development Agreement
executed by both parties.
ARTICLE 12 - DISPUTE RESOLUTION
-------------------------------
12.1 Any claim, controversy or dispute which arises between the
parties, their agents, employees, officers, directors, or affiliates
("Dispute") which the parties are unable to settle through consultation and
negotiation may be mediated under the Commercial Mediation rules of the
American Arbitration Association ("AAA") by a mutually acceptable mediator. Any
Dispute which cannot be resolved through negotiation or mediation shall be
resolved by binding arbitration as provided in this Article. The arbitrability
of claims shall be determined under the Federal Arbitration Act, 9 USC Secs.
1-15. Notwithstanding the foregoing, the parties may cancel or terminate this
Agreement in accordance with its terms and conditions without being required to
follow the procedures set forth in this Article.
12.2 A single arbitrator engaged in the practice of law, who is
knowledgeable about the subject matter of this Agreement and the matter in
Dispute, shall conduct the arbitration under the rules of the AAA then in
effect, except as otherwise provided herein. The arbitrator shall be selected
in accordance with AAA procedures from a list of qualified people maintained by
AAA. The arbitration shall be conducted in Denver, Colorado, and all expedited
procedures prescribed by the AAA rules shall apply. The laws of Colorado shall
govern the construction and interpretation of this Agreement. The arbitrator's
decision and award shall be final, conclusive and binding, and judgment may be
entered upon it in accordance with applicable law in any court having
jurisdiction thereof.
12.3 Either party may request from the arbitrator injunctive relief to
maintain the status quo until such time as the arbitration award is rendered or
the Dispute is otherwise resolved. The arbitrator shall not have authority to
award punitive damages. Each party shall bear its own costs and attorneys'
fees, and the parties shall share equally the fees and expenses of the mediator
and arbitrator.
12.4 If any party files a judicial or administrative action asserting
claims subject to arbitration, as prescribed herein, and another party
successfully stays such action and/or compels arbitration of said claims, the
party filing said action shall pay the other party's costs and expenses
incurred in seeking such stay and/or compelling arbitration, including
reasonable attorneys' fees.
12.5 CGI agrees that in the event of any Dispute between the parties,
it will continue to provide Purchases without interruption.
CALL HANDLING 35-001-97 5 DECEMBER 31, 1996
<PAGE> 7
US WEST AGREEMENT # 9600050389
TASK ORDER # 3
12.6 CGI shall include in all contracts with its subcontractors
provisions similar to those in this Article, requiring that all disputes in any
way involving Licensee shall be settled by binding arbitration.
ARTICLE 13 - INTEGRATION
This Development Agreement, the Exhibits attached hereto and the terms
of the GLA set forth the entire and exclusive agreement and understanding of
the parties relating to the subject matter contained herein, and supersede all
prior and contemporary discussions. Neither party will be bound by any
definition, condition, warranty or representation except as expressly set forth
in this Development Agreement or the GLA or as subsequently set forth in
writing signed by authorized representatives of each party.
IN WITNESS WHEREOF, Licensee and CGI have executed this Development
Agreement in duplicate by their respective authorized representatives.
CARNEGIE GROUP, INC. LICENSEE
By: /s/ John W. Manzetti By: /s/ Dennis R. Dempsey
----------------------- ------------------------------
Title: Exec VP and CFO Title: VP - IAD
------------------ -------------------------
Date: 1/18/97 Date: 1/14/97
------------------ -------------------------
U S WEST Business Resources, Inc.
Acting as Agent for: LICENSEE
By: /s/ Marian K. Rathbun
------------------------------
Title: Contract Agent
-------------------------
Date: 1/13/97
-------------------------
CALL HANDLING 35-001-97 6 DECEMBER 31, 1996
<PAGE> 8
US WEST AGREEMENT # 9600050389
TASK ORDER # 3
EXHIBIT 1
PROJECT DESCRIPTION
INTRODUCTION
------------
This Agreement covers efforts to be performed by CGI from January 1, 1997
through December 31, 1997 for U S WEST in support of enhancements to the Call
Handling Front End Screen & Route (FES&R) project. The overall Call Handling
project is being undertaken by U S WEST to deliver several system deployments:
* Load Balance I
* Load Balance II
* Voice Over Data (Screen Pop) for 5ESS
* Voice Over Data (Screen Pop) for DMS
* Activity-based Routing
The deliverables covered by this Agreement are in support of the Load Balance
Releases, the Voice Over Data (Screen Pop) Releases, and Activity-based Routing
Releases. Additionally, CGI will handle/develop any Change Requests (CRs)
assigned by the U S WEST Project Manager within the funding limitations of this
Agreement.
CGI ROLES AND RESPONSIBILITIES
------------------------------
Based on the defined scope and deliverables, and the architecture design and
detailed design work that has been accomplished through December of 1996 by CGI
and U S WEST (reference the previous U S WEST/CGI Development Agreement
35-003-96), the following roles and responsibilities can be defined for the
Call Handling / FES&R project for 1997:
* CGI will be responsible for project management for specific modules of
the overall U S WEST Call Handling architecture. This involvement includes
the functional specification, detail design, development, test (unit test
and component integration test), documentation, and delivery of the
modules outlined below:
LOAD BALANCE
- ------------
* LOAD BALANCE I - The Load Balance I release will provide equitable routing
for queued and non-queued Call Handing situations for resource groups. It
will balance the queues to equal and different teams and performing ratio
routing. It also provides
CALL HANDLING 35-001-97 7 DECEMBER 31, 1996
<PAGE> 9
US WEST AGREEMENT # 9600050389
TASK ORDER # 3
for a direct data feed from the 5ESS to capture additional parameters
required for equitable resource routing. For a subset of the toolset
screens, a sharper GUI that is more efficient with a quick and easy update
capability will also be provided. The GUI will also provide field level
validation, consistency checking, and rule validation.
* LOAD BALANCE II - The Load Balance II release will provide for a direct
data feed from the DMS 100 to capture additional parameters required for
equitable resource routing. Provide possible enhancements to Load Balance
I release.
ACTIVITY-BASED ROUTING
- ----------------------
* ACCOUNT ACTIVITY (AA) - Customer accounts, identified by a billing
telephone number, at times have activities associated with them. These
activities include pending order, pending repair, and collection status.
The Routing Engine will access and utilize account activity in determining
a route for a call.
* PERSISTENT CONDITIONS LOADER (PC) - Persistent conditions are associated
with individual customer accounts. These originate when a customer
initiates multiple transactions (calls) of the same type in a given time
period. The routing engine will use business rules that will indicate the
routing for a call when a persistent condition for a customer exists.
* GLOBAL CONDITIONS (GC) - Global Conditions are conditions that apply to
groups of telephone numbers. Examples are promotions, product trials, and
disasters. The routing engine will access and utilize global conditions
that apply in determining a route for a call.
* INFORMATION REQUEST (PING-PONG) - This module allows Call Handling to
return to the VRU to request for additional information or to play a voice
script to the caller. The Information Request is known as Ping Ponging
since multiple interactions between the VRU and FES&R are possible.
VOICE OVER DATA (SCREEN POP)
- ----------------------------
Voice Over Data (Screen Pop) is a client project which adds new Computer
Telephony Integration and extends call handling to the Customer Contact
Employee's desktop. It pops call information on the Customer Contact Employee's
desktop. This project will be deployed in two releases. The first release
provides screen pop capability for Customer
CALL HANDLING 35-001-97 8 DECEMBER 31, 1996
<PAGE> 10
US WEST AGREEMENT # 9600050389
TASK ORDER # 3
Contact Employee's using 5ESS ACDs. The second release provides screen pop
capability for Customer Contact Employees using DMS100 ACDs. The Voice Over
(Screen Pop) modules which CGI is responsible for include:
* SCREEN POP MANAGER - Screen Pop Manager receives call information, call
identification and routing information from the routing engine. Screen
Pop Manager tracks calls being transferred from VRUs to ACDs. After calls
arrive at the ACD Screen Pop Manager receives status about calls
including: call arrival, call abandoned and call delivery from the Message
Filters. Screen Pop Manager matches call information from the routing
engine with individual calls. Screen Pop manager tracks the call as it
moves through the ACD. When the ACD delivers a call to a Customer Contact
Employee Screen Pop Manager sends call information to the appropriate Call
Information Server.
* MESSAGE FILTERS - For each ACD Listener a Message Filter filters messages
going to Screen Pop Manager from the ACD Listener. Each ACD type, 5ESS and
DMS100, requires a filter. The filter translates the ACD messages unique to
each ACD type into generic messages going to Screen Pop Manager.
* CALL INFORMATION SERVER - For Voice Over Data - Screen Pop each CCE has a
NT Workstation on their desktop. Call Information Server runs on the CCE's
NT Workstation. It receives the call information from the Screen Pop
Manager. Call Information Server forwards the call information to the Call
Information Display on the CCE's NT Workstation. Call Information Server
also provides an interface for other U S WEST applications to receive the
call information.
* CALL INFORMATION DISPLAY - Call Information Display receives the call
information from the Call Information Server. Call Information Display
displays a window with the appropriate call information.
* SYAD GUI FOR VOICE OVER DATA - SCREEN POP - The Voice Over Data - Screen
Pop requires new capabilities be added to the SYAD GUI. The new
capabilities provide for the maintenance of VRU, workstation and display
items reference tables.
* DMS100 ACD LISTENER - The DMS ACD Listener for Voice Over Data - Screen Pop
uses the CompuCall Computer Telephone Integration interface for the DMS100
ACD. This listener reads the CompuCall data stream from the DMS100 ACD. It
decodes the CompuCall messages and forwards the messages to a message
filter.
CALL HANDLING 35-001-97 9 DECEMBER 31, 1996
<PAGE> 11
US WEST AGREEMENT # 9600050389
TASK ORDER # 3
ROUTING ENGINE
- --------------
CGI will continue to be involved in Routing Engine enhancements in 1997.
Specific Routing Engine modules that CGI is responsible for include:
* FES&R INTERFACE SERVER MODULE - This module handles FES&R Server call
routing requests from the VRU Interface Client Module.
* CALL CONTROL MANAGER (ROUTING ENGINE) - This module handles an individual
call, from the receipt of the new call request until a routing message is
returned for the call. Enhanced routing capabilities will account
activities, global conditions, persistent conditions and information
requests.
* ACD DATA FEED MANAGER - This module receives periodic ACD queue status
data feeds from the MIS nodes.
* MARKET PROFILE LOADER - This module accepts the extract file from the
Marketing Database, parses the market profile associated with each
customer account into the appropriate attributes, applies the business
rules to classify and convert the market profile to a market profile
template and a particular channel function group for routing, and loads
the routing table which associates each customer account/TN with the
appropriate routing pointer/channel functional group for every possible
call reason per application. This module may also load the market profile
data associated with each customer account into the FES&R database if
required for reporting.
* RATING ENGINE - The Rating Engine is a subsystem that is responsible for
calculating and maintaining queue and non-queue desirability ratings for
each Call Handling resource team. The Rating Engine uses embedded
algorithms and current team status data captured by the ACD Feed and the
ACD Listener to maintain team desirability rating for use by the CCM. The
Rating Engine uses the latest team agent and queue status, along with the
constant factors defined as the team's queue parameters, to generate a
team's desirability measurement; this is a rating that reflects the team's
current ability to handle another call effectively.
* ACD LISTENER - The ACD Listener is composed of two modules, a Listener and
a Tracker. The ACD Listener receives a data feed from the 5ESS switches
describing a Resource Group's statistics. An action by an Agent or a call
state change causes data to be sent to the Listener. The Listener forwards
messages to the Agent/Call Tracker which updates the database for the
appropriate Agent's Resource Group.
CALL HANDLING 35-001-97 10 DECEMBER 31, 1996
<PAGE> 12
US WEST AGREEMENT # 9600050389
TASK ORDER # 3
USER INTERFACE
- --------------
CGI will continue to be involved in Call Handling User Interface enhancement
for 1997. The Call Handling User Interface provides various tool sets to the
user for updating and maintaining data for the Call Handling system.
Information is presented to the user as Hypertext Markup language (HTML), via
the Netscape browser. Users navigate via hypertext links and buttons. A Hyper
Text Transfer Protocol (HTTP) server is used to deliver the information to the
browser. Functionality is separated through screens in each of the tool sets.
The system consist of the following tool sets: Market Profile, Resource Groups,
Load Balance, Reports, Reference Tables, and Utilities.
* CGI will be responsible for transferring the technology developed by
CGI over to U S WEST.
* CGI will be responsible for the engineering management of the CGI
resources and delivery management of the CGI Deliverables.
* CGI will be responsible for status reporting to U S WEST and
participating in status meetings.
* CGI will be responsible for system support (problem tracking and
resolution) during the integration testing, the system testing, the
production and user acceptance testing, and the deployment tasks.
U S WEST ROLES AND RESPONSIBILITIES1
------------------------------------
U S WEST will be responsible either directly or indirectly if required (from
outside vendors) for the design, development, testing, integration,
documentation and deployment of all other modules not listed previously in this
Exhibit 1, including but not limited to:
* AT&T ACD/MIS Feed
* CAT/S Data Feed
* Northern Telecom CompuCall Feed
* VRU Software & Hardware Upgrades
* Voice Network Upgrades
* Data Models - Logical and Physical
* Data Extract Programs for:
- --------
1 Some of the tasks involved in delivering the U S WEST Responsibilities
may be assigned to CGI in other Development Agreements, but are listed here to
clearly indicate that they are not in the scope of this Agreement.
