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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
to
Annual Report Pursuant to Section 13 of 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 1994
Commission File Number 1-1969
CERIDIAN CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 52-0278528
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8100 34th Avenue South
Minneapolis, Minnesota 55425
(Address of principal executive offices)
Telephone No.: (612) 853-8100
Securities Registered Pursuant to Section 12(b) of the Act:
Title of each class: Name of each exchange on which
registered:
Common Stock, par value $.50 New York Stock Exchange,
Inc.; The Chicago Stock
Exchange; and Pacific Stock
Exchange
Depositary Shares, each representing
a One One-Hundredth Interest in a
Share of 5/% Cumulative Convertible
Exchangeable Preferred Stock,
Par Value $100........................ New York Stock Exchange, Inc.
5/% Cumulative Convertible
Exchangeable Preferred Stock,
Par Value $100........................ None
5/% Convertible Subordinated
Debentures Due 2008................... None
Has the Registrant (1) filed all reports required by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12 months and (2)
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. ( )
The aggregate market value of the voting stock held by non-affiliates of
the Registrant as of February 28, 1995 was $1,418,184,842.
1
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The shares of Common Stock outstanding as of February 28, 1995 were
45,534,311.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the 1994 Annual Report to Stockholders of Registrant: Parts I &
II
Portions of the Proxy Statement for Annual Meeting of Stockholders, May 10,
1995: Parts III and IV
2
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PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) 3. Exhibits
Ceridian Corporation (the "Company") hereby amends its Annual Report
on Form 10-K for the fiscal year ended Decrmber 31, 1994 by refiling as
Exhibit 10.18 to such report the Agreement for Information Technology
Services, dated as of January 10, 1995, between the Company and Integrated
Systems Solutions Corporation (the "Agreement"). Exhibit 10.18 as
refiled herewith reflects the redaction of fewer provisions of the
Agreement, as a result of the modification of the Company's request for
confidential treatment of portions of the Exhibit 10.18.
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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 Amendment No. 1
to its Annual Report on Form 10-K for the fiscal year ended December 31,
1994.
CERIDIAN CORPORATION
By: /s/John A. Haveman
Vice President and Secretary
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EXHIBIT 10.18
ISSC/Ceridian Corporation
Agreement for Information Technology Services
CONFIDENTIAL INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND IS BEING
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ANY SUCH
OMISSIONS IN THIS AGREEMENT ARE INDICATED BY THE WORDS CONFIDENTIAL IN-
FORMATION OMITTED OR THE REFERENCE ("CIO"). This Agreement for Information
Technology Services ("Agreement"), dated as of January 20, 1995 is by and
between Ceridian Corporation acting through its Ceridian Employer Services
Division having a place of business at at 300 Embassy Row, Atlanta,
Georgia 3-328. ("CES"), and Integrated Systems Solutions Corporation, a
wholly owned subsidiary of International Business Machines Corporation,
having its headquarters at 44 South Broadway, White Plains, New York 10601
("ISSC"). CES and ISSC agree that the following terms and conditions will
apply to services provided by ISSC under this Agreement. CES and ISSC will
be referred to individually as a "Party" and collectively as the "Parties."
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TABLE OF CONTENTS
Section Title Page
1.0 Background and Objectives 6
2.0 Definitions, Documents and Term 6
2.1 General Definitions 6
2.2 Associated Contract Documents 11
2.3 Term 12
2.4 Renewal and Expiration 12
3.0 Overview 12
3.1 Implementation Plan 12
3.2 Ceridian-Owned Software 13
3.3 Third Party Software 13
3.4 Software Currency 13
3.5 Required Consents 14
3.6 Joint Verification 14
3.7 On-going Relationship 14
4.0 Services 15
4.1 ISSC Project Executive 16
4.2 Personnel Replacement 17
4.3 Non-Competition 17
4.4 Use of Subcontractors 18
4.5 Alternate Source for Work 18
4.6 CES Project Executive 19
4.7 Performance 19
4.8 Efficient Use of Resources 20
4.9 Management and Control 20
4.10 Annual Technology Plan 22
4.11 CES Approvals and Notification 23
5.0 Operations 23
5.1 ISSC Machines 23
5.2 Software Services 23
5.3 Operations, Support and Maintenance 24
5.4 Consolidation and Relocation Services 25
5.5 Systems Management 25
5.6 Production Services 25
5.7 Software 25
5.8 CES-Retained Machines 25
5.9 Connectivity 26
5.10 Viruses 27
5.11 Software Licenses 27
6.0 Additional Services 27
6.1 Help Desk 28
6.2 Security 28
6.3 Back-up and Disaster Recovery 28
6.4 Facilities and Support Services 28
6.5 Audits 29
7.0 Charges and Expenses 29
7.1 Annual Services Charge 30
7.2 Additional Resource Charges 30
7.3 [CIO] Adjustments 30
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7.4 Cost of Living Adjustment 30
7.5 New Entities 30
7.6 New Services 30
7.7 Taxes 31
7.8 Reduction of CES Requirements for the Base System 32
7.9 Services Transfer Assistance 33
8.0 Invoicing and Payment 34
8.1 Annual Services Charge Invoices 34
8.2 ARC and COLA Invoicing 35
8.3 Capacity Invoicing 35
8.4 Other Charges 35
8.5 Invoice Payment 35
8.6 Proration 35
8.7 Disputed Charges/Credits 35
8.8 Other Credits 36
9.0 Intellectual Property Rights 36
9.1 Intellectual Property Definitions 37
9.2 ISSC Developed Code 38
9.3 CES Developed Code 38
9.4 General Rights 38
10.0 Confidentiality/Data Security 39
10.1 Confidential Information 39
10.2 Obligations 40
10.3 Exclusions 41
10.4 Protection of CES Information 41
10.5 Loss of Confidential Information 41
10.6 Limitation 41
11.0 Termination 42
11.1 Termination for Convenience 42
11.2 Termination for Change of Control 42
11.3 [CIO] 42
11.4 Termination Proration 43
11.5 Termination [CIO] 43
11.6 [CIO] 44
11.7 Extension of Service 44
11.8 Other Rights Upon Termination 44
12.0 Liability 46
12.1 General Intent 46
12.2 Damages 46
13.0 Remedies 47
13.1 Warranty 48
13.2 Work Standards 48
13.3 Ownership of CES-Retained Machines 48
13.4 Noninfringement 48
13.5 Compliance with Obligations 48
13.6 Disclaimer 49
13.7 Disabling Code 49
13.8 Authorization and Enforceability 49
13.9 Regulatory and Corporate Proceedings 49
14.0 Indemnities 50
14.1 Indemnity by ISSC 50
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14.2 Indemnity by CES 51
14.3 Employment Actions 52
14.4 Cross Indemnity and Contribution 52
14.6 Indemnification Procedures 53
15.0 Insurance and Risk of Loss 54
15.1 ISSC Insurance 54
15.2 CES Insurance 55
15.3 Risk of Property Loss 57
15.4 Mutual Waiver of Subrogation 57
16.0 Publicity 57
17.0 Review Committee and Dispute Resolution 57
17.1 Joint Advisory Committee 57
17.2 Dispute Resolution 58
17.3 Continued Performance 59
18.0 General 59
18.1 Control of Services 59
18.2 Right to Perform Services for Others 59
18.3 Scope of Services 60
18.4 Amendments and Revisions 60
18.5 Force Majeure 60
18.6 Nonperformance 61
18.7 Remarketing 61
18.8 Waiver 61
18.9 Severability 61
18.10 Limitations Period upon Termination 62
18.11 Counterparts 62
18.12 Governing Law 62
18.13 Binding Nature and Assignment 62
18.14 Notices 62
18.15 No Third Party Beneficiaries 64
18.16 Other Documents 64
18.17 Consents and Approvals 64
18.18 Headings 64
SUPPLEMENT
Annual Services Charge
Capacity Rates
Additional Resource Charge Rates
Termination Charge
Capacity Plan
Baselines
Disaster Recovery Options
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TABLE OF SCHEDULES
Schedule Title
Schedule A Applications Software
Schedule B Systems Software
Schedule C CES-Retained Machines
Schedule D ISSC Machines
Schedule E Support Services, Performance Standards and Operational
Responsibilities
Schedule F Procedures Manual Table of Contents
Schedule G Disaster Recovery Services
Schedule H Implementation Plan
Schedule I Operations Help Desk
Schedule J ISSC Charges, Measures of Utilization and Financial
Responsibilities
Schedule K Application Installation Standards
Schedule L Security Procedures
Schedule M Confidential Information Categories
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1.0
a) CES desires that:
1) ISSC and CES mutually work to define and develop a
fully operational data processing environment to
support the CES Business; and
2) ISSC provide, operate, maintain and support a
professional, cost effective and flexible operational
data processing environment (including, without
limitation, the ISSC facility housing such
environment) for the support of the CES Business.
b) ISSC, a large and well-known provider of a broad range of
information management and related services (including
without limitation, the services described in Section
1.0(a)(1) and (2) above), desires to perform and provide the
services described in Section 1.0(a)(1) and (2) above as
described in this Agreement. The Parties intend that ISSC,
and any of its subcontractors performing Services under this
Agreement, will constantly strive to improve the efficiency,
quality and effectiveness of the Services to be provided to
CES in accordance with this Agreement.
c) This Agreement documents the terms and conditions under
which CES agrees to purchase and ISSC agrees to perform and
provide the Services.
d) In entering into this Agreement, the Parties have identified
specific objectives and goals intended to be satisfied
throughout performance of this Agreement. In determining
these goals and objectives CES has made certain assumptions,
which ISSC has reviewed, but not validated, regarding the
volume of transactions that could be processed as part of
the Services. These objectives and goals include the
following:
1) a level and quality of Services to facilitate
retention and expansion of CES's customer base.
2) ability to transition services to CES or its
designee with minimal disruption to the CES Business;
and
3) flexibility regarding evolving technologies and
CES Business' needs;
e) The provisions of this Section are intended to be a general
introduction to this Agreement and are not intended to
expand the scope of the Parties' obligations hereunder or to
alter the plain meaning of the terms and conditions of this
Agreement. However, to the extent the terms and conditions
of this Agreement are unclear or ambiguous, such terms and
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conditions are to be interpreted and construed consistent
with the objectives set forth in the preceding paragraphs of
this Section 1.0.
2.1 General Definitions
As used in this Agreement:
a) (CIO} has the meaning given in Section V.B of Schedule
J.
b) "Additional Resource Charge Rate" ("ARC Rate") means the
charge rate for each Resource Unit in excess of its
Baseline, as set forth in the Supplement and Schedule J.
c) "Additional Resource Charges" ("ARCs") means the charges for
utilization of Resource Units in excess of the Baseline
quantity set forth in the Supplement and described in
Schedule J.
d) "Affiliate" means, with respect to a Party, any entity
(including joint ventures) at any time Controlling,
Controlled by or under common Control with, such Party.
e) "Applications Development" ("AD/M") means the programming of
(1) any new applications software, (2) regulatory/statutory
mandated changes, (3) version upgrades to applications
software and (4) changes or enhancements to existing
applications programs. Programming effort shall include,
without limitation, the pre and post development analysis,
planning, design, coding, testing, installation, provision
of program and training documentation and training necessary
to complete the task.
f) "Annual Services Charge" means the fixed charge to CES for
ISSC's provision of the Services and includes the CPU and
DASD capacity and the quantity of tape Resource Units set
forth under Capacity Plan and Baselines in the Supplement.
g) "Applications Software" means those programs and programming
resident on ISSC Machines, including all supporting
documentation and media, that perform specific user related
information processing and communication tasks. Applications
Software as of the Commencement Date is listed in Schedule
A, which will be updated pursuant to Section 2.2 to reflect
the then current Applications Software.
h) "Available Resources" has the meaning given in
Section 18.7.
i) "Baseline" means the specified quantity of resources for a
resource category included within the Annual Services
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Charge, as set forth under the category entitled "Baselines"
in the Supplement.
j) "Cable" or "Cabling" means the wires or cables that
interconnect Machines and/or connect a Machine to a facility
connection point.
k) "Capacity Plan" has the meaning given in Section IV.A
of Schedule J.
l) "Ceridian-Owned Software" has the meaning given in
Section 3.2.
m) "CES Business" means the services that CES provides to
its customers.
n) "CES Facilities" means any CES facilities used or required
by ISSC in connection with ISSC's provision of the Services.
o) "CES-Retained Machines" means Machines physically located
at the ISSC Data Center and Recovery Centers that are
owned, leased or rented and retained by CES after the
Commencement Date and for which CES has retained
responsibility except as described in this Agreement. CES-
Retained Machines are listed in Schedule C which will be
updated pursuant to Section 2.2 to reflect the then current
CES-Retained Machines.
p) "CES Service Employees" has the meaning given in
Section 11.8(e).
q) "Change of Control" has the meaning given in Section
18.13.
r) "Change Management Procedures" has the meaning given in
Section 4.9(b).
s) "Claim" has the meaning given in Section 14.6.
t) "Code" has the meaning given in Section 9.0.
u) "Commencement Date" means January 1, 1995.
v) "Confidential Information" has the meaning given in
Section 10.1.
w) "Contract Year" means the first 12 months following the
Commencement Date and each 12 month period thereafter
beginning on the anniversary of the Commencement Date.
x) "Control," "Controlling" or "Controlled" means the legal,
beneficial or equitable ownership, directly or indirectly,
of more than 50% of the aggregate of all voting equity
interests in such entity.
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y) "Data Center" means the ISSC Machines, CES-Retained Machines
and Software to be located at 1505 Windward Concourse,
Alpharetta, Georgia 30202, ("Site 1") as of the Commencement
Date and at the second location to be provided hereunder if
applicable ("Site 2") and at such other locations as ISSC
may establish thereafter.
z) "DEC Machines" means the Machines listed in Schedule C under
the heading "DEC Machines" or the then current replacement
or equivalent thereof.
aa) "Deferral Credit" has the meaning given in Section V.A
of Schedule J
ab) "Derivative Work" has the meaning given in Section
9.1(a).
ac) "Develop" has the meaning given in Section 9.0.
ad) "Direct Damages Cap" has the meaning given in Section
12.2(a).
ae) "Disaster Recovery" has the meaning given in Schedule
G.
af) "Equipment Plan" has the meaning given in Section V.A
of Schedule J.
ag) "Execution Date" means the date this Agreement is signed by
both Parties.
ah) "Force Majeure Event" has the meaning given in Section
18.5(a).
ai) "IBM Systems Software" means the Systems Software licensed
by IBM or its Affiliates operating on the ISSC Machines in
the Data Center.
aj) "Implementation Plan" has the meaning given in Section 3.1
and Schedule H.
ak) "Indemnified Party" has the meaning given in Section
14.6(a).
al) "Indemnifying Party" has the meaning given in Section
14.6(a).
am) "ISSC Machines" means Machines which are provided by ISSC on
or after the Commencement Date in order to meet its
obligations under this Agreement. ISSC Machines as of the
Commencement Date are listed in Schedule D, which will be
updated pursuant to Section 2.2 to reflect the then current
ISSC Machines.
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an) "Joint Advisory Committee" has the meaning given in Section
17.1.
ao) "Level One Support" means, with respect to hardware and
software, receiving the initial call, problem recording,
isolation to a failing subsystem, (e.g., workstation,
network, host application, etc.), call routing and problem
tracking.
ap) "Level Two Support" means, with respect to hardware and
software, performing the maintenance diagnostic routines to
isolate a problem to a failing component of the subsystem
and includes replacing the failing component.
aq) "Level Three Support" means, with respect to hardware
and software, diagnosing or repairing the failure
within the component.
ar) "Losses" means all losses, liabilities, damages and claims
(including taxes), and all related costs and expenses
(including any and all reasonable attorneys' fees and
reasonable costs of investigation, litigation, settlement,
judgment, interest and penalties).
as) "Machines" means the equipment used to provide the
Services including the following:
(1) computer equipment, including all computers and
associated features, peripheral devices, and other
equipment; and
(2) communications equipment, including all cabling,
communications controllers, multiplexors,
modems/DSUs and all other communications
equipment.
at) "Maintenance Release" means those Software fixes and
updates provided by the Software vendor as part of
normal maintenance service for which there is no
additional cost to ISSC.
au) "Materials" has the meaning given in Section 9.1(b).
av) [CIO] has the meaning given in Schedule E.
aw) [CIO] has the meaning given in Section 4.0(d).
ax) [CIO] has the meaning given in Section 4.0(d).
ay) "New Services" has the meaning given in Section 7.6.
az) "Operational Support" means the provision of data
backups, monitoring of consoles, mounting of tapes,
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reloading and any other standard procedures documented
in the Procedures Manual and/or other requested
activities consistent with the normal and customary
operation of the machine environment.
ba) "Out-of-Pocket Expenses" means all actual direct
payments made by ISSC for equipment, materials,
supplies and other services purchased by ISSC that ISSC
would not otherwise have expended in connection with
the provision of the Services hereunder and will include,
but not be limited to, ISSC's reasonable indirect expenses
such as ISSC's personnel and overhead costs or allocations
thereof, administrative expenses or other partially or fully
burdened charge factors consistent with industry practice in
connection with providing the services; provided, however,
that such costs shall have been approved in writing by CES
in advance and in no event will any profit be included in
the concept of Out-of-Pocket Expenses, and ISSC shall not be
obligated to perform any functions for which Out-of-Pocket
Expenses are applicable and have not been approved.
bb) [CIO] means the [CIO] and [CIO] responsibilities under
which the Services will be provided. The [CIO] are
described in Section 4.7 and listed in Schedule E.
bc) [CIO] has the meaning given in Section V.G of Schedule J.
bd) "Procedures Manual" has the meaning given in Section 4.9(a).
be) [CIO] has the meaning given in Section V.G of Schedule J.
bf) "Recovery Center" has the meaning given in Section II.E of
Schedule G.
bg) "Replacement Services" has the meaning given in Section
7.6(c).
bh) "Required Consents" means any consents or approvals required
to be obtained to grant ISSC the same rights of access and
use of the Software and CES-Retained Machines that CES has
with respect to the Software and CES-Retained Machines.
bi) [CIO] has the meaning given in Section 3.5.
bj) "Required Consents Charges" has the meaning given in Section
3.5.
bk) "Resource Unit" ("RU") means a particular unit of resource
utilization, as described in Schedule J and set forth under
Baseline quantities in the Supplement.
bl) [CIO] has the meaning given in Section V.G. of Schedule J.
bm) [CIO] has the meaning set forth in Schedule E.
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bn) "Services," ("Information Technology Services") means those
services and functions which ISSC agrees to provide to CES
pursuant to this Agreement.
bo) "Services Transfer Assistance" has the meaning given in
Section 7.9.
bp) "Similarly Situated Customers" means ISSC customers, during
the term of such customer's contracts with ISSC, with
substantially the same mix of on-line and batch processing
applications and systems resources utilization at similar or
lesser volumes and for whom ISSC is providing services
substantially similar to the Services ISSC is providing CES,
using a substantially similar charging methodology.
bq) "Software" means both Applications Software and Systems
Software.
br) "Software Maintenance" means problem analysis, defect
identification, fixes and installation of Maintenance
Releases and Versions.
bs) "Systems Software" means those programs and programming
resident on the Machines, including all IBM Systems Software
and Third Party Systems Software and all supporting
documentation and media, that perform tasks basic to the
functioning of the Machines that are necessary to operate
the Applications Software or otherwise support the provision
of Services by ISSC. Systems Software includes, but is not
limited to, operating systems, software utilities, data
security software and data base managers. Systems Software
as of the Commencement Date is listed in Schedule B, which
shall be updated pursuant to Section 2.2 to reflect the then
current Systems Software.
bt) "Technology Plan" has the meaning given in Section 4.10.
bu) "Term" has the meaning given in Section 2.3 and any
extension and renewal term described in this Agreement.
bv) [CIO] has the meaning given in Section 11.1.
bw) "Third Party Systems Software" means Systems Software other
than IBM Systems Software.
bx) "Type I Materials," "Type II Materials," Type III
Materials," "Type IV Materials," Type V Materials," "Type VI
Materials" and Type VII Materials" have the meanings given
in Sections 9.1(c), 9.1(d), 9.1(e), 9.1(f), 9.1(g), 9.1(h)
and 9.1(i), respectively.
by) "Version" means those Software updates that generally add
function to the existing Software and are provided by the
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Software vendor at a fee over and above the standard
software maintenance costs.
bz) "Virus" or "Viruses" has the meaning given in Section 5.10.
ca) "Wind-Down Expenses" has the meaning given in Section 11.3.
cb) "Wire" or "Wiring" means those cables or wires that are
internal to the building structure that interconnect
machines within the same building or between buildings.
2.2 Associated Contract Documents
This Agreement also includes:
a) Supplement ("Supplement") containing the charges and certain
other necessary information; and
b) Schedules A through M which will be updated by the Parties
as necessary or appropriate during the Term.
2.3 Term
The term of this Agreement will begin as of 12:01 a.m. on the
Commencement Date and will end as of 12:00 midnight on December
31, 2004, (the "Term"), unless earlier terminated or extended in
accordance with this Agreement.
2.4 Renewal and Expiration
ISSC agrees to notify CES, in writing, whether it desires to
renew this Agreement not less than [CIO] months prior to the
expiration of the Term and, if so, of the proposed prices and
terms to govern such renewal not less than [CIO] months prior to
the expiration of the Term. If ISSC notifies CES that it desires
to renew this Agreement, CES agrees to inform ISSC in writing
whether it desires to renew not less than [CIO] months prior to
the expiration of the Term.
If CES notifies ISSC that it desires to renew the Agreement, but
the Parties are unable to agree upon renewal prices, terms and
conditions as of [CIO] prior to the expiration of the Term, this
Agreement will be extended for[CIO] at the then current prices,
terms and conditions. If the Parties are unable to reach
agreement on renewal during such extension period, this Agreement
will expire at the end of such extension period.
3. 0 Overview
3.1 Implementation Plan
On the Commencement Date, the Parties completed a transition
period pursuant to that certain letter agreement between ISSC and
CES executed November 9, 1994, which is hereby replaced and
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superseded by this Agreement. Any amounts paid by CES (a)
attributable to the overlapping time period covered by both the
letter agreement and this Agreement, and (b) attributable to the
rate differential between the letter agreement and this Agreement
for the period of January 8, 1995, through February 7, 1995, will
be credited to the amounts owed by CES under this Agreement which
credit both Parties agree equals[CIO]. During such transition
period, the Parties mutually developed a detailed written plan
for the operating environments being provided under this
Agreement ("Implementation Plan") which is set forth in
Schedule H and which will be updated by the Parties throughout
the Term as necessary.
The Implementation Plan is divided into four specific phases as
follows:
a) Phase I addresses the requirements for implementing an MVS
operating environment at the Data Center.
b) Phase II addresses the requirements for implementing the CES
application development and testing environments in the Data
Center.
c) Phase III addresses the implementation of the CES customer
processing in the operating environment.
d) Phase IV addresses the implementation of Site 2, if
applicable.
e) CES and ISSC will cooperate with one another in
accomplishing all aspects of the Implementation Plan,
including the fulfillment of their respective obligations to
complete the Implementation Plan.
3.2 Ceridian-Owned Software
As of the Commencement Date, Ceridian Corporation and its
Affiliates grant to ISSC a license to use such Software owned by
Ceridian or its Affiliates ("Ceridian-Owned Software") as is
necessary and appropriate for ISSC to perform the Services. Such
Ceridian-Owned Software is identified as such in Schedules A and
B. Ceridian-Owned Software remains the property of Ceridian
Corporation or its Affiliates, as applicable.
3.3 Third Party Software
CES will make the Software available to ISSC for the purpose of
providing the Services. ISSC will comply with all license
obligations of CES, including those of nondisclosure, under any
such Software licenses to the extent such obligations were
disclosed. The Parties acknowledge and agree that ISSC has had
access to such CES books, records, documents and personnel as
ISSC deemed necessary or appropriate and has had the opportunity
to perform due diligence as it deemed applicable to verify and
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validate such obligations. ISSC's due diligence does not include
a review of CES's compliance with any such lease, license or
other agreement prior to the Commencement Date.
3.4 Software Currency
The Parties agree to maintain reasonable currency for Maintenance
Releases and Versions of Software, unless CES determines
otherwise. For purposes of this Section, "reasonable currency"
shall mean that the next Maintenance Release or Version is
installed not later than the longer of (a) [CIO] after the date
the licensor makes such Maintenance Release or Version
commercially available or (b) within [CIO] after the date the
licensor makes a subsequent Maintenance Release or Version
commercially available which causes CES to be more than one
Maintenance Release or Version behind.
In the event CES requests ISSC to expedite installation of a
Maintenance Release or Version or to delay upgrading of specific
Software beyond such period or requires operation and maintenance
of multiple versions of Software, ISSC shall do so, provided,
that if ISSC reasonably determines that it will incur any Out-of-
Pocket Expenses as a result of such requests (e.g., Software
support costs due to withdrawal of maintenance by the licensor,
multiple version charges, etc.); then ISSC will notify CES of the
amount of such Out-of-Pocket Expenses in writing and CES, at its
option, will either delay installation of such Maintenance
Release or Version or update the Software to the current level
(as applicable) or reimburse ISSC for any demonstrable Out-of-
Pocket Expenses.
In addition, CES shall relieve ISSC from any failure to meet a
Minimum Service Level directly related to delaying, or impacted
by the operation of, the next Maintenance Release or Version
until such time as the affected Software is deemed current.
3.5 Required Consents
CES shall be responsible for obtaining all Required Consents
necessary to enable ISSC to use the Software and CES-Retained
Machines until such time as the third party vendor refuses to
provide such Required Consents.
ISSC will provide CES with advice and counsel regarding ISSC's
experience with vendors and ISSC's agreements with vendors. CES
will be responsible for all vendor charges and fees related
specifically to obtaining the Required Consents (the "Required
Consents Charges"). [CIO] shall reimburse [CIO] of the Required
Consents Charges. Thereafter, ISSC shall reimburse CES for [CIO]
of any and all Required Consents Charges up to the Required
Consents Cap. The [CIO] is the [CIO] for Required Consents
Charges and is initially set at [CIO], which amount may [CIO]
described in [CIO] and [CIO] of [CIO]. ISSC shall bear the
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costs, if any, associated with the cancellation and relicensing
of IBM brand software.
In the event that any Required Consent is not obtained with
respect to the Software licenses, leases or contracts related to
the Services, then, unless and until such Required Consents are
obtained, the Parties shall cooperate with each other in
achieving a reasonable alternative arrangement for CES to
continue to process its work with minimum interference to the CES
Business, and [CIO] shall bear [CIO] of the expenses related to
achieving such alternative arrangement, which amount shall be
applied towards the [CIO].
3.6 Joint Verification
Following the Commencement Date, ISSC and CES reserve the right
to inventory, validate and update, any information that is
reflected in or omitted from the attached Supplement or
Schedules. If any administrative or clerical discrepancies are
detected, the Supplement and Schedules shall be changed, modified
and adjusted to correct such discrepancies so that the Supplement
and Schedules will be correct and accurately reflect the scope of
Services provided CES. If either Party disputes the discrepancy
then the Parties will submit the matter to the Joint Advisory
Committee for dispute resolution as specified in Section 17 of
this Agreement.
3.7 On-going Relationship
Both CES and ISSC agree that the Services provided may require
adjustments to reflect the evolving business and operations of
CES and ISSC. Therefore, CES and ISSC will establish a Joint
Advisory Committee as described in Section 17.1, which will
periodically evaluate the business operating strategies of each
Party and recommend modifications to, and evolution of, the
Services to optimize such strategies.
The Parties acknowledge that the relationship memorialized by
this Agreement is dynamic in nature and that such relationship
will change as the operating and business environment of CES
changes and evolves, and that it is impossible to define with
specificity the scope of the Services that will be provided by
ISSC during the Term of this Agreement. While the Parties will
endeavor to modify the Schedules and amend the Agreement as
necessary or appropriate from time to time to reflect the
parameters and changing nature of the Services, the Parties
acknowledge that such activities may not always be documented
with specificity. Therefore, the Parties agree to deal with each
other in good faith and endeavor to resolve in good faith,
through the dispute resolution processes contained in this
Agreement, any disputes that may arise.
4. 0 Services
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During the Term, ISSC shall provide the Services, consisting of
the following, as they may evolve during the Term and be
supplemented and enhanced as provided in this Agreement:
a) The services, functions and responsibilities described in
this Agreement and its Schedules, including without
limitation, the services, functions and responsibilities
described in Sections 3.0 through 6.0 and the Schedules.
b) If any services, functions or responsibilities not
specifically described in this Agreement are required for
the proper performance and provision of the Services and are
an inherent part of, or a necessary sub-task included
within, the Services described above in this Section,
including, without limitation, those described in
Schedule E, such services, functions and responsibilities
shall be deemed to be implied by and included within the
scope of the Services to the same extent and in the same
manner as if specifically described in this Agreement.
c) Except as otherwise expressly provided in this Agreement and
the Schedules, ISSC shall be responsible for providing all
facilities, personnel and other resources set forth in this
Agreement, the Schedules and the Supplement. The Parties
agree that additional or replacement Data Center machines and
other equipment, including upgrades not set forth in the
Equipment Plan listed in Section H-2 of Schedule H, or
provided pursuant to the charging methodologies described in
the Supplement and Schedule J, are the responsibility of CES
and will be provided by ISSC as New Services in accordance
with Section 7.6 of the Agreement.
d) ISSC agrees to take commercially reasonable actions, without
an increase in charges to CES, to provide the ISSC Machines
and IBM Systems Software at a technological level that will
enable CES to take advantage of technological advancement in
its industry; provided, however, that ISSC will maintain the
ISSC Machines and IBM Systems Software as a whole [CIO]
unless otherwise mutually agreed; provided, further, ISSC
will maintain new installations for critical components,
such as the processors and DASD supporting the production
environment at a level [CIO]
4.1 ISSC Project Executive
a) Prior to the Commencement Date, ISSC will designate an ISSC
Project Executive, who will be located at the CES Facility
on and after the Execution Date, to whom all CES's
communications may be addressed and who has the authority to
act for ISSC and its subcontractors in connection with all
aspects of this Agreement.
b) ISSC shall cause the person assigned to the position of
Project Executive to devote substantially his or her full
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working time and effort in the employ of ISSC to the
provision of the Services under this Agreement. Before
assigning an individual to the position of Project
Executive, whether the individual is initially assigned or
is subsequently assigned, ISSC shall:
1) notify CES of the proposed assignment;
2) introduce the individual to appropriate CES
representatives; and
3) consistent with ISSC's personnel practices,
provide CES with a resume and any other information
about the individual reasonably requested by CES.
ISSC agrees to discuss with CES any objections CES may have
to such assignment and will resolve such concerns on a mutually
agreed basis.
c) ISSC will give CES at least [CIO] advance notice of a change
of the person appointed to the position of Project Executive
and will discuss with CES any objections CES may have to
such change. Appointment of any such candidate will be in
accordance with Section 4.1(b) above. CES shall have the
right to request a replacement of the ISSC Project Executive
in accordance with Section 4.2.
d) ISSC shall not reassign or replace any person assigned to
the position of Project Executive during the [CIO] of his or
her assignment to the CES service team nor shall ISSC assign
more than [CIO] different individuals to the position during
the Term unless:
1) CES consents to such reassignment or replacement;
or
2) any such ISSC employee:
(a) voluntarily resigns from ISSC; or
(b) is dismissed by ISSC for misconduct or
materially failing to perform his or her duties
and responsibilities pursuant to this Agreement in
ISSC's reasonable judgment; or
(c) is unable to work due to his or her death or
disability.
e) If ISSC reassigns or replaces the Project Executive, ISSC
will provide a reasonable period for overlap training as the
circumstances allow.
4.2 Personnel Replacement
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a) In the event that CES reasonably and in good faith
determines that it is not in the best interests of CES for
any individual ISSC employee or subcontractor employee to be
appointed to perform or to continue performing any of the
Services, then CES shall give the ISSC Project Executive
written notice requesting that the employee or subcontractor
employee not be appointed, not be replaced or be replaced.
Promptly after its receipt of such a notice, ISSC shall
investigate the matters stated in such notice. If it
determines that CES's position is valid, ISSC shall not
appoint, shall not remove, or shall cause to be removed,
such ISSC employee, including the ISSC Project Executive, or
subcontractor employee from the CES service team providing
the Services under this Agreement.
b) If ISSC [CIO] to meet the [CIO] or [CIO] and if CES
reasonably determines such [CIO] is attributable in whole or
in part to [CIO] assigned to the CES service team, CES will
notify ISSC of such determination. ISSC will provide data
concerning its [CIO] for providing the Services and will
meet with CES to discuss the reasons for the [CIO]. If
reasonably requested by CES, ISSC shall submit to CES its
proposals for reducing the turnover rate and the Parties
shall mutually agree on a plan to bring the turnover rate
down to a reasonably acceptable level. Notwithstanding
transfer or turnover of personnel, ISSC remains obligated to
perform the Services in accordance with the [CIO] and the
other terms and conditions of this Agreement. Any exercise
or non-exercise of this provision by CES shall not impact
any other right or remedy of CES under this Agreement.
4.3 Non-Competition
a) Except as approved by CES, ISSC will not:
1) assign to the account of a CES competitor an ISSC
employee who has held a position hereunder as [CIO] for
[CIO] after the date such individual ceased to hold a
position of [CIO] hereunder; provided, however, that
such reassignment limitation shall not be applicable
after the termination of this Agreement, if such
termination was by CES for convenience or by ISSC for
cause pursuant to Sections 11.1 or 11.5, respectively.
For the purposes of this Section 4.3a(1), CES's
competitors will be the list of [CIO] businesses
provided by CES to the ISSC Project Executive in
writing. CES may update such list not more than once
annually and the updated listing cannot exceed [CIO]
businesses; or
2) [CIO] for [CIO] for [CIO] or [CIO] development for
[CIO]. For purposes of this provision, [CIO] includes
any present or future Affiliate of [CIO] that provides
[CIO], relating to [CIO], as well as any successor in
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interest to [CIO] (in whatever corporate form) that
provides such services.
b) CES will not reduce the volume of Services obtained from
ISSC below the Capacity Plan set forth in the Supplement in
order to transfer data processing for CES's payroll
customers to a competitor of ISSC or in-house to a CES
facility during the Term; provided, however, that nothing
contained herein shall prevent CES from retaining the CES
data processing facilities operated by CES as of the
Commencement Date in connection with its then current data
processing for payroll customers, or prevent CES from
utilizing in-house or any third party facilities and
services for (1) data processing for CES payroll customers
in an amount in excess of such Capacity Plan, or (2) data
processing for CES Business' activities other than payroll
processing for its payroll customers or (3) data processing
on a hardware and/or software platform other than the
integrated hardware and software platforms set forth on
Schedules A, B, C and D.
4.4 Use of Subcontractors
a) ISSC may delegate or subcontract its obligations under this
Agreement but ISSC shall remain primarily liable to CES for
the timely and proper performance of all such obligations
and the performance and actions of any person or entity to
which it delegates or subcontracts any such obligation.
ISSC shall notify CES of a decision to delegate or
subcontract its basic Data Center operations (i.e., systems
programming) and obtain CES's approval of such delegation or
subcontract.
b) ISSC shall remain responsible for:
1) obligations performed by the subcontractors that
it engages or permits to be engaged to provide and/or
perform the Services; and
2) for the performance and actions of all such
persons and entities, to the same extent as if such
obligations were performed by ISSC and its employees.
4.5 Alternate Source for Work
a) Except as limited in Section 4.3(b), CES shall have the
right during the Term to retain third parties to perform any
part of the Services, any services, functions or
responsibilities that would be deemed New Services pursuant
to Section 7.6, or to do either such work internally. ISSC
shall cooperate with any such third party and CES. Such
cooperation shall include, without limitation:
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1) providing reasonable electronic access to the Data
Center and Software (other than Third Party Systems
Software, if any, where the underlying license
agreement does not authorize such access and a
Required Consent permitting such access has not been
obtained), and other resources used by ISSC to perform
the Services; and
2) providing such information regarding the operating
environments, system constraints, and other operating
parameters as is reasonably necessary for the work
product of the third party or CES to be compatible with
the Services.
b) ISSC's obligations hereunder shall be subject to the third
party's:
1) compliance with ISSC's reasonable security and
other applicable standards and procedures;
2) execution of appropriate confidentiality
agreements; and
3) scheduling of computer time and scheduling access
to other resources to be furnished by ISSC pursuant to
this Agreement.
c) The Parties agree that if ISSC's cooperation with CES or any
third party performing such work for CES causes ISSC to
expend additional resources that ISSC would not otherwise
have expended, ISSC's Out-of-Pocket Expenses for such
additional requested Resources will be paid by CES.
d) The Parties further agree that if a third party's activities
affect ISSC's ability to meet the Performance Standards or
otherwise provide the Services in ISSC's reasonable
determination, ISSC will provide written notice to CES of
such determination and the Parties will cooperate to
determine whether such affect is caused by the third party
and how to ameliorate any such affect. ISSC shall be
excused for any inability to meet the Performance Standards,
[CIO] or provide Services due to the third party's access
and use of the resources ISSC otherwise uses to provide the
Services and meet the Performance Standards to the extent
such inability is demonstrated by ISSC to be caused by such
third party's access.
4.6 CES Project Executive
Prior to the Commencement Date, CES agrees to designate a Project
Executive to whom all ISSC communications may be addressed and
who has the authority to act for CES and its subcontractors in
connection with all aspects of this Agreement.
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4.7 Performance
a) ISSC agrees that it will perform the [CIO] and [CIO] such
Services. ISSC further agrees that its performance of the
Services will [CIO] and [CIO].
b) Within[CIO] after the Commencement Date, CES and ISSC will
review and modify, as agreed by the Parties, each of the
[CIO] but the [CIO] and [CIO] shall not be [CIO] or [CIO]
agreed to by the Parties at any time without the prior
written agreement of CES, except [CIO] that ISSC [CIO] is
[CIO] on [CIO] beyond the Capacity Plan set forth on the
Supplement without the corresponding adjustment to increase
such Capacity Plan in accordance with the Supplement and
Schedule J. The Parties expect and understand that the
[CIO] and[CIO] will be [CIO] over time. As part of this
review process, the Parties shall jointly determine and, if
appropriate, agree on additional or alternate [CIO] which
may be added to Schedule E as applicable.
c) ISSC shall install and implement the measurement and
monitoring tools set forth on Schedule B and shall implement
procedures approved by CES as required to measure and report
ISSC's performance of the Services against the applicable
[CIO] and [CIO]. Such measurement and monitoring shall
permit reporting at a reasonable level of detail sufficient
to verify compliance with the [CIO] and [CIO], if any, and
shall be subject to reasonable audit by CES. ISSC shall
provide CES with the information for, data for and access to
such tools for CES's use and analysis to the extent
permitted under the Software license subject to Section
5.11(b), upon request, for purposes of verification and for
CES's own analysis.
4.8 Efficient Use of Resources
ISSC shall take commercially reasonable actions to efficiently
use resources that will be chargeable to CES under this Agreement
for providing and performing the Services including, but not
limited to the following:
a) ISSC will make schedule adjustments (consistent with CES's
priorities and schedules for the Services and ISSC's
obligation to meet the Performance Standards) including,
without limitation, delaying the performance of noncritical
functions within established limits;
b) ISSC will tune or optimize the ISSC Machines and Systems
Software running on the ISSC Machines used to perform the
Services;
c) ISSC will assign personnel with the required skills,
training and experience to perform the duties,
responsibilities and functions assigned to such personnel;
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d) ISSC will utilize project management tools, including
productivity aids and project management systems, as
reasonably necessary to perform the Services; and
e) ISSC will be responsible for providing and implementing
quality assurance processes and procedures that are
reasonably necessary to assure that the Services are
performed accurately and in a timely manner.
CES will cooperate with ISSC, and as reasonably requested by
ISSC, promptly make management decisions and provide approvals,
information and otherwise facilitate ISSC's provision of the
Services.
4.9 Management and Control
a) On the Execution Date, ISSC shall provide a manual
describing the operating processes and procedures relating
to ISSC's performance of the Services then being provided
(the "Procedures Manual"). The Procedures Manual shall
generally conform to the format and content set forth in
Schedule F. Until such procedures are completed and
accepted by the Parties, ISSC shall provide the Services
using generally accepted industry processes and procedures.
1) The Procedures Manual shall be provided to CES for
review, comment and approval. Any reasonable
proposals, comments or suggestions of CES will be
incorporated therein.
2) ISSC shall periodically update the Procedures Manual
to reflect any changes in the operations or procedures
described therein and provide such changes to CES for
review, comment and approval.
3) ISSC shall perform all Services in accordance with
the Procedures Manual.
ISSC shall develop the Procedures Manual according to the
priorities and schedule mutually established by the Parties.
b) On the Execution Date, ISSC shall provide the "Change
Management Procedures" then being provided, which shall
include, at a minimum, that:
1) ISSC will make no change which may adversely affect
the business operations of CES without first obtaining
approval from CES.
2) ISSC will assure that all programs are moved from
the applications development and test environments to the
production environment in a controlled and documented
manner that is adequately noticed in advance in a writing
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delivered by ISSC to CES in hard copy or through CES's
electronic mail system.
3) ISSC will schedule all change(s) to CES's operating
environment in consultation with CES so as not to
unreasonably interrupt the CES Business.
4) ISSC will prepare monthly, a rolling quarterly "look
ahead" schedule for ongoing and planned change(s) to
CES's operating environment. The status of such change(s)
will be monitored and tracked against the applicable
schedule.
5) ISSC will document and provide to CES, via the
change control notice referenced in Section 4.9(b)(2)
above, notification of all change(s) performed for
emergency purposes or as otherwise not precluded in
Section 4.9(b)(1) above. In addition, ISSC shall provide
verbal notification within 12 hours after such change to
the contact specified in the Procedures Manual.
The Change Management Procedures will be included in the
Procedures Manual and shall be provided to CES for review,
comment and approval. Any reasonable comments or suggestions of
CES will be incorporated therein.
c) Beginning on February 1, 1995, ISSC will provide to CES
preliminary reports regarding ISSC's performance of the
Services. Beginning March 1, 1995, ISSC will provide to CES
a mutually agreed upon set of periodic reports and cooperate
with CES to establish a final report structure by a mutually
agreed upon date. At a minimum, the reports to be provided
beginning March 1, 1995 will include the following:
1) a monthly performance report documenting ISSC's
performance with respect to the Performance Standards,
[CIO] and applicable Service Credits;
2) a monthly project schedule report containing the
information described in Section 4.9(b)(4);
3) a monthly change report setting forth a record of
all change(s) to CES's operating environment performed
during the previous month; and
4) a monthly report describing CES's utilization of
each particular type of RU during such month, and
comparing such utilization to the then applicable
Baseline for each RU.
ISSC will provide CES with such documentation and other
information as may be reasonably requested by CES from time to
time in order to verify the accuracy of the reports specified
above.
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d) By the Execution Date, the Parties will mutually determine an
appropriate set of periodic meetings to be held between
representatives of CES and ISSC. At a minimum, these meetings
will include the following:
1) a weekly meeting, unless otherwise agreed upon by
the Parties, among operational personnel to discuss
ongoing issues relating generally to daily performance
and planned or anticipated activities and change(s) to
CES's operating environment;
2) a monthly management meeting to review the
performance report, the project schedule report, the
changes report, and such other matters as appropriate;
and
3) a quarterly senior management meeting to review
relevant contract and performance issues.
All meetings will have a published agenda agreed to by CES
and ISSC, which agenda shall be issued by ISSC sufficiently in
advance of the meeting to allow meeting participants a reasonable
opportunity to prepare for the meeting. ISSC shall prepare
minutes of all such meetings and shall circulate the minutes for
review.
4.10 Annual Technology Plan
The Parties shall jointly prepare a "Technology Plan" in
accordance with the following procedures:
a) The First Technology Plan under this Agreement will be
completed by [CIO]. The Technology Plan for subsequent
years of this Agreement will be completed by [CIO] of each
year, commencing [CIO].
b) The Technology Plan will be composed of short-term and long-
range plans, which tie into CES Business' goals and
objectives. The long-range plan will include strategic and
flexible use of the Data Center in light of CES Business'
priorities and strategies. The short-term plan will include
an identification of proposed software and hardware, as
appropriate, and a projected time schedule for developing
and implementing the proposed changes.
c) CES will draft the Technology Plan with ISSC's active
participation, advice and consent. ISSC will provide CES
with its written comments regarding the draft Technology
Plan within [CIO] after receipt thereof by ISSC. ISSC's
response will include, without limitation, information
regarding industry trends in production capabilities and
pricing and the implementation of proposed hardware and
software changes. The final Technology Plan will be subject
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to mutual agreement by the Parties. If the Parties are
unable to agree with respect to a particular element of the
Technology Plan, then the Parties' rights and obligations
with respect to such element shall be as otherwise required
under this Agreement without reference to the Technology
Plan. Implementation of any portion of the Technology Plan
that is inconsistent with the Parties' obligations hereunder
will require an amendment to this Agreement pursuant to
Section 18.4.
4.11 CES Approvals and Notification
For those areas of the Services where CES:
a) has reserved right-of-approval or consent or agreement;
b) is required to provide notification; and/or
c) is required to perform a responsibility set forth in this
Agreement;
and such approval, consent, notification or performance is
delayed or withheld by CES without authorization or right beyond
the period provided in this Agreement or the Schedules and such
delay or withholding is not caused by ISSC and affects ISSC's
ability to provide the Services under this Agreement, then CES
will relieve ISSC of the responsibility for that portion of the
Services affected by the delay or withholding during the period
such approval, consent, notification or performance is delayed or
withheld beyond the period provided in this Agreement or the
Schedules provided that ISSC provides reasonable written notice
to CES of such delay by CES and of the responsibility affected.
CES will reimburse ISSC for its Out-of-Pocket Expenses, if any,
incurred during such period as a result thereof.
5.0 Operations
5.1 ISSC Machines
ISSC will provide the Services using the ISSC Machines.
Additional or replacement ISSC Machines, including upgrades, will
be added by ISSC to the Data Center, as necessary to perform the
Services in accordance with the Performance Standards, subject to
capacity charges beyond the specified Capacity Plan or ARCs for
growth beyond the Baselines set forth in the Supplement, as
applicable. ISSC retains all right, title and interest in and to
all ISSC Machines, subject to Section 11.8 with respect to CES's
rights upon termination or expiration of this Agreement.
5.2 Software Services
ISSC will:
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a) operate, maintain and enhance all IBM Systems Software in
the Data Center, as necessary to perform the Services in
accordance with the Performance Standards;
b) operate the Third Party Systems Software in the Data Center;
c) provide Operational Support for the CES-Retained Machines in
the Data Center;
d) apply problem analysis, preventive maintenance and program
temporary fixes to correct defects in the Systems Software
operating on the ISSC Machines running in the Data Center;
e) provide or obtain new Versions and Maintenance Releases,
upgrades, replacements or additional IBM Systems Software as
ISSC deems appropriate, subject to Section 3.4, in order to
perform the Services in accordance with the Performance
Standards;
f) operate all Applications Software in the Data Center;
g) provide Operational Support for the interfaces to the
Applications Software and Systems Software developed by CES;
and
h) cooperate with CES in connection with CES's development of
Applications Software and Systems Software, upon request.
CES will develop interfaces to the Applications Software and
Systems Software.
5.3 Operations, Support and Maintenance
ISSC will:
a) operate the Data Center;
b) provide maintenance services for ISSC Machines in the Data
Center seven days a week, twenty-four hours a day;
c) provide files to the queue in accordance with Schedule E;
d) monitor file transmissions originating from the ISSC
Machines using monitoring tools provided by CES and approved
by ISSC, which approval will not be unreasonably withheld,
and take appropriate action in accordance with the
Procedures Manual;
e) store, maintain and provide security for storage media (tapes,
disk packs, etc.) provided to ISSC; and
f) provide reasonable system capacity to support CES
application development and testing, in accordance with
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Schedule E, the resources utilized for which will be
included in the Capacity Plan and when calculating RUs.
5.4 Consolidation and Relocation Services
ISSC will install, rearrange and relocate equipment in the Data
Center as ISSC deems necessary in order to perform the Services
in accordance with the Performance Standards and in such a manner
so as to minimize service level impact to CES users. ISSC will
also be responsible for the de-installation and relocation of the
ISSC Machines in the Data Center, including without limitation,
appropriate packaging, certification and shipping. Installation,
relocation or rearrangement of CES-Retained Machines if made
pursuant to CES's request will be invoiced to CES as Out-of-
Pocket Expenses or if made pursuant to ISSC's request will be
deemed to be included in the Annual Services Charge. De-
installation and relocation of the CES-Retained Machines,
including without limitation, appropriate packaging,
certification and shipping, if made pursuant to CES's request
will be invoiced to CES as Out-of-Pocket Expenses or if made
pursuant to ISSC's request will be deemed to be included in the
Annual Services Charge.
