<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
F O R M 10 - K/A
(Amendment No. 1)
[X] ANNUAL REPORT PURSUANT TO SECTION l3 OR l5(d) OF
THE SECURITIES EXCHANGE ACT OF l934
For the fiscal year ended June 30, 1996 Commission file number 1-5371
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
---------- ----------
----------------------
THE UNION CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 25-0848970
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
145 MASON STREET, GREENWICH, CONNECTICUT 06830
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 629-0505
Securities registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EXCHANGE ON WHICH REGISTERED
------------------- ------------------------------------
Common Stock, $.50 Par Value New York Stock Exchange
Securities registered pursuant to Section l2(g) of the Act: None
---------------------------
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section l3 or l5(d) of the Securities Exchange
Act of l934 during the preceding l2 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [_]
As of September 16, 1996 the Company had outstanding 5,707,391 shares
of common stock. The aggregate market value (based upon the closing price of
these shares on The New York Stock Exchange) of these shares held by
nonaffiliates was approximately $124,961,000.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Company's Annual Report for the year ended June 30,
1996 are incorporated by reference into Parts I and II.
Portions of the Company's Proxy Statement, in connection with its
Annual Meeting to be held on November 14, 1996, are incorporated by reference
into Part III. The Company's Proxy Statement will be filed within 120 days after
June 30, 1996.
<PAGE>
INSERT THE FOLLOWING IMMEDIATELY FOLLOWING THE COVER PAGE:
The Union Corporation (the "Registrant" or the "Company"), a Delaware
corporation, is filing this Amendment No. 1 on Form 10-K/A (this "Amendment") to
the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1996
(the "Original Report") in order to file a revised version of Exhibit 10(n)
(i.e., Contract between Advanta Corp. and High Performance Services, Inc. dated
August 16, 1996) to the Original Report, which revised version includes text as
to which confidential treatment was originally requested but is no longer being
sought. Notwithstanding the foregoing, confidential portions of Exhibit 10(n)
as to which confidential treatment has been granted by the Securities and
Exchange Commission (the "Commission") are omitted from the copy of Exhibit
10(n) filed with this Amendment and have been filed separately with the
Commission.
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SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, this 25th day of February,
1997.
THE UNION CORPORATION
(Registrant)
By: /s/Melvin L. Cooper
--------------------------------------
Melvin L. Cooper
Chairman of the Board
(Chief Executive Officer)
By: /s/Nicholas P. Gill
-------------------------------------
Nicholas P. Gill
Vice President, Treasurer and Secretary
(Principal Financial Officer and
Principal Accounting Officer)
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Page 1 of 19 Pages
[CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR
PORTIONS OF THIS EXHIBIT, WHICH PORTIONS ARE
INDICATED BY THE SYMBOL "*"]
High Performance Services, Inc. Advanta Corp.
c/o The Union Corporation Blair Mill Business Center
145 Mason Street 550 Blair Mill Road
Greenwich, CT 06830 Horsham, PA 19044
Attention: Mr. William B. Hewitt Attention: Ms. Diane Bowser
Subject to the terms and conditions stated in this Agreement, High Performance
Services, Inc. agrees to perform the customer services described below,
hereinafter "Work" or "Services", and Advanta Corp. ("Advanta") agrees to pay
the charges stated. Whenever the terms "you", "your" or "Contractor" are used
in this Agreement, the same shall mean High Performances Services, Inc.
Contractor is a wholly-owned subsidiary of The Union Corporation ("Union").
STATEMENT OF WORK
- -----------------
Contractor shall perform Services in anticipation of or following execution of
this Agreement and this Agreement shall expire on the last day of the calendar
month which is 24 months from the date Contractor notifies Advanta that the
facility where the Work will be performed (described in Section VI below) has
become operational. The facility will be deemed "operational" on the first day
of the month following the month in which Contractor first services live
accounts. The Services shall include but are not necessarily limited to the
following:
I. Contractor shall render customer services on behalf of Advanta and such
services shall be performed as described hereunder and in Exhibits A, B, C,
D and E, attached hereto and hereby made a part of this Agreement.
Contractor shall render customer services to Advanta and/or its affiliates.
Contractor shall render such customer services on behalf of and as directed
by Advanta and shall update Advanta's customer account information by
entering such available information into Advanta's computer system.
Contractor shall identify and "brand" itself as Advanta in providing
services as specified under this Agreement. Contractor shall use its best
efforts to provide these services in accordance with the highest
professional industry standards (and will follow, as near as may be
possible, Advanta's guidelines for telephone contacts). Contractor shall
be responsible for hiring and training the required management,
administrative personnel, customer service representatives and technical
staff to perform the Work under this Agreement within the timeframes agreed
upon.
II. Contractor's customer service representatives shall perform the Work by
utilizing Advanta's customer service policies as revised and updated from
time to time. Contractor will be notified of said changes within a
reasonable period of time to allow for sufficient training of Contractor's
customer service representatives.
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Page 2 of 19 Pages
Advanta shall have one Advanta on-site Manager ("Advanta's
Representative"), co-located with Contractor's employees performing the
Work, and such person shall be a liaison to the Contractor on behalf of
Advanta. Contractor shall share information with on-site and visiting
Advanta representatives in order to inform such Advanta representatives
regarding Services performed. Such representatives will not be employees or
agents of persons (other than Advanta and its affiliates) performing
services which are the same or substantially the same as the Services
performed by Contractor.
Advanta and Contractor will establish an Executive Committee on which the
parties hereto are equally represented, consisting only of employees of the
parties or employees of the parties' affiliates, which will address and
resolve all issues affecting the Contractor's performance specified in this
Agreement. This committee will assure effective communications, planning
of work, review of performance standards and volumes covered by this
Agreement. This committee will meet at least quarterly or more often, if
warranted.
III. Contractor shall transfer the data Contractor deems pertinent in connection
with the Work to Advanta-selected employees through means of day-to-day
interaction, oral presentations, and reports. Such interaction,
presentations and reports shall not unreasonably interfere with the normal
conduct of the Work. When transferring any such data, if Contractor
incorporates any of its proprietary information as provided in the
CONFIDENTIAL INFORMATION clause of this Agreement, Advanta shall treat such
information in accordance with requirements set forth in such clause.
IV. The following Exhibits are attached hereto as part of this Agreement.
Definitions hereunder apply to the Exhibits unless the Agreement otherwise
requires:
Exhibit A describes the operational requirements for the Work to be
---------
performed by the Contractor on behalf of Advanta.
Exhibit B describes Advanta's Performance Measurements.
---------
Exhibit C describes the systems and interfaces, Contractor's access rights
---------
to such systems, and the Equipment to be supplied by Advanta and to be used
by the Contractor for the Work.
Exhibit D describes the volume-forecast process to be used by Contractor
---------
under this Agreement.
Exhibit E describes Contractor's compensation for Work performed under this
---------
Agreement.
V. Unless Contractor obtains Advanta customer names for purpose of
solicitation through a means other than through Advanta-provided
information or through the performance of Services under this Agreement,
Contractor shall not solicit Advanta customers nor shall Contractor use
Advanta customer names and/or customer databases for any purpose other than
those expressly allowed under this Agreement.
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Page 3 of 19 Pages
VI. Contractor shall lease a facility to service the Advanta Work (hereinafter
referred to as the "Facility"). *
-----------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
-------------------------------------------------------------* The copy of
Facility design plans, specifications and lease for the Facility shall be
signed by Contractor for such Facility, but shall be reviewed and approved
by Advanta. Such Facility and staff working in such Facility shall be
utilized solely for the Work under this Agreement or other work requested
in writing by Advanta or approved in writing by Advanta's Representative.
VII. Union shall provide to Advanta its consolidated audited annual financial
statements within 110 days after the end of each fiscal year.
ARBITRATION
- -----------
If a dispute arises out of or relates to this Agreement, or its breach, and the
parties have not been successful in resolving such dispute through negotiation,
the parties agree to attempt to resolve the dispute through arbitration by
submitting the dispute to a sole arbitrator selected by the parties or, at any
time at the option of a party, to arbitration by the American Arbitration
Association ("AAA"). Each party shall bear its own expenses and an equal share
of the expenses of the arbitrator and the fees of the AAA. The parties, their
representatives, other participants and the arbitrator shall hold the existence,
content and result of arbitration in confidence, except as may be required by
applicable law or regulation. All defenses based on passage of time shall be
tolled pending the termination of the arbitration. Nothing in this clause shall
be construed to preclude any party from seeking injunctive relief in order to
protect its rights pending arbitration. A request by a party to a court for
such injunctive relief shall not be deemed a waiver of the obligation to
arbitrate.