CALL HANDLING 35-001-97 11 DECEMBER 31, 1996
<PAGE> 13
US WEST AGREEMENT # 9600050389
TASK ORDER # 3
-> [ ]
-> [ ]
-> Promotions
-> [ ]
-> [ ]
-> [ ]
-> [Repair]
* Data Batch Load Programs/Conversion Programs for:
-> [ ]
-> Promotions
-> [ ]
-> [ ]
-> [ ]
-> Repair
* Setup and population of the databases including:
-> the system test database
-> the production test database
-> the production database
* U S WEST will be responsible for ordering, installing, and making
available the Development Environment (including HP and Sequent File
Servers), the Test Environments ( unit, integration, system, and
production test environments), and the Production Environment in a
timely manner.
* U S WEST will assume overall project management responsibility.
* U S WEST will be responsible for the Deployment Strategy and Deployment
Plan.
* U S WEST will be responsible for the Operational Impact Analysis.
* U S WEST will be responsible for defining the Change Control
Methodology.
* U S WEST will be responsible for defining the Call Flow Definitions and
the Current/New Process Definitions.
* U S WEST will be responsible for enhancing VRU Applications.
* U S WEST will be responsible for developing the Communications Plan.
* U S WEST will be responsible for developing the Technical Trial Plan.
* U S WEST will be responsible for scope and expectation setting with
the Clients.
* U S WEST will provide Subject Matter Experts (SMEs) for the CGI design
and development efforts, including expertise on tuning and programming
on the Sequent Platform, as well as Call Routing Expertise.
* U S WEST will be responsible for the move of the Development Code to
the Test and Production Hosts.
* U S WEST will be responsible for the management and implementation of
the System and Production Testing Processes.
CALL HANDLING 35-001-97 12 DECEMBER 31, 1996
<PAGE> 14
US WEST AGREEMENT # 9600050389
TASK ORDER # 3
* U S WEST will be responsible for the management and implementation of
the Training Program for Call Handling, including both end-user and
SYAD training.
* US WEST will be responsible for establishing the development, test,
and demonstration environment(s), including a VRU, a Lucent ACD, a
Northern Telecom ACD, a FES&R Server, representative User Equipment,
an IWS Server, and several CCE terminals and phone sets.
* U S WEST will arrange and coordinate the necessary demonstration
sessions within U S WEST.
* U S WEST will facilitate CGI Access to legacy system experts.
JOINT CGI AND U S WEST ROLES AND RESPONSIBILITIES
-------------------------------------------------
* U S WEST will provide engineering resources per the project plan. CGI
will manage the assigned resources provided for the CGI Roles and
Responsibilities listed in this Exhibit 1.
* CGI will share the responsibility of establishing Acceptance Criteria
and Acceptance Test Plans for the Routing Engine and the overall
system.
* CGI will share the responsibility for developing the System and
Production Test Plans.
* CGI will share the responsibility for producing the System
Administration Procedures and Documentation, specifically for the
Routing Engine and User Interface.
* CGI will share the responsibility of installing all hardware and
software for the Routing Engine and User Interface in all Environments.
* CGI will share the responsibility of training the "trainers" on the
System Administration Functions for the Routing Engine User Interface.
* CGI will share the responsibility for tuning of the Routing Engine.
* CGI will share the responsibility of managing the Clients expectations
in all meetings by presenting perceived changes in direction or scope
to the Call Handling Project Manager.
* CGI will share the responsibility for developing the prototype test
and demonstration plan.
* CGI will share the responsibility of setup and population of the
databases including: development database, unit test database, &
integration test database
* CGI will share the responsibility for maintenance and support of the
Routing Engine and User Interface.
CALL HANDLING 35-001-97 13 DECEMBER 31, 1996
<PAGE> 15
US WEST AGREEMENT # 9600050389
TASK ORDER # 3
EXHIBIT 2
PROJECTED COST
The total cost of the work to be performed will be $[ ] based on estimated time
and materials. No travel is anticipated. Should travel become a necessity for
the project, U S WEST agrees to pay CGI travel expenses for all pre-approved
trips.
It is planned that U S WEST will provide the majority of the platforms and
software for the project work environment and CGI will work at the U S WEST
site. Because this reflects a cost savings benefit to CGI, a [ ]% Computer &
Facilities discount is included in the project costs. Work requiring platforms
and software outside of this environment will be requested by U S WEST. It is
planned that U S WEST will provide availability to the nonstandard items to CGI
for the duration of the project should any be required.
U S WEST may, at its discretion, close the project or the involvement of CGI
resources by providing a written notice to the CGI Program Manager. If such an
eventuality occurs, the respective resources will be given a ramp down period
of [ ] weeks to find other work. Upon completion of the [ ] week ramp down
period, U S WEST will be obligated to CGI for the time and materials expended
up to and including the [ ] week ramp down.
Estimated costs for the project are provided below. Note that the Alliance,
Volume, and Facilities discounts are subtracted from the standard time and
material costs. The Alliance Discount has been extended through the temporary
extension of the GLA in anticipation of this Agreement being signed by U S WEST
in 1996. The applicable Volume discount has also been provided.
<TABLE>
<S> <C>
Total Time and Materials Costs $[ ]
Less [ ]%Alliance Discount [ ]
Less [ ]% Volume Discount [ ]
Less [ ]% Computer Facilities Discount [ ]
----------------------------------------------------------
Total Contract Engineering $[ ]
</TABLE>
CALL HANDLING 35-001-97 14 DECEMBER 31, 1996
<PAGE> 16
US WEST AGREEMENT # 9600050389
TASK ORDER # 3
Additionally, we are providing the estimated hours for the labor categories
associated with the [ ]-person CGI team as shown below:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
# OF PEOPLE LABOR CATEGORY ESTIMATED 1997 TOTAL HOURS
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
[ ] Manager [ ]
- ---------------------------------------------------------------------------------------------------------------
[ ] Sr. Engineer III [ ]
- ---------------------------------------------------------------------------------------------------------------
[ ] Sr. Engineer II [ ]
- ---------------------------------------------------------------------------------------------------------------
[ ] Sr. Engineer I [ ]
- ---------------------------------------------------------------------------------------------------------------
[ ] Engineer [ ]
- ---------------------------------------------------------------------------------------------------------------
TOTAL 97 HOURS ESTIMATE: [ ]
</TABLE>
CALL HANDLING 35-001-97 15 DECEMBER 31, 1996
<PAGE> 17
US WEST AGREEMENT # 9600050389
TASK ORDER # 3
EXHIBIT 3
SCHEDULE AND STATEMENT OF WORK
The following table summarizes the CGI Tasks, Schedule and Deliverables that
are covered under this Agreement.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
CGI TASKS: START Finish CGI DELIVERABLES
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LOAD BALANCE I ESTIMATE:$[ ]
- -------------------------------------------------------------------------------------------------------------------------
Construction 1996 2/97 Software Development
- -------------------------------------------------------------------------------------------------------------------------
Integration Testing 1996 2/97 Testing Support
- -------------------------------------------------------------------------------------------------------------------------
System Testing 1996 3/97 Testing Support
- -------------------------------------------------------------------------------------------------------------------------
User Acceptance Testing & 1996 4/97 Support includes Production
deployment Support Builds, Install Software,
Training, Load Balance
Rollout and support for
Load Balance Deployment.
- -------------------------------------------------------------------------------------------------------------------------
Production Maintenance & On-going 1996 12/31/97 Maintenance & Support
Support includes:
Bug Tracking and
Resolution,
Emergency Builds,
Installation Support
- -------------------------------------------------------------------------------------------------------------------------
LOAD BALANCE II (DMS) ESTIMATE: $[ ]
- -------------------------------------------------------------------------------------------------------------------------
Design Prototype 12/96 2/97 Design
- -------------------------------------------------------------------------------------------------------------------------
Construction 2/97 3/97 Software Development
- -------------------------------------------------------------------------------------------------------------------------
Integration Testing 3/97 3/97 Testing Support
- -------------------------------------------------------------------------------------------------------------------------
System Testing 3/97 4/97 Testing Support
- -------------------------------------------------------------------------------------------------------------------------
User Acceptance Testing & 4/97 4/97 Support includes Production
- -------------------------------------------------------------------------------------------------------------------------
Deployment Support Builds, Install Software,
Training, Load Balance
Rollout and support for
Load Balance Deployment.
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
CALL HANDLING 35-001-97 16 DECEMBER 31, 1996
<PAGE> 18
US WEST AGREEMENT # 9600050389
TASK ORDER # 3
<TABLE>
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
Production Maintenance & On-going 4/97 12/31/97 Maintenance & Support
Support includes:
Bug Tracking and
Resolution,
Emergency Builds,
Installation Support
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
CALL HANDLING 35-001-97 17 DECEMBER 31, 1996
<PAGE> 19
US WEST AGREEMENT # 9600050389
TASK ORDER # 3
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
CGI TASKS: START FINISH CGI DELIVERABLES
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ACTIVITY-BASED ROUTING ESTIMATE:$[ ]
- -------------------------------------------------------------------------------------------------------------------------
Functional Specification 12/96 2/97 Functional Spec.
- -------------------------------------------------------------------------------------------------------------------------
[Detailed Schedule will be [This covers Account Activity
prepared after functional spec is & Information Request only.]
delivered.]
- -------------------------------------------------------------------------------------------------------------------------
SCREEN POP - 5ESS ESTIMATE: $[ ]
- -------------------------------------------------------------------------------------------------------------------------
Design 1/97 1/97 Design
- -------------------------------------------------------------------------------------------------------------------------
Construction 1/97 2/97 Software Development
- -------------------------------------------------------------------------------------------------------------------------
Integration Test 2/97 4/97 Testing Support
- -------------------------------------------------------------------------------------------------------------------------
System Test 3/97 5/97 Testing Support
- -------------------------------------------------------------------------------------------------------------------------
User Acceptance, Product Integration, 4/97 12/31/97 Support includes Production Builds,
ORL, & Deployment Support Install Software, Training,
5ESS Screen Pop and support
for Deployment.
- -------------------------------------------------------------------------------------------------------------------------
SCREEN POP - DMS ESTIMATE: $[ ]
- -------------------------------------------------------------------------------------------------------------------------
Functional Specification 1/97 2/97 Functional Spec.
- -------------------------------------------------------------------------------------------------------------------------
Design 3/97 5/97 Design
- -------------------------------------------------------------------------------------------------------------------------
Construction 5/97 7/97 Software Development
- -------------------------------------------------------------------------------------------------------------------------
Integration Test 7/97 8/97 Testing Support
- -------------------------------------------------------------------------------------------------------------------------
System Test 8/97 9/97 Testing Support
- -------------------------------------------------------------------------------------------------------------------------
User Acceptance, Product Integration, 9/97 12/31/97 Support includes Production Builds,
ORL, & Deployment Support Install Software, Training,
DMS Screen Pop and support
for Deployment.
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
CALL HANDLING 35-001-97 18 DECEMBER 31, 1996
<PAGE> 20
US WEST AGREEMENT # 9600050389
TASK ORDER # 3
ASSUMPTIONS/DEPENDENCIES
------------------------
The following assumptions/dependencies were developed by CGI in creating the
above Work Plans/Schedules. Changes in the assumptions/dependencies may affect
the associated schedule, costs and deliverables listed in this Agreement. As
part of the normal project status reporting process, CGI will identify issues
and jeopardies caused by any assumption/dependency violations. As appropriate,
jeopardies will indicate that, unless the situation is resolved, a Change Order
to this agreement will have to be issued to resolve unforeseen schedule/cost
impacts.
1. The Development Environment: Sequent & HP machines, user ids, directory
structure, SCM tools, database structures and DDL, some data population,
desks, terminals, etc., must remain stable and available through out the
development process.
2. Other modules/components not being developed/purchased by CGI must be
in place and configured for the start date for the Integration Testing.
These include, but are not limited to: U S WEST VRU Scripting, the
Physical Integration U S WEST Test Database with the Routing tables
populated integration with all SYAD tool sets, data feeds and new voice
scripts. It is assumed that Integration Testing will be done using the
Development Environment.
3. The system can not be released to System Test until it passes the
Integration Test (with zero critical problems) and it can not be released
to Production without first passing System Test and the User Acceptance
Testing.
4. U S WEST is responsible for establishing the User Acceptance Test (UAT)
environment. The development of the User Acceptance Test Plan and Criteria
are the responsibility of U S WEST and the Clients.
5. The System Test Environment must be established and made available by
U S WEST in accordance with the project plan. Establishment of the
Environment is the responsibility of the U S WEST System Test Group.
6. Test Plans, Environments, Scenarios and Test Data must be identified by
U S WEST and in place by the start of the Integration, System Test, and
User Acceptance Phases. The Test Data and Scenarios are the responsibility
of the U S WEST Clients but will be shared by CGI. The System Test Plan is
the responsibility of the U S WEST System Test Group.
CALL HANDLING 35-001-97 19 DECEMBER 31, 1996
<PAGE> 21
US WEST AGREEMENT # 9600050389
TASK ORDER # 3
7. The dates for the final production builds for all releases are dependent on
the dates that the U S WEST Project Manager sets for the start of each
phases deployment, which may be sometime after the software has been
accepted. CGI assumes that this date will be within two weeks after the
software is accepted.
8. Additional, specific CGI assumptions include:
(a) The detailed design and prototyping tasks need to be completed
before the programming and unit testing tasks can begin.
(b) Formal technology transfer from CGI to U S WEST will be done in parallel
to system and user acceptance testing and production support for the
Releases.