5.5 Systems Management
ISSC will:
a) perform capacity planning, performance analysis and tuning for
the ISSC Machines and Systems Software operating on the ISSC
Machines running in the Data Center;
b) implement controls to effectively manage the environment of
the Data Center according to the Procedures Manual;
c) provide backup and restore capability for data and programs
maintained in the Data Center;
d) invoke the disaster recovery plan when appropriate in
accordance with Schedule G; and
e) provide for systems access security for the ISSC Machines
through the use of appropriate security products. Any other
security products specified by CES will be considered Third
Party Systems Software.
5.6 Production Services
ISSC will:
a) take direction from CES and cooperate with the scheduling,
controlling, monitoring and running of production jobs on
the ISSC Machines using scheduling and quality control
procedures, as specified in Schedule E and in the Procedures
Manual; and
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b) follow procedures for scheduling and directing output of all
production work (including workload and performance
balancing), as specified in the Procedures Manual.
5.7 Software
ISSC agrees to use any Third Party Systems Software selected by
CES. CES may add Applications Software to, or delete
Applications Software, from Schedule A. ISSC agrees to use any
Applications Software selected by CES, subject to the provisions
of Schedule K and Section 7.6. CES will retain responsibility
for maintenance, support and all license and related charges for
all Applications Software and Third Party Systems Software,
subject to the provisions of Section 3.5.
If CES requests a [CIO] of any IBM Systems Software, CES shall
pay [CIO] the [CIO] and [CIO] attributable to the [CIO] IBM
System Software [CIO] attributable to the IBM Systems Software
being [CIO]. If CES [CIO] any IBM Systems Software [CIO]
Schedule B and does not at the same time [CIO] any other IBM
Systems Software therefor, CES may [CIO] an amount equal to [CIO]
and[CIO] to such [CIO] IBM System Software [CIO] attributable to
any [CIO] to the IBM System Software [CIO] by CES.
CES shall audit, control and approve all new Applications
Software and Third Party Systems Software prior to its promotion
into production.
5.8 CES-Retained Machines
ISSC shall provide approximately [CIO] of space within each Data
Center location (Site 1 and Site 2, if applicable) and the
Recovery Center for the DEC Machines. Upon request by CES, ISSC
shall increase such square footage of floor space at a rate not
to exceed [CIO] each year for the remainder of the Term at [CIO].
In addition, ISSC shall provide space within each Data Center
location and the Recovery Center for the CES-Retained Machines
other than the DEC Machines. ISSC shall provide heat, light,
power, air conditioning, UPS, and such other similar utilities as
may reasonably be necessary for the CES-Retained Machines. ISSC
shall provide reasonable physical and electronic access to the
CES-Retained Machines by CES and CES's maintenance providers upon
reasonable advance notice. In addition, ISSC will:
a) provide Operational Support for the Systems Software resident
on the CES-Retained Machines;
b) to the extent the CES-Retained Machines trigger notification
to ISSC of the need for reasonable local operational action,
ISSC will perform such action;
c) to the extent that CES's personnel notify ISSC of the need for
reasonable local operational action, ISSC shall perform such
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action; and
d) follow standard local operational procedures for such CES-
Retained Machines provided to ISSC by CES (such as disk back-
up procedures).
CES shall otherwise be financially and operationally responsible
for the CES-Retained Machines and the Software resident thereon,
including the operation, other than that specified above or in
Schedule E, maintenance, upgrade, enhancement and replacement
thereof.
5.9 Connectivity
CES will be responsible for providing and managing connectivity
up to the output side of the 3745 and/or the 3172 controller and
interconnect equipment or their equivalent located in the Data
Center from end users and ISSC will be responsible for managing
connectivity from the mainframe to the output side of the 3745
and/or the 3172 controller. ISSC will monitor network messages
regarding connectivity, utilizing mutually agreed upon monitoring
tools and notify CES in accordance with the Procedures Manual.
5.10 Viruses
Each Party agrees to use diligent efforts to ensure that no
viruses or similar items ("Viruses") are coded or introduced into
the systems by their respective employees, contractors or other
third parties that have access to or utilize the Services. ISSC
will engage in and comply with IBM established virus prevention
programs and processes for Software used or being promoted into
the production environment. ISSC agrees that, in the event a
Virus is found to have been introduced into the operating
environment used to provide the Services, ISSC shall, at CES's
written request, use commercially reasonable efforts to assist
CES in reducing the effects of the Virus and, if the Virus causes
a loss of operational efficiency or loss of data, to assist CES
to the same extent to mitigate and restore such losses; provided,
however, that the Party that introduced a Virus shall bear the
cost associated with such efforts. If a Virus was introduced by
CES, CES shall relieve ISSC of the Minimum Service Level effect
of such Virus, if any, to the extent caused by or resulting from
such Virus(es). ISSC shall not be deemed to have introduced a
Virus if ISSC promotes Applications Software to production to
which it applies its applicable virus protection programs and
processes prior to promotion to production.
5.11 Software Licenses
a) All Software provided by ISSC in connection with the
Services, with the exception of IBM Systems Software, shall
be licensed in CES's name as licensee with ISSC having the
right to use such Systems Software in performing the
Services unless ISSC can provide the Software specified by
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CES on a more cost effective basis in its own name. ISSC
shall consider and take into account in its dealings with
the Software vendors CES's reasonable concerns regarding the
terms and conditions of such Software licenses including
CES's use upon termination.
b) Prior to the initial use of any new or additional Systems
Software operating on the ISSC Machines, which is not listed
in Schedule B, and prior to any upgrade, enhancement or
modification of existing Systems Software listed in Schedule
B operating on the ISSC Machines, or the addition of or
migration to different Systems Software operating on the
ISSC machines licensed to anyone other than CES, ISSC shall
[CIO] for any such actions. In addition, prior to taking
any such action, ISSC will provide CES with information
regarding the amount of any fees and other requirements CES
would have to undertake in order to obtain a license to and
maintenance for such Systems Software, and shall obtain,
where possible using commercially reasonable efforts, a firm
commitment from the third party vendor of such software to
license the software to CES and provide maintenance for the
Software upon the payment of such fees. To the extent
possible, using commercially reasonable efforts, each
Systems Software license entered into hereunder in either
CES's or ISSC's name shall include use and access rights for
CES's consultants and subcontractors. ISSC will not utilize
Systems Software to which CES [CIO] unless CES otherwise
agrees in advance in writing.
6. 0 Additional Services
6.1 Help Desk
As part of the Services, ISSC will provide a Data Center
operations help desk and problem management in accordance with
Schedule I.
6.2 Security
CES shall approve and ISSC shall administer system level access,
granting group access and control to CES for their administration
and control of CES's applications and end users. CES shall notify
ISSC of what entities and personnel are to be granted access to
the Software and the level of security access required by each.
The Parties shall cooperate in administering security procedures
regarding such access, all as set forth in Schedule L.
6.3 Back-up and Disaster Recovery
ISSC shall perform the back-up, recovery and storage procedures
specified in Schedule E and provide Disaster Recovery services as
specified in Schedule G.
6.4 Facilities and Support Services
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To enable ISSC to provide the Services, CES agrees:
a) to provide, at no charge to ISSC, the use of CES Facilities
as may be reasonably necessary to house the ISSC Project
Executive and his or her office business equipment for the
performance of the Services. This includes reasonable office
space, storage space, telephone capability (but excluding
long distance telephone charges, and all long distance
telephone charges for facsimile transmissions for which CES
will be reimbursed by ISSC), office support services (e.g.,
janitorial and physical security) and furniture;
b) to provide for the CES Facilities during the Term, all heat,
light, power, air conditioning, UPS, and such other similar
utilities as may reasonably be necessary for ISSC to perform
the Services as described in this Agreement;
c) to provide access to CES parking (if available, but
excluding CES's paying for such parking) and break room
facilities for ISSC employees;
d) if CES decides to relocate its current CES Facility that
houses the ISSC Project Executive and his or her office
business equipment, CES will provide comparable space,
facilities and resources in the new location, as well as
relocation of such equipment to the new location, under the
same terms and conditions of this Agreement;
e) following the expiration or termination of this Agreement,
CES will allow ISSC the use, at [CIO], of those CES
Facilities then being used to perform the Services for up to
[CIO] following the effective date of such expiration or
termination (or from the last day of any Services Transfer
Assistance period) to enable ISSC to affect an orderly
transition of ISSC resources;
f) it is understood that ISSC's use of the CES Facilities does
not constitute or create a lease hold interest. When the
CES Facilities are no longer being utilized by ISSC to
perform the Services, CES's obligations set forth in this
Section with respect to the CES Facilities will cease; and
g) it is understood that ISSC's usage of any of the foregoing
CES facilities and services will not be deemed to be a part
of any Baseline Charge related thereto payable by CES to
ISSC hereunder.
6.5 Audits
ISSC will assist CES in meeting its audit and regulatory
requirements, including providing access to the Data Center to
enable CES and its auditors and examiners to conduct appropriate
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audits and examinations of the operations of ISSC relating to the
performance of the Services to verify:
a) the accuracy of ISSC's charges to CES; and
b) that the Services are being provided in accordance with this
Agreement and the Performance Standards.
Such access will require not less than two business days prior
written notice to ISSC and will be provided during normal
business hours, provided that any audit does not interfere with
ISSC's ability to perform the Services in accordance with the
Performance Standards. ISSC will provide access to information
reasonably necessary to perform the audit. ISSC shall not allow
CES, its examiners or auditors access to ISSC's proprietary data.
ISSC will also assist CES's employees or auditors in testing
CES's data files and programs, including, without limitation,
installing and running audit software, subject to CES's
reimbursing ISSC for its Out-of-Pocket Expenses.
ISSC agrees to make any changes and take other actions which are
necessary in order to maintain compliance with applicable laws or
regulations in effect on the Commencement Date at no charge to
CES, except with respect to any such changes or actions arising
out of CES's failure to comply with such laws or regulations
prior to the Commencement Date. In addition, ISSC agrees to make
any changes and take other actions which are necessary in order
to maintain compliance with laws or regulations applicable to CES
Business effective after the Commencement Date and CES shall
reimburse ISSC for such changes and actions as a New Service in
accordance with Section 7.6. CES may submit additional findings
or recommendations to ISSC for its consideration and ISSC shall
consider such findings.
If any audit or examination reveals that ISSC's invoices for the
audited period are not correct for such period, ISSC shall
promptly reimburse CES for the amount of any overcharges, or CES
shall promptly pay ISSC for the amount of any undercharges.
CES may audit the Services annually and may provide reports on
the audit results to CES's customers; provided, however, CES may
not provide pricing and financial information provided to CES by
ISSC to CES's customers.
7. 0 Charges and Expenses
7.1 Annual Services Charge
CES agrees to pay the Annual Services Charge specified in the
Supplement for each year of the Term together with the other
amounts as described in this Section 7 and Schedule J, as set
forth in the Supplement.
7.2 Additional Resource Charges
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Beginning for the initial month following the Commencement Date
and monthly thereafter, ISSC will review the quantity of Resource
Units utilized by CES during the preceding month, and calculate
Additional Resource Charges (ARCs) in accordance with the
Supplement and Schedule J. CES agrees to pay Additional Resource
Charges in accordance with Section 8.2.
7.3 [CIO] Adjustments
CES may [CIO] or [CIO] of the [CIO] of [CIO] in accordance with
the Supplement and Schedule J. If CES elects to [CIO] of an[CIO]
of [CIO], ISSC shall provide CES a [CIO], as described in
Schedule J, until the [CIO] of [CIO] is [CIO]. If CES elects to
[CIO] of an [CIO] of [CIO], ISSC will use commercially reasonable
efforts to meet CES's [CIO]. CES shall pay ISSC an [CIO], as
described in Schedule J, for the period from when the [CIO] is
[CIO] until the time [CIO] was [CIO] to [CIO] as shown on the
Supplement.
7.4 Cost of Living Adjustment
CES agrees to pay ISSC, or ISSC will credit CES with, a Cost of
Living Adjustment ("COLA"), in accordance with Section III of
Schedule J, as applicable, beginning in the first
January following the Commencement Date.
In the event that the rate of change of CPI-U for any year is
greater than [CIO] and the Parties agree that the CPI-U does not
accurately reflect the rate of inflation actually experienced by
the elements of cost that make up the Services for such year, the
Parties shall determine by agreement either an alternative index
or the actual rate of inflation that shall be used for computing
the COLA for such year.
7.5 New Entities
If CES acquires any additional Affiliates during the Term for
which CES desires ISSC to provide Services and ISSC's acceptance
of such responsibilities would require ISSC to (a) utilize
capacity or resources for which there is not an existing charging
methodology and/or Baseline and (b) expend additional resources
that ISSC would not otherwise have expended, then ISSC will
provide the Services to such Affiliate in accordance with this
Agreement, subject to Section 7.6.
7.6 New Services
In the event that CES requests ISSC to perform functions
different from, and in addition to, the Services ("New
Services"), the charge to CES for ISSC performing such functions
will be determined as follows:
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a) if the additional function requires only those resources
which have a current charging methodology or Baseline, the
additional function will not be considered a New Service and
the charges for the incremental resources, if any, will be
recovered through the applicable charging methodology set
forth in the Supplement and Schedule J;
b) if the additional function requires resources not covered by
a current charging methodology, an existing Baseline and/or
requires additional start-up expenses, then to the extent
that ISSC should not otherwise have provided such function
as part of the Services, such additional resources and/or
start-up expenses will be considered New Services, and prior
to performing such New Services:
1) ISSC will quote to CES the increase in the Annual
Services Charge or other payment method that will be
attributable to such New Services, which will be based
upon the required proportional increase in system and
other applicable resources relative to the Annual
Services Charge; and
2) CES, upon receipt of such quote, may then elect
through written notice by the CES Project Executive to
have ISSC perform the New Services, and the Annual
Services Charge, charging methodology and/or Baselines
will be adjusted, if necessary, to reflect such New
Services; and
c) if CES's request for different or additional services
results in ISSC having to reduce or eliminate Services being
provided hereunder, and such reduced or eliminated Services
are not a result of CES or a third party services provider
performing such Services, such different or additional
services will be deemed "Replacement Services." In such
event, the Parties shall determine the resources and
expenses related to the Services being replaced, the
resources and expenses related to the services being added
and the net increase or decrease in resources and expenses
will be the basis on which ISSC will quote a price to CES
for Replacement Services.
Notwithstanding the foregoing, nothing herein may be interpreted
as obligating CES to obtain New Services from ISSC.
During the Term, if the Services evolve or are supplemented and
enhanced over time by ISSC at its sole discretion, such as by
changes made which keep pace with technological advancements or
improvements, the Parties acknowledge that such changes will not
be deemed to result in functions materially different from and in
addition to the Services and will not be considered New or
Replacement Services.
7.7 Taxes
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a) The Annual Services Charges, ARCs (if any) and any other
charges paid by CES to ISSC are inclusive of any applicable
sales, use, personal property or other taxes based upon or
measured by ISSC's cost of acquiring or providing materials,
supplies or services furnished by ISSC in performing the
Services. CES will be responsible for paying any tax on the
Services (if any) and any other taxes for which it is
legally responsible.
b) Each Party shall bear sole responsibility for all taxes,
assessments and other real property-related levies on its
owned or leased real property.
c) The Parties agree to reasonably cooperate with each other to
more accurately determine each Party's tax liability and to
minimize such liability to the extent legally permissible.
d) Each Party shall provide and make available to the other any
resale certificates, information regarding out-of-state
sales or use of equipment, materials or services, and other
exemption certificates or information reasonably requested
by either Party. The Parties will also work together to
segregate the Annual Services Charge, ARCs and other charges
into separate payment streams:
1) that for taxable Services, if any;
2) that for nontaxable Services;
3) that for which a sales, use or similar tax has
already been paid by ISSC; and
4) that for which ISSC functions merely as a paying
agent for CES in receiving goods, supplies or services
(including leasing and licensing arrangements) that
otherwise are nontaxable or have previously been subject
to tax.
Consistent with this Agreement, no portion of the payment
stream will be described as the lease or rental of tangible
property.
7.8 Reduction of CES Requirements for the Base
a) If, during the Term, CES experiences significant changes in
the scope or nature of its business, exclusive of any
Services set forth in this Agreement, which have or are
reasonably expected to have the effect of causing sustained
substantial decreases ([CIO] or more) in the amount of the
"Base System" (as defined in Schedule J) used in providing
the Services, such changes shall be governed by this
Section. Examples of the kinds of events that might cause
such substantial decreases are:
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1) changes to locations where CES operates;
2) changes in CES's products or markets;
3) mergers, acquisitions or divestitures;
4) changes in the method of service delivery (other
than use of another vendor or an in-house solution); or
5) changes in market priorities.
b) CES will notify ISSC of any event or discrete set of events
which CES believes qualifies under this Section and ISSC
will identify the changes that need to be made to
accommodate the extraordinary decrease of resource
requirements in a cost-effective manner without disruption
to CES Business, and the cost savings that will result
therefrom in a plan that will be submitted to CES for review
and acceptance.
c) Upon acceptance by CES, ISSC will make the applicable
adjustments to the Annual Services Charge and the Baselines
to reflect the foregoing and distribute an amended
Supplement to the Parties.
d) CES may, at its option and expense, employ an accredited and
mutually agreed upon independent auditor to verify that
ISSC's methodology for calculating the savings referenced in
Section 7.8(b) above conforms to accepted accounting
practices.
7.9 Services Transfer Assistance
It is the intent of the Parties that ISSC will cooperate with CES
to assist with the orderly transfer of the services, functions
and operations provided by ISSC hereunder to CES itself or
another services provider in connection with the expiration or
earlier termination of this Agreement. Commencing [CIO] prior to
expiration or commencing upon any notice of termination or of
non-renewal of this Agreement, CES may request ISSC to provide
and, if so requested, ISSC shall provide to CES or CES's designee
(except in the event of a termination due to a failure by CES to
pay any amounts due and payable under this Agreement when due;
provided, however, that [CIO] shall not be considered a failure
by CES to pay amounts due and payable) services in connection
with migrating the work of CES to CES itself or another services
provider ("Services Transfer Assistance"), subject to Section
11.8. Services Transfer Assistance shall be provided until the
effective date of expiration or termination with respect to the
Services, and, for expiration or termination related services
other than those relating to the Services, upon request by CES,
for up to [CIO] after the effective date of expiration or
termination. Subject to Section 7.9(d) below, Services Transfer
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Assistance shall include, but not be limited to, providing CES
and its Affiliates and their agents, contractors and consultants,
as necessary, with services such as the following:
a) Premigration Services
1) continue to install, load and operate Software as
necessary to meet project schedules until it is necessary
to freeze all noncritical Software changes to perform the
Migration Services,
2) notifying all outside vendors of procedures to be
followed during the turnover phase,
3) reviewing all Software libraries (tests and
production) with CES and/or the new service provider,
4) assisting in establishing naming conventions for the
new production site,
5) providing copies of configuration diagrams, manuals,
inventories, operational records, and other documentation
generally used to provide the Services,
6) analyzing space required for the data bases and
Software libraries, and
7) generating a tape and computer listing of the source
code on the ISSC Machines in a form reasonably requested
by CES.
b) Migration Services
1) unloading the production data bases,
2) delivering tapes of production data bases (with
content listings) to the new operations staff,
3) assisting with the loading of the data bases,
4) assisting with the Data Center connectivity to the
communications network turnover, if applicable, and
5) assisting in the execution of a parallel operation
until the effective date of expiration or termination of
this Agreement.
c) Post Migration Services
1) answering questions regarding the Services on an "as
needed" basis, and
2) turning over of any remaining CES owned reports and
documentation still in ISSC's possession.
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d) If any Services Transfer Assistance provided by ISSC
requires the utilization of additional resources for which
there is a current Baseline that ISSC would not otherwise
use in the performance of this Agreement, CES will pay ISSC
for such usage at the then current Agreement charges. If
the Services Transfer Assistance requires ISSC to incur
expenses in addition to the expenses that ISSC would
otherwise incur in the performance of this Agreement, then:
1) ISSC shall notify CES of any Out-of-Pocket Expenses
associated with the performance of any additional
services pursuant to this Section prior to performing
such services, and
2) upon CES's authorization, ISSC shall perform the
additional services and invoice CES for such Out-of-
Pocket Expenses; and
3) CES shall pay ISSC for such Out-of-Pocket Expenses
within thirty business days of the date of the invoice.
8. 0 Invoicing and Payment
8.1 Annual Services Charge Invoices
ISSC will invoice CES on a monthly basis the proportional amount
of the Annual Services Charge for that month in advance. The
invoice will state separately applicable taxes owed by CES, if
any, by tax jurisdiction. No such invoice shall be delivered
prior to the month for which such invoice is applicable.
8.2 ARC and COLA Invoicing
Beginning in the fifth month following the Commencement Date and
quarterly thereafter, ISSC will invoice CES for the net amounts
due for ARCs, if any, for the preceding quarter. ISSC will
invoice CES for COLA monies starting in January following the
Commencement Date for such month and monthly thereafter in
accordance with Section 7.4. No COLA invoice shall be delivered
to CES prior to the month for which such invoice is applicable.
8.3 Capacity Invoicing
ISSC will bill or credit CES on a monthly basis in advance for
the CPU and/or DASD capacity that is either installed early or
deferred in accordance with the procedures set forth in Schedule
J.
8.4 Other Charges
Any amount due under this Agreement including amounts described
in Sections 8.1, 8.2 and 8.3 shall be payable as described in
Section 8.5. No invoice for any such amount, exclusive of amounts
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under Sections 8.1, 8.3 and 11.7, shall be delivered to CES until
after the Service, which is the subject of such invoice, has been
provided to CES.
8.5 Invoice Payment
CES will pay each invoice either by wire funds transfer or other
electronic means acceptable to ISSC to an account specified by
ISSC or, at CES's option, by bank check within [CIO] after the
date of receipt of such invoice. In the event that any payments
are not received by ISSC within [CIO] following the due date, a
late fee equal to [CIO] will be payable to ISSC on unpaid
balances; provided, however, that such late fee will not apply to
disputed amounts placed in escrow, which amounts shall not accrue
a late fee, but may accrue interest in accordance with Section
8.7 and provided, further, that with respect to disputed amounts
below the escrow account minimum amount, such disputed amounts
shall not accrue a late fee until the [CIO] day after the
original due date.
8.6 Proration
All periodic charges under this Agreement are to be computed on a
calendar month basis, and will be prorated for any partial month,
unless specifically stated otherwise in this Agreement.
8.7 Disputed Charges/Credits
In the event either Party disputes the accuracy or applicability
of any charge or credit, then that Party shall notify the other
Party of the disputed matter and support for such dispute in
writing within [CIO] after becoming aware of, and performing an
investigation of, dispute. The Party contesting its obligation
to pay a charge or to grant a credit of [CIO] such or greater
will deposit the disputed amount in an escrow account in a
mutually agreed upon United States commercial bank or, if the
Parties do not reach agreement, NationsBank of Georgia, N.A. in
Atlanta shall be the depository. The amounts so escrowed shall
be deposited in an interest bearing account and the interest
accruing on such escrowed amount will be allocated among the
Parties based on the percentage of the principal amount of the
escrow paid to each Party upon resolution of the dispute.
Neither Party shall set off or fail to pay a disputed amount
without prior notification to the other Party of such dispute and
escrow of the disputed amount. A disputed amount on an invoice
does not relieve the Party of the obligation for payment of the
other undisputed amounts contained on such invoice and the Party
will pay such undisputed amounts pursuant to the applicable terms
and conditions of this Agreement.
If requested by the non-escrowing Party, the non-escrowing Party
will be added as a second Party of the escrow account and the
disputed amounts and accrued interests in escrow may only be
released by the escrow agent upon receipt of written instructions
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signed by both Parties, or by the escrowing Party if the non-
escrowing Party does not request addition as a second Party on
the escrow account.
No failure by either Party to identify a contested charge or
credit prior to payment of the invoiced amount will limit or
waive any of such Party's rights or remedies with respect to such
charges or credits, including such Party's right to withhold such
disputed amounts from subsequent payments or credits due to the
other Party hereunder and pay such sums that are [CIO] into an
escrow account as described in this Section 8.7. If the Parties
do not investigate and resolve any disputed amounts pursuant to
Section 17.2, within [CIO] after receipt of written notification
of the request for the initiation of such dispute resolution
procedures by the noncontesting Party, the Parties shall notify
the escrow agent to release the applicable disputed funds, at the
contesting Party's sole discretion, (a) to the contesting Party
or (b) to the noncontesting Party. Upon settlement of the
dispute by the Parties or final resolution of the dispute by a
court of competent jurisdiction, if the holder of the disputed
amounts shall be determined not to be entitled to such amounts,
the holder shall pay the amounts to which it is found not to be
entitled to the other Party together with interest thereon
payable at a rate of [CIO] from the date such amounts were due or
the date released from escrow, whichever is later, through the
date of payment thereof.
Unpaid charges and credits that are in dispute and placed in
escrow pursuant to this Section 8.7 or held by the noncontesting
Party pursuant to this Section 8.7 pending final resolution of
the dispute will not be considered a basis for monetary or other
default under this Agreement.
8.8 Other Credits
Except as otherwise set forth in this Agreement, with respect to
any amount to be paid or reimbursed to CES by ISSC pursuant to
this Agreement, ISSC may, at its option, pay that amount to CES
by giving CES a credit against the charges otherwise payable to
ISSC hereunder at the time any such amount is due and payable to
CES. Notwithstanding the foregoing, if the amount to be paid or
reimbursed by ISSC in any specific month, together with the
credits due CES for such month, exceed the pro rata portion of
the Annual Services Charge for such month, ISSC shall [CIO]
during such month.
9. 0 Intellectual Property Rights
Pursuant to this Agreement, ISSC, its subcontractors and CES
personnel may develop, create, modify or personalize
(collectively, "Develop") certain computer programming code,
including source and object code ("Code") and documentation to
perform the Services.
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9.1 Intellectual Property Definitions
a) "Derivative Work" means a work based on one or more
preexisting works, including, without limitation, a
condensation, transformation, expansion or adaptation,
which, if prepared without authorization of the owner of the
copyright of such preexisting work, would constitute a
copyright infringement.
b) "Materials" means Type I, Type II, Type III, Type IV, Type V,
Type VI and VII Materials collectively.
c) "Type I Material" means Developed Code which constitutes a
Derivative Work of software for which the copyright is owned
by CES.
d) "Type II Material" means Developed Code created at ISSC's
expense, by ISSC personnel performing the Services hereunder
and used to provide the Services, which does not constitute
a Derivative Work of any software owned by CES, ISSC, IBM or
their Affiliates or any third party.
e) "Type III Material" means Code Developed under this
Agreement which constitutes Derivative Works of software
for which the copyright is owned by ISSC, IBM, their
Affiliates or their subcontractors.
f) "Type IV Material" means literary works of authorship
Developed under this Agreement, such as user manuals,
charts, graphs and other written documentation and machine-
readable text and files created at ISSC's expense, by ISSC
personnel performing the Services hereunder and used to
provide the Services, and excludes Code.
g) "Type V Material" means Code Developed under this Agreement
by ISSC and/or its subcontractors independently or jointly
with CES, at CES's expense or as part of the Services or
specifically related to the core business of CES.
h) "Type VI Material" means literary works of authorship
Developed under this Agreement, such as user manuals,
charts, graphs and other written documentation, and machine-
readable text and files, by ISSC and/or it subcontractors
independently or jointly with CES, at CES's expense or as
part of the Services or specifically related to the core
business of CES, but excludes Code.
i) "Type VII Material" means Code and/or literary works of
authorship such as user manuals, charts, graphs and other
written documentation, and machine-readable text and files
created at ISSC's expense and used to interface between
Applications Software and/or Systems Software which does not
constitute a Derivative Work of any software owned by CES,
ISSC, IBM or their Affiliates or any third party.
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9.2 ISSC Developed Code
With respect to any Materials whether Developed solely by ISSC or
its subcontractors, or jointly by CES personnel and ISSC or its
subcontractors, ownership will be as follows:
a) Type I, Type V and VI Materials shall be owned by CES, and
ISSC shall have the following license rights:
1) a perpetual, nonexclusive, worldwide, paid-up
license to use, execute, reproduce, display, perform,
operate, distribute, modify, develop, personalize and
create Derivative Works from such Materials internally
for the sole benefit of and exclusive use by CES during
the Term; and
2) the right to sublicense third parties to do any of
the foregoing.
b) Type II, III, IV and VII Materials, shall be owned by ISSC,
and CES shall have the following license rights:
1) a perpetual, nonexclusive, worldwide, perpetual,
paid-up license to use, execute, operate, reproduce,
display, perform, distribute, modify, Develop,
personalize and create Derivative Works from such
Materials internally within CES and its Affiliates; and
2) the right to sublicense third parties to do any of
the foregoing.
9.3 CES Developed Code
With respect to any Materials whether or not Developed under this
Agreement, which are or have been Developed solely by CES
personnel, such Materials shall be owned by CES, and ISSC, at
CES's sole option, shall have the following license rights:
a) an irrevocable, nonexclusive, worldwide, paid-up license to
use, execute, operate, reproduce, display, perform,
distribute, modify, Develop, personalize and create
Derivative Works from such Materials for the purpose of
performing the Services for the sole benefit of and
exclusive use by CES during the Term; and
b) the right to sublicense third parties to do any of the
foregoing.
9.4 General Rights
a) At the expiration or earlier termination of this Agreement,
so long as CES is not in arrears of its payment of monies
due ISSC (other than amounts disputed by CES in accordance
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with Section 8.7), ISSC will grant to CES the following
license rights in the Types II, III, IV and VII Materials:
1) an irrevocable, nonexclusive, worldwide,
perpetual, paid up license to use, execute, operate,
reproduce, display, perform, distribute, modify,
Develop, personalize and create Derivative Works from
the Materials internally for the sole benefit of and
exclusive use by CES and its Affiliates in the
operation of their businesses; and
2) the right to sublicense third parties to do any of
the foregoing.
b) Any ownership or license rights herein granted to either
Party are limited by and subject to any patents and
copyrights held by, and terms and conditions of any license
agreements with, applicable third party software providers.
c) To the extent any of the Materials may not, by operation of
law, be owned by the Party to which ownership has been
granted (as described in this Section 9), each Party agrees
to assign (and take such actions and execute and deliver
such documents as shall be necessary or appropriate to
effect such assignment) and hereby assigns, without further
consideration, the ownership of all right, title and
interest in all U.S. and foreign copyrights and mask work
rights (if any) and patents in such Materials to the other
Party as set forth in this Section 9, and such assignee
Party shall have the right to obtain and hold in its own
name copyrights, registrations, renewals and all other
rights relating or pertinent thereto.
d) The Parties agree to reproduce copyright legends which
appear on any portion of the Materials which may be owned by
third parties.
e) This Agreement shall not preclude either Party from
developing materials or providing services which are
competitive to the Materials or Services which might be
delivered pursuant to this Agreement subject to the
limitations set forth in Section 4.3, except to the extent
any of same may infringe any of the other Party's patent
rights or copyrights or mask work rights.
f) Except as set forth in Sections 4.3 and 10, nothing
contained in this Agreement shall restrict either Party
from the use of any ideas, concepts, know-how, or
techniques relating to data processing or network
management which either Party, individually or jointly,
develops or discloses under this Agreement, except to the
extent such use infringes any of either Party's patent
rights or copyrights or mask work rights. However, except
for the licenses expressly granted under this Section 9,
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neither this Agreement nor any disclosure made hereunder
grants any license to either Party under any patents or
copyrights or mask work rights of the other Party.
10. 0 Confidentiality/Data Security
10.1 Confidential Information
ISSC and CES each acknowledge that the other possesses and will
continue to possess information that has been created,
discovered, developed by or acquired by such party, which
information has commercial value in its business and is not in
the public domain. "Confidential Information" means: information
related to either Party and/or its Affiliates (i) which derives
economic value, actual or potential, from not being generally
known to or readily ascertainable by other persons who can obtain
economic value from its disclosure or use; (ii) which is the
subject of efforts that are reasonable under the circumstances to
maintain its secrecy and (iii) all tangible reproductions of such
information including, but not limited to, technical and
nontechnical data related to the formulas, patterns, designs,
compilations, programs, inventions, methods, techniques,
drawings, processes, finances, actual or potential employees,
customers and suppliers and existing and future products;
provided, however, that all of either Party's information which
falls within one of the categories of information set forth on
Schedule M shall be deemed Confidential Information whether or
not so marked. Schedule M may be modified by either party if the
Party seeking modification obtains prior written consent from the
other Party, which consent shall not be unreasonably withheld.
All information that does not fall within a category set forth on
Schedule M must be marked confidential, restricted or proprietary
by either Party or its Affiliates to be deemed Confidential
Information.
10.2 Obligations
a) CES and ISSC will each use the same care to prevent
disclosing to third parties the Confidential Information of
the other as it employs to avoid disclosure, publication or
dissemination of its own information of a similar nature but
in no event less than a reasonable standard of care.
Notwithstanding the foregoing, the Parties may disclose such
information to subcontractors involved in providing Services
under this Agreement where:
1) such disclosure is necessary to permit the
subcontractor to perform its duties hereunder;
2) the subcontractor agrees in writing, under which
the nondisclosing Party is a third party beneficiary
for all purposes, to observe the confidentiality and
restricted use and disclosure covenants and standards
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of care set forth in this Section 10 at the security
levels as applicable to CES and ISSC respectively; and
3) the disclosing Party assumes full responsibility
for the acts or omissions of its subcontractor, no less
than if the acts or omissions were those of the
disclosing Party.
a) Without limiting the generality of the foregoing, neither
Party will publicly disclose the terms of this Agreement,
except to the extent permitted by Sections 10.3 and 16,
without the prior written consent of the other.
Furthermore, neither ISSC nor CES will:
1) make any use of the Confidential Information of the
other except as contemplated by this Agreement;
2) acquire any right in or assert any lien against the
Confidential Information of the other except as
contemplated by this Agreement; or
3) refuse to promptly return, provide a copy of or
destroy such Confidential Information upon the request of
the other Party;
provided, however, that except for those restrictions set forth
in Section 4.3 and this Section 10, neither Party will be restricted
in using any data processing or network management ideas, concepts,
know-how and techniques, (including without limitation, in the
development, manufacturing and marketing of its products and
services and in its operations) which are retained in the minds of
employees who have had access to the Confidential Information of
such Party without reference to any physical or electronic
embodiment of such information, unless such use shall infringe any
of such Party's patent rights, copyrights or mask work rights.
10.3 Exclusions
Notwithstanding the foregoing, this Section will not apply to any
information which ISSC or CES can demonstrate was:
a) at the time of disclosure to it, in the public domain;
b) after disclosure to it, published or otherwise becomes part of
the public domain through no fault of the receiving Party;
c) without a breach of duty owed to the disclosing Party, is in
the possession of the receiving Party at the time of
disclosure to it;
d) received after disclosure to it from a third party who had a
lawful right to, and without a breach of duty owed to the
disclosing Party, did disclose such information to it; or
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e) independently developed by the receiving Party without
reference to Confidential Information of the furnishing Party.
Further, either Party may disclose Confidential Information of
the other to the extent required by law or order of a court or
governmental agency; provided, however, that the recipient of
such Confidential Information must give the discloser prompt
notice and make a reasonable effort to obtain a protective order
or otherwise protect the confidentiality of such information, all
at the discloser's cost and expense. It is understood that the
receipt of Confidential Information under this Agreement will not
limit or restrict assignment or reassignment of employees of ISSC
and CES within or between the respective Parties and their
Affiliates.
10.4 Protection of CES Information
Any additional responsibilities of ISSC and CES with respect to
protection of Confidential Information are set forth in Schedule
L.
10.5 Loss of Confidential Information
In the event of any disclosure or loss of, or use in violation of
this Agreement of Confidential Information of a disclosing Party
known to the receiving Party, the receiving Party will notify the
disclosing Party immediately, orally or in writing.
10.6 Limitation
a) That portion, if any, of the Confidential Information that
constitutes trade secrets shall be subject to this Section
10 for such period as it shall qualify as trade secrets
under applicable law. The remainder of the Confidential
Information shall be subject to this Section 10 for a period
of two years after the expiration or earlier termination of
this Agreement.
b) ISSC will not be responsible for the security of data during
transmission via public communications facilities if the
breach of security occurred through access to the public
communications facilities, except to the extent that such
breach of security is caused by the failure of ISSC to
perform its security obligations under this Agreement, or
the negligent acts or omissions of ISSC.
11. 0 Termination
11.1 Termination for Convenience
Subject to the other provisions of this Agreement, CES may
terminate this Agreement for CES's convenience beginning on the
[CIO] upon at least [CIO] prior written notice to ISSC; provided,
however, CES may terminate this Agreement for CES's convenience
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prior to such [CIO] if the [CIO]. If CES terminates this
Agreement prior to the expiration of the Term for CES's
convenience, CES agrees to pay ISSC on the effective date of
termination either:
a) the charge, as specified in the Supplement, ([CIO]) under
[CIO]
b) the [CIO] specified in the Supplement under [CIO] and [CIO].
11.2 Termination for Change of Control
In the event of a sale of stock of either Party resulting in the
ability of the purchaser(s) of such stock to elect a majority of
the board of directors of such Party, the merger of either Party
with another entity, or the sale of all or substantially all of
the assets of either Party to another entity, not effected solely
for the purpose of permitting termination under this Section 11.2
("Termination for Change of Control"), CES or its successor
corporation in the case of a merger or the entity purchasing the
assets of CES, may terminate this Agreement with [CIO] prior
written notice to ISSC given not later than [CIO] after such
Change of Control, upon payment of either:
a) the [CIO] specified in the Supplement under [CIO]
b) the [CIO] specified in the Supplement under [CIO].
11.3 [CIO]
a) No [CIO], however described, payable by CES to ISSC
hereunder shall include any element of anticipated profit or
revenue, lost opportunity or similar amounts.
b) For purposes of this Agreement, "Wind-Down Expenses" shall
mean ISSC's reasonable expenses related to the displacement
of assets and personnel, and discontinuance of leases,
licenses and contracts due to CES's early termination.
c) Within [CIO] of the receipt of CES's notification of
termination under the provisions of this Section 11, ISSC
will provide CES an estimate of the amounts associated with
the Wind-Down Expenses and will provide the actual Wind-Down
Expenses not less than [CIO] prior to the effective date of
termination. Further, ISSC will use commercially reasonable
efforts to mitigate its Wind-Down Expenses, such efforts to
include, without limitation, appropriate redeployment of
assets and personnel. Wind-Down Expenses shall be reduced
by all such mitigation anticipated, planned or realized by
ISSC prior to termination.
d) Upon CES's prior written notification, ISSC will include
full payout of the ISSC Machines in the Data Center that are
being used solely to provide the Services to CES in the
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Wind-Down Expenses for [CIO] for either termination for
convenience or termination for Change of Control, and upon
receipt of the [CIO] and Wind-Down Expenses, transfer title
for such ISSC Machines to CES.
e) The Parties agree that the charge(s) paid ISSC under either
Sections 11.1 or 11.2 above are CES's sole and exclusive
liability for termination under such provisions.
11.4 Termination Proration
Any [CIO] will be prorated according to the following formula:
[{(A-B),12 months} x C] + B = Prorated [CIO]
where:
A = the [CIO] specified in the Supplement for the year in
which termination is effective;
B = the [CIO] specified in the Supplement for the year
after the year in which termination is effective; and
C = the number of months remaining during the year in which
termination is effective.
11.5 Termination [CIO]
Upon written notice, either Party may terminate this Agreement,
without charge to the terminating Party, in the event of a [CIO]
by the other; provided, however, any action or inaction by [CIO]
for which [CIO] has made payments under Section 14.1(f) and/or
[CIO] has received [CIO] in the form of [CIO], that are related
to the grounds for termination under this Section, shall be
specifically excluded from this provision unless [CIO] returned
such [CIO] in accordance with Section 13 and/or such other
payments made under Section 14.1(f). However, the Party seeking
termination will provide the other Party with sufficient,
reasonable written prior notice of such material breach,
persistent or continuous breach(es) and the opportunity to cure
same, as follows:
a) in the event of a failure to pay any amount due and payable
under this Agreement when due, at least [CIO], and
b) in the event of any other material breach, or persistent or
continuous breach(es) at least [CIO].
If the nature of any nonmonetary breach is such that it would be
unreasonable to expect a cure within a [CIO] period, the
breaching Party shall be given an additional [CIO] to cure such
breach. In the event the material breach or persistent or
continuous breach(es) are not cured within the periods specified
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above after delivery of the notice, the nonbreaching Party may
terminate this Agreement, which termination shall be in writing,
as of a date specified in such notice of termination. The
terminating Party shall have all rights and remedies afforded by
law or equity, subject to the limitations expressed in this
Agreement.
11.6 [CIO]
The Parties acknowledge that the [CIO] of [CIO] may have [CIO] on
the [CIO] even if such [CIO] does not [CIO] that gives CES the
[CIO] under [CIO] above; provided, however, any [CIO] or [CIO] by
ISSC for which ISSC has provided [CIO] or CES has received [CIO]
in the form of [CIO] that are related to the grounds for [CIO]
under this Section shall be specifically excluded from this
provision unless CES returned such [CIO]. In the event of such a
[CIO], CES may, at its option, [CIO] as provided under [CIO],
[CIO] to CES, which termination shall then become CES's [CIO].
If CES does not elect to [CIO] as provided under [CIO], then
nothing in this Section 11.6 shall be deemed to limit or restrict
the ability of CES to claim that a [CIO] constitutes a [CIO] and
elect [CIO] CES [CIO] or otherwise pursuant to the provisions of
this Agreement.
11.7 Extension of Service
Except in the case of a termination of this Agreement due to a
material breach by CES, CES may once request and ISSC will extend
the provision of services for a period not to exceed [CIO] beyond
the effective date of termination or expiration. Such request
must be a written notice received not less than [CIO] prior to
the effective date of termination or expiration of this
Agreement; provided, however, CES may so request and ISSC will
extend the provisions of Services beyond the effective date of
termination or expiration [CIO] for the portion of the [CIO]
period CES desires such extension of Services.
11.8 Other Rights Upon Termination
So long as CES has complied with Section 8.7 and is not otherwise
in default of monies due ISSC at the expiration or earlier
termination of this Agreement:
a) ISSC agrees to sell to CES or its designee, upon CES's
request, the ISSC Machines at the Data Center then currently
being used by ISSC on a dedicated basis to perform the
Services at ISSC's accounting book value with such book
value based on a [CIO] straight-line depreciation from
initial entry on ISSC's books or, in the case of ISSC
Machines that ISSC is leasing, at the lease buy-out charge
based on a [CIO] lease period or, for ISSC Machines that
have either been fully depreciated or the leases have
expired and ISSC is the owner of such ISSC Machines, for the
[CIO]. CES shall be responsible for any sales, use or
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similar taxes associated with the purchase of such
equipment.
b) For Software proprietary to ISSC and not otherwise owned by
or licensed to CES in accordance with Section 9 and not
generally commercially available, ISSC will provide a source
code license, with the right to modify and own such
modifications, to CES, for use only by CES and its
Affiliates in the CES Business upon terms and prices (which
prices shall not be greater than those offered to other
Similarly Situated Customers or, in the case where no
Similarly Situated Customers exist, other third parties
generally) to be mutually agreed upon by the Parties or, at
CES's option, ISSC will recommend a mutually agreeable
commercially available substitute, if any, to perform the
same function.
c) With respect to generally commercially available Software,
if ISSC has licensed or purchased and is using any such
Software solely for providing the Services to CES at the
date of expiration or termination, CES will reimburse ISSC
for initial license or purchase charges, except to the
extent that CES has already compensated ISSC for such
investment, for such Software in an amount equal to the
remaining unamortized cost of such Software, if any,
depreciated over a [CIO] year life, and pay any transfer fee
or charge imposed by any applicable vendor; provided,
however, that ISSC shall bear the costs, if any, associated
with the transfer of [CIO] upon termination.
d) With respect to generally commercially available Software,
if ISSC has licensed or purchased and is using any such
Software for providing the Services to CES and other ISSC
customers in a shared environment at the date of expiration
or termination, ISSC will assist CES in obtaining licenses
for such Software subject to CES's payment of any license
fee or charge imposed by any applicable vendor.
e) Upon the date of expiration or termination of this
Agreement, CES shall have the right to make offers of
employment to any or all ISSC employees performing Services
for CES or its Affiliates hereunder ("CES Service
Employees"). Promptly after either Party sends the other
written notice of termination or expiration, ISSC agrees to
supply CES, at no charge, with the names and resumes
requested by CES for the purpose of exercising its rights
under this Section. CES's rights under this Section will
take precedence over any ISSC/employee employment contract
or covenant that may otherwise limit an employee's right to
accept employment with CES.
f) ISSC will transfer or assign to CES or its designee, upon
CES's request, on mutually acceptable terms and conditions,
subject to the payment by CES of any transfer fee or charge
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imposed by the applicable vendors, any contracts applicable
solely to services being provided to CES for maintenance,
Disaster Recovery services and other necessary third party
services (other than subcontractor services) then being used
by ISSC to perform the Services.
g) ISSC will provide Services Transfer Assistance pursuant to
Section 7.9.
h) ISSC will use commercially reasonable efforts to negotiate
license arrangements with third parties that will minimize
the amount of license transfer fees to be paid by CES.
12. 0 Liability
12.1 General Intent
Each Party's and each of its subcontractor's entire monetary
liability to the other Party and its exclusive remedies for
monetary damages are set forth in this Section, in Schedule E
(Service Credits) and in Section 14 (Indemnities). Subject to
the specific provisions of this Section, it is the intent of the
Parties that each Party will be liable to the other Party for any
damages incurred by the nonbreaching Party as a result of the
breaching Party's failure to perform its obligations in the
manner required by this Agreement.
12.2 Damages
a) Each Party's and each of its subcontractor's liability for
actual, direct monetary liability arising out of or
resulting from the other Party's and each of its
subcontractor's performance or non-performance under this
Agreement regardless of the form of the action (whether in
contract, tort, warranty or other legal or equitable
grounds), will be limited [CIO] breach by such Party and its
subcontractors, to [CIO](the [CIO]). Actual, direct damages
shall include, by way of example but without limitation, the
costs of cover incurred by CES to obtain services which are
the same as or substantially similar to the Services, the
costs incurred by CES to transition to another provider of
information technology services and/or taking some or all of
such functions and responsibilities in-house, the difference
in the amounts to be paid to ISSC hereunder and the charges
to be paid to such other provider and/or the costs of
providing such functions and responsibilities in-house, and
similar damages.
The [CIO] shall be [CIO] in any or all of the following
three ways:
1) reduced by the amount of [CIO] actually paid by
[CIO] pursuant to [CIO] hereof;
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2) as described in [CIO] if the [CIO] set forth in
[CIO] is not [CIO] or is [CIO]; and
3) if the ASC is adjusted pursuant to [CIO].
b) In the event ISSC [CIO] to provide the Services in
accordance with [CIO], ISSC [CIO] according to the schedule
set forth in [CIO] (each, a [CIO]); collectively, the [CIO]
) against the amounts owed to ISSC in respect of the [CIO]
following the [CIO] in which the [CIO] was (were) incurred.
c) The [CIO] shall not apply to any of the following:
1) any failure by CES to pay any amounts due and
payable but remaining unpaid to ISSC pursuant to the
terms of this Agreement;
2) Losses covered by either Party's obligation to
indemnify the other Party under Sections 14.1(a),
14.1(c), 14.1(d), 14.1(e), 14.2(a), 14.2(c), 14.2(d)
and 14.2(e), respectively;
3) Losses incurred by either Party caused by or
arising out of the inaccuracy or untruthfulness of the
representations and warranties of the other Party
contained in this Agreement;
4) amounts to be [CIO] to [CIO] by [CIO] pursuant to
[CIO] in the form [CIO]; and
5) Losses arising from a violation of Section 10.0
Confidentiality/Data Security of this Agreement.
d) In no event will either Party have any liability whether
based on contract, tort (including, without limitation,
negligence), warranty or any other legal or equitable
grounds, for any damages other than the actual, direct
damages described in Section 12.2(a), (b) and (c) including
without limitation, any other damages constituting:
1) loss of interest, profit or revenue of the other
Party; or
2) any consequential, indirect, incidental, special,
punitive or exemplary damages suffered by the other
Party, arising from or related to this Agreement, even if
such Party has been advised of the possibility of such
losses or damages; provided, however, that this clause
will not prevent either Party from recovering accrued but
unpaid credits and amounts due under this Agreement.
e) In no event will ISSC or its subcontractors be liable for
any damages if and to the extent caused by CES's failure to
perform its responsibilities, nor shall CES or its
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subcontractors be liable for any damages if and to the
extent caused by any failure to perform by ISSC or its
subcontractors.