ASSIGNMENT AND SUBCONTRACTING BY CONTRACTOR
- -------------------------------------------
Contractor shall not assign any right or interest under this Agreement
(excepting monies due or to become due) or delegate or subcontract any Work or
other obligation to be performed or owed under this Agreement without the prior
written consent of Advanta. Any attempted assignment, delegation or
subcontracting in contravention of the above provisions shall be void and
ineffective. Any assignment of monies due shall be void and ineffective to the
extent that (1) Contractor shall not have given Advanta at least thirty (30)
days prior written notice of such assignment or (2) such assignment attempts to
impose upon Advanta obligations to the assignee additional to the payment of
such monies, or to preclude Advanta from dealing solely and directly with
Contractor in all matters pertaining to this Agreement, including the
negotiation of amendments or settlements or charges due.
ASSIGNMENT BY ADVANTA
- ---------------------
Advanta shall have the right to assign this Agreement and to assign its rights
and delegate its duties under this Agreement either in whole or in part (an
"Assignment"), including, but not limited to, software licenses and other grants
of intellectual property rights, at any time and without Contractor's consent,
to (i) any present or future affiliate (including any subsidiary or affiliated
entity thereof) of Advanta or (ii) any unaffiliated new entities that may be
formed by Advanta pursuant to a corporate
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Page 4 of 19 Pages
reorganization, including any subsidiary or affiliated entity thereof. Advanta
shall give Contractor prior written notice of any Assignment, including (i) the
effective date of the Assignment ("Effective Date"), and (ii) the entity or
entities receiving rights and/or assuming obligations thereunder ("Entities").
Such assignment shall not relieve Advanta from its obligations hereunder.
AUDIT
- ------
Contractor shall maintain accurate records of all hours and costs of direct
labor employees engaged in Work for which payment under this Agreement is to be
computed and all other costs payable by Advanta under this Agreement. Such
records shall be maintained in accordance with the requirements of applicable
law and generally accepted accounting principles and shall be held until costs
have been determined under this Agreement. Contractor shall permit Advanta or
Advanta's Representative to examine and audit these records and all supporting
records at all reasonable times at the expense of Advanta (except as set forth
in the following paragraph). Audits shall be made not later than one (1)
calendar year after the completion of services rendered.
In the event Advanta conducts an audit of Contractor as a result of (or in the
course of an audit discovers) misconduct by Contractor, Contractor shall incur
the reasonable out-of-pocket expenses incurred by Advanta for such audit, unless
the amount of damages incurred by Advanta as a result of such misconduct does
not exceed $50,000, in which case the Contractor shall not be required to bear
the cost of such audit. For purposes hereof, "misconduct" shall be deemed to
mean fraud, gross negligence or willful misconduct of Contractor, or material
breaches of this Agreement by Contractor.
CARE AND CUSTODY OF PROPERTY
- ----------------------------
Contractor shall have the care, custody and control of Equipment (as hereinafter
defined in the EQUIPMENT clause) and any other Advanta records or materials
(hereinafter in this clause collectively referred to as "Materials") as
described hereunder in the possession of Contractor pursuant to this Agreement,
and shall be responsible for any and all damage to or loss of such Materials,
other than damage attributable to Advanta or its agents, acts of war and other
uninsurable risks and damages and other than normal wear and tear during the
time they are in Contractor's care, custody and control. Contractor's
responsibility hereunder with respect to any Materials shall commence upon
delivery and/or installation of such Materials (in good working order) by
Advanta and shall continue until such Materials are repossessed by Advanta or
its designees. The delivery, installation and, if required, the repossession of
any such Materials shall be at no cost to Contractor. The liability of
Contractor for any and all damage to or loss of Materials of Advanta in
Contractor's possession shall be based on the replacement value of such
Materials as determined. Materials supplied by Advanta shall be maintained by
Advanta at no cost to Contractor.
<PAGE>
Page 5 of 19 Pages
CHANGES
- -------
Advanta may at any time during the progress of the Work require additions to or
alterations of or deductions or deviations (all hereinafter referred to as a
"Change") from the Work described herein. No Change shall be considered as an
addition or alteration to or deduction or deviation from the Work, unless made
pursuant to a written Change Order issued by Advanta. Within thirty (30) days
after a request for a Change, Contractor shall submit a proposal to Advanta
which includes estimated increases or decreases in Contractor's costs or changes
in the Work schedule necessitated by the Change. Advanta shall, within thirty
(30) days of receipt of the proposal, either (i) accept the proposal, in which
event Advanta shall issue a written Change Order directing Contractor to perform
the Change or (ii) advise Contractor not to perform the Change, in which event
Contractor shall proceed with the original Work.
CHOICE OF LAW
- -------------
The construction, interpretation and performance of this Agreement and all
transactions under it shall be governed by the laws of the State of Delaware.
The parties agree that the provisions of the Delaware Uniform Commercial Code
apply to this Agreement and all transactions under it, including agreements and
transactions relating to the furnishing of services, the lease or rental of
equipment or material, and the license of software.
COMPENSATION
- ------------
Contractor's invoices for fees established in Exhibit E shall be paid to
Contractor for Work, and are to include the cost of all labor, materials,
equipment and all other costs incurred in the performance of the Work, as set
forth in Exhibit E. Advanta agrees to pay Contractor following receipt by
Advanta of invoices for Work performed hereunder. Payment shall be made fifteen
(15) days after invoices are received by the designated Advanta Representative.
COMPLIANCE WITH LAWS
- --------------------
Contractor and all persons furnished by Contractor shall comply with all
applicable federal, state and local laws, ordinances, regulations and codes,
including the procurement of required permits, certificates, licenses,
insurance, approvals and inspections in performance under this Agreement.
CONFIDENTIAL INFORMATION
- ------------------------
Neither Contractor nor Advanta shall provide to the other under, or have
provided in contemplation of, this Agreement any idea, data, program, technical,
business or other intangible information, however conveyed, or any document,
print, tape, disk, semiconductor memory or other information-conveying tangible
article, unless such party has the right to do so.
Subject to the foregoing, in the event either party discloses Confidential
Information (as hereinafter defined) to the other, the receiving party shall
hold such Confidential Information in confidence, shall use the Confidential
Information only for the purpose of its internal business, shall reproduce the
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Page 6 of 19 Pages
Confidential Information only to the extent necessary for such purpose, shall
restrict disclosure of the Confidential Information to its employees (and
employees and/or consultants of its affiliated companies) and consultants with a
need to know (and advise the employees of the obligations assumed herein) and
shall not disclose the Confidential Information to any other third party without
prior without written approval of the other and will take reasonable precautions
to avoid unauthorized disclosure and protect against unauthorized use of the
Confidential Information. The foregoing imposes no obligation upon the
receiving party with respect to Confidential Information which the receiving
party can establish by legally sufficient evidence: (a) was previously and
legally in the possession of or was rightfully known by the receiving party
without an obligation to maintain its confidentiality prior to receipt from the
disclosing party; (b) is or becomes generally known to the public without
violation of this Agreement; (c) is obtained by the receiving party in good
faith from a third party having the right to disclose it without an obligation
of confidentiality; (d) is independently developed by the receiving party
without the participation of individuals who have had access to the Confidential
Information; or (e) is required by law to be disclosed provided diligent efforts
are undertaken to limit disclosure.
The term "Confidential Information" means any and all information disclosed by
the disclosing party to the receiving party verbally, electronically, visually,
written or in other tangible form which is identified as confidential or
proprietary to the disclosing party. If any Confidential Information disclosed
is not in tangible form, its confidential or proprietary nature must first be
announced and it must be reduced to writing, with a copy of the writing being
furnished to the receiving party, within thirty (30) days of the disclosure of
the intangible information. Confidential Information includes, but is not
limited to, trade secrets, computer programs, software, formulas, data,
inventions, techniques, marketing plans, strategies, forecasts, third party
confidential information, business data, employee data and business plans. Any
Confidential Information provided by Contractor shall be furnished only to the
Advanta's Representative at the Jacksonville, Florida facility.