9. The Customer Access Experience Scripts, if applicable, and associating
routing data need to be specified for integration with the routing engine
modules.
10. The Account Activity Module is dependent upon extracts from
Legacy Systems. ([ ], [ ], [ ], [ ],
[ ], [ ], [ ]).
CALL HANDLING 35-001-97 20 DECEMBER 31, 1996
<PAGE> 22
US WEST AGREEMENT # 9600050389
TASK ORDER # 3
EXHIBIT 4
DELIVERABLES
The deliverables covered under this Agreement are classified as Licensee
Specific Technology. It is not intended that any new Generic Research
Technology will be created in the course of this project.
The following are the deliverables covered for all Call Handling Releases under
this Agreement:
SOFTWARE
* Routing Engine, SYAD Toolset & NT Client Software - System Test Build
* Routing Engine, SYAD Toolset & NT Client Software - User Acceptance Build
* Routing Engine, SYAD Toolset & NT Client Software - Production Build
* Routing Engine, SYAD Toolset & NT Client Software - Emergency Builds (if
required)
SERVICES AND SUPPORT
* Client Demonstration
* Unit Testing
* Integration Testing
* Integration Testing Support
* System Testing Support
* User Acceptance Testing Support
* Installation Support
* System Administration Training Support
* System Support (Problem Tracking & Resolution - Bug Fixes)
* Technology Transfer to U S WEST
* Operational Support
DOCUMENTATION
* Functional Specification
* Unit/Component Integration Test Plan for Routing Engine
* Input/Review to User Acceptance Test Plan
* Input/Review to System Test Plan
CGI will deliver one copy of each Deliverable to the appropriate U S WEST
Project Manager. If U S WEST does not provide CGI a written list of the items
that are not in compliance with the project specifications within ten (10)
business days after delivery, then the Deliverable shall be deemed accepted.
CALL HANDLING 35-001-97 21 DECEMBER 31, 1996
<PAGE> 23
US WEST AGREEMENT # 9600050389
TASK ORDER # 3
In addition, CGI will provide U S WEST with status reports as well as the hours
expended by month and to date on the project. Regularly scheduled meetings
between CGI and U S WEST will be held to review the project status and discuss
any proposed changes, including functionality/scope changes that would
necessitate a change order being written against this Agreement.
CALL HANDLING 35-001-97 22 DECEMBER 31, 1996
<PAGE> 24
EXHIBIT 5
SAMPLE PROJECT PLAN FOR SCREEN POP
The sample schedule attached to this Agreement as Exhibit 5 is meant to
illustrate the level of detail associated with the major modules of U S WEST's
Call Handling architecture that CGI is responsible for managing. Similar
schedules and the associated level of detail will be used by CGI for each
module of the Call Handling architecture U S WEST engages CGI to manage.
The Exhibit 5 sample schedule is attached for illustration purposes only.
CALL HANDLING 35-001-97 23 DECEMBER 31, 1996
<PAGE> 25
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
and DMS Screen PoP Schedule
- ---------------------------------------------------------------------------------------------------------------------------------
ID TASK NAME DURATION START FINISH
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 Screen Pop 328d September 1, 1996 December 19, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
2 Start 0d September 25, 1996 September 25, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
3 Q13 Project Initiation 75d September 26, 1996 January 16, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
4 Secure 1997 Funding Transfers 0d January 1, 1997 January 1, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
5 Secure 1996 Funding Transfers 0d September 26, 1996 September 26, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
6 Procure Development Personnel 20d September 26, 1996 October 23, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
7 Craig Pirner Start 0d October 8, 1996 October 8, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
8 Glenn Hoy Start 0d October 18, 1996 October 18, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
9 Dirk Mewes Start 0d November 25, 1996 November 25, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
10 Dave Wood Start 0d October 28, 1996 October 28, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
11 Sai Kalaga Start1/2time 0d November 12, 1996 November 12, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
12 Tom Shuford 0d November 6, 1996 November 6, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
13 Mike Fagen 0d January 15, 1997 January 15, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
14 Procure Test Personnel 54d September 26, 1996 December 12, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
15 Acquire Facilities 75d September 26, 1996 January 16, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
16 Development Environment 75d September 26, 1996 January 16, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
17 Get 5E Test ACD 27d September 26, 1996 November 1, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
18 Get Curtis Park Link II Data Stream 37d September 26, 1996 November 15, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
19 Set up MLHG with Caller ID in Lab 27d September 26, 1996 November 1, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
20 Install 5E CPND options on Test ACD 1d November 20, 1996 November 20, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
21 Get DMS Test ACD Queue 30d December 2, 1996 January 16, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
22 Get DMS CompuCall in Denver 56.04d October 22, 1996 January 16, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
23 NT Workstations 36d September 26, 1996 November 14, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
24 NT Software 15d October 23, 1996 November 12, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
25 Q12 Business Needs Analysis 1d November 7, 1996 November 8, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
26 Business Needs Complete 0d November 7, 1996 November 7, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
27 Conduct High Level Review 1d November 8, 1996 November 8, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1
<PAGE> 26
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
and DMS Screen PoP Schedule
- -----------------------------------------------------------------------------------------------------------------------------
ID TASK NAME DURATION START FINISH
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
28 Q11 Feasibility Analysis 79.04d September 26, 1996 January 23, 1997
- -----------------------------------------------------------------------------------------------------------------------------
29 5E Feasibility 47d September 26, 1996 December 3, 1996
- -----------------------------------------------------------------------------------------------------------------------------
30 Preform 5E Feasibility Analysis 25d September 26, 1996 October 30, 1996
- -----------------------------------------------------------------------------------------------------------------------------
31 Test 5E CPND 10d November 18, 1996 December 3, 1996
- -----------------------------------------------------------------------------------------------------------------------------
32 DMS Feasibility 79.04d September 26, 1996 January 23, 1997
- -----------------------------------------------------------------------------------------------------------------------------
33 Perform DMS Feasibility Analysis 70d September 26, 1996 January 9, 1997
- -----------------------------------------------------------------------------------------------------------------------------
34 Test DMS Originating Call Number 5d January 16, 1997 January 23, 1997
- -----------------------------------------------------------------------------------------------------------------------------
35 Develop Preliminary Project Plan 20d September 26, 1996 October 23, 1996
- -----------------------------------------------------------------------------------------------------------------------------
36 Cost Estimates 26.04d September 26, 1996 November 1, 1996
- -----------------------------------------------------------------------------------------------------------------------------
37 5E Options for CPND 26.04d September 26, 1996 November 1, 1996
- -----------------------------------------------------------------------------------------------------------------------------
38 Change MLHG for TN hunt 26.04d September 26, 1996 November 1, 1996
- -----------------------------------------------------------------------------------------------------------------------------
39 Link III Costs 26.04d September 26, 1996 November 1, 1996
- -----------------------------------------------------------------------------------------------------------------------------
40 CompuCall Costs 26.04d September 26, 1996 November 1, 1996
- -----------------------------------------------------------------------------------------------------------------------------
41 DMS new Generic 26.04d September 26, 1996 November 1, 1996
- -----------------------------------------------------------------------------------------------------------------------------
42 Develop User Requirements 73.08d September 26, 1996 January 15, 1997
- -----------------------------------------------------------------------------------------------------------------------------
43 Call Handling Requirements Analysis 1d September 26, 1996 September 26, 1996
- -----------------------------------------------------------------------------------------------------------------------------
44 Desktop Requirements Analysis 72.08d September 27, 1996 January 15, 1997
- -----------------------------------------------------------------------------------------------------------------------------
45 Q10 Functional Requirements 266d September 26, 1996 October 15, 1997
- -----------------------------------------------------------------------------------------------------------------------------
46 5E Project Management 185d September 26, 1996 July 1, 1997
- -----------------------------------------------------------------------------------------------------------------------------
47 DMS Project Management 75d July 2, 1997 October 15, 1997
- -----------------------------------------------------------------------------------------------------------------------------
48 Develop Plans 37d January 9, 1997 February 28, 1997
- -----------------------------------------------------------------------------------------------------------------------------
49 Develop User Acceptance Test Plan 10d February 17, 1997 February 28, 1997
- -----------------------------------------------------------------------------------------------------------------------------
50 Develop Release Plan 6d January 29, 1997 February 6, 1997
- -----------------------------------------------------------------------------------------------------------------------------
51 Develop Documentation & Training Plan 4d January 15, 1997 January 21, 1997
- -----------------------------------------------------------------------------------------------------------------------------
52 Develop Deployment Plan 10d January 9, 1997 January 29, 1997
- -----------------------------------------------------------------------------------------------------------------------------
53 Functional Specification 27d September 27, 1996 November 4, 1996
- -----------------------------------------------------------------------------------------------------------------------------
54 Func. Spec. Screen Pop Manager 20d October 8, 1996 November 4, 1996
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 27
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
and DMS Screen PoP Schedule
- ---------------------------------------------------------------------------------------------------------------------------------
ID TASK NAME DURATION START FINISH
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
55 Func. Spec. Overall 27d September 27, 1996 November 4, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
56 Func. Spec. for GUI 6d October 18, 1996 October 25, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
57 Func. Spec. for Call Info Server 5d October 28, 1996 November 1, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
58 Func. Spec. for 5E Listener 5d October 28, 1996 November 1, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
59 Architecture Specification 12d October 18, 1996 November 4, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
60 Client Sign Off-Function Spec 0d November 11, 1996 November 11, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
61 DMS Update Functional Spec 10d January 23, 1997 February 6, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
62 Client Sign Off - DMS Functional Spec 0d February 6, 1997 February 6, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
63 Q9 Design 156d October 11, 1996 May 27, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
64 Network Investigation 30d December 3, 1996 January 17, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
65 Architecture Review 20d December 16, 1996 January 16, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
66 Kickoff Meeting 1d December 16, 1996 December 16, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
67 Prepare for review 18d December 17, 1996 January 15, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
68 Architecture Review 1d January 16, 1997 January 16, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
69 Database Design 77d October 11, 1996 February 4, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
70 Update Logical Data Model 10d October 11, 1996 October 24, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
71 Create DDL 15d November 5, 1996 November 25, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
72 Initial DDL Review 0d January 3, 1997 January 3, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
73 Update DDL for Design 15d January 14, 1997 February 3, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
74 DDL review after Design 1d February 4, 1997 February 4, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
75 5E Integration Plan 3d January 14, 1997 January 16, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
76 5E System Test Plan 25d January 14, 1997 February 17, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
77 CCM Modifications 34d November 12, 1996 January 6, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
78 CCM Design 30d November 12, 1996 January 3, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
79 CCM Design Review 1d January 6, 1997 January 6, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
80 5E ACD Listener Medication 25d December 4, 1996 January 13, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
81 5E ACD Listener Design 20d December 4, 1996 January 10, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE> 28
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
and DMS Screen PoP Schedule
- -------------------------------------------------------------------------------------------------------------------------------
ID TASK NAME DURATION START FINISH
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
82 5E ACD Listener Design Review 1d January 13, 1997 January 13, 1997
- -------------------------------------------------------------------------------------------------------------------------------
83 DMS ACD Listener Modification 61d February 28, 1997 May 27, 1997
- -------------------------------------------------------------------------------------------------------------------------------
84 Load Balance DMS ACD Listener Built 0d February 28, 1997 February 28, 1997
- -------------------------------------------------------------------------------------------------------------------------------
85 DMS ACD Listener Design 60d March 3, 1997 May 23, 1997
- -------------------------------------------------------------------------------------------------------------------------------
86 DMS ACD Listener Design Review 1d May 27, 1997 May 27, 1997
- -------------------------------------------------------------------------------------------------------------------------------
87 Screen Pop Manager 38d November 12, 1996 January 10, 1997
- -------------------------------------------------------------------------------------------------------------------------------
88 Screen PoP Manager Design 25d November 12, 1996 January 2, 1997
- -------------------------------------------------------------------------------------------------------------------------------
89 Screen Pop Manager Design Review 1d January 3, 1997 January 3, 1997
- -------------------------------------------------------------------------------------------------------------------------------
90 Issue SPM Interface Spec 0d January 10, 1997 January 10, 1997
- -------------------------------------------------------------------------------------------------------------------------------
91 Call Information Server 31d November 12, 1996 December 30, 1996
- -------------------------------------------------------------------------------------------------------------------------------
92 Call Info Server Design 25d November 12, 1996 December 18, 1996
- -------------------------------------------------------------------------------------------------------------------------------
93 Call Info Server Design Review 1d December 19, 1996 December 19, 1996
- -------------------------------------------------------------------------------------------------------------------------------
94 Issue Call Info Interface Specification 0d December 30, 1996 December 30, 1996
- -------------------------------------------------------------------------------------------------------------------------------
95 Call Information Display Design 16d November 26, 1996 December 19, 1996
- -------------------------------------------------------------------------------------------------------------------------------
96 Call Info Display Design 15d November 26, 1996 December 18, 1996
- -------------------------------------------------------------------------------------------------------------------------------
97 Call Info Display Design Review 1d December 19, 1996 December 19, 1996
- -------------------------------------------------------------------------------------------------------------------------------
98 Admin GUI Design 38d November 12, 1996 January 10, 1997
- -------------------------------------------------------------------------------------------------------------------------------
99 Workstation GUI Design 15d November 12, 1996 December 9, 1996
- -------------------------------------------------------------------------------------------------------------------------------
100 VRU TN GUI Design 5d December 10, 1996 December 16, 1996
- -------------------------------------------------------------------------------------------------------------------------------
101 Call Data GUI Design 10b December 17, 1996 January 9, 1997
- -------------------------------------------------------------------------------------------------------------------------------
102 Admin GUI Design Review 1d January 10, 1997 January 10, 1997
- -------------------------------------------------------------------------------------------------------------------------------