13. 0 Remedies
If ISSC's provision of the Services is such that ISSC would
otherwise owe CES a [CIO], CES may, at its option:
a) seek [CIO] subject to the limitations specified in Section
12.2; or
b) recover as [CIO] the [CIO]; provided, however, CES may
[CIO], which are related to [CIO] under Sections 11.5 and
11.6, received from ISSC hereunder within [CIO] after CES's
receipt thereof and seek in lieu thereof [CIO].
If [CIO] does not return a [CIO] prior to the end of such [CIO]
period, [CIO] recovery of the [CIO] shall constitute
acknowledgement of [CIO] of full satisfaction of any claim by
[CIO] that [CIO] has [CIO] its obligations under this Agreement
with respect to such event or said events giving rise to the
applicable [CIO].
13.1 Warranty
13.2 Work Standards
ISSC represents and warrants that:
a) it has [CIO], rights and [CIO] to provide and perform the
Services; and
b) it has [CIO] and [CIO] the Services or [CIO] that are [CIO]
to the Services for other customers.
CES represents that:
a) CES is authorized to permit ISSC access to and use of the
CES Facilities and ISSC is performing a portion of the
Services for CES at the CES Facilities at CES's request; and
b) if the CES Facilities are found not to be in compliance with
all material applicable federal, state and local
environmental laws regarding hazardous substances by an
applicable governmental regulatory authority, ISSC may
remove the ISSC Project Executive from the CES Facility
until such noncompliance is remedied.
13.3 Ownership of CES-Retained Machines
CES represents that CES is either the owner of each CES-Retained
Machine or is authorized by its owner to include it under this
Agreement.
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13.4 Noninfringement
The Parties represent and warrant that they will perform their
responsibilities under this Agreement in a manner that does not
infringe, or constitute an infringement or misappropriation of,
any patent, trade secret, copyright or other proprietary right of
any third party. Notwithstanding this provision or any other
provision in this Agreement, CES makes no warranty or
representation with respect to any claims for such infringement
or misappropriation by virtue of its compliance with obligations
herein to provide ISSC access to, use of or benefits of the
software licenses, leases and related contracts prior to
receiving the necessary Required Consents.
13.5 Compliance with Obligations
Each Party represents and warrants that its entry into this
Agreement does not violate or constitute a breach of any of its
contractual obligations with third parties. Notwithstanding this
provision or any other provision in this Agreement, CES makes no
warranty or representation with respect to any claims for
violation or breach of any of its contractual obligations by
virtue of its compliance with obligations herein to provide ISSC
use of the objects of such arrangements prior to receiving the
necessary Required Consents.
13.6 Disclaimer
a) ISSC does not warrant the accuracy of any advice, report,
data or other product delivered to CES to the extent any
inaccuracies are caused by data and/or Software provided by
CES, and such products are delivered AS IS, and ISSC shall
not be liable for any inaccuracy thereof. ISSC will
promptly notify CES of any such inaccuracies of which ISSC
becomes aware and the cause therefore and will provide
reasonable assistance to CES to remedy the problem.
b) Subject to the obligations of ISSC contained in this
Agreement and the Supplement and Schedules referenced
herein, ISSC does not assure uninterrupted or error-free
operation of the ISSC Machines.
c) EXCEPT AS PROVIDED IN THIS AGREEMENT, THERE ARE NO OTHER
EXPRESS WARRANTIES AND THERE ARE NO IMPLIED WARRANTIES,
INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
13.7 Disabling Code
Each Party represents and warrants that, without the prior
written consent of the other Party, it will not insert into the
Software any code which would have the effect of disabling or
otherwise shutting down all or any portion of the Services. Each
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Party further represents and warrants that, with respect to any
disabling code that may be part of the Software, it will not
invoke such disabling code at any time, including upon expiration
or termination of this Agreement for any reason, without the
other Party's prior written consent.
13.8 Authorization and Enforceability
Each Party hereby represents that:
a) it has all requisite corporate power and authority to enter
into this Agreement and to carry out the transactions
contemplated hereby;
b) the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby have
been duly authorized by all requisite corporate action on the
part of each Party; and
c) this Agreement has been duly executed and delivered by such
Party and (assuming the due authorization, execution and
delivery hereof by the other Party) is a valid and binding
obligation of such Party, enforceable against it in accordance
with its terms.
13.9 Regulatory and Corporate Proceedings
Each Party agrees to obtain all necessary regulatory approvals
applicable to its business, obtain any necessary permits, and
comply with any regulatory requirement applicable to the
performance of the Services.
14.0 Indemnities
14.1 Indemnity by ISSC
ISSC agrees to indemnify, defend and hold CES, its Affiliates and
their respective officers, directors, employees, agents,
successors and assigns harmless, in accordance with the
procedures described in Section 14.6 from and against any and all
Losses incurred by CES, caused by, arising from or in connection
with:
a) any Claims of infringement made against CES of any United
States letters patent, or any copyright, trademark, service
mark, trade name, trade secret or similar proprietary rights
conferred by contract or by common law or by any law of the
United States or any state, alleged to have occurred because
of equipment, systems, products or other resources or items
provided to CES by ISSC; provided, however, that ISSC will
have no obligation with respect to any Losses to the extent
the same are caused by, arise out of or arise in connection
with CES's modification of a program or a machine or CES's
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combination, operation or use with devices, data or programs
not furnished by ISSC or its subcontractors;
b) the inaccuracy or untruthfulness of any representation or
warranty made by ISSC under this Agreement;
c) any amounts, including but not limited to taxes, interest
and penalties assessed against CES which are obligations of
ISSC pursuant to Section 7.7;
d) personal injuries, death or damage to tangible personal or
real property of third parties, including employees of ISSC,
its contractors or subcontractors; provided, however, that
ISSC will have no obligation with respect to any Losses,
under this part, to the extent the same are caused by, arise
out of or arise in connection with the negligence of CES;
e) any Claims by third parties arising out of or resulting from
the failure to obtain any [CIO] as of the Commencement Date
and applicable to [CIO], where CES has used commercially
reasonable efforts to obtain such [CIO] and
f) notwithstanding anything to the contrary contained in [CIO]
hereof, any amounts that are [CIO]; provided, however, that
ISSC shall not be required to indemnify CES for charges
incurred under this Section 14.1(f) if:
1) CES does not cooperate with ISSC to mitigate the
charges incurred under this Section 14.1(f) to the same
degree CES sought to mitigate such charges prior to the
Commencement Date;
2) After notifying ISSC of the [CIO], CES does not
allow ISSC to participate in CES's efforts to mitigate
any charges incurred under Section 14.1(f), after being
notified in writing of ISSC's desire to so participate;
3) The charges are incurred under a process and/or
during a window of time that is substantially different
from those processes and time windows utilized as of
the Commencement Date (which the Parties agree to
document by a mutually agreed upon date) to the extent
that the change in the process or window of time,
without ISSC's consent, which will not be unreasonably
withheld, causes the charges to be incurred;
4) The charges are incurred as a result of an [CIO]
of this Agreement that occurred more than [CIO]
previously for which CES has received a [CIO] and has
not elected to return such [CIO] in accordance with
Section 13 hereof.
In the event and to the extent that a Claim is made by an
employee of ISSC or its contractors or subcontractors providing
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Services hereunder against CES, its Affiliates and their
respective directors, officers, employees or agents, the intent
of this Agreement is that ISSC shall indemnify CES, its
directors, officers, employees and agents, to the same extent as
if the Claim was made by a non-employee of ISSC or its
contractors or subcontractors. Accordingly, in addition to other
provisions herein, and in order to render the Parties' intent and
this indemnification agreement fully enforceable, ISSC, in an
indemnification Claim hereunder, expressly and without
reservation waives any defense or immunity it may have under any
applicable Workers' Compensation Law(s) or any other statute or
judicial decision disallowing or limiting such indemnification
and consents to a cause of action for indemnity. Said waiver and
consent to indemnification is made irrespective of and
specifically waiving, only between the Parties, any defense or
immunity under any statute or judicial decision.
14.2 Indemnity by CES
CES agrees to indemnify, defend and hold ISSC, its Affiliates and
their respective officers, directors, employees, agents,
successors and assigns harmless, in accordance with the
procedures described in Section 14.6, from and against any and
all Losses incurred by ISSC, caused by, arising from or in
connection with:
a) any Claims of infringement made against ISSC of any United
States letters patent, or any copyright, trademark, service
mark, trade name, trade secret or similar proprietary rights
conferred by contract or by common law or by any law of the
United States or any state, alleged to have occurred because
of equipment, systems, products or other resources or items
provided to ISSC by CES hereunder; provided, however, that
CES will have no obligation with respect to any Losses to
the extent the same are caused by, arise out of, or arise in
connection with ISSC's modification of a program or machine
or ISSC's combination, operation or use with devices, data
or programs not furnished by CES;
b) the inaccuracy or untruthfulness of any representation or
warranty made by CES under this Agreement;
c) any amounts, including but not limited to taxes, interest
and penalties, assessed against ISSC which are obligations
of CES pursuant to Section 7.7;
d) personal injuries, death or damage to tangible personal or
real property of third parties, including employees of CES,
its contractors and subcontractors; provided however, that
CES will have no obligation with respect to any Losses,
under this part, to the extent the same are caused by, arise
out of or arise in connection with the negligence of ISSC or
its contractors or subcontractors; and
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e) any Claim by third parties arising out of or in connection
with CES's disposition of the [CIO] pursuant to Section
[CIO].
In the event and to the extent that a Claim is made by an
employee of CES against ISSC or its contractors or
subcontractors, its Affiliates and their respective directors,
officers, employees and agents, the intent of this Agreement is
that CES shall indemnify ISSC, its directors, officers, employees
and agents, to the same extent as if the Claim was made by a non-
employee of CES or its contractors or subcontractors..
Accordingly, in addition to other provisions herein, and in order
to render the Parties' intent and this indemnification agreement
fully enforceable, CES, in an indemnification Claim hereunder,
expressly and without reservation waives any defense or immunity
it may have under any applicable Workers' Compensation Law(s) or
any other statute or judicial decision disallowing or limiting
such indemnification and consents to a cause of action for
indemnity. Said waiver and consent to indemnification is made
irrespective of and specifically waiving, only between the
Parties, any defense or immunity under any statute or judicial
decision.
14.3 Employment Actions
It is understood and agreed that ISSC shall be solely and
exclusively responsible for personnel decisions (including
hiring, promotions, training, compensation, evaluation,
discipline, and discharge) affecting ISSC's employees,
contractors and agents except as specified in Section 4.1. CES
shall be solely and exclusively responsible for personnel
decisions (including hiring, promotion, training, compensation,
evaluation, discipline and discharge) affecting CES's employees,
contractors, and agents.
14.4 Cross Indemnity and Contribution
Each Party agrees to contribute to the amount paid or payable by
the other Party for any and all Losses for which such Party is
legally liable and in proportion to such Party's comparative
fault in causing such Losses, arising in favor of any person,
corporation or other entity, including the Parties hereto and
their employees, contractors and agents, on account of personal
injuries, death or damage to tangible personal or real property
in any way incident to, or in connection with or arising out of:
a) this Agreement;
b) the Services provided by ISSC hereunder;
c) the presence of such Party, its employees, contractors or
agents on the premises of the other Party; or
d) the act or omission of such Party, its employees,
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contractors or agents.
14.5 Exclusive Remedy
The indemnification rights of each Indemnified Party for third
party Claims pursuant to Sections 14.1, 14.2, 14.3 or 14.4,
together with the Indemnified Party's right to recover any and
all Losses under this Agreement or otherwise caused by, arising
out of or arising in connection with the event or facts that give
rise to such indemnification right, shall be the exclusive remedy
of such Indemnified Party with respect to each such third party
Claim to which such indemnification relates.
14.6 Indemnification Procedures
a) If any civil, criminal, administrative or investigative
action or proceeding is commenced or threatened (any of the
above being a "Claim") against any Party entitled to
indemnification under Sections 14.1, 14.2 or 14.3 (an
"Indemnified Party") written notice thereof shall be given
to the Party that is obligated to provide indemnification
under such Sections (the "Indemnifying Party") as promptly
as practicable but in all events, within a period that will
not prejudice the rights of the Indemnifying Party under
this Agreement or to defend the Claim. After such notice, if
the Indemnifying Party shall acknowledge in writing to such
Indemnified Party that this Agreement applies with respect
to such Claim, then the Indemnifying Party shall be
entitled, if it so elects, in a written notice delivered to
the Indemnified Party not fewer than [CIO] prior to the date
on which a response to such Claim is due or such lesser
period as is reasonable given the nature of the Claim and
the notice and response time permitted by law or the facts
and circumstances, to take control of the defense and
investigation of such Claim and to employ and engage
attorneys of its sole choice to handle and defend the same,
at the Indemnifying Party's sole cost and expense. The
Indemnified Party shall cooperate in all reasonable respects
with the Indemnifying Party and its attorneys in the
investigation, trial and defense of such Claim and any
appeal arising therefrom; provided, however, that the
Indemnified Party may, at its own cost and expense,
participate, through its attorneys or otherwise, in such
investigation, trial and defense of such Claim and any
appeal arising therefrom. No settlement of a Claim that
involves a remedy other than the payment of money by the
Indemnifying Party shall be entered into without the consent
of the Indemnified Party, which consent will not be
unreasonably withheld.
b) After notice by the Indemnifying Party to the Indemnified
Party of its election to assume full control of the defense
of any such Claim, the Indemnifying Party shall not be
liable to the Indemnified Party for any legal expenses
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incurred thereafter by such Indemnified Party in connection
with the defense of that Claim. If the Indemnifying Party
does not promptly assume full control over and diligently
pursue the defense of a Claim subject to such defense as
provided in this Section 14.6, the Indemnifying Party may
participate in such defense, at its sole cost and expense,
and the Indemnified Party shall have the right to defend,
settle or otherwise resolve the Claim in such manner as it
may deem appropriate, at the cost and expense of the
Indemnifying Party, provided, however, any settlement of the
Claim shall require the consent of the Indemnifying Party
which consent shall not be unreasonably withheld.
15.0 Insurance and Risk of Loss
15.1 ISSC Insurance
During the Term of this Agreement, ISSC and any ISSC contractor
and subcontractor shall maintain and keep in force, at its own
expense, the following minimum insurance coverages and minimum
limits:
a) Workers' Compensation Insurance, the statutory limits as
required by the various laws and regulations applicable to
the employees of ISSC or any ISSC contractor or
subcontractor.
b) Employer's Liability Insurance, for employee bodily injuries
and deaths, with a limit of [CIO] each accident.
c) Comprehensive or Commercial General Liability Insurance,
covering claims for bodily injury, death and property
damage, including Premises and Operations, Independent
Contractors, Products and Completed Operations, Personal
Injury, Contractual, and Broad-form Property Damage
liability coverages, with limits as follows:
1) Occurrence/Aggregate Limit of [CIO] for bodily
injury, death and property damage each occurrence of
[CIO] general aggregate; or
2) Split liability limits of:
(a) [CIO] for bodily injury per person;
(b) [CIO] for bodily injury per occurrence;
(c) [CIO] for property damage.
d) Comprehensive Automobile Liability Insurance, covering owned,
non-owned and hired vehicles, with limits as follows:
1) Combined Single Limit of [CIO] for bodily injury,
death and property damage per occurrence; or
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2) Split liability limits of:
(a) [CIO] for bodily injury per person;
(b) [CIO] for bodily injury per occurrence;
(c) [CIO] for property damage.
e) All-Risk Property Insurance, on a replacement cost basis,
covering the real property of ISSC which ISSC is obligated
to insure by this Agreement. Such real property may include
buildings, equipment, furniture, fixtures and supply
inventory.
All such policies of insurance of ISSC and its contractors and
subcontractors shall provide that the same shall not be canceled
nor the coverage modified nor the limits changed without first
[CIO] prior written notice thereof to CES. No such cancellation,
modification or change shall affect ISSC's obligation to maintain
the insurance coverages required by this Agreement.
ISSC shall be responsible for payment of any and all deductibles
from insured claims under its policies of insurance. The
coverage afforded under any insurance policy obtained by ISSC
pursuant to this Agreement shall be primary coverage regardless
of whether or not CES has similar coverage.
ISSC or its contractors and subcontractors shall not perform
under this Agreement unless and until certificates of such
insurance, including renewals thereof, have been delivered to and
approved by CES.
ISSC shall have the right to self-insure any of the insurance
coverages required by this Agreement upon prior written
notification to CES. Unless previously agreed to in writing by
CES, ISSC's contractors and subcontractors shall comply with the
insurance requirements herein. The minimum limits of coverage
required by this Agreement may be satisfied by a combination of
primary and excess or umbrella insurance policies.
If ISSC or its contractors or subcontractors shall fail to comply
with any of the insurance requirements herein, upon written
notice to ISSC by CES, CES may, without any obligation to do so,
procure such insurance and ISSC shall pay CES the cost thereof
plus a reasonable administrative fee as designated by CES.
The maintenance of the insurance coverages required under this
Agreement shall in no way operate to limit the liability of ISSC
to CES under the provisions of this Agreement.
15.2 CES Insurance
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During the Term of this Agreement, CES shall maintain and keep in
force, at its own expense, the following minimum insurance
coverages and minimum limits:
a) Workers' Compensation Insurance, with statutory limits as
required by the various laws and regulations applicable to
the employees of CES.
b) Employer's Liability Insurance, for employee bodily injuries
and deaths, with a limit of [CIO] each accident.
c) Comprehensive or Commercial General Liability Insurance,
covering claims for bodily injury, death and property
damage, including Premises and Operations, Independent
Contractors, Products and Completed Operations, Personal
Injury, Contractual, and Broad-form Property Damage
liability coverages, with limits as follows:
1) Occurrence/Aggregate Limit of [CIO] for bodily
injury, death and property damage each occurrence and
[CIO] general aggregate; or
2) Split liability limits of:
(a) [CIO] for bodily injury per person;
(b) [CIO] for bodily injury per occurrence;
(c) [CIO] for property damage.
d) Comprehensive Automobile Liability Insurance, covering owned,
non-owned and hired vehicles, with limits as follows:
1) Combined Single Limit of [CIO] for bodily injury,
death and property damage per occurrence; or
2) Split liability limits of:
(a) [CIO] for bodily injury per person;
(b) [CIO] for bodily injury per occurrence;
(c) [CIO] for property damage.
e) All-Risk Property Insurance, on a replacement cost basis,
covering the real property of CES which CES is obligated to
insure by this Agreement. Such real property may include
buildings, equipment, furniture, fixtures and supply
inventory.
All such policies of insurance of CES shall provide that the same
shall not be canceled nor the coverage modified nor the limits
changed without first giving [CIO] prior written notice thereof
to ISSC. No such cancellation, modification or change shall
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affect CES's obligation to maintain the insurance coverages
required by this Agreement.
CES shall be responsible for payment of any and all deductibles
from insured claims under its policies of insurance. The
coverage afforded under any insurance policy obtained by CES
pursuant to this Agreement shall be primary coverage regardless
of whether or not ISSC has similar coverage.
CES shall not perform under this Agreement unless and until
certificates of such insurance, including renewals thereof, have
been delivered to and approved by ISSC.
CES shall have the right to self-insure any of the insurance
coverages required by this Agreement upon prior written
notification to ISSC. The minimum limits of coverage required by
this Agreement may be satisfied by a combination of primary and
excess or umbrella insurance policies.
If CES shall fail to comply with any of the insurance
requirements herein, upon written notice to CES by ISSC, ISSC
may, without any obligation to do so, procure such insurance and
CES shall pay ISSC the cost thereof plus a reasonable
administrative fee as designated by ISSC.
The maintenance of the insurance coverages required under this
Agreement shall in no way operate to limit the liability of CES
to ISSC under the provision of this Agreement.
15.3 Risk of Property Loss
CES is responsible for risk of loss of, or damage to, the CES-
Retained Machines and other CES property regardless of where
located, and loss or damage to software on the CES-Retained
Machines or any Software in CES's possession at the time of such
loss or damage. ISSC is responsible for risk of loss of, or
damage to, the ISSC Machines and other ISSC property regardless
of where located, and loss or damage to Software in ISSC's
possession at the time of such loss or damage.
15.4 Mutual Waiver of Subrogation
a) To the extent permitted by law, ISSC and its contractors and
subcontractors hereby waive their rights of subrogation
against CES, its directors, officers, employees and agents
for any loss or damage to the Machines and other tangible
real property of ISSC, its contractors and subcontractors
resulting from operations in connection with this Agreement.
Each property insurance policy of ISSC and its contractors
and subcontractors shall be endorsed to provide a waiver of
any and all rights of subrogation against CES, its
directors, officers, employees and agents for loss resulting
from operations in connection with this Agreement.
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b) To the extent permitted by law, CES, its directors,
officers, employees and agents hereby waive their rights of
subrogation against ISSC and its contractors and
subcontractors for any loss or damage to the Machines and
other tangible real property of CES, its directors,
officers, employees and agents resulting from operations in
connection with this Agreement.
16.0 Publicity
Each Party will submit to the other all advertising, written
sales promotion, press releases and other publicity materials
relating to this Agreement in which the other Party's name or
mark is mentioned or language from which the connection of said
name or mark may be inferred or implied, and will not publish or
use such advertising, sales promotion, press releases, or
publicity materials without prior written approval of the other
Party. However, either Party may include the other Party's name
and a factual description of the work performed under this
Agreement on employee bulletin boards, in its list of references
and in the experience section of proposals to third parties, in
internal business planning documents and in its annual report to
stockholders, and whenever required by reason of legal,
accounting or regulatory requirements.
17.0 Review Committee and Dispute Resolution
17.1 Joint Advisory Committee
ISSC and CES agree to create a Joint Advisory Committee
consisting of two people of the following titles from each Party:
ISSC
1) Director, Cross-Industry Applications and Business
Services
2) ISSC Project Executive
CES
1) Vice-President, Technology
2) CES Project Executive
The Joint Advisory Committee will:
a) conduct quarterly reviews of the progress of the Services;
b) annually review the operating and strategic plans prepared by
the Project Executives;
c) review, on an annual basis, performance objectives and
measurements;
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d) provide advice and direction on technology changes; and
e) resolve disputes between the Parties.
17.2 Dispute Resolution
a) Any dispute between the Parties either with respect to the
interpretation of any provision of this Agreement or with
respect to the performance by ISSC or by CES hereunder shall
be resolved as specified in this Section 17.2, as follows:
1) Upon the written request of either Party, each of
the Parties will appoint a designated representative
who does not devote substantially all of his or her
time to performance under this Agreement, whose task it
will be to meet for the purpose of endeavoring to
resolve such dispute.
2) The designated representatives shall meet as often
as necessary to gather and furnish to the other all
information with respect to the matter in issue which
is appropriate and germane in connection with its
resolution.
3) Such representatives shall discuss the problem and
negotiate in good faith in an effort to resolve the
dispute without the necessity of any formal proceeding
relating thereto.
4) During the course of such negotiation, all
reasonable requests made by one Party to the other for
nonprivileged information reasonably related to this
Agreement, will be honored in order that each of the
Parties may be fully advised of the other's position.
5) The specific format for such discussions will be
left to the discretion of the designated
representatives but may include the preparation of
agreed upon statements of fact or written statements of
position furnished to the other Party.
b) If the designated representatives cannot resolve the
dispute, then the dispute shall be escalated to the
President of CES and the President of ISSC, for their review
and resolution. If the dispute cannot be resolved by such
officers, then the Parties may initiate formal proceedings;
however, formal proceedings for the judicial resolution of
any such dispute may not be commenced until the earlier of:
1) the designated representatives, concluding in good
faith that amicable resolution through continued
negotiation of the matter in issue does not appear
likely; or
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2) [CIO] after the initial request to negotiate such
dispute; or
3) [CIO] before the statute of limitations governing
any cause of action relating to such dispute would
expire;
provided, however, that the pendency of this dispute resolution
procedure shall not prevent either Party from seeking equitable
relief with respect to a dispute prior to such period.
17.3 Continued Performance
Both Parties agree to continue performing their respective
obligations under this Agreement while any dispute is being
resolved unless and until such obligations are terminated or
expire in accordance with the provisions hereof.
18. 0 General
18.1 Control of Services
a) This Agreement shall not be construed as constituting either
Party as partner of the other or to create any other form of
legal association that would impose liability upon one Party
for the act or failure to act of the other or as providing
either Party with the right, power or authority (express or
implied) to create any duty or obligation of the other
Party.
b) Each Party shall be responsible for the management,
direction and control of its employees and such employees
shall not be employees of the other Party.
18.2 Right to Perform Services for Others
Each Party recognizes that ISSC personnel providing Services to
CES under this Agreement may perform similar services for others
and this Agreement shall not prevent ISSC from using the
personnel and equipment provided to CES under this Agreement for
such purposes subject only to the restrictions set forth in
Sections 4.1, 4.3 and 10. ISSC may perform its obligations
through its subsidiaries, Affiliates or through the use of ISSC-
selected independent contractors; provided, however, that ISSC
shall not be relieved of its obligations under this Agreement by
use of such subsidiaries, Affiliates, or subcontractors.
18.3 Scope of Services
The Services provided under this Agreement are for ISSC Machines
and facilities located within the United States, Puerto Rico or
Guam.
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18.4 Amendments and Revisions
No changes or modifications to this Agreement, its Supplement and
Schedules may be made orally, but only by a written amendment or
revision signed by both Parties.
18.5 Force Majeure
a) Neither Party shall be liable for any default or delay in
the performance of its obligations hereunder if and to the
extent such default or delay is caused, directly or
indirectly, by fire, flood, earthquake, elements of nature
or acts of God, acts of war, terrorism, riots, civil
disorders, rebellions or revolutions in the United States,
strikes, lockouts, or labor difficulties (other than in the
case of ISSC, strikes, lockouts or labor difficulties
initiated by ISSC's employees or, in the case of CES,
strikes, lockouts, or labor difficulties initiated by CES's
or its subcontractor's employees), or any other similar
cause beyond the reasonable control of such Party
(individually, each being a "Force Majeure Event"); provided
such Force Majeure Event could not have been prevented by
reasonable precautions and cannot reasonably be circumvented
by the nonperforming Party through the use of alternate
sources, work-around plans or other means.
b) In such event, the nonperforming Party will be excused from
any further performance or observance of the obligation(s)
so affected for as long as such circumstances prevail and
such Party continues to use commercially reasonable efforts
to recommence performance or observance whenever and to
whatever extent possible without delay. Any Party so
delayed in its performance will immediately notify the other
by telephone (to be confirmed in writing within [CIO] of the
inception of such delay) and describe at a reasonable level
of detail the circumstances causing such delay.
c) This Section 18.5 does not limit or otherwise affect ISSC's
obligation to provide Disaster Recovery services in
accordance with Schedule G in the event that Site 1 and Site
2 simultaneously experience conditions that cause such
Disaster Recovery services to be invoked, or if (1) prior to
the scheduled inception of the provision of Services from
Site 2 or, (2) if CES does not elect to implement Site 2, in
the event that Site 1 experiences such conditions.
d) If ISSC materially breaches its obligations to provide
Disaster Recovery Services in accordance with Schedule G,
CES may terminate this Agreement pursuant to Section 11.5
without regard to the cure periods, provided that CES gives
ISSC written notice of termination within [CIO] of the
alleged breach. Nothing in this subsection shall be deemed
to otherwise limit CES's right to terminate pursuant to
Section 11.5 subject to the cure periods stated therein.
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18.6 Nonperformance
Except as otherwise provided in this Agreement, to the extent any
nonperformance by either Party of its nonmonetary obligations
under this Agreement results from or is caused by the other
Party's failure to perform its nonmonetary obligations under this
Agreement, such nonperformance shall be excused.
18.7 Remarketing
CES may not remarket all or any portion of the Services provided
under this Agreement, or make all or any portion of the Services
available to any party, without the prior written consent of
ISSC; provided, however, CES may [CIO] subject to the following
limitations:
a) CES shall independently [CIO];
b) CES does not utilize ISSC's [CIO];
c) CES discloses to its [CIO];
d) CES will seek ISSC's approval of a potential [CIO] prior to
CES's initiating [CIO] for such [CIO], which approval shall
only be withheld pursuant to ISSC's contractual obligations
to its [CIO] and which approval ISSC shall use commercially
reasonable efforts to timely obtain for CES;
e) if CES's activities for an [CIO] cause ISSC to fail to meet
a Minimum Service Level, ISSC shall be excused from such
failure to the extent ISSC demonstrates that the failure was
caused by such [CIO] activities; and
f) if ISSC incurs incremental costs in connection with any such
[CIO] of the [CIO], such costs will be treated as a New
Service in accordance with Section 7.6 hereof.
Nothing herein may be construed to limit or hinder CES from (i)
marketing, selling or performing its employee services to and for
its customers and/or (ii) from providing any portion of the
Services to its Affiliates.
18.8 Waiver
No waiver of any breach of any provision of this Agreement shall
constitute a waiver of any prior, concurrent or subsequent breach
of the same or any other provisions hereof.
18.9 Severability
If any provision of this Agreement shall be held to be invalid,
illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way
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be affected or impaired thereby, and such provision shall be
deemed to be restated to reflect the original intentions of the
Parties as nearly as possible in accordance with applicable
law(s).
18.10 Limitations Period upon Termination
Neither Party may bring an action, regardless of form, arising
out of this Agreement more than [CIO] after the cause of action
has arisen or the date such cause of action was or should have
been discovered.
18.11 Counterparts
This Agreement shall be executed in duplicate counterparts. Each
such counterpart shall be an original.
18.12 Governing Law
This Agreement shall be governed by the laws of the State of
Georgia as such laws are applied to contracts which are entered
into and performed entirely within the State of Georgia.
18.13 Binding Nature and Assignment
This Agreement will be binding on the Parties and their
respective successors and permitted assigns. For purposes of this
Agreement, a "Change of Control" of a Party or a merger of a
Party or a sale of all or substantially all of the assets of a
Party shall not be deemed a prohibited assignment of this
Agreement; provided, however, in the case of a purchase of all or
substantially all of the assets of a Party, the purchasing entity
must be at least as credit worthy as the Party was as of the
Commencement Date. Further, the Party must assign this Agreement
in writing to the entity purchasing the assets, and the Party
shall be released from all obligations and liability hereunder
upon the execution by the entity purchasing the assets of a full
and unconditional assumption of all obligations of the Party
under this Agreement without further modification or amendment to
this Agreement.
Except as provided in the first paragraph of this Section 18.13,
neither Party may, or will have the power to, assign this
Agreement without the prior written consent of the other, except
that either Party may assign its rights and obligations under
this Agreement, without the approval of the other, to an
Affiliate which expressly assumes such Party's obligations and
responsibilities hereunder, provided that the assigning Party
remains fully liable for and shall not be relieved from the full
performance of all obligations under this Agreement.
Any attempted assignment that does not comply with the terms of
this Section 18.13 shall be null and void. Any Party assigning
its rights or obligations to an Affiliate in accordance with this
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Agreement shall, within three business days of such assignment,
provide written notice thereof to the other Party together with a
copy of the assignment document.
18.14 Notices
a) Under this Agreement whenever one Party is required or
permitted to give notice to the other, such notice will be
in writing unless otherwise specifically provided herein and
will be deemed given when delivered in hand, [CIO] after
being given to an express courier with a reliable system for
tracking delivery, or [CIO] after the day of mailing, when
mailed by United States mail, registered or certified mail,
return receipt requested, postage prepaid, or when sent by
facsimile and thereafter delivered by one of the foregoing
methods of delivery.
b) Notifications will be addressed as follows:
1) For termination, breach or default, notify:
In the case of ISSC:
ISSC Project Executive
300 Embassy Row
Atlanta, Georgia 30328
Facsimile: 404-353-2099
with a courtesy, but not legally required, copy to:
ISSC General Counsel
44 South Broadway
White Plains, New York 10601
Facsimile: 914-288-1167
In the case of CES:
CES Director of Data Services
300 Embassy Row
Atlanta, Georgia 30328
Facsimile: 404-353-2099
with a courtesy, but not legally required, copy to:
CES General Counsel
8100 34th Avenue South
Minneapolis, Minnesota 55425-1640
Facsimile: 612-853-4555
2) For all other notices:
In the case of ISSC:
ISSC Project Executive
300 Embassy Row
Atlanta, Georgia 30328
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Facsimile: 404-353-2099
In the case of CES:
CES Director of Data Services
300 Embassy Row
Atlanta, Georgia 30328
Facsimile: 404-353-2099
Either Party hereto may from time to time change its address for
notification purposes by giving the other prior written notice of
the new address and the date upon which it will become effective.
18.15 No Third Party Beneficiaries
Except as specified in Sections 10 and 15 with respect to either
Party's contractors or subcontractors, the Parties do not intend,
nor will any clause be interpreted, to create for any third party
any obligations to or benefit from either ISSC or CES.
18.16 Other Documents
On or after the Commencement Date and the date(s) of any
amendments or revisions hereto and at the request of the other
Party, each Party shall furnish to the other such certificate of
its Secretary, certified copy of resolutions of its Board of
Directors, or opinion of its counsel as shall evidence that this
Agreement or any amendment or revision hereto has been duly
executed and delivered on behalf of such Party.
18.17 Consents and Approvals
The Parties agree that in any instance where consent, approval or
agreement is required of a Party in order for the other Party to
perform under or comply with the terms and conditions of this
Agreement, then such Party will not unreasonably withhold or
delay such consent, approval or agreement and where consent,
approval or agreement cannot be provided, the Party shall notify
the other Party in a timely manner.
18.18 Headings
All headings herein and the table of contents are not to be
considered in the construction or interpretation of any provision
of this Agreement. This Agreement was drafted with the joint
participation of both Parties and shall be construed neither
against nor in favor of either, but rather in accordance with the
fair meaning thereof. In the event of any apparent conflicts or
inconsistencies between this Agreement or any Supplements,
Schedules, Exhibits or other Attachments to this Agreement, to
the extent possible such provisions shall be interpreted so as to
make them consistent, and if such is not possible, the provisions
of this Agreement shall prevail.
<PAGE>
<PAGE>
THE PARTIES ACKNOWLEDGE THAT THEY HAVE READ THIS AGREEMENT,
UNDERSTAND IT, AND AGREE TO BE BOUND BY ITS TERMS AND CONDITIONS.
FURTHER, THE PARTIES AGREE THAT THE COMPLETE AND EXCLUSIVE
STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES RELATING TO THIS
SUBJECT SHALL CONSIST OF 1) THIS AGREEMENT, 2) THE SUPPLEMENT,
AND 3) THE SCHEDULES, INCLUDING THOSE MADE EFFECTIVE BY THE
PARTIES IN THE FUTURE. THIS STATEMENT OF THE AGREEMENT
SUPERSEDES ALL PROPOSALS OR OTHER PRIOR AGREEMENTS, ORAL OR
WRITTEN, AND ALL OTHER COMMUNICATIONS BETWEEN THE PARTIES,
RELATING TO THE SUBJECT MATTERS DESCRIBED IN THIS AGREEMENT.
Accepted by: Accepted by:
Integrated Systems Solutions Ceridian Corporation
Corporation
By: /s/K. R. Johnson By: /s/Kenneth Weber
Authorized Signature Authorized Signature
Date January 10, 1995 Date January 10, 1995
<PAGE>
<PAGE>
<PAGE>
<TABLE>
ISSC / Ceridian Corporation
Agreement for Information Technology Services
-----------------------------------------------------------------------------
Supplement to
Agreement for Information Technology Services
Name and Address of Customer: Customer No.: 8098415
Ceridian Corporation
300 Embassy Row
Atlanta, Georgia 30328
ISSC Project Office Address: ISSC Project Office No.:
ISSC Project Executive
44 South Broadway
White Plains, New York 10601
Commencement Date: January 1, 1995
Term End Date: December 31, 2004
Contract Year
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
1/1- 1/1- 1/1- 1/1- 1/1- 1/1- 1/1- 1/1- 1/1- 1/1-
12/31 12/31 12/31 12/31 12/31 12/31 12/31 12/31 12/31 12/31
_____ ______ ______ ______ ______ ______ ______ ______ ______ ______
ANNUAL SERVICES CHARGE 4,518 10,034 11,234 12,834 13,134 11,734 11,834 11,634 11,634 11,634
(K$)
CAPACITY RATES
CPU 1,800 1,650 1,525 1,400 1,300 1,200 1,100 1,000 900 850
($ per MIPS)
DASD 225 207 190 175 161 148 136 126 115 106
($ per gigabyte)
SITE 2 CREDITS *108,889 88,000 83,583 86,250 77,836 74,417 76,833 76,583 73,250
($ per Month)
ADDITIONAL RESOURCE CHARGE RATES
Tape Utilization 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00
($ per tape mount)
Tape Library 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25
($ per tape stored)
Tape Transfer 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88
($ per tape transfer)
Tape Vaulting 0.75 0.75 0.75 0.75 0.75 0.75 0.75 0.75 0.75 0.75
($ per tape stored in vault)
TERMINATION CHARGE
($ in Millions)
Convenience
Option 1 6.0 7.9 7.9 7.7 6.4 5.4 4.4 3.0 2.0 1.6
Option 2 2.1 4.2 4.2 4.0 3.4 2.9 2.5 1.5 1.0 0.6
Change of Control
Option 1 6.0 7.9 7.9 7.7 6.4 5.4 4.4 3.0 2.0 1.6
Option 2 2.1 4.2 4.2 4.0 3.4 2.9 2.5 1.5 1.0 0.6
NOTE Credits for cancellation of Site 2 will begin in April 1996.
</TABLE>
January 10, 1995
ISSC/CES Confidential Supplement Page 1 of 3
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<PAGE>
<TABLE>
Supplement to
Agreement for Information Technology Services
Monthly Baselines
_________________
Months
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___
YEAR Tape Utilization (# of Mounts)
1995 1,000 1,000 1,000 2,000 2,000 2,000 3,000 3,000 4,000 4,000 4,000 4,000
1996 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
1997 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
1998 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
1999 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
2000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
2001 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
2002 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
2003 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
2004 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
YEAR Tape Library (# of Tapes Stored)
1995 2,000 2,000 2,000 4,000 4,000 4,000 6,000 6,000 8,000 8,000 10,000 10,000
1996 10,000 12,000 12,000 14,000 14,000 14,000 16,000 16,000 18,000 18,000 20,000 20,000
1997 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000
1998 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000
1999 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000
2000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000
2001 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000
2002 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000
2003 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000
2004 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000
YEAR Tape Transfer (Aggregate # of Tapes Logged In and Out)
1995 400 400 400 800 800 800 1,200 1,200 1,600 1,600 1,600 1,600
1996 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000
1997 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000
1998 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000
1999 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000
2000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000
2001 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000
2002 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000
2003 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000
2004 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000
YEAR Tape Vaulting (Aggregate # of Tapes Sent to/Received from Vault Storage)
1995 200 200 200 400 400 400 600 600 800 800 1,000 1,000
1996 1,000 1,200 1,200 1,400 1,400 1,400 1,600 1,600 1,800 1,800 2,500 2,500
1997 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500
1998 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500
1999 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500
2000 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500
2001 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500
2002 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500
2003 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500
2004 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500
</TABLE>
January 10, 1995
ISSC/CES Confidential Supplement Page 2 of 3
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<PAGE>
<TABLE>
Supplement to
Agreement for Information Technology Services
Capacity Plan
_____________
Months
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> ______
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___
YEAR Host CPU (Installed MIPS)
1995 30 30 30 30 30 30 30 60 60 60 60 60
1996 60 60 60 120 120 120 120 170 170 170 170 220
1997 220 220 220 220 220 220 220 330 330 330 330 330
1998 330 330 330 330 330 330 330 370 370 370 370 370
1999 370 370 370 370 370 370 370 410 410 410 410 410
2000 410 410 410 410 410 410 410 450 450 450 450 450
2001 450 450 450 450 450 450 450 490 490 490 490 490
2002 490 490 490 490 490 490 490 540 540 540 540 540
2003 540 540 540 540 540 540 540 590 590 590 590 590
2004 590 590 590 590 590 590 590 650 650 650 650 650
YEAR DASD (Installed Gigabytes)
1995 90 90 90 180 180 180 180 180 270 270 270 270
1996 270 270 360 720 720 720 720 720 900 900 900 900
1997 900 900 1,080 1,080 1,080 1,080 1,080 1,260 1,260 1,260 1,260 1,260
1998 1,260 1,260 1,260 1,260 1,260 1,260 1,260 1,260 1,350 1,350 1,350 1,350
1999 1,350 1,350 1,350 1,350 1,350 1,350 1,350 1,350 1,530 1,530 1,530 1,530
2000 1,530 1,530 1,530 1,530 1,530 1,530 1,530 1,530 1,710 1,710 1,710 1,710
2001 1,710 1,710 1,710 1,710 1,710 1,710 1,710 1,710 1,890 1,890 1,890 1,890
2002 1,890 1,890 1,890 1,890 1,890 1,890 1,890 1,890 2,070 2,070 2,070 2,070
2003 2,070 2,070 2,070 2,070 2,070 2,070 2,070 2,070 2,250 2,250 2,250 2,250
2004 2,250 2,250 2,250 2,250 2,250 2,250 2,250 2,250 2,430 2,430 2,430 2,430
</TABLE>
Disaster Recovery Options
_________________________
24 HOUR RECOVERY 10,000 (Effective July 1, 1997 through end of Term)
($ per month)
ADDITIONAL TEST PERIOD
($ per test)
48 Hours 105,000
24 Hours 73,000
January 10, 1995
ISSC/CES Confidential Supplement Page 3 of 3
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<PAGE>
ISSC / Ceridian Corporation
Agreement for Information Technology Services
-----------------------------------------------------------------------------
Schedules to
Agreement for Information Technology Services
SCHEDULE A - Applications Software
SCHEDULE B - Systems Software
SCHEDULE C - CES-Retained Machines
SCHEDULE D - ISSC Machines
SCHEDULE E - Support Services, Performance Standards and
Operational Responsibilities
SCHEDULE F - Procedures Manual Table of Contents
SCHEDULE G - Disaster Recovery Services
SCHEDULE H - Implementation Plan
SCHEDULE I - Operations Help Desk
SCHEDULE J - ISSC Charges, Measures of Utilization and
Financial Responsibilities
SCHEDULE K - Application Installation Standards
SCHEDULE L - Security Procedures
SCHEDULE M - Confidential Information Categories
January 10, 1995
ISSC/CES Confidential Table of Schedules Page 1 of 1
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<PAGE>
ISSC / Ceridian Corporation
Agreement for Information Technology Services
-----------------------------------------------------------------------------
Schedule A
Applications Software
ITEM APPLICATION RESPONSIBILITY
NO. VENDOR NAME/DESCRIPTION OPER FIN MAINT DEV LIC
1. CES Signature 2000 ISSC CES CES CES CES
2. CES Tesseract V.941 ISSC CES CES CES CES
LEGEND: "OPER" = OPERATE "FIN" = FINANCIAL "MAINT" = MAINTENANCE "DEV" =
DEVELOPMENT "LIC" = LICENSEE
January 10, 1995
ISSC/CES Confidential Schedule A Page 1 of 1
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<PAGE>
<TABLE>
ISSC / Ceridian Corporation
Agreement for Information Technology Services
-----------------------------------------------------------------------------
Schedule B
Systems Software
Section B-1
IBM Systems Software (MVS)
ITEM PROGRAM SOFTWARE RESPONSIBILITY
NO. VENDOR NO. NAME/DESCRIPTION OPER FIN MAINT LIC
<S> <C> <C> <C> <C> <C> <C> <C>
1. IBM 5621-425 3172 INTERCONNECT CONTROLLER ISSC ISSC ISSC ISSC
2. IBM 5648-063 ACF/NCP V7.01 ISSC ISSC ISSC ISSC
3. IBM 5655-257 ICKDSF V1 ISSC ISSC ISSC ISSC
4. IBM 5655-041 ACF/SSP ISSC ISSC ISSC ISSC
5. IBM 5655-042 ISPF/PDF ISSC ISSC ISSC ISSC
6. IBM 5658-260 EREP V3 ISSC ISSC ISSC ISSC
7. IBM 5665-279 BTAM V1 ISSC ISSC ISSC ISSC
8. IBM 5665-311 3270 PC FILE TRANSFER ISSC ISSC ISSC ISSC
9. IBM 5665-488 SDSF ISSC ISSC ISSC ISSC
10. IBM 5668-949 SMP/E ISSC ISSC ISSC ISSC
11. IBM 5685-083 CICS/ESA V3 ISSC ISSC ISSC ISSC
12. IBM 5685-025 TSO/E ISSC ISSC ISSC ISSC
13. IBM 5685-111 NETVIEW V2 ISSC ISSC ISSC ISSC
14. IBM 5685-151 AOC/MVS ISSC ISSC ISSC ISSC
15. IBM 5688-008 ESCON MGR ISSC ISSC ISSC ISSC
16. IBM 5688-139 TSCF ISSC ISSC ISSC ISSC
17. IBM 5695-DF1 DFSMS/MVS/RMM ISSC ISSC ISSC ISSC
18. IBM 5695-039 RACF V2 ISSC ISSC ISSC ISSC
19. IBM 5695-046 BOOKMGR READ/MVS ISSC ISSC ISSC ISSC
20. IBM 5695-100 DITTO ISSC ISSC ISSC ISSC
21. IBM 5695-117 VTAM V4 ISSC ISSC ISSC ISSC
22. IBM 5695-167 GDDM V3 ISSC ISSC ISSC ISSC
23. IBM 5706-254 QMF V3 ISSC ISSC ISSC ISSC
24. IBM 5735-HAL TCP/IP V2 ISSC ISSC ISSC ISSC
25. IBM 5669-962 ASSEMBLER H ISSC ISSC ISSC ISSC
26. IBM 5695-064 CICS AO ISSC ISSC ISSC ISSC
27. IBM 5685-DB2 DB2 ISSC ISSC ISSC ISSC
28. IBM 5688-015 BOOKMASTER ISSC ISSC ISSC ISSC
29. IBM 5668-958 COBOL II ISSC ISSC ISSC ISSC
30. IBM 5740-SM1 DFSORT ISSC ISSC ISSC ISSC
31. IBM 5771-ABA FONT-SONORAN SERIF ISSC ISSC ISSC ISSC
32. IBM 5771-ABC FONT-P1 & SPECIAL ISSC ISSC ISSC ISSC
33. IBM 5685-060 INFO/MGMNT ISSC ISSC ISSC ISSC
34. IBM 5695-MVS MVS/ESA ISSC ISSC ISSC ISSC
35. IBM 5756-265 NETVIEW ANO ISSC ISSC ISSC ISSC
36. IBM 5695-040 PSF ISSC ISSC ISSC ISSC
37. IBM 5695-057 SYSTEMVIEW ISSC ISSC ISSC ISSC
38. IBM 5798-BQH CICS 3270PC FILE TRANSFER ISSC ISSC ISSC ISSC
39. IBM 5771-ABB FONT-SONORAN SANS SERIF ISSC ISSC ISSC ISSC
40. IBM 5771-ADB FONT-APL2 ISSC ISSC ISSC ISSC
41. IBM 5798-DXQ ICFRU ISSC ISSC ISSC ISSC
42. IBM 5685-059 INFO/SYS ISSC ISSC ISSC ISSC
43. IBM 5695-169 NETVIEW AUTOBRIDGE ISSC ISSC ISSC ISSC
44. IBM 5668-909 PL/1 ISSC ISSC ISSC ISSC
</TABLE>
January 10, 1995
ISSC/CES Confidential Schedule B Page 1 of 4
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<PAGE>
<TABLE>
Schedule B
Systems Software
Section B-1
IBM Systems Software (MVS)
ITEM PROGRAM SOFTWARE RESPONSIBILITY
NO. VENDOR NO. NAME/DESCRIPTION OPER FIN MAINT LIC
<S> <C> <C> <C> <C> <C> <C> <C>
45. IBM 5685-029 RMF ISSC ISSC ISSC ISSC
46. IBM 5688-187 C/370 COMPILER ISSC ISSC ISSC ISSC
47. IBM 5688-188 C/370 LIBRARY ISSC ISSC ISSC ISSC
48. IBM 5798-DQD CACHE RMF REPORTER ISSC ISSC ISSC ISSC
49. IBM 5775-DNH CONCAID ISSC ISSC ISSC ISSC
50. IBM 5798-DZW DSF/TSO ISSC ISSC ISSC ISSC
51. IBM 5771-ADT FONT-MATH & SCIENC ISSC ISSC ISSC ISSC
52. IBM 5732-071 PASCAL-RUNTIME LIB ISSC ISSC ISSC ISSC
53. IBM 5688-190 PPFA ISSC ISSC ISSC ISSC
54. IBM 5686-191 OGL ISSC ISSC ISSC ISSC
55. IBM 5665-307 PMF ISSC ISSC ISSC ISSC
56. IBM 5695-047 JES2-MVS/ESA ISSC ISSC ISSC ISSC
LEGEND: "OPER" = OPERATE "FIN" = FINANCIAL "MAINT" = MAINTENANCE "LIC" = LICENSEE
</TABLE>
January 10, 1995
ISSC/CES Confidential Schedule B Page 2 of 4
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<PAGE> Schedule B
Systems Software
Section B-2
Third Party Systems Software (MVS)
<TABLE>
ITEM VERSION SOFTWARE RESPONSIBILITY
NO. VENDOR NO. NAME/DESCRIPTION OPER FIN MAINT LIC
<S> <C> <C> <C> <C> <C> <C> <C>
1. ALTAI CURRENT ZEKE/ZEBB/GWS JOB SCHEDULER/RERUN RESTART ISSC CES CES CES
2. B&B STOP-X37 DASD SPACE MANAGER ISSC CES CES CES
3. CANDLE OMEGAMON II FOR CICS ISSC ISSC ISSC ISSC
4. CANDLE OMEGAMON II FOR DB2 ISSC ISSC ISSC ISSC
5. CANDLE OMEGAMON II FOR MVS ISSC ISSC ISSC ISSC
6. CANDLE OMEGAMON II FOR SMS ISSC ISSC ISSC ISSC
7. CANDLE OMEGAMON II FOR VTAM ISSC ISSC ISSC ISSC
8. CANDLE OMEGAVIEW ISSC ISSC ISSC ISSC
9. CHICAGO SOFTWARE CURRENT MVS/QUICKREF ON-LINE REFERENCE MANUALS ISSC CES CES CES
10. CHICAGO SOFTWARE CURRENT MVS/SOP ON-LINE STANDARDS & PROCEDURES ISSC CES CES CES
11. COMPUWARE CURRENT ABEND-AID XLF/DB2 ABEND DEBUG TOOL-BATCH ISSC CES CES CES
12. COMPUWARE CURRENT CICS ABEND-AID/RADAR/DB2 ABEND DEBUG TOOL-CICS ISSC CES CES CES
13. COMPUWARE CURRENT FILE AID MVS/DB2 OPT EXTEND ISPF UTILITIES ISSC CES CES CES
14. COMPUWARE CURRENT PLAYBACK/DB2 OPT TEST DATA CREATOR & GENERATOR ISSC CES CES CES
15. COMPUWARE CURRENT XPEDITER CICS ON-LINE DEBUG TRACE TOOL-CICS ISSC CES CES CES
16. COMPUWARE CURRENT XPEDITER TSO ON-LINE DEBUG TRACE TOOL-BATCH ISSC CES CES CES
17. LEGENT CURRENT ENDEVOR/ACM (AUTOMATED CONFIGURATION MANAGER) ISSC CES CES CES
18. LEGENT CURRENT ENDEVOR/EP EXTERNAL PROCESSORS ISSC CES CES CES
19. LEGENT CURRENT ENDEVOR/ESI EXTERNAL SECURITY INTERFACE ISSC CES CES CES
20. LEGENT CURRENT ENDEVOR/MVS AUTOMATED SOFTWARE MGT-MVS ENVIRMNT ISSC CES CES CES
21. LEGENT CURRENT ENDEVOR/PDM (PARALLEL DEVLMT MGR) ISSC CES CES CES
22. LEGENT CURRENT MICS SYSTEM DATA COLLECT, ANALYSIS & REPORT TOOLS ISSC ISSC ISSC ISSC
23. LEGENT 02.03.00 XCOM FILE TRANSFER ISSC CES CES CES
24. LEVI, RAY & SHOUP CURRENT VPS VTAM PRINTER SUPPORT SYSTEM ISSC CES CES CES
25. LEVI, RAY & SHOUP CURRENT VPS/PC & WINDOWS ISSC CES CES CES
26. LEVI, RAY & SHOUP CURRENT VPS FOR TCPIP ISSC CES CES CES
27. LEVI, RAY & SHOUP CURRENT VPS ADAPT SNA/DYNACOM ISSC CES CES CES
28. LEVI, RAY & SHOUP CURRENT VPS VMCF FOR VTAM & CICS ISSC CES CES CES
29. MERRILLE CURRENT MXG SAS COPY BOOKS FOR SMF ISSC ISSC ISSC ISSC
30. MERRILLE CURRENT MXG SAS COPY BOOKS FOR SMF ISSC CES CES CES
31. SAS INSTITUTE CURRENT SAS BASE REPORT WRITER, SMF ANALLSYS TOOL ISSC CES CES CES
32. SAS INSTITUTE CURRENT REPORT WRITER & GRAPHICS TOOLS FOR SAS ISSC CES CES CES
33. STERLING SOFTWARE CURRENT SUPERTRACS FILE TRANSFER (SNA RJE) ISSC CES CES CES
34. TBD AUTOMATED BALANCING PRODUCT ISSC CES CES CES
35. TBD DB2/DBA DEVELOPMENT TOOLS ISSC CES CES CES
36. TBD REPORT & OUTPUT DISTRIBUTION ISSC CES CES CES
37. TBD REPORT WRITERS ISSC CES CES CES
38. TBD SESSION MANAGER ISSC CES CES CES
LEGEND: "OPER" = OPERATE "FIN" = FINANCIAL "MAINT" = MAINTENANCE "LIC" = LICENSEE
</TABLE>
NOTE ISSC has not performed due diligence on these products and reserves the
right to perform due diligence and make appropriate adjustments to the
Agreement after CES provides the applicable documentation to ISSC.