DISASTER RECOVERY
- -----------------
On or before 120 days after execution of this Agreement, Contractor shall submit
a contingency plan for Advanta's Work in the event of a disaster, described as a
force majeure condition in the clause FORCE MAJEURE or extended outage at
Contractor's site where Work is being performed, and shall submit such plan to
Advanta for review and approval by Advanta and such approval shall be provided
in writing by Advanta to Contractor. The plan shall include, but shall not be
limited to, modification of inbound calling requirements in the event of a
disaster and how Contractor will support operations in the event of major system
and/or infrastructure outages and its capability in support of the Facility,
systems, infrastructure and data. Costs incurred in connection with the
establishment, maintenance, implementation and performance of the plan shall be
chargeable to Advanta. Within 120 days after execution of this Agreement,
Advanta shall provide Contractor with a disaster recovery plan for Advanta as it
relates to Work under this Agreement.
In the event any telecommunications services or processes are not operating
properly, Contractor shall take immediate and appropriate action in accordance
with Contractor's business continuity plan to rectify the malfunction and shall
immediately notify Advanta's Representative within one (1) hour (or such lesser
time as appropriate under the circumstances) after Contractor becomes aware of
the service-
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Page 7 of 19 Pages
affecting situation and of remedial action taken. Advanta shall take immediate
and appropriate action to remedy any malfunction involving its Equipment.
ENTIRE AGREEMENT
- ----------------
This Agreement and Exhibits and Attachments hereto shall constitute the entire
agreement between the parties with respect to the subject matter of this
Agreement and shall not be modified or rescinded, except in writing signed by
Contractor and Advanta. Additional or different terms inserted in this
Agreement, or deletions thereto, whether by alterations, addenda, or otherwise,
shall be of no force and effect, unless expressly consented to by the parties in
writing. Estimates or forecasts furnished by Advanta or Contractor shall not
constitute commitments. The provisions of this Agreement supersede all
contemporaneous oral agreements and all prior oral and written quotations,
communications, agreements and understandings of the parties with respect to the
subject matter of this Agreement. All approvals or consents by the parties in
this Agreement or the Exhibits hereto shall not be unreasonably withheld or
unreasonably delayed.
EQUIPMENT
- ---------
Except for the communications and computer equipment provided directly to
Contractor by Advanta ("Equipment") as provided for in this Agreement,
Contractor shall provide all labor and other equipment for performance of this
Agreement (the "tools"). Advanta shall provide the Equipment for performance of
this Agreement.
Contractor shall assume risk of loss and damage to such Equipment while on
Contractor's premises. Contractor agrees not to remove the Equipment from
Contractor's premises where such Equipment is located. Advanta shall assume
responsibility for the Equipment upon expiration or termination of this
Agreement. Advanta shall conduct maintenance on the Equipment at its cost. The
Equipment shall be provided and maintained in accordance with the following
requirements.
A. Advanta shall provide communications and computer equipment necessary to
equip the Facility leased by Contractor for performance of the Work for
Advanta under this Agreement and such Equipment shall remain Advanta's
property at all times.
1. Contractor shall be responsible for the safekeeping of the Equipment,
assume all risks of loss or damage to the same except as limited by
the CARE AND CUSTODY OF PROPERTY clause and be liable for the
replacement value of such Equipment (subject to the provisions of
paragraph 3. below). Advanta shall provide maintenance service for
the Equipment, as required, repair, remove, replace, move or ship such
Equipment, unless such Equipment was lost or damaged by Contractor.
Contractor shall maintain during the term of this Agreement and during
the period of time Contractor has the care, custody and control of the
Equipment owned or furnished by Advanta the All Risk Property
Insurance policy required in the INSURANCE clause.
2. Contractor shall use the Equipment in accordance with all applicable
OSHA requirements and other safety requirements, codes or standards,
and keep in force at all times during
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Page 8 of 19 Pages
the course of this Agreement a policy of Workers' Compensation
insurance as prescribed by the law of the state in which the Work is
performed. Contractor may procure whatever additional insurance
Contractor deems appropriate. Contractor agrees to indemnify and hold
harmless Advanta from and against any and all losses, damages, claims,
demands, suits, and liabilities (including reasonable attorney's fees)
resulting from the operation, use or storage of the Equipment unless
such claims are based on defects in the Equipment or its operation not
the fault of Contractor.
3. Advanta shall permanently mark or, if impracticable to do so, then
affix labeling stating that the Equipment is the PROPERTY OF ADVANTA
CORP. Advanta shall prepare and deliver to Contractor, simultaneously
with the delivery of any Equipment, a report providing the name,
location and serial number for such Equipment. Such report shall also
include Advanta's estimate of replacement value of such Equipment, it
being understood that Contractor shall use its reasonable efforts to
insure such Equipment for the amount of the replacement value
estimated by Advanta, but that if the insurer ascribes a lower
replacement value to such Equipment, Contractor's liability with
respect to replacement value shall be limited to the insurable amount.
Advanta shall update reports with respect to any Equipment delivered
hereunder as appropriate. Contractor shall promptly notify Advanta of
any Equipment operational issues as it so becomes aware.
4. Contractor shall keep the Equipment in the location where Services are
being performed for Advanta by Contractor, and, in case of removal by
Contractor or any of its employees of all or any part of it from one
building to another, Contractor's responsibility for loss or damage
shall continue.
5. Contractor shall use the Equipment only in performing Services for
Advanta, unless otherwise agreed in writing by Advanta.
6. Advanta may inspect, inventory, and authenticate the account of
Equipment furnished under this Agreement during Contractor's normal
business hours. Contractor shall provide Advanta access to the
premises where all such Equipment is located. The obligations assumed
by Contractor with respect to Equipment furnished under this Agreement
are for the protection of Advanta's property. Contractor shall hold
for Advanta's disposition any or all of such Equipment in Contractor's
possession free of restrictions at (a) the completion of the Services,
or (b) termination of this Agreement.
B. The data stored in the computer Equipment and on all backup and archival
media is and shall remain the property of Advanta and is subject to the
terms and conditions set forth in the CONFIDENTIAL INFORMATION and RIGHTS
IN DATA clauses set forth hereunder. Contractor shall provide all such
data in the format reasonably required by Advanta upon (a) the completion
of the services, (b) termination of this Agreement, or (c) the withdrawal
of Equipment. Upon being notified of Advanta's receipt of such data by
Advanta, Contractor shall destroy (or at Advanta's request provide to
Advanta) all other copies, regardless of form, of Advanta's data in its
possession.
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Page 9 of 19 Pages
FORCE MAJEURE
- -------------
Neither party shall be held responsible for any delay or failure in performance
of any part of this Agreement to the extent such delay or failure is caused by
fire, flood, explosion, war, strike, embargo, government requirement, civil or
military authority, act of God, or other similar causes beyond its control and
without the fault or negligence of the delayed or nonperforming party ("force
majeure conditions"). Notwithstanding the foregoing, Contractor's liability for
loss or damage to Advanta's Equipment in Contractor's possession or control
shall not be modified by this clause. If any force majeure condition occurs,
the party delayed or unable to perform shall give immediate notice to the other
party, stating the nature of the force majeure condition and any action being
taken to avoid or minimize its effect. Once the force majeure condition ceases,
the parties will resume performance under this Agreement with an option by
either party to extend the period of this Agreement up to the length of time the
force majeure condition endured, not to exceed ninety (90) days.
HEADINGS
- --------
The headings contained in this Agreement are for convenience of reference only
and shall not affect the interpretation or meaning of this Agreement.
INCENTIVE PAYMENTS
- ------------------
Advanta and Contractor agree to enter into good faith negotiations for
development of the Quality Performance Measurement Standards, incorporating
applicable incentive payments related to such standards, and such standards
shall be developed in final form within six months after execution of this
Agreement. In the event no agreement can be reached between the parties at the
end of six months, Advanta shall have final decision as to the standards for
performance of the Work under this Agreement. Such standards shall be
incorporated in this Agreement.
INDEMNITY
- ---------
1. Subject to the provisions of the LIMITATION OF LIABILITY clause, Contractor
agrees to indemnify and save harmless Advanta, its affiliates and each of
their officers, directors, employees, agents, successors and assigns (all
hereinafter referred to in this clause as "Advanta") from and against any
losses, damages, claims, demands, suits, liabilities, and expenses
(including reasonable attorney's fees) which arise out of or result from
acts or omissions of Contractor or its affiliates or assigns or the
employees or agents of any of them in connection with its performance under
this Agreement or that arise out of or result from third party actions
which are based upon acts or omissions of Contractor, including without
limitation: (1) injuries or death to persons, or damage to property,
arising out of or caused by the performance of the Work or services
performed by Contractor or persons employed by Contractor; (2) assertions
under Workers' Compensation or similar acts made by persons employed by
Contractor; (3) any failure on the part of Contractor to satisfy all valid
claims for labor, equipment and materials relating directly or indirectly
to the performance of the Work by Contractor; or (4) any failure by
Contractor to perform Contractor's obligations under this clause.