103 Q8 Construction and Unti Test 202d December 20, 1996 October 8, 1997
- -------------------------------------------------------------------------------------------------------------------------------
104 CCM Construction 35d January 7, 1997 February 24, 1997
- -------------------------------------------------------------------------------------------------------------------------------
105 CCM Code & Unit Test 34d January 7, 1997 February 21, 1997
- -------------------------------------------------------------------------------------------------------------------------------
106 Code Walkthrough 1d February 24, 1997 February 24, 1997
- -------------------------------------------------------------------------------------------------------------------------------
107 5E ACD Listener Construction 24d January 14, 1997 February 14, 1997
- -------------------------------------------------------------------------------------------------------------------------------
108 5E ACD Listener Code & Unit Testing 20d January 14, 1997 February 10, 1997
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE> 29
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
and DMS Screen PoP Schedule
- ----------------------------------------------------------------------------------------------------------------------------------
ID TASK NAME DURATION START FINISH
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
109 5E ACD Listener Code Walkthrough 1d February 14, 1997 February 14, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
110 DMS ACD Listener Construction 41d May 28, 1997 July 24, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
111 DMS ACD Listener Code & Unit Testing 40d May 28, 1997 July 23, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
112 DMS ACD Listener Code Walkthrough 1d July 24, 1997 July 24, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
113 Screen Pop Manager Construction 36d January 6, 1997 February 24, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
114 Screen Pop Manager Code & Unit Test 30d January 6, 1997 February 14, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
115 Screen Pop Manager Code Walkthrough 1d February 24, 1997 February 24, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
116 Call Information Server Construction 25d December 20, 1996 January 29, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
117 Call Info Server Code & Unit Test 20d December 20, 1996 January 28, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
118 Call Info Server Code Walkthrough 1d January 29, 1997 January 29, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
119 Call Information Display Construction 21d January 7, 1997 February 4, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
120 Call Info Display Code & Unit Test 20d January 7, 1997 February 3, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
121 Call Info Display Code Walk Through 1d February 4, 1997 February 4, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
122 Admin GUI Construction 21d January 13, 1997 February 10, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
123 VRU TN GUI Code and Unit Test 5d January 13, 1997 January 17, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
124 Workstation GUI Code and Unit Test 5d January 20, 1997 January 24, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
125 Call Data GUI Code and Unit Test 10d January 27, 1997 February 7, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
126 Admin GUI Code Walkthrough 1d February 10, 1997 February 10, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
127 VRU Changes 21d January 6, 1997 February 3, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
128 Issue Purchase Order to Gold 5d January 6, 1997 January 10, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
129 Gold Systems Change 10d January 13,1997 January 24, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
130 Test Gold System Changes 1d January 27, 1997 January 27, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
131 Update VRU Scripts 5d January 28, 1997 February 3, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
132 Update Documentation 50d February 11, 1997 April 21, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
133 User Guide 20d February 11, 1997 March 10, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
134 Installation Guide 15d March 11, 1997 March 31, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
135 Management Strategy 15d April 1, 1997 April 21, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE> 30
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
and DMS Screen PoP Schedule
- -----------------------------------------------------------------------------------------------------------------------------------
ID TASK NAME DURATION START FINISH
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
136 Training Plan 10d April 8, 1997 April 21, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
137 Update Database 16d February 12, 1997 March 5, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
138 Update Database DDL 15d February 12, 1997 March 4, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
139 Review DDL after Code 1d March 5, 1997 March 5, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
140 Update 5E Alarm Attribute File 5d June 4, 1997 June 10, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
141 Update DMS Alarm Attribute File 3d October 6, 1997 October 8, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
142 DMS Installation Scripts 1d August 15, 1997 August 15, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
143 5E Installation Scripts 10d April 8, 1997 April 21, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
144 Q7 Integration 176d December 4, 1996 August 14, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
145 Make 5E Voice Network Changes 50d December 4,1996 February 17, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
146 VRU MLHG Changes 50d December 4, 1996 February 17, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
147 5E Enable CPND 50d December 4, 1996 February 17, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
148 Get Test Link II and MIS datafeeds 50d December 4, 1996 February 17, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
149 5E Integration Test 44d February 5, 1997 April 7, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
150 NT Integration Test 20d February 5, 1997 March 4, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
151 FES&R Integration Test 30d February 25, 1997 April 7, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
152 Make DMS Voice Network Changes 50d January 23, 1997 April 3, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
153 VRU MLHG Changes 50d January 23, 1997 April 3, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
154 Get CompuCall datafeeds 50d January 23, 1997 April 3, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
155 DMS Integration Test 15d July 25, 1997 August 14, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
156 Q6 & Q5 System Test 135d March 5, 1997 September 12, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
157 5E System Testing 54d March 5, 1997 May 19, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
158 NT System Test 20d March 5, 1997 April 1, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
159 FES&R System Test 30d April 8, 1997 May 19, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
160 DMS System Test 20d August 15, 1997 September 12, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
161 Q4 Interoperability Testing 128d April 2, 1997 October 1, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
162 5E Interoperability Test 52d April 2, 1997 June 13, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 31
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
and DMS Screen PoP Schedule
- ------------------------------------------------------------------------------------------------------------------------------------
ID TASK NAME DURATION START FINISH
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
163 NT Product Integration Testing 52d April 2, 1997 June 13, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
164 Product Delivery To NT Integration 1d April 2, 1997 April 2, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
165 NT PRODUCT INTEGRATION PHASE 0d April 2, 1997 April 2, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
166 Develop NT Integration Proj. Plan 2d April 3, 1997 April 4, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
167 Product Evaluation or Verification 15d April 3, 1997 April 23, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
168 Architectural Design 10d April 3, 1997 April 16, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
169 NT Integration Test of Product 10d April 17, 1997 April 30, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
170 NT INTEGRATION TEST PHASE 0d April 16, 1997 April 16, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
171 PRODUCT RELEASE PHASE 0d April 30, 1997 April 30, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
172 ORL Interoperability Test 10d May 1, 1997 May 14, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
173 Sched. Product into NT Quarterly Release 1d May 1, 1997 May 1, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
174 Product BETA Trial 10d May 15, 1997 May 29, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
175 Accept Product into Quarterly Release 1d May 29, 1997 May 29, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
176 Quarterly Release Freeze 1d May 29, 1997 May 29, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
177 Build Distrib. Pkg. & Gold Disk 5d May 30, 1997 June 5, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
178 NT Test of Quarterly Rel. Pkg. & Gold Disk 5d June 6, 1997 June 12, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
179 Deliver Quarterly Release Pkg. to Rel. Mgt. 1d June 6, 1997 June 6, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
180 ORL Test of Pkg. 5d June 6, 1997 June 12, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
181 QUARTERLY RELEASE (Per Rel. Mgt. 1d June 13, 1997 June 13, 1997
Sched.)
- ------------------------------------------------------------------------------------------------------------------------------------
182 Infrastructure Test of Pkg. 2d June 9, 1997 June 10, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
183 5E User Training 3d May 20, 1997 May 22, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
184 5E User Acceptance Testing 10d May 23, 1997 June 6, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
185 5E Go/No Go Decision to Deploy 0d June 13, 1997 June 13, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
186 DMS Interoperability Test 13d September 12, 1997 October 1, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
187 NT Product Integration Testing 0d September 12, 1997 September 12, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
188 DMS User Training 3d September 15, 1997 September 17, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
189 DMS User Acceptance Testing 10d September 18, 1997 October 1, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE> 32
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
and DMS Screen PoP Schedule
- ----------------------------------------------------------------------------------------------------------------------------------
ID TASK NAME DURATION START FINISH
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
190 DMS Go/No Go Decision to Deploy 0d October 1, 1997 October 1, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
191 Q3 Site Readiness Test 87d May 20, 1997 September 22, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
192 5E Coordinate Site Specific Design 6d May 20, 1997 May 28, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
193 DMS Coordinate Site Specific Design 6d September 15, 1997 September 22, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
194 Q2 Final Client Site Test 90.5d May 29, 1997 October 6, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
195 5E Final Client Site Test 9.5d May 29, 1997 June 11, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
196 Release to Operations Organization 4d May 29, 1997 June 3, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
197 Train Support Personnel 2d June 9, 1997 June 10, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
198 Review Activities 0.5d June 11, 1997 June 11, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
199 DMS Final Client Site Test 9.5d September 23, 1997 October 6, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
200 Release to Operations Organization 4d September 23, 1997 September 26, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
201 Train Support Personnel 2d October 2, 1997 October 3, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
202 Review Activities 0.5d October 6, 1997 October 6, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
203 Q1 Deployment 328d September 1, 1996 December 19, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
204 Sequent CPU upgrade 50d January 2, 1997 March 12, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
205 Order CPU boards 20d January 2, 1997 January 29, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
206 Sequent Delivery 20d January 30, 1997 February 26, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
207 Plan Installation 10d January 30, 1997 February 12, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
208 Install CP4 board 5d March 6, 1997 March 12, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
209 NT Workstation Deployment 328d September 1, 1996 December 19, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
210 Denver 0d September 1, 1996 September 1, 1996
- ----------------------------------------------------------------------------------------------------------------------------------
211 Omaha 0d April 18, 1997 April 18, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
212 St. Paul 0d April 25, 1997 April 25, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
213 Phoenix 0d May 2, 1997 May 2, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
214 CMC 44d August 1, 1997 October 3, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
215 Grand Junction 0d August 1, 1997 August 1, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
216 Bismark 0d August 29, 1997 August 29, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE> 33
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
and DMS Screen PoP Schedule
- ----------------------------------------------------------------------------------------------------------------------------------
ID TASK NAME DURATION START FINISH
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
217 Helena 0d October 3, 1997 October 3, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
218 Sale Lake 0d August 29, 1997 August 29, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
219 Seattle 0d August 29, 1997 August 29, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
220 Boise 0d December 12, 1997 December 12, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
221 Des Moines 0d December 19, 1997 December 19, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
222 Propogate to VRU Machines 1d June 16, 1997 June 16, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
223 5E Deployment 11d June 16, 1997 June 30, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
224 Deploy FES&R 1d June 16, 1997 June 16, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
225 ACD Updates 1d June 16, 1997 June 16, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
226 Eliminate 5E Prompt and Collect 1d June 16, 1997 June 16, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
227 Monitor Production 10d June 16, 1997 June 27, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
228 Perofrm Post Project Review 1d June 30, 1997 June 30, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
229 DMS Deployment 11d October 6, 1997 October 21, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
230 Deploy FES&R 1d October 6, 1997 October 7, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
231 Monitor Production 10d October 6, 1997 October 20, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
232 Perofrm Post Project Review 1d October 20, 1997 October 21, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
233 Project Complete 0d December 19, 1997 December 19, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE> 1
EXHIBIT 10.02
-------------
Confidential treatment with respect to certain information in this exhibit has
been requested of the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended. The bracketed portions
of this exhibit have been omitted from the material filed in accordance with
Rule 24b-2 and have been filed separately with the Commission.
<PAGE> 2
DEVELOPMENT AGREEMENT NO. 37-001-97
FETCH & STUFF PHASE 2 -- 1997
-----------------------------
This Development Agreement is entered into on the 24TH day of JANUARY,
1997 by and between U S WEST Advanced Technologies, Inc., a Colorado
corporation ("USW-Technologies"), U S WEST Communications, Inc., a Colorado
corporation ("USW-Communications"), (hereinafter USW-Technologies,
USW-Communications and their Affiliates will be collectively referred to as
"Licensee"), and Carnegie Group, Inc., a Delaware corporation with a principal
place of business at Five PPG Place, Pittsburgh, PA 15222 ("CGI").
ARTICLE 1 - RECITALS
--------------------
1.1 Licensee and CGI entered into a General License Agreement (the
"GLA") on December 17, 1992 in which the parties committed to enter into a
series of Artificial Intelligence ("AI") technology research, experimentation
and development agreements ("Development Agreements") over a period beginning
on the Effective Date, as defined in the GLA, and ending on the fourth
anniversary of the Effective Date, and extended through mutual consent through
March 15, 1997.
1.2 Licensee and CGI now desire to enter into this Development
Agreement pursuant to which the parties, as contemplated by the GLA, will
commit to a project of specific research, experimentation and development as
stated herein.
NOW, THEREFORE, in consideration of the mutual covenants set forth in
this Development Agreement, Licensee and CGI agree as follows:
ARTICLE 2 - DEFINITIONS
-----------------------
2.1 Defined terms used in this Development Agreement shall have the
meanings set forth in Article 2 of the GLA, unless different meanings are
specifically set forth in this Development Agreement.
2.2 "Project" means the specific research, experimentation and
development which CGI will perform for Licensee under this Development
Agreement.
37-001-97 1 JANUARY 24, 1997
<PAGE> 3
2.3 "Project Description" means a detailed written description of
the Project, including but not limited to:
(a) any Deliverable Performance Specifications; and
(b) a listing which identifies and describes, as to the
Project:
(i) any Deliverables intended to be created in the
course of the Project; and
(ii) any Licensee Specific Technology intended to be
created in the course of the Project; and
(iii) any Licensee Proprietary Information or Licensee
Confidential Information to be made available to
CGI in the course of the Project; and
(iv) any Generic Research Technology intended to be
created in the course of the Project.