NOTE The actual Software program for this item will be chosen from the CES
list (SOFTGRP1.XLS) dated 12/12/94.
January 10, 1995
ISSC/CES Confidential Schedule B Page 3 of 4
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<PAGE>
<TABLE>
Schedule B
Systems Software
Section B-3
Systems Software for CES-Retained Machines
ITEM VER REV SOFTWARE RESPONSIBILITY
NO. VENDONO. LEV PRODUCT NO. NAME/DESCRIPTI OPER FIN MAINT LIC
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. DEC 0.0 2 ALS-WM-92361-2084 BASE-VMS-25013 ISSC CES CES CES
2. DEC 0.0 1 ASP-MS-91312-2 BOOKBROWSER ISSC CES CES CES
3. DEC 0.0 4 AL2-WM-92339-2272 C ISSC CES CES CES
4. DEC 0.0 1 BIX-PK-93266-1-CLO-CLOEIS-3800 C ISSC CES CES CES
5. DEC 0.0 1 BIX-PK-93266-1-CLO-CLOEIS-3817 CDDS-3817 ISSC CES CES CES
6. DEC 0.0 1 BIX-PK-93266-1-CLO-CLOEIS-3818 CDD-PLUS8 ISSC CES CES CES
7. DEC 0.0 1 BIX-PK-93266-1-CLO-CLOEIS-3819 CDD-PLUS-USER ISSC CES CES CES
8. DEC 0.0 1 BIX-PK-93266-1-CLO-CLOEIS-3820 CDDADMIN0 ISSC CES CES CES
9. DEC 0.0 1 BIX-PK-93266-1-CLO-CLOEIS-3821 CDDADMIN-RTO ISSC CES CES CES
10. DEC 0.0 1 BIX-PK-93266-1-CLO-CLOEIS-3822 CDDADMIN-USER ISSC CES CES CES
11. DEC 0.0 1 AL2-WM-92339-2270 COMMSERVER-BSC ISSC CES CES CES
12. DEC 0.0 1 ALS-WM-92339-2269 COMMSERVER-V ISSC CES CES CES
13. DEC 0.0 1 ALS-WM-93081-832 DECPS-DC ISSC CES CES CES
14. DEC 0.0 1 ALS-WM-93081-833 DECPS-PA ISSC CES CES CES
15. DEC 0.0 1 BIX-PK-93266-1-CLO-CLEIS-4017 DECTRACE7 ISSC CES CES CES
16. DEC 0.0 1 ALJ-WM-92357-764 DMQ-RTO-V ISSC CES CES CES
17. DEC 0.0 1 ALS-WM-92339-2274 DVNETEND ISSC CES CES CES
18. DEC 0.0 1 BIX-PK-93266-1-CLO-CLEIS-4126 DVNETRTG6 ISSC CES CES CES
19. DEC 0.0 1 BIR-PK-91259-1-CLO-CLEIS-11645 DW-MOTIF45 ISSC CES CES CES
20. DEC 0.0 1 ALJ-WM-92339-2271 P.S.I.-ACCESS ISSC CES CES CES
21. DEC 0.0 1 BIX-MS-92041-1-CLO-CLEIS-7236 RDBS-7236 ISSC CES CES CES
22. DEC 0.0 1 BIX-MS-92041-1-CLO-CLEIS-7240 RDB-INTERACTIV ISSC CES CES CES
23. DEC 0.0 1 BIX-MS-92041-1-CLO-CLEIS-7246 RDB-RT246 ISSC CES CES CES
24. DEC 0.0 1 ALJ-WM-93005-883 SNA-API ISSC CES CES CES
25. DEC 0.0 1 ALS-WM-93005-882 SNA-VMS ISSC CES CES CES
26. DEC 0.0 1 BIX-PK-93266-1-CLO-CLEIS-5029 VAXSET029 ISSC CES CES CES
27. DEC 0.0 2 ALS-WM-92361-2082 VMS-USER ISSC CES CES CES
28. DEC 0.0 2 ALS-WM-92361-2083 VMS-USER ISSC CES CES CES
29. Novel0.0 NETWARE FOR SA ISSC CES CES CES
LEGEND: "OPER" = OPERATE "FIN" = FINANCIAL "MAINT" = MAINTENANCE "LIC" = LICENSEE
NOTE:ISSC will be responsible for operating the software specified in Section
B-3 when the Machines listed in Schedule C are installed in the Data
Center.
NOTE ISSC has not performed due diligence on these products and reserves the
right to perform due diligence and make appropriate adjustments to the
Agreement after CES provides the applicable documentation to ISSC.
</TABLE>
January 10, 1995
ISSC/CES Confidential Schedule B Page 4 of 4
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<PAGE>
ISSC / Ceridian Corporation
Agreement for Information Technology Services
-----------------------------------------------------------------------------
<TABLE>
Schedule C
CES-Retained Machines
ITEM MACHINE MACHINE DEC RESPONSIBILITY
NO. QTY DESCRIPTION TYPE S/N MACHINE OPER FIN MAINT
<S> <C> <C> <C> <C> <C> <C> <C>
1. 1 PC-ZENITH 386 YES ISSC CES CES
2. 1 PC-MONITOR ZENITH YES ISSC CES CES
3. 1 CPU 4700A DEC YES ISSC CES CES
4. 1 DISK CABINET W/ 8 DISKS DEC-ARRAY YES ISSC CES CES
5. 1 DISK CABINET W/ 8 DISKS DEC-ARRAY YES ISSC CES CES
6. 2 TF85 TAPEDRIVES DEC YES ISSC CES CES
7. 1 SNA SWITCH RAD YES ISSC CES CES
8. 1 COMSERVER DEC YES ISSC CES CES
9. 1 COMSERVER DEC YES ISSC CES CES
10. 1 COMSERVER DEC YES ISSC CES CES
11. 1 COMSERVER DEC YES ISSC CES CES
12. 1 COMSERVER DEC YES ISSC CES CES
13. 1 GATEWAY DEC YES ISSC CES CES
14. 1 GATEWAY DEC YES ISSC CES CES
15. 1 GATEWAY DEC YES ISSC CES CES
16. 1 GATEWAY DEC YES ISSC CES CES
17. 1 DELNI DEC YES ISSC CES CES
18. 1 DELNI DEC YES ISSC CES CES
19. 1 BRIDGE VITALNK YES ISSC CES CES
20. 1 CSU/DSU DOWTY YES ISSC CES CES
21. 1 DEC WORKSTATION 2000 YES ISSC CES CES
22. 1 DEC MONITOR DEC YES ISSC CES CES
23. 1 DEC KEYBOARD DEC YES ISSC CES CES
24. 1 DEC MOUSE DEC YES ISSC CES CES
25. 120 DEC TAPES TK85 YES ISSC CES CES
26. 1 PC PS/2 MOD 60 IBM YES ISSC CES CES
27. 1 EPSON PRINTER LQ1000 YES ISSC CES CES
28. 1 DEC CD READER DEC YES ISSC CES CES
29. 1 DEC TAPE DRIVE DEC YES ISSC CES CES
30. 1 DEC VAXSTATION SYS BOX YES ISSC CES CES
31. 1 DEC STORAGE EXP BOX YES ISSC CES CES
32. 1 DEC KEYBOARD DEC YES ISSC CES CES
33. 1 DEC MOUSE DEC YES ISSC CES CES
34. 1 DEC MONITOR DEC YES ISSC CES CES
35. 1 PC ZENITH 386 YES ISSC CES CES
36. 2 PC ZENITH 8088 YES ISSC CES CES
37. 1 MODEM ZOOM NO ISSC CES CES
38. 1 CSU RACAL NO ISSC CES CES
39. 1 ROUTER WELLFLEET NO ISSC CES CES
40. 1 HUB 3COM NO ISSC CES CES
41. 2 19" RACK RACAL NO ISSC CES CES
42. 2 SAA GATEWAY J&L NO ISSC CES CES
</TABLE>
LEGEND: "OPER" = OPERATE "FIN" = FINANCIAL "MAINT" = MAINTENANCE
NOTE:ISSC will be responsible for operating these Machines when they are
installed in the Data Center.
January 10, 1995
ISSC/CES Confidential Schedule C Page 1 of 2
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<PAGE>
Schedule C
CES-Retained Machines
NOTE:The items listed above are representative of the actual CES-Retained
Machines to be installed in the Data Center. This Schedule C will be
updated to reflect the actual CES-Retained Machines as they are
installed.
NOTE ISSC has not performed due diligence on these products and reserves the
right to perform due diligence and make appropriate adjustments to the
Agreement after CES provides the applicable documentation to ISSC.
January 10, 1995
ISSC/CES Confidential Schedule C Page 2 of 2
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>PAGE>
ISSC / Ceridian Corporation
Agreement for Information Technology Services
-----------------------------------------------------------------------------
<PAGE>
<TABLE>
Schedule D
ISSC Machines
ITEM MACHINE MACHINE RESPONSIBILITY
NO. TYPE/MODEL DESCRIPTION S/N OPER FIN MAINT
<S> <C> <C> <C> <C> <C> <C>
1. 9121-480 IBM Processor 00125 ISSC ISSC ISSC
2. 3990-6 IBM DASD Controller 91778 ISSC ISSC ISSC
3. 3390-3 IBM A38 DASD * A7585 ISSC ISSC ISSC
4. 3390-3 IBM B3C DASD * BH150 ISSC ISSC ISSC
5. 3390-3 IBM B3C DASD * B9784 ISSC ISSC ISSC
6. 3745-210 IBM Communications Controller 02975 ISSC ISSC ISSC
7. 3172-003 IBM Interconnect Controller 62918 ISSC ISSC ISSC
8. 9391-A10 RAMAC ISSC ISSC ISSC
9. 9392-B13 RAMAC ISSC ISSC ISSC
10. 9392-B13 RAMAC ISSC ISSC ISSC
11. 9392-B13 RAMAC ISSC ISSC ISSC
12. 9392-B13 RAMAC ISSC ISSC ISSC
13. 9392-B13 RAMAC ISSC ISSC ISSC
14. 9392-B13 RAMAC ISSC ISSC ISSC
15. 9392-B13 RAMAC ISSC ISSC ISSC
16. 9392-B13 RAMAC ISSC ISSC ISSC
17. 9392-B13 RAMAC ISSC ISSC ISSC
18. 9392-B13 RAMAC ISSC ISSC ISSC
19. 9392-B13 RAMAC ISSC ISSC ISSC
20. 9392-B13 RAMAC ISSC ISSC ISSC
21. 9392-B13 RAMAC ISSC ISSC ISSC
22. 9392-B13 RAMAC ISSC ISSC ISSC
23. 9392-B13 RAMAC ISSC ISSC ISSC
24. 9392-B13 RAMAC ISSC ISSC ISSC
</TABLE>
LEGEND: "OPER" = OPERATE "FIN" = FINANCIAL "MAINT" = MAINTENANCE
NOTE CES's preferred solution is the acquisition of the RAMAC equipment
described above. In the interim period until such RAMAC equipment can
be obtained and installed, ISSC will provide CES with the asterisk (*)
DASD.
January 10, 1995
ISSC/CES Confidential Schedule D Page 1 of 1
cesskdd
<PAGE>
<TABLE>
ISSC / Ceridian Corporation
Agreement for Information Technology Services
-----------------------------------------------------------------------------
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
I. INTRODUCTION
A. This Schedule E describes certain duties, obligations and responsi-
bilities of ISSC, including, but not limited to:
1. Data Center operations and management;
2. IBM Systems Software support and maintenance;
3. Third Party Systems Software maintenance coordination;
4. Data base management and administration;
5. Performance Standards relating to certain of the duties described
herein; and
6. Service Credits which shall apply in the event that ISSC fails to
meet certain Minimum Service Levels.
B. During the Term, ISSC will provide information processing services to
CES using the CES-Retained Machines and ISSC Machines, the Applica-
tions and Third Party Systems Software provided by CES and ISSC as
required by this Agreement and the IBM Systems Software provided
under this Agreement. ISSC will provide such other services as
requested and approved by CES during the Term as New Services in
accordance with Section 7.6 of the Agreement.
C. The descriptions contained in this Schedule E of specific types of
Services, and methods and procedures used to perform such Services,
set forth how ISSC will deliver the Services.
D. The Parties agree that the provision of Services should improve over
the Term based on:
1. ISSC's knowledge of, and access to, improvements in resources and
technology; and
2. ISSC's implementation of improved methods and procedures for pro-
viding Services and efficiencies arising from the use of ISSC as
a services provider.
E. The Parties agree that appropriate implementation details and proce-
dures for the Services shall be incorporated into the Procedures
Manual. During the Term, the Parties may agree on different or addi-
tional Services and Performance Standards, and will amend this
Schedule E or the Procedures Manual in writing accordingly.
All capitalized terms not defined in this Schedule E shall have the
meanings given them in the Agreement, Supplement or other Schedules.
January 10, 1995
ISSC/CES Confidential Schedule E Page 1 of 34
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<PAGE>
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Section E-1
Support Services
I. SYSTEMS MANAGEMENT CONTROLS
ISSC shall recommend to CES and CES shall approve the following
processes/procedures as the standard set of disciplines for managing
information systems, the "Systems Management Controls" or "SMC" proce-
dures for use by ISSC and CES. The SMC procedures shall be included in
the Procedures Manual. ISSC will administer each SMC discipline. In
general, ISSC's SMC responsibilities shall include, without limitation,
the following processes in the Data Center:
A. Batch Management - for controlling production batch work including
the scheduling of resources, the processing of data and transactions
and the distribution of data/information between users and facili-
ties. CES instructions on what, when and how to schedule and recover
shall be provided to ISSC and included in the Procedures Manual.
Setup and scheduling shall be performed and controlled by ISSC in
accordance with the Procedures Manual except for the automatic sched-
uling that will be performed by the Applications Software.
B. Capacity Management - for the development and maintenance of tactical
and strategic plans to ensure that the ISSC Machines in the Data
Center environment accommodate CES's growing or changing business
requirements. The capacity management procedures will, among other
issues, provide for CES's input and review of capacity management.
C. Change Management - to assess if the change is necessary, validate
the adequacy of the acceptance test, notify the appropriate func-
tions, schedule its promotion into the production environment and
verify successful implementation.
D. Configuration Management - for processing hardware and Software con-
figuration changes and maintaining lists and diagrams of systems con-
figurations in the Procedures Manual. ISSC will provide revised
configurations to CES upon CES's reasonable request.
E. Inventory Management - of the ISSC Machines (including incoming and
outgoing) in the Data Center.
F. On-Line Management - for coordinating the appropriate skills, infor-
mation, tools and procedures required to manage on-line connectivity
to the Networks and their supporting hardware and Software systems.
This includes the staffing of a Data Center help desk facility for
CES's help desk.
G. Performance Management - to monitor, measure, analyze and report
systems performance as it compares to the Performance Standards.
Where warranted, ISSC may request CES to approve changes to the
Applications Software to enable system performance improvement. The
performance management procedures will, among other issues, provide
for CES's input and review of performance management.
H. Problem Management - to identify, record, track, and correct issues
impacting Services delivery, recognize recurring problems, address
procedural issues and contain or reduce the impact of problems that
occur.
I. Recovery Management - for planning, establishing and testing the
recovery procedures required to provide the Services in the event of
a failure, including without limitation, a failure giving rise to
invoking the Disaster Recovery Services described in Schedule G. The
intent of this process is to anticipate and minimize the impact of
systems resource failure through the development of predefined, docu-
mented procedures and Software/hardware recovery capabilities. CES
instructions on what and how to recover shall be provided to ISSC and
included in the Procedures Manual.
II. DATA CENTER OPERATIONS
A. Operation of Data Center
ISSC shall be responsible for the operation and management of the
Data Center. This responsibility shall include establishing and
maintaining a properly trained and adequately staffed Data Center
population, including necessary management and support staff. The
hours of operation of the Data Center shall be 24 hours per day, 7
days per week, except for the regularly scheduled weekly maintenance
period unless otherwise agreed by the Parties. However, the Parties
agree that the regularly scheduled weekly maintenance period will not
impact ISSC's performance of the Services in accordance with the Per-
formance Standards.
January 10, 1995
ISSC/CES Confidential Schedule E Page 2 of 34
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<PAGE>
B. Processing Operations
ISSC shall make available, monitor and process on-line and batch
applications, including scheduled, unscheduled and on-request ser-
vices. Included in such responsibilities, ISSC shall:
1. support all test and production environments;
2. provide complete computer room operations support and perform all
console monitoring activities;
3. install and maintain host Network Software for the 3745 and 3172;
4. operate and provide application availability to present and
future Applications Software to support the operating schedules
of CES with applicable systems availability, 24 hours per day, 7
days per week (subject to Scheduled Downtime), in accordance with
the Performance Standards;
5. perform all technical system support operations, including DASD
management, system programming, capacity planning and performance
tuning, including providing support for the ISSC Machines and
Systems Software for ISSC Machines;
6. with the approval of the CES Project Executive, schedule systems
maintenance so as to minimize interference with the business
needs of CES;
7. complete all processing schedules on time and in the correct
sequence set forth in the Procedures Manual;
8. to the extent reasonably possible, process all special request
activities within the requested time frames and in the sequence
defined by CES;
9. regularly monitor end user job submissions and ensure that these
jobs are successfully completed as time permits in view of com-
peting production resources;
10. provide access to, and Software compatibility with, external
systems necessary for the Services and other systems identified
by CES consistent with the operating environment specified in
Schedule K and the terms and conditions set forth in Section 7.6
of the Agreement;
11. continuously endeavor to enhance processing capabilities and
efficiencies for the ISSC Machines in the Data Center through
system tuning and other run-time improvements;
12. perform regular monitoring of utilization needs and efficiencies
and regular reporting on tuning initiatives for the ISSC
Machines;
13. consistent with the Agreement, operate and support and maintain
third-party products, exclusive of the Software operating on the
CES-Retained Machines, listed in Schedules B and D, services and
projects;
14. provide Operational Support for the CES-Retained Machines, the
Software running on CES-Retained Machines and the Applications
Software;
15. operate the Applications Software; and
16. identify possible product and enhancement opportunities for
improved performance and notify CES of these opportunities.
C. Production Control
ISSC shall maintain production schedules and cooperate with CES in
responding to special processing requests and new processing require-
ments. Included in such responsibilities, ISSC shall:
1. prioritize and schedule batch jobs and report distribution
systems subject to CES's schedule parameters including but not
limited to automated scheduling features in the Applications
Software and CES's specific directions so on-line Applications
dependent on batch processing and batch process outputs shall be
available as scheduled;
2. distribute and obtain CES approval for major production control
schedules prior to implementation, as described in the Change
Management Procedures;
3. update the scheduler data base, as required, to reflect changes
to the production environment;
4. monitor scheduler related incidents, and develop and recommend
refinements and revisions to the scheduler data base;
5. coordinate and modify schedules, subject to applicable Perform-
ance Standards Attainment relief, for special requests and follow
CES priorities and promptly notify CES if special requirements
shall affect the timely completion of other tasks, so that CES
can adjust the priorities if CES so desires; and
January 10, 1995
ISSC/CES Confidential Schedule E Page 3 of 34
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<PAGE>
6. respond expeditiously to requests from CES for priority job exe-
cution.
D. File Services
ISSC shall manage files on the ISSC Machines in a manner which shall
ensure the availability and integrity of all CES data. Included in
such responsibilities, ISSC shall:
1. ensure that all files under ISSC's control are current and avail-
able during requested access times;
2. initiate and complete required data processing activities to
ensure the data is processed, with data integrity of all proc-
essed files, according to the specifications set forth in the
Procedures Manual;
3. verify, using tools and procedures set forth in the Procedures
Manual, the successful receipt of all incoming files and the suc-
cessful processing and transmission of all outgoing files;
4. document, maintain and, as appropriate, update and execute mutu-
ally approved file back-up and recovery procedures;
5. provide a recovery procedure for restoring the data image to a
previous level within a mutually agreed amount of time;
6. conduct regularly scheduled back-up and recovery procedures as
set forth in the Procedures Manual and as prioritized by CES,
(e.g., data set restore), so as not to impact scheduled oper-
ations and provide recommendations to CES regarding back-up and
recovery considerations, such as improved levels of protection,
efficiencies and cost reductions;
7. conduct routine monitoring and corrective action according to
procedures prepared by ISSC and approved by CES for intermediate
files used for on-line and batch processing;
8. ensure that adequate file space is available for processing,
subject to the provisions of the Agreement and Schedule J;
9. report CES disk space utilization and requirements for capacity
planning purposes;
10. assist and advise CES in utilizing disk storage resources in an
efficient and cost effective manner; and
11. identify possible product and enhancement opportunities for
improved performance and notify CES of these opportunities.
E. Tape Management
ISSC shall provide tape management services. Included in such
responsibilities, ISSC shall:
1. update CES's procedures, as appropriate and with CES's consent,
governing time periods for retention of tapes, including reason-
able periods for retention of tapes for auditing purposes and
include such procedures in the Procedures Manual;
2. provide logging and tracking of physical tapes in and out of the
Data Center and provide required rotation of tapes for off-site
vault storage;
3. establish and/or follow procedures established by CES to log and
track physical tapes that are checked in and checked out to third
party vendors (e.g., tapes for CES vendors such as insurance com-
panies and banks) and CES customers;
4. store tapes and paper documentation, as appropriate, at secure
off-site vault storage;
5. complete tape mounts in sufficient time to meet production proc-
essing requirements in accordance with the Performance Standards;
6. complete tape mounts for non-production processing in accordance
with agreed to Performance Standards;
7. provide tape specifications to CES to ensure tape media is reli-
able and read/write errors are kept to a minimum;
8. ensure equipment is properly cleaned and maintained at the
required intervals in accordance with manufacturers' specifica-
tions to minimize problems and outages;
9. ensure adequate supplies for the tape environment are maintained
and that the scratch tape pool is sufficient to service all
required processing needs and notify CES when additional tape and
other supplies are required;
10. retrieve archived tapes and restore required files and data sets
within mutually agreed time frames;
January 10, 1995
ISSC/CES Confidential Schedule E Page 4 of 34
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<PAGE>
11. upon CES's reasonable request, provide CES with the right to, and
access to, monitor tape management operations, mailing and
receipt control;
12. report tape utilization; and
13. identify possible product and enhancement opportunities for
improved performance and notify CES of these opportunities.
F. Data Base Administration
ISSC, as applicable, shall be responsible for managing the data and
the data base environment. Included in such responsibilities, ISSC
shall:
1. participate in planning for changes in the size of data bases due
to business growth and Applications Development projects, and
review CES's plans on a regular basis for comment;
2. provide for data base environments, such as Applications Develop-
ment, maintenance, testing, quality assurance and ad hoc
reporting, as directed by CES that are separate from the pro-
duction data base environments;
3. provide data base support for CES data base environments and
those established by ISSC;
4. audit and evaluate all data base design changes associated with
Applications Development and Software Maintenance;
5. monitor and report data base performance and data base space
utilization and identify and recommend practical modifications
for improved performance, and, if required to meet the Perform-
ance Standards, implement reasonable modifications as approved by
CES;
6. maintain and/or implement data base archive processes and proce-
dures to meet CES business requirements and requests;
7. maintain and/or implement mutually agreed upon data base back-up
procedures, provided by CES, to recover from a data base outage
or corrupted data base within time frames recommended by ISSC or
CES and approved by CES;
8. provide requested test and production environments with the
ability to increase the number of environments;
9. maintain data base definitions and make data base definitions
available to CES upon request;
10. promote data base changes into the production environment as
approved by CES;
11. maintain the standard data base access routines used by Applica-
tions Development and Software Maintenance personnel and document
any changes to same;
12. assist in problem determination and resolution of data base
issues including escalation of IBM if related to IBM Systems
Software; and
13. identify possible product and enhancement opportunities for
improved performance, and notify CES of these opportunities.
G. Output
ISSC shall provide output device processing and Operational Support
necessary to accomplish such processing including production and
delivery of files and tape. Included in such responsibilities, ISSC
shall:
1. produce and deliver output within established Performance Stand-
ards;
2. track, manage, communicate and resolve problems related to ISSC
Machines output Services;
3. separate, package, label, scan and track all tape output and
ensure that it is properly distributed to the mutually agreed to
distribution drop point within the mutually agreed upon time
frames;
4. ensure that all files are on the queue and available for trans-
mission to the applicable CES typical output and production
control locations within the mutually agreed upon time frames and
monitor file transmissions originating from ISSC Machines pur-
suant to Section 5.3(d) of the Agreement and network messages
regarding connectivity pursuant to Section 5.9 of the Agreement;
5. work with mail room personnel or CES help desk to find, trace or
replace lost or missing items;
6. execute reruns of output requested by CES and notify CES if
rerunning any output shall impact scheduled on-line or batch pro-
duction processing; and
7. identify possible enhancement opportunities for improved output
performance and notify CES of these opportunities.
January 10, 1995
ISSC/CES Confidential Schedule E Page 5 of 34
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<PAGE>
H. Quality Assurance
ISSC shall:
1. review problem reports and recommend/implement appropriate fixes
with CES's approval;
2. maintain and update the Application Installation Standards doc-
umentation set forth in the Procedures Manual;
3. in conjunction with CES, review new CES production jobs and JCL
for correctness and conformance to mutually agreed to standards
for efficient resource utilization;
4. organize and chair weekly change control meetings, or on such
other frequency agreed to by the Parties, with CES designees in
accordance with the Change Management Procedures; and
5. prepare and distribute management reports.
I. Emergency Restoration of Services
ISSC shall:
1. develop and/or implement Data Center procedures, as required, to
support CES's emergency restoration of Services requirements;
2. work with CES's emergency plan coordinator to assure ISSC's Data
Center support plan meets CES's requirements and obtain CES's
approval of procedures; and
3. invoke the Disaster Recovery Plan, in accordance with Schedule G.
J. Information Security
ISSC shall provide and implement security access control tools for
data, data bases and other information repositories and for Applica-
tions, operating systems and libraries as described in Schedule L.
ISSC shall cooperate with and assist the CES Security Administrators
to allow the Security Administrators to complete their duties.
III. DATA NETWORK
ISSC's responsibilities shall include:
A. making the Data Center systems and Applications available during the
hours set forth in Exhibit E-1 to this Schedule E;
B. ensuring that the batch output files are on the queue by the times
specified in Exhibit E-1 of this Schedule E;
C. providing Operational Support and monitoring the transmissions on the
queue to ensure successful transmission;
D. providing floor space for the CES-Retained Machines in the Data
Center over and above that floor space specified in Section 5.8 of
the Agreement for the DEC Machines;
E. monitoring the operations of the CES-Retained Machines in the Data
Center, performing specified backup, resets and problem isolation
procedures and controlling vendor access to such CES-Retained
Machines;
F. providing access to CES personnel and/or third-party vendors, subject
to the ISSC Security Procedures, for Moves, Adds and Changes for the
CES-Retained Machines;
G. performing Cabling and Wiring of CES-Retained Machines in the Data
Center, as requested by CES to be invoiced to CES as Out-of-Pocket
Expenses; and
H. performing all VTAM/NCP changes for the ISSC controllers.
IV. SYSTEMS SOFTWARE SUPPORT AND MAINTENANCE
ISSC shall provide support for all the Systems Software operating on ISSC
Machines and Operational Support for the Systems Software operating on
CES-Retained Machines and Software Maintenance for the IBM Systems Soft-
ware and Third Party Systems Software operating on ISSC Machines which
are licensed to ISSC unless specified otherwise on Schedule B. ISSC will
coordinate Software Maintenance for the Third Party Systems Software
using CES's third party maintenance provider. ISSC will provide Systems
Software Maintenance and support such that ISSC meets the Performance
Standards for the operational areas set forth in Exhibit E-1 of this
Schedule E.
January 10, 1995
ISSC/CES Confidential Schedule E Page 6 of 34
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<PAGE>
A. General Responsibilities
ISSC's Systems Software Maintenance and support responsibilities
include the responsibilities described in the Agreement and this
Schedule E.
B. Quality Assurance
ISSC shall be responsible for providing and implementing quality
assurance processes and procedures that are reasonably necessary to
ensure that ISSC's Systems Software Maintenance and support responsi-
bilities are executed accurately and in a timely manner. Subject to
the foregoing, the Parties shall mutually agree upon terms and condi-
tions for conducting checkpoint reviews, Software testing and accept-
ance and other quality assurance procedures. These procedures shall
be included in the Procedures Manual.
C. Software Maintenance
ISSC will provide Software Maintenance for IBM Systems Software
listed in Schedule B. ISSC will employ a maintenance methodology,
including standards for work plans, design and programming, as set
forth in the Procedures Manual.
D. Systems Support
ISSC will provide on-site Systems Support during normal business
hours Monday through Friday, and on-call support and coverage for
each Software product during all other hours, including scheduled
holidays, ISSC will provide escalation procedures for ISSC's on-call
support to CES.
The following diagram reflects the functional deliverables for
Systems Support and the normal interfaces for engagement. The actual
contact listing and organizational structure for Systems Support will
be set forth in the Procedures Manual.
SYSTEMS SUPPORT
+-------------+ +------------+ +------------+ +------------+
| Change | | ISSC | | CES | | CES AD/M |
| Management | | Help Desk |<---------| Help Desk |<------| Tech Svcs |
+-------------+ +------------+ +------------+ | & Comm Spt |
| | +------------+
+-----------------------------+ |
| |
+----------------------------+ |
| TECHNICAL TEAM -------------------+
+----------------------------+
|
+--------------------------------------------------------------+
| | | | | | | |
+-------------+| |+-------------+ |+-------------+ |+-------------+
| Capacity/ || || MVS Support | || Technical | || |
| Performance || || | || Planning | || Automated |
| & H/W Plng. || || | || | || Operations |
+-------------+| |+-------------+ |+-------------+ |+-------------+
| | | |
- H/W Planning | |- MVS Support |- Project Plng. |
- Capacity | | |- Architecture |- Automated Ops
Planning | | | Direction |
- Performance | | | |
Management | | | |
| | | |
+-------------+ +-------------+ +-------------+ +-------------+
| Networking | | DB2/CSP | | CICS | | Data |
| Support | | Support | | Support | | Management |
+-------------+ +-------------+ +-------------+ +-------------+
- TP H/W Plng. - Prog. Prod. - CICS - DASD
- TP S/W Plng. Support Support Management
& Support
January 10, 1995
ISSC/CES Confidential Schedule E Page 7 of 34
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<PAGE>
V. HARDWARE SUPPORT AND MAINTENANCE
The following table shows Customer Engineer ("CE") coverage for hardware
support and maintenance as of the Commencement Date:
+------------------+------------------+------------------+------------------+
] DAY ] 1ST SHIFT ] 2ND SHIFT ] 3RD SHIFT ]
+------------------+------------------+------------------+------------------+
] MONDAY ] On-Site ] Reporting Point ] Branch Office ]
+------------------+------------------+------------------+------------------+
] TUESDAY ] On-Site ] Reporting Point ] Branch Office ]
+------------------+------------------+------------------+------------------+
] WEDNESDAY ] On-Site ] Reporting Point ] Branch Office ]
+------------------+------------------+------------------+------------------+
] THURSDAY ] On-Site ] Reporting Point ] Branch Office ]
+------------------+------------------+------------------+------------------+
] FRIDAY ] On-Site ] Reporting Point ] Branch Office ]
+------------------+------------------+------------------+------------------+
] SAT & SUN ] Branch Office ] Branch Office ] Branch Office ]
+------------------+------------------+------------------+------------------+
In the table above:
o "On-Site" means that a CE is on-site at the Data Center during the
time period shown, unless covering an emergency at another location
in the area.
o "Reporting Point" means that a CE is based at the Data Center and
that the CE is at the Data Center during the time period shown unless
actively working on a customer problem at another location in the
area.
o "Branch Office" means that the CE is based at and dispatched out of
the local IBM branch office during the time period shown.
o "1st Shift," "2nd Shift" and "3rd Shift" are ISSC's first, second,
and third work shifts.
After each occurrence of systems unavailability attributable to ISSC, CES
and ISSC will review the reason for the unavailability and the recovery
time. If it is determined that the recovery time was extended as a
result of a CE not being available on-site then the on-site hours of CE
coverage will be extended to increase the likelihood of improved recovery
time for future systems outages.
VI. TRAINING AND TECHNICAL DOCUMENTATION
A. ISSC will:
1. provide training on the initial Systems Software Platform for
designated CES personnel ("train-the-trainer");
2. provide training, as required, for CES designated personnel
("train-the-trainer") on new Systems Software installed during
the Term; and
3. provide a copy of the technical documentation supporting the
existing and new IBM Systems Software and Third Party Software
licensed to ISSC.
B. CES will:
1. provide training on the initial Applications for designated ISSC
personnel ("train-the-trainer");
2. provide training, as required, for ISSC designated personnel
("train-the-trainer") on new Applications installed during the
Term; and
3. provide a copy of the technical documentation supporting the
existing and new Applications and Third Party Systems Software.
VII. GENERAL SUPPORT SERVICES
A. Finance and Accounting Functions
ISSC will as necessary or required to provide the Services, negotiate
lease, license agreements, and vendor contracts.
B. Reports
ISSC shall provide CES with reports in accordance with Section 4.9(c)
of the Agreement.
Where possible and economically feasible, using Software and
resources being used to provide the Services, ISSC shall provide CES
with the capability to down-load data base information and create
CES's own reports.
January 10, 1995
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C. Supplies Specifications
ISSC will provide CES the technical and quality specifications for
and inventory quantities of the supplies, if any, required by ISSC to
perform the Services.
D. Technology
ISSC will assist CES in the review of vendor proposals affecting
ISSC's ability to provide the Services to ensure existing and future
systems' compatibility with changing industry standards. ISSC will
advise CES regarding new data processing systems as appropriate.
E. Vendor Liaison and Industry Contacts
ISSC will maintain contact with vendors providing information
technology services or products to CES in order to keep abreast and
apprise CES of the latest technological developments.
F. Service Review Meetings
ISSC will participate in service review meetings with vendors and
service providers providing services relating to the Agreement, as
reasonably requested by CES.
VIII. SERVICES RESPONSIBILITIES MATRICES
The Services Responsibilities Matrices attached as Exhibit E-2 to this
Schedule summarize the roles and responsibilities of the Parties.
January 10, 1995
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Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Section E-2
Performance Standards
I. INTRODUCTION
A. ISSC will meet the duties, obligations and responsibilities
associated with these Services, including without limitation, host
system availability, data and print file availability on the queue,
host internal response time, and other activities comprising the
Services. ISSC will provide these services at a level of performance
that meets or exceeds the performance levels set forth in Charts E-1,
E-2 and E-3.
1. For Operations Activities listed on Chart E-2 for which
performance levels are to be established, ISSC shall, by May 1,
1995 (the "Measurement Period"), measure the actual performance
of the systems for the agreed to performance categories using the
mutually agreed upon measurement tools. The range of such
performance measurements will be set forth as the Performance
Standards and be the basis for setting Minimum Service Levels
provided, however, that if the Parties determine that such period
is not representative of CES's normal operating environment, then
the Parties shall mutually select another agreed upon period that
is representative of CES's normal operating environment as the
Measurement Period or mutually agree on the Performance Standards
and Minimum Service Levels for the Operations Activities as
applicable. Thereafter, ISSC's performance of the services shall
be measured and compared to the Performance Standards and Minimum
Service Levels on a monthly basis.
2. During the period between the Commencement Date and the initial
CES production system the Parties will benchmark CES's operating
environment at intervals determined by CES and agreed to by ISSC,
which agreement will not be unreasonably withheld. The purpose
of such benchmarks will be to establish the Performance Standards
and MSLs for the production environment.
3. If the performance data for the Operations Activities selected by
the Parties was not collected during the initial Measurement
Period then the Parties shall:
a. select another 180 day period that will be representative of
CES's normal operating environment;
b. collect and track the performance data for such Operations
Activities; and
c. upon completion of the 180 day Measurement Period, establish
the Performance Standards and Minimum Service Levels and
update the applicable charts in Exhibit E-1 and report
monthly thereafter.
4. To ensure that the Performance Standards and Minimum Service
Levels accurately reflect CES's business operations seasonality,
the Parties agree to continue to track the performance Attainment
for each of the Operations Activities for the succeeding
contiguous six months and adjust the Performance Standards and
Minimum Services Levels for each of the Operations Activities
based on the combined performance Attainment data for both
periods. ISSC will be responsible for meeting the initial
Performance Standards and Minimum Service Levels during this
second six month Measurement Period.
5. For those Operations Activities where a Performance Standard of
100% is obtained during the Measurement Period, ISSC shall adopt
such Performance Standard; provided, that the Performance
Standard shall be reassessed, and reset as applicable, at the end
of the next six month period, using the data collected during
both periods, to ensure that the original Measurement Period was
indicative of normal operations.
Beginning no later than the 15th day of the 2nd month following the
establishment of Performance Standards and Minimum Service Levels and
monthly thereafter, ISSC shall provide CES with a report of the
performance level Attainment against the Performance Standards and
Minimum Service Levels for each established Operations Activity.
B. ISSC will be responsible for promptly investigating and correcting
failures to meet accepted Performance Standards and/or Minimum
Service Levels by:
January 10, 1995
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1. initiating problem investigations to identify root causes of
failures;
2. promptly reporting problems to CES that reasonably could be
expected to have a material adverse effect on CES operations; and
3. making written recommendations to CES including both ISSC actions
and CES actions necessary for improvement in procedures.
C. ISSC shall identify root causes, correct problems and minimize
recurrences of problems for which ISSC is responsible. CES will
correct and minimize the recurrence of problems for which CES is
responsible and which prevent ISSC from meeting the accepted
Performance Standards and/or Minimum Service Levels.
D. ISSC shall be relieved of Performance Standard(s) and/or Minimum
Service Level(s) Attainment where ISSC's failure to the Performance
Standard(s) and/or Minimum Service Level(s) is due to:
1. CES's failure to perform it obligations under the Agreement to
the extent such failure affects ISSC's ability to meet the
Performance Standard(s) and/or Minimum Service Level(s);
2. CES's prioritization of available resources;
3. circumstances that constitute a Force Majeure Event pursuant to
Section 18.5 of the Agreement;
4. inadequate systems capacity to provide the service level
commitments or meet the Performance Standards and/or Minimum
Service Levels; or
5. CES's withholding of its approval or failure to notify ISSC in a
timely manner pursuant to Section 4.11 of the Agreement.
E. Not less than annually, the Parties will review the Operations
Activities and their Performance Standards, and;
1. add or delete Operations Activities and/or Operations Activities
categories to reflect changes in CES's business operations and/or
strategies; and
2. adjust the existing Performance Standards to reflect changes in
ISSC's operations, use of technology or CES's business.
In no event, will Performance Standards be decreased unless such
reduction is necessitated by capacity or resource constraints of the
existing systems and CES elects not to increase such capacity or
changes in CES's business or technology direction.
F. Minimum Service Levels
The Parties have agreed to establish a Minimum Service Level for each
Operations Activity and that the Minimum Service Level will be that
performance level below which the Parties agree that CES's business
operations will be negatively impacted and result in possible
financial or operational damage to CES. Since the Parties may not be
able to ascertain the exact performance level for each Operations
Activity, the Parties shall, for such Operations Activities, set the
Minimum Service Level according to one of the following:
1. use the Minimum Service Level to Performance Standard deviation
percentages existing for other similar/related Operations
Activities; or
2. set the Minimum Service Level at a point just less than the
maximum deviation below the Performance Standard; or
3. in the case where no deviation occurs during the Measurement
Period, at a performance level that is not greater than one
percentage point below the Performance Standard or 100%.
II. DEFINITIONS
For purposes of this Schedule E, the following terms shall have the
meanings given:
A. "ACTUAL UPTIME" means, of the Scheduled Hours, the aggregate number
of hours in any month during which the System is actually available.
B. "ATTAINMENT" means, for purposes of determining whether ISSC's actual
performance meets any Performance Standard or MSL for any Operations
Activity for each month, the monthly (or weekly, as the case may be)
average level of performance for each Operations Activity.
Attainment will be calculated and reported once monthly.
C. "AVAILABILITY" means Actual Uptime for the month (or week, as the
case may be) plus Excusable Downtime for the month (or week, as the
case may be) divided by Scheduled Hours for that month (or week, as
the case may be).
January 10, 1995
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D. "EXCUSABLE DOWNTIME" means, of the Scheduled Hours, the aggregate
number of hours in any month during which the System is down due to:
1. action or inaction by CES (e.g., systems outage attributable to
Application defects and Applications incompatibility with the
Systems Software, etc.);
2. a Force Majeure Event (as defined in Section 18.5 of the
Agreement); or
3. mutually agreed upon time for such things as preventive
maintenance, system upgrades, etc.
E. "HOST SYSTEM" means the Data Center ISSC Machines and related
Software.
F. "MEASUREMENT PERIOD" means the first 180 days following the execution
of this Agreement or such other 180 day period mutually agreed to by
the Parties.
G. "MINIMUM SERVICE LEVEL" OR "MSL" means the level of service which, if
not met, may damage CES's business operations.
H. "OPERATIONS ACTIVITY" OR "OPERATIONS ACTIVITIES" means the
Applications or Services specified in Charts E-1 through E-3 of
Exhibit E-1.
I. "SCHEDULED DOWNTIME" means of those hours which are not Scheduled
Hours, consisting of the aggregate amount of time which each
Application and/or Host System is scheduled to be unavailable for CES
end users due to such things as preventive maintenance, system
upgrades, etc. Scheduled Downtime must be mutually agreed to by the
Parties.
J. "SCHEDULED HOURS" means the days of the week and hours per day that
each Application or Host System is scheduled to be available for use
by CES end users, subject to mutually agreed upon Scheduled Downtime.
K. "SYSTEM" means the hardware and Software that facilitates the running
of the subsystems listed in Chart E-1.
III. OPERATIONS ACTIVITIES
A. SYSTEM AVAILABILITY: System services will be made available in
accordance with the schedule set forth in Chart E-1 of Exhibit E-1 to
this Schedule. ISSC shall perform the Services as necessary to meet
each of the Availability Performance Standards and Minimum Service
Levels set forth in Chart E-1 of Exhibit E-1. Performance Attainment
for each service listed on Chart E-1 of Exhibit E-1 will be
considered independently of the others.
B. HOST RESPONSE TIME: ISSC's performance of the Services will provide
the host response times listed in Chart E-2 of Exhibit E-1. The
actual performance Attainment for each of the categories listed on
Chart E-2 of Exhibit E-1 will be considered independently of the
others.
C. OTHER SERVICES: ISSC will provide operations help desk support and
other services to perform and/or coordinate Level Two and Level Three
Support for Data Center operations.
ISSC and CES acknowledge that Chart E-2 in Exhibit E-1 are not complete
or correct and will be completed during the Measurement Period.