Contractor agrees to defend Advanta, at Advanta's request, against any such
claim,
<PAGE>
Page 10 of 19 Pages
demand or suit. Advanta agrees to notify Contractor within a reasonable
time of any written claims or demands against Advanta for which Contractor
is responsible under this clause.
2. Subject to the provisions of the LIMITATION OF LIABILITY clause, Advanta
agrees to indemnify and save harmless Contractor, its affiliates and the
officers, directors, employees, agents, successors and assignees of each
(all hereinafter referred to in this clause as "Contractor") from and
against, without limitation, any losses, damages, claims, demands, suits,
liabilities, and expenses (including reasonable attorney's fees) that arise
out of or result from acts or omissions of Advanta or its affiliates or
assigns or the employees or agents of any of them (other than Contractor)
in connection with its performance under this Agreement. Advanta agrees to
defend Contractor, at Contractor's request, against any such claim, demand
or suit. Contractor agrees to notify Advanta within a reasonable time of
any written claims or demands against Contractor for which Advanta is
responsible under this clause.
3. Subject to the provisions of the LIMITATION OF LIABILITY clause, Contractor
shall indemnify and save harmless Advanta, its affiliates and each of their
officers, directors, employees, successors and assigns (all hereinafter
referred to in this clause as "Advanta") from and against any losses,
damages, liabilities, and expenses (including reasonable attorney's fees)
that arise out of or result from any claim of infringement brought against
Advanta to the extent it is based upon Advanta's use of tangible or
intangible material provided by Contractor (hereinafter referred to in this
clause as an "Infringement Claim"). If the Infringement Claim arises from
Contractor's adherence to Advanta's written or oral instructions regarding
Work or tangible or intangible goods provided to Contractor (hereinafter
referred to in this clause as "Items") and if the Items are not owned by or
licensed to Contractor, Advanta shall indemnify Contractor to the same
extent and upon the same terms which apply to Contractor's obligation to
indemnify Advanta hereunder. Advanta or Contractor shall defend or settle,
at its own expense, any demand, action or suit on any Infringement Claim
against the other for which it is indemnitor under the preceding provisions
and each shall timely notify the other of any assertion against it of any
Infringement Claim and shall cooperate in good faith with the other to
facilitate the defense of any such Claim.
INSPECTION
- ----------
Advanta's Representative shall, during regular business hours, have access to
any and all Work and work related data and facilities containing such Work and
data for the purpose of inspection or quality review and Contractor shall
provide facilities for such purpose. Such inspection shall not unreasonably
interfere with performance of the Work.
INSURANCE
- ---------
Contractor shall maintain during the term of this Agreement: (1) Workers'
Compensation insurance as prescribed by the law of the state or nation in which
the Work is performed; (2) employer's liability insurance with limits of at
least $300,000 for each occurrence; (3) comprehensive automobile liability
insurance if the use of motor vehicles is required, with limits of at least
$1,000,000 combined single limit for bodily injury and property damage for each
occurrence; (4) Comprehensive General Liability
<PAGE>
Page 11 of 19 Pages
("CGL") insurance, including Blanket Contractual Liability and Broad Form
Property damage, with limits of at least $1,000,000 combined single limit for
bodily injury and property damage for each occurrence, (5) All Risk Property
Insurance (including flood and earthquake coverage) at replacement value, and
(6) Errors and Omissions and Electronic Data Processing professional liability
insurance, with limits of at least $3,000,000. All CGL, automobile liability
and All Risk Property insurance shall designate Advanta, its affiliates, and
their officers, directors and employees (all hereinafter referred to in this
clause as the "Additional Insureds") as an additional insured. All such
insurance must be primary and required to respond and pay prior to any other
available coverage. Contractor agrees that Contractor, and to the extent
Contractor is able to so secure the agreement of such person, Contractor's
insurer(s) and anyone claiming by, through, under or in Contractor's behalf,
shall have no claim, right of action or right of subrogation against the
Additional Insureds based on any loss or liability insured under the foregoing
insurance. Contractor shall furnish certificates or adequate proof of the
foregoing insurance including, if specifically requested by Advanta, copies of
the endorsements and insurance policies. Advanta shall be notified in writing
at least fifteen (15) days prior to cancellation by Contractor of any applicable
policy, and as promptly as practicable following cancellation of any such policy
by an insurer.
INVOICING
- ---------
Contractor's invoices shall be rendered upon completion of the Work or at other
times expressly provided for in the Agreement, and shall be payable within
fifteen (15) days after receipt by the designated Advanta Representative.
Contractor shall mail invoices with copies of any supporting documentation
reasonably required by Advanta to the address shown in this Agreement.
Invoicing will begin following the execution of this Agreement. Invoicing will
continue during any force majeure period and will also continue after
termination of this Agreement until all costs described in the
TERMINATION/EXPIRATION clause have been paid to Contractor.
Contractor's invoices shall be rendered and paid in accordance with the
COMPENSATION clause contained herein.
Contractor's invoices shall be sent to Advanta twice a month as follows: (i) by
the 25th day of the calendar month for the Work performed through the 15th day
of the current calendar month and (ii) by the 10th day of the calendar month for
then unbilled Work performed in the preceding calendar month. Such invoices
shall be in the format provided for in Attachment V to Exhibit E, attached
hereto and hereby made a part of this Agreement.
Contractor shall submit an original and duplicate copy of each invoice to the
following address or to an address to be mutually agreed upon by the parties in
writing:
Advanta Corp.
Blair Mill Business Center
550 Blair Mill Road
Horsham, PA 19044
<PAGE>
Page 12 of 19 Pages
LABOR RELATIONS
- ---------------
Contractor shall be responsible for its own labor relations with any trade or
union represented among its employees and shall negotiate and be responsible for
adjusting all disputes between itself and its employees or any union
representing such employees. Contractor shall notify Advanta's Representative
if Contractor has knowledge of any actual or potential labor dispute which is
delaying or could delay the timely performance of this Agreement. If any
dispute, work stoppage or strike should occur, Contractor shall notify Advanta's
Representative and agrees to make all reasonable efforts and take all reasonable
action necessary to settle the matter.
LICENSE TO MEDIA
- ----------------
Advanta hereby grants to Contractor a non-exclusive, revocable, non-transferable
license to copy, distribute, display and use the Advanta media for the purpose
of training Contractor's employees to perform Work under this Agreement and such
media shall be for customer service training, whether such Advanta media is
fixed in any documentary material, photograph, tape, diskette or other tangible
medium of expression furnished under this Agreement by Advanta to Contractor,
and which act would, if unlicensed, constitute or contribute to or induce an
infringement of any copyright or patent licensable by Advanta for its works of
authorships. Such license is, however, restricted to the extent that it shall
be exercised solely to further educational or training programs conducted by
Contractor to aid the implementation of training the employees of Contractor
that are performing Work under this Agreement. The foregoing license does not
include the right of Contractor to grant any sublicenses whatsoever. Title to
any such documentary material, photograph, tape, diskette or other tangible
medium of expression furnished hereunder to Contractor will remain with Advanta
and shall be promptly returned to Advanta upon expiration or termination of this
Agreement (if a renewal agreement is not executed by the parties), termination
of the foregoing license by Advanta and/or upon request by Advanta.
LIMITATION OF LIABILITY
- -----------------------
A. Except as otherwise provided in this Agreement, each party's liability to
the other (as distinct from a party's obligation to pay for Services
provided pursuant to this Agreement) for any loss, cost, claim, injury,
liability, or expense, including reasonable attorneys' fees, relating to or
arising out of any act or omission in its performance under this Agreement,
shall be limited to the amount of direct damages actually incurred.
B. In no event shall either party be liable to the other for consequential
damages in the nature of lost profits or lost revenue arising under this
Agreement or exemplary or punitive damages unless imposed by regulatory
authority.
C. Each party hereto shall be entitled to reasonably rely upon information or
instructions supplied by the other party, and neither party shall be liable
to the other for any loss or damage resulting from acts or omissions of the
other reasonably taken at the request of the other party, or reasonably
based on information or instructions supplied or omitted by the other.