2.4 "Projected Cost" means that projected cost referred to in Article 9
of the GLA and set forth in Article 5 hereof.
2.5 "Projected Date" means the projected date for completion of the
Project agreed upon by the parties and set forth in Article 6 hereof, including
any Agreed Completion Date.
ARTICLE 3 - EFFECT OF THE GLA
-----------------------------
This Development Agreement is subject in all respects to the terms and
conditions of the GLA. Ownership of Generic Research Technology developed
hereunder is vested in U S WEST, in accordance with Article 3.3 of the GLA and
the payment of ALLIANCE rates by Licensee to CGI as provided in Exhibit 2,
attached hereto.
ARTICLE 4 - PROJECT DESCRIPTION
-------------------------------
4.1 The Project Description is set forth in Exhibit 1 attached hereto.
4.2 CGI shall use its best efforts to complete the Project in
accordance with the Project Description. Except for the warranties set forth in
Article 8 of the GLA regarding any Deliverable Performance Specifications set
forth in Exhibit 1 of this Development
37-001-97 2 JANUARY 24, 1997
<PAGE> 4
Agreement, CGI hereby disclaims any express or implied warranty that all or any
portion of the Project intended to be created or developed pursuant to this
Development Agreement will perform in accordance with the Project Description
or any other criteria.
ARTICLE 5 - PROJECTED COST; PAYMENT
-----------------------------------
5.1 CGI's Projected Cost for the Project is $[ ]. An itemized
account of the Projected Cost including person-year rates applied as Alliance,
Technology and/or Co-Development Rates as defined in the GLA is set forth in
Exhibit 2 attached hereto. Modifications to the Projected Cost (and any payments
under Section 5.2) shall be governed by Sections 9.4 and 14.7 of the GLA.
5.2 Licensee shall pay to CGI, in consideration for CGI's performance
of its obligations under this Development Agreement, the sum of $ * in
accordance with the payment schedule set forth in Article 5 of the GLA.
"*" REPRESENTS TIME AND MATERIAL COSTS IN ACCORDANCE WITH EXHIBIT 2 OF THIS
DEVELOPMENT AGREEMENT.
ARTICLE 6 - PROJECTED DATE
--------------------------
6.1 The Projected Date for completion of the Project is DECEMBER 31,
1997. A time schedule listing projected dates for completion of interim stages
of the Project is set forth in Exhibit 3 attached hereto.
6.2 CGI shall use its best efforts to complete the Project by the
Projected Date. Except for the obligations set forth in Article 9 of the GLA
regarding any Agreed Completion Date set forth in Exhibit 3 of this Development
Agreement, CGI hereby disclaims any express or implied warranty that all or any
portion of the Project intended to be created or developed pursuant to this
Development Agreement will be completed on any date certain, including the
Projected Date.
ARTICLE 7 - TERMS OF DELIVERY AND RISK OF LOSS
----------------------------------------------
7.1 CGI will deliver, at its expense, to Licensee any Deliverables and
Licensee Specific Technology in accordance with the Exhibits hereto.
7.2 CGI will bear the risk of loss or destruction of such Deliverables
and Licensee Specific Technology until the delivery of such items to Licensee
at the location designated
37-001-97 3 JANUARY 24, 1997
<PAGE> 5
by Licensee. For the purposes hereof, "delivery" shall mean physical delivery
to a facility and shall not include installation.
ARTICLE 8 - INSTALLATION
------------------------
8.1 CGI will provide, at Licensee's request and expense, technical
assistance to Licensee sufficient for the proper installation of Deliverables
and Licensee Specific Technology in Licensee facilities. Such assistance may
include, if deemed necessary by Licensee, the presence of one or more CGI
employees at Licensee facilities to assist in such installation. Licensee will
pay, in accordance with the GLA, travel, room and board expense incurred by
such employees of CGI.
8.2 Licensee will bear the risk of loss or destruction of the
Deliverables, Licensee Specific Technology or any other items delivered to
Licensee facilities during and after installation.
ARTICLE 9 - OPERATIONAL TRAINING
--------------------------------
CGI will provide, in accordance with Article 6 of the GLA, adequate
training to no more than 0 Licensee employees regarding the proper operation
and use of Deliverables, Licensee Specific Technology and Generic Research
Technology created in the course of the Project.
ARTICLE 10 - MAINTENANCE
------------------------
CGI will perform maintenance and repair services on Deliverables,
Licensee Specific Technology and Generic Research Technology in accordance with
the GLA.
ARTICLE 11 - MODIFICATIONS AND AMENDMENTS
-----------------------------------------
Any modifications to the Project or to this Development Agreement,
including but not limited to modifications to the Project Description, the
Projected Costs, or the Projected Date, to which the parties agree after the
date of execution of the Development Agreement, will be evidenced by a written
supplement to this Development Agreement executed by both parties.
37-001-97 4 JANUARY 24, 1997
<PAGE> 6
ARTICLE 12 - DISPUTE RESOLUTION
-------------------------------
12.1 Any claim, controversy or dispute which arises between the
parties, their agents, employees, officers, directors or affiliates ("Dispute")
which the parties are unable to settle through consultation and negotiation may
be mediated under the Commercial Mediation Rules of the American Arbitration
Association ("AAA") by a mutually acceptable mediator. Any Dispute which cannot
be resolved through negotiation or mediation shall be resolved by binding
arbitration as provided in this Article. The arbitrability of claims shall be
determined under the Federal Arbitration Act, 9 USC Secs. 1-15. Notwithstanding
the foregoing, the parties may cancel or terminate this Agreement in accordance
with its terms and conditions without being required to follow the procedures
set forth in this Article.
12.2 A single arbitrator engaged in the practice of law, who is
knowledgeable about the subject matter of this Agreement and the matter in
Dispute, shall conduct the arbitration under the rules of the AAA then in
effect, except as otherwise provided herein. The arbitrator shall be selected
in accordance with AAA procedures from a list of qualified people maintained by
the AAA. The arbitration shall be conducted in Denver, Colorado, and all
expedited procedures prescribed by the AAA rules shall apply. The laws of
Colorado shall govern the construction and interpretation of this Agreement.
The arbitrator's decision and award shall be final, conclusive and binding, and
judgement may be entered upon it in accordance with applicable law in any court
having jurisdiction thereof.
12.3 Either party may request from the arbitrator injunctive relief to
maintain the status quo until such time as the arbitration award is rendered or
the Dispute is otherwise resolved. The arbitrator shall not have authority to
award punitive damages. Each party shall bear its own costs and attorneys'
fees, and the parties shall share equally the fees and expenses of the mediator
and arbitrator.
12.4 If any party files a judicial or administrative action asserting
claims subject to arbitration, as prescribed herein, and another party
successfully stays such action and/or compels arbitration of said claims, the
party filing said action shall pay the other party's costs and expenses
incurred in seeking such stay and/or compelling arbitration, including
reasonable attorneys' fees.
12.5 CGI agrees that in the event of any Dispute between the parties,
it will continue to provide Purchases without interruption.
12.6 CGI shall include in all contracts with its subcontractors
provisions similar to those in this Article, requiring that all disputes in any
way involving Licensee shall be settled by binding arbitration.
37-001-97 5 JANUARY 24, 1997
<PAGE> 7
ARTICLE 13 - INTEGRATION
------------------------
This Development Agreement, the Exhibits attached hereto and the terms
of the GLA set forth the entire and exclusive agreement and understanding of
the parties relating to the subject matter contained herein, and supersede all
prior and contemporary discussions. Neither party will be bound by any
definition, condition, warranty or representation except as expressly set forth
in this Development Agreement or the GLA or as subsequently set forth in
writing signed by authorized representatives of each party.
IN WITNESS WHEREOF, Licensee and CGI have executed this Development
Agreement in duplicate by their respective authorized representatives.
CARNEGIE GROUP, INC. LICENSEE
By: /s/ Dennis Yablonsky By: /s/ Dennis R. Dempsey
------------------------- ------------------------------
Title: President/CEO Title: VP/IAD
--------------------- --------------------------
Date: 1/31/97 Date: 1/31/97
--------------------- --------------------------
U S WEST Business Resources, Inc.
Acting as Agent for: LICENSEE
By:
-------------------------------
Title:
----------------------------
Date:
----------------------------
37-001-97 6 JANUARY 24, 1997
<PAGE> 8
EXHIBIT 1 - PROJECT DESCRIPTION
-------------------------------
OVERVIEW
This Development Agreement outlines the proposed scope of consulting services
to be performed by Carnegie Group, Inc.(CGI) for U S WEST's Fetch & Stuff
Engine within the overall framework of the Developing Advanced Routine Tools
(DART) strategy. During Phase 1 of the Fetch & Stuff project, CGI provided U S
WEST with a proof of concept "Fetch & Stuff" Engine and associated short term
deliverables that support U S WEST's overall development efforts for the DART
project. This Development Agreement outlines the Fetch & Stuff Phase 2 project
that will provide enhancements and modifications to the proof of concept Fetch
& Stuff Engine and associated client software. The Fetch & Stuff Phase 2
project transitions the Fetch & Stuff Engine into a production level system.
From a conceptual level, CGI proposes to provide 3 releases of software during
the 1997 Fetch & Stuff Phase 2 project. These will occur in 1997 and are
identified as Group A, B and C Project Work Items. These translate as shown
below:
<TABLE>
<CAPTION>
- ------------- -------------------------------------------------------------------------------------------
GROUP PROJECT WORK ITEM DESCRIPTION
<S> <C>
- ------------- -------------------------------------------------------------------------------------------
A Additional Messages (SONAR Transactions)
- ------------- -------------------------------------------------------------------------------------------
A Additional Legacy Systems (SONAR Transaction API)
- ------------- -------------------------------------------------------------------------------------------
A Inventory Control Services (Usage and Defect counts)
- ------------- -------------------------------------------------------------------------------------------
A Product Deployment (Alarming, Product Support and Mtce., etc.)
- ------------- -------------------------------------------------------------------------------------------
- ------------- -------------------------------------------------------------------------------------------
B Failover Enhancements (Hardware & Software)
- ------------- -------------------------------------------------------------------------------------------
B Dynamic routing (API priorities, Oracle rule-driven)
- ------------- -------------------------------------------------------------------------------------------
B Increase robustness of F/S server (Performance, Scaleability, # of
> users, etc.)
- ------------- -------------------------------------------------------------------------------------------
B Load Balancing
- ------------- -------------------------------------------------------------------------------------------
- ------------- -------------------------------------------------------------------------------------------
C New Routing Destinations (Interface/interact with Call Handling)
- ------------- -------------------------------------------------------------------------------------------
C Routing Administration Environment
- ------------- -------------------------------------------------------------------------------------------
C One Stop Shopping
- ------------- -------------------------------------------------------------------------------------------
- ------------- -------------------------------------------------------------------------------------------
ABC Documentation (SYAD guide, deployment guide, req doc, design doc updates)
- ------------- -------------------------------------------------------------------------------------------
</TABLE>
37-001-97 7 JANUARY 24, 1997
<PAGE> 9
High-level timeframes associated with the Project Work Item groupings shown
above are envisioned as follows:
* GROUP A - February, March, April - 1997
* GROUP B - April, May, June, July - 1997
* GROUP C - July through December - 1997
As Fetch & Stuff is deployed in a staged rollout to production in 1997, CGI
realizes that there may be unanticipated "engine" architecture or strategy
changes necessary to accommodate the needs of the U S WEST client user base.
As such, we are flexible to re-evaluate the Project Work Items scoped for
completion during the July-December timeframe as necessary. We envision any
significant scope substitutions to be mutually agreed to by U S WEST and CGI,
and, if changes to the resource mix or the overall work hours estimate occurs,
the two companies will mutually execute a Change Order to formally amend this
Development Agreement. As each group of Project Work Items is completed, CGI
and U S WEST will reassess the remaining planned work list for each subsequent
project stage before starting work on the next release group of Project Work
Items.
The CGI deliverables provided under this 3-release 1997 project will provide
U S WEST with a manageable long term production solution that puts an
architecture and framework in place to support current and future Service
Delivery functions. We believe that this incremental, "staged" approach to the
overall project allows U S WEST to continue to partner with CGI and leverage
business and technical resources to meet the organizational needs of the
project. It also positions both companies to be mutually successful in this
1997 effort.
CGI ROLES AND RESPONSIBILITIES
The following activities are to be performed by CGI:
* Develop an overall project schedule for this effort based on joint CGI/U S
WEST input.
* Create monthly status reports documenting project progress.
* Update (as needed) the inventory and interface protocol documents of
existing interfaces to selected legacy systems ([ ], [ ], [ ],
[ ] Transactions, etc.). The following information is provided for each
interface:
-> Purpose of the interface
-> Ownership organization
-> Project (business/technical purpose) for which the interface was
developed
-> Interface approach (e.g. TN3270 or API)
-> Current status (development, production, etc.)
* Update the following technical documentation for the enhanced Fetch & Stuff
production system:
-> High level Requirements Specification
-> High level Design Specification
-> Integration Test Plan
37-001-97 8 JANUARY 24, 1997
<PAGE> 10
-> Interface Message Specification Document
-> Architecture Document
* Design/develop/implement the planned enhancements or modifications to major
components of the Fetch & Stuff Engine system. These are detailed in the
Scope and Deliverables section below.
* Conduct unit and integration testing for the enhanced Fetch & Stuff Engine.
* Provide knowledge transfer to U S WEST for maintenance, training, and
ongoing support.