IV. NEW APPLICATIONS OR SERVICES
Performance Standards and Minimum Service Levels for new Applications or
Services which are material to CES's business shall be set forth in the
applicable charts of Exhibit E-1. The Performance Standard and Minimum
Service Level for each new Application or Service shall be agreed upon by
ISSC and CES based on actual performance during an agreed upon period
following implementation, as amended by the subsequent agreed upon
period; provided, however, that such Application or Service Performance
Standard and Minimum Service Level shall be consistent with the
Performance Standards and Minimum Service Levels set forth in the
applicable charts of Exhibit E-1 for other comparable Applications and
Services. New Applications shall meet the mutually agreed qualification
criteria and be compatible with the systems operating environment then
being used to provide the Services or as specified in Schedule K, as
applicable.
January 10, 1995
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Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Section E-3
Service Credits
I. INTRODUCTION
CES expects and ISSC agrees to provide the Services in a manner that will
meet or exceed the Performance Standards and Minimum Service Levels. The
Parties agree that ISSC will grant service level credits to CES for
service levels that do not meet the Minimum Service Levels (each an
"MSL"). This Section E-3 describes the methodology agreed to by CES and
ISSC to address these matters.
The Parties have agreed upon a Services performance measurement process
that will measure ISSC's overall provision of the Services by comparing
ISSC's actual level of performance against the mutually agreed upon MSLs.
In no event, will MSLs be decreased unless such reduction is necessitated
by capacity or resource constraints of the existing systems and CES
elects not to increase such capacity or changes in CES's business or
technology direction.
The Operations Activities have been segregated into two categories based
on their relative importance to CES Business operations. The two
categories of Operations Activities will be denominated as Service Credit
Bearing Activities ("SC Activities") and Service Level Point Bearing
Activities ("SL Activities"). Only SC Activities will be tracked for the
purpose of determining Service Credits due to CES relative to the ASC.
SC Activities are those activities determined to have the highest
importance relative to CES Business operations. SL Activities are
relatively less important to CES Business operations and are only tracked
in order to determine whether a consistent pattern of failure to meet the
MSLs has developed and whether any such failure would permit CES to
terminate the Agreement.
II. SERVICE CREDITS
A. Introduction
ISSC acknowledges that its failure to meet the MSL may have an impact
on the CES Business. Because in most cases it would be difficult to
quantify such impact, ISSC agrees that in the event of its failure to
meet the MSL for SC Activities, CES may elect to receive liquidated
damages from ISSC which are believed by the Parties to be reasonably
indicative of the injury incurred by CES in the applicable
circumstances. Such liquidated damages, if elected, will take the
form of a financial credit against charges by ISSC to CES under the
Agreement ("Service Credit").
The assessment of ISSC's actual level of performance compared to the
MSLs will be accomplished on a weekly and monthly cycle which matches
the CES Business operating cycle. However, the calculation and
reporting of Service Credits will be done monthly. Service Credits,
if any, will always be issued in the second month following the month
for which such Service Credit is applicable. The Service Credits, if
any, will be calculated during the interim month.
B. Identification of Service Credit Bearing Activities
Only the Operations Activities identified as SC Activities in Charts
E-1 through E-3 in Exhibit E-1 will be used to determine whether any
Service Credits are due CES. Breach of the MSLs applicable to the SC
Activities may be taken into account when considering cause for
termination of the Agreement by CES pursuant to Sections 11.5 and
11.6 of the Agreement if CES foregoes accepting earned Service
Credits or returns such Service Credits in accordance with Section 13
of the Agreement.
C. Service Credits Implementation
1. SC Activities will be assigned a credit which will be issued to
CES if ISSC does not comply with the MSL for the particular
activity during a specified period. The credits are calculated
as a percentage of the ASC. See Chart E-4 for a listing of the
activities, periods and multipliers.
The Parties agree that the SC Activities and their corresponding
credits will be reviewed beginning March 1, 1995, and that CES
may propose reasonable changes to the SC Activities, including
without limitation, adding or deleting Operations Activities
and/or changing individual weighting factors, periods and
multipliers to reflect the importance of such activities to the
CES Business, which changes shall be adopted upon the consent of
ISSC, which consent by ISSC shall not be unreasonably withheld.
Following this initial review of the SC Activities, weighting
factors, periods and multipliers, the Parties shall establish a
periodic review schedule for SC Activities, weighting factors,
periods and multipliers to insure that they continue to support
the CES Business operations with the review schedule to be not
less than once and not more than twice annually.
January 10, 1995
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2. Each Service Credit will be calculated based on its specified
cycle (either weekly or monthly). Within the given cycle, for
each minute that ISSC's performance does not comply with the MSL,
a credit to CES will be calculated based on a multiplier for the
period (A, B, C or D) in which the failure occurs and the pro
rata ASC on a per minute basis. See Chart E-4.
At the end of each month, the credits due CES in each week will
be summed to arrive at the total credits due CES for the month.
As set forth in Section E-2, Service Credits will begin to accrue
on March 1, 1995 for specified SC Activities.
3. In no event will CES receive a reduction in any monthly ASC
invoice for Service Credits that are, in the aggregate, in excess
of 20% of the pro rata portion of the Annual Services Charge for
that month. However, in the event the Service Credits calculated
for a given month do exceed 25% of the pro rata portion of the
Annual Services Charge for that month, the excess of such Service
Credits over 20% of the pro rata portions of the Annual Services
Charge for that month will be carried over to the next and
succeeding months subject to the following limitations. The
total credit being carried forward at any given time may not
exceed 50% of the pro rata portion of the ASC for the month into
which such credit is carried over. The credits thus carried
forward shall be applied in future months subject to the 20%
limitation. Credits may be carried forward throughout the Term
of the Agreement.
D. Service Credit Activities: Termination
ISSC and CES agree that, in addition to the SC Activities MSLs for
which ISSC may be liable for liquidated damages as set forth above,
the failure of ISSC to achieve the MSLs for the SC Activities may
cause damage to CES to such an extent that termination of the
Agreement, at the option of CES, is appropriate.
III. SERVICE LEVEL POINTS
A. Introduction
While the consequences to CES of ISSC's failure to satisfy the MSLs
for SC Activities have been described above, there may also be a
serious impact to the CES Business if ISSC's aggregate performance
for SL Activities is less than the MSL.
ISSC's actual level of performance for SL Activities will be compared
to the MSLs for those activities for the applicable period. Also as
with the SC Activities, the calculation and reporting of SL Points
will be done monthly.
B. Identification of Service Level Point Bearing Activities
The Operations Activities identified as SL Activities in Charts E-1
through E-3 in Exhibit E-1 will not be used to determine whether any
Service Credits are due CES; however, these SL Activities will be
taken into account to determine whether a consistent pattern of
failure to meet the MSLs for the SL Activities has developed and
whether any such failure is sufficient for termination of the
Agreement.
C. Service Level Point Implementation
Each month, ISSC's actual performance for each SL Activity will be
compared to the MSL and each performance level will be determined to
either be in compliance or not in compliance. For each SL Activity
not in compliance with the MSL, one (1) Service Level Point ("SL
Point") will be noted. At the end of the month, SL Points will be
totaled. On a rolling six month basis, if the number of SL Points
noted total more than 35% of the total possible SL Points for the
period, then CES may terminate this Agreement under the provision for
special termination pursuant to Section 11.6 of the Agreement. The
SL Points and failure to achieve the MSLs for the SL Activities may
also be considered in the determination of a material breach and
termination pursuant to Section 11.5 of the Agreement. The SL
Activities and the format for calculating the SL Points are shown as
Chart E-5.
January 10, 1995
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Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-1
Performance Standards
CHART E-1
+---------------+--------------+--------------+---------------+-------------+
] ] ] ] ] SERVICE ]
] ] ] ] ] CREDITS ]
] AVAILABILITY ] TOTAL HOURS ] PERFORMANCE ] ] OR SERVICE ]
] ((2)) ] OF POSSIBLE ] STANDARD ] ] LEVEL ]
] PERIODS ] AVAILABILITY ] ((1)) ] MSL ((1)) ] POINTS ]
+---------------+--------------+--------------+---------------+-------------+
] Period A ]
________
+---------------+--------------+--------------+---------------+-------------+
] Mon. 5:01 ] ] ] ] ]
] a.m. through ] ] ] ] Service ]
] Thu. 5:00 ] 72 ] 99.6% ] 98.61% ] Credits ]
] a.m. ] ] ] ] ]
] Weekly Basis ] ] ] ] ]
+---------------+--------------+--------------+---------------+-------------+
] Period B ]
________
+---------------+--------------+--------------+---------------+-------------+
] Thu. 5:01 ] ] ] ] ]
] a.m. through ] ] ] ] Service ]
] Sat. 5:00 ] 48 ] 99.4% ] 97.92% ] Credits ]
] a.m. ] ] ] ] ]
] Weekly Basis ] ] ] ] ]
+---------------+--------------+--------------+---------------+-------------+
] Period C** ]
________
+---------------+--------------+--------------+---------------+-------------+
] Sat. 5:01 ] ] ] ] ]
] a.m. through ] ] ] ] Service ]
] Mon. 5:00 ] 46 ] 99.2% ] 97.83% ] Credits ]
] a.m. ] ] ] ] ]
] Weekly Basis ] ] ] ] ]
+---------------+--------------+--------------+---------------+-------------+
] **Scheduled Downtime in this 48 hour period = 2 hours per week to be ]
] scheduled during Period C as mutually agreed by the Parties. ]
+---------------------------------------------------------------------------+
] Period D ]
________
+---------------+--------------+--------------+---------------+-------------+
] Overall ] ] ] ] ]
] availability**] ] ] ] Service ]
] Monthly basis ] 712 ] 99.6% ] 99.4% ] Credits ]
] (based on a ] ] ] ] ]
] 30 day month) ] ] ] ] ]
+---------------+--------------+--------------+---------------+-------------+
] ***Scheduled Downtime in this 720 hour period = 8 hours as to be mutually ]
] agreed by the Parties. ]
+---------------------------------------------------------------------------+
Exhibit E-1
Performance Standards
NOTE: All times are Eastern Time, unless otherwise noted.
((1)) Initial Program Load ("IPL") of Systems and Applications Software will
be included as downtime when calculating Systems Availability. Rebuild of
the data base indices and data base currency will not be considered downtime
when calculating Systems Availability.
((2)) Availability means availability of all hardware and the following
Software subsystems:
January 10, 1995
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Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-1
Performance Standards
SOFTWARE DESCRIPTION
_________ ___________
3172 Interconnect Controller 3172 software with SNA feature
ACF/NCP Advanced Communications Facility/Network Control Program
ACF/SSP MVS Advanced Communication Facility/System Support Program
ACF/VTAM Virtual Telecommunication Access Method
AOC/MVS Automated Operations Control Program
CICS/ESA Customer Information Control System
DB2 Data Base 2
DFSMS/MVS DFP/DSS/HSM Data Facility System Managed Storage product family
DFSMS/MVS RMM feature Tape Management
DFSORT Sort Utility
ESCON MGR Escon Manager
IBM TCP/IP Communication Protocol
ICFRU Integrated catalog forward recovery utility
ICKDSF Device Support Facility
ISPF/PDF Interactive System Productivity Facility w/Program Development Facility
MVS/ESA SP BCP & JES2 ESA and JES2
NetView Network and automated operations program
QMF Query Management Facility
RACF Resource Access Control Facility
SDSF System Display and Search Facility
TIOC Base Program required for MVS/ESA
TSO/E Time Sharing Option Extended (terminal access/program development)
THIRD PARTY VENDORS
___________________
ZEKE / ZEBB / GWS Job scheduler / rerun restart
STOP-X37 DASD space manager
XCOM File Transfer
VPS VTAM printer support system
TBD Automated Balancing product
TBD Report and output distribution
TBD Report writers
TBD Session manager
TBD Other Software as required
January 10, 1995
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Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-1
Performance Standards
EXCEPTIONS: During the critical periods set forth below the Availability
shall be as follows:
+---------------+--------------+--------------+---------------+-------------+
] ] ] ] ] SERVICE ]
] ] ] ] ] CREDITS ]
] AVAILABILITY ] TOTAL HOURS ] PERFORMANCE ] ] OR SERVICE ]
] ((2)) ] OF POSSIBLE ] STANDARD ] ] LEVEL ]
] PERIODS ] AVAILABILITY ] ((1)) ] MSL ((1)) ] POINTS ]
+---------------+--------------+--------------+---------------+-------------+
] Period A ]
________
+---------------+--------------+--------------+---------------+-------------+
] Mon. 5:01 ] ] ] ] ]
] a.m. through ] ] ] ] Service ]
] Thu. 5:00 ] 72 ] 99.6% ] 98.61% ] Credits ]
] a.m. ] ] ] ] ]
] Weekly Basis ] ] ] ] ]
+---------------+--------------+--------------+---------------+-------------+
] Period A ]
________
+---------------+--------------+--------------+---------------+-------------+
] Thu. 5:01 ] ] ] ] ]
] a.m. through ] ] ] ] Service ]
] Sat. 5:00 ] 48 ] 99.6% ] 97.92% ] Credits ]
] a.m. ] ] ] ] ]
] Weekly Basis ] ] ] ] ]
+---------------+--------------+--------------+---------------+-------------+
] Period A* ]
________
+---------------+--------------+--------------+---------------+-------------+
] Sat. 5:01 ] ] ] ] ]
] a.m. through ] ] ] ] Service ]
] Mon. 5:00 ] 46 ] 99.6% ] 97.83% ] Credits ]
] a.m. ] ] ] ] ]
] Weekly Basis ] ] ] ] ]
+---------------+--------------+--------------+---------------+-------------+
] *Scheduled Downtime in this 48 hour period = 2 hours per week to be ]
] scheduled during the period from Saturday, 5:01 a.m. through Monday, 5:00 ]
] a.m. as mutually agreed by the Parties. ]
+---------------------------------------------------------------------------+
1995 CRITICAL PERIODS **
PERIOD SITUATION ((3))
March 20 through April 14 Full Conjunction
May 22 through June 2 Partial Conjunction
June 19 through July 14 Full Conjunction and
Holiday
September 1 through September 8 Partial Conjunction
September 22 through October 6 Full Conjunction
November 17 through November 24 Partial Conjunction
December 20 through February 7, 1996 Full Conjunction
January 10, 1995
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Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-1
Performance Standards
((3)) The situation descriptions governing the specified periods are
identified below.
** During the fourth quarter of each year of the Term, CES shall provide ISSC
with the Critical Periods of the subsequent year.
SITUATION DESCRIPTIONS
FULL CONJUNCTION - THESE EVENTS PARTIAL CONJUNCTION - THESE EVENTS
OCCUR SIMULTANEOUSLY OCCUR SIMULTANEOUSLY
- Weekly - Weekly
- Bi-Weekly - Bi-Weekly
- Semi-Monthly - Semi-Monthly
- Month-end - Month-end
- Quarter-end - Holiday
- Peak Install Volume
January 10, 1995
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Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-1
Performance Standards
CHART E-2
ISSC MACHINE INTERNAL RESPONSE TIME
CRITICAL
January 10, 1995
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<PAGE>
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-1
Performance Standards
+------------------+------------------+------------------+------------------+
] ] PERFORMANCE ] ] SERVICE CREDITS ]
] ] STANDARD ] MSL ] OR SERVICE LEVEL ]
] APPLICATION ] (WEEKLY) ] (WEEKLY) ] POINTS ]
+------------------+------------------+------------------+------------------+
] CICS * ] Average of 95% ] Average of 85% ] Service Credits ]
] ] of transactions ] of transactions ] ]
] ] are completed ] are completed ] ]
] ] within 0.3 ] within 0.3 ] ]
] ] second; and ] second ] ]
+------------------+------------------+------------------+------------------+
] ] Average of the ] Average of the ] ]
] ] remaining 5% of ] remaining 15% of ] ]
] ] all transactions ] all transactions ] ]
] ] within 1 second ] are completed ] ]
] ] or less ] within 1 second ] ]
] ] ] or less ] ]
+------------------+------------------+------------------+------------------+
] TSO * ] Average of 95% ] Average of 85% ] Service Credits ]
] ] of transactions ] of transactions ] ]
] ] are completed ] are completed ] ]
] ] within 0.5 ] within 0.5 ] ]
] ] second or less ] second or less ] ]
+------------------+------------------+------------------+------------------+
] ] Average of the ] Average of the ] Service Credits ]
] ] remaining 5% of ] remaining 15% of ] ]
] ] all transactions ] all transactions ] ]
] ] within 1.5 ] are completed ] ]
] ] seconds or less ] within 1.5 ] ]
] ] ] seconds or less ] ]
+------------------+------------------+------------------+------------------+
] Manual Tape ] Average 100% of ] Average 100% of ] SL Points ]
] Mounts ] the tape mounts ] the transactions ] ]
] ] are completed ] are completed ] ]
] ] within 2.0 ] within 2 minutes ] ]
] ] minutes or less ] 48 seconds or ] ]
] ] ((4)) ] less ((4)) ] ]
+------------------+------------------+------------------+------------------+
] ] No single ] No single ] SL Points ]
] ] transaction over ] transaction over ] ]
] ] _ minutes * ] _ minutes * ] ]
] ] ((5)) ] ((5)) ] ]
+------------------+------------------+------------------+------------------+
] Batch * ] TBD ] TBD ] TBD ]
+------------------+------------------+------------------+------------------+
] Compiles * ] TBD ] TBD ] TBD ]
+------------------+------------------+------------------+------------------+
] Test Jobs * ] TBD ] TBD ] TBD ]
+------------------+------------------+------------------+------------------+
] Output * ] TBD ] TBD ] TBD ]
+------------------+------------------+------------------+------------------+
NOTE: All times are Eastern Time, unless otherwise noted.
January 10, 1995
ISSC/CES Confidential Schedule E Page 30 of 55
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<PAGE>
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-1
Performance Standards
* The Parties agree to jointly research, benchmark and establish Performance
Standards and MSLs similar to the examples set forth above by May 1, 1995, or
a mutually agreed to scheduled date. The values set forth above will be
replaced with the Performance Standards and MSLs so established. The values
set forth above represent CES's desired Performance Standards and MSLs and
will not apply unless and until validated by the Parties as described in the
first sentence of this note.
((4)) The Performance Standards and MSLs for tape mounts will be measured
beginning March 1, 1995.<PAGE>
((5)) The Parties agree to jointly benchmark and establish Performance
Standards and MSLs during the period, June, July and August, 1995. Such
Performance Standards and MSLs will apply as of September 1, 1995.
January 10, 1995
ISSC/CES Confidential Schedule E Page 31 of 55
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<PAGE>
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-1
Performance Standards
CHART E-3
OTHER SERVICES
+------------+-----------------------+------------------------+-------------+
] ] ] ] SERVICE ]
] ] ] ] CREDITS ]
] ] ] ] OR SERVICE ]
] MEASUREMENT] ] MIN SVC LVL ] LEVEL ]
] CRITERIA ] PERFORMANCE STANDARD ] (PER MONTH) ] POINTS ]
+------------+-----------------------+------------------------+-------------+
] Resolution ] ] ] ]
] Times for ] ] ] ]
] work-around] ] ] ]
] or ] ] ] ]
] resolution ] ] ] ]
] of ] ] ] ]
] Priority ] ] ] ]
] 1-3 ] ] ] ]
] problems ] ] ] ]
+------------+-----------------------+------------------------+-------------+
] Priority ] all monthly problems ] Not more than 1 ] Service ]
] 1: ] within 2 hours or ] problem with a ] Credits ]
] ] less ] resolution time > 120 ] ]
] ] ] minutes ] ]
+------------+-----------------------+------------------------+-------------+
] Priority ] all monthly problems ] Not more than 1 ] Service ]
] 2: ] within 6 hours or ] problem with a ] Credits ]
] ] less ] resolution time > 360 ] ]
] ] ] minutes ] ]
+------------+-----------------------+------------------------+-------------+
] Priority ] all monthly problems ] 85% within 3 days ] SL Points ]
] 3: ] within 3 days or less ] ] ]
+------------+-----------------------+------------------------+-------------+
] Problem ] ] ] ]
] notificatio] ] ] ]
] to CES by ] ] ] ]
] ISSC: ] ] ] ]
+------------+-----------------------+------------------------+-------------+
] Priority 1 ] 95% within 5 minutes ] 90% within 5 minutes ] SL Points ]
] (worst) ] or less ] or less ] ]
+------------+-----------------------+------------------------+-------------+
] Priority 2 ] 95% within 15 minutes ] 90% within 15 minutes ] SL Points ]
] ] or less ] or less ] ]
+------------+-----------------------+------------------------+-------------+
CES Priority Levels:
Priority 1 means system or subsystem unavailable as defined in Chart E-1
(applications not running).
January 10, 1995
ISSC/CES Confidential Schedule E Page 32 of 55
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<PAGE>
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-1
Performance Standards
Priority 2 means severe downgrade in performance (through-put).
Priority 3 means a degradation of a non-critical facility, loss of a
non-critical function, solid or intermittent problems of low impact, or
problems that degrade but do not prevent a support location from
providing services.
January 10, 1995
ISSC/CES Confidential Schedule E Page 33 of 55
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<PAGE>
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-1
Performance Standards
CHART E-4
Service Credit Bearing Activities, Minimum Service Level Exceptions
AVAILABILITY
____________
Service Credits = (Adjusted ASC / 525,600 minutes per year) * Period
Multiplier * Minutes ISSC's performance does not comply with MSL for a
specified SL Activity.
AVAILABILITY PERIODS
____________________
Minutes of Unavailability
Prior to Falling Below MSL
Period Multiplier and Incurring Service Credits
______ __________ _____________________________
A 20 60
B 15 60
C 1 60
D 15 257
PRIORITY RESOLUTION TIMES
_________________________
Minimum Individual Problem Number of Problem
Duration before ServicOccurrences Each Month before
Problem PrCredits are Applied (MinutService Credits are Applied
_______________________________________________________________
I 120 1
II 360 1
Minutes ISSC's performance does not comply with MSL = Sum of problem
durations other than initial problem - (Minimum problem duration * (number of
problems-1))
January 10, 1995
ISSC/CES Confidential Schedule E Page 34 of 55
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<PAGE>
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-1
Performance Standards
CHART E-5
Service Level Point Bearing Activities, Minimum Service Level Exceptions
Monthly <PAGE>
Total
______
Response Time
Tape mounts
Average within 2 minutes 48 seconds 0
100% within _ minutes 0
Batch - TBD 0
Compiles - TBD 0
Test Jobs - TBD 0
Other Services
Help desk resolution time
Priority III 85% within 3 days 0
Help Desk Problem Notification
Priority I 90% within 5 minutes 0
Priority II 90% within 15 minutes<PAGE>
0
Running total of Service Level Points for pr0vious 5 months
Current Service Level Points outstanding 0
Notes:
(1Termination trigger
Number of Service Level Point Activities monito5ed (currently defined)
Number of months * 6
___
Total potential Service Level Points in 6 mont30
Termination percentage (%) *.35
____
Exceptions within 6 months to trigger terminat11n
January 10, 1995
ISSC/CES Confidential Schedule E Page 35 of 55
cesskde
<PAGE>
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-1
Performance Standards
CHART E-6
Availability Credit Calculation
(Example)
Minutes Not Available
_____________________
Week Delivered
and PerioService Total
PeriodFactorLevel Hour Hour Hour Hour Hour Hour 6 Minutes
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1A 20 92.62% 60 60 60 60 60 19 319
1B 15 97.92% 60 - - - - - 60
1C 1 97.28% 60 15 - - - - 75
2A 20 99.19% 35 0 0 - - - 35
2B 15 100.00% - - - - - - 0
2C 1 95.65% 60 60 - - - - 120
3A 20 100.00% 0 0 0 0 0 0 0
3B 15 100.00% - 0 0 - - - 0
3C 1 100.00% - - - - - - 0
4A 20 100.00% - - - - - - 0
4B 15 98.44% 45 - - - - - 45
4C 1 99.46% 15 - - - - - 15
__ _ _ _ _ _ __
335 135 60 60 60 19 669
Weekly Credit Dollars
_____________________
Week
and Period
PeriodFactor Hour Hour Hour Hour Hour Hour 6 Dollars
____________ _______________________________ _______
1A 20 0 29,9729,9729,9729,979,492 129,396
1B 15 0 - - - - - --
1C 1 0 375 - - - - 375
2A 20 0 - - - - - --
2B 15 0 - - - - - --
2C 1 0 1,499 - - - - 1,499
3A 20 0 - - - - - --
3B 15 0 - - - - - --
3C 1 0 - - - - - --
4A 20 0 - - - - - --
4B 15 0 - - - - - --
4C 1 0 - - - - - --
_ _ _ _ _ _ __
Total Weekly Availability Credit131,270
January 10, 1995
ISSC/CES Confidential Schedule E Page 36 of 55
cesskde
<PAGE>
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-1
Performance Standards
Monthly Credit Dollars
Allowable
Total Minutes Not Available Period
Not Available Minutes Difference Factor
_____________ _______ __________ ______
669 257 412 15
(412 minutes * 15) * $24.98 =
$154,376
Total Credit Dollars
____________________
Total Weekly Availability$131,270
Total Monthly Availability154,376
_______
285,646
Maximum Deductible Monthly218,900
_______
Deferred Monthly Credit 66,746
The Deferred Monthly Credit will be deducted from future monthly installments
of payable ASC.
Additional Comments
1. In this example, all of the Deferred Monthly Credit will be credited in
future months. If the Total Monthly Credit had been less than $273,625
(25% of the monthly charge of $1,094,500) then the monthly credit would
have been $218,900 (20% of $1,094,500) and there would have been no
Deferred Monthly Credit applied to future months.
2. The maximum monthly credit carry forward (after payment of the 20%
maximum deductible monthly credit) would be $547,250 ($1,094,500 * 50%).
3. Processing charge per minute = ASC / (365 * 24 * 60)
Example Assumptions
Applicable ASC $13,134,000
Applicable Monthly C$1,094,500 ($13,134,000 / 12)
Processing Charge Pe$24.98te
NOTE: All schedules in Charts E-1 through E-3 are reflected in the
Procedures Manual.
January 10, 1995
ISSC/CES Confidential Schedule E Page 37 of 55
cesskde
<PAGE>
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-1
Performance Standards
CHART E-7
Problem Resolution Time Service Credits
PRIORITY I
__________
For problems with a resolution time greater than the threshold value.
Monthly
Problem No. 1 ((Problem No. 2 Problem No. 3 Total
_____________________________ _____________ _____
Problem 150 150 130
duration
(minutes)
Maximum
acceptable
duration (120) (120) (120)
________ _____ _____ _____
30 30x 10x
Per Minute $24.992)) $24.99 $24.99
Multiplier ((3N/A * 20 * 20
_________________ ____ ____
Credit 0 $14,994 $4,998 = $19,992
NOTE First Priority I Problem in excess of 120 minutes does not bear Service
Credits.
NOTE Per minute ASC = ASC / (365 * 24 * 60)
NOTE Use the multiplier listed below for the period during which the problem
arose.
Multipliers
Initial ProbleN/A
Period A: 20
Period B: 15
Period C: 1
January 10, 1995
ISSC/CES Confidential Schedule E Page 38 of 55
cesskde
<PAGE>
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-2
Services Responsibilities Matrices
LEGEND: "P" = PRIMARY "S" = SUPPORT
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] COMPUTER OPERATIONS +--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] OPERATE CONSOLE (INCL. DEC @ CES'S ] X ] ]
] DIRECTION) ] ] ]
+---------------------------------------------+--------------+--------------+
] TAPE HANDLING (INCL. DEC) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- MOUNTS ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- LIBRARY ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- TRANSFERS ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- PACKAGING FROM ISSC FACILITY ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- TRANSMISSION, TAPE PREPARATION AND ] X ] ]
] MAILING ] ] ]
+---------------------------------------------+--------------+--------------+
] PRINT ] ] X ]
+---------------------------------------------+--------------+--------------+
] OPERATIONAL SUPPORT FOR ISSC MACHINES ] X ] ]
+---------------------------------------------+--------------+--------------+
] FILE BACK-UP/RECOVERY (RECOVERY MANAGEMENT ] X ] ]
] - ISSC MACHINES) ] ] ]
+---------------------------------------------+--------------+--------------+
] OPERATIONS PROCEDURES ] ] ]
+---------------------------------------------+--------------+--------------+
] -- INPUT AND REVIEW ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- DOCUMENT & MAINTAIN ISSC MACHINES ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- DOCUMENT & MAINTAIN CES-RETAINED ] ] X ]
] MACHINES ] ] ]
+---------------------------------------------+--------------+--------------+
] HARDWARE PLANNING AND INSTALLATION (ISSC ] ] ]
] MACHINES) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- TECHNOLOGY INPUT AND REVIEW ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- FACILITIES REQUIREMENTS ] X ] ]
+---------------------------------------------+--------------+--------------+
] CAPACITY MANAGEMENT (ISSC MACHINES) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- DEFINE APPLICATION PLANS AND ] ] X ]
] REQUIREMENTS ] ] ]
+---------------------------------------------+--------------+--------------+
January 10, 1995
ISSC/CES Confidential Schedule E Page 39 of 55
cesskde
<PAGE>
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-2
Services Responsibilities Matrices
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] COMPUTER OPERATIONS +--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] -- DEFINE AND MAINTAIN (SMC) PROCESS ] X ] ]
] DOCUMENTS ] ] ]
+---------------------------------------------+--------------+--------------+
] -- CAPACITY MONITORING ] P ] S ]
+---------------------------------------------+--------------+--------------+
] -- BENCHMARKING ] ] X ]
+---------------------------------------------+--------------+--------------+
] PERFORMANCE MANAGEMENT ] ] ]
+---------------------------------------------+--------------+--------------+
] -- DEFINE SERVICE LEVEL REQUIREMENTS (ISSC ] ] X ]
] MACHINES) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- DEFINE AND MAINTAIN (SMC) PROCESS ] X ] ]
] DOCUMENT (ISSC MACHINES) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- DOCUMENT SERVICE LEVEL AGREEMENTS AND ] X ] ]
] OBJECTIVES (ISSC MACHINES) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- MEASURE AND ANALYZE SYSTEM PERFORMANCE ] P ] S ]
] (ISSC MACHINES) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- MEASURE AND ANALYZE SYSTEM PERFORMANCE ] ] X ]
] (CES-RETAINED MACHINES) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- IMPLEMENT IMPROVEMENT PROGRAMS (ISSC ] X ] ]
] MACHINES) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- IMPLEMENT IMPROVEMENT PROGRAMS ] ] X ]
] (CES-RETAINED MACHINES) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- PROVIDE MONTHLY REPORTS (ISSC MACHINES) ] X ] ]
+---------------------------------------------+--------------+--------------+
] CHANGE MANAGEMENT (ISSC MACHINES) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- DEFINE AND MAINTAIN (SMC) PROCESS ] X ] ]
] DOCUMENT ] ] ]
+---------------------------------------------+--------------+--------------+
] -- PROVIDE CHANGE REQUIREMENTS FOR ] ] X ]
] APPLICATION INSTALLS AND UPGRADES ] ] ]
+---------------------------------------------+--------------+--------------+
] -- PROVIDE CHANGE REQUIREMENTS FOR SYSTEMS ] X ] ]
] SOFTWARE ] ] ]
+---------------------------------------------+--------------+--------------+
] -- CONDUCT CHANGE MANAGEMENT MEETING ] P ] S ]
+---------------------------------------------+--------------+--------------+
] -- PROMOTE CHANGES TO PRODUCTION ] X ] ]
+---------------------------------------------+--------------+--------------+
January 10, 1995
ISSC/CES Confidential Schedule E Page 40 of 55
cesskde
<PAGE>
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-2
Services Responsibilities Matrices
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] COMPUTER OPERATIONS +--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] -- REPORT ON CHANGE SUCCESS ] X ] ]
+---------------------------------------------+--------------+--------------+
] CHANGE MANAGEMENT (CES-RETAINED MACHINES) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- DEFINE AND MAINTAIN (SMC) PROCESS ] ] X ]
] DOCUMENT ] ] ]
+---------------------------------------------+--------------+--------------+
] -- PROVIDE CHANGE REQUIREMENTS FOR ] ] X ]
] APPLICATION INSTALLS AND UPGRADES ] ] ]
+---------------------------------------------+--------------+--------------+
] -- PROVIDE CHANGE REQUIREMENTS FOR SYSTEMS ] ] X ]
] SOFTWARE ] ] ]
+---------------------------------------------+--------------+--------------+
] -- CONDUCT CHANGE MANAGEMENT MEETING ] S ] P ]
+---------------------------------------------+--------------+--------------+
] -- PROMOTE CHANGES TO PRODUCTION ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- REPORT ON CHANGE SUCCESS ] ] X ]
+---------------------------------------------+--------------+--------------+
] EXECUTIVE REPORTING ] X ] ]
+---------------------------------------------+--------------+--------------+
] PROBLEM MANAGEMENT - DEFINE & MAINTAIN ] X ] ]
] (SMC) PROCESS DOCUMENT (ISSC MACHINES) ] ] ]
+---------------------------------------------+--------------+--------------+
] WRITE STANDARDS AND PROCEDURES (ISSC ] ] ]
] MACHINES) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- DEFINE INPUT ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- PROMOTE TO PRODUCTION ] X ] ]
+---------------------------------------------+--------------+--------------+
] STANDARDS AND PROCEDURES ANALYSIS (ISSC ] X ] ]
] MACHINES) ] ] ]
+---------------------------------------------+--------------+--------------+
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] PRODUCTION CONTROL (EXCLUDES CES-RETAINED MA+--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] BATCH TEST SCHEDULE (ON TEST LPAR) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- DEFINE TEST SYSTEM REQUIREMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- EXECUTE TEST SCHEDULES ] ] X ]
+---------------------------------------------+--------------+--------------+
January 10, 1995
ISSC/CES Confidential Schedule E Page 41 of 55
cesskde
<PAGE>
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-2
Services Responsibilities Matrices
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] PRODUCTION CONTROL (EXCLUDES CES-RETAINED MA+--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] -- EXECUTE TEST APPLICATIONS ] ] X ]
+---------------------------------------------+--------------+--------------+
] BATCH PRODUCTION SCHEDULE (CENTRALIZED) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- SCHEDULER INPUT ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- SCHEDULER UPDATES ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- EXECUTION ] X ] ]
+---------------------------------------------+--------------+--------------+
] REPORT BALANCING ] ] X ]
+---------------------------------------------+--------------+--------------+
] INITIATE AND TRACK PROBLEM REPORT ] ] X ]
] (BALANCING ERROR) ] ] ]
+---------------------------------------------+--------------+--------------+
] TRACK BATCH PROBLEM REPORTS AND SYSTEM ] X ] ]
] CRASHES (INITIATED BY OPERATORS) ] ] ]
+---------------------------------------------+--------------+--------------+
] REPORT PROBLEM RESOLUTION STATISTICS ] ] X ]
+---------------------------------------------+--------------+--------------+
] PREPARATION OF RUN PARAMETER CARDS ] ] X ]
+---------------------------------------------+--------------+--------------+
] APPLICATION INSTALLATION ] ] ]
+---------------------------------------------+--------------+--------------+
] -- ACCEPTANCE TESTING ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- VERIFICATION PROCESS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- PROMOTE TO PRODUCTION ] X ] ]
+---------------------------------------------+--------------+--------------+
] OUTPUT MANAGEMENT ] ] ]
+---------------------------------------------+--------------+--------------+
] -- INPUT & REVIEW ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- TECHNOLOGY IMPLEMENTATION ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- ANALYSIS OF HARD COPY REPORTS FOR ] ] X ]
] CONVERSION TO SOFT COPY ] ] ]
+---------------------------------------------+--------------+--------------+
] -- APPLICATION CHANGES, IF REQUIRED ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- SET-UP ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- OPERATION ] ] ]
+---------------------------------------------+--------------+--------------+
] -- RESENDING ] X ] ]
+---------------------------------------------+--------------+--------------+
January 10, 1995
ISSC/CES Confidential Schedule E Page 42 of 55
cesskde
<PAGE>
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-2
Services Responsibilities Matrices
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] PRODUCTION CONTROL (EXCLUDES CES-RETAINED MA+--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] -- BUNDLING FROM CES FACILITY ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- ROUTING ] X ] ]
+---------------------------------------------+--------------+--------------+
] RUN DOCUMENTATION ] ] ]
+---------------------------------------------+--------------+--------------+
] -- INPUT AND REVIEW ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- SET-UP ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- DEPENDENCIES ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- IMPLEMENTATION ] X ] ]
+---------------------------------------------+--------------+--------------+
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] TECHNICAL SERVICES (EXCLUDES CES-RETAINED MA+--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] SYSTEM CONTROL PROGRAM INSTALLATION & ] X ] ]
] MAINTENANCE ] ] ]
+---------------------------------------------+--------------+--------------+
] SYSTEM MONITORING ] P ] S ]
+---------------------------------------------+--------------+--------------+
] PERFORMANCE TUNING ] ] ]
+---------------------------------------------+--------------+--------------+
] -- SYSTEMS ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- APPLICATIONS ] ] X ]
+---------------------------------------------+--------------+--------------+
] DEVELOPMENT OF INTERFACES TO APPLICATIONS ] ] X ]
] SOFTWARE AND THIRD PARTY SOFTWARE ] ] ]
+---------------------------------------------+--------------+--------------+
] SUPPORT DEVELOPMENT OF INTERFACES TO ] ] ]
] APPLICATIONS SOFTWARE AND THIRD PARTY ] X ] ]
] SOFTWARE (REFERENCE SECTION 5.2(H) OF ] ] ]
] AGREEMENT) ] ] ]
+---------------------------------------------+--------------+--------------+
] MAINTENANCE OF TAPE LIBRARIAN SYSTEM ] X ] ]
+---------------------------------------------+--------------+--------------+
] TROUBLESHOOTING/PROBLEM RESOLUTION - ] X ] ]
] SYSTEMS ] ] ]
+---------------------------------------------+--------------+--------------+
] TROUBLESHOOTING/PROBLEM RESOLUTION - ] ] X ]
] APPLICATIONS ] ] ]
+---------------------------------------------+--------------+--------------+
January 10, 1995
ISSC/CES Confidential Schedule E Page 43 of 55
cesskde
<PAGE>
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-2
Services Responsibilities Matrices
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] TECHNICAL SERVICES (EXCLUDES CES-RETAINED MA+--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] BACK-UP/RECOVERY PROCEDURES - SYSTEMS ] X ] ]
+---------------------------------------------+--------------+--------------+
] BACK-UP/RECOVERY PROCEDURES - APPLICATIONS ] ] X ]
+---------------------------------------------+--------------+--------------+
] VTAM/NCP INSTALLATION ] X ] ]
+---------------------------------------------+--------------+--------------+
] INITIATE VTAM/NCP CHANGE REQUESTS WITHIN ] X ] X ]
] THE ISSC DATA CENTER ] ] ]
+---------------------------------------------+--------------+--------------+
] VENDOR PERFORMANCE AND UTILIZATION ] ] ]
] MONITORING ] ] ]
+---------------------------------------------+--------------+--------------+
] -- BENCHMARKING & ANALYSIS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- ESTABLISH PERFORMANCE CRITERIA ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- IMPLEMENT IMPROVEMENT PROGRAMS ] X ] X ]
+---------------------------------------------+--------------+--------------+
] -- MEASURE AND ANALYZE PERFORMANCE ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- PERFORMANCE REPORTING ] X ] ]
+---------------------------------------------+--------------+--------------+
] NEW TECHNOLOGY/PRODUCT RESEARCH ] ] ]
+---------------------------------------------+--------------+--------------+
] -- TECHNOLOGY INPUT AND REVIEW ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- TECHNOLOGY IMPLEMENTATION ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- TECHNOLOGY SELECTION ] X ] ]
+---------------------------------------------+--------------+--------------+
] CES-RETAINED MACHINES, SYSTEMS & ] ] X ]
] APPLICATIONS ] ] ]
+---------------------------------------------+--------------+--------------+
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] DATA BASE ADMINISTRATION (EXCLUDES CES-RETAI+--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] MAKE DB2 AVAILABLE FOR EACH CES REQUESTED ] X ] ]
] ENVIRONMENT ] ] ]
+---------------------------------------------+--------------+--------------+
] MAKE DATA BASE DEFINITIONS AVAILABLE TO CES ] X ] ]
+---------------------------------------------+--------------+--------------+
] DATA MODELING ] ] X ]
+---------------------------------------------+--------------+--------------+
January 10, 1995
ISSC/CES Confidential Schedule E Page 44 of 55
cesskde
<PAGE>
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-2
Services Responsibilities Matrices
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] DATA BASE ADMINISTRATION (EXCLUDES CES-RETAI+--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] LOGICAL DATA BASE DESIGN ] ] X ]
+---------------------------------------------+--------------+--------------+
] DBMS (DATA BASE MANAGEMENT SYSTEM) ] X ] ]
] MAINTENANCE ] ] ]
+---------------------------------------------+--------------+--------------+
] PHYSICAL DATA BASE DESIGN ] ] X ]
+---------------------------------------------+--------------+--------------+
] PHYSICAL DATA BASE REVIEW/SUPPORT ] ] X ]
+---------------------------------------------+--------------+--------------+
] USER ACCESS (VIEWS, COPY MEMBERS) ] ] X ]
+---------------------------------------------+--------------+--------------+
] SECURITY (DBMS) ] ] X ]
+---------------------------------------------+--------------+--------------+
] DBMS CAPACITY PLANNING ] S ] P ]
+---------------------------------------------+--------------+--------------+
] DBMS PERFORMANCE MANAGEMENT ] S ] P ]
+---------------------------------------------+--------------+--------------+
] DBMS PERFORMANCE UTILIZATION TRACKING ] S ] P ]
+---------------------------------------------+--------------+--------------+
] TRAINING/APPLICATION DEVELOPMENT ASSISTANCE ] ] X ]
+---------------------------------------------+--------------+--------------+
] BACK-UP/RECOVERY PROCEDURES ] X ] X ]
+---------------------------------------------+--------------+--------------+
] INVOLVEMENT WITH APPLICATION INSTALLATION ] X ] X ]
+---------------------------------------------+--------------+--------------+
] DATA BASE TROUBLESHOOTING/PROBLEM ] X ] X ]
] RESOLUTION ] ] ]
+---------------------------------------------+--------------+--------------+
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] FAILURE RECOVERY +--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] ISSC MACHINES FAILURE ] X ] ]
+---------------------------------------------+--------------+--------------+
] CES-RETAINED MACHINES FAILURE ] ] X ]
+---------------------------------------------+--------------+--------------+
] ISSC MACHINES SYSTEMS SOFTWARE FAILURE ] X ] ]
+---------------------------------------------+--------------+--------------+
] CES-RETAINED MACHINES SYSTEMS SOFTWARE ] ] X ]
] FAILURE ] ] ]
+---------------------------------------------+--------------+--------------+
] APPLICATIONS SOFTWARE FAILURE ] ] X ]
+---------------------------------------------+--------------+--------------+
] END USER MACHINE/SOFTWARE FAILURE ] ] X ]
+---------------------------------------------+--------------+--------------+
January 10, 1995
ISSC/CES Confidential Schedule E Page 45 of 55
cesskde
<PAGE>
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-2
Services Responsibilities Matrices
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] FAILURE RECOVERY +--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] NETWORK FAILURE ] ] X ]
+---------------------------------------------+--------------+--------------+
] LAN FAILURE ] ] X ]
+---------------------------------------------+--------------+--------------+
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] APPLICATIONS DEVELOPMENT AND MAINTENANCE (AD+--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] APPLICATION SOFTWARE ] ] ]
+---------------------------------------------+--------------+--------------+
] - REQUIREMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] - PROCURE PACKAGES ] ] X ]
+---------------------------------------------+--------------+--------------+
] - DEVELOPMENT/ENHANCEMENT OF PACKAGES ] ] X ]
+---------------------------------------------+--------------+--------------+
] - COMPLIANCE WITH APPLICATION INSTALLATION ] ] X ]
] STANDARDS ] ] ]
+---------------------------------------------+--------------+--------------+
] - ACCEPTANCE TEST CRITERIA ] ] X ]
+---------------------------------------------+--------------+--------------+
] - ACCEPTANCE TEST EXECUTION ] ] X ]
+---------------------------------------------+--------------+--------------+
] - BENCHMARKING & PERFORMANCE ANALYSIS ] ] X ]
+---------------------------------------------+--------------+--------------+
] - ACCEPTANCE TEST VERIFICATION ] ] X ]
+---------------------------------------------+--------------+--------------+
] - MAINTENANCE ] ] ]
+---------------------------------------------+--------------+--------------+
] -- DEFECT IDENTIFICATION AND FIXES ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- PREVENTIVE MAINTENANCE ] ] X ]
+---------------------------------------------+--------------+--------------+
] - DEVELOPMENT ] ] ]
+---------------------------------------------+--------------+--------------+
] -- UPGRADES ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- NEW RELEASES ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- ENHANCEMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- GOVERNMENT/REGULATORY CHANGES ] ] X ]
+---------------------------------------------+--------------+--------------+
] - EDUCATION/TRAINING ] ] X ]
+---------------------------------------------+--------------+--------------+
January 10, 1995
ISSC/CES Confidential Schedule E Page 46 of 55
cesskde
<PAGE>
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-2
Services Responsibilities Matrices
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] APPLICATIONS DEVELOPMENT AND MAINTENANCE (AD+--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] - END USER SUPPORT (HELP DESK) ] ] X ]
+---------------------------------------------+--------------+--------------+
] - PROMOTION INTO PRODUCTION (ISSC ] X ] ]
] MACHINES) ] ] ]
+---------------------------------------------+--------------+--------------+
] - APPROVAL OF ALL CHANGES (ISSC MACHINES) ] X ] X ]
+---------------------------------------------+--------------+--------------+
] - CHANGE REPORTING (ISSC MACHINES) ] X ] ]
+---------------------------------------------+--------------+--------------+
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] DATA NETWORK +--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] BUSINESS REQUIREMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] TECHNICAL REQUIREMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] DATA LINES MANAGEMENT ] ] X ]
+---------------------------------------------+--------------+--------------+
] PRODUCT EVALUATION AND PROCUREMENT ] ] ]
] (HARDWARE AND SOFTWARE) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- DEFINE BUSINESS REQUIREMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- SUGGEST AND REVIEW PRODUCTS FOR ] ] X ]
] REQUIREMENTS SATISFACTION ] ] ]
+---------------------------------------------+--------------+--------------+
] -- EVALUATE AND PROCURE PRODUCTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] DATA NETWORK MANAGEMENT ] ] ]
+---------------------------------------------+--------------+--------------+
] -- DEVELOP AND MAINTAIN DOCUMENTATION ] ] X ]
+---------------------------------------------+--------------+--------------+
] --PROVIDE DOCUMENTATION TO ISSC ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- NETWORK CONTROL CENTER ("NCC") ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- HELP DESK (24 HOURS PER DAY/7 DAYS PER ] ] X ]
] WEEK) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- PROBLEM DETERMINATION ON ] ] X ]
] CIRCUITS/HARDWARE ] ] ]
+---------------------------------------------+--------------+--------------+
] -- VENDOR DISPATCH AND COORDINATION ] ] X ]
+---------------------------------------------+--------------+--------------+
January 10, 1995
ISSC/CES Confidential Schedule E Page 47 of 55
cesskde
<PAGE>
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-2
Services Responsibilities Matrices
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] DATA NETWORK +--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] -- PROVIDE STATUS ON PROBLEM RESOLUTION ] ] X ]
] PROGRESS TO USER ] ] ]
+---------------------------------------------+--------------+--------------+
] -- REVIEW/APPROVE VENDOR TIME & MATERIAL ] ] X ]
] INVOICES ] ] ]
+---------------------------------------------+--------------+--------------+
] -- TRACK VENDOR PERFORMANCE ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- RESPOND TO ALARMS ON NETWORK MANAGEMENT ] ] X ]
] SYSTEMS ] ] ]
+---------------------------------------------+--------------+--------------+
] -- ASSIST AT CES'S DIRECTION WITHIN THE ] X ] ]
] DATA CENTER ] ] ]
+---------------------------------------------+--------------+--------------+