<PAGE>
Page 13 of 19 Pages
MARKET RIGHTS
- -------------
It is expressly understood and agreed that this Agreement does not grant to
Contractor an exclusive right or privilege to sell to Advanta any services of
the type described in this Agreement. It is, therefore, understood that Advanta
may contract with other Contractors for the procurement of comparable services.
In the event that Contractor or any of its affiliates provide like customer
service activities to any other bankcard issuer, Contractor shall provide a
separate physical customer service center and separate and different local
operations management and customer service representatives for such services.
Contractor's customer service representatives performing Work under this
Agreement shall not concurrently perform customer services for other bankcard
issuers.
NOTICES
- -------
Any notice or demand which under the terms of this Agreement or under any
statute must be given or made by Contractor or Advanta shall be in writing and
shall be given or made by telegram, overnight courier, confirmed facsimile, or
similar communication or by certified or registered mail addressed to the
respective parties as follows:
To Advanta: Advanta Corp.
Blair Mill Business Center
550 Blair Mill Road
Horsham, PA 19044
Attn: Legal Department
Fax No. _______________
To Contractor: William B. Hewitt
High Performance Services, Inc.
c/o The Union Corporation
145 Mason Street
Greenwich, CT 06830
Fax No. (203) 629-1046
The above addresses may be changed at any time by giving prior written notice as
above provided. Notice shall be effective when received, if given by overnight
courier, telegram or confirmed facsimile, or three days after it is sent by
certified or registered mail.
ORDERLY TRANSITION
- ------------------
In the event of expiration or termination of this Agreement, in whole or in
part, wherein all or some portion of the Work will be performed by Advanta
itself or another party, Contractor agrees to provide its full cooperation in
the orderly transition of the Work to Advanta or elsewhere, including packing
and preparing for shipment of any materials or other inventory to be
transferred, files and similar
<PAGE>
Page 14 of 19 Pages
media necessary for continuation of the Work transferred, continuation of Work
at reducing levels if necessary during a transition period and at reduced levels
if Work is transferred in part. Contractor shall not be responsible for packing
or shipment of Advanta Equipment supplied by Advanta pursuant hereto.
Contractor shall within sixty (60) days after notice by Advanta of a decision to
effect a transition, develop and submit to Advanta an orderly transition plan of
the Work to Advanta itself or otherwise.
PERFORMANCE
- -----------
Contractor will proceed with promptness and diligence and will use its best
efforts to ensure that the Work is performed in a first class workmanlike
manner.
RELATIONSHIP
- ------------
It is understood and agreed that all employees hired by Contractor to perform
the services under this Agreement are Contractor's employees. Contractor shall
exercise full control and direction over the employees of Contractor performing
the Work covered by this Agreement. Any changes in personnel that may be
reasonably requested by Advanta through its authorized representative shall be
made as soon as reasonably possible.
Neither Contractor nor its employees or agents shall be deemed to be Advanta's
employees or agents. It is understood that Contractor is an independent
contractor engaged to provide customer and other services for Advanta.
Contractor is wholly responsible for withholding and remitting all applicable
federal, state and local income and other payroll taxes with respect to its
employees, including contributions from them as required by law.
Without limiting any other requirements in this Agreement for complying with
laws, Contractor shall, when hiring personnel for performing the Work hereunder,
comply with applicable legislation and government agency orders and regulations
prohibiting discrimination against any employee or applicant for employment
because of race, color, religion, sex, national origin, age or handicap, and
Contractor shall comply with the provisions of the Fair Labor Standards Act of
1938, as amended, and all other applicable Federal, state and local law
governing employment. Where required by law, certificates of compliance shall
be provided.
None of Contractor's customer service employees assigned to perform Work under
this Agreement shall be assigned to any other activities, unless Contractor
submits a plan of the work and time involved for such work to Advanta for
approval by Advanta.
REPRESENTATION OF RIGHT TO USE
- ------------------------------
Contractor represents that it is authorized and permitted to use any and all
software and other material which it does not own and which will be used to
perform the Services, excluding materials provided to Contractor by Advanta.
<PAGE>
Page 15 of 19 Pages
REPRESENTATIVES
- ---------------
Advanta's Representative is Diane Bowser or such other person as may be
designated in writing by from time to time. Contractor's Representative is
William B. Hewitt or such other person as may be designated in writing by
Contractor from time to time.
RIGHTS IN DATA
- --------------
Contractor agrees that all material prepared by Contractor under this Agreement,
regardless of where prepared, shall be owned by Advanta and shall be deemed to
be works made for hire. To the extent that any material may not, by operation
of law, be works for hire, Contractor hereby assigns to Advanta the ownership of
all right, title and interest in such items, including but not limited to
copyrights. Contractor agrees to give Advanta, its designees, assigns or
successors all assistance reasonably required to perfect such rights, titles and
interest. Advanta shall permit Contractor to keep copies of any material deemed
works for hire hereunder or otherwise assigned to Advanta hereunder, to the
extent such material constitutes business records generated by Contractor in the
course of its performance of Services hereunder.
RIGHT OF ENTRY AND PLANT RULES
- ------------------------------
Advanta personnel shall have the right to enter the Facility during normal
business hours with respect to the performance of this Agreement, subject to all
building rules and regulations, security regulations and procedures.
Visitations at the Facility shall not unreasonably interfere with performance of
the Work.
Contractor shall initiate and maintain building security for the protection of
Advanta's information while in Contractor's control and shall limit access to
operating areas and information to those with a need for such access. Within 90
days of execution of this Agreement, Contractor shall establish and provide in
writing to Advanta its security procedures for approval by Advanta.
SEVERABILITY
- ------------
If any of the provisions of this Agreement shall be invalid or unenforceable,
such invalidity or unenforceability shall not invalidate or render unenforceable
the entire agreement, but rather the entire agreement shall be construed as if
not containing the particular invalid or unenforceable provision or provisions,
and the rights and obligations of Contractor and Advanta shall be construed and
enforced accordingly.
SURVIVAL OF OBLIGATIONS
- -----------------------
Notwithstanding any other provision of this Agreement to the contrary, the
obligations of the parties under this Agreement which by their nature would
continue beyond the termination, cancellation or expiration of this Agreement,
including, by way of illustration only and not limitation, those in the clauses
ARBITRATION, COMPENSATION, COMPLIANCE WITH LAWS, CONFIDENTIAL
<PAGE>
Page 16 of 19 Pages
INFORMATION, INDEMNITY, INSURANCE and USE OF INFORMATION, as well as Exhibit E,
shall survive termination, cancellation or expiration of this Agreement.
TAXES
- -----
Advanta shall reimburse Contractor for all taxes, other than taxes based on
Contractor's income or capitalization or interest or penalties from failure to
timely or properly file a return or pay taxes. Following notification from
Advanta, Contractor shall utilize any tax exemption for which Contractor is
eligible. Advanta shall have the right to have Contractor contest any such
taxes that Advanta deems improperly levied, at Advanta's expense and subject to
Advanta's direction and control.
TERMINATION/EXPIRATION
- ----------------------
Termination provisions under this Agreement shall be in accordance with the
following:
A. Termination for Convenience:
Advanta may at any time terminate this Agreement, in whole or in part, by
providing not less than 120 days prior written notice to Contractor. In
such case, Advanta shall be liable for payment of the amount due for Work
performed up to and including the date of termination, including the
portion of any incentive payments earned by Contractor through the date of
such termination, and no further Work will be rendered by Contractor after
the effective date of termination. In addition, in the event of such
termination for convenience:
(1) Advanta shall assume the remainder of the Two-Year Costs as set forth
in Exhibit E and all other costs related to the leasing of the
Facility used to perform services on behalf of Advanta, including but
not limited to the net rent, real estate taxes, common charges, and
maintenance costs (including but not limited to utilities, repairs and
insurance) for the term of the lease, and
(2) If such termination occurs less than two years after Work has
commenced under this Agreement, Advanta shall pay for the unrecouped
Two-Year Costs set forth in Exhibit E, and
(3) Advanta shall pay the Semi-Variable and Variable Costs as set forth in
Exhibit E, Sections III and IV, resulting from and/or continuing after
termination, and
(4) Advanta shall pay all (i) the associated termination costs of
employees hired by Contractor and (ii) other continuing contractual
and legal obligations and costs incurred by Contractor pursuant to
Exhibit E, unless such obligations and costs are deemed covered by (1)
or (2) above, in which case assumption and/or payment by Advanta shall
be made pursuant to (1) or (2), as the case may be.