* Support system and acceptance testing.
* Provide software support and technical assistance to fix Problem Reports
identified in the software releases during 1997.
U S WEST ROLES AND RESPONSIBILITIES
The following activities are to be performed by U S WEST:
* Provide subject matter expertise on legacy systems as needed by the project
schedules.
* Acquire and install all development hardware and software required by the
end of Week 2 of each collection of Project Work Items as grouped into
category A, B or C in the preceding table.
* Provide communication network access from the development server to each
legacy system that U S WEST directs CGI to implement in the Fetch & Stuff
Engine during 1997.
* Provide system administration and database administration for software and
hardware platforms.
* Specify documentation standards, formats, and templates that CGI is required
to follow in all project deliverables by the end of week 2 of each Project
Work Item category grouping.
* Provide project management and appropriate sponsorship support to aid CGI in
gaining access to internal IT groups who provide either legacy system
expertise and/or software.
* Manage scope and expectations with end user clients.
* System test and acceptance test the DART system environment with the Fetch &
Stuff Engine incorporated.
* Conduct user training for the DART system environment with the Fetch & Stuff
Engine included.
JOINT CGI AND U S WEST ROLES AND RESPONSIBILITIES
CGI and U S WEST are jointly responsible for the following activities:
* Identification and acceptance decision on which legacy system interfaces are
in a production-ready state and are to be included in the enhanced Fetch &
Stuff Engine by the end of week 2, for each Project Work Item group.
* Develop high-level system administration notes for the enhanced production
Fetch & Stuff Engine.
* Hold weekly status meeting where time, progress, plans, and issues are
presented and action items are assigned for resolution.
37-001-97 9 JANUARY 24, 1997
<PAGE> 11
* Follow change management procedures. (It is anticipated that U S WEST has
already defined change management procedures. Otherwise, CGI's standard
change management procedures can be incorporated into this project.)
* Define the success criteria for the project.
* Develop documentation and present information at Architecture and
operational readiness reviews.
* Monthly project review.
GENERAL PROJECT SCOPE AND DELIVERABLES
The following comprise the general scope and deliverables envisioned by CGI for
all releases of this project:
* High level System Requirements Specification. This documents the joint
success criteria for the project and the individual requirements that the
Fetch & Stuff Engine must provide.
* High level System Design Specification. This documents the development
hardware and software platforms and system design elements. This will be
delivered at the end of the development interval so that it includes the
final version of the software design.
* Interface Specification Document. This describes the various APIs supported
by the Fetch & Stuff Engine module.
* Provide enhanced NT OLE Server API to the front end interface to Fetch &
Stuff Engine facility.
* Monthly status report documenting the CGI team progress during that month.
* The enhanced Fetch & Stuff Engine software (developed in C++ on the UNIX
OS). This includes the legacy system interfaces.
* The delivered Fetch & Stuff Engine software which has been unit tested and
integrated with a test client program.
A detailed description and outline of the specific deliverables for this
project can be found in Exhibit 4 of this Development Agreement.
The deliverables embodied in this Development Agreement will contain portions
of CGI-proprietary technology known as COE, which are being provided to U S
WEST as CGI Background Technology, for purposes of this Development Agreement.
SUMMARY
The consulting business and technical services outlined in this document
provide U S WEST with a cost-effective framework for rapid success while
incorporating a robust and scaleable production environment over 1997. As
envisioned by CGI, the Fetch & Stuff
37-001-97 10 JANUARY 24, 1997
<PAGE> 12
Engine (to be enhanced and modified under this Development Agreement) and
associated environment is as shown in Figure 1 on the following page.
[ ]
Figure 1 - Fetch & Stuff Environment
This Development Agreement specifically covers the continuing Legacy Systems
Interface Code Inventory and Fetch & Stuff Engine enhancements and
modifications efforts to be performed by CGI from February 1, 1997 through
December 31, 1997.
CGI EXPERIENCE
CGI offers U S WEST a proven approach that allows for procurement and
acquisition of business/technical resources at the pace the business/project
needs, and a proven record of success in Legacy Systems Interface Project Work.
CGI has a long-standing track record of success with U S WEST that includes
successful project experience with the following:
Call Handling
* Fetch & Stuff Phase 1 (Proof of Concept)
* Interface to 5ESS, 1AESS, DMS100 switches on the Soft Dial Tone ASAP project
* Interface to SDT via ASAP project
* Teaming with U S WEST Soft Dial Tone team and INI to build SOAC interface
* Interface to [ ] pricing and availability tables on CASH project
* Interface to [ ] for C-LINK Sales Assistant
* CSSP evaluation of interfaces built using CONNAPI for Screen Scraping to
37-001-97 11 JANUARY 24, 1997
<PAGE> 13
[ ], [ ], and [ ] for repair information
Interface to [ ], [ ], [ ] and Work
Manager via ARMAR
CGI has the seasoned, available talent to partner with U S WEST for this
project. We can continue to provide business and technical resources very
quickly to be flexible and responsive to U S WEST's needs. Finally, CGI brings
a track record of performance and success in the initial proof of concept
activities to continue the momentum for the 1997 production rollout of the
Fetch & Stuff project.
37-001-97 12 JANUARY 24, 1997
<PAGE> 14
EXHIBIT 2 - ESTIMATED COST
--------------------------
COST OVERVIEW
The total cost of the work net of discounts is estimated at $[ ] based on
expected time and material expenses. No travel is anticipated for this project.
Should travel be required, U S WEST agrees to pay CGI travel expenses for all
pre-approved trips.
Work will be provided on a time and materials basis. The cost estimate and
applicable discount breakouts being extended are as shown below. The [ ]%
Alliance Discount has been extended pursuant to the GLA extension executed
between U S WEST and CGI in December, 1996. The [ ]% Facilities Discount
(includes [ ]% computer and [ ]% building discount) is extended under the
assumption that all work will be performed at U S WEST facilities for this
project. CGI has extended the [ ]% Volume Discount in recognition of this being
a significant follow-on to the original proof of concept project, and in
anticipation of this Development Agreement being signed by U S WEST in January
to keep the existing project team in place for the duration of 1997.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
ITEMIZATION OF COSTS AMOUNTS
- -----------------------------------------------------------------------------------------------------------
<S> <C>
CONTRACT ENGINEERING COSTS (TIME AND MATERIALS) $[ ]
LESS: [ ]% ALLIANCE DISCOUNT [ ]
LESS: [ ]% VOLUME DISCOUNT [ ]
LESS: [ ]% FACILITIES DISCOUNT [ ]
- -----------------------------------------------------------------------------------------------------------
TOTAL CONTRACT ENGINEERING [ ]
- -----------------------------------------------------------------------------------------------------------
TRAVEL EXPENSES 0
- -----------------------------------------------------------------------------------------------------------
TOTAL DA ESTIMATE: $[ ]
- -----------------------------------------------------------------------------------------------------------
</TABLE>
37-001-97 13 JANUARY 24, 1997
<PAGE> 15
Estimated hours by skill category are as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
CATEGORY NUMBER OF PEOPLE TOTAL ESTIMATED HOURS
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Manager .75 [ ]
Principal Engineer .5 [ ]
Sr. Engineer II 1 [ ]
Sr. Engineer I 3 [ ]
Engineer 1.5 [ ]
- --------------------------------------------------------------------------------------------------------
TOTAL PEOPLE / HOURS: 6.75 [ ]
- --------------------------------------------------------------------------------------------------------
</TABLE>
U S WEST may, at its discretion, close the project or the involvement of CGI
resources by providing a written notice to the CGI Program Manager. If such an
eventuality occurs, the respective resources will be given a ramp down period
of [ ] weeks to find other work. Upon completion of the [ ] week ramp down
period, U S WEST will be obligated to CGI for the time and materials expended
up to and including the [ ] week ramp down.
37-001-97 14 JANUARY 24, 1997
<PAGE> 16
EXHIBIT 3 - SCHEDULE & STATEMENT OF WORK
----------------------------------------
TASKS, SCHEDULE, AND STATEMENT OF WORK DELIVERABLES
The high level Fetch & Stuff Phase 2 project activities as proposed by CGI
appears in charts below. Each chart is intended to represent the major tasks
and deliverables over the estimated timeline. The overall schedule for the 3
releases assumes a Project Start Date of February 1, 1996 and an End Date of
December 31, 1997.
GROUP A TASKS [FEBRUARY--APRIL, 1997]
<TABLE>
<CAPTION>
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
TASKS Responsibility START DATE END DATE DELIVERABLES
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
<S> <C> <C> <C> <C>
Develop schedule CGI 2/1/97 2/6/97 schedule
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Define Success Joint 2/1/97 2/14/97 success criteria
Criteria
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Client SME U S WEST 2/1/97 3/15/97 SMEs assigned
Available
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Requirements Dev CGI 2/1/97 2/14/97 Requirements
& Analysis Document
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Req. Review U S WEST 2/15/97 2/21/97 feedback
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
HW & SW System U S WEST 2/14/97 Development
Available Platform
Available
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Provide HW/SW U S WEST 2/1/97 3/15/97 Support
system guidance &
Sys admin
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Design CGI 2/15/97 2/28/97 Design Draft
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Design Doc CGI 2/24/97 3/21/97 Design
Document
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Design Review U S WEST 2/1/97 3/28/97 feedback
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Software CGI 2/1/97 3/14/97 Software
Development
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Unit Test CGI 3/10/97 3/21/97 Unit tested
software
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Integration Test CGI 3/22/97 3/28/97 Int. tested
software
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
</TABLE>
37-001-97 15 JANUARY 24, 1997
<PAGE> 17
<TABLE>
<S> <C> <C> <C> <C>
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Provide Support for U S WEST 3/22/97 3/28/97 Support
integration testing
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Interface CGI 2/1/97 3/28/97 Document
Specification
Document
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
System Test Team U S WEST 3/17/97 3/21/97 Test Team
in Place assigned
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
System Test Plan U S WEST 3/18/97 3/28/97 System Test Plan
Development
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
System CGI 3/17/97 3/28/97 System
Administration Administration
Document Document
Development
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
System U S WEST 3/31/97 4/4/97 Training
Administration
Training and
Documentation
Review
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
System Testing U S WEST 3/31/97 4/11/97 Testing
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Provide System CGI 3/31/97 4/11/97 Test Support &
Testing Support Software
Maintenance
Releases
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
</TABLE>
GROUP B TASKS [APRIL--JULY, 1997]
<TABLE>
<CAPTION>
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
TASKS Responsibility START DATE END DATE DELIVERABLES
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
<S> <C> <C> <C> <C>
Develop schedule CGI 4/14/97 4/18/97 schedule
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Define Success Joint 4/14/97 4/25/97 success criteria
Criteria
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Client SME U S WEST 4/14/97 7/18/97 SMEs assigned
Available
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Requirements Dev CGI 4/14/97 5/2/97 Requirements
& Analysis Document
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Req. Review U S WEST 5/5/97 5/9/97 feedback
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
HW & SW System U S WEST 4/25/97 Development
Available Platform
Available
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Provide HW/SW U S WEST 4/14/97 7/18/97 Support
system guidance &
Sys admin
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Design CGI 4/21/97 5/9/97 Design Draft
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
</TABLE>
37-001-97 16 JANUARY 24, 1997
<PAGE> 18
<TABLE>
<S> <C> <C> <C> <C>
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Design Document CGI 4/28/97 7/11/97 Design
Document
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Design Review U S WEST 5/12/97 5/16/97 feedback
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Software CGI 5/5/97 6/6/97 Software
Development
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Unit Test CGI 6/2/97 6/27/97 Unit tested
software
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Integration Test CGI 6/30/97 7/4/97 Int. tested
software
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Provide Support for U S WEST 6/30/97 7/4/97 Support
integration testing
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Interface CGI 4/14/97 7/18/97 Document
Specification
Document
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
System Test Team U S WEST 6/20/97 6/20/97 Test Team
in Place assigned
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
System Test Plan U S WEST 6/23/97 7/4/97 System Test Plan
Development
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
System CGI 6/23/97 7/4/97 System
Administration Administration
Document Document
Development
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
System U S WEST 7/7/97 7/11/97 Training
Administration
Training and
Documentation
Review
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
System Testing U S WEST 7/7/97 7/18/97 Testing
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
Provide System CGI 7/7/97 7/18/97 Test Support &
Testing Support Software
Maintenance
Releases
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
</TABLE>
GROUP C TASKS [JULY--DECEMBER, 1997]
<TABLE>
<CAPTION>
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
TASKS Responsibility START DATE END DATE DELIVERABLES
- -------------------------- ----------------------- ------------------- ------------------ ----------------------
<S> <C> <C> <C> <C>
Develop schedule CGI 7/21/97 7/25/97 schedule
- ---------------------------- --------------------- ----------------- ----------------- -----------------------
Define Success Joint 7/21/97 8/1/97 success criteria
Criteria
- ---------------------------- --------------------- ----------------- ----------------- -----------------------
Client SME Available U S WEST 7/21/97 12/31/97 SMEs assigned
- ---------------------------- --------------------- ----------------- ----------------- -----------------------
</TABLE>
37-001-97 17 JANUARY 24, 1997
<PAGE> 19
<TABLE>
<S> <C> <C> <C> <C>
- ---------------------------- --------------------- ----------------- ----------------- -----------------------
Requirements Dev & CGI 7/21/97 8/15/97 Requirements
Analysis Document
- ---------------------------- --------------------- ----------------- ----------------- -----------------------
Req. Review U S WEST 8/18/97 8/22/97 feedback
- ---------------------------- --------------------- ----------------- ----------------- -----------------------
HW & SW System U S WEST 8/4/97 Development
Available Platform Available
- ---------------------------- --------------------- ----------------- ----------------- -----------------------
Provide HW/SW U S WEST 8/5/97 12/31/97 Support
system guidance &
Sys admin
- ---------------------------- --------------------- ----------------- ----------------- -----------------------
Design CGI 8/4/97 8/29/97 Design Draft
- ---------------------------- --------------------- ----------------- ----------------- -----------------------
Design Document CGI 8/11/97 12/31/97 Design Document
- ---------------------------- --------------------- ----------------- ----------------- -----------------------
Design Review U S WEST 9/1/97 9/5/97 feedback
- ---------------------------- --------------------- ----------------- ----------------- -----------------------
Software CGI 9/2/97 10/10/97 Software
Development
- ---------------------------- --------------------- ----------------- ----------------- -----------------------
Unit Test CGI 9/29/97 11/17/97 Unit tested
software
- ---------------------------- --------------------- ----------------- ----------------- -----------------------
Integration Test CGI 11/20/97 12/5/97 Int. tested software
- ---------------------------- --------------------- ----------------- ----------------- -----------------------
Provide Support for U S WEST 11/20/97 12/5/97 Support
integration testing
- ---------------------------- --------------------- ----------------- ----------------- -----------------------
Interface CGI 8/1/97 12/31/97 Document
Specification
Document
- ---------------------------- --------------------- ----------------- ----------------- -----------------------
System Test Team in U S WEST 11/28/97 11/28/97 Test Team
Place assigned
- ---------------------------- --------------------- ----------------- ----------------- -----------------------
System Test Plan U S WEST 12/1/97 12/12/97 System Test Plan
Development
- ---------------------------- --------------------- ----------------- ----------------- -----------------------
System CGI 12/3/97 12/14/97 System
Administration Administration
Document Document
Development
- ---------------------------- --------------------- ----------------- ----------------- -----------------------
System U S WEST 12/17/97 12/21/97 Training
Administration
Training and
Documentation
Review
- ---------------------------- --------------------- ----------------- ----------------- -----------------------
System Testing U S WEST 12/8/97 12/31/97 Testing
- ---------------------------- --------------------- ----------------- ----------------- -----------------------
Provide System CGI 12/8/97 12/31/97 Test Support &
Testing Support Software
Maintenance
Releases
- ---------------------------- --------------------- ----------------- ----------------- -----------------------
</TABLE>
37-001-97 18 JANUARY 24, 1997
<PAGE> 20
ASSUMPTIONS
The above tasks, schedule and deliverables were developed based on the
following assumptions.