] -- RESET EQUIPMENT, LED STATUS, CONTROL ] X ] ]
] VENDOR ACCESS ] ] ]
+---------------------------------------------+--------------+--------------+
] CABLING/WIRING DESIGN AND COORDINATION ] ] X ]
+---------------------------------------------+--------------+--------------+
] ASSIST CABLING AND COORDINATION WITHIN DATA ] X ] ]
] CENTER ] ] ]
+---------------------------------------------+--------------+--------------+
] DATA NETWORK RESTORE ] ] ]
+---------------------------------------------+--------------+--------------+
] -- INTELLIGENT DIAL BACK-UP SYSTEM TO ] ] X ]
] RECOVER PRIVATE LINE FAILURES ] ] ]
+---------------------------------------------+--------------+--------------+
] -- AFFILIATE APPROVAL REQUIRED FOR DIAL ] ] X ]
] BACK-UP ] ] ]
+---------------------------------------------+--------------+--------------+
] -- SHIPMENT OF REPLACEMENT COMPONENTS FOR ] ] X ]
] REMOTE HARDWARE FAILURES ] ] ]
+---------------------------------------------+--------------+--------------+
] -- APPROVE EXPEDITED SHIPMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- RECEIVE EXPRESS SHIPMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- RE-ACQUIRING SESSIONS WHEN A RESTART OF ] X ] ]
] CICS REGION OCCURS ] ] ]
+---------------------------------------------+--------------+--------------+
] DATA NETWORK DESIGN ] ] X ]
+---------------------------------------------+--------------+--------------+
] DATA NETWORK PROJECT PLANNING ] ] ]
+---------------------------------------------+--------------+--------------+
] -- DEVELOP PROJECT PLAN ] ] X ]
+---------------------------------------------+--------------+--------------+
January 10, 1995
ISSC/CES Confidential Schedule E Page 48 of 55
cesskde
<PAGE>
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-2
Services Responsibilities Matrices
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] DATA NETWORK +--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] -- VALIDATE ASSUMPTIONS & PROVIDE ] ] X ]
] PROGRAMMING & OTHER INPUTS ] ] ]
+---------------------------------------------+--------------+--------------+
] HARDWARE/SYSTEMS SOFTWARE INSTALLATION ] ] ]
+---------------------------------------------+--------------+--------------+
] -- COORDINATE INSTALLS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- PERFORM INSTALLS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- COORDINATE INSTALLS WITHIN DATA ] ] X ]
] CENTER ] ] ]
+---------------------------------------------+--------------+--------------+
] -- PROVIDE LOGISTICAL SUPPORT ] ] X ]
+---------------------------------------------+--------------+--------------+
] TROUBLESHOOTING/PROBLEM RESOLUTION ] ] X ]
+---------------------------------------------+--------------+--------------+
] COMMUNICATIONS EQUIPMENT VENDOR MANAGEMENT ] ] X ]
+---------------------------------------------+--------------+--------------+
] BACK-UP/RECOVERY ] ] X ]
+---------------------------------------------+--------------+--------------+
] CAPACITY PLANNING AND MANAGEMENT - ALL ] ] ]
] FRONT END PROCESSORS ("FEPS") EXCEPT 3745 ] ] ]
] AT ISSC DATA CENTER ] ] ]
+---------------------------------------------+--------------+--------------+
] -- TECHNICAL SUPPORT TO MONITOR ] ] ]
] UTILIZATION & PERFORMANCE CES-RETAINED ] ] X ]
] MACHINES ] ] ]
+---------------------------------------------+--------------+--------------+
] -- TECHNICAL SUPPORT TO MONITOR ] X ] ]
] UTILIZATION & PERFORMANCE ISSC MACHINES ] ] ]
+---------------------------------------------+--------------+--------------+
] -- PROVIDE REQUIREMENTS FOR ISSC MACHINES ] ] X ]
+---------------------------------------------+--------------+--------------+
] CHANGE MANAGEMENT ] ] ]
+---------------------------------------------+--------------+--------------+
] -- PROVIDE INPUT TO CHANGE PROCESS ] ] X ]
] DEVELOPMENT ] ] ]
+---------------------------------------------+--------------+--------------+
] -- DESIGN AND OWN CHANGE MANAGEMENT ] ] X ]
] PROCESS ] ] ]
+---------------------------------------------+--------------+--------------+
] -- MAKE REQUESTS/DEFINE REQUIREMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- MANAGE CHANGE FOR CES-RETAINED MACHINES ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- MANAGE CHANGE FOR ISSC MACHINES ] X ] ]
+---------------------------------------------+--------------+--------------+
January 10, 1995
ISSC/CES Confidential Schedule E Page 49 of 55
cesskde
<PAGE>
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-2
Services Responsibilities Matrices
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] DATA NETWORK +--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] TECHNICAL SUPPORT ] ] X ]
+---------------------------------------------+--------------+--------------+
] TRAINING ] ] ]
+---------------------------------------------+--------------+--------------+
] -- TECHNOLOGY ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- APPLICATIONS ] ] X ]
+---------------------------------------------+--------------+--------------+
] INVENTORY MANAGEMENT ] ] X ]
+---------------------------------------------+--------------+--------------+
] STANDARDS ] ] ]
+---------------------------------------------+--------------+--------------+
] -- TAKE LEAD IN DEFINING STANDARDS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- PROVIDE INPUT AND REVIEW ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- IMPLEMENT STANDARDS ] ] X ]
+---------------------------------------------+--------------+--------------+
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] DATA NETWORK - FIELD SUPPORT +--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] EQUIPMENT INSTALLATION ] ] ]
+---------------------------------------------+--------------+--------------+
] -- PRETESTING PRIOR TO INSTALL ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- PREPARATION OF CONTROLLER OPERATING ] ] X ]
] SYSTEM DISKETTES ] ] ]
+---------------------------------------------+--------------+--------------+
] -- EQUIPMENT CABINET LAYOUT AND CABLING ] ] X ]
+---------------------------------------------+--------------+--------------+
] TEST NEW HARDWARE PRODUCTS AND ] ] X ]
] CONFIGURATIONS ] ] ]
+---------------------------------------------+--------------+--------------+
] MAINTAIN FEP PORT AND T1 CHANNEL ] ] X ]
] ASSIGNMENTS ] ] ]
+---------------------------------------------+--------------+--------------+
] CABLE PLANT MANAGEMENT ] ] ]
+---------------------------------------------+--------------+--------------+
] -- CABLING DESIGN ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- INSTALLATION ] ] X ]
+---------------------------------------------+--------------+--------------+
January 10, 1995
ISSC/CES Confidential Schedule E Page 50 of 55
cesskde
<PAGE>
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-2
Services Responsibilities Matrices
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] DATA NETWORK - FIELD SUPPORT +--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] -- REMOTE SITE INSTALLATIONS - THIRD PARTY ] ] X ]
] VENDOR COORDINATION ] ] ]
+---------------------------------------------+--------------+--------------+
] -- PROVIDE RFP/SPECIFICATIONS TO VENDOR ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- REVIEW VENDOR BIDS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- POWER ] ] ]
+---------------------------------------------+--------------+--------------+
] -- DETERMINE POWER REQUIREMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- PROVIDE POWER PER RECOMMENDATIONS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- TROUBLESHOOT VOICE/DATA PROBLEMS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- PERFORM END USER MACHINE AND VOICE ] ] X ]
] EQUIPMENT MACS ] ] ]
+---------------------------------------------+--------------+--------------+
] -- MAINTAIN CABLE DOCUMENTATION ] ] X ]
+---------------------------------------------+--------------+--------------+
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] DATA NETWORK - DATA SERVICES +--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] SUBMIT PROJECT REQUEST ] ] X ]
+---------------------------------------------+--------------+--------------+
] COMPLETE PROJECT TRACKING & PROVIDE STATUS ] ] X ]
] AS REQUIRED ] ] ]
+---------------------------------------------+--------------+--------------+
] INTERPRET BUSINESS OBJECTIVES ] ] X ]
+---------------------------------------------+--------------+--------------+
] CONSULT ON DATA ] ] X ]
] PRODUCTS/TECHNOLOGIES/SERVICES ] ] ]
+---------------------------------------------+--------------+--------------+
] CONSULT ON PROTOCOL/INTERFACE ] ] X ]
] STANDARDS/CONNECTIVITY OPTIONS/ETC. ] ] ]
+---------------------------------------------+--------------+--------------+
] GATHER & ANALYZE INFO FOR ] ] X ]
] DEVELOPING/MODIFYING NETWORK SYSTEMS ] ] ]
+---------------------------------------------+--------------+--------------+
] COMPLETE NETWORK TRAFFIC STUDIES/CAPACITY ] ] X ]
] PLANNING ] ] ]
+---------------------------------------------+--------------+--------------+
] -- PROVIDE REQUIREMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
January 10, 1995
ISSC/CES Confidential Schedule E Page 51 of 55
cesskde
<PAGE>
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-2
Services Responsibilities Matrices
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] DATA NETWORK - DATA SERVICES +--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] PERFORM DATA NETWORK TECHNICAL DESIGN AND ] ] X ]
] COST ANALYSIS ] ] ]
+---------------------------------------------+--------------+--------------+
] -- PROVIDE REQUIREMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] DATA NETWORK PROJECT PLANNING ] ] ]
+---------------------------------------------+--------------+--------------+
] -- DEVELOP PROJECT PLAN ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- VALIDATE ASSUMPTIONS & PROVIDE ] ] X ]
] PROGRAMMING & OTHER INPUTS ] ] ]
+---------------------------------------------+--------------+--------------+
] MANAGE PROJECT IMPLEMENTATION ] ] X ]
+---------------------------------------------+--------------+--------------+
] COMPLETE SITE SURVEYS AS APPROPRIATE ] ] X ]
+---------------------------------------------+--------------+--------------+
] COORDINATE PHYSICAL REQUIREMENTS (POWER, ] ] ]
] FLOOR SPACE, ETC.) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- DETERMINE REQUIREMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- PROVIDE REQUIRED POWER, FLOOR SPACE, ] ] X ]
] ETC.(CES LOCATIONS) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- PROVIDE REQUIRED POWER, FLOOR SPACE, ] X ] ]
] ETC. (ISSC LOCATIONS) ] ] ]
+---------------------------------------------+--------------+--------------+
] CHECK EQUIPMENT AVAILABILITY ] ] X ]
+---------------------------------------------+--------------+--------------+
] COORDINATE ORDER PLACEMENT OF DATA LINES & ] ] X ]
] ASSOCIATED HARDWARE ] ] ]
+---------------------------------------------+--------------+--------------+
] COORDINATE DATA NETWORK IMPLEMENTATION ] ] X ]
] (TECH STAFF/VENDOR SUPPORT) ] ] ]
+---------------------------------------------+--------------+--------------+
] OBTAIN T1/FEP/MUX/PROCESSOR PORT ] ] X ]
] ASSIGNMENTS ] ] ]
+---------------------------------------------+--------------+--------------+
] MINIMIZE DATA NETWORK DOWNTIME ] ] X ]
+---------------------------------------------+--------------+--------------+
] PREPARE DATA NETWORK IMPLEMENTATION PLAN ] ] X ]
] (NOTIFICATION OF PARTIES) ] ] ]
+---------------------------------------------+--------------+--------------+
] COORDINATE SHIPMENT/PICK-UP OF EQUIPMENT ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- RECEIVE AND SEND DESIGNATED EQUIPMENT ] ] X ]
+---------------------------------------------+--------------+--------------+
January 10, 1995
ISSC/CES Confidential Schedule E Page 52 of 55
cesskde
<PAGE>
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-2
Services Responsibilities Matrices
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] DATA NETWORK - DATA SERVICES +--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] RETURN/RELOCATE DISPLACED EQUIPMENT ] ] ]
+---------------------------------------------+--------------+--------------+
] -- RECEIVE DISPLACED EQUIPMENT ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- RETURN LEASED EQUIPMENT ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- DISPOSE OF DISPLACED CES OWNED ] ] X ]
] EQUIPMENT ] ] ]
+---------------------------------------------+--------------+--------------+
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] DATA NETWORK - LAN SUPPORT +--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] WIDE AREA NETWORK ("WAN") REQUIREMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] TECHNICAL REVIEW OF LAN PROJECTS ] ] ]
+---------------------------------------------+--------------+--------------+
] -- SUBMIT PROPOSED PROJECTS FOR REVIEW ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- PROVIDE TECHNICAL REVIEW ] ] X ]
+---------------------------------------------+--------------+--------------+
] HANDLE EQUIPMENT ROOM RELOCATION ] ] X ]
+---------------------------------------------+--------------+--------------+
] SUPPORT OF ASSOCIATED SYSTEMS ] ] X ]
+---------------------------------------------+--------------+--------------+
] SECURITY REQUIREMENTS PERTAINING TO ] ] ]
] INSTALLATION & SUPPORT OF ASSOCIATED ] ] ]
] SYSTEMS ] ] ]
+---------------------------------------------+--------------+--------------+
] -- PROVIDE SECURITY REQUIREMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- PROVIDE WIRING CLOSETS AND OTHER ] ] X ]
] APPROPRIATE SECURE ENVIRONMENTS ] ] ]
+---------------------------------------------+--------------+--------------+
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] LOCAL AREA NETWORK +--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] BUSINESS REQUIREMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] TECHNICAL REQUIREMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
January 10, 1995
ISSC/CES Confidential Schedule E Page 53 of 55
cesskde
<PAGE>
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-2
Services Responsibilities Matrices
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] LOCAL AREA NETWORK +--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] LAN SERVERS - EQUIPMENT AND SOFTWARE ] ] ]
+---------------------------------------------+--------------+--------------+
] -- MANAGEMENT, OPERATION & MAINTENANCE ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- THIRD PARTY VENDOR MAINTENANCE ] ] X ]
] MANAGEMENT ] ] ]
+---------------------------------------------+--------------+--------------+
] PCS/WORKSTATIONS ] ] ]
+---------------------------------------------+--------------+--------------+
] -- THIRD PARTY VENDOR MAINTENANCE ] ] X ]
+---------------------------------------------+--------------+--------------+
] FUTURE LAN SERVER EQUIPMENT AND SOFTWARE ] ] ]
+---------------------------------------------+--------------+--------------+
] -- PROVIDE REQUIREMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- PROCURE AND INSTALL ] ] X ]
+---------------------------------------------+--------------+--------------+
] CABLING/WIRING DESIGN AND COORDINATION ] ] X ]
+---------------------------------------------+--------------+--------------+
] PRODUCT EVALUATION AND PROCUREMENT ] ] ]
] (HARDWARE AND SOFTWARE) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- DEFINE BUSINESS REQUIREMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- SUGGEST AND APPROVE PRODUCTS AS ] ] X ]
] APPROPRIATE ] ] ]
+---------------------------------------------+--------------+--------------+
] -- EVALUATE PRODUCTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- PROCURE PRODUCTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] LAN MANAGEMENT ] ] X ]
+---------------------------------------------+--------------+--------------+
] LAN DESIGN ] ] X ]
+---------------------------------------------+--------------+--------------+
] LAN PROJECT PLANNING ] ] ]
+---------------------------------------------+--------------+--------------+
] -- DEVELOP PROJECT PLAN ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- VALIDATE ASSUMPTIONS AND PROVIDE INPUT ] ] X ]
] REQUIREMENTS ] ] ]
+---------------------------------------------+--------------+--------------+
] END USER HELP DESK ] ] X ]
+---------------------------------------------+--------------+--------------+
] TROUBLESHOOTING/PROBLEM RESOLUTION ] ] X ]
+---------------------------------------------+--------------+--------------+
January 10, 1995
ISSC/CES Confidential Schedule E Page 54 of 55
cesskde
<PAGE>
Schedule E
SUPPORT SERVICES, PERFORMANCE STANDARDS AND
OPERATIONAL RESPONSIBILITIES
Exhibit E-2
Services Responsibilities Matrices
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] LOCAL AREA NETWORK +--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] BACK-UP/RECOVERY ] ] X ]
+---------------------------------------------+--------------+--------------+
] --MOUNT BACKUP TAPES ON THE SERVER AT ] X ] ]
] ISSC LOCATION ] ] ]
+---------------------------------------------+--------------+--------------+
] CAPACITY MANAGEMENT ] ] X ]
+---------------------------------------------+--------------+--------------+
] --PROVIDE REQUIREMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] CHANGE MANAGEMENT ] ] ]
+---------------------------------------------+--------------+--------------+
] -- PROVIDE INPUT TO CHANGE PROCESS ] ] X ]
] DEVELOPMENT ] ] ]
+---------------------------------------------+--------------+--------------+
] -- DESIGN AND OWN CHANGE MANAGEMENT ] ] X ]
] PROCESS ] ] ]
+---------------------------------------------+--------------+--------------+
] -- MAKE REQUESTS/DEFINE REQUIREMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- MANAGE CHANGE ] ] X ]
+---------------------------------------------+--------------+--------------+
] INVENTORY MANAGEMENT ] ] X ]
+---------------------------------------------+--------------+--------------+
] STANDARDS ] ] ]
+---------------------------------------------+--------------+--------------+
] -- TAKE LEAD IN DEFINING STANDARDS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- PROVIDE INPUT AND REVIEW ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- IMPLEMENT STANDARDS ] ] X ]
+---------------------------------------------+--------------+--------------+
January 10, 1995
ISSC/CES Confidential Schedule E Page 55 of 55
cesskde
<PAGE>
+-------------------------------------------------------+
] TABLE DEFINITIONS ]
+-------------------------------------------------------+
ID FILE PAGE REFERENCES
__ ____ ____ __________
<S> <C> <C> <C>
HDR0 CESSKDE SCRIPT
13 13
BODY0 CESSKDE SCRIPT
13 13, 13, 13, 13,
13, 13, 13
SPACE0 CESSKDE SCRIPT
13
HDR1 CESSKDE SCRIPT
24 24, 27
BODY1 CESSKDE SCRIPT
24 24, 24, 24, 24,
24, 27, 27, 27,
27
SPACE1 CESSKDE SCRIPT
24 24, 24, 24, 24,
24, 24, 27, 27,
27, 27
HDR2 CESSKDE SCRIPT
29 30
BODY2 CESSKDE SCRIPT
29 29, 30, 30, 30,
30, 30, 30, 30,
30, 30, 30
HDR3 CESSKDE SCRIPT
32 32
BODY3 CESSKDE SCRIPT
32 32, 32, 32, 32,
32, 32, 32, 32
HDR CESSKDE SCRIPT
39 39, 41, 43, 44,
45, 46, 47, 50,
51, 53, 53
BODY CESSKDE SCRIPT
39 39, 39, 39, 39,
39, 39, 39, 39,
39, 39, 39, 39,
39, 39, 39, 39,
39, 39, 39, 40,
40, 40, 40, 40,
40, 40, 40, 40,
40, 40, 40, 40,
40, 40, 40, 40,
40, 41, 41, 41,
41, 41, 41, 41,
41, 41, 41, 41,
41, 41, 41, 41,
41, 41, 41, 42,
42, 42, 42, 42,
42, 42, 42, 42,
42, 42, 42, 42,
42, 42, 42, 42,
42, 42, 43, 43,
43, 43, 43, 43,
43, 43, 43, 43,
43, 43, 43, 43,
43, 44, 44, 44,
44, 44, 44, 44,
44, 44, 44, 44,
44, 44, 44, 44,
44, 44, 45, 45,
45, 45, 45, 45,
45, 45, 45, 45,
45, 45, 45, 45,
45, 45, 45, 45,
45, 46, 46, 46,
46, 46, 46, 46,
46, 46, 46, 46,
46, 46, 46, 46,
46, 46, 46, 47,
47, 47, 47, 47,
47, 47, 47, 47,
47, 47, 47, 47,
47, 47, 47, 47,
48, 48, 48, 48,
48, 48, 48, 48,
48, 48, 48, 48,
48, 48, 48, 48,
49, 49, 49, 49,
49, 49, 49, 49,
49, 49, 49, 49,
49, 49, 49, 49,
50, 50, 50, 50,
50, 50, 50, 50,
50, 50, 50, 50,
50, 50, 50, 50,
50, 50, 50, 51,
51, 51, 51, 51,
51, 51, 51, 51,
51, 51, 51, 51,
51, 51, 51, 51,
51, 52, 52, 52,
52, 52, 52, 52,
52, 52, 52, 52,
52, 52, 52, 52,
52, 52, 52, 53,
53, 53, 53, 53,
53, 53, 53, 53,
53, 53, 53, 53,
53, 53, 53, 53,
54, 54, 54, 54,
54, 54, 54, 54,
54, 54, 54, 54,
54, 54, 54, 54,
54, 54, 54, 54,
54, 55, 55, 55,
55, 55, 55, 55,
55, 55, 55, 55,
55, 55
SPACE CESSKDE SCRIPT
39
<PAGE>
</TABLE>
ISSC / Ceridian Corporation
Agreement for Information Technology Services
-----------------------------------------------------------------------------
Schedule F
Procedures Manual Table of Contents
The following is a sample of the Table of Contents for the Procedures Manual
to be developed in accordance with Section 4.9(a) of the Agreement. The
actual content and Table of Contents for the Procedures Manual developed for
CES's production and applications test environments will be of a form and
content necessary to provide support for the actual CES environment. The
sample Table of Contents is shown below:
I. INTRODUCTION X. CONFIGURATION MANAGEMENT
A. Purpose A. Scope
B. Audience B. Objectives
C. Layouts
II. ENFORCEMENT OF STANDARDS
XI. STORAGE AND DATA MANAGEMENT
III. REQUIREMENTS PROCESS PROCESSES
A. Introduction A. Tape Backup
B. When are Requirements required? B. Data Security System (RACF)
C. Requirements/Services
Request Documentation XII. SYSTEMS MANAGEMENT CONTROLS
D. How does the Requirements
process work? A. Service Level Management
B. Security
IV. SECURITY C. Problem Management
D. Change Management
A. Data Center Security E. Recovery Management
Requirements F. Batch Processing Management
B. Physical Security G. Online Processing Management
H. Performance Management
V. DISASTER RECOVERY I. Capacity Management
A. Overview
B. Critical Applications
C. Disaster Recovery Plan Outline
D. Operations XIII. LEGEND OF ASSIGNEES
VI. PRODUCTION XIV. HARDWARE LISTING
A. Production Support A. Hardware in the ISSC Data
Center and Configuration
VII. ISSC SYSTEM HARDWARE SERVICE
CALL PROCEDURES XV. CUSTOMER SOFTWARE REQUIREMENTS
BY APPLICATION VERSUS SYSTEM
A. ISSC System Hardware
B. CES System Hardware (at ISSC A. Application Requirements
Locations) B. System Software
VIII. OPERATIONS HELP DESK XVI. CUSTOMER APPLICATIONS
A. Scope A. List of Customer Applica-
B. Help Desk Procedures Doc- tions
umentation
C. Escalation/Alert Process XVII. APPLICATION AVAILABILITY
D. Executive Alert Process
A. On-line and Batch Time
IX. NETWORK CONFIGURATIONS Frames
A. Data Center to Customer Con-
nection
January 10, 1995
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ISSC / Ceridian Corporation
Agreement for Information Technology Services
-----------------------------------------------------------------------------
Schedule G
Disaster Recovery Services
Section G-1
I. INTRODUCTION
Beginning on the Execution Date, ISSC will be responsible for the pro-
vision of Disaster Recovery capability and services to CES. In the event
the Services provided to CES are interrupted due to a declared Disaster
during the period following the Execution Date during which the Disaster
Recovery Plan is being developed, ISSC will provide Disaster Recovery
services on a commercially reasonable efforts basis.
It is ISSC's intent to provide Disaster Recovery services for Critical
Applications at a level of performance which will allow CES to restore
and continue those functions which are vital to the continuation of CES's
business operations during a declared Disaster. ISSC will make commer-
cially reasonable efforts to meet the Performance Standards during such
Disaster; provided, however, ISSC will not be liable for Service Credits
while providing Services from the Disaster Recovery Center.
II. DEFINITIONS
A. "Configuration" means the hardware and Software, set forth in Section
G-2, designated for support of the Critical Applications during a
declared Disaster.
B. "Critical Applications" means the applications specified by CES to
support CES's vital business functions in the event of a Disaster.
C. "Disaster" means any unplanned interruption of information processing
for CES, due to causes beyond the control of CES or ISSC, which sig-
nificantly impairs the ability of ISSC to operate the Critical Appli-
cations at the Data Center. Examples are:
1. loss of the building to fire;
2. loss of power to the facility due to hurricane damage; and
3. inability to access the facility due to a chemical spill, etc.
D. "Disaster Recovery" means the restoration, at a location other than
the Data Center, of Critical Applications following a declared Dis-
aster.
E. "Recovery Center" means the facility located at 3405 West Dr. Martin
Luther King Jr. Boulevard, Tampa, Florida 33607, from which ISSC pro-
vides Disaster Recovery services.
III. SERVICES
January 10, 1995
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A. Disaster Recovery Plan
The plan for recovering the Critical Applications, necessary for con-
tinuation of the vital business processes of CES, will be developed
and tested prior to 7/1/95 (the "Disaster Recovery Plan") and will be
amended as appropriate throughout the Term, and will include, but not
be limited to, the following:
o a brief description of the critical services and functions,
including a prioritized listing of the Critical Applications;
o the hardware and Software comprising the Configuration;
o the hardware and Software necessary for connection to the Data
Network;
o ISSC's and CES's recovery responsibilities;
o contact listings of key personnel;
o identification of recovery teams;
o recovery scenarios;
o criteria for Disaster declaration, recovery and testing;
o names of those individuals who are authorized by each Party to
declare a Disaster;
o backup process and components;
o notification procedures;
o recovery information, procedures, schedules, etc.;
o testing results and any required corrective action plans; and
o procedures for maintaining the Disaster Recovery Plan.
A listing of the Critical Applications specified by CES will be
included in Section G-3 of this Schedule.
ISSC will provide a representative who is knowledgeable in Disaster
Recovery planning and the Disaster Recovery Plan for the Services
covered by the Agreement to serve as a single point of contact for
CES's Disaster Recovery related communications and activities. The
ISSC representative will be responsible for the development and main-
tenance of the Disaster Recovery Plan and will ensure safe storage
and distribution of copies as follows:
1. off-site vital records storage;
2. CES's Disaster Recovery coordinator;
3. ISSC's Disaster Recovery coordinator; and
4. ISSC Project Office.
January 10, 1995
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<PAGE>
ISSC, in cooperation with CES, will review and update, if necessary,
the Disaster Recovery Plan on an annual basis or as warranted by
business and/or technical changes to ensure compatibility with CES's
and ISSC's overall Disaster Recovery strategies and related plans.
The Disaster Recovery Plan will be tested annually. Any additional
updates which are necessary as a result of actions by CES will be
considered New Services.
ISSC, in cooperation with CES, will test the Disaster Recovery Plan
initially within 90 days after the plan is completed, assuming avail-
ability of the Recovery Center and the CES provided network
connectivity, and annually thereafter to ensure the plan remains
practicable and current. Disaster Recovery testing will be coordi-
nated with CES and ISSC will provide CES with a report of the test
results following each Disaster Recovery test.
B. Data Center Recovery
The declaration of a Disaster will require mutual agreement of the
representatives designated by ISSC and CES and specified in the Dis-
aster Recovery Plan.
1. In the event of a declared Disaster, ISSC will take immediate
action to prepare the Recovery Center for use and will provide
the Configuration resources specified in Section G-2 to support
CES's Critical Applications. Except as described in Section C
below, restoration of Services for the Critical Applications will
be provided within 24 hours, if data volumes permit, or a maximum
of 48 hours after a Disaster is declared and will include, but
not be limited to:
a. delivering the data and Software archived in off-site storage
to the Recovery Center designated in the Disaster Recovery
Plan or at such other location as may be established by ISSC
thereafter;
b. rerouting the data communications circuits to the Recovery
Center;
c. operating the Critical Applications on the Configuration at
the Recovery Center; and
d. providing reasonable office space at the Recovery Center to
CES, if required.
2. In the event of a Disaster, access to the Recovery Center or
other recovery facility will be on a first-come-first-served
basis and may be shared with other subscribers also experiencing
a Disaster. CES will be provided priority access over:
a. customers who are not Disaster Recovery services customers;
b. customers who have scheduled testing; and
c. customers who subsequently notify the Recovery Center that
they have declared a Disaster.
3. If the Recovery Center specified above is not available when a
Disaster is declared, Disaster Recovery services will be provide
January 10, 1995
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<PAGE>
at another Recovery Center or at an ISSC internal information
processing facility in the committed 48 hours. ISSC will
actively cooperate with CES to assist CES in moving network
connectivity to the alternate Disaster Recovery Center.
January 10, 1995
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<PAGE>
C. 24 Hour Recovery Option
Beginning on July 1, 1995 and for a period of two years immediately
thereafter, ISSC will provide Disaster Recovery for CES's operating
environment at the Disaster Recovery Center in 24 hours or less at no
additional charge to CES, with such commitment based on the following
conditions:
1. backup tapes for Systems Software, Applications Software and
required customer data are stored at the Disaster Recovery Center
and that such tapes are refreshed on a weekly basis.
2. total capacity of such backup tapes does not exceed 180
gigabytes; and
3. backup tapes are created using the "volume dump" process using
the DFDSS facility while the Applications are inactive, or some
other mutually agreed upon process.
Disaster Recovery shall include restoration of the backup Systems
Software, Applications Software and base customer databases as pro-
vided on the weekly backup tapes to DASD at the Disaster Recovery
Center and IPL of the Software to provide the environment for CES.
CES is responsible for restoring the customer databases currency and
such restoration time is not included in the 24 hour Disaster
Recovery period.
After July 1, 1997 CES may elect to continue or reinstate the 24 Hour
Disaster Recovery option, in which case ISSC will either continue to
provide or provide once again 24 Hour Disaster Recovery. To rein-
state 24 Hour Disaster Recovery will require 90 days prior written
notification and six months minimum commitment to the service. The
monthly price for the 24 Hour Disaster Recovery option is set forth
in the Supplement under Disaster Recovery Options.
D. Multiple Annual Tests
CES may elect to have more that one annual test of the effectiveness
of the Disaster Recovery Plan, adequacy of the Disaster Recovery
Center and ISSC's and CES's ability to execute Disaster Recovery Plan
procedures. The fee for each additional test over the one annual
test provided under this Agreement is set forth in the Supplement
under Disaster Recovery Options and is predicated upon available test
time at the Disaster Recovery Center.
In order to simulate an actual Disaster and test the effectiveness of
the ISSC, CES and Disaster Recovery Center operations personnel in
executing the Disaster Recovery Plan, CES may schedule such test(s)
with an executive at the Disaster Recovery Center who will reserve
the resources without reference to customer identity. CES acknowl-
edges the ISSC personnel performing the test will be the same per-
sonnel providing the day-to-day operations at the Data Center and
that a test scheduled without local notification may affect ISSC's
ability to meet the Performance Standards and Minimum Service Levels.
Accordingly, CES agrees to relieve ISSC of the Performance Standards
and Minimum Service Levels to the extent so affected. Also, a simu-
lated unplanned test may not occur prior to the initial test of the
Data Recovery Plan.
E. Status Notification
January 10, 1995
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<PAGE>
ISSC will inform CES whenever there is insufficient resources at the
Disaster Recovery Center to accommodate and recover CES in accordance
with the Disaster Recovery Plan.
F. Data Network Recovery
CES will be responsible for developing a local area network ("LAN")
and wide area network ("WAN") recovery plan for inclusion in the Dis-
aster Recovery Plan. LAN and WAN processing capabilities as well as
connectivity to the Data Center will also be the responsibility of
CES. ISSC is not responsible for end user recovery in the event of a
Disaster.
G. Resources and Growth
The resources for Disaster Recovery services are the capacities of
the Configuration listed in Section G-2 of this Schedule. Growth in
the Configuration will be provided at a rate necessary to support the
percent of growth in the Equipment Plan and Baselines set forth in
Schedule J and the Supplement without an increase in price to CES.
Section G-2 of this Schedule will be updated with each change to the
Configuration.
H. New Services
Additional services, functions or capacity beyond that specified in
Section G-2 will be added at the request of CES as New Services
subject to Section 7.6 of the Agreement.
IV. SERVICES RESPONSIBILITIES MATRIX
The Services Responsibilities Matrix attached as Exhibit G-1 to this
Schedule summarizes the role and responsibilities of ISSC and CES.
January 10, 1995
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<PAGE>
Schedule G
Disaster Recovery Services
Section G-2
Configuration
The Disaster Recovery services will be provided by ISSC with the following
Configuration:
MACHINE DESCRIPTION TYPE MODEL QTY
___________________ ____ _____ ___
ES9000 CPU 9021 740 01
Triple Capacity DASD 3390 X3X 18
Tape Cartridge Unit 3490 02
Communications Controlle3745 210 01
NOTE:The above Configuration is subject to change as CES business operations
and priorities change and/or Recovery Center technology changes. The
above is the Configuration through year end 1997 to accommodate the
Equipment Plan set forth in Section H-2 of Schedule H and then will be
changed to accommodate annual growth designated in the Capacity Plan set
forth in the Supplement; provided, however that such growth in the above
Configuration will be adjusted in accordance with CES's deferral or
acceleration of capacity. For example if CES accelerates capacity then
capacity of the above Configuration would be increased by the same
relationship percentage of the accelerated capacity to the installed
capacity. The converse will be true for deferral of capacity.
NOTE If the installed 3745 does not replace the functionality of the
installed 3172, then a 3172 or compatible backup machine will be pro-
vided to supplement the above Configuration.
January 10, 1995
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<PAGE>
Schedule G
Disaster Recovery Services
Section G-3
Critical Applications
CES's Critical Applications supported by the Configuration listed in Section
G-2 will be listed here, when identified, and included as part of the Dis-
aster Recovery Plan. In the event a Disaster occurs prior to the Parties
completing this Section G-3, ISSC will run those Applications, as prioritized
by CES, which are capable of running on the Configuration specified in
Section G-2.
To Be Determined
January 10, 1995
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<PAGE>
Schedule G
Disaster Recovery Services
Exhibit G-1
Services Responsibilities Matrix
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] DISASTER RECOVERY +--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] DEFINE REQUIREMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] DEVELOP & IMPLEMENT PLAN ] ] ]
+---------------------------------------------+--------------+--------------+
] --ISSC MACHINES ] X ] ]
+---------------------------------------------+--------------+--------------+
] --CES-RETAINED MACHINES ] ] X ]
+---------------------------------------------+--------------+--------------+
] --APPLICATIONS ] ] X ]
+---------------------------------------------+--------------+--------------+
] --NETWORK ] ] X ]
+---------------------------------------------+--------------+--------------+
] --LAN ] ] X ]
+---------------------------------------------+--------------+--------------+
] DEFINE TEST ] ] X ]
+---------------------------------------------+--------------+--------------+
] ESTABLISH TEST DATES ] X ] X ]
+---------------------------------------------+--------------+--------------+
] COORDINATE TEST - CES-RETAINED MACHINES ] ] X ]
+---------------------------------------------+--------------+--------------+
] COORDINATE TEST - ISSC MACHINES ] X ] ]
+---------------------------------------------+--------------+--------------+
] EXECUTE TEST ] X ] X ]
+---------------------------------------------+--------------+--------------+
] UPDATE & MAINTAIN DOCUMENTATION ] ] ]
+---------------------------------------------+--------------+--------------+
] --ISSC MACHINES ] X ] ]
+---------------------------------------------+--------------+--------------+
] --CES-RETAINED MACHINES ] ] X ]
+---------------------------------------------+--------------+--------------+
] --APPLICATIONS ] ] X ]
+---------------------------------------------+--------------+--------------+
] --NETWORK ] ] X ]
+---------------------------------------------+--------------+--------------+
] --LAN ] ] X ]
+---------------------------------------------+--------------+--------------+
January 10, 1995
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<PAGE>
ISSC / Ceridian Corporation
Agreement for Systems Operations Services
-----------------------------------------------------------------------------
Schedule H
Implementation Plan
Section H-1
Implementation Plan Outline
Following is an outline of the tasks necessary to complete the implementation
of CES' future operating systems to the hardware platform at the Data Center.
A detailed plan (the "Implementation Plan") will be developed by the Exe-
cution Date and will be amended throughout the Term and will be appended as
Attachment H-3 to this Schedule H.
I. OVERVIEW
A. Introduction
The Implementation Plan will describe the tasks and resources
required to implement an MVS operating environment at the Data Center
and will include the following:
1. the goals, expectations and individual objectives of the Parties;
2. the technical assumptions and dependencies inherent to the
success of the transition; and
3. the time frames, target dates and the individuals assigned to
each task.
The plan will be modified, upon mutual agreement of the Parties, as
new requirements emerge and additional technical constraints demand.
Revised versions of the plan will be provided on a timely basis to
the CES Project Executive and to other CES designated personnel.
B. Implementation
There are two major objectives during implementation:
1. provide an MVS platform for CES to develop and implement their
new Signature 2000 Service for the purpose of moving their
existing customer base to as well as utilizing for all new cus-
tomers; and
2. implement standard ISSC conventions, disciplines, and products as
applicable, while maintaining flexibility in meeting the needs of
CES's Business, to provide increased levels of service to CES and
minimize future constraints and costs; provided, however, that
any naming conventions that will cause the Business Units' Appli-
cations Software to be incompatible with CES's mid-size regions
will be reviewed with and have CES's approval prior to implemen-
tation.
January 10, 1995
ISSC/CES Confidential Schedule H Page 1 of 8
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<PAGE>
C. Methodology
A matrix management system will be utilized indicating the resources
assigned by CES and ISSC. Major activities will be assigned to the
appropriate resource as designated by CES and ISSC. Each major
activity will have its own plan which in turn will be integrated into
the overall Implementation Plan by the ISSC Transition Manager and
assigned staff.
Normal communication channels will be used on a day-to-day basis
during plan execution. A weekly status meeting will be held with the
members of the transition team and will provide the initial esca-
lation point during the transition. The frequency of these status
meetings may be altered upon mutual agreement of the Parties. All
issues and concerns will be documented and managed to resolution.
January 10, 1995
ISSC/CES Confidential Schedule H Page 2 of 8
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<PAGE>
D. Roles and Responsibilities
1. ISSC Responsibilities
ISSC has primary responsibility for the development and implemen-
tation of the Implementation Plan. Responsibilities include the
management of status meetings and the tracking of all tasks.
Regular updates will be provided to CES management on a timely
basis describing the following:
a. activities scheduled for this reporting period;
b. activities planned for the next reporting period;
c. change control activity
o Cumulative
o Approved
o Rejected
o In-Progress; and
d. concerns/recommendations.
2. CES Responsibilities
CES will be required to assign personnel to the implementation
team.
a. Staff from ISSC and CES will be given the responsibility to
jointly develop individual plan chapters, including the iden-
tification of tasks needed to complete each major activity.
b. Representation and input from CES End User organizations will
be required to define the criteria within the Implementation
Plan that verifies the migration of the CES application func-
tions to the Data Center.
II. IMPLEMENTATION PLAN
A. Activity 1: Hold Joint Planning Session
A joint planning session will be completed within approximately ten
days of the Execution Date. The objective of this session will be to
develop task level detail for all implementation activities. Appro-
priate CES and ISSC management participation will be required
throughout the sessions and key management representatives must be
present when plans relating to their area are being developed.
B. Activity 2: Document Detailed Implementation Plan
As implementation tasks are identified by the participants of the
joint planning session, they will be documented in the Implementation
Plan.
Responsibility for development of the plan will be shared by ISSC and
CES. ISSC is responsible for documenting the plan and CES is respon-
sible for reviewing and approving the plan.
C. Activity 3: Develop Implementation Schedule
January 10, 1995
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<PAGE>
Critical implementation activities with committed deliverable dates
will be agreed to and documented between ISSC and CES.
The implementation schedule will include go/no go criteria and check
point meetings to review the status of all implementation activities.
January 10, 1995
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<PAGE>
Schedule H
Implementation Plan
Section H-2
Equipment Plan
I. Activity 1: 12/09/94 V. Activity 5: 04/96
A. Install 9121-480 A. Install 9672 (60 MIPS) Site
B. Install 3390-003 (90 Gig) 2
C. Install 3990-006 B. Install 3495-L20 with 16
D. Install 3172-003 3490 transports
E. Install 3745-210 C. Install 3745-210
II. Activity 2: 04/95 VI. Activity 6: 08/96
A. Install 3495-L20 with 16 A. Install 9672 (50 MIPS) Site
3490 transports 1
B. Install 8 3490 transports VII. Activity 7: 12/96
C. Install 2 9391-A10 * A. Upgrade 9672 (+50 MIPS) Site
D. Install 32 9392-B13 * 2
III. Activity 3: 06/95 VIII. Activity 8: 08/97
A. Install 4 3420 A. Upgrade 9672 (+70 MIPS) Site
B. Install 8 3480 1
IV. Activity 4: 08/95 B. Upgrade 9672 (+40 MIPS) Site
A. Upgrade 9121-480 to 9121-621 2
NOTE:See DASD Baseline for growth and timing.
NOTE One A10 and sixteen B13s are replacing the 3390 DASD installed 12/94.
January 10, 1995
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<PAGE>
Schedule H
Implementation Plan
Section H-3
Implementation Plan
ITEM PERCENTSTART END
NO. TASK NAME COMPLETEDATE DATE RESPONSIBILITY
1. PHASE I - BASE SYSTEM AVAILABL1011/08/9412/15/94 ISSC
2. Kickoff Meeting 10011/08/9411/08/94 CES & ISSC
3. Order Equipment 6711/08/9411/22/94 ISSC
4. Order Teleco Lines 10011/08/9411/08/94 CES
5. Order CPU and DASD 10011/08/9411/11/94 Heimbach
6. Order ESCON Channels 10011/08/9411/11/94 Heimbach
7. Determine Network Connecti10011/08/9411/09/94 Zents
8. Order 3172 10011/10/9411/11/94 Heimbach
9. Order 3745 10011/10/9411/11/94 Hartert
10. Source System Cables and F10011/11/9411/15/94 Copeland
11. Determine Console Reqmts 10011/08/9411/11/94 Wilcox
12. Order Console Furniture 10011/11/9411/11/94 Wilcox
13. Source 3174 and Consoles 10011/11/9411/15/94 Hartert
14. Order Communications Racks10011/08/9411/08/94 Headley
15. Determine Tape Reqmts (Type/011/11/9411/22/94 CES
16. Order Initialized Tapes 10011/11/9411/15/94 Wilcox
17. Order Tapeview Equipment 011/11/9411/15/94 Wilcox
18. Order System Software 1911/08/9411/30/94 ISSC
19. Determine Initial MVS Vers10011/08/9411/08/94 Mayer
20. Investigate MVS 4.3 Platfo10011/08/9411/11/94 ISSC
21. Order MVS 4.3 Platform/Pro10011/11/9411/11/94 Coble
22. Order Additional IBM Product011/14/9411/15/94 Garner
23. License IBM Software Product011/15/9411/30/94 Garner
24. Obtain CPU Serial Number 10011/14/9411/15/94 Hartert
25. Order/License OEM Software P011/08/9411/23/94 CES
26. Facilities 2211/11/9411/28/94 ISSC
27. Develop configuration/conn10011/14/9411/14/94 ISSC
28. Determine any reqmts for T10011/14/9411/14/94 ISSC
29. Create System/Network Diag10011/11/9411/14/94 ISSC
30. Determine Equipment Placemen011/14/9411/18/94 Copeland & Headley
31. Prepare area for CPU and DAS011/18/9411/28/94 Copeland
32. Dismantle Microfiche Room 10011/11/9411/16/94 Hartert
33. Create Space for Network Equ011/14/9411/28/94 Wilcox
34. CES Visit-Network Responsibi011/18/9411/18/94 Martin & Headley
35. Prepare area for Network Equ011/18/9411/28/94 Headley
36. Prepare area for Consoles 011/18/9411/28/94 Wilcox
37. Determine Terminal Area fo10011/15/9411/18/94 Hartert
38. Build System on TEC2 011/14/9412/02/94 Mayer
39. Receive MVS 4.3 Platform 011/15/9411/18/94 Mayer
40. Update TEC2 IOCP/GEN for Sys011/14/9411/18/94 Coble
41. Change to Activate New IOCP 011/20/9411/20/94 Coble
42. Load Platform onto TEC2 011/15/9411/18/94 Mayer
43. Setup Data Set Naming Conven011/14/9411/18/94 ISSC & CES
44. Install/Customize IBM Softwa011/15/9411/30/94 ISSC
45. Customize RACF 011/21/9412/02/94 Walker & Bates
46. Customize DB2 011/21/9412/02/94 Jones
47. Customize CICS 011/21/9412/02/94 Armstrong & Bates
January 10, 1995
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<PAGE>
<TABLE>
Schedule H
Implementation Plan
Section H-3
Implementation Plan
ITEM PERCENTSTART END
NO. TASK NAME COMPLETEDATE DATE RESPONSIBILITY
<S> <C> <C> <C> <C>
48. OEM Software Products Receiv011/18/9411/30/94 CES
49. Install/Customize OEM Softwa011/18/9412/02/94 ISSC
50. IPL System on TEC2 011/16/9411/28/94 Mayer
51. Test Base CES System on TEC2011/16/9412/02/94 ISSC
52. System Installation 111/11/9412/15/94 ISSC
53. Receive Equipment 311/11/9411/30/94 Copeland
54. ES9000-480 011/21/9411/30/94 Copeland
55. ESCON Channels 011/21/9411/30/94 Copeland
56. 3990/3390s 011/21/9411/30/94 Copeland
57. 3172 and ICP Software 011/21/9411/30/94 Copeland
58. 3745 011/18/9411/23/94 Copeland
59. System Cables and Fiber 011/18/9411/23/94 Copeland
60. 3174 10011/11/9411/11/94 Hartert
61. Consoles 10011/11/9411/11/94 Hartert
62. CES Telecommunications 011/28/9412/15/94 CES
63. Installation of WILTEL T1.5s012/15/9412/15/94 CES
64. Receive WELLFLEET Router 011/28/9411/30/94 CES
65. Receive SAA Gateway 011/28/9411/30/94 CES
66. Receive Token Ring Hub 011/28/9411/30/94 CES
67. Installation of Phone Line 011/28/9411/30/94 CES
68. Receive Dial MODEM for Route011/28/9411/30/94 CES
69. Installation Activities 011/18/9412/04/94 ISSC
70. Pre-lay Cables 011/18/9411/30/94 Copeland
71. Cable from TELCO Room 011/21/9411/30/94 Headley
72. Cable Terminal Room for CES 011/21/9411/30/94 Copeland
73. Install ESCON Channels to ES011/28/9412/04/94 Stephens
74. Install System Equipment 011/28/9412/04/94 Stephens
75. Install Telecommunications E011/28/9412/04/94 CES
76. Install Operations Console 011/28/9412/04/94 Wilcox
77. Install phone at Console 011/21/9411/30/94 Wilcox
78. Install Tapeview 011/28/9412/04/94 Wilcox
79. Initialize and Test System 011/21/9412/08/94 Mayer
80. Create IOCDS/IOCP for ES9000011/21/9411/30/94 Mayer
81. Migrate TEC2 Software to CES012/01/9412/05/94 Mayer
82. IPL CES System 012/01/9412/05/94 Mayer
83. Test System Software 012/01/9412/08/94 Mayer
84. Test Network Connectivity 012/01/9412/08/94 Zents & Headley
85. Test Print to CES 012/01/9412/08/94 Zents & CES
86. Operations 011/28/9412/08/94 Wilcox
87. Training on New Software Pac011/28/9412/08/94 Wilcox
88. Tape Rack for CES 011/28/9412/05/94 Wilcox
89. Receive Initialized Tapes 011/28/9412/05/94 Wilcox
90. Backup Schedule/Jobs 011/28/9412/08/94 Wilcox
91. Create Procedures Manual 011/14/9412/06/94 Crenshaw
92. Define Operations Procedures011/21/9412/06/94 Wilcox
93. Define Problem Management Pr011/14/9412/06/94 Crenshaw
94. Define Change Management Pro011/14/9412/06/94 Crenshaw
</TABLE>
ISSC/CES Confidential Schedule H Page 7 of 8
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<TABLE>
Schedule H
Implementation Plan
Section H-3
Implementation Plan
ITEM PERCENTSTART END
NO. TASK NAME COMPLETEDATE DATE RESPONSIBILITY
<S> <C> <C> <C> <C>
95. Define Communications/Help D011/14/9412/06/94 Crenshaw
96. Review Procedures Manual wit012/01/9412/06/94 Crenshaw
97. SYSTEM AVAILABLE 012/09/9412/09/94 ISSC
98. PHASE II - APPLICATION DEV & TE012/09/9408/14/95 ISSC & CES
99. Install Tesseract Application012/12/9412/16/94 CES
100. Verify Tesseract Applications012/19/9412/23/94 CES
101. System Benchmarking 001/10/9506/01/95 CES
102. Flight Simulator Ready 002/01/9502/01/95 CES
103. Develop Disaster Recovery Pla012/09/9401/31/95 ISSC & CES
104. Create 2nd LPAR 001/15/9502/15/95 ISSC
105. Migrate DEC System 002/01/9503/01/95 CES
106. Implement Automated Tape Unit002/01/9503/15/95 ISSC
107. Upgrade to MVS 5.1 001/02/9503/31/95 ISSC
108. Upgrade 3390 to RAMAC DASD 004/01/9504/30/95 ISSC
109. Migrate from 3172 to 3745 005/01/9506/01/95 ISSC & CES
110. PHASE III - IMPLEMENTATION PLAN0
111. CES Beta Test 006/01/9508/14/95 CES
112. Upgrade 480 to 621 007/01/9508/01/95 ISSC
113. CES PRODUCTION 008/15/9508/15/95 CES
114. PHASE IV - SITE 2 INSTALLATION 0
115. Site 2 Decision Go/No Go 006/01/9506/01/95 CES
116. Begin Site 2 Build 008/01/95 ISSC
117. 9672 60 MIPS Installed Site 2004/01/96 ISSC
118. Install 3495-L20 w 16 3490 Tr004/01/96- InternalISSC
119. Install 8 3490 Transports - E004/01/96 ISSC
120. Site 1 to 110 MIPS (Add a 50 008/15/96) ISSC
121. Site 2 to 110 MIPS (Add a 50 012/01/96) ISSC
122. Site 1 to 180 MIPS (Add a 70 008/15/97 Upgrade) ISSC
123. Site 2 to 150 MIPS (Add a 40 008/15/97 Upgrade) ISSC
</TABLE>
January 10, 1995
ISSC/CES Confidential Schedule H Page 8 of 8
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<TABLE>
<S> <C>
ISSC / Ceridian Corporation
Agreement for Information Technology Services
-----------------------------------------------------------------------------
Schedule I
Operations Help Desk
I. INTRODUCTION
ISSC will provide an operations help desk to provide Data Center informa-
tion and status and provide and/or coordinate Levels I, II and III Data
Center Operations and Systems Software support for the Data Center.