<PAGE>
Page 17 of 19 Pages
B. Breach by Contractor:
Advanta may terminate this Agreement at any time, without waiving other
rights herein, and shall be entitled to obtain all such remedies as
injunctive or equitable relief, as well as attorneys' fees, as may be
deemed proper by a court of competent jurisdiction at any time if
Contractor is in material breach of this Agreement. In such breach case,
Advanta shall provide Contractor ninety (90) days to cure such breach prior
to termination after notice specifying the alleged breach. In the event of
such termination Advanta's liability to Contractor shall be for Work
performed and reimbursable expenses.
C. Termination for Default:
Advanta may terminate this Agreement at any time for fraud by Contractor or
if Union or Contractor declares bankruptcy or makes a filing of a petition
under any Federal or state bankruptcy, receivership, moratorium or similar
law, or if a petition is filed or case commenced against Contractor or
Union (which filing or case is not dismissed within 30 days of filing or
commencement). In such case, Advanta's liability shall be limited to
payment of the amount due for Work performed, up to and including the date
of termination, and no further Work will be rendered by Contractor after
the effective date of termination.
D. The parties agree that a failure to achieve performance standards
established under the Agreement is not considered a breach for purposes of
this TERMINATION/EXPIRATION clause.
E. Advanta shall notify Contractor not later than six (6) months prior to
expiration of this Agreement of either (i) its desire to extend or renew
this Agreement, in which case both parties shall promptly and in good faith
enter into negotiations to extend or renew this Agreement on terms that are
acceptable to both parties or (ii) its decision to exercise its option to
renew or its decision not to renew this Agreement and exit the location
with the Advanta-provided Equipment. In the event of non-renewal,
Advanta's responsibility for payments to Contractor shall be limited to
requirements set forth in Section A of this clause, and Contractor shall be
returned the security deposit, if any, under the lease.
<PAGE>
Page 18 of 19 Pages
WAIVER
- ------
The failure of either party at any time to enforce any right or remedy available
to it under this Agreement or otherwise with respect to any breach or failure by
the other party shall not be construed to be a waiver of such right or remedy
with respect to any other breach or failure by the other party.
IN WITNESS WHEREOF, Contractor and Advanta have executed this Agreement in
duplicate on the day and year below written.
HIGH PERFORMANCE ADVANTA CORP.
SERVICES, INC.
By: /s/William B. Hewitt By: /s/Diane L. Bowser
----------------------------- --------------------------------
(Signature) (Signature)
William B. Hewitt
President and Diane L. Bowser
Chief Executive Officer Vice President Operations
--------------------------------- --------------------------------
Name & Title Name & Title
(Typed or Printed) (Typed or Printed)
August 13, 1996 August 16, 1996
--------------------------------- --------------------------------
(Date) Date
<PAGE>
Page 19 of 19 Pages
The Union Corporation hereby guarantees the performance of all obligations,
services and duties of High Performance Services, Inc. under and in connection
with this Agreement and the Exhibits annexed hereto.
THE UNION CORPORATION
By: /s/Melvin L. Cooper
-------------------------------------
(Signature)
Melvin L.
Chairman of the Board and
Chief Executive Officer
- --------------------------------------
Name & Title
(Typed or Printed)
August 14, 1996
- --------------------------------------
(Date)
<PAGE>
EXHIBIT A
---------
This is Exhibit A to Agreement between High Performance Services, Inc.
("Contractor") and Advanta Corp. ("Advanta") and outlines the operational
requirements for the Work performed by the Contractor on behalf of Advanta.
I. DEPARTMENTAL GOALS
The following is a list of the departmental goals within Advanta Customer
Service where performance levels are expected to be met or exceeded on
daily basis:
. Service Level *________*
. Abandonment Rate *________*
. Calls/Hour/Rep. *________*
. Total Work Time *________*
. Manned Time % *________*
. Calls Monitored/Rep/Mo. *________*
. Average Monitoring Score *________*
Note: An incentive program is currently being discussed to compensate
Contractor for performance that exceeds target in the following areas:
Service Level
Abandonment Rate
Unit Costs
Quality/Satisfaction Measurement
This contract will be amended to reflect the details of this program once
finalized.
II. HOURS OF OPERATION
A. The Contractor shall arrange its work schedules to accommodate forecasted
call volumes and list completion requirements, unless directed otherwise by
Advanta
B. Incoming calls will be handled within the following timeframes:
1. Monday through Friday 8:00 A.M. - 12:00 P.M. Eastern Time
2. No inbound calls will be handled on the following holidays:
a. New Year's Day
b. Memorial Day
c. Independence Day
d. Labor Day
e. Thanksgiving Day
f. Christmas Day
A-1
<PAGE>
III. HOLIDAYS
A. Contractor observes the following holidays:
1. New Year's Day
2. Memorial Day
3. Independence Day
4. Labor Day
5. Thanksgiving Day
6. Christmas Day
B. When Advanta chooses to be open on a holiday observed by Contractor, since
this contract is on a "cost-plus" basis, Advanta will incur expenses at
Contractor's holiday payroll rates as mutually agreed upon by Contractor
and Advanta.
C. In addition, Advanta shall advise Contractor regarding closure on non-
traditional Advanta holidays, weekends, or early closing on a particular
work day such as Christmas Eve, a minimum of two weeks prior to the first
of the month in which the day occurs.
IV. POLICIES AND PROCEDURES
Advanta will furnish Contractor with Advanta policies and procedures for the
Work to be performed on behalf of Advanta. Any changes Contractor makes to such
material must have the written approval of Advanta prior to implementation.
When Advanta provides updates, revisions, and/or deletions to policies and
procedures, Contractor shall promptly implement such changes.
Contractor has the right to employ its internal policies and procedures as they
relate to the administration of its business and its proprietary systems (e.g.,
payroll, scheduling systems). Advanta has the right to review such policies and
procedures and all subsequent changes to such procedures prior to
implementation.
Contractor is responsible to ensure that its staff is aware of and fully
complies with all Advanta and Contractor policies and procedures.
V. CUSTOMER COMPLAINT HANDLING
Advanta will provide Contractor with customer complaint handling procedures for
both written and verbal complaints. Advanta's general guideline for responding
to customer complaints is within *___________________* of receipt. However,
specific timeframes will be dependent on the source and nature of the complaint
and may be of an expedited nature requiring less than *_____________________*
resolution. Complaints may be received from, but are not limited to, the
following sources: State Utility Commissions, FCC, Consumer Rights Groups,
Advanta Executives, and directly from the customer or representative of the
customer.
Contractor shall comply with complaint retention guidelines provided by Advanta.
A-2
<PAGE>
VI. CALL MONITORING
Monitoring of customer contacts will be performed by Advanta and Contractor to
verify that service quality levels established by Advanta are met or exceeded.
It is Contractor's responsibility to monitor outbound and inbound calls to
ensure compliance with Advanta and Contractor policies and procedures. Minimum
standards require that an average of *_____ * calls per full time on-line
employee per month be monitored and documented along with any comments and
action taken. The actual number of contacts per on-line employee will be based
on the number of hours worked and the individual level of performance. Based on
call observation data, it is the responsibility of Contractor to provide re-
training, skill development and disciplinary action, when appropriate. Advanta
has the right to review such documentation at any time and provide remedial
recommendations. Contractor is responsible for implementing and complying with
Advanta recommended actions.
Advanta has the right to monitor on-line employee calls at any time, at
Advanta's expense either on site by Advanta personnel or remotely by Advanta
Headquarters Staff. When deemed appropriate by Advanta, Advanta will provide
results of such monitoring to Contractor. Contractor and Advanta will mutually
agree upon recommended actions.
Advanta has the right to conduct independent audit interviews of customers to
verify that call quality standards established by Advanta are met or exceeded.
Advanta will provide Contractor with the results of such interviews.
VII. ON-SITE PERSONNEL
Contractor will provide a sufficient number of on-site skilled personnel to
answer questions, resolve problems, respond to requests, provide development to
employees, and to ensure Advanta quality standards and requirements are met or
exceeded.