1. The schedule is based on a project start date of February 1, 1997.
Delays in this start date may impact the estimated enhanced Fetch &
Stuff Engine production rollout and associated software delivery dates.
2. The work estimates are based on CGI Methodology and past experience.
CGI will continuously monitor the status and notify U S WEST of any
issues or jeopardy situations which may impact the delivery date.
3. CGI has timely access to U S WEST personnel (i.e. SMEs). CGI assumes
SME access will begin at Project Start and will continue through the
duration of the project schedule (i.e. through 12/31/97).
4. U S WEST to provide a sponsor and Project Manager to act as the liaison
between the U S WEST project team and the CGI project team.
5. CGI will work directly with subject matter experts (SMEs) to identify
highest priority legacy systems and the data required from those legacy
systems.
6. Function determination for inclusion in interface evaluation work for
different operations related to legacy system access will be
prioritized by U S WEST.
7. Weekly status reports and meetings to be held between the U S WEST
project manager the CGI project manager to measure progress against the
workplan. Any known issues and risks are also discussed and raised to
the next level if not resolved.
8. CGI development work will continue to be performed on a Hewlett-Packard
UNIX server to be provided by U S WEST, unless otherwise notified.
9. U S WEST to provide any necessary facilities, computer equipment,
server access, software, etc., by the end of Week 2 (February 15th).
10. Any delays in dependent tasks (i.e. U S WEST tasks) may impact the
delivery date.
11. Changes requests to be submitted using the CGI or U S WEST change
request process for analysts to provide estimates, costs, and impact on
current deliverables. Signed approval is required before implementation
of any changes requests.
37-001-97 19 JANUARY 24, 1997
<PAGE> 21
EXHIBIT 4 - DELIVERABLES
------------------------
DELIVERABLES
A copy of the project deliverables, as outlined below, will be provided to the
appropriate U S WEST recipients. The master copy will contain a letter to be
mutually signed by the parties acknowledging delivery, receipt and acceptance
of the deliverables. Should CGI not receive the signed letter or a written list
of items which are not in compliance with the project specifications within ten
(10) business days after delivery, then the Deliverables shall be deemed
accepted.
DETAILED SCOPE ASSOCIATED WITH AFOREMENTIONED PROJECT WORK ITEMS
The following comprise the scope and deliverables envisioned by CGI for the
Project Work Items associated with each of the three planned software releases
of this project in 1997:
GROUP A PROJECT WORK ITEMS [FEBRUARY--APRIL, 1997]
A--1.0 Additional Interface Messages Developed for the Fetch & Stuff Server
Develop additional interface messages for the Fetch & Stuff server that
call existing [ ] Transaction APIs to obtain or update data. Examples of
new [ ] Transaction messages are:
* Set Billing Date
* Delete TN from Account
* Retrieve USOCs
There are approximately 50 [ ] Transaction messages. In the Fetch & Stuff
Phase 2, release associated with the Group A Project Work Items, there will
be time to develop approximately 20 of these messages. Prioritization will
be needed from the U S WEST DART team to identify the messages that will be
included in Fetch & Stuff Phase 2, release for Group A Items. The remaining
[ ] Transaction messages can be completed in future Fetch & Stuff
development releases, if desired.
37-001-97 20 JANUARY 24, 1997
<PAGE> 22
The effort involved is on a per message basis. There are software changes
needed on the client application and on the Fetch & Stuff Server Engine to
define the appropriate message protocol. The Fetch & Stuff Server Engine
will also need modifications to install data in the routing tables which
direct each message to a specific API.
A--2.0 Additional Legacy Data Access Systems
Fetch & Stuff Phase 2 will provide access to the [ ] Transaction APIs. An
additional "server engine" will be added to the Fetch & Stuff Engine Server
to manage access to the [ ] Transaction APIs. It is assumed that the [ ]
Transactions API is in a stable state, and can be integrated into the Fetch
& Stuff Engine Server in the same manner as the [ ] APIs.
The software changes required are to the Fetch & Stuff Server Engine alone.
The work involves adding a new "server engine" for the [ ] Transaction
APIs. This work will be married with items described in section 1.0 above,
to add new interface messages that will request work for the new [ ]
Transaction engine.
A--3.0 Inventory Control (Usage Counts) and Defect Tracking Services
There is a need to maintain data which identifies what clients have been
using each interface message, along with the results of these usage
attempts. A data table will be used to collect usage count and defect
tracking data. Usage counts are the number of requests made for a
particular service. Defect tracking is how many times a specific interface
message failed for each possible API. Data will be collected on a per
message and per client basis. The interface message protocol will need to
be enhanced to include a client identifier in all messages. The different
kinds of counts collected will be:
* # of requests
* # of successes
* # of failures (reply returned but with failure code)
* # of time-outs (did not receive a reply from legacy API)
A Web based administration system will be developed that will provide a
mechanism to display the data collected, by way of "canned" reports. Data
will be stored in an Oracle database on request from the UNIX processes in
the Fetch & Stuff Engine Server.
There will be software changes to the Fetch & Stuff Server Engine to add
code to collect data. There will also be a totally new element developed to
provide the Web-based reporting system. A database schema will be defined
to detail how data will be saved. Pro*C code will be created to write data
into the new database.
37-001-97 21 JANUARY 24, 1997
<PAGE> 23
A--4.0 Product Deployment
Develop items that will be used in support of product deployment, such as:
* Alarming - Fetch & Stuff was developed with the use of Service Layer
components in mind. These elements need to be added to the existing system.
* Resolve Problem Reports and make software updates on released software.
The Service Layer software changes are enhancements to the Fetch & Stuff Server
Engine. Administrative processes need to be developed on how to handle alarms.
Software maintenance changes may be in NT client or in the Fetch & Stuff Engine
software.
A--5.0 Documentation
Produce or update the following documents:
* Updated System Administration Guide
* Updated Requirements Document
* Updated Architecture Document
* Updated Design Document
* Updated Interface Inventory Document
* Updated Interface Message Protocol Document
* Deployment Guide
* Other documents, as directed by U S WEST
GROUP B PROJECT WORK ITEMS [APRIL--JULY, 1997]
B--1.0 Failover Enhancement
Hardware and Software modifications are needed to manage automatic failover to
another hardware device or software process when major failures occur to the
Interface Server machine or process. Actual HW/SW plans cannot be made until
after the production HW/SW environment is selected. One option is to add
additional hardware (servers) or separate processors on the same server along
with system software to manage the failover. Software tools from HP or Sequent
can be integrated into the Fetch & Stuff environment in order to implement
failover services.
Additional changes are desired to provide appropriate replies whenever there is
a need to communicate information relating to interface message changes or
system problems. The Fetch & Stuff Engine will send a msg back to the client as
each problem occurs. Examples of this are:
* msg replaced
* API OOS
37-001-97 22 JANUARY 24, 1997
<PAGE> 24
B--2.0 Dynamic Routing
Routing tables are used to direct an incoming message to the appropriate server
engine for processing. The proof of concept system was implemented with the
routing tables "hard coded" into the software. Changes are needed to allow for
a dynamic implementation approach to the routing tables. The software changes
will take into account the following items:
* API Priorities (meaning go to AT API 1st, DA API 2nd, etc.)
* Whether the table is developed in Oracle or just maintained as a
matrixed array of data.
B--3.0 Increase Robustness of Fetch & Stuff Server
The current version of Fetch & Stuff Server Engine was implemented as a proof
of concept, to be trialed with a small number of users. In order to increase
robustness system improvements will be implemented for:
* Performance
* Scaleability (# of Users)
* Information Logging
* Port software to UNIX 10.x
Some items (e.g., information logging) can be implemented by adding Service
Layer elements to the Fetch & Stuff Engine Server. Other items need utilize
data collected about the system after it is completed and has stress tests
applied to it.
B--4.0 Documentation
Produce or update the following documents:
* Updated System Administration Guide
* Updated Requirements Document
* Updated Architecture Document
* Updated Design Document
* Updated Interface Inventory Document
* Updated Interface Message Protocol Document
* Deployment Guide
* Other documents, as directed by U S WEST
B--5.0 Load Balancing
Provide hardware or software mechanisms to balance the load of requests being
made to the Fetch & Stuff Interface Server. Load Balancing can be achieved
37-001-97 23 JANUARY 24, 1997
<PAGE> 25
dynamically by developing a software process that monitors the arrival rate of
requests, and sends them to another system/processor once a threshold has been
reached. One approach may be to have specific clients' requests designated to
go to a specific server, possibly on a regional basis. Other approaches will
also be evaluated. A final approach will be heavily dependent on the hardware
chosen by U S WEST for the production environment.
GROUP C PROJECT WORK ITEMS [JULY--DECEMBER, 1997]
C--1.0 New Routing Destinations
Currently, the Fetch & Stuff Server Engine services fetch and stuff requests
from a client and returns a reply to the same client. A desired option for
Fetch & Stuff is that the application that requests data is not the application
to receive data. Additional message protocol and Fetch & Stuff Server Engine
modifications are needed to direct the resulting data to the appropriate
destination. An applications that this would be appropriate for is Call
Handling.
There will be "engine" functionality changes to recognize the protocol which
directs data to the receiving client. Software will also need to be changed on
the receiving client application's system, so that it knows what to do with a
data message being received. Finally, an effort will be required to define the
message protocol for each new interface message.
C--2.0 Routing Administration Environment
If dynamic routing tables are implemented as described above, then there will
be a need to make changes to these routing tables as production rollout
continues and data is obtained on the performance of specific APIs. A
presentation system should be implemented to add, change or delete routing
table entries. This could be done in JAVA or another GUI of U S WEST's
choosing.
Updating the routing tables will be a system administration task. A
presentation system will be very useful so that the routing table data does not
get inadvertently corrupted.
C--3.0 One Stop Shopping
This envisions the U S WEST software environment for DA and AT run on the same
hardware server as the Fetch & Stuff server engine. This, in turn, would
eliminate the need for an unnecessary "hop" to a DA or AT server before
accessing the legacy systems to process a client request. Integration test of
all software on the Fetch & Stuff production hardware is needed to successfully
complete this Project Work Item.
37-001-97 24 JANUARY 24, 1997
<PAGE> 26
C--4.0 Documentation
Produce or update the following documents:
* Updated System Administration Guide
* Updated Requirements Document
* Updated Architecture Document
* Updated Design Document
* Updated Interface Inventory Document
* Updated Interface Message Protocol Document
* Deployment Guide
* Other documents, as directed by U S WEST
37-001-97 25 JANUARY 24, 1997
<PAGE> 1
EXHIBIT 10.03
-------------
Confidential treatment with respect to certain information in this exhibit has
been requested of the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended. The bracketed portions
of this exhibit have been omitted from the material filed in accordance with
Rule 24b-2 and have been filed separately with the Commission.