Calls to the ISSC operations help desk will be initiated by the CES help
desk for CES.
II. ISSC DATA CENTER HELP DESK RESPONSIBILITIES
The ISSC Data Center help desk will perform the following typical func-
tions for both the production and test environments:
A. receive calls from the CES help desk;
B. initiate a problem management record ("PMR") for all Services
outages;
C. perform Level I problem determination;
D. route call to applicable services provider, e.g., maintenance vendor
in the case of a data center ISSC Machine malfunction and/or ISSC
Systems Software support for systems programming problems;
E. monitor Data Center problems to resolution and report progress to CES
help desk;
F. close the PMR at problem resolution;
G. confirm problem resolution with CES help desk;
H. provide a monthly summary of all problems opened and closed during
the reporting period in accordance with the Procedures Manual;
I. provide assistance for problems pertaining to the procedures for the
new environment;
J. report on the status of batch jobs upon request;
K. notify designated CES personnel of systems or equipment failures, or
of an emergency, according to the Procedures Manual; and
L. maintain and distribute an updated Help Desk telephone number
listing.
Hours of Operation
The ISSC Operations Help Desk hours will be 24 hours a day, 7 days a
week.
III. CES RESPONSIBILITIES
CES will:
A. provide single-point-of-contact for CES users;
B. contact the ISSC Data Center help desk for Data Center information
and problems;
C. provide feedback to CES users concerning information requests and
problem status for problems referred to the ISSC Data Center help
desk;
D. route call to applicable services provider, e.g., maintenance vendor
in the case of a data center CES-Retained Machine malfunction, appli-
cations support for systems programming problems, CES help desk for
LAN or WAN problems, CES AD/M personnel for Applications Software or
applications problems, etc.;
E. recycle, start and stop devices at CES end user or CES AD/M request;
F. reset passwords;
January 10, 1995
ISSC/CES Confidential Schedule I Page 1 of 3
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<PAGE>
G. report on the status of batch jobs upon request;
H. perform end user and applications support, operations and training;
and
I. maintain an updated listing for use by the ISSC Data Center help desk
for contacting appropriate CES personnel for assistance/notification
as specified above.
IV. ISSC DATA CENTER HELP DESK FLOW
+------------+
| USERS |
| |
+------|-----+
|
+------|-----+
+--------------------->| CES |<------------------------------------+
| +-----------+ | Help Desk | |
|---->| CES ---+ +------|-----+ +------------+ |
| | AD/M | | | +-------------| CES |<---|
| +-----------+ | | | | |COMMO SPT | |
| | | | | +------------+ |
| | | | | |
| +----|--------|-----------|--+ | +------------+ |
| | ISSC Data Center Help Desk | +-----| CES |<---|
| +-------------|--------------+ |TECH SVCS | |
| | +------------+ |
| | |
| | |
| | |
| +----|----+ +---------+ |
| Info/Status | Info or | Problem | ISSC | No |
+------------------------| Problem |----------------->| Problem |-------->|
+---------+ +----|----+ |
Yes| |
+----|----+ |
| Open | |
| PMR | |
+----|----+ |
| |
+---------------------------+ +-----|-----+ |
+----|----+ +----|----+ | Dispatch | |
|Escalate | No | Problem |<----------------| Svc Vendor| |
| as |<----------------| Resolved| | &/or Route| |
|Required | +----|----+ | to Tech. | |
+---------+ Yes| +-----------+ |
+----|----+ |
| Close | Notify CES |
| PMR |--------------------------------------+
+----|----+
|
+----|----+
| Update |
| Monthly |
| Records |
+---------+
V. SERVICES RESPONSIBILITIES MATRICES
The Services Responsibilities Matrices attached as Exhibit I-1 to this
Schedule summarizes the roles and responsibilities of the ISSC and CES
help desks.
January 10, 1995
ISSC/CES Confidential Schedule I Page 2 of 3
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<PAGE>
Schedule I
Operations Help Desk
Exhibit I-1
Services Responsibilities Matrices
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] HELP DESK - ISSC (DATA CENTER OPERATIONS ONL+--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] ANSWER CALLS FROM CES HELP DESK ] X ] ]
+---------------------------------------------+--------------+--------------+
] PROBLEM MANAGEMENT ] ] ]
+---------------------------------------------+--------------+--------------+
] -- RECORD PROBLEMS ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- TRACK PROBLEMS THROUGH RESOLUTION ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- PROVIDE FEEDBACK TO CES HELP DESK ] X ] ]
+---------------------------------------------+--------------+--------------+
] PROBLEM SUPPORT (ISSC MACHINES) ] X ] ]
+---------------------------------------------+--------------+--------------+
] INVOKE PROPER PROBLEM RESOLUTION RESOURCES ] X ] ]
+---------------------------------------------+--------------+--------------+
] DISPATCH SERVICE PROVIDER (ISSC MACHINES) ] X ] ]
+---------------------------------------------+--------------+--------------+
] FOLLOW-UP FOR RESOLUTION STATUS (ISSC ] X ] ]
] MACHINES) ] ] ]
+---------------------------------------------+--------------+--------------+
] ESCALATE TO NEXT LEVEL OF SUPPORT (ISSC ] X ] ]
] MACHINES) ] ] ]
+---------------------------------------------+--------------+--------------+
] NOTIFY CES HELP DESK OF SYSTEMS ] X ] ]
] AVAILABILITY (EXCEPTION PROCESS ONLY) ] ] ]
+---------------------------------------------+--------------+--------------+
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] HELP DESK - CES +--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] ANSWER CALLS FROM USERS ] ] X ]
+---------------------------------------------+--------------+--------------+
] PROBLEM MANAGEMENT ] ] ]
+---------------------------------------------+--------------+--------------+
] -- RECORD PROBLEMS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- TRACK PROBLEMS THROUGH RESOLUTION ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- PROVIDE FEEDBACK TO USERS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- INTERFACE WITH ISSC HELP DESK ] ] X ]
+---------------------------------------------+--------------+--------------+
] INVOKE PROPER PROBLEM RESOLUTION RESOURCES ] ] X ]
+---------------------------------------------+--------------+--------------+
] DISPATCH SERVICE PROVIDER (CES-RETAINED ] ] X ]
] MACHINES) ] ] ]
+---------------------------------------------+--------------+--------------+
] COORDINATE SERVICE/MAINTENANCE CALLS ] ] X ]
] (CES-RETAINED MACHINES) ] ] ]
+---------------------------------------------+--------------+--------------+
] FOLLOW-UP FOR RESOLUTION STATUS ] ] X ]
+---------------------------------------------+--------------+--------------+
] ESCALATE TO NEXT LEVEL OF SUPPORT ] ] X ]
+---------------------------------------------+--------------+--------------+
] NOTIFY USERS OF SYSTEMS AVAILABILITY ] ] X ]
+---------------------------------------------+--------------+--------------+
] LEVEL ONE AND LEVEL TWO SUPPORT OF CES ] ] X ]
] SYSTEMS & APPLICATIONS ] ] ]
+---------------------------------------------+--------------+--------------+
] LEVEL ONE AND LEVEL TWO SUPPORT OF ] ] X ]
] CES-RETAINED MACHINES ] ] ]
+---------------------------------------------+--------------+--------------+
January 10, 1995
ISSC/CES Confidential Schedule I Page 3 of 3
</TABLE>
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<PAGE>
ISSC / Ceridian Corporation
Agreement for Information Technology Services
-----------------------------------------------------------------------------
Schedule J
ISSC Charges, Measures of Utilization and
Financial Responsibilities
I. INTRODUCTION
This Schedule J describes the methodologies for calculating the charges
with respect to the Services being provided to CES pursuant to the Agree-
ment, other than those Services which may be provided to CES on an Out-
of-Pocket Expenses billing basis or to the extent the Agreement expressly
provides otherwise. The Annual Services Charge ("ASC"), as adjusted by
Acceleration Charges, Deferral Credits, Site 2 Credits, Additional
Resource Charges ("ARCs"), Baseline Adjustment charges and credits (the
"Adjusted ASC"), the Cost of Living Adjustment ("COLA") and the related
charge provisions set forth in Section 7 of the Agreement are intended,
in the aggregate, to compensate ISSC for all of the resources used in
providing the Services. In addition, this Schedule J describes the
Equipment Installation Plan and the measures of resource utilization and
the tracking thereof.
All capitalized terms used and not defined in this Schedule J shall have
the same meanings given them in the Agreement, Supplement or other Sched-
ules.
II. ANNUAL SERVICES CHARGE
The Annual Services Charge is the fixed charge to CES for ISSC's pro-
vision of the Services and includes the quantity of Resource Units set
forth under Capacity Plan and Baselines in the Supplement.
Beginning on the Execution Date and monthly thereafter, ISSC will invoice
CES in advance for the proportional monthly amount of the Annual Services
Charge due ISSC. The monthly amount will be calculated by dividing the
Annual Services Charge specified in the Supplement by 12, which will then
be netted with any applicable credits and charges as described in this
schedule to arrive at the Adjusted ASC.
III. COST OF LIVING ADJUSTMENT
The Parties agree to use the December unadjusted Consumer Price Index, as
published in the "Summary Data from the Consumer Price Index News
Release" by the Bureau of Labor Statistics, U.S. Department of Labor, For
All Urban Consumers, ("CPI-U"), for purposes of determining actual
inflation.
ISSC will calculate the Cost of Living Adjustment beginning in January
following the Commencement Date using the factor specified below, (the
"COLA Factor"). If such factor is in excess of zero, COLA monies will be
due ISSC for the applicable period; and if the COLA Factor is less than
zero (minus), ISSC shall provide CES with COLA credits for the applicable
period. The COLA is applied and payable monthly on a prospective basis
(e.g., the actual inflation for year 1995 will determine the COLA for
1996) for the inflation sensitive portions, 58%, of the Adjusted ASC
payable by CES under this Agreement for the subsequent calendar year.
The COLA Factor will be determined as soon as practicable after the end
of each calendar year and the COLA will be calculated as follows:
January 10, 1995
ISSC/CES Confidential Schedule J Page 1 of 37
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<PAGE>
A. Actual Inflation
ISSC will calculate the COLA by comparing the change in the year-to-
year CPI-U with the CPI-U for the December preceding the Commencement
Date, (the "Base Year Index"). For each year of the Term, the actual
CPI-U for the December prior to the year for which COLA is being cal-
culated, (the "Actual Index"), is compared to the Base Year Index set
forth in the Supplement, and:
1. if the Actual Index for any year is equal to the Base Year Index,
then no COLA monies or COLA credits are due for the succeeding
year; or
2. if the Actual Index for any year is greater than the Base Year
Index, then COLA will be applied to the Adjusted ASC due ISSC in
the succeeding year, or
3. if the Actual Index for any year is less than the Base Year
Index, then ISSC will issue COLA credits against the Adjusted ASC
due ISSC in the succeeding year.
For example purposes, we will assume that the actual CPI-Us for
December of each of the first few years are:
BASE 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
YEAR
ACTUAL
INFLAT144.8149.0154.3158.0144.8143.9
B. COLA Factor:
COLA is equal to the COLA Factor times the monies due ISSC for each
month of the calendar year succeeding the calendar year during which
Actual Index is different than the Base Year Index. The COLA Factor
is calculated as follows:
COLA FACTOR = {((ACTUAL INDEX - BASE YEAR INDEX) / BASE YEAR
INDEX) * 0.58}
WHERE:
Actual Index = The CPI-U for December preceding the cal-
endar year for
which COLA is being calculated.
Base Year Ind=x The CPI-U for the December preceding the
Commencement Date.
0.58 = The portion of the charges that are
inflation sensitive.
C. COLA Calculation:
Following is an example for calculating the COLA for years beginning
January 1, 1996 for an Agreement having a 1995 Commencement Date
using the Actual Index, Base Year Index and COLA Factor specified
above:
In the above example, there will be COLA monies due ISSC for calendar
years 1996, 1997 and 1998 as the Actual Index for their preceding
years is greater than the Base Year Index, i.e., Decembers 1995, 1996
and 1997 CPI-Us (149.0, 154.3 and 158.0) are greater than the Base
Year Index (144.8).
To determine the COLA monies due, in addition to the other charges,
for February of 1996 where the monthly prorated portion of the ASC
for February is $500,000.00 and there are CPU Acceleration Charges of
January 10, 1995
ISSC/CES Confidential Schedule J Page 2 of 37
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<PAGE>
$57,000.00, DASD Deferral Credits of $18,230.00 and Tape Mount ARCs
of $500.00 due for that month, the calculation will be as follows:
COLA = {(ASC + Acceleration Charges - Deferral Credits +
ARCs) * COLA Factor}
COLA = {(($500,000 + $57,000 - $18,230 + $500) * (149.0 -
144.8) / 144.8) * 0.58}
COLA = $539,270 * {(4.2 / 144.8) * 0.58}
COLA = $539,270 *(0.0290 * 0.58)
COLA = $539,270 * 0.0168
COLA = $9,059.74 due ISSC for that month
In the example above, there will be no COLA monies due ISSC or COLA
credits due CES for calendar year 1999 as the Actual Index for the
preceding years is equal to the Base Year Index, i.e., Decembers 1998
CPI-U (144.8) is equal to the Base Year Index (144.8); however, there
will be COLA credits due CES for calendar year 2000 as the Actual
Index for the preceding years is less than the Base Year Index, i.e.,
Decembers 1999 CPI-U (143.9) is less than to the Base Year Index
(144.8).
Assuming the same variables and dollar values as in the example
above, to determine the COLA credits due CES for February of 2000
where the monthly prorated portion of the ASC for February is
$500,000.00 and there are CPU Acceleration Charges of $57,000.00,
DASD Deferral Credits of $18,230.00 and Tape Mount ARCs of $500.00
due for that month, the calculation will be as follows:
COLA = {(ASC + Acceleration Charges - Deferral Credits +
ARCs) * COLA Factor}
COLA = {(($500,000 + $57,000 - $18,230 + $500) * (143.9 -
144.8) / 144.8) * 0.58}
COLA = $539,270 * {(-0.9 / 144.8) * 0.58}
COLA = $539,270 *(-0.0062 * 0.58)
COLA = $539,270 * -0.0036
COLA = $1,941.37 due CES for that month
The COLA for each month of each year in which COLA monies or COLA
credits are due are calculated as above substituting the appropriate
monthly monies and COLA Factors based upon the calendar year.
D. COLA Index Change
In the event the Bureau of Labor Statistics stops publishing the
CPI-U or substantially changes its content and format, the Parties
will substitute another comparable index published at least annually
by a mutually agreeable source. If the Bureau of Labor Statistics
merely redefines the base year for the CPI-U from 1982-84 to another
year, the Parties will continue to use the CPI-U, but will convert
the Base Year Index to the new base year by using an appropriate con-
version formula.
ISSC will invoice CES for COLA, if any, starting in January 1996 and
monthly thereafter as specified in Section 8.2 of the Agreement.
IV. UNITS OF MEASURE FOR RESOURCE CATEGORIES
Starting at the Execution Date and monthly thereafter, ISSC will measure,
track and report capacity units and usage of Resource Units (RUs) in the
categories listed below.
A. CPU and DASD
ISSC will be operating the CES data processing environment on
resources dedicated solely to CES, unless otherwise agreed by the
January 10, 1995
ISSC/CES Confidential Schedule J Page 3 of 37
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<PAGE>
Parties. The Parties have agreed upon the equipment installation
plan set forth in Section H-2 of Schedule H, ("Equipment Plan"), and
the CPU and DASD growth throughout the Term that will provide the
anticipated capacity to process CES's applications development, test
and production requirements, (the "Capacity Plan"). The CPU growth,
expressed in MIPS, and DASD growth, expressed in gigabytes, are set
forth on the Supplement under Capacity Plan.
Resource usage for CPU and DASD will be the capacity of the installed
CPU(s), associated DASD and peripheral equipment, exclusive of tapes,
attached to such processing unit(s) as specified in the Equipment
Plan.
Additional capacity, whether needed for:
1. maintaining agreed upon service levels for CES end users;
2. increased processing requirements for existing users;
3. processing requirements for new users;
4. processing requirements for additional applications development
and maintenance; or
5. processing new applications,
will be the responsibility of CES or, at CES's request, will be pro-
vided by ISSC pursuant to Section V of this Schedule.
B. Tape Utilization
Resource usage for this category will be measured as the aggregate
number of tapes loaded by ISSC at the Data Center during the appli-
cable measurement period which are necessary to run the Applications
Software. Tape mounts are counted for each application job name or
user ID which invoked the tape mount and include, but are not limited
to:
1. application and system specified mounts;
2. systems backups, journals and archives;
3. tape correspondence; and
4. application development and maintenance tape mounts.
For purposes of this Schedule and Agreement a "Tape Mount" means any
physical mount of a tape by an operator or "ejects" on the Automated
Tape Library, ("ATL"). The initial loading of the tapes in the ATL
and tape mounts and dismounts performed by the ATL are not considered
Tape Mounts and are not counted when comparing actual Tape Mounts to
the Tape Utilization Baseline for reporting Tape Utilization or cal-
culating ARCs. Tape utilization will be measured using SMF Type 30
records or equivalent tape management system products reports and
will exclude Tape Mounts related to ISSC's Systems Software Mainte-
nance responsibilities under this Agreement.
One tape mount equals one RU.
The Tape Mount Baseline set forth in the Supplement reflects the
agreed upon quantity of Tape Utilization Resource Units including any
January 10, 1995
ISSC/CES Confidential Schedule J Page 4 of 37
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<PAGE>
growth factors and/or seasonal adjustments, the charges for which are
included in the Annual Services Charge.
C. Tape Library
Resource usage for this category will be measured as the aggregate
number of tapes in the CES tape library necessary to support the Ser-
vices.
One tape reel/cartridge equals one RU.
The Tape Library Baseline set forth in the Supplement reflects the
agreed upon quantity of Tape Library Resource Units including any
growth factors and/or seasonal adjustments, the charges for which are
included in the Annual Services Charge.
D. Tape Transfer
Resource usage for this category will be measured as the aggregate
number of tapes ISSC bar codes, packages and ships to or receives
from CES's customers or vendors. This Resource Unit does not include
expenses for the tape media, whether new or replacement, nor the
actual expenses for packaging materials and transporting the tapes
between the Data Center and CES's customers or vendors. Any media,
packaging materials or shipping expenses incurred by ISSC will be
invoiced to CES as Out-of-Pocket Expenses.
One tape reel/cartridge shipped or received equals one RU.
The Tape Transfer Baseline set forth in the Supplement reflects the
agreed upon quantity of Tape Transfer Resource Units including any
growth factors and/or seasonal adjustments, the charges for which are
included in the Annual Services Charge.
E. Tape Vaulting
Resource usage for this category will be measured as the aggregate
number of CES tapes stored in off-site storage facilities. This
Resource Unit does not include expenses for tape media but does
include transportation expenses to and from the off-site storage
facility and the storage costs at the vault.
One tape reel/cartridge equals one RU.
The Tape Vaulting Baseline set forth in the Supplement reflects the
agreed upon quantity of Tape Vaulting Resource Units including any
growth factors and/or seasonal adjustments, the charges for which are
included in the Annual Services Charge.
V. CAPACITY ACCELERATION/DEFERRAL
The Equipment Plan set forth in Section H-2 of Schedule H and the
Capacity Plan for CPU and DASD specified in the Supplement are CES's
estimate of the data processing requirements necessary to support CES's
applications development, test and production requirements. The Parties
understand that CES's CPU and DASD capacity requirements may need to be
accelerated (installed earlier than the schedule in the Equipment and/or
Capacity Plans) or deferred (installed later than the schedule in the
Equipment and/or Capacity Plans) depending on such things as business
growth, conversion of the existing production environments to the new
platform schedule changes, etc. The Parties further understand and agree
that CES may, in fact, install CPU and/or DASD resources in excess of the
Equipment and Capacity Plans, which, for the purposes of this Schedule
and Agreement, will be considered an acceleration of capacity and subject
to an Acceleration Charge even though such capacity was not contemplated
in the Equipment and/or Capacity Plans.
January 10, 1995
ISSC/CES Confidential Schedule J Page 5 of 37
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<PAGE>
To accommodate the variability inherent in the future environments and to
provide necessary flexibility required to meet the probable business
changes, CES will be allowed, subject to Section 4.3(b) of the Agreement,
to accelerate or defer the installation of CPU and DASD capacity that is
in excess of the initial 30 MIPS of CPU capacity and 90 gigabytes of DASD
capacity.
The initial 30 MIPS of CPU capacity and 90 gigabytes of DASD capacity
shall constitute the "Base System" and costs associated with the Base
System include provision of such data processing resources as the Tape
Utilization, Library, Vaulting and Transfer Baseline resources, tape
equipment (reel or cartridge), personnel resources (ISSC Project Execu-
tive, account manager, Systems Software support, help desk, operations,
etc.), Disaster Recovery, Systems Software licensed by ISSC per Schedule
B, 3745 communication controller, space for CES Retained Machines,
Required Consents to the limit specified in the Agreement, and ISSC
facilities and ISSC facilities support equipment.
The methodology for CES to accelerate and/or defer CPU and/or DASD
capacity in excess of the Base System is described below.
A. Deferral
With at least three months prior written notice, CES may defer the
installation of all or some portion thereof (explained further in
Section V.D below) of either or both CPU MIPS or DASD gigabytes. In
which case ISSC shall reduce the monthly pro rata portion of the
Annual Services Charge by the CPU and/or DASD Capacity Rate in effect
for that month multiplied by the number of CPU MIPS and/or DASD
gigabytes deferred for each month the CPU and/or DASD is deferred,
(the "Deferral Credit"). Deferral Credits shall be prorated for
partial months deferral. Any deferral of capacity that crosses a
Contract Year boundary will use the Capacity Rates applicable to the
new Contract Year when calculating Deferral Credits.
January 10, 1995
ISSC/CES Confidential Schedule J Page 6 of 37
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<PAGE>
B. Acceleration
With at least three months prior written notice before the desired
installation date, CES may accelerate the installation of either or
both CPU MIPS or DASD gigabytes (pursuant to Section V.D below) and
ISSC shall increase the monthly pro rata portion of the Annual Ser-
vices Charge by the CPU and/or DASD Capacity Rate in effect for that
month multiplied by the number of CPU MIPS and/or DASD gigabytes
accelerated for each month the CPU and/or DASD is installed early,
(the "Acceleration Charge"). Acceleration Charges will be prorated
for partial months acceleration. Any acceleration of capacity that
crosses a Contract Year boundary will use the Capacity Rates appli-
cable to the new Contract Year when calculating Acceleration Charges.
The amounts in addition to the ASC for the early install of CPU
and/or DASD will continue until such time as the capacity would have
been installed under the Equipment and/or Capacity Plans, or, in the
case of capacity in excess of the Equipment and/or Capacity Plans,
until the end of the Term, using the Capacity Rates applicable to
each remaining Contract Year.
C. Rates
The Capacity Rates set forth in the Supplement, in the case of a
credit to CES for a deferral of capacity, reimburse CES for all asso-
ciated resources that would have been necessary for ISSC to install
and support CPU MIPS or DASD gigabytes and that were included in the
Annual Services Charge; and, conversely in the case of a payment to
ISSC for an acceleration of capacity, reimburse ISSC for all associ-
ated resources necessary to install and support the CPU MIPS and/or
DASD gigabytes being installed in excess of the Equipment and/or
Capacity Plans. The additional resources referenced above include,
but are not limited to, such things as computer operators, Systems
Software support personnel, ISSC operations help desk, Disaster
Recovery, Systems Software upgrade fees, ISSC facilities, resultant
Software and equipment maintenance fees and purchase/lease of the
equipment. If ISSC is required to add incremental Systems Software,
personnel or training as a result of CES's request for capacity
acceleration or deferral, then ISSC shall provide CES with the price
for such incremental additions and, upon CES's approval, provide such
resources and, if necessary, amend the applicable portions of the
Agreement in accordance with Section 18.4 of the Agreement. The
rates for each unit of additional installed and/or deferred CPU MIPS
and DASD gigabytes are reduced for each year of the Term to reflect
the efficiencies ISSC has factored in the pricing to CES.
Any capacity acceleration and/or deferral that begins in one Contract
Year and extends into another Contract Year shall use the Capacity
Rates in effect for each Contract Year in which the capacity acceler-
ation and/or deferral is occurring, e.g., if CES accelerates the
installation of 90 gigabytes of DASD that would have been normally
installed on May 1, 1996 by six months then the monthly Acceleration
Charge for the two months occurring in 1995 will be calculated using
the 1995 Capacity Rate for DASD (90 gigabytes * $225.00 = $20,250.00
per month) and the Acceleration Charge for the remaining four months
will be calculated using the 1996 Capacity Rate for DASD (90
gigabytes * $207.00 = $18,630.00 per month). The monthly Deferral
Credit will be calculated using the same logic.
D. Increments
January 10, 1995
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The capacity rates for CPU MIPS and DASD gigabytes set forth in the
Supplement under Capacity Rates are a rate per each MIPS of installed
CPU capacity above the Base System and a rate per each gigabyte of
installed DASD capacity above the Base System for all Contract Years
of the Term. The actual minimum number of MIPS or gigabytes that can
be accelerated or deferred will be dependent upon variables deter-
mined by where the installed capacity is with respect to the Equip-
ment and/or Capacity Plans as follows:
1. The minimum capacity acceleration/deferral increments of CPU MIPS
capacity will be determined by such things as CES's requested
acceleration/deferral increment as modified by the then current
technology, available compatible machines and/or model incre-
ments, etc., and will be agreed to by the Parties at the quar-
terly planning sessions and/or at such time as CES requests such
capacity acceleration or deferral.
2. The minimum increment of DASD acceleration or deferral is 90
gigabytes or such other increment as dictated by technology at
the time CES requests DASD capacity acceleration or deferral.
The 90 gigabyte minimum increment includes a DASD controller.
The DASD Capacity Rates in the Supplement includes the costs for
provision of the DASD controller.
3. With at least 30 days prior notice, CES and ISSC may mutually
agree upon other acceptable minimum increments of DASD capacity
that may or may not include the provision of a DASD Controller,
in which event ISSC shall provide new Capacity Rates commensurate
with the requested change in DASD capacity increments.
It is ISSC's intent to accelerate/defer the increments of CPU/DASD
capacity requested by CES consistent with the factors set forth
above.
E. Short Lead Time Requests
In the event CES wishes to accelerate or defer CPU and/or DASD
capacity and CES is unable to provide the requisite three months
planning horizon, ISSC will use commercially reasonable efforts to
accommodate such requests at no additional charges over the Acceler-
ation Charge or Deferral Credit as calculated above. If there will
be additional charges, prior to accelerating or deferring such
capacity, ISSC will quote to CES the Out-of-Pocket Expenses, if any,
over and above the Capacity Rates specified in the Supplement caused
by such late notification. Upon CES's approval of such additional
costs, ISSC shall accelerate or defer the requested capacity and
invoice CES for such additional costs as Out-of-Pocket Expenses.
F. Installed Equipment
CES's ability to accelerate or defer capacity installation is for
uninstalled CPUs MIPS or DASD gigabytes only. Once equipment is
installed it can only be discontinued, provided such discontinuances
are not for Base System CPU and/or DASD capacity or due to CES
resuming the provision of such Services by itself or CES transferring
the provision of such Services to another vendor, as follows:
1. CES will notify ISSC 90 days in advance of its intent to discon-
tinue excess installed CPU and/or DASD capacity. The increments
January 10, 1995
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<PAGE>
of CPU and/or DASD capacity requested for discontinuance must
conform to the minimum acceleration/deferral increments set forth
in Section V.D above.
2. ISSC will identify the changes that need to be made in the envi-
ronment to accommodate the requested decrease of capacity
requirements in a cost-effective manner without disruption to
CES's ongoing operations, and the cost savings that will result
therefrom in a plan that will be submitted to CES for review and
acceptance.
3. Upon CES's acceptance of such plan and ISSC's off-loading of such
capacity, ISSC will make the applicable adjustments to the Annual
Services Charge and the Capacity Plan to reflect the foregoing
and distribute an amended Supplement to the Parties.
4. CES may, at its option and expense, employ an accredited and
independent auditor to verify ISSC's methodology for calculating
the savings referenced in Section V.F.2 above conform to accepted
accounting practices.
G. Rates Refresh and ASC Adjustments
ISSC will periodically recalculate the Capacity Rates and that
portion of the ASC applicable to uninstalled capacity (including
deferred capacity but not including replacement Machines for existing
capacity) as described herein. The intent is for the Capacity Rates
and ASC for future additions of capacity to more accurately reflect
increases or decreases in the cost of providing the Services than if
the ASC and Capacity Rates were based on a fixed price-performance
improvement rate over the entire Term.
During the fourth quarters of each of the third, sixth, and ninth
Contract Years (each a "Rate Refresh"), ISSC will re-project the
price-performance improvement rate in data processing services (the
"Revised Improvement Rate") using the same methodology that it used
to estimate the improvement rate at the prior Rate Refresh (the Com-
mencement Date in the case of the Rate Refresh occurring in the third
Contract Year) (the "Previous Improvement Rate"). The estimated
price-performance improvement rate used as of the Commencement Date
is deemed to be 8% according to ISSC's proprietary modeling calcu-
lations. In computing the Revised Improvement Rate, ISSC will nor-
malize its calculations to remove any effect of inflation.
If the Revised Improvement Rate varies from the Previous Improvement
Rate by three percentage points or more, then ISSC will adjust the
Capacity Rates using the Revised Improvement Rate instead of the Pre-
vious Improvement Rate and adjust the ASC as described below. ISSC
will increase or decrease, as the case may be, the ASC by multi-
plying the uninstalled capacity by the applicable number of months in
accordance with the capacity plan and by the increase or decrease,
respectively, in the Capacity Rates, using the following formula:
o New ASC = Original ASC
- ((deferred CPU * 12 months * original CPU Capacity Rate )
+ (future planned CPU * number of months planned installed *
original CPU Capacity Rate) + (deferred DASD * 12 months *
original DASD Capacity Rate) + (future planned DASD * number
of months planned installed * Original DASD Capacity Rate))
January 10, 1995
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+ ((deferred CPU * 12 months * revised CPU Capacity Rate) +
(future planned CPU * number of months planned installed *
revised CPU Capacity Rate) + (deferred DASD * 12 months *
revised DASD Capacity Rate) + (future planned DASD * number
of months planned installed * revised DASD Capacity Rate))
The adjustment to the ASCs for each year will be based on the differ-
ence between the planned capacity for such year and the installed
capacity at the end of the year before the refresh becomes effective.
Such Capacity Rates and ASC will be applicable commencing after the
end of the quarter in which the Rate Refresh is performed. ISSC will
distribute a revised Supplement showing the revised Capacity Rates
and ASC.
o Example 1:
In the fourth quarter of 1997 the Revised Improvement Rate is 5%
instead of 8%. Thirty MIPS have been deferred going into 1998,
and DASD is on plan.
The revised CPU and DASD Capacity Rates would be as follows:
Contract Year
1998 1999 2000 2001 2002 2003 2004
CP1,450 1,378 1,309 1,244 1,182 1,123 1,067
DAS181 172 163 155 147 140 133
The revised Annual Services Charge applicable for 1998 would be
calculated as follows:
1. Original ASC: $12,834,000
2. Less: Portion attributable to future capacity:
CPU:
30 MIPS * 12 months * $1,400= $504,000
(370 MIPS - 330 MIPS) * 5 mo=t$280,000400
DASD:
(1,350 gigs. - 1,260 gigs.) *=4$63,000 * $175
-------------
- $847,000
3. Plus: Future capacity at new rates:
CPU:
30 MIPS * 12 months * $1,450= $522,000
(370 MIPS - 330 MIPS) * 5 mo=t$290,000450
DASD:
(1,350 gigs. - 1,260 gigs.) *=4$65,160 * $181
-------------
+ $877,160
-------------
4. New Annual Services Charge for 1998 $12,864,160
January 10, 1995
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<PAGE>
The revised Annual Services Charge for 1999 would be calculated
as follows:
1. Original ASC: $13,134,000
2. Less: Portion attributable to future capacity:
CPU:
30 MIPS * 12 months * $1,300= $468,000
(370 MIPS - 330 MIPS) * 5 mo=t$260,000300
(370 MIPS - 330 MIPS) * 7 mo=t$364,000300
(410 MIPS - 330 MIPS) * 5 mo=t$520,000300
DASD:
(1,350 gigs. - 1,260 gigs.) = $ 57,960 * $161
(1,350 gigs. - 1,260 gigs.) = $115,920 * $161
(1,530 gigs. - 1,260 gigs.) = $173,880 * $161
--------------
- $1,959,760
3. Plus: Future capacity at new rates:
CPU:
30 MIPS * 12 months * $1,378= $496,080
(370 MIPS - 330 MIPS) * 5 mo=t$275,600378
(370 MIPS - 330 MIPS) * 7 mo=t$385,840378
(410 MIPS - 330 MIPS) * 5 mo=t$551,200378
DASD;
(1,350 gigs. - 1,260 gigs.) = $ 61,920 * $172
(1,350 gigs. - 1,260 gigs.) = $123,840 * $172
(1,530 gigs. - 1,260 gigs.) = $185,760 * $172
--------------
+$2,080,240
----------------
4. New Annual Services Charge for 1999 $13,254,480
o Example 2:
In the fourth quarter of 1997 the Revised Improvement Rate is 11%
instead of 8%. Thirty MIPS have been deferred going into 1998,
and DASD is on plan.
The revised CPU and DASD Capacity Rates would be as follows:
Contract Year
1998 1999 2000 2001 2002 2003 2004
CP1,357 1,208 1,075 957 852 759 677
DAS169 151 135 120 107 95 85
The revised Annual Services Charge applicable for 1998 would be
calculated as follows:
1. Original ASC: $12,834,000
2. Less: Portion attributable to future capacity:
January 10, 1995
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<PAGE>
CPU:
30 MIPS * 12 months * $1,400= $504,000
(370 MIPS - 330 MIPS) * 5 mo=t$280,000400
DASD:
(1,350 gigs. - 1,260 gigs.) *=4$63,000 * $175
-------------
- $847,000
3. Plus: Future capacity at new rates:
CPU:
30 MIPS * 12 months * $1,357= $488,520
(370 MIPS - 330 MIPS) * 5 mo=t$271,400357
DASD:
(1,350 gigs. - 1,260 gigs.) *=4$60,840 * $169
-------------
+ $820,760
--------------
4. New Annual Services Charge for 1998 $12,807,760
The Required Consents Cap will be adjusted by the percentage increase
or decrease, respectively, if any, in the ASC as a result of the pro-
cedures described above.
In addition to the Direct Damages Cap adjustment set forth in Section
12.2(a)(1) of the Agreement and the Direct Damages Cap adjustment
described in Section VIII of this Schedule J, the Direct Damages Cap
will be adjusted by the percentage increase or decrease, respec-
tively, if any, in the ASC as a result of the procedures described
above.
If CES requests, IBM's independent outside auditor will examine
ISSC's computation of the Actual Improvement Rate, the revised
Capacity Rates and the ASCs, and certify to CES that ISSC performed
the computations in accordance with the foregoing and consistent with
computations made in the calculation of the 8% estimated price per-
formance improvement rate used on the Commencement Date as described
in Section V.G of Schedule J, as modified in accordance with this
Schedule J.
January 10, 1995
ISSC/CES Confidential Schedule J Page 12 of 37
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<PAGE>
H. CES Supplied DASD
In the event that CES has available DASD due to discontinuance of
operations at its existing data processing sites through migration of
such operations to the new operating environment provided under this
Agreement and such DASD is a suitable replacement for DASD capacity
provided either under the Capacity Plan or in addition to that sup-
plied under the Capacity Plan and such CES provided DASD does not
cause ISSC to be in violation of its N-1 technology commitment then
CES shall be allowed to make such substitution or addition. The
Parties will determine an equitable adjustment to the Annual Services
Charge at the time of such CES request.
I. Deferral Limitations
CES may defer any or all increments of CPU and/or DASD capacity for
the entire Term and may cancel the Site 2 installation and ISSC will
provide the credits as described above. In the event that the total
dollar value of the Deferral Credits without COLA for any contiguous
three year period exceeds 95% of the total dollar value, without
COLA, of the capacity to be installed during such period as set forth
in the Capacity Plan, then the terms and conditions of Section
4.3(a)(2) shall be null and void.
For example, if the three year period being looked at ended on August
31, 1999 then we would look back to September 1, 1996 and determine
the incremental CPU and DASD capacity that was scheduled to be
installed in such period and determine the dollar value of such
scheduled capacity installations as follows:
1. Incremental CPU capacity for 1996 is 50 MIPS * 1 month * $1,650 =
$82,500
2. Incremental CPU capacity for 1997 is (50 MIPS * 12 months *
$1,525) + (110 MIPS * 5 months * $1,525) = $1,753,750
3. Incremental CPU capacity for 1998 is (160 MIPS * 12 months *
$1,400) + (40 MIPS * 5 months * $1,400) = $2,968,000
4. Incremental CPU capacity for 1999 is (200 MIPS * 8 months *
$1,300) + (40 MIPS * 1 month * $1,300) = $2,132,000
5. Incremental CPU capacity for period is $82,500 + $1,753,750 +
$2,968,000 + $2,132,000 = $6,936,250
6. Incremental DASD capacity for 1996 is zero (there is no scheduled
DASD capacity from September through December of 1996)
7. Incremental DASD capacity for 1997 is (180Gbytes * 10 months *
$190) + (180Gbytes * 5 months * $190) = $444,600
8. Incremental DASD capacity for 1998 is (360Gbytes * 12 months *
$175) + (90Gbytes * 4 months * $175) = $819,000
9. Incremental DASD capacity for 1999 is 450Gbytes * 8 months * $161
= $579,600
10. Incremental DASD capacity for period is $444,600 + $819,000 +
$579,600 = $1,843,200
January 10, 1995
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<PAGE>
11. Total Incremental capacity for period is $6,936,250 + $1,843,200
= $8,779,450
In this example if the total capacity Deferral Credits during the
period from September 1, 1996 through August 31, 1999 exceeds
$8,340,200, then the terms and conditions of Section 4.3(a)(2) are
null and void.
In the event that CES does not install Site 2, the Parties shall
agree on an equitable adjustment to the Capacity Plan to reflect the
lowered CPU and DASD capacity requirements for single site operation
and will use the same process described above with the agreed to
adjustment to the Capacity Plan for capacity installation expecta-
tions.
VI. SITE 2 DEFERRAL OPTION
Not later than December 1, 1995 and with nine months prior written
notice, CES may defer or cancel the installation of Site 2. If CES
cancels the installation of Site 2, a deferral of Site 2 installation of
greater than six months will be considered a Site 2 cancellation, ISSC
will, starting in April 1996, provide CES a monthly credit ("Site 2
Credit") in the amount specified in the Supplement under Site 2 Credits
for each remaining month in the Term. The Site 2 Credit will reimburse
CES for the monies factored into the Annual Services Charge for such
items as the real estate costs for Site 2, the tape equipment in Site 2
and the fit-up costs (UPS, motor generators, security systems, etc.) for
Site 2.
If CES, after cancelling or deferring Site 2 longer than six months,
decides to proceed with a Site 2 location, then ISSC shall provide CES,
as New Services pursuant to Section 7.6 of the Agreement, a price for
providing a Site 2 facility. The price for the new Site 2 facility may
be different from the Site 2 price factored in Annual Services Charge due
solely to increases in ISSC's costs associated with supplying Site 2 at
the time of CES's subsequent request for Site 2. CES's request for a new
Site 2 after cancelling the original Site 2 does not affect the monthly
Site 2 Credit for the cancelled original Site 2.
VII. TERMINATION CHARGES
The Termination Charges set forth in the Supplement are based on CES's
acceptance of the CPU/DASD capacity and Site 2 in accordance with the
Equipment and Capacity Plans, however, with the flexibility inherent in
this Agreement, CES is able to accelerate or defer CPU and DASD capacity
as well as defer or cancel Site 2 installation. Because this flexibility
in scheduling capacity and Site 2 installation affects the timing of
ISSC's capital and expense outlays, the Termination Charges will be
adjusted accordingly. The methodology for dynamically adjusting the Ter-
mination Charges will be as follows:
A. If CES elects to defer CPU and/or DASD capacity and/or cancel Site 2
Installation, then the Termination Charges for that Contract Year and
for each Contract Year thereafter during which CES is receiving
Deferral or Site 2 Credits will be reduced by the percentage the
dollar value of the credits for that Contract Year are of the Annual
Services Charge for that Contract Year.
For example:
January 10, 1995
ISSC/CES Confidential Schedule J Page 14 of 37
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<PAGE>
1. It is January 1, 1998 and all previous capacity increments have
been installed and Site 2 installation has occurred as scheduled;
and
2. CES notifies ISSC in writing that CES wishes to terminate the
Agreement for Convenience under Option 1 effective July 1, 1998;
and
3. CES notifies ISSC that CES wishes to defer the 60 MIPS of CPU
capacity and 90 gigabytes of DASD capacity scheduled for March 1,
1998 indefinitely (the 60 MIPS and 90 gigabytes are the only
capacity increases scheduled for 1998); and
4. There are an additional 30 MIPS and 90 gigabytes of CPU and DASD
scheduled for June 1, 1999;
then the calculation for determining the Termination Charges for July
1, 1998 are as follows:
a. Termination Charge for 1998 =
1) {1 - (((Deferred MIPS * 1998 Capacity Rate * #Months
Deferred) + Deferred DASD * 1998 Capacity Rate * #Months
Deferred) / 1998 ASC)} * 1998 Option 1 Termination Charge
2) {1 - (((60MIPS * $1,400 * 9 Months) + 90Gbytes * $175 * 9
Months) / $12,834,000)} * $7,700,000
3) {1 - (($756,000 + $141,750) / $12,834,000)} * $7,700,000
4) {1 - ($897,750 / $12,834,000)} * $7,700,000
5) {1 - .07} * $7,700,000
6) 0.93 * $7,700,000
7) $7,161,000 is the Option 1 Termination Charge for 1998
b. Termination Charge for 1999 =
1) {1 - (((Deferred MIPS * 1999 Capacity Rate * #Months
Deferred) + Deferred DASD * 1999 Capacity Rate * #Months
Deferred) / 1999 ASC)} * 1999 Option 1 Termination Charge
2) {1 - (((((60MIPS * $1,300 * 12 Months) + 30MIPS * $1,300
* 7 Months) + 90Gbytes * $161 * 12 Months) + 90Gbytes *
$161 * 7 Months) / $13,134,000)} * $6,400,000
3) {1 - (($936,000 + $273,000 + $173,880 + $101,430) /
$13,134,000)} * $6,400,000
4) {1 - ($1,484,310 / $13,134,000)} * $6,400,000
5) {1 - .113} * $6,400,000
6) 0.887 * $6,400,000
January 10, 1995
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<PAGE>
7) $5,676,800 is the Option 1 Termination Charge for 1999
c. Using the Termination Charge proration formula from Section
11.4 of the Agreement:
1) {(($7,161,000 - $5,676,800) / 12) * 6} + $5,676,800
2) {($1,484,200 / 12) * 6} + $5,676,800
3) {$123,683 * 6} + $5,676,800
4) $742,098 + $5,676,800
5) $6,418,898 is the Option 1 Termination Charge for July 1,
1998.
B. If CES elects to accelerate CPU and/or DASD capacity then the Termi-
nation Charges for that Contract Year would be increased by per-
centage the dollar value of the Acceleration Charges for that
Contract Year are to the Annual Services Charge for that Contract
Year.
For example:
1. It is January 1, 1998 and all previous capacity increments have
been installed and Site 2 installation has occurred as scheduled;
and
2. CES notifies ISSC in writing that CES wishes to terminate the
Agreement for Convenience under Option 1 effective July 1, 1998;
and
3. CES notified ISSC that CES wished to accelerate the 60 MIPS of
CPU capacity and 90 gigabytes of DASD capacity scheduled for
March 1, 1998 to January 1, 1998 (the 60 MIPS and 90 gigabytes
are the only capacity increases scheduled for 1998); and
4. There are an additional 30 MIPS and 90 gigabytes of CPU and DASD
scheduled for June 1, 1999;
then the calculation for determining the Termination Charges for July
1, 1998 are as follows:
a. Termination Charge for 1998 =
1) {1 + (((Accelerated MIPS * 1998 Capacity Rate * #Months
Accelerated) + Accelerated DASD * 1998 Capacity Rate *
#Months Accelerated) / 1998 ASC)} * 1998 Option 1 Termi-
nation Charge
2) {1 + (((60MIPS * $1,400 * 3 Months) + 90Gbytes * $175 * 3
Months) / $12,834,000)} * $7,700,000
3) {1 + (($252,000 + $47,250) / $12,834,000)} * $7,700,000
4) {1 + ($299,250 / $12,834,000)} * $7,700,000
5) {1 + .023} * $7,700,000
January 10, 1995
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<PAGE>
6) 1.023 * $7,700,000
7) $7,877,100 is the Option 1 Termination Charge for 1998
b. Termination Charge for 1999 =
1) {1 - (((Deferred MIPS * 1999 Capacity Rate * #Months
Deferred) + Deferred DASD * 1999 Capacity Rate * #Months
Deferred) / 1999 ASC)} * 1999 Option 1 Termination Charge
2) {1 - (((30MIPS * $1,300 * 7 Months) + 90Gbytes * $161 * 7
Months) / $13,134,000)} * $6,400,000
3) {1 - (($273,000 + $101,430) / $13,134,000)} * $6,400,000
4) {1 - ($374,430 / $13,134,000)} * $6,400,000
5) {1 - .029} * $6,400,000
6) 0.971 * $6,400,000
7) $6,214,200 is the Option 1 Termination Charge for 1999
c. Using the Termination Charge proration formula from Section
11.4 of the Agreement:
1) {(($7,877,100 - $6,214,200) / 12) * 6} + $6,214,200
2) {($1,662,900 / 12) * 6} + $6,214,200
3) {$138,575 * 6} + $6,214,200
4) $831,450 + $6,214,200
5) $7,045,650 is the Option 1 Termination Charge for July 1,
1998.
VIII. REQUIRED CONSENTS CAP AND DIRECT DAMAGES CAP
The Required Consents Cap and Direct Damages Cap set forth in Sections
3.5 and 12.2 respectively in the Agreement are based on CES's acceptance
of the CPU/DASD capacity and Site 2 in accordance with the Equipment and
Capacity Plans, however, with the flexibility inherent in this Agreement,
CES is able to accelerate or defer CPU and DASD capacity as well as defer
or cancel Site 2 installation. Because this flexibility in scheduling
capacity and Site 2 installation affects the timing of ISSC's capital and
expense outlays and ISSC's total revenue for this Agreement, the Required
Consents Cap and Direct Damages Cap will be adjusted accordingly. The
methodology for dynamically adjusting the Required Consents Cap and
Direct Damages Cap will be as follows:
A. If CES elects to defer CPU and/or DASD capacity and/or defer and/or
cancel Site 2 installation, then the Required Consents Cap and Direct
Damages Cap for that Contract Year and for each Contract Year there-
after during which CES is receiving Deferral or Site 2 Credits will
be reduced by the percentage the dollar value of the credits for that
Contract Year are of the Annual Services Charge for that Contract
Year.