Advanta will initially provide one (1) on-site person. Any modifications to the
number of Advanta on-site personnel will be mutually agreed upon between Advanta
and Contractor. Contractor is responsible for providing suitable office
accommodations, supplies, data, and voice communications, monitoring capability
and security access for Advanta personnel. Contractor, as deemed appropriate,
will include the on-site Advanta Manager in staff meetings and general business
meetings related to the services performed for Advanta.
VIII. PROFESSIONALISM IN THE WORKPLACE
Contractor personnel are responsible for adhering to the highest level of
professionalism when handling Advanta customers and when interacting with
Advanta employees.
Contractor shall ensure that all personnel associated with this project adhere
to Advanta's Business Ethics and the highest quality standards when interacting
with Advanta customers.
A-3
<PAGE>
IX. DISPUTE RESOLUTION
All disputes that arise out of relate to this Agreement shall be resolved by
using protocol in accordance with the following:
A. Routine channels such as Advanta's on-site manager, Technical
Representative, Agreement Representative, and/or other designated Advanta
personnel
B. Executive Committee
C. American Arbitration Association as set forth in the ARBITRATION clause
A-4
<PAGE>
EXHIBIT B
---------
This is Exhibit B to Agreement between High Performance Services, Inc.
("Contractor") and Advanta Corp. ("Advanta") and outlines the measurement
standards and reporting which shall be applicable to all customer service
activities performed by the Contractor on behalf of Advanta under this
Agreement.
The following monthly key performance indicators are to be used and
reported to measure departmental performance:
. Inquiry rate
. Total call volume accepted
. Abandonment rate
. Rep. average speed of answer
. Service level
. Calls handled/FTE
. Rep. productivity/hour
The following daily key performance indicators are to be used and reported
to Advanta:
. Attrition rate
. Service level
. Abandonment rate
. Rep. average speed of answer
. Total average speed of answer
. Rep. average call length
. Staff utilization
. Average PCP
. Average wait time
. Total number of calls accepted
. Number of calls answered by Rep.
. Number of calls accepted by Rep.
. Forecasted Rep. productivity
. Actual Rep. productivity
. Forecasted total hours paid
. Administrative hours paid
. Regular hours paid
. Overtime hours paid
. Total Rep. hours paid
. New hire hours paid
. Total actual hours paid
. Phone FTE
. Paid FTE
. Forecasted phone hours worked
. Actual phone hours worked
. Senior support hours
. New hire support hours
. New hire training hours
B-1
<PAGE>
. Current training hours
. Phone miscellaneous hours
. Meeting hours
. Break hours
. Sick hours
. Paid time off hours
. Clerical hours
The following standards are used to measure call quality (Customer Contact
Quality Objectives and Scoring sheet are attached):
. Call opening or greeting
. Telephone skills
. Resource utilization
. Product knowledge
. Call closing
Once final requirements are established, this list may be modified to
reflect only those performance indicators in which Advanta does not have
direct access to the daily and monthly results. Performance indicators
will be included on Advanta's existing daily/monthly MIS report.
B-2
<PAGE>
EXHIBIT C
---------
This is Exhibit C to Agreement Number [________] between High Performance
Services, Inc. ("Contractor") and Advanta Corp. ("Advanta") and outlines the
systems and interface requirements for the Work performed by the Contractor on
behalf of Advanta. All Tools and Equipment supplied by Advanta will be
maintained by Advanta at its cost.
Assumptions:
1. One on-site technical resource will act as site technical coordinator
for duration of contract.
2. Service maintenance agreements are in place for all systems that
require service maintenance agreements.
3. Adequate spares will be available where required.
The following matrix outlines the required service levels for the systems
and the parties responsible for the service.
Sparred items will be installed by the HPSI technical resource on-site.
The traffic manager will route calls to the Centralized Help desk.
Support issues will be collected by the traffic manager and routed to the
help desk for call tracking and problem resolution. Recurring issues will
be tracked, and escalated to tier 2 or tier 3 support. Escalated issues
will be the responsibility of tier 3 for resolution.
The following flow chart represents the problem resolution process:
[Flow chart not included]
C-1
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
System Escalation Action
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
RMS Tier 1 - Advanta Help Desk . Verify network connectivity
. Verify application operation
. Verify production statistics
. Escalate to production operations
within 10 minutes
. Update HPSI traffic manager every
20 minutes
- --------------------------------------------------------------------------------------------------------
Aspect Remote Call Center Tier 1 - Advanta Help Desk . Verify network connectivity
. Verify Aspect Switch operation
. Escalate to production operations
within 10 minutes
. Escalate to Aspect for on-site
trouble
shooting as required problem
identification + 30 minutes
. Update HPSI traffic manager every
20 minutes
- --------------------------------------------------------------------------------------------------------
Aspect Teleset Tier 1 - HPSI technical resource . Replace teleset
. Obtain RMA number for return of
teleset
. Return for replacement to Aspect
- --------------------------------------------------------------------------------------------------------
Point to Point T-1 Tier 1 - Advanta Help Desk . Verify T-1 line operation
. Establish telnet session with
CSU/DSU, router
. Escalate to production operations
within 10 minutes
. Escalate to AT&T for loop testing
problem identification + 30 minutes.
. Update HPSI traffic manager every
20 minutes
- --------------------------------------------------------------------------------------------------------
Routers Tier 1 - Advanta Help desk . Ping router verify existence.
. Establish telnet session with router.
. Escalate to production operations
within 10 minutes
. Escalate to AT&T for router
problem identification + 30 minutes.
. Update HPSI traffic manager every
20 minutes
- --------------------------------------------------------------------------------------------------------
CSU/DSU Tier 1 - Advanta Help Desk . Verify T-1 line operation
. Establish telnet session with CSU-
DSU, router
. Escalate to production operations
within 10 minutes
. Escalate to AT&T for loop testing
problem identification + 30 minutes.
. Update HPSI traffic manager every
20 minutes
- --------------------------------------------------------------------------------------------------------
</TABLE>
C-2
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
3 COM Hubs Tier 1 - Advanta Help Desk . Ping hub verify existence.
. Establish telnet session with hub.
. Escalate to production operationw
within 10 minutes
. Escalate to AT&T for router
problem identification + 30 minutes.
. Update HPSI traffic manager every
20 minutes
- --------------------------------------------------------------------------------------------------------
Digital Terminal Servers HPSI resource . Escalated to DEC for service
(process to be provided)
- --------------------------------------------------------------------------------------------------------
Digital VT 220 HPSI resource . Replace as required
. Dispose of asset
. Notify help desk for replacement
- --------------------------------------------------------------------------------------------------------
PC's HPSI resource . Perform initial diagnosis
. Escalate to hardware service
provider
(telephone number to be provided)
- --------------------------------------------------------------------------------------------------------
NT server Tier 1 - Advanta Help Desk . Verify system operation
. Escalate to FCP for service
- --------------------------------------------------------------------------------------------------------
Cabling HPSI resource HPSI resource . Replace using spare cables
. Obtain spare from local provider
. Contact local provider to conduct
tone tests as required
- ------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Escalation matrix
- --------------------------------------------------------------------------------------------
Service Maintenance
System Response Time Requirement Responsible Party Contract
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
RMS ASAP 0800 - 0001 Advanta Not Applicable
- --------------------------------------------------------------------------------------------
Aspect Remote
Call Center 2 hours 0800 - 0001 Advanta X
- --------------------------------------------------------------------------------------------
HPSI technical
Aspect Teleset Stock spares 0800 - 0001 resource X
- --------------------------------------------------------------------------------------------
Point to Point T-1 Hot cut-over 0001 - 0000 AT&T X
- --------------------------------------------------------------------------------------------
Routers 2 hours 0800 - 0001 Advanta X
- --------------------------------------------------------------------------------------------
CSU/DSU 2 hours 0800 - 0001 AT&T X
- --------------------------------------------------------------------------------------------
3 COM Hubs 2 hours 0800 - 0001 AT&T X
- --------------------------------------------------------------------------------------------
Digital Terminal HPSI technical
Servers 4 hours 0800 - 0001 resource X
- --------------------------------------------------------------------------------------------
Digital VT 220 Stock spares 0800 - 0001 HPSI technical
resource X
- --------------------------------------------------------------------------------------------
PC's 4 hours 0800 - 0001 Advanta X
- --------------------------------------------------------------------------------------------
NT server 4 hours 0800 - 0001 Advanta X
- --------------------------------------------------------------------------------------------
Cabling Stock spares 0800 - 0001 HPSI technical X
resource
- --------------------------------------------------------------------------------------------
</TABLE>
C-3
<PAGE>
EXHIBIT D
---------
This is Exhibit D to Agreement between High Performance Services, Inc.