<PAGE> 2
LETTER AGREEMENT TO AMEND
DEVELOPMENT AGREEMENT NO. 35-001-97
- Call Handling - 1997-
AMENDMENT NO. 35-001-97-A
-------------------------
This Letter Agreement dated March 25, 1997 is in regard to Development
Agreement No. 35-001-97 dated December 31, 1997, and constitutes an amendment
to portions of the Development Agreement and to one or more of the Exhibits
attached thereto, in accordance with Article 11 of the Development Agreement.
At the request of U S WEST's Call Handling Project Manager, CGI will complement
the current Call Handling 1997 efforts by providing additional CGI resources in
support of newly recognized project needs to be incorporated into the ongoing
project. The time period in which the additional CGI resources will work is
currently estimated to be March 24, 1997 through September 30, 1997.
These additional efforts require the addition of one (1) CGI resource who is
working as a Manager to assist in the Repair area, more specifically to provide
client management needed to make Repair successful within the Call Handling
architecture for an estimated period of six (6) months beginning March 24,
1997.
Such management services are currently being provided by Thornton Bell, CGI
Senior Business Consultant, at the [ ] CGI Manager rate in consideration for
U S WEST's commitment to a six (6) month engagement term for this new CGI
Manager position in the Repair area.
Also required is the addition of one (1) CGI resource who will work as a Senior
Engineer II ("SE2") to provide consulting services including assessing the
overall network performance and making recommendations for architecture design
and detailed design improvements within the Call Handling /FES&R system, under
U S WEST's direction. These consulting services at the SE2 level are estimated
to be provided over a period of ten (10) weeks between the period of April 1,
1997 and July 31, 1997.
This Amendment includes additional funding in the amount of $[ ] to the
original work scoped in Development Agreement 35-001-97. The Projected Cost and
Payment for the Project in Article 5 of the Development Agreement have been
increased by $[ ] to $[ ].
Exhibit 2 - Estimated Cost is amended as attached.
35-001-97A 1 March 24, 1997
<PAGE> 3
This Amendment describes the expanded scope, in accordance with the
current intent of the parties, for which the Call Handling - 1997
Development Agreement is being modified hereunder. It is intent of the
parties that the new services to be provided by CGI under this Amendment
will be incorporated into the ongoing effort under the 35-001-97
Development Agreement without interruption. Such services will continue
to be provided by CGI under this Development Agreement and Amendment as
subject to change in accordance with U S WEST direction and additional
amendments or change orders.
Except as expressly set forth in this Letter Agreement, the terms of the
Development Agreement and all signed amendments shall remain in full
force and effect.
IN WITNESS WHEREOF, Licensee and CGI have executed this Letter Agreement in
duplicate by their respective authorized representatives.
CARNEGIE GROUP, INC. LICENSEE
By: /s/ Dennis Yablonsky By: /s/ Barbara Irwin
------------------------- -----------------------------
Title: President/CEO Title: Director
--------------------- -------------------------
Date: 3/31/97 Date: 3/31/97
--------------------- -------------------------
US WEST BUSINESS RESOURCES, INC.
ACTING AS AGENT FOR: LICENSEE
By:
------------------------------
Title:
---------------------------
Date:
---------------------------
35-001-97A 2 March 24, 1997
<PAGE> 4
EXHIBIT 2 - ESTIMATED COST
COST OVERVIEW
The total cost of the work net of discounts is estimated at $[ ]
based on expected time and material expenses, which represents an
increase of $[ ] above the original funding approved for Call
Handling - 1997 of $[ ]. No travel is anticipated for this project.
Should travel be required, U S WEST agrees to pay CGI travel expenses
for all pre-approved trips.
Work will be provided on a time and materials basis. The cost estimate and
applicable discount breakouts being extended are as shown below. The [ ]%
Alliance Discount has been extended pursuant to the GLA extension executed
between U S WEST and CGI in March, 1997. The [ ]% Facilities Discount (includes
[ ]% computer and [ ]% building discount) is extended under the assumption that
all work will be performed at U S WEST facilities for this project. Work
requiring platforms and software outside of this environment will be requested
by U S WEST. It is planned that U S WEST will provide availability to the
nonstandard items to CGI for the duration of the project should any be
required. CGI has also extended the applicable Volume Discount of [ ]%.
U S WEST may, at its discretion, close the project or the involvement of CGI
resources by providing a written notice to the CGI Program Manager. If such an
eventuality occurs, the respective resources will be given a ramp down period
of [ ] weeks to find other work. Upon completion of the [ ] week ramp down
period, U S WEST will be obligated to CGI for the time and materials expended
up to and including the [ ] week ramp down.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
ITEMIZATION OF COSTS AMOUNTS
- -----------------------------------------------------------------------------------------------------------
<S> <C>
CONTRACT ENGINEERING COSTS (TIME AND MATERIALS) $[ ]
LESS: [ ]% ALLIANCE DISCOUNT [ ]
LESS: [ ]% VOLUME DISCOUNT [ ]
LESS: [ ]% FACILITIES DISCOUNT [ ]
- -----------------------------------------------------------------------------------------------------------
TOTAL CONTRACT ENGINEERING [ ]
- -----------------------------------------------------------------------------------------------------------
TRAVEL EXPENSES 0
- -----------------------------------------------------------------------------------------------------------
TOTAL AMENDED DA ESTIMATE: $[ ]
- -----------------------------------------------------------------------------------------------------------
</TABLE>
35-001-97A 3 March 24, 1997
<PAGE> 5
Additionally, we are providing the estimated hours for the labor categories
associated with the [ ]-person CGI team as shown below:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
CATEGORY CONTRIBUTION BY TOTAL ESTIMATED HOURS
CATEGORY
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Manager ([ ]) .23 [ ]
Sr. Engineer III ([ ]) .9 [ ]
Sr. Engineer II ([ ]) .22 [ ]
Sr. Engineer I ([ ]) .37 [ ]
Engineer ([ ]) .9 [ ]
- -----------------------------------------------------------------------------------------------------------
TOTAL CONTRIBUTION / HOURS: 100% [ ]
- -----------------------------------------------------------------------------------------------------------
</TABLE>
35-001-97A 4 March 24, 1997
<PAGE> 1
EXHIBIT 10.04
-------------
Confidential treatment with respect to certain information in this exhibit has
been requested of the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended. The bracketed portions
of this exhibit have been omitted from the material filed in accordance with
Rule 24b-2 and have been filed separately with the Commission.
<PAGE> 2
LETTER AGREEMENT TO AMEND
DEVELOPMENT AGREEMENT NO. 37-001-97
- Fetch & Stuff Phase 2 - 1997-
AMENDMENT NO. 37-001-97-A
-------------------------
This Letter Agreement dated March 6, 1997 is in regard to Development Agreement
No. 37- 001-97 dated January 24, 1997, and constitutes an amendment to portions
of the Development Agreement and to one or more of the Exhibits attached
thereto, in accordance with Article 11 of the Development Agreement.
At the request of U S WEST's Fetch & Stuff Project Director, CGI will
complement the current Fetch & Stuff Phase 2 consulting services by providing
additional CGI resources in support of new Interconnect interface work relating
to the Fetch & Stuff Engine. These additional consulting services will include
software design, developing the software interface and updating all related
technical documentation and will be incorporated into the existing schedule,
statement of work and deliverables, under U S WEST's direction.
Five (5) additional CGI team members will be included to perform the
Interconnect related project work for approximately two (2) project months of
effort, currently estimated from March 3, 1997 through May 30, 1997. This
Amendment includes additional funding in the amount of $[ ] to the original
work scoped in Development Agreement 37-001-97.
The Projected Cost and Payment for the Project in Article 5 of the Development
Agreement have been increased by $[ ] to $[ ].
Exhibit 2 - Estimated Cost is amended as attached.
This Amendment describes the expanded scope, in accordance with the current
intent of the parties, for which the Fetch & Stuff Phase 2 Development
Agreement is being modified hereunder. It is understood by the parties that the
consulting services will continue to be provided by CGI under this Development
Agreement and Amendment as subject to change in accordance with U S WEST
direction.
37-001-97A 1 March 6, 1997
<PAGE> 3
Except as expressly set forth in this Letter Agreement, the terms of the
Development Agreement and all signed amendments shall remain in full force and
effect.
IN WITNESS WHEREOF, Licensee and CGI have executed this Letter Agreement in
duplicate by their respective authorized representatives.
CARNEGIE GROUP, INC. LICENSEE
By: /s/ Dennis Yablonsky By: /s/ Barbara Irwin
----------------------- -----------------------------
Title: President/CEO Title: Director IAD/SDS
------------------- -------------------------
Date: 3/18/97 Date: 03/10/97
------------------- -------------------------
U S WEST BUSINESS RESOURCES, INC.
ACTING AS AGENT FOR: LICENSEE
By:
-----------------------------
Title:
--------------------------
Date:
--------------------------
37-001-97A 2 March 6, 1997
<PAGE> 4
EXHIBIT 2 - ESTIMATED COST
--------------------------
COST OVERVIEW
The total cost of the work net of discounts is estimated at $[ ] based on
expected time and material expenses, which represents an increase of $[ ]
above the original funding approved for Fetch & Stuff Phase 2 of $[ ]. No
travel is anticipated for this project. Should travel be required, U S WEST
agrees to pay CGI travel expenses for all pre-approved trips.
Work will be provided on a time and materials basis. The cost estimate and
applicable discount breakouts being extended are as shown below. The [ ]%
Alliance Discount has been extended pursuant to the GLA extension executed
between U S WEST and CGI in December, 1996. The [ ]% Facilities Discount
(includes [ ]% computer and [ ]% building discount) is extended under the
assumption that all work will be performed at U S WEST facilities for this
project. CGI has extended the [ ]% Volume Discount in recognition of this being
a significant follow-on to the original proof of concept project provided under
Development Agreement 37-001-96.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
ITEMIZATION OF COSTS AMOUNTS
- -----------------------------------------------------------------------------------------------------------
<S> <C>
CONTRACT ENGINEERING COSTS (TIME AND MATERIALS) $[ ]
LESS: [ ]% ALLIANCE DISCOUNT [ ]
LESS: [ ]% VOLUME DISCOUNT [ ]
LESS: [ ]% FACILITIES DISCOUNT [ ]
- -----------------------------------------------------------------------------------------------------------
TOTAL CONTRACT ENGINEERING [ ]
- -----------------------------------------------------------------------------------------------------------
TRAVEL EXPENSES 0
- -----------------------------------------------------------------------------------------------------------
TOTAL AMENDED DA ESTIMATE: $[ ]
- -----------------------------------------------------------------------------------------------------------
</TABLE>
37-001-97A 3 March 6, 1997
<PAGE> 5
Estimated hours by skill category are as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
CATEGORY CONTRIBUTION BY TOTAL ESTIMATED HOURS
CATEGORY
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Manager .75 [ ]
Principal Engineer
.7 [ ]
Sr. Engineer III
.2 [ ]
Sr. Engineer II 1 [ ]
Sr. Engineer I 3.4 [ ]
Engineer 1.5 [ ]
Associate Engineer .2 [ ]
- -------------------------------------------------------------------------------------------------------------
TOTAL CONTRIBUTION / HOURS: 7.65 [ ]
- -------------------------------------------------------------------------------------------------------------
</TABLE>
U S WEST may, at its discretion, close the project or the involvement of CGI
resources by providing a written notice to the CGI Program Manager. If such an
eventuality occurs, the respective resources will be given a ramp down period
of [ ] weeks to find other work. Upon completion of the [ ] week ramp down
period, U S WEST will be obligated to CGI for the time and materials expended
up to and including the [ ] week ramp down.
37-001-97A 4 March 6, 1997
<PAGE> 1
Exhibit 11.1
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
PRIMARY EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three months ended
March 31,
1997 1996
-------------------------
<S> <C> <C>
Weighted Average Common and
Common Equivalent Shares:
Weighted Average Common Stock
Outstanding During the Period 6,278,594 6,205,842
Weighted Average Common Equivalent:
Shares 674,220 970,285
---------- ----------
6,952,814 7,176,127
---------- ----------
Net Income $ 388,274 $ 683,185
========== ==========
Net Income Per Common Share $ 0.06 $ 0.10
========== ==========
</TABLE>
FULLY DILUTED EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three months ended
March 31,
1997 1996
-------------------------
<S> <C> <C>
Weighted Average Common and
Common Equivalent Shares:
Weighted Average Common Stock
Outstanding During the Period 6,278,594 6,205,842
Weighted Average Common Equivalent:
Shares 674,072 969,803
---------- ----------
6,952,666 7,175,645
---------- ----------
Net Income $ 388,274 $ 683,185
========== ==========
Net Income Per Common Share $ 0.06 $ 0.10
========== ==========
</TABLE>
15
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001001188
<NAME> CARNEGIE GROUP, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 14,396,031
<SECURITIES> 0
<RECEIVABLES> 7,508,630
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 24,539,319
<PP&E> 2,413,834
<DEPRECIATION> 0
<TOTAL-ASSETS> 28,546,344
<CURRENT-LIABILITIES> 4,509,031
<BONDS> 0
0
0
<COMMON> 65,140
<OTHER-SE> 23,972,173
<TOTAL-LIABILITY-AND-EQUITY> 28,546,344
<SALES> 625,078
<TOTAL-REVENUES> 7,131,918
<CGS> 6,653,763
<TOTAL-COSTS> 2,234,518
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,645
<INCOME-PRETAX> 644,607
<INCOME-TAX> 256,360
<INCOME-CONTINUING> 388,247
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 388,247
<EPS-PRIMARY> .06
<EPS-DILUTED> 0
</TABLE>