January 10, 1995
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<PAGE>
For example:
1. It is January 1, 1998 and all previous capacity increments have
been installed and Site 2 installation has occurred as scheduled;
and
2. CES notifies ISSC that CES wishes to defer the 60 MIPS of CPU
capacity and 90 gigabytes of DASD capacity scheduled for March 1,
1998 indefinitely (the 60 MIPS and 90 gigabytes are the only
capacity increases scheduled for 1998);
then the calculations for determining the Required Consents Cap and
Direct Damages Cap beginning March 1, 1998 are:
a. Required Consents Cap =
1) {1 - (((Deferred MIPS * 1998 Capacity Rate * #Months
Deferred) + Deferred DASD * 1998 Capacity Rate * #Months
Deferred) / 1998 ASC)} * Required Consents Cap
2) {1 - (((60MIPS * $1,400 * 9 Months) + 90Gbytes * $175 * 9
Months) / $12,834,000)} * $600,000
3) {1 - (($756,000 + $141,750) / $12,834,000)} * $600,000
4) {1 - ($897,750 / $12,834,000)} * $600,000
5) {1 - .07} * $600,000
6) 0.93 * $600,000
7) $558,000 is Required Consents Cap for the remainder of
1998.
b. Direct Damages Cap =
1) {1 - (((Deferred MIPS * 1998 Capacity Rate * #Months
Deferred) + Deferred DASD * 1998 Capacity Rate * #Months
Deferred) / 1998 ASC)} * Direct Damages Cap
2) {1 - (((60MIPS * $1,400 * 9 Months) + 90Gbytes * $175 * 9
Months) / $12,834,000)} * $10,000,000
3) {1 - (($756,000 + $141,750) / $12,834,000)} * $10,000,000
4) {1 - ($897,750 / $12,834,000)} * $10,000,000
5) {1 - .07} * $10,000,000
6) 0.93 * $10,000,000
7) $9,300,000 is Direct Damages Cap for the remainder of
1998.
Both the Required Consents Cap and the Direct Damages Cap will have
to be recalculated for each Contract Year that CES is receiving
Deferral and/or Site 2 Credits using the Capacity and/or Site 2
January 10, 1995
ISSC/CES Confidential Schedule J Page 18 of 37
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<PAGE>
Credit Rates, total deferred capacity and/or Site 2 deferral, and
total number of deferral months applicable to each Contract Year.
B. If CES elects to accelerate CPU and/or DASD capacity then the
Required Consents Cap and Direct Damages Cap for that Contract Year
would be increased by percentage the dollar value of the Acceleration
Charges for that Contract Year are to the Annual Services Charge for
that Contract Year.
For example:
1. It is January 1, 1998 and all previous capacity increments have
been installed and Site 2 installation has occurred as scheduled;
and
2. CES notified ISSC that CES wished to accelerate the 60 MIPS of
CPU capacity and 90 gigabytes of DASD capacity scheduled for
March 1, 1998 to January 1, 1998 (the 60 MIPS and 90 gigabytes
are the only capacity increases scheduled for 1998);
then the calculations for determining the Required Consents Cap and
Direct Damages Cap for 1998 are as follows:
a. Required Consents Cap for 1998 =
1) {1 + (((Accelerated MIPS * 1998 Capacity Rate * #Months
Accelerated) + Accelerated DASD * 1998 Capacity Rate *
#Months Accelerated) / 1998 ASC)} * Required Consents Cap
2) {1 + (((60MIPS * $1,400 * 3 Months) + 90Gbytes * $175 * 3
Months) / $12,834,000)} * $600,000
3) {1 + (($252,000 + $47,250) / $12,834,000)} * $600,000
4) {1 + ($299,250 / $12,834,000)} * $600,000
5) {1 + .023} * $600,000
6) 1.023 * $600,000
7) $613,800 is the Required Consents Cap for 1998
b. Direct Damages Cap for 1998 =
1) {1 + (((Accelerated MIPS * 1998 Capacity Rate * #Months
Accelerated) + Accelerated DASD * 1998 Capacity Rate *
#Months Accelerated) / 1998 ASC)} * Direct Damages Cap
2) {1 + (((60MIPS * $1,400 * 3 Months) + 90Gbytes * $175 * 3
Months) / $12,834,000)} * $10,000,000
3) {1 + (($252,000 + $47,250) / $12,834,000)} * $10,000,000
4) {1 + ($299,250 / $12,834,000)} * $10,000,000
5) {1 + .023} * $10,000,000
6) 1.023 * $10,000,000
January 10, 1995
ISSC/CES Confidential Schedule J Page 19 of 37
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<PAGE>
7) $10,230,000 is the Direct Damages Cap for 1998
Both the Required Consents Cap and the Direct Damages Cap will have
to be recalculated for each Contract Year that CES is paying Acceler-
ation Charges using the Capacity Rates, total accelerated capacity,
and total number of acceleration months applicable to each Contract
Year.
In the event there are both Acceleration Charges and Deferral Credits in
the same Contract Year then the Acceleration Charges and Deferral Credits
will be netted prior to performing any adjustment to the Required Con-
sents Cap and Direct Damages Cap. The actual calculation method used
will then depend upon whether the net of the Acceleration Charges and
Deferral Credits results in charge or credit.
The above adjustments to the Direct Damages Cap are in addition to the
Direct Damages Cap adjustments in connection with the Required Consents
charges set forth in Section 12.2(a)(1) of the Agreement and Section V.G
of this Schedule J. The above adjustments to the Required Consents Cap
are in addition to the Required Consents Cap adjustment set forth in
Section V.G of this Schedule J.
IX. ADDITIONAL RESOURCE CHARGES
ARCs will be based on CES's utilization of resources, beginning on the
Execution Date, in the following categories;
o Tape Utilization;
o Tape Library;
o Tape Transfer; and
o Tape Vaulting.
The categories of resources for which Baselines and ARC Rates are set
forth in the Supplement are those major categories of resources that will
be used by ISSC to perform the tape Services, the aggregate use of which
will be measured and reported monthly, and which will be representative
of and reflect the level of use of all other resources that will be used
by ISSC to perform the tape Services, e.g., machines, personnel, mainte-
nance, etc.
CES's increased usage of the resource categories will result in an ARC.
After the completion of each month during the Term, starting with the
first full month after the Commencement Date, ISSC will calculate ARCs,if
any, as follows.
ISSC will compare the quantity of RUs actually used during the applicable
period, (the "Actual RUs"), with the Baseline for that category. There
will be no increase of the charges otherwise payable to ISSC for such
period unless the actual quantity of RUs used for that period exceeds the
Baseline for that category for such period, in which case CES will pay
ISSC an ARC equal to the product of the ARC Rate for the applicable cate-
gory (as set forth in the Supplement) multiplied by the difference
between the number of RUs for that category actually used and the
Baseline.
ARC = (ACTUAL RUS - BASELINE) * ARC RATE
For example, if the Tape Utilization RU usage for a month is 5,700 tape
mounts and the monthly Tape Utilization Baseline is 5,000 tape mounts and
January 10, 1995
ISSC/CES Confidential Schedule J Page 20 of 37
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<PAGE>
the Tape Utilization ARC Rate is $2.00 per tape mount, then the ARC cal-
culation will be:
ARC = (5,700 tape mounts - 5,000 tape mounts) * $2.00
ARC = 700 tape mounts * $2.00
ARC = $1,400.00
Per the above example, the ARC for Tape Utilization for the month would
be $1,400.00.
ARCs, even though reported and calculated monthly will be accumulated and
invoiced quarterly.
ARCs are applicable to Tape Utilization, Tape Library, Tape Transfer and
Tape Vaulting resource utilization all as specified in the Supplement.
Additional Resource Charge Rates are specified in the Supplement.
X. BASELINE ADJUSTMENT
A. Introduction:
The Parties understand that CES's predicted resource requirements,
while based on the best knowledge available, may be subject to sig-
nificant variation as a result of unexpected growth or reduction in
its business and that such resource variations may place CES in the
position of incurring ARCs. Realizing CES's intent and concern, the
Parties have agreed to the following Baseline adjustment methodology.
B. Adjustment Qualification
In the event that CES's use of the Resource Units, as specified
below, increases or decreases, ("Change"), or, if in CES's judgement,
CES's use of such RUs will Change and such Change is expected to con-
tinue for the foreseeable future, then CES may elect to have ISSC set
the applicable Baseline(s) to the new actual or anticipated resource
usage level and adjust the Annual Services Charge as described below.
1. Increased Resource Usage
________________________
If CES increases its usage of Tape Utilization, Tape Library
and/or Tape Transfer Services and elects to exercise its option
of setting a Baseline to an increased resource usage level, ISSC
shall, with 90 days prior written notice and a one year minimum
commitment to the adjusted Baseline(s), set the Baseline(s) to
the new resource usage level and increase the Annual Services
Charge, per the example set forth below, prorated to the month
the adjustment is made. The Annual Services Charge for each
month remaining in the Term will be increased by 85% of the ARC
Rate for that category for that month, (the "Applicable ARC
Rate"), multiplied by the number of Resource Units that the
Baseline is being increased.
NEW ASC = ASC + {(ADJUSTED BASELINE - BASELINE) * APPLICABLE
ARC RATE * .85}
For example, if the monthly pro rata portion of the Annual Ser-
vices Charge is $500,000.00, the monthly Tape Utilization
Baseline is 5,000 tape mounts, the Applicable ARC Rate for that
month is $2.00 per tape mount and the growth is 1,500 tape
mounts, then the new Tape Utilization Baseline will be 6,500 tape
mounts per month and that month's new ASC will be:
New ASC = $500,000.00 + {(6,500 tape mounts - 5,000 tape
mounts) * $2.00 * .85}
New ASC = $500,000.00 + (1,500 tape mounts * $2.00 * .85)
New ASC = $500,000.00 + $2,550.00
New ASC = $502,550.00
January 10, 1995
ISSC/CES Confidential Schedule J Page 21 of 37
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Per the above example, all future monthly pro rata ASCs having a
corresponding ARC Rate of $2.00 will be increased by $2,550.00
and all future monthly Tape Utilization Baselines will be
increased by 1,500 tape mounts.
The above calculation shall be performed using the Applicable ARC
Rate for each ASC period and the monthly ASC adjusted accord-
ingly.
2. Reduced Resource Usage
______________________
If CES reduces its usage of Tape Utilization, Tape Library,
and/or Tape Transfer and elects to exercise its option of setting
the Baseline to a new reduced resource usage level, ISSC shall,
upon 90 days prior written notice and a one year minimum commit-
ment to the adjusted Baseline(s), set the Baseline(s) to the new
resource usage level and reduce the Annual Services Charge, per
the example set forth below, prorated to the month the adjustment
is made. The Annual Services Charge for each month remaining in
the Term will be reduced by 85% of the Applicable ARC Rate for
that category for that period multiplied by the number of
Resource Units that the Baseline is being reduced.
NEW ASC = ASC - {(BASELINE - ADJUSTED BASELINE) * APPLICABLE
ARC RATE * 0.85}
For example, if the monthly pro rata portion of the Annual Ser-
vices Charge is $200,000.00, the monthly Tape Utilization
Baseline is 5,000 tape mounts, the Applicable ARC Rate is $2.00
per tape mount and the resource reduction is 500 tape mounts,
then the new Baseline will be 4,500 tape mounts and the monthly
ASC will be:
New ASC = $200,000.00 - {(5,000 tape mounts - 4,500 tape
mounts) * $2.00 * 0.85}
New ASC = $200,000.00 - {500 tape mounts * $2.00 * 0.85}
New ASC = $200,000.00 - $850.00
New ASC = $199,150.00
Per the above example, all future monthly pro rata ASCs having a
corresponding Applicable ARC Rate of $2.00 would be decreased by
$850.00 and all future monthly Tape Utilization Baselines would
be decreased by 500 tape mounts.
The above calculation shall be performed using the Applicable ARC
Rate for each ASC period and the monthly ASC adjusted accord-
ingly.
The Supplement will be updated to reflect such Changes and the
revised Supplement distributed to the Parties.
C. Return to the Baseline
In the event that CES exercises its option under this Section and
finds that future resource usage in that category does not continue
to equal the Change or CES's expectation that initiated the Baseline
adjustment, then, CES may with 90 days prior written notice to ISSC
and a minimum of 12 months commitment to the Baseline Change (such
notice may be given at anytime during or after the initial 12 months
commitment to the Baseline Change), cancel all or some portion of the
previous Baseline adjustment and ISSC will allow such cancellation
and reset the Baseline at the same Applicable ARC Rate percentage
that ISSC used to perform the previous Baseline adjustment(s).
D. Baseline Adjustment Limits and Frequency
January 10, 1995
ISSC/CES Confidential Schedule J Page 22 of 37
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<PAGE>
The reduction of a Baseline cannot exceed more than 20% of the
Baseline quantity per occurrence or a total of 50% of the Original
Baseline Quantity. The initial reduction of a Baseline may not occur
earlier than the first anniversary of the Commencement Date and
thereafter at 12 month intervals from the last adjustment.
E. Previously Calculated/Paid ARCs
Previously calculated or paid ARCs shall not be affected by any
Baseline adjustment under this Section.
XI. FILE TRANSMISSIONS AND NETWORK CONNECTIVITY
Pursuant to Sections 5.3(d) and 5.9 of the Agreement, the Services ISSC
provides will include monitoring the files produced by the ISSC Machines,
using the tools provided by CES, to determine whether the transmissions
occur in the time-frames set forth in the Procedures Manual, monitoring
the CPU and NetView operator console messages concerning network and data
line connectivity through the output of the 3745 and/or 3172 front end
controllers and notifying the CES representative listed in the Procedures
Manual. It is understood that ISSC's network connectivity responsibil-
ities are limited to those lines and communications equipment with proto-
cols compatible with the NetView monitoring Software or such other
network monitoring software tools agreed upon by the Parties.
The table attached as Exhibit J-2 to this Schedule J lists the data com-
munications and network connectivity lines anticipated by CES during the
Term. In the event that CES increases the data communications and
network connectivity lines above that shown in Exhibit J-1 of this
Schedule, ISSC will determine the additional resources, if any, required
to monitor and manage file transmissions and network connectivity and
provide CES with a price for such additional resources. Since the corre-
lation between additional data lines/network connections and network
monitoring/managing resources (e.g., console operator, workstations,
training, etc.) is not known, it is the Parties' intent for ISSC to dem-
onstrate when incremental resources are required in order to perform such
network services and the type of incremental resources required and then
quote a price for such resources. Upon acceptance by CES ISSC will
provide the network Services for the additional data communication lines
and/or network connections, amend the Agreement as necessary and dis-
tribute such amendments to the Parties.
January 10, 1995
ISSC/CES Confidential Schedule J Page 23 of 37
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<PAGE>
XII. FINANCIAL RESPONSIBILITIES MATRIX
The Financial Responsibilities Matrix attached as Exhibit J-1 to this
Schedule summarizes the financial responsibilities of ISSC and CES.
January 10, 1995
ISSC/CES Confidential Schedule J Page 24 of 37
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<PAGE>
Schedule J
ISSC Charges, Measures of Utilization and
Financial Responsibilities
Exhibit J-1
Financial Responsibilities Matrix
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] FINANCIAL +--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] ANNUAL SERVICES CHARGE ] ] X ]
+---------------------------------------------+--------------+--------------+
] ADDITIONAL RESOURCE CHARGES (SUBJECT TO ] ] X ]
] BASELINES & ARC RATES IN SUPPLEMENT) ] ] ]
+---------------------------------------------+--------------+--------------+
] ACCELERATION CHARGES ] ] X ]
+---------------------------------------------+--------------+--------------+
] DEFERRAL CREDITS ] X ] ]
+---------------------------------------------+--------------+--------------+
] SITE 2 CREDITS ] X ] ]
+---------------------------------------------+--------------+--------------+
] COST OF LIVING ADJUSTMENT CHARGES ] ] X ]
+---------------------------------------------+--------------+--------------+
] COST OF LIVING ADJUSTMENT CREDITS ] X ] ]
+---------------------------------------------+--------------+--------------+
] TAXES ] ] ]
+---------------------------------------------+--------------+--------------+
] -- PERSONAL PROPERTY/USE/SALES ] ] ]
+---------------------------------------------+--------------+--------------+
] -- CES-RETAINED MACHINES ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- ISSC MACHINES ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- THIRD PARTY SYSTEMS & APPLICATIONS ] ] X ]
] SOFTWARE ] ] ]
+---------------------------------------------+--------------+--------------+
] -- IBM SYSTEMS SOFTWARE (LISTED UNDER ] X ] ]
] SCHEDULE B) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- END USER MACHINES ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- END USER SOFTWARE ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- EXCISE TAXES ON COMMUNICATIONS LINES ] ] X ]
] AND CIRCUITS ] ] ]
+---------------------------------------------+--------------+--------------+
] -- REAL ESTATE TAXES ] ] ]
+---------------------------------------------+--------------+--------------+
] -- ISSC OWNED/LEASED PROPERTY ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- CES OWNED/LEASED PROPERTY ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- FUTURE TAXES ON PROVISION OF ] ] ]
] SERVICES/NEW SERVICES (SALES, USE, EXCISE ] ] X ]
] OR SERVICES) ] ] ]
+---------------------------------------------+--------------+--------------+
] TERMINATION CHARGE ] ] X ]
+---------------------------------------------+--------------+--------------+
January 10, 1995
ISSC/CES Confidential Schedule J Page 25 of 37
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<PAGE>
Schedule J
ISSC Charges, Measures of Utilization and
Financial Responsibilities
Exhibit J-1
Financial Responsibilities Matrix
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] FINANCIAL +--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] DATA CENTER ] ] ]
+---------------------------------------------+--------------+--------------+
] -- CES-RETAINED MACHINES (E.G., DEC, LAN, ] ] ]
] ETC...) & SOFTWARE ] ] ]
+---------------------------------------------+--------------+--------------+
] -- LEASES ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- LICENSES ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- OPERATIONAL SUPPORT (DEC MONITORING & ] X ] ]
] LAN USAGE) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- OPERATIONS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- SYSTEMS SUPPORT & MANAGEMENT ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- MAINTENANCE ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- UPGRADES ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- REPLACEMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- ISSC MACHINES ] ] ]
+---------------------------------------------+--------------+--------------+
] -- LEASES (ON OR AFTER THE COMMENCEMENT ] X ] ]
] DATE) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- OPERATIONS ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- MAINTENANCE ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- UPGRADES (PER THE SUPPLEMENT) ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- REPLACEMENTS (MAINTENANCE RELATED) ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- IBM SYSTEMS SOFTWARE ] ] ]
+---------------------------------------------+--------------+--------------+
] -- LICENSES (ON OR AFTER THE ] X ] ]
] COMMENCEMENT DATE) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- OPERATIONS ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- MAINTENANCE ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- UPGRADES ] X ] ]
+---------------------------------------------+--------------+--------------+
] THIRD PARTY SYSTEMS & APPLICATIONS SOFTWARE ] ] ]
+---------------------------------------------+--------------+--------------+
January 10, 1995
ISSC/CES Confidential Schedule J Page 26 of 37
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<PAGE>
Schedule J
ISSC Charges, Measures of Utilization and
Financial Responsibilities
Exhibit J-1
Financial Responsibilities Matrix
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] FINANCIAL +--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] -- PROCURE PACKAGES ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- LICENSES ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- MAINTENANCE ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- AD/M SERVICES ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- OPERATIONS ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- TECH SPT OF SYSTEMS SOFTWARE ISSC ] X ] ]
] MACHINES (AS SPECIFIED IN SCHEDULE E) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- REPLACEMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- UPGRADES ] ] X ]
+---------------------------------------------+--------------+--------------+
] DISASTER RECOVERY ] ] ]
+---------------------------------------------+--------------+--------------+
] -- UP TO CONFIGURATION (AS SPECIFIED IN ] X ] ]
] SCHEDULE G) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- ABOVE SPECIFIED CONFIGURATION ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- RECOVERY CENTER USAGE FEES ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- OFF-SITE DATA STORAGE(AS SPECIFIED IN ] X ] ]
] SCHEDULE E) ] ] ]
+---------------------------------------------+--------------+--------------+
] MISCELLANEOUS CHARGES ] ] ]
+---------------------------------------------+--------------+--------------+
] -- REQUIRED CONSENTS ] ] ]
+---------------------------------------------+--------------+--------------+
] -- ADMINISTRATION ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- TRANSFER/ACCESS FEES(PURSUANT TO ] X ] ]
] SECTION 3.5 OF AGREEMENT) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- TRANSFER/ACCESS FEES(PURSUANT TO ] ] X ]
] SECTION 3.5 OF AGREEMENT) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- CONTRACTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- FACILITIES (OCCUPANCY, MAINTENANCE, ] X ] ]
] SECURITY, ETC.) - ISSC LOCATIONS ] ] ]
+---------------------------------------------+--------------+--------------+
January 10, 1995
ISSC/CES Confidential Schedule J Page 27 of 37
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<PAGE>
Schedule J
ISSC Charges, Measures of Utilization and
Financial Responsibilities
Exhibit J-1
Financial Responsibilities Matrix
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] FINANCIAL +--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] -- FACILITIES (OCCUPANCY, MAINTENANCE, ] ] X ]
] SECURITY, ETC.) - CES LOCATIONS ] ] ]
+---------------------------------------------+--------------+--------------+
] -- OFFICE EQUIPMENT (WORKSTATIONS, ] ] ]
] FURNITURE, TELEPHONES, FAX, ETC.) - ISSC ] X ] ]
] LOCATIONS ] ] ]
+---------------------------------------------+--------------+--------------+
] -- OFFICE EQUIPMENT (WORKSTATIONS, ] ] ]
] FURNITURE, TELEPHONES, FAX, ETC.) - CES ] ] X ]
] LOCATIONS ] ] ]
+---------------------------------------------+--------------+--------------+
] -- MAIL ROOM, MESSENGER, COURIER (ISSC ] X ] ]
] INTERNAL) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- MAIL ROOM, MESSENGER, COURIER (CES ] ] X ]
] INTERNAL) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- ISSC MACHINE SUPPLIES (EXCLUDING TAPE ] X ] ]
] MEDIA) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- CES-RETAINED MACHINE SUPPLIES ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- ISSC PERSONNEL OFFICE SUPPLIES ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- CES PERSONNEL OFFICE SUPPLIES ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- EXTERNAL ] ] X ]
] MAILING/SHIPPING/TRANSPORTATION ] ] ]
+---------------------------------------------+--------------+--------------+
] MEDIA COSTS (ISSC MACHINES) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- TAPE MOUNTS (UP TO 5,000 AS SPECIFIED IN ] X ] ]
] THE SUPPLEMENT) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- TAPE MOUNTS (ABOVE 5,000 AS SPECIFIED IN ] ] X ]
] THE SUPPLEMENT) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- TAPE LIBRARY (UP TO 20,000 AS SPECIFIED ] X ] ]
] IN THE SUPPLEMENT) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- TAPE LIBRARY (ABOVE 20,000 AS SPECIFIED ] ] X ]
] IN THE SUPPLEMENT) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- TAPE TRANSFERS ] ] ]
+---------------------------------------------+--------------+--------------+
] --MEDIA ] ] X ]
+---------------------------------------------+--------------+--------------+
January 10, 1995
ISSC/CES Confidential Schedule J Page 28 of 37
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<PAGE>
Schedule J
ISSC Charges, Measures of Utilization and
Financial Responsibilities
Exhibit J-1
Financial Responsibilities Matrix
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] FINANCIAL +--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] --TRANSPORTATION/SHIPPING/PACKAGING ] ] X ]
] MATERIALS ] ] ]
+---------------------------------------------+--------------+--------------+
] --HANDLING AT ISSC LOCATION (AS ] X ] ]
] SPECIFIED IN SCHEDULE J) ] ] ]
+---------------------------------------------+--------------+--------------+
] DATA NETWORK (EXCLUDING 3745 AT ISSC DATA ] ] ]
] CENTER) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- EQUIPMENT ] ] ]
+---------------------------------------------+--------------+--------------+
] -- LEASES ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- OPERATIONS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- MAINTENANCE ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- UPGRADES ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- REPLACEMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- MOVES, ADDS AND CHANGES ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- SYSTEMS SOFTWARE ] ] ]
+---------------------------------------------+--------------+--------------+
] -- LICENSES ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- OPERATIONS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- DEVELOPMENT ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- MAINTENANCE ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- REPLACEMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] PRINT ] ] X ]
+---------------------------------------------+--------------+--------------+
] MICROFICHE ] ] X ]
+---------------------------------------------+--------------+--------------+
] NETWORK LOCATIONS (LINES/CIRCUITS) ] ] ]
+---------------------------------------------+--------------+--------------+
] -- EXISTING ON COMMENCEMENT DATE ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- UPGRADES/ADDITIONS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- DISCONTINUANCE - CREDIT APPLICABLE TO ] ] X ]
] ON-GOING MONTHLY CHARGE ONLY ] ] ]
+---------------------------------------------+--------------+--------------+
January 10, 1995
ISSC/CES Confidential Schedule J Page 29 of 37
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<PAGE>
Schedule J
ISSC Charges, Measures of Utilization and
Financial Responsibilities
Exhibit J-1
Financial Responsibilities Matrix
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] FINANCIAL +--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] -- CARRIER CHARGES - LONG DISTANCE, ] ] X ]
] CALLING CARD ] ] ]
+---------------------------------------------+--------------+--------------+
] -- LOCAL TELEPHONE SERVICE AND CELLULAR ] ] X ]
+---------------------------------------------+--------------+--------------+
] VOICE NETWORK ] ] X ]
+---------------------------------------------+--------------+--------------+
] LOCAL AREA NETWORK ] ] ]
+---------------------------------------------+--------------+--------------+
] -- EQUIPMENT ] ] ]
+---------------------------------------------+--------------+--------------+
] -- LEASES ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- OPERATIONAL SUPPORT ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- MAINTENANCE ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- UPGRADES ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- REPLACEMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- MOVES, ADDS AND CHANGES ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- CONNECTION BETWEEN SITE 1 AND SITE 2 ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- SOFTWARE ] ] ]
+---------------------------------------------+--------------+--------------+
] -- PURCHASES ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- LICENSES ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- OPERATIONAL SUPPORT ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- DEVELOPMENT ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- MAINTENANCE ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- REPLACEMENTS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- END USER SUPPORT ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- NETWORK MANAGEMENT ] ] X ]
+---------------------------------------------+--------------+--------------+
] END USER MACHINES (PCS, WORKSTATIONS, ] ] X ]
] TERMINALS, ETC.) ] ] ]
+---------------------------------------------+--------------+--------------+
] END USER SOFTWARE ] ] X ]
+---------------------------------------------+--------------+--------------+
January 10, 1995
ISSC/CES Confidential Schedule J Page 30 of 37
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<PAGE>
Schedule J
ISSC Charges, Measures of Utilization and
Financial Responsibilities
Exhibit J-1
Financial Responsibilities Matrix
NOTE
____
Although particular items which are out-of-scope may be identified in the
Financial Responsibilities Matrix above, there is no intent to imply that
items which are not identified are in scope. Those items (Machines,
Software, etc.) which are in scope will be fully defined in the Schedules to
the Agreement.
January 10, 1995
ISSC/CES Confidential Schedule J Page 31 of 37
cesskdj
<PAGE>
<TABLE>
Schedule J
ISSC Charges, Measures of Utilization and
Financial Responsibilities
Exhibit J-2
CES Communication Requirements
<S> <C> <C> <C> <C> <C> <C>
+----------+----------+----------+----------+----------+----------+---------+
] ITEM # ] MONTH ] WILTEL ] 3RD PARTY] OTHER ] MVS/DEC ] DEC ]
] ] ] ROUTERS ] ROTARY ] HS LINKS ] LS LINKS ] HS LINKS]
+----------+----------+----------+----------+----------+----------+---------+
] 1 ] Oct-1994 ] 1 ] 3 ] 0 ] 5 ] 0 ]
+----------+----------+----------+----------+----------+----------+---------+
] 2 ] Nov-1994 ] 1 ] 3 ] 0 ] 5 ] 0 ]
+----------+----------+----------+----------+----------+----------+---------+
] 3 ] Dec-1994 ] 1 ] 3 ] 0 ] 5 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 4 ] Jan-1995 ] 1 ] 6 ] 0 ] 5 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 5 ] Feb-1995 ] 2 ] 6 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 6 ] Mar-1995 ] 2 ] 6 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 7 ] Apr-1995 ] 2 ] 6 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 8 ] May-1995 ] 2 ] 10 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 9 ] Jun-1995 ] 2 ] 10 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 10 ] Jul-1995 ] 2 ] 10 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 11 ] Aug-1995 ] 2 ] 10 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 12 ] Sep-1995 ] 2 ] 20 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 13 ] Oct-1995 ] 2 ] 20 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 14 ] Nov-1995 ] 3 ] 20 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 15 ] Dec-1995 ] 3 ] 20 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 16 ] Jan-1996 ] 3 ] 20 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 17 ] Feb-1996 ] 3 ] 20 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 18 ] Mar-1996 ] 3 ] 30 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 19 ] Apr-1996 ] 3 ] 30 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 20 ] May-1996 ] 3 ] 30 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 21 ] Jun-1996 ] 3 ] 30 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 22 ] Jul-1996 ] 3 ] 30 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 23 ] Aug-1996 ] 3 ] 30 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 24 ] Sep-1996 ] 3 ] 30 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
</TABLE>
January 10, 1995
ISSC/CES Confidential Schedule J Page 32 of 37
cesskdj
<PAGE>
<TABLE>
Schedule J
ISSC Charges, Measures of Utilization and
Financial Responsibilities
Exhibit J-2
CES Communication Requirements
<S> <C> <C> <C> <C> <C> <C>
+----------+----------+----------+----------+----------+----------+---------+
] ITEM # ] MONTH ] WILTEL ] 3RD PARTY] OTHER ] MVS/DEC ] DEC ]
] ] ] ROUTERS ] ROTARY ] HS LINKS ] LS LINKS ] HS LINKS]
+----------+----------+----------+----------+----------+----------+---------+
] 25 ] Oct-1996 ] 3 ] 30 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 26 ] Nov-1996 ] 3 ] 30 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 27 ] Dec-1996 ] 3 ] 30 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 28 ] Jan-1997 ] 3 ] 30 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 29 ] Feb-1997 ] 3 ] 30 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 30 ] Mar-1997 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 31 ] Apr-1997 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 32 ] May-1997 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 33 ] Jun-1997 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 34 ] Jul-1997 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 35 ] Aug-1997 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 36 ] Sep-1997 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 37 ] Oct-1997 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 38 ] Nov-1997 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 39 ] Dec-1997 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 40 ] Jan-1998 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 41 ] Feb-1998 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 42 ] Mar-1998 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 43 ] Apr-1998 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 44 ] May-1998 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 45 ] Jun-1998 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 46 ] Jul-1998 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 47 ] Aug-1998 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 48 ] Sep-1998 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
</TABLE>
January 10, 1995
ISSC/CES Confidential Schedule J Page 33 of 37
cesskdj
<PAGE>
<TABLE>
Schedule J
ISSC Charges, Measures of Utilization and
Financial Responsibilities
Exhibit J-2
CES Communication Requirements
<S> <C> <C> <C> <C> <C> <C>
+----------+----------+----------+----------+----------+----------+---------+
] ITEM # ] MONTH ] WILTEL ] 3RD PARTY] OTHER ] MVS/DEC ] DEC ]
] ] ] ROUTERS ] ROTARY ] HS LINKS ] LS LINKS ] HS LINKS]
+----------+----------+----------+----------+----------+----------+---------+
] 49 ] Oct-1998 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 50 ] Nov-1998 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 51 ] Dec-1998 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 52 ] Jan-1999 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 53 ] Feb-1999 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 54 ] Mar-1999 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 55 ] Apr-1999 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 56 ] May-1999 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 57 ] Jun-1999 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 58 ] Jul-1999 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 59 ] Aug-1999 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 60 ] Sep-1999 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 61 ] Oct-1999 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 62 ] Nov-1999 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 63 ] Dec-1999 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 64 ] Jan-2000 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 65 ] Feb-2000 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 66 ] Mar-2000 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 67 ] Apr-2000 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 68 ] May-2000 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 69 ] Jun-2000 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 70 ] Jul-2000 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 71 ] Aug-2000 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 72 ] Sep-2000 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
</TABLE>
January 10, 1995
ISSC/CES Confidential Schedule J Page 34 of 37
cesskdj
<PAGE>
<TABLE>
Schedule J
ISSC Charges, Measures of Utilization and
Financial Responsibilities
Exhibit J-2
CES Communication Requirements
<S> <C> <C> <C> <C> <C> <C>
+----------+----------+----------+----------+----------+----------+---------+
] ITEM # ] MONTH ] WILTEL ] 3RD PARTY] OTHER ] MVS/DEC ] DEC ]
] ] ] ROUTERS ] ROTARY ] HS LINKS ] LS LINKS ] HS LINKS]
+----------+----------+----------+----------+----------+----------+---------+
] 73 ] Oct-2000 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 74 ] Nov-2000 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 75 ] Dec-2000 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 76 ] Jan-2001 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 77 ] Feb-2001 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 78 ] Mar-2001 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 79 ] Apr-2001 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 80 ] May-2001 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 81 ] Jun-2001 ] 4 ] 40 ] 0 ] 10 ] 4 ]
+----------+----------+----------+----------+----------+----------+---------+
] 82 ] Jul-2001 ] 5 ] 45 ] 0 ] 12 ] 5 ]
+----------+----------+----------+----------+----------+----------+---------+
] 83 ] Aug-2001 ] 5 ] 45 ] 0 ] 12 ] 5 ]
+----------+----------+----------+----------+----------+----------+---------+
] 84 ] Sep-2001 ] 5 ] 45 ] 0 ] 12 ] 5 ]
+----------+----------+----------+----------+----------+----------+---------+
] 85 ] Oct-2001 ] 5 ] 45 ] 0 ] 12 ] 5 ]
+----------+----------+----------+----------+----------+----------+---------+
] 86 ] Nov-2001 ] 5 ] 45 ] 0 ] 12 ] 5 ]
+----------+----------+----------+----------+----------+----------+---------+
] 87 ] Dec-2001 ] 5 ] 45 ] 0 ] 12 ] 5 ]
+----------+----------+----------+----------+----------+----------+---------+
] 88 ] Jan-2002 ] 5 ] 45 ] 0 ] 12 ] 5 ]
+----------+----------+----------+----------+----------+----------+---------+
] 89 ] Feb-2002 ] 5 ] 45 ] 0 ] 12 ] 5 ]
+----------+----------+----------+----------+----------+----------+---------+
] 90 ] Mar-2002 ] 5 ] 45 ] 0 ] 12 ] 5 ]
+----------+----------+----------+----------+----------+----------+---------+
] 91 ] Apr-2002 ] 5 ] 45 ] 0 ] 12 ] 5 ]
+----------+----------+----------+----------+----------+----------+---------+
] 92 ] May-2002 ] 5 ] 45 ] 0 ] 12 ] 5 ]
+----------+----------+----------+----------+----------+----------+---------+
] 93 ] Jun-2002 ] 5 ] 45 ] 0 ] 12 ] 5 ]
+----------+----------+----------+----------+----------+----------+---------+
] 94 ] Jul-2002 ] 5 ] 45 ] 0 ] 12 ] 5 ]
+----------+----------+----------+----------+----------+----------+---------+
] 95 ] Aug-2002 ] 5 ] 45 ] 0 ] 12 ] 5 ]
+----------+----------+----------+----------+----------+----------+---------+
] 96 ] Sep-2002 ] 5 ] 45 ] 0 ] 12 ] 5 ]
+----------+----------+----------+----------+----------+----------+---------+
</TABLE>
January 10, 1995
ISSC/CES Confidential Schedule J Page 35 of 37
cesskdj
<PAGE>
<TABLE>
Schedule J
ISSC Charges, Measures of Utilization and
Financial Responsibilities
Exhibit J-2
CES Communication Requirements
<S> <C> <C> <C> <C> <C> <C>
+----------+----------+----------+----------+----------+----------+---------+
] ITEM # ] MONTH ] WILTEL ] 3RD PARTY] OTHER ] MVS/DEC ] DEC ]
] ] ] ROUTERS ] ROTARY ] HS LINKS ] LS LINKS ] HS LINKS]
+----------+----------+----------+----------+----------+----------+---------+
] 97 ] Oct-2002 ] 5 ] 45 ] 0 ] 12 ] 5 ]
+----------+----------+----------+----------+----------+----------+---------+
] 98 ] Nov-2002 ] 5 ] 45 ] 0 ] 12 ] 5 ]
+----------+----------+----------+----------+----------+----------+---------+
] 99 ] Dec-2002 ] 5 ] 45 ] 0 ] 12 ] 5 ]
+----------+----------+----------+----------+----------+----------+---------+
] 100 ] Jan-2003 ] 6 ] 50 ] 0 ] 14 ] 6 ]
+----------+----------+----------+----------+----------+----------+---------+
] 101 ] Feb-2003 ] 6 ] 50 ] 0 ] 14 ] 6 ]
+----------+----------+----------+----------+----------+----------+---------+
] 102 ] Mar-2003 ] 6 ] 50 ] 0 ] 14 ] 6 ]
+----------+----------+----------+----------+----------+----------+---------+
] 103 ] Apr-2003 ] 6 ] 50 ] 0 ] 14 ] 6 ]
+----------+----------+----------+----------+----------+----------+---------+
] 104 ] May-2003 ] 6 ] 50 ] 0 ] 14 ] 6 ]
+----------+----------+----------+----------+----------+----------+---------+
] 105 ] Jun-2003 ] 6 ] 50 ] 0 ] 14 ] 6 ]
+----------+----------+----------+----------+----------+----------+---------+
] 106 ] Jul-2003 ] 6 ] 50 ] 0 ] 14 ] 6 ]
+----------+----------+----------+----------+----------+----------+---------+
] 107 ] Aug-2003 ] 6 ] 50 ] 0 ] 14 ] 6 ]
+----------+----------+----------+----------+----------+----------+---------+
] 108 ] Sep-2003 ] 6 ] 50 ] 0 ] 14 ] 6 ]
+----------+----------+----------+----------+----------+----------+---------+
] 109 ] Oct-2003 ] 6 ] 50 ] 0 ] 14 ] 6 ]
+----------+----------+----------+----------+----------+----------+---------+
] 110 ] Nov-2003 ] 6 ] 50 ] 0 ] 14 ] 6 ]
+----------+----------+----------+----------+----------+----------+---------+
] 111 ] Dec-2003 ] 6 ] 50 ] 0 ] 14 ] 6 ]
+----------+----------+----------+----------+----------+----------+---------+
] 112 ] Jan-2004 ] 6 ] 50 ] 0 ] 14 ] 6 ]
+----------+----------+----------+----------+----------+----------+---------+
] 113 ] Feb-2004 ] 6 ] 50 ] 0 ] 14 ] 6 ]
+----------+----------+----------+----------+----------+----------+---------+
] 114 ] Mar-2004 ] 6 ] 50 ] 0 ] 14 ] 6 ]
+----------+----------+----------+----------+----------+----------+---------+
] 115 ] Apr-2004 ] 6 ] 50 ] 0 ] 14 ] 6 ]
+----------+----------+----------+----------+----------+----------+---------+
] 116 ] May-2004 ] 6 ] 50 ] 0 ] 14 ] 6 ]
+----------+----------+----------+----------+----------+----------+---------+
] 117 ] Jun-2004 ] 6 ] 50 ] 0 ] 14 ] 6 ]
+----------+----------+----------+----------+----------+----------+---------+
] 118 ] Jul-2004 ] 6 ] 50 ] 0 ] 14 ] 6 ]
+----------+----------+----------+----------+----------+----------+---------+
] 119 ] Aug-2004 ] 6 ] 50 ] 0 ] 14 ] 6 ]
+----------+----------+----------+----------+----------+----------+---------+
] 120 ] Sep-2004 ] 6 ] 50 ] 0 ] 14 ] 6 ]
+----------+----------+----------+----------+----------+----------+---------+
</TABLE>
January 10, 1995
ISSC/CES Confidential Schedule J Page 36 of 37
cesskdj
<PAGE>
<TABLE>
Schedule J
ISSC Charges, Measures of Utilization and
Financial Responsibilities
Exhibit J-2
CES Communication Requirements
<S> <C> <C> <C> <C> <C> <C>
+----------+----------+----------+----------+----------+----------+---------+
] ITEM # ] MONTH ] WILTEL ] 3RD PARTY] OTHER ] MVS/DEC ] DEC ]
] ] ] ROUTERS ] ROTARY ] HS LINKS ] LS LINKS ] HS LINKS]
+----------+----------+----------+----------+----------+----------+---------+
] 121 ] Oct-2004 ] 6 ] 50 ] 0 ] 14 ] 6 ]
+----------+----------+----------+----------+----------+----------+---------+
] 122 ] Nov-2004 ] 6 ] 50 ] 0 ] 14 ] 6 ]
+----------+----------+----------+----------+----------+----------+---------+
] 123 ] Dec-2004 ] 6 ] 50 ] 0 ] 14 ] 6 ]
+----------+----------+----------+----------+----------+----------+---------+
</TABLE>
Each router has HS Link, SAA Gateway 3172 cont.
NOTE:The above Chart lists the data communications requirements for single
site operation. Installation of Site 2 will replicate the above data
communications requirements.
January 10, 1995
ISSC/CES Confidential Schedule J Page 37 of 37
cesskdj
<PAGE>
ISSC / Ceridian Corporation
Agreement for Information Technology Services
-----------------------------------------------------------------------------
Schedule K
Application Installation Standards
CES agrees that Applications Software provided to ISSC for execution will
conform to the following standards:
1. Programs will be fully tested for compatibility and conformity to ISSC's
specifications prior to transfer to ISSC for promotion into the pro-
duction system;
2. Back out and recovery procedures will be documented; and
3. Programs will conform to the mutually agreed
a. File allocation and naming conventions
b. Sysout class
c. Job execution class
d. Forms standards
e. Accounting fields
f. Job Name Standards.
As mutually agreed by ISSC and CES, programs will execute in the following
target software environments.
MVS
___
Operating System MVS/ESA
Job Entry System JES2
Security RACF
Transaction Processing CICS
Storage Management DFRMM, DFSMS, DFHSM, DFDSS
Problem/Change Management INFO
Performance Management OMEGAMON
Analysis/Reporting MICS
Remote Operations NETVIEW
On-line Viewing TBD
Scheduling ZEKE
Restart/Rerun ZEBB
Output Processing TBD
Network Software ACF/VTAM, ACF/NCP, EP, BTAM
Compiler COBOL, COBOL2, ASSEMBLER H
Interactive Development DFSORT, ENDEVOR,TSO/ISPF,DB2
Automation AOC
All changes to the operating environment will be in accordance with the
ISSC/CES Change Management Procedures.
January 10, 1995
ISSC/CES Confidential Schedule K Page 1 of 1
cesskdk
<PAGE>
ISSC / Ceridian Corporation
Agreement for Information Technology Services
-----------------------------------------------------------------------------
Schedule L
Security Procedures and Responsibilities
I. ISSC WILL:
A. provide physical security for the Data Center and other ISSC facili-
ties, if any, required to provide the Services;
B. restrict access to the Data Center to authorized personnel only;
C. conduct periodic reviews of the Data Center access logs for unusual
occurrences and perform follow-up activities;
D. identify the protection requirements for operating system resources
and implement this protection via the access control software;
E. install, maintain and upgrade new or existing data access control
software;
F. implement the functions and features of the access control software
which will satisfy CES's security standards and practices as defined
in the Procedures Manual;
G. grant system access to ISSC employees only to the extent necessary to
perform activities required by this Agreement;
H. provide storage and security for portable storage media including,
but not limited to, tapes and disk packs under ISSC's control;
I. keep abreast of the latest concepts and techniques associated with
system and data security;
J. review security policies and procedures for effectiveness and recom-
mend improvements; and
K. provide sufficient access to the Data Center to allow CES's security
administrator to fulfill CES's responsibilities.
II. CES WILL:
A. provide ISSC with CES's most recent data security standards and prac-
tices and updates as they occur;
B. identify the protection requirements for application resources and
protect them via the access control software;
C. identify the protection requirements for end user data and protect it
via the access control software;
D. establish, change, deactivate and remove logon IDs and associated
access authorities;
E. reset logon ID passwords and disclose passwords to authorized per-
sonnel;
F. periodically review logon IDs and remove those for which management
authorization no longer exists;
G. review, approve and grant requests for group privileged user authori-
ties;
H. periodically review group privileged user authorities and remove
those for which management approval no longer exists;
I. implement and maintain security controls for those subsystems which
do not use the access control software for their security (all sub-
systems will use RACF);
J. keep abreast of the latest concepts and techniques associated with
system and data security; and
K. review security policies and procedures for effectiveness and recom-
mend improvements.
III. SERVICES RESPONSIBILITIES MATRIX
The Services Responsibilities Matrix attached as Exhibit L-1 to this
Schedule summarizes the roles and responsibilities of ISSC and CES.
January 10, 1995
ISSC/CES Confidential Schedule L Page 1 of 2
cesskdl
<PAGE>
Schedule L
Security Procedures and Responsibilities
Exhibit L-1
Services Responsibilities Matrix
+---------------------------------------------+-----------------------------+
] ] RESPONSIBILITY ]
] SECURITY +--------------+--------------+
] ] ISSC ] CES ]
+---------------------------------------------+--------------+--------------+
] PHYSICAL SECURITY - CES FACILITIES ] ] ]
+---------------------------------------------+--------------+--------------+
] -- ADMINISTRATIVE AND TECHNICAL SUPPORT ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- BADGE DISTRIBUTION, ALARM MONITORING ] ] X ]
] AND RESPONSE ] ] ]
+---------------------------------------------+--------------+--------------+
] -- EMERGENCY RESPONSE (FIRE, MEDICAL, ] ] X ]
] FIRST AID) ] ] ]
+---------------------------------------------+--------------+--------------+
] PHYSICAL SECURITY - ISSC FACILITIES ] ] ]
+---------------------------------------------+--------------+--------------+
] -- ADMINISTRATIVE AND TECHNICAL SUPPORT ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- BADGE DISTRIBUTION, ALARM MONITORING ] X ] ]
] AND RESPONSE ] ] ]
+---------------------------------------------+--------------+--------------+
] -- EMERGENCY RESPONSE (FIRE, MEDICAL, ] X ] ]
] FIRST AID) ] ] ]
+---------------------------------------------+--------------+--------------+
] DATA SECURITY - ISSC MACHINES ] ] ]
+---------------------------------------------+--------------+--------------+
] -- ACCESS CONTROL SYSTEM ] ] ]
+---------------------------------------------+--------------+--------------+
] -- RACF INSTALLATION & MAINTENANCE ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- RACF UPGRADES ] X ] ]
+---------------------------------------------+--------------+--------------+
] -- ADMINISTRATIVE SUPPORT ] ] ]
+---------------------------------------------+--------------+--------------+
] * SYSTEM ] X ] ]
+---------------------------------------------+--------------+--------------+
] * GROUP ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- SYSTEMS PROFILE IDENTIFICATION ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- LOGON ID ADMINISTRATION ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- PASSWORD RESETS (HELP DESK) ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- SUBSYSTEMS PASSWORD AUTHORIZATION ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- SUBSYSTEMS PASSWORD ADMINISTRATION ] ] X ]
+---------------------------------------------+--------------+--------------+
] DATA SECURITY - CES-RETAINED MACHINES ] ] ]
+---------------------------------------------+--------------+--------------+
] -- ACCESS CONTROL SYSTEM ] ] ]
+---------------------------------------------+-----------------------------+
] -- SYSTEM INSTALLATION & MAINTENANCE ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- SYSTEM UPGRADES ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- ADMINISTRATIVE SUPPORT ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- SYSTEMS PROFILE IDENTIFICATION ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- LOGON ID ADMINISTRATION ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- PASSWORD RESETS (HELP DESK) ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- SUBSYSTEMS PASSWORD AUTHORIZATION ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- SUBSYSTEMS PASSWORD ADMINISTRATION ] ] X ]
+---------------------------------------------+--------------+--------------+
] LAN SYSTEMS ] ] X ]
+---------------------------------------------+--------------+--------------+
] DATA NETWORK ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- DIAL NETWORKS ] ] X ]
+---------------------------------------------+--------------+--------------+
] -- LEASED LINES ] ] X ]
+---------------------------------------------+--------------+--------------+
] VOICE NETWORK ] ] X ]
+---------------------------------------------+--------------+--------------+
January 10, 1995
ISSC/CES Confidential Schedule L Page 2 of 2
cesskdl
<PAGE>
ISSC / Ceridian Corporation
Agreement for Information Technology Services
-----------------------------------------------------------------------------
Schedule M
Confidential Information Categories
I. Customer Lists
II. Customer Information
III.Account Information
IV. Business Planning Documentation
January 10, 1995
ISSC/CES Confidential Schedule M Page 1 of 1
cesskdm