("Contractor") and Advanta Corp. ("Advanta") and provides account volume and
staffing levels required to perform the Work.
<TABLE>
<CAPTION>
MONTHLY/FISCAL CALL VOLUME FORECAST
MONTH/PERIOD YEAR TOTAL
------------ ---- ------
<S> <C> <C>
AUG 1996 122206
SEP 1996 219323
OCT 1996 214572
NOV 1996 227738
DEC 1996 210493
</TABLE>
A. Initial Account Volume Estimates
The current estimate for call volumes is shown above and hereby made a part
of this Exhibit.
B. Volume and Staffing Forecast Process
1. The projections of on-line FTEs required to support the forecasted
volumes will be established using a monthly process and model
involving Advanta and Contractor personnel. Advanta and Contractor
agree that the assumptions used in the model may change, based upon
operational experience resulting in difference staffing estimates.
2. The volume forecasting and staffing process will take place between
the 15th and 20th day of each month. The process will be completed by
the 20th of the month.
a. By the 15th of each month, Advanta will provide Contractor with
inbound call volume forecasts for a minimum of three (3) months.
b. By the 19th of each month, Contractor and Advanta shall use
Advanta forecasts to determine the staff needed for the next
three months. These current estimates will be compared to the
prior month's forecasted staff levels to identify potential
"short cycle" problems, e.g., decrease staff this month and
increase next month.
c. By the 20th of each month, Contractor will set target staffing
levels for the month commencing approximately 40 days hence,
hiring levels for the coming month, and staffing schedules for
the coming month.
d. Contractor will manage the staffing hours to within +/- *____*
percent (*__*%) of the staffing level agreed upon in (c) above.
D-1
<PAGE>
e. Once a staffing forecast has been determined for a given month,
any increases to the staffing levels (other than as contemplated
by (d) above) within that month must be approved by Advanta in
writing.
D-2
<PAGE>
EXHIBIT E
---------
This is Exhibit E to Agreement between High Performance Services, Inc.
("Contractor") and Advanta Corp. provides the pricing of the Work performed
under this Agreement.
I. PRICING STRUCTURE
Contractor is to be paid Contractor's actual costs plus a *____* markup (Cost
Plus) on all costs and expenses. The pricing of the Work performed under this
Agreement will be comprised of Two Year Costs, Semi-Variable, and Variable cost
components. Two Year Cost payments generally do not vary with changes in staff
size. Semi-Variable cost payments vary at certain steps with changes in FTEs.
Variable cost payments vary directly with incremental changes in FTEs.
II. TWO YEAR COSTS
Two Year Costs consist of costs and expenses, plus mark-up, related to the
leasing of the facilities where the Work will be performed (i.e. rent, real
estate taxes, common charges, building repairs and maintenance, etc.) (the
"Facilities Costs") and all other pro-forma costs to be written off over 24
months. Contractor has entered into a *__________* lease for office space in
which it will perform the Work on behalf of Advanta. Advanta acknowledges and
agrees that all costs associated with such *_________* lease shall be written-
off and billed to Advanta during the two year term of this Agreement. The Two
Year Costs are initially the pro-forma costs, plus mark-up, expected to be
incurred by Contractor for (i) the Facilities Costs, (ii) leasehold
improvements, (iii) the purchase of all depreciable equipment (including
equipment acquired under capitalized leases) and (iv) other expenses required in
connection of the Work, including start-up costs, which are not included in
another cost category. These costs will be written-off over a 24 month period
on a straight line basis. The monthly cost that Advanta shall pay to Contractor
is the actual or pro forma costs incurred or to be incurred by Contractor plus
markup, divided by 24 months. Purchases during the term of the agreement will
be amortized over the period from date of purchase to the date of expiration.
Estimated costs in this category will be adjusted to actual, plus mark-up, on a
current basis when actual costs become known.
III. SEMI-VARIABLE COSTS
Semi-Variable Costs consist of salaries, related taxes and benefits and all
other costs relating to the general administration of the Facility operations
and the Work. The monthly Semi-Variable cost that Advanta shall pay to
Contractor are the actual cost incurred by Contractor plus markup. Upon
termination of the Agreement, the parties shall mutually determine the time
period for which Semi-Variable Costs are to be paid by Advanta to Contractor;
however, if the parties are unable to agree upon such a time period, the
Contractor shall use its best efforts to minimize and/or eliminate such costs as
soon as practicable and Advanta shall continue to be liable for and pay such
amounts to Contractor in accordance with the above.
E-1
<PAGE>
IV. VARIABLE COSTS
Variable Costs consist of salaries, related taxes and benefits of full time and
part time customer service employees of Contractor and their immediate
supervisors. The monthly Variable Costs that Advanta shall pay to Contractor
are the actual costs incurred by Contractor, plus markup. Upon termination of
the Agreement, the parties shall mutually determine the time period for which
Variable Costs are to be paid by Advanta to Contractor; however, if the parties
are unable to agree upon such a time period, the Contractor shall use its best
efforts to minimize and/or eliminate such costs as soon as practicable and
Advanta shall continue to be liable for and pay such amounts to Contractor in
accordance with the above.
V. MONTHLY PAYMENT PROCESSING
Each month Contractor will submit to Advanta a budget detailing a forecast for
the next three months of the total expected costs for each of the categories
described in Sections II through IV as well as the number of full time and part
time customer service FTEs expected to work that month. Any materially
significant purchase or contractual binding commitments that obligate Advanta
should be properly identified by Contractor and submitted to Advanta for
approval by Advanta prior to incurring such expense.
In addition to the forecast, Contractor shall provide a variance analysis that
will show for each category how the actual costs differ from the previous
month's forecast for each of the cost categories. The content and format of
this variance analysis will be agreed to by the parties at a later date.
From time to time Contractor may deem it necessary to enter into contractual
agreements to perform the services under this Agreement. Any written
contractual obligation for a period in excess of twelve months shall be approved
by Advanta in writing.
A sample invoice is shown in Attachment V. Invoicing should start at the end of
the first month following execution of the Agreement, and will continue until
all costs are paid as provided by the Termination/Expiration clause.
VI. RIGHT TO INFORMATION
To validate the monthly cost reports, the on-site Advanta Manager or a
designated representative shall have complete and timely access to any and all
of Contractor's financial information relating to any costs for the customer
service center including, but not limited to, employee timesheets, payroll
records, internal budgets, and customer service center profit and loss
statements.
VII. FORCE MAJEURE
Payments herein provided will continue during periods covered by the Force
Majeure clause. If the Force Majeure continues for an extended period of time,
Advanta's costs will be reduced as the number of customer service and other
employees of Contractor is reduced;
E-2
<PAGE>
however, Advanta will remain liable for the cost related to the termination of
employees of Contractor.
E-3
<PAGE>
Attachment V
to Exhibit E
Sample Invoice
<TABLE>
<CAPTION>
[Name and Address of Advanta representative] Invoice Date:
Invoice Number: XXXXXXXX
Advanta Agreement No.:
Invoice for Work Performed from DATE1 to DATE2
Invoice
Budgeted Amount
-------- -------
<S> <C> <C>
1. Two Year Cost Payment
Cost $XX,XXX $XX,XXX
Markup @ * * $X,XXX $X,XXX
------ ------ ------
Total Two Year Costs: $XX,XXX $XX,XXX
2. Semi-Variable Cost Payment
Cost $XXX,XXX $XXX,XXX
Markup @ * * $XX,XXX $XX,XXX
------ ------- -------
Total Semi-Variable Costs: $XXX,XXX $XXX,XXX
3. Variable Cost Payment
Number of FTEs (Full and Part Time) XXX XXX
Variable Cost FTE rate $X,XXX $X,XXX
Total Variable Cost $X,XXX,XXX $X,XXX,XXX
Markup @ * * $XXX,XXX $XXX,XXX
------ -------- --------
Total Variable Costs: $X,XXX,XXX $X,XXX,XXX
TOTAL: $X,XXX,XXX $X,XXX,XXX
- ----------------------------------------------------------------------------------------
INVOICE TOTAL: $X,XXX,XXX
- ----------------------------------------------------------------------------------------
</TABLE>
Variance Analysis and Supporting Data Submitted on Separate Pages
Please remit payment to: High Performance Services, Inc. Street Address, City,
State, Zip
Attention: William B. Hewitt
E-4
